ADM Alleges Antitrust Violations by CSX, Other Railroads
In addition to Paul Ratchford’s lawsuit claiming that he was forced out of his job as president of The Greenbrier, CSX Transportation, Inc. is also defending an action filed on March 25, 2008 by Archer Daniels Midland Company, which alleges that CSX and four other railroads violated federal and state antitrust laws. The other defendants are Union Pacific Railroad Company, BNSF Railway Company, Norfolk Southern Railway Company, and Kansas City Southern Railway Company. Archer-Daniels-Midland Company v. Union Pacific Railroad Company, et al., Civil Action No. 08-CV-00857 (D.Minn.).
Here is the complaint, which was filed in United States District Court in Minnesota, and which alleges that the railroads engaged in “a conspiracy to fix prices of rail fuel surcharges” in violation of the Sherman Act, the Clayton Act, and Minnesota antitrust law, and “imposed upon ADM rail fuel surcharges that constitute unreasonable ‘practices’” because they did not correspond with actual fuel costs and were in excess of actual fuel costs.
ADM is not alleging that the rail fuel surcharges are illegal; according to the complaint, the surcharges are "itemized charges for transportation services assessed by railroads to shippers -- including ADM -- that are designated for the sole purpose of recovering unanticipated costs associated with sharp increases in fuel prices." Rather, ADM's allegation is that the railroads improperly conspired to fix the rail fuel surcharge prices and agreed not to compete against each other with their prices:
Defendants used the rail fuel surcharges as a means of extracting profit, rather than for their designated purpose of recovering unexpected costs from fuel... ADM has paid over a quarter of a billion dollars in rail fuel surcharges to Defendants since 2003.
CSX has denied that its fuel surcharge practices violate any laws or regulations. Todd Sullivan wrote about the lawsuit at the stock investing blog, Seeking Alpha, and suggests that ADM's lawsuit may serve as a model for smaller shippers who are affected by high fuel costs more acutely than large corporations like ADM. The Sherman and Clayton Acts provide for treble damages if a plaintiff prevails under those statutes.
