Rail Freight Fuel Surcharge Antitrust Litigation (No. Ii)- Mdl No. 2925

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

IN RE RAIL FREIGHT FUEL SURCHARGE MDL Dkt. No. 1869

ANTITRUST LITIGATION (NO. I) Miscellaneous No. 07-489

(MDL I)

Judge Beryl A. Howell

IN RE RAIL FREIGHT FUEL SURCHARGE

ANTITRUST LITIGATION (NO. II) MDL Dkt. No. 2925

Miscellaneous No. 20-008

(MDL II)

Judge Beryl A. Howell

OXBOW CARBON & MINERALS LLC, et

al.,

Civil Action No. 11-1049

Plaintiffs, Judge Beryl A. Howell

v. FILED UNDER SEAL PENDING COUNSEL

REVIEW FOR

UNION PACIFIC RAILROAD CO., et al., REDACTION OF CONFIDENTIAL

BUSINESS INFORMATION

Defendants. UNSEALED FOLLOWING COUNSEL

REVIEW (NO REDACTIONS)

MEMORANDUM OPINION

This antitrust litigation challenges fuel surcharges imposed by the four largest freight

railroad companies in the United States as they responded to volatile oil prices in the early

2000s. Plaintiffs, hundreds of customers shipping freight on these railroads, brought antitrust

claims against BNSF Railway Co., CSX Transportation, Inc., Norfolk Southern Railway Co.,

and Union Pacific Railroad Co. (“defendants”), alleging that they conspired to impose

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coordinated, aggressive, and universal fuel surcharges (“FSCs”), in violation of section 1 of the

Sherman Act, 15 U.S.C. § 1. See, e.g., Direct Purchaser Pls.’ Consolidated Am. Class Action

Compl., In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL I”), MDL No. 1869, 7-mc-

489, ECF No. 91-1; Indirect Purchaser Pls.’ Consolidated Am. Compl., id., ECF No. 93; Am.

Compl., In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL II”), MDL No. 2925, 20-mc-

008, ECF No. 5; Compl., Oxbow Carbon & Minerals, LLC v. Union Pac. R.R. Co. (“Oxbow”),

11-cv-1049, ECF No. 1.

Some of those claims have been pending since as early as 2007. See Transfer Order,

MDL I, ECF No. 1 (Nov. 6, 2007, U.S. Judicial Panel on Multi-District Litigation (“MDL

Panel”) transferring seven cases from various districts for consolidated pretrial proceedings, in

MDL I, in the District Court for the District of Columbia). After passing multiple procedural

steps—including the grant and then denial of class certification, prompting two trips to the D.C.

Circuit, several intervening motions and a third trip to the D.C. Circuit, actions by the MDL

Panel to create MDL II and subsequently to transfer a total of 114 cases for consolidated pretrial

proceedings in MDL I and MDL II before this Court, and several years of discovery in each of

these two related MDLs—briefing on dispositive and related motions were completed at the end

of 2024, with defendants’ pending motions for summary judgment addressed at a lengthy hearing

held on June 18, 2025. See Defs.’ Common Mem. in Supp. of Defs.’ Joint & Individ. Mots. for

Summ. J. (“Defs.’ Mem.”), MDL I, ECF No. 1163 (sealed); MDL II, ECF No. 982 (sealed);

Oxbow, ECF No. 303 (sealed). For the reasons explained below, defendants’ motions for

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summary judgment are granted, and the related pending motions from both plaintiffs and

defendants are denied as moot. 1

* * *

To aid in review of this Memorandum Opinion, given the breadth and complexity of the

alleged antitrust conspiracy and the length of this decision, an overview is provided. Part I

provides the relevant factual and procedural background in this case, including an overview of

the freight rail industry and FSCs (section A), the timing and terms of defendants’ FSCs and

pricing behavior before and during the alleged conspiracy period (section B), and the extensive

procedural history of this case (section C).

Part II provides the legal standard governing defendants’ motions for summary

judgment on the Section I Sherman Act claim under Federal Rule of Civil Procedure 56.

Part III addresses the merits and disposition of the summary judgment motions. In sum,

plaintiffs theorize that the four defendants conspired, starting in 2003, to increase their profits by

raising FSCs and imposing them universally across all of their unregulated traffic, using the

prevailing high fuel costs in the early 2000s as an excuse. Section A explains in detail the legal

framework governing consideration of such an alleged antitrust conspiracy in the context of an

oligopolistic market, with only a few competitors, and what plaintiffs must prove through either

direct or circumstantial evidence. Section B concludes, after noting plaintiffs’ admitted lack of

direct proof positive of the alleged conspiracy, that they must rely on circumstantial evidence to

prove the alleged conspiracy, with evidence demonstrating parallel conduct and further “plus”

factors that tend to disprove the possibility of independent action. Section C considers

1

With a few exceptions, the parties filed identical briefs across all three dockets in MDL I, MDL II and

Oxbow. Unless otherwise specified, ECF numbers will refer to the numbers in the MDL I docket, MDL No. 1869,

7-mc-489.

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plaintiffs’ attempt to demonstrate that defendants acted in a parallel way to raise FSCs and

expand application of FSCs to shippers for carload and coal traffic and concludes that plaintiffs’

evidence does not so demonstrate, because defendants’ FSC formulas differed more during than

prior to the alleged conspiracy period (subsection 1), the timing of defendants’ changes to their

FSCs was not aligned (subsection 2), and defendants did not expand their application of FSCs in

a uniform way on the same timeline (subsection 3). Given that plaintiffs cannot demonstrate

that defendants acted in a parallel fashion, their circumstantial evidence is insufficient to allow

for an inference of conspiracy, and defendants are entitled to summary judgment.

