IN RE: RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION (2024)

OPINION AND ORDER

Following the decision of the United States Court of Appeals for the District of Columbia Circuit, In re Rail Freight Fuel Surcharge Antitrust Litig., 34 F.4th 1 (D.C. Cir. 2022), the defendants in Rail Freight and the defendants in Oxbow again ask the Court pursuant to 49 U.S.C. § 10706 to exclude evidence of any discussion or agreement between or among rail carriers that concerned interline movements (and any rate or other action resulting from such discussion or agreement), and to enforce the statutory bar on inferring a conspiracy from specified evidence. See Defendants’ Response Brief to the Court's Order on Section 10706 [Dkt. No. 1104].¹ Plaintiffs in Oxbow and direct purchaser plaintiffs in Rail Freight oppose these requests. See Plaintiffs’ Supplemental Briefing Regarding Section 10706 In Response to the Court's Order of May 26, 2023 [Dkt. No. 1107]; see also Joint Status Report [Dkt. No. 1094]; Parties’ Notice of Joint Status Report, Stipulation, and Proposed Order in Advance of July 19, 2022 Status Conference [Dkt. No. 1085].

The Court has considered the parties’ written submissions, the relevant case law – including primarily the D.C. Circuit's decision interpreting Section 10706 – and the relevant portions of the record in this case. It has also personally reviewed every document at issue in this matter. The Court will grant in part and deny in part defendants’ requests to exclude certain evidence.²

I. FACTUAL AND PROCEDURAL HISTORY

The Court has previously recounted at length the factual and procedural history of the Rail Freight and Oxbow litigation. See In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight I”), 587 F. Supp. 2d 27, 29-31 (D.D.C. 2008); In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight II”), 593 F. Supp. 2d 29, 32, 34-35 (D.D.C. 2008), aff'd sub nom. Fayus Enters. v. BNSF Ry. Co., 602 F.3d 444, 445-46, 454 (D.C. Cir. 2010); In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight III”), 287 F.R.D. 1, 11-20 (D.D.C. 2012), vacated sub nom. In re Rail Freight Fuel Surcharge Antitrust Litig. – MDL No. 1869, 725 F.3d 244 (D.C. Cir. 2013); In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight IV”), 292 F. Supp. 3d 14, 33-38 (D.D.C. 2017), aff'd sub nom. In re Rail Freight Fuel Surcharge Antitrust Litig. – MDL No. 1869, 934 F.3d 619 (D.C. Cir. 2019); In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight V”), 520 F. Supp. 3d 1, 8-10 (D.D.C. 2021); see also Oxbow Carbon & Minerals LLC v. Union Pac. R.R. Co. (“Oxbow I”), 926 F. Supp. 2d 36, 39-40 (D.D.C. 2013); Oxbow Carbon & Minerals LLC v. Union Pac. R.R. Co. (“Oxbow II”), 81 F. Supp. 3d 1, 5-6 (D.D.C. 2015).

These cases involve allegations of a conspiracy to fix prices in violation of the Sherman Antitrust Act, 15 U.S.C. § 1. Plaintiffs in Rail Freight, purchasers of rail freight transportation services, allege that defendants, BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company, “engaged in a price-fixing conspiracy to coordinate their fuel surcharge programs as a means to impose supra-competitive total price increases on their shipping customers.” Rail Freight IV, 292 F. Supp. 3d at 34. Similarly, plaintiffs in Oxbow allege that defendants Union Pacific Railroad Company and BNSF Railway Company conspired to “fix prices above competitive levels through a uniform fuel surcharge.” Oxbow II, 81 F. Supp. 3d at 5. Many of the allegations in Oxbow are “virtually identical” to the allegations in Rail Freight. Id. at 5 n.3.

Pending before the Court are the defendant railroads’ motions for summary judgment as to whether they conspired to violate the antitrust laws. See Order of May 7, 2022 [Dkt. No. 1025]; Memorandum Opinion and Order of March 30, 2021 [Dkt. No. 1016]. With respect to the Court's consideration of these motions, the defendant railroads seek to exclude from consideration evidence of interline-related communications, or communications concerning shared traffic, under 49 U.S.C. § 10706(a)(3)(B)(ii) (“Section 10706”). As the D.C. Circuit has explained:

Interline movements are shipments carried along two or more railroads’ tracks under a common arrangement. Section 10706 states that “[i]n any proceeding” in which rail carriers are alleged to have violated antitrust laws, conspiracy “may not be inferred from evidence that two or more rail carriers acted together with respect to an interline rate or related matter and that a party to such action took similar action with respect to a rate or related matter on another route or traffic.” 49 U.S.C. § 10706(a)(3)(B)(ii). The statute tellingly provides that “evidence of a discussion or agreement between or among” rail carriers “shall not be admissible if the discussion or agreement ․ concerned an interline movement of the rail carrier,” and “would not, considered by itself, violate the [antitrust] laws.” Id. § 10706(a)(3)(B)(ii)(II) (emphasis added).

