Ruling on price-fixing lawsuit against railroads thrown out

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Posted: Friday, August 9, 2013 12:00 am

A ruling that last year turned a price-fixing lawsuit against four major U.S. railroads into a class action has been thrown out.

On Friday, a three-judge panel of the U.S. Court of Appeals in Washington reversed a decision by a lower-court judge who had certified a class of about 30,000 shippers in a case against Omaha-based Union Pacific, CSX, Norfolk Southern and BNSF Railway, which is owned by Omaha-based Berkshire Hathaway.

The railroads had faced potential damages of at least $10 billion. In writing for the panel, Circuit Judge Janice Rogers Brown said the lower court underestimated the potential harm to railroads; the method for calculating prospective damages was flawed; and because of “the pressure to settle posed by the threat to the defendants' market capitalization, and the identified defect in the damages model, we grant the defendants' interlocutory appeal."

Stephen R. Neuwirth of Quinn, Emanuel, Urquhart & Sullivan, co-lead counsel for the plaintiffs, said in a statement that while the outcome is not preferred, his team is "gratified that the case was remanded."

"We are confident that we will be able to demonstrate that the damages model in fact satisfies the highest standards that have been set by the courts, and that ultimately the case will move forward as a class action," he said.

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