Sections D and E nonetheless go on to consider, if plaintiffs were able to show that

defendants’ behavior was sufficiently parallel, whether plaintiffs’ evidence could tend to exclude

the alternative inference of independent conduct and to conclude that plaintiffs would still fail to

survive summary judgment. Section D, in particular, considers the evidence defendants have

advanced to support an inference of independent action, demonstrating that they had a rational

business motivation for their imposition of FSCs during the alleged conspiracy period

(subsection 1) and that their decisions were the result of independent, internal decision-making

(subsection 2). Section E further considers plaintiffs’ evidence to exclude the inference of

independent conduct, examining plaintiffs’ arguments regarding defendants’ purported

pretextual justifications for the imposition of FSCs (subsection 1), defendants’ common motive

to conspire (subsection 2), defendants’ opportunities to conspire (i.e., meetings where

defendants purportedly discussed FSCs) (subsection 3), defendants’ sharing of information

related to FSCs (subsection 4), defendants’ related actions through their trade industry

association allegedly to facilitate the conspiracy (subsection 5), defendants’ changes in business

practices during the alleged conspiracy period (subsection 6), defendants’ perceived acts against

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their self-interest (subsection 7), the oligopolistic nature of the industry as conducive to

collusion (subsection 8), and defendants’ actions to adjust their base rates near the end of the

conspiracy period to bake-in the higher prices that FSCs produced (subsection 9). Subsection

10 puts all these pieces of evidence together to evaluate holistically plaintiffs’ showing and

concludes that the evidence fails to tend to exclude an inference of independent but consciously

parallel conduct regarding carload and coal traffic and thus cannot sustain a claim for a Sherman

Act conspiracy.

Section F evaluates plaintiffs’ claim that defendants also conspired with respect to their

intermodal traffic. Subsection 1 explains why intermodal traffic is evaluated separately, looking

to the unique qualities and pricing formulas applied to intermodal customers. Subsection 2

concludes that defendants’ conduct was not parallel, and subsection 3 explains that even if

defendants’ approach to intermodal FSCs were parallel, plaintiffs’ evidence does not tend to

exclude an inference of independent, though consciously parallel action. Plaintiffs thus fail in

demonstrating any genuine dispute of fact on a claim of conspiracy warranting proceeding to a

jury.

Section G explains why that conclusion obviates the need to consider the parties’

arguments about damages and other pending motions.

Part IV provides a brief conclusion summarizing the disposition of defendants’ motions

for summary judgment.

I. BACKGROUND

The factual background and procedural history relevant to the pending motions are

described below.

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A. Background on Railroad Industry and Fuel Surcharges

The four defendants in this case control most of this country’s freight railroads, operating

as an oligopoly. See Pls.’ Counterstatement of Facts ¶ 1 (“Pls.’ COF”), ECF No. 1198-2

(sealed); Defs.’ Mem. CSX Transportation, Inc. (“CSX”) and Norfolk Southern Railway Co.

(“NS”) operate primarily in the East, while Union Pacific Railroad Co. (“UP”) and BNSF

Railway Co. (“BNSF”) operate primarily in the West. See Defs.’ Statement of Undisputed

Material Facts (“Defs.’ SUMF”) ¶ 5.1, ECF No. 1163-1; DA12504 at 12508, Defs.’ App’x Vol.

24, ECF No. 1172-24 (sealed) (Sep. 17, 2008, presentation on National Rail Freight

Infrastructure Capacity and Investment Study to the Railroad Energy Transportation Advisory

Committee); Defs.’ Mem. at 6. 2 Together, defendants account for around 90% of the freight

railroad industry revenue. See In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL I Class

Cert. II”), 725 F.3d 244, 247 (D.C. Cir. 2013); Defs.’ Mem. at 5-6; PX583 at 19, Pls.’ App’x

Vol. 9B, ECF No. 1221-1 (sealed) (Oct. 2006, GAO Report on Freight Railroads).

Most of the traffic on these railroads is referred to as “carload traffic,” Defs.’ Mem. at 4-

5, with the bulk movement of coal at times referred to separately as “coal traffic,” id.; see Pls.’

Opp’n to Defs.’ Mot. for Summ. J. (“Pls.’ Opp’n”) at 115, ECF No. 1218 (sealed). The industry

also refers separately to “intermodal traffic,” which is containerized freight requiring more than

one transportation mode to arrive at its destination (e.g., railroad to truck). See Defs.’ Mem. at

2

“DA” citations refer to materials in defendants’ appendices filed in support of their joint and individual

motions for summary judgment, see ECF No. 1172, and the supplemental appendices filed in support of their

replies, ECF No. 1245. Pin cites refer to the DA page number at the bottom center of each page. The exhibit

locations are indicated by the appendix volume number (which is also identified via ECF number for each volume’s

first appearance).

“PX” citations refer to materials in plaintiffs’ appendices filed in support of their opposition, see ECF Nos.

1219-25. Pin cites refer either to the last three digits of the Bates number of the cited page (if preceded by an

apostrophe) or otherwise to the page number of clearly paginated reports, depositions, or pleadings. The exhibit

locations are likewise indicated by the appendix volume number (again identified via ECF number for each

volume’s first appearance).