In re Rail Freight Fuel Surcharge Antitrust Litigation – MDL No. 1869 (“Rail Freight VI”), 34 F.4th 1 at 5 (alterations in original).

On December 19, 2019, this Court invited plaintiffs and defendants in Rail Freight MDL No. 1869 and Oxbow, as well as the new plaintiffs in MDL No. 2952 before Judge Beryl Howell, to file additional memoranda addressing defendants’ still-pending motions concerning Section 10706. Memorandum Opinion and Order of December 19, 2019 [Dkt. No. 918] at 3. The Court also invited the United States to submit a Statement of Interest reflecting the views of the Department of Justice, the Federal Trade Commission, and the Surface Transportation Board. Order of March 16, 2020 [Dkt. No. 947] at 2. On August 26, 2020, the Court heard oral arguments on the interpretation and application of Section 10706 from defendants, named plaintiffs in Rail Freight MDL No. 1869, plaintiffs in MDL No. 2952, and the Department of Justice. See Minute Entry of August 26, 2020.

On February 19, 2021, the Court issued an opinion and order interpreting Section 10706 and denying defendants’ motions to exclude interline-related communications. See Rail Freight V, 520 F. Supp. 3d. at 15-38. The Court held that “for a discussion or agreement to be inadmissible” under Section 10706, “the carriers must be discussing or agreeing upon identifiable interline movements which they share; but context and logic confirm that ‘an interline movement’ may refer to multiple interline movements.” Id. at 29. The Court said that protected discussions and agreements concern “an identifiable movement or movements with identifiable circumstances, such as a specific shipper, specific shipments, and specific destinations.” See id. The Court rejected the defendants’ arguments that an entire document must be excluded “if it is about interline traffic even if it also includes communications about local traffic or other subjects,” id. at 25, noting that “there are more nuanced ways to read and apply the statute. It need not be an all or nothing proposition.” Id. As in all cases, the Court held, a document “may be admitted in part and excluded in part” through the use of redactions. Id.; see id. at 26.

The United States Court of Appeals for the D.C. Circuit affirmed in part and reversed in part. See Rail Freight VI, 34 F.4th 1. The D.C. Circuit explained that a discussion or agreement “concerns” an interline movement “only if Defendants meet their burden of showing that the movements at issue are the participating rail carriers’ shared interline traffic.” Id. at 9. Furthermore, disagreeing with this Court, it held that a discussion or agreement “need not identify a specific shipper, shipments, or destination to qualify for exclusion.” Id. Discussions or agreements “about the formation of the participating railroads’ interline agreements” and “anticipated shared traffic” are not admissible. Id.

By contrast, “evidence of discussions or agreements about single-line traffic or about rail freight generally is not excludable.” Rail Freight VI, 34 F.4th at 9. When a discussion or agreement about interline movements contains references to other, non-excludable movements, that discussion or agreement may still be subject to exclusion so long as any reference to other movements “did not change the focus of the discussion or agreement away from the participating railroads’ shared, identifiable interline movements.” Id. at 10; see id. at 9 (“de minimis,” “brief and insignificant,” and “fleeting and inconsequential” references to non-interline movements “do[ ] not automatically disqualify evidence from exclusion”). The railroads have the burden of demonstrating “that the reference was either fleeting and inconsequential or appropriate to the advancement of the interline discussion itself.” Id. at 10.

The D.C. Circuit also held that a rail carrier's internal documents “need not convey the substance of a discussion or agreement concerning interline movements to qualify for exclusion under the statute.” Rail Freight VI 34 F.4th at 11-12. “[I]nternal documents prepared in advance of discussions or agreements with other carriers concerning shared interline movements” and internal documents that “reference[ ] only the existence of such a discussion or agreement with another carrier” are not admissible. Id. at 12 (emphasis omitted). Because “[a] single document may reference more than one discussion or agreement, ․ [t]he court must consider each discussion and agreement separately in determining whether it should be excluded under Section 10706.” Id. at 9. The Circuit therefore agreed with this Court that redactions may be employed “where segregable portions of documents contain protected evidence of discussions or agreements concerning interline movements,” and the court may employ redactions to admit non-protected portions of documents. Id. at 13. The Circuit explained why limiting instructions would not work in the context of Section 10706, where the court is to be the gatekeeper shielding the jury from evidence that must be excluded. See Rail Freight VI, 34 F.4th at 13-14.

