On August 9, 2012, the U.S. District Court for the District of Columbia held a status conference (hearing) in In re Rail Freight Fuel Surcharge Antitrust Litigation. The hearing was set to discuss the parties' joint report on scheduling, which contained widely divergent time periods for setting the schedule for the remainder of the case. At this stage, no date has been established for sending notice to the class members.

The court opened the hearing with Judge Friedman providing his preliminary thoughts on various issues, including:

  • If the Court of Appeals were to take the railroads' appeal of Judge Friedman's decision to certify the plaintiff class, strong grounds would exist to issue a stay of the proceedings on the merits in the trial court.
  • Substantial expert discovery remains to be completed.
  • The issue of statutory antitrust immunity for interline communications, or "Section 10706" immunity, should probably be decided at the summary judgment stage.
  • Challenges to the admissibility of the parties' experts' testimony should be heard at the same time as summary judgment.
  • Motions for access to the unredacted portions of the record filed by plaintiff class members who are not designated as the named plaintiffs are not yet ripe. With respect to the issue of public access to the record, the judge reminded the parties on several occasions that there is a court order requiring the parties to always submit a redacted version of the filing for the public, and he is concerned that this order has not been followed rigorously. He ordered the parties to go back and make sure they have complied with the order and the public record is complete. Judge Friedman acknowledged that this still will not address the issue of whether the parties are over-designating information as "confidential."

The remainder of the hearing provided insight into the issues that likely will be addressed before notice is sent to the class, including:

  • The railroads want a partial stay of the trial court proceedings pending resolution of any appeal of the class certification decision. The railroads assert that the only issue that should be decided during the stay is how the law exempting the railroads' communications concerning interline movements (Section 10706) limits the evidence that can be considered at the summary judgment and trial stages of the case.
  • The railroads requested an evidentiary hearing on Section 10706 to present to the court live testimony concerning how interline service works, including how prices are set, how a railroad bills a shipper, how rates are divided, how routing and switching works, and to promote understanding of all that railroads are required to communicate in order to interline traffic.
  • The railroads assert that interline traffic covers 30 to 40 percent of all traffic, and Congress clearly wanted to encourage interline communications by immunizing those conversations from being used against the railroads in an antitrust case. They also maintain that the Surface Transportation Board has encouraged them to work together and form alliances. Finally, the railroads assert that this threat has clouded how they can do business under the national transportation policy of the last 30 years. Therefore, they argue, it is important for the court to take up this issue before it considers the merits of the plaintiffs' claims at summary judgment and trial.
  • The plaintiffs contend that there is no need to separate the Section 10706 issue from resolution on the merits. They argued that this case has been pending too long already and justice is being delayed. They expressed concern that some key railroad witnesses have moved on or have illnesses that could impact the case.
  • The plaintiffs believe that this case is almost ready for trial and that the issues of expert challenges, Section 10706 and summary judgment should be combined and decided at the same time.
  • In addition, class counsel believes that any stay could have the perverse result of the class being stayed but allowing other parties to bring their own actions and move ahead of the class case while any appeal is resolved. The plaintiffs' counsel is troubled by how this would play out, given the time and resources already invested by counsel and the court, fearing more time would enable certain parties to potentially opt out or bring their own cases outside of the class, inconsistent with class action rules.

At the end of the hearing, the court acknowledged that the parties' scheduling requests are widely divergent and pushed to schedule dates for the next steps in the case. The court ordered the parties to provide some scheduling guidelines with specific dates based on different scenarios concerning resolution of the stay issue. Judge Friedman asked the parties to share their scheduling proposals with each other and file them with the court by September 6, along with a draft of a notice that would be sent to plaintiff class members.

In response to the plaintiffs' request that the court move expeditiously on briefing the stay issue, the court set the following schedule for the next steps in the case and issued a follow-up scheduling order on August 10 confirming these dates:

  • August 21 - Railroads file their motion to stay the proceeding.
  • August 31 - Plaintiffs file their opposition to the motion to stay.
  • September 6 - Railroads file their reply to the plaintiffs' opposition to the motion to stay.
  • September 6 - If any other motion for access is to be filed and the party desires that motion to be considered at the September 13 hearing, it must be filed in time for the motion to be fully briefed by this date.
  • September 6 - The plaintiffs and defendants shall meet and confer and file with the Court (i) a joint report concerning class notice details and (ii) a comparative proposed schedule or alternative schedules.
  • September 13 - Hearing on stay issue and motion for access.

This case continues to have far-reaching implications for rail shippers. Any company that shipped large volumes of goods by rail and paid fuel surcharges directly to one or more of the defendant railroads in the class period (July 1, 2003 to December 31, 2008) has many facts and legal issues to evaluate.