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xi, 4-5; Defs.’ SUMF ¶ 36; Pls.’ Objections and Responses to Defs.’ SUMF (“Pls.’ Objs. &

Resp.”) ¶ 36, ECF No. 1198-1 (sealed) (not contesting that fact). Another way to categorize

railroad traffic is distinguishing rate-regulated traffic, which is subject to rules enacted and

enforced by the Surface Transportation Board (“STB”), and private contract or rate-unregulated

traffic. See Defs.’ Mem. at 11. This dispute only involves the latter, rate-unregulated traffic. Id.

Given the limited number of railroads operating across the United States, freight railroad

companies must sometimes engage in joint ventures, known as “interline partnerships.” See

Defs.’ SUMF ¶ 5; Pls.’ COF ¶ 36; Defs.’ Mem. at 7. “[I]nterline movements are shipments

carried along two or more railroads’ tracks under a common arrangement,” in contrast to “single-

line shipments [which] are moved by one carrier on its own tracks.” In re Rail Freight Fuel

Surcharge Antitrust Litig. (“MDL I Section 10706 Decision II”), 34 F.4th 1, 6 (D.C. Cir. 2022).

Interline shipments, by their nature, require competing railroads to “coordinat[e] . . . over

logistics and shipping rates.” Id. (quoting MDL I Class Cert. II, 725 F.3d at 247 n.1); Defs.’

SUMF ¶ 5.6; Pls.’ Objs. & Resp. ¶ 5 at 26 (not contesting the need to sometimes coordinate over

interline rates while maintaining that defendants are still horizontal competitors); Pls.’ COF ¶ 37

(recognizing situations where limited coordination may occur for interline traffic). Such

interline arrangements are encouraged because they promote efficiency while avoiding the need

for further railroad mergers in an already concentrated industry. See 49 C.F.R. § 1180.1(c) (in

policy statement for mergers between Class I railroads cautioning against “further consolidation

of the few remaining Class I carriers” as “likely to result in a number of anticompetitive effects”

and noting “that other private-sector initiatives, such as joint marketing agreements and interline

partnerships, can produce many of the efficiencies of a merger while risking less potential harm

to the public”). To facilitate such interline arrangements, discussions to coordinate interline

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shipments are statutorily protected: Under 49 U.S.C. § 10706(a)(3)(B)(ii), Congress barred the

use of discussions about interline shipments to infer an antitrust conspiracy and precluded their

admission in proceedings where antitrust violations are alleged. See MDL I Section 10706

Decision II, 34 F.4th at 6.

Operating fuel-intensive enterprises, railroads are sensitive to fluctuations in fuel pricing.

Fuel costs generally increased from 2000 to 2008, after a sharp increase in 1999. Defs.’ SUMF

¶¶ 3.1-3.2; Pls.’ Objs. & Resp. ¶ 3 (admitting that defendants’ graph accurately reflects fuel

prices during the period); Defs.’ SUMF ¶ 2 (describing the percentage increase in fuel costs out

of total expenses for railroads during the 2000s); Pls.’ Objs. & Resp. ¶ 2 at 10 (not disputing the

self-reported statistics but disputing that the increase was substantial or growing throughout the

conspiracy period); Defs.’ Mem. at 32 (describing massive increases in price in 1999 and early

2000 and increases continuing through early 2003). In addition to steep and volatile fuel costs,

railroads also faced declining rates in the early 2000s such that inflation-adjusted railroad rates

declined every year from 1985 to 2004 (with a single year exception). See PX593 at 1, Pls.’

App’x Vol. 10A, ECF No. 1202-3 (sealed) (Jan. 16, 2009, STB Study of Railroad Rates: 1985-

2007).

In response to the fluctuating and increasing fuel prices, by the early 2000s, railroads

commonly keyed their prices to indices that reflected fuel costs, using price escalators like the

Rail Cost Adjustment Factor (“RCAF”) or imposing “fuel surcharges” (“FSCs”), which were

variable charges on top of railroads’ base rates dependent on the contemporaneous price of fuel.

See Defs.’ Mem. at xi; MDL I Section 10706 Decision II, 34 F.4th at 6-7. FSCs were also used

by other transportation providers, including non-defendant railroads and trucking companies,

around this period to recover increasing fuel costs. See Defs.’ SUMF ¶ 1; Pls.’ Objs. & Resp. ¶ 1

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at 3 (agreeing that other transportation providers used FSCs); DA11527, Defs.’ App’x Vol. 23,

ECF No. 1172-23 (sealed) (July 2009, Department of Transportation report, describing various

surcharge and price adjustment mechanisms used to control for fuel price volatility); DA4034 at

4034, 4040, Defs.’ App’x Vol. 9, ECF No. 1172-9 (sealed) (Sep. 17, 2002, internal BNSF email

from Thomas Hund to David Burr et al., forwarding Bear Sterns analysis mentioning trucking

companies’ FSCs); DA4289 at 4300, Defs.’ App’x Vol. 11, ECF No. 1172-11 (sealed) (Apr. 3,

2003, internal BNSF email from Sam Kyei, BNSF Chief Economist, to Gary Shoop et al.,

attaching presentation on BNSF Fuel Surcharges Cost Recovery Improvements including table

of FSC methodologies for trucking companies); e.g., DA6654, Defs.’ App’x Vol. 16, ECF No.

1172-16 (sealed) (Sep. 18, 2002, letter from Canadian National (“CN”), a non-defendant

railroad, about FSCs); DA6650 at 6652, id. (June 12, 2001, copy of contract attachments

describing FSCs at Canadian Pacific Railway (“CPR”), a non-defendant railroad); infra Part

III.D.1.