The court of appeals remanded the case for this Court “to reconsider the evidence at issue consistent with [its] interpretation of Section 10706.” Rail Freight VI, 34 F.4th at 5.

II. DISCUSSION

Following the D.C. Circuit's decision, the parties conferred and submitted a list of exhibits that the defendant railroads argue should be excluded under Section 10706 for the purpose of resolving the summary judgment motions. See Joint Status Report [Dkt. No. 1094] at Ex. 1. Defendants listed twenty-five discussions reflected in what they believe are forty-three “key documents.” Dkt. No. 1094 at 5. Subsequently, the plaintiffs withdrew their reliance on five of those documents, “in effect resolving 3 discussions.” Id.; see also id. Exhibit 1.³ The Court has carefully reviewed each of the disputed exhibits and has considered each exhibit within the context of the broader discussions identified by the defendants. See id. The Court has also considered the parties’ written submissions about specific discussions, agreements, and documents. See Pls. Supp.; Defs. Supp. The Court has reached the following conclusions:

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In view of the foregoing discussion and analysis, it is hereby

ORDERED that the exhibits shall be excluded or admitted consistent with the above discussion, analysis, and conclusions; and it is

FURTHER ORDERED that the defendants – operating in good faith and consistent with the analysis set forth in this opinion – shall submit proposed redactions for the following exhibits on or before March 18, 2024: PX0610, PX0596, PX0237, PX0595, PX0120, PX0253, PX0242, PX0167, PX0474, PX0067, PX0085, Oxbow 24, PX0095, PX0612, and Oxbow 8. The plaintiffs shall file any objections to the defendants’ proposed redactions on or before April 1, 2024.

SO ORDERED.

FOOTNOTES

1.   All citations to docket entries, unless otherwise specified, will refer to the first above captioned matter, In re Rail Freight Fuel Surcharge Antitrust Litig., MDL No. 1869, Miscellaneous No. 07-0489.

2.   The documents considered in connection with the pending matter include: Defendants’ Response Brief to the Court's Order on Section 10706 (“Defs. Supp.”) [Dkt. No. 1104]; Supplemental Defendants’ Appendix in Support of Defendants’ Response Brief to the Court's Order on Section 10706 [Dkt. No. 1105]; Plaintiffs Supplemental Briefing Regarding Section 10706 In Response to the Court's Order of May 26, 2023 (“Pls. Supp.”) [Dkt. No. 1107]; Declaration of Sami H. Rashid in Support of Plaintiffs’ Supplemental Briefing Regarding Section 10706 in Response to the Court's Order of May 26, 2023 [Dkt. No. 1108]; Joint Status Report [1094]; Parties’ Notice of Joint Status Report, Stipulation, and Proposed Order in Advance of July 19, 2022 Status Conference [Dkt. No. 1085]; Defendant BNSF Railway Company's Motion for Summary Judgment [Dkt. No. 1030]; CSX Transportation, Inc.’s Motion for Summary Judgment [Dkt. No. 1031]; Defendant Union Pacific Railroad Company's Motion for Summary Judgment [Dkt. No. 1032]; Norfolk Southern Railway Company's Motion for Summary Judgment [Dkt. No. 1033]; Plaintiffs’ Memorandum in Opposition to Defendants’ Joint and Individual Motions for Summary Judgment [Dkt. No. 1050]; Declaration of Alicia Cobb in Support of Plaintiffs’ Opposition to Defendants’ Joint and Individual Motions for Summary Judgment [Dkt. No. 1051]; Defendants’ Motion to Exclude Interline-Related Communications from Consideration for Class Certification or Any Other Purpose Prohibited by 49 U.S.C. § 10706 [Dkt. No. 417]; Defendants’ Memorandum in Support of Motion to Exclude Interline-Related Communications from Consideration for Class Certification or Any Other Purpose Prohibited by 49 U.S.C. § 10706 [Dkt. No. 420]; Plaintiffs’ Memorandum in Opposition to Defendants’ Motion to Exclude Interline-Related Communications from Consideration for Class Certification or Any Other Purpose Prohibited by 49 U.S.C. § 10706 [Dkt. No. 438]; and Defendants’ Reply Memorandum in Support of Motion to Exclude Interline-Related Communications from Consideration for Class Certification or Any Other Purpose Prohibited by 49 U.S.C. § 10706 [Dkt. No. 444].

3.   There is some confusion on this point. The parties in some places reference eight documents that plaintiffs have withdrawn from consideration, see Dkt. No. 1094 at 14, while in other places identify only five such documents. See id. at 2, 5.

PAUL L. FRIEDMAN United States District Judge