Compass Lexecon’s Clients Achieve Landmark Victory in Long-Standing Rail Freight Antitrust Litigation

After nearly two decades of litigation, U.S. District Judge Beryl Howell granted summary judgment on behalf of the four largest Class I railroads in the United States in their dispute against shippers regarding the imposition of fuel surcharges.

Longtime Compass Lexecon clients BNSF Railway Co., CSX Transportation Inc., Norfolk Southern Railway Corp., and Union Pacific Railroad Co. recently prevailed on summary judgment in the Rail Freight Fuel Surcharge Antitrust Litigation, one of the lengthiest and most complex antitrust litigation cases of this century. The decision issued in late June of this year rejects Plaintiffs’ claims that the four largest Class I railroads in the U.S. engaged in a price-fixing cartel to impose supra-competitive freight fuel surcharges (FSCs) from 2003-2008. Judge’s Howell’s reasoning echoed the analysis and testimony of Compass Lexecon’s experts over time and was centered on the absence of sound economic and documentary evidence to infer a coordinated effort by the railroads to impose FSCs, the rationality of the business incentives the railroads had to unilaterally impose FSCs in times of high fuel costs, and the lack of parallelism in their conduct.

Over the course of almost 18 years of litigation, Compass Lexecon’s experts provided the courts with extensive economic analysis on class, merits, and damages issues in support of BNSF, CSX, NS, and UP. Compass Lexecon experts, Professors Dennis Carlton, Joe Kalt, Janusz Ordover (for BNSF), Robert Willig, and Dr. Mark Israel (now at Econic Partners), submitted testimony encompassing more than a dozen expert reports and numerous depositions, as well as a live hearing during the class certification phase of the case where Professor Carlton’s testimony contributed to informing the court’s decision to reject Plaintiffs’ class arguments. Since then, two multi-district litigations consolidated the claims of more than 100 shippers, all of which are subject to Judge Howell’s decision to grant summary judgment in favor of the railroads.

Many Compass Lexecon staff supported our experts throughout the duration of this litigation. Professor Carlton was supported by a team led by Theresa Sullivan, Matias Escudero, Benjamin Spulber, and Quinn Johnson, and support staff from Compass Lexecon, as well as longtime colleagues now at Econic Partners. Compass Lexecon experts and staff worked closely with counsel for each of the railroads, including John Majoras and Kelsey Bryan of Jones Day and Tim O’Mara of Latham & Watkins LLP for Union Pacific; Linda Stein and Tara Woods of Steptoe, Joshua Soven of Paul Hastings LLP, and Ben Horwich of Munger, Tolles & Olson LLP for BNSF; Luke van Houwelingen and Eric Enson of Crowell & Moring LLP for CSX; and Tara Reinhart and Thomas Gentry of Skadden, Arps, Slate, Meagher & Flom LLP and Jennifer Patterson of Haug Partners for Norfolk Southern.