FSCs may be either “rate-based,” which impose a surcharge “as a function of the base

rate” once “fuel prices exceed [a] trigger price,” or “mileage-based,” which “raise total rates in

proportion to shipping distances.” MDL I Section 10706 Decision II, 34 F.4th at 6-7. In

application, as defendants explain, a rate-based FSC may use a “formula” that “might specify a

2% surcharge when oil is $29/bbl [barrel], thus adding $20 to the price of a shipment with a base

rate of $1,000 per carload.” Defs.’ Mem. at 10. The oil price would be calculated according to

an average or minimum of oil prices over a certain time period according to a widely accepted

index, either the WTI (West Texas Intermediate crude oil price) or the HDF (U.S. National

Average On-Highway Diesel Fuel price, published by the U.S. Department of Energy). See id. at

x-xi. For example, the formula might specify that an oil price would be considered $29/bbl if the

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HDF measured the price of oil at or above $29/bbl every day for the past 30 days. By the mid-

2000s, “fuel surcharge provisions became ubiquitous, governing the vast majority of the

defendants’ shipments.” MDL I Class Cert. II, 725 F.3d at 248; see infra Parts I.B, III.C.3.

In 2007, the practice came under scrutiny, however, by the STB. See MDL I Class Cert.

II, 725 F.3d at 248. The STB issued a decision that prohibited FSCs for rate-regulated traffic,

citing concern about the “disconnect between the purported rationale for the fuel surcharges—

fuel cost recovery—and the formula’s dependence on base rates, which need not reflect the

marginal fuel costs of a particular shipment.” Id. While the STB decision did not affect rates for

unregulated freight outside of the STB’s regulatory authority, this decision triggered questioning

by shippers of such unregulated traffic about the propriety of FSCs in their contracts too.

This case arises out of such questioning and alleges conspiratorial price-fixing in

violation of the Sherman Act, section 1, between March 2003 and December 2008. In re Freight

Fuel Surcharge Antitrust Litig. (“MDL I MTD Order (Direct Purchasers)”), 587 F. Supp. 2d 27,

30 (D.D.C. 2008); Pls.’ Opp’n at 1. 3

B. Factual Summary

The following facts are undisputed by the parties. 4

3

The parties dispute the end date of the alleged conspiracy. See Defs.’ Mem. at 99-106 (arguing that, at a

minimum, no triable issue exists for a conspiracy beyond January 2007); Pls.’ Opp’n at 140-53 (arguing that the

conspiracy extended beyond January 2007 to at least December 2008). As explained infra Part III.G, the precise end

date of the conspiracy is immaterial because plaintiffs have not put forth evidence allowing a plausible inference of

conspiracy. The period from March 2003 to December 2008 will be referred to as the “alleged conspiracy period.”

As explained infra Part I.C.1, this Court determined in MDL II that claims predicated on alleged acts occurring after

December 2008 were barred by the statute of limitations, which was tolled only as to the claims initially filed in

MDL I during the pendency of the class certification issue. See MDL II MTD Order on Time-Barred Claims, No.

20-mc-8 (BAH), 2020 WL 5016922, at *29 (D.D.C. Aug. 25, 2020).

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The identification of undisputed material facts has been unnecessarily difficult in this case. Between

defendants’ Statement of Undisputed Material Facts, ECF No. 1163-1, plaintiffs’ Objections and Responses, ECF

No. 1198-1, plaintiffs’ Counterstatement of Facts, ECF No. 1198-2, and defendants’ Rebuttal, ECF No. 1242, over

660 pages have been submitted on the stated facts alone—550 of these from plaintiffs. Both sides accuse the other

of failing to comply with local rules. See Pls.’ Objs. & Resp. at 1-2; Defs.’ Rebuttal at 1-2. Plaintiffs insist that

defendants submitted legal conclusions, inferences, and immaterial matters as “facts,” Pls.’ Objs. & Resp. at 1-2,

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1. Carload Traffic FSCs

In the early 2000s, prior to the alleged start of the conspiracy in 2003, all four defendants

independently and unilaterally adopted rate-based FSCs for their carload traffic in response to

unpredictable and rapidly rising fuel prices. See Pls.’ COF ¶¶ 22-32, 46; id. Part II.C (titled,

“Prior to 2003, the Defendants did Not Coordinate to Impose Uniform Fuel Surcharges”); Defs.’

SUMF ¶¶ 3, 6; Pls.’ Objs. & Resp. ¶¶ 3, 6 (agreeing with these points); see also In re Rail

Freight Fuel Surcharge Antitrust Litig. (“MDL I Class Cert. III”), 292 F. Supp. 3d 14, 122-23

(D.D.C. 2017). The formulas used by three of the defendants to calculate their FSCs were

largely identical, while BNSF’s formula was different.

a) FSCs Prior to 2003 When Alleged Conspiracy Began

requiring a response to defendants’ facts consisting of broad, narrative counterarguments, without indicating

whether each supporting fact listed by defendants is admitted or denied, see generally Pls.’ Objs. & Resp.

Defendants critique plaintiffs for not providing a concise counterstatement of facts and instead dumping hundreds of

pages of argument on the Court, Defs.’ Rebuttal 1-11; see generally Pls.’ COF, with the result that defendants did

not respond seriatim to the plaintiffs’ counterstatement of facts, see generally Defs.’ Rebuttal.

