Antitrust Law Daily Wrap Up, ANTITRUST—D.D.C.: Evidentiary statute applied to settle disputes in rail carrier antitrust litigation, (Mar 6, 2024)

By Justin Marcus Smith, J.D.

The trial court concluded that most of the disputed documents were fully inadmissible based on interline content, while others were partially admissible to the extent that inadmissible interline content was segregable.

On remand from interlocutory appeal to the U.S. Court of Appeals for the District of Columbia, 27 of 43 documents disputed in long-running multi-district rail carrier antitrust litigation were fully excludable under the appellate court’s interpretation of Section 10706, which excludes admissibility of discussions or agreements about interline movements from evidence in railroad antitrust suits. Most of the 27 documents were excludable because their focus was on interline. Only three of the 27 were excludable under Section 10706 to the extent that inclusion of non-interline content did not change the essential interline focus of the documents. Of the remaining 15 discrete, non-duplicative documents, the court ordered redaction of segregable content, or, in some instances, full exclusion of segregable sub-documents or attachments. The court noted that courts must consider each discussion and agreement separately to make Section 10706 excludability determinations and redaction decisions about segregable portions of documents. The court presented the considerable details of its admissibility decisions in tabular form in the body of its written opinion. The opinion on remand applies to all of the direct purchaser cases (In Re Rail Freight Fuel Surcharge Antitrust Litigation, March 4, 2024, Friedman, P.).

Background. The Rail Freight plaintiffs alleged that defendants BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company, conspired to price-fix their fuel surcharge programs as a way to impose supracompetitive total price increases on shipping customers. The Oxbow plaintiffs similarly alleged that Union Pacific Railroad Company and BNSF Railway Company conspired to fix prices at supracompetitive levels through a uniform fuel surcharge. The court said many of the allegations were identical.

At the summary judgment stage, the railroads sought to exclude evidence of interline-related communications or communications about shared traffic under Section 10706. That statute, as the D.C. Circuit explained, says that courts reviewing allegations about antitrust violations “may not” infer a conspiracy from evidence that rail carriers acted together about interline rates and “shall not” admit evidence of discussions or agreements about interline movement. Such evidence would not, by itself, indicate antitrust violation.

On February 19, 2021, the court issued an opinion and order interpreting Section 10706 and denying the railroads’ motions to exclude interline-related communications. After certifying interlocutory appeal (see Antitrust Law Daily Wrap Up, Jun. 16, 2021), United States Court of Appeals for the D.C. Circuit affirmed in part and reversed in part. See Rail Freight VI. The D.C. Circuit explained that a discussion or agreement “concerns” an interline movement only if the defendants show that movements at issue are shared interline traffic, but defendants need not identify a specific shipper, shipments, or destination to qualify for the exclusion.

In contrast, evidence of discussions or agreements about single-line traffic are generally not excludable. However, they might be excludable if sufficiently involved with excludable interline discussion to remain focused on interline movement. In that case, the railroads would bear the burden of demonstrating that the non-excludable, single-line traffic discussion, was fleeting or inconsequential to advancement of the excludable interline discussion. The D.C. Circuit also held that a rail carrier’s internal documents need not convey the substance of interline discussion or agreement to qualify for exclusion. To the extent a single document can reference multiple discussions or agreements, courts must consider each discussion and agreement separately to make Section 10706 excludability determinations and redaction decisions about segregable portions of documents. The D.C. Circuit explained that limiting instructions would not work in this context to shield the jury from excludable evidence, and remanded.

On remand, and to advance resolution of pending summary judgment motions, the parties conferred and submitted a list of 43 “key documents” referencing twenty-five discussions on the question of Section 10706 excludability. The plaintiffs later withdrew reliance on some documents, effectively resolving three discussions, but there was some confusion about whether the plaintiffs withdrew five or eight documents. The last 7-plus pages of the court’s written opinion displayed its Section 10706 exclusion decisions in tabular form.

Excluded documents. The court fully excluded a total of 27 documents referring to 13 unique discussions. Four of these documents were duplicates. As to document type, 25 documents consisted of correspondence, four of which were internal to a company; one document memorialized a meeting; and one document memorialized a list of joint projects. As to document content, the court excluded 24 on the ground that the focus was on interline traffic.

Essential focus. Of the 27 total fully excluded documents, the court fully excluded only three on the ground that non-excludable, non-interline traffic content did not change the essential interline focus of the document. The document that memorialized a meeting was one of these. The court further described four of the correspondence documents, all focused on interline, as being about fuel surcharges. A fourth was about “rates.” The document that listed joint projects focused on interline.

Partial exclusions. The court otherwise ordered the defendants to partly exclude 16 other documents, one of which was a duplicate, about 12 unique discussions. Most often, it ordered redactions for 15 distinct documents, consistent with the court’s exclusion analysis, before March 18, 2024. In some instances, the court ordered exclusion of segregable sub-documents or attachments. The stated reasons for these partial exclusions are varied and detailed. They are best read directly from the opinion.

The case is No. 07-0489 (PLF).

Attorneys: Alicia Cobb (Quinn Emanuel Urquhart & Sullivan, LLP) and Arthur Nash Bailey, Jr. (Hausfeld LLP) for Oxbow Carbon & Minerals LLC.

Companies: Oxbow Carbon & Minerals LLC; Union Pacific Railroad Co.

Cases: Antitrust DistrictofColumbiaNews