Both Federal Rule of Civil Procedure 56(e)(2) and D.D.C. Local Civil Rule 7(h) permit a district court to

assume as undisputed any facts that are identified by the moving party in its statement of material facts but are not

properly addressed or controverted by the opposing party. See FED. R. CIV. P. 56(e)(2) (providing that “[i]f a party

fails to properly address another party’s assertion of fact . . . the court may . . . consider the fact undisputed for

purposes of the motion [for summary judgment]”); D.D.C. LCvR 7(h)(1) (“In determining a motion for summary

judgment, the Court may assume that facts identified by the moving party in its statement of material facts are

admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the

motion.”); see also Grimes v. District of Columbia, 794 F.3d 83, 96 (D.C. Cir. 2015) (Griffith, J., concurring)

(noting that the 2010 amendment to Rule 56 “reflects the ‘deemed admitted’ provisions in many local rules”

(quoting FED. R. CIV. P. 56 advisory committee’s note (2010)). The D.C. Circuit “has long upheld strict compliance

with the district court’s local rules on summary judgment when invoked by the district court,” Burke v. Gould, 286

F.3d 513, 517 (D.C. Cir. 2002), recognizing that such compliance “is justified both by the nature of summary

judgment and by the rule’s purposes,” which include “isolat[ing] the facts that the parties assert are material,

distinguish[ing] disputed from undisputed facts, and identif[ying] the pertinent parts of the record,” Gardels v. CIA,

637 F.2d 770, 773 (D.C. Cir. 1980).

Regardless of whether either side precisely complied with the local rules or would have done a better job if

directed to re-do their respective statements and counterstatements of material facts, defendants are correct that

plaintiffs’ unwieldy factual submissions appear manufactured to generate a genuine dispute of fact. See Defs.’

Rebuttal at 2. Plaintiffs’ Objections and Responses make more difficult the task of determining those facts on which

the parties agree, and their Counterstatement of Facts is a morass of briefing that goes far beyond identification of

facts. In an effort to be fair to both sides’ factual contentions while preserving some judicial efficiency, the

following approach has been taken. First, given that plaintiffs’ Objections and Responses, ECF No. 1198-1, were so

lengthy, imprecise, and unyielding, any of defendants’ facts not clearly contested by plaintiffs therein will be

deemed admitted. Second, because plaintiffs’ Counterstatement of Facts, ECF No. 1198-2 was so lengthy,

repetitive, and argumentative, defendants’ refusal to respond piecemeal was not unreasonable, so only facts

advanced by plaintiffs that are consistent with defendants’ statement of facts will be deemed undisputed.

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BNSF adopted its first FSC in the 1990s. Defs.’ SUMF ¶ 11.1. In 2000, BNSF adopted a

formula similar to that used by the other defendants at the time: a 2.0% surcharge triggered at a

price of $28/bbl and increasing by 1.0% for every $2.50 increase in price. Pls.’ COF ¶ 25; Defs.’

Mem. at 33. The trigger price was determined by the monthly average price of fuel on the WTI

index. Defs.’ SUMF ¶ 11.3; Pls.’ Objs. & Resp. ¶ 11 (not disputing this specific fact); Pls.’ COF

¶¶ 25, 68. BNSF modified its formula again, effective July 1, 2001, to impose a surcharge that

moved away from that used by the other defendants’: 1.0% at a $1.30/gal trigger price with 0.5%

surcharge increase for every $0.05/gal increase in price. Defs.’ Mem. at 33; Pls.’ Objs. & Resp.

¶ 11 (not disputing these figures); Pls.’ COF ¶ 26. The new formula calculated fuel price based

on an average of the last month’s prices on the HDF index instead of the WTI index. Pls.’ COF

¶ 69; Defs.’ Mem. at 33; Defs.’ SUMF ¶ 11.5.

In the period of 2000 through 2002, the other three defendants used the same formula,

which was virtually identical to the one BNSF also used until its July 2001 modification: a 2.0%

surcharge applicable if the WTI index was above $28/bbl for the past thirty consecutive days and

increasing by 2% for every $5/bbl increase in price. NS adopted that FSC in June 2000, see

Defs.’ Mem. at 33; Pls.’ COF ¶ 28; Defs.’ SUMF ¶¶ 23-24; Pls.’ Objs. & Resp. ¶ 23 (not

disputing the date or formula), CSX on October 25, 2000, see Defs.’ Mem. at 33; Pls.’ COF ¶ 23;

Defs.’ SUMF ¶¶ 17.3-17.4, and UP on December 1, 2002, see Defs.’ Mem. at 33; Pls.’ COF

¶ 27; Defs.’ SUMF ¶¶ 30.2, 31.1; Pls. Objs. & Resp. ¶ 31 at 152 (not disputing the accuracy of

the formula itself).

During these initial years, FSCs were not universally imposed on all unregulated freight

or collected from some such freight where they were imposed. For instance, in February 2003,

39% of CSX’s carload traffic revenue was covered by FSCs. Defs.’ SUMF ¶ 19.4; Pls.’ Objs. &

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Resp. ¶ 19 at 101 (contesting that “CSX successfully imposed” (emphasis added) and collected

FSCs but not contesting that they were imposed on 39% of revenue). Some plaintiffs in this

litigation were nevertheless subject to contracts with rate-based FSCs even during this period

prior to the alleged conspiracy. Defs.’ SUMF ¶¶ 7, 47.7; Pls.’ Objs. & Resp. ¶ 7 at 31, ¶ 47 at

239 (not disputing those points).

b) FSCs During Alleged Conspiracy Beginning in 2003

As fuel prices continued to rise in 2002 and early 2003, defendants reconsidered their

FSC formulas. See Defs.’ SUMF ¶ 3 (demonstrating fuel costs); Pls.’ Objs. & Resp. ¶ 3 (not

contesting statistics or graph of fuel prices presented by defendants); infra Part III.D.2. Each

defendant made an FSC formula change in 2003 or 2004. Plaintiffs contend that these changes

were conspiratorial.

On March 20, 2003, CSX announced a new formula to take effect June 1, 2003. See

Defs.’ Mem. at 34; Defs.’ SUMF ¶ 20.8; Pls.’ COF ¶ 111 (not disputing the formula but

suggesting the announcement was March 19, not March 20, based on PX163 at ‘357, which

difference is inconsequential); PX163 at ‘357, Pls.’ App’x Vol. 3, ECF No. 1200-3 (sealed)

(March 19, 2003, internal CSX email, stating merely that the press release would go out that

day); DA2616, Defs.’ App’x Vol. 4, ECF No. 1188-4 (sealed) (Mar. 20, 2003, press release). A

surcharge of 0.4% would be imposed at a lower trigger of $23.01/bbl with a 0.4% surcharge

increase for every $1/bbl increase in price. See PX163 at ‘357, Pls.’ App’x Vol. 3; DA2616,

Defs.’ App’x Vol. 4; DA2745, id. (Mar. 31, 2003, letter from Pricing Director, stating that

announcement was made on March 20, 2003). Fuel price remained tied to the WTI index and

was calculated based on average prices from the prior month, not the minimum of the last thirty

consecutive days. See PX163 at ‘357, Pls.’ App’x Vol. 3; DA2745 at 2745-46, Defs.’ App’x

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Vol. 4. A few weeks later, on April 4, 2003, UP announced that it would match CSX’s formula,

also to take effect June 1, 2003. Defs.’ SUMF ¶ 33.4; Pls.’ Objs. & Resp. ¶ 33 at 164-65 (not

disputing these facts).

BNSF, on the other hand, announced a separate new formula of its own on May 7, 2003.

Having already adopted the HDF index in 2001, BNSF maintained the index but changed the

trigger to $1.25/gallon, imposing a 0.5% surcharge at that price and then increasing the surcharge

by 0.5% for every $0.05/gal increase in fuel price. See Defs.’ SUMF ¶ 13.9; Pls.’ SUMF ¶ 13 at

74-75 (not contesting this formula). BNSF kept its calculation of fuel price based on the average

monthly price. See Defs.’ SUMF ¶ 13.9 (citing DA3979, Defs.’ App’x Vol. 9 (June 1, 2003,

BNSF Rules Book 6100-A, Item 3375C)); Pls.’ SUMF ¶ 13 at 74-75 (not contesting this

formula).

On May 9, 2003, despite UP’s prior announcement about following CSX, UP changed

course. UP announced a different surcharge that, like BNSF’s, relied on the HDF benchmark.

See Defs.’ SUMF ¶ 33.6; Pls.’ Objs. & Resp. ¶ 33 at 165-66 (not disputing that fact). UP’s

trigger was ten cents higher than BNSF’s, at $1.35/gal, though its formula used a mathematically

equivalent surcharge of 1.5% with the same increment, a 0.5% increase for every $0.05/gal

increase in fuel price. Fuel prices under that formula would likewise be calculated based on the

average of the prior month’s HDF prices. Defs.’ SUMF ¶¶ 33.6, 33.9 (citing DA1563, Defs.’

App’x Vol. 2 (May 9, 2003, fuel surcharge revision notice)); Defs.’ Mem. at 34; Pls.’ Objs. &

Resp. ¶ 33 at 165-66 (not disputing the formula).

NS made no changes that spring, instead waiting until the next year to make an

adjustment. On January 9, 2004, NS announced a new formula, effective March 1, 2004, that

mimicked CSX’s. See Defs.’ SUMF ¶ 26.6; Pls.’ Objs. & Resp. ¶ 26 at 139-40 (not contesting

14

this fact). NS imposed a 0.4% surcharge at the trigger price of $23.01/bbl based on the prior

month’s average of the WTI and increased that surcharge 0.4% for every $1/bbl increase in

price. Defs.’ SUMF ¶ 26.6 (citing DA5936, Defs.’ App’x Vol. 16 (Jan. 8, 2004, internal NS

email from Seale to David Goode et al., describing the new FSC)); Defs.’ Mem. at 34; Pls.’ Objs.

& Resp. ¶ 26 at 139-40 (not contesting the formula itself). NS maintained that formula until

2006 when NS “rebased,” in other words, transferred much of the fuel recovery from the FSC

into its base price. Defs.’ SUMF ¶¶ 27.1, 51.4; Pls.’ Objs. & Resp. ¶¶ 27, 51 (not contesting the

change but only its implications). At that point, NS increased its trigger point to $64, decreased

its increment to 0.3% per $1 changes in the WTI price, and increased its base price by 16.4%.

Defs.’ SUMF ¶ 27.1.

Defendants increased their FSC coverage over time, applying FSCs more broadly across

their contracts for carload traffic throughout the mid-2000s. At the highest point in 2006, more

than half of each defendants’ carload traffic transactions by revenue were covered by an FSC,

with over 90% of such transactions by NS covered. See DA21943 at 22036, Defs.’ App’x Vol.

34, ECF No. 1172-34 (sealed) (Report of plaintiffs’ experts Dr. Douglas Bernheim and Dr.

Leslie Marx (“Bernheim & Marx, Pls.’ Expert, Report”), Fig. IV-14, cited at Defs.’ SUMF

¶ 19.4 n.102); Pls.’ Objs. & Resp. at 33 (citing same table).

2. Coal Traffic FSCs

Prior to the alleged conspiracy period, all defendants applied their carload formulas to

their coal traffic. During the alleged conspiracy period, UP and BNSF adopted coal-specific

FSCs, while, in contrast, CSX and NS continued to apply their general carload formulas to coal-

specific traffic too. See Defs.’ SUMF ¶¶ 21, 28; Pls.’ Objs. & Resp. ¶ 21 (not disputing the

formulas); Pls.’ Objs. & Resp. ¶ 28 (admitting that NS applied carload formula to coal shipments

during the conspiracy). In June 2004, BNSF announced a different formula for coal traffic,

15

taking effect July 1, 2004. The surcharge was 0.5% at a $1.24/gal trigger with an increase of

0.5% for every $0.04/gal increase and with fuel prices calculated based on the average of the last

month’s prices in the HDF index. Defs.’ SUMF ¶ 14.4; Pls.’ Objs. & Resp. ¶ 14 (not disputing

the formula itself); Pls.’ COF ¶ 290.

In October 2004, UP also announced a different FSC formula for coal traffic than its

carload formula. In contrast to BNSF’s coal-traffic formula, UP’s new coal traffic formula used

a tiered scheme with a trigger of $1.35/gal calculated based on the past month’s average of the

HDF. See Defs.’ SUMF ¶ 34.3; Pls.’ COF ¶ 291. Between $1.35 and $1.60/gal, UP’s surcharge

increments were the same as its carload (0.5% for every $0.05 increase); for prices above

$1.60/gal, there was a 0.75% increase for each $0.05 increase in the HDF price. See Defs.’

SUMF ¶ 34.3; Pls.’ Objs. & Resp. ¶ 34 (not disputing formula); Pls.’ COF ¶ 291.

BNSF announced a change in its formula again less than a year later. In March 2005,

BNSF announced a shift to a mileage-based, as opposed to a rate-based, FSC to take effect

January 1, 2006, for all traffic, i.e., both carload and coal traffic. Defs.’ SUMF ¶¶ 15.1, 15.6;

Pls.’ Objs. & Resp. ¶ 15 (not disputing the basic facts). BNSF had previously considered but

never before adopted a mileage-based surcharge. Defs.’ SUMF ¶¶ 15.1, 15.2; Pls.’ Objs. &

Resp. ¶ 15 at 89 (discussing BSNF’s earlier considerations of FSCs). This FSC imposed a

$0.01/mile charge triggered at $1.25/gal with a $0.01/mile increase for every $0.06/gal price

increase; prices were determined by the prior month’s average on the HDF index. Defs.’ Mem.

at 35; Pls.’ Objs. & Resp. ¶ 15 (not disputing formula). In October 2005, however, BNSF

announced that the mileage-based surcharge would be applied only to coal traffic in January

2006, noting customers’ need for more time to adjust to the new FSC. Defs.’ SUMF ¶¶ 15.4-

15.6; DA4635, Defs.’ App’x Vol. 12, ECF No. 1172-12 (sealed) (Oct. 20, 2005, internal BNSF

16

email from Linda Wertz to listserv, attaching advisory shared with customers); Pls.’ Objs. &

Resp. ¶ 15 (not disputing the announcement); Pls.’ COF ¶¶ 556-57. BNSF’s mileage-based

formula, UP’s coal-specific formula, and CSX and NS’s carload formulas applied to coal traffic

for the remainder of the alleged conspiracy period.

3. Intermodal Traffic FSCs

All four defendants also adopted FSCs on intermodal traffic prior to 2003 and then

continued to impose FSCs throughout the alleged conspiracy period. BNSF’s first intermodal

FSC took effect on March 1, 2000. At the price of $1.10/gal an FSC of 0.5% applied with

increases of 0.5% for every $0.05/gal increase in fuel price. Fuel prices were calculated based

on the weekly average of the HDF index. Defs.’ Mem. at 72; Defs.’ SUMF ¶ 38.1 (citing

DA3969 at 3969-70, Defs.’ App’x Vol. 9); Pls.’ Objs. & Resp. ¶ 38 (not disputing these figures).

BNSF changed its formula in September 2001 to have a 1.0% surcharge at $1.24/gal, increasing

by 0.5% for every $0.04/gal price increase. See Defs.’ SUMF ¶ 41.2; Pls.’ Objs. & Resp. ¶ 41 at

202 (not contesting the formula); Defs.’ Mem. at 72. BNSF did not change its formula again

during the alleged conspiracy period. Defs.’ SUMF ¶ 41.2; Pls.’ Objs. & Resp. ¶ 41 at 202 (not

contesting that point); Defs.’ Mem. at 72.

NS also adopted intermodal FSCs in the early 2000s, though NS had separate domestic

and international formulas. Effective March 20, 2000, NS’s Domestic division adopted a flat 4%

FSC on all intermodal traffic. Defs.’ Mem. at 72; Defs.’ SUMF ¶ 38.2; Pls.’ Objs. & Resp. ¶ 38

(not disputing this formula). In April 2002, NS Domestic adopted a formula that matched

BNSF’s 2001 formula: a 1.0% surcharge at $1.24/gal, increasing by 0.5% for every $0.04/gal

price increase. Defs.’ Mem. at 72; Defs.’ SUMF ¶ 38.2; Pls.’ Objs. & Resp. ¶ 38 (not disputing

the formula). NS Domestic did not change its published intermodal formula during the alleged

17

conspiracy period. Defs.’ SUMF ¶ 42.2; Pls.’ Objs. & Resp. ¶ 42 at 208 (not disputing that

modifications to the published formula were not made).

Effective March 1, 2001, NS’s International division also imposed an FSC on intermodal

traffic: 1.0% starting at $1.30/gal, increasing 1.0% for every $0.01/gal increase in price, with the

price based on the average of the HDF index for the prior three weeks. See Defs.’ Mem. at 72.

NS International changed the FSC formula twice during the alleged conspiracy period, adopting

NS’s Domestic formula in August 2006 and adjusting to a price calculated by the HDF monthly

average in August 2007. Defs.’ SUMF ¶¶ 42.3, 42.4; Pls.’ Objs. & Resp. ¶ 42 (not disputing the

FSC formulas).

CSX Intermodal (“CSXI”), CSX’s Intermodal division, established an FSC for

intermodal traffic starting April 1, 2000. Defs.’ SUMF ¶ 38.3; Pls.’ Objs. & Resp. ¶ 38 (not

disputing the adoption of FSC formula); Defs.’ Mem. at 72. 5 The FSC was calculated using the

following formula: ((HDF on last Monday of the prior month - $1.10)/$1.10)*0.10*100. See

Defs.’ Mem. at 72. In October 2004, CSXI changed its formula to match BNSF’s intermodal

formula with a surcharge of 1.0% at $1.24/gal with an increase of 0.5% for every $0.04/gal

increase in price, though CSXI calculated the price differently—using the HDF of the last

Monday of the previous month. See Defs.’ Mem. at 72; see also Defs.’ SUMF ¶¶ 14.4, 44; Pls.’

Objs. & Resp. ¶ 44 (not disputing the formula).

UP adopted an intermodal FSC on November 1, 2000 with a unique formula: (HDF

price/$1.292 -1) * 20.0% [the fuel weight]. See Defs.’ Mem. at 72; Defs.’ SUMF ¶ 43.1. The

5

The parties dispute whether the entity that provided intermodal rail service during the alleged conspiracy

period, CSXI, is a defendant in MDL I, see infra Part I.C (Procedural History), because CSXI was not specifically

named and is a distinct subsidiary of CSX Corporation, separate from the named defendant, CSX Transportation,

another CSX Corporation subsidiary. See Pls.’ Objs. & Resp. ¶ 37 at 190; Defs.’ SUMF ¶ 37. Plaintiffs argue,

however, that CSXI merged into the named defendant CSX (i.e., CSX Transportation) in 2010 so CSX can be held

liable for the corporations’ intermodal shipments. Pls.’ Objs. & Resp. at 190-91. Plaintiffs cannot survive summary

judgment on intermodal shipments regardless, so this dispute need not be resolved.

18

HDF price was calculated based on the prior month’s average. See Defs.’ SUMF ¶ 38.4 (citing

DA19037, Defs.’ App’x Vol. 30, ECF No. 1172-30 (sealed) (Nov. 8, 2000, customer letter));

Pls.’ Objs. & Resp. ¶ 43 (not disputing any of these figures but only whether they were actually

collected or broadly imposed pre-conspiracy period). UP adjusted the figures in this formula in

October 2001, see Defs.’ Mem. at 72; Defs.’ SUMF ¶ 43.2, and then made three more

adjustments during the alleged conspiracy period. In 2005, UP adjusted the formula to: (HDF

price/$1.253 – 1) * 18.5% [the fuel weight]. See Defs.’ Mem. at 72; Defs.’ SUMF ¶ 43.2. Then,

in 2006, UP used the formula: (HDF price/$1.253 – 1) * 16.5 [the fuel weight]. See Defs.’ Mem.

at 72; Defs.’ SUMF ¶ 43.3. In 2007, UP made the formula dependent on a weekly rather than

monthly HDF measure. See Defs.’ SUMF ¶ 43.5; Pls.’ Objs. & Resp. ¶ 43 (not disputing the

formulas).

In short, no defendant altered its published intermodal formula from the start of 2003

through October 2004—the period when all four defendants altered their carload formulas and

the alleged conspiracy supposedly formed. See Defs.’ SUMF ¶ 40; Pls.’ Objs. & Resp. ¶ 40 (not

insisting otherwise). Defendants’ intermodal formulas only overlapped in the respect that

BNSF’s formula effective in late 2001 was adopted by NS Domestic in April 2002 and NS

International in 2006.

4. Adjustments in Response to STB Action

Shippers of rate-regulated traffic complained to the STB about rate-based FSCs, and the

STB, in 2007, determined that the “practice [of] comput[ing] fuel surcharges as a percentage of

the base rates” was “unreasonable” because they have “no prospect of reflecting the actual

increase in fuel costs for handling [that] particular traffic”—i.e., the railroads’ variable costs—

given that base-rate pricing differs by route and commodity. PX653 at 6, Pls.’ App’x Vol. 10B,

ECF No. 1202-4 (sealed) (Jan. 25, 2007, STB decision); Rail Fuel Surcharges (“STB

19

Decision”), Ex Parte No. 661, 2007 WL 201205, at *1, 4 (S.T.B. Jan. 25, 2007); see also Defs.’

SUMF ¶ 52.1; MDL I Class Cert. II, 725 F.3d at 248. 6 As the STB explained, because the base

rates for regulated traffic are not tied to fuel but rather other factors such as the number of

transportation alternatives, “[t]wo shippers may have traffic with identical fuel costs, but if one

starts out with a higher base rate . . ., it will pay dramatically more in fuel surcharges.” STB

Decision, 2007 WL 201205, at *4; see id. (“Because railroads rely on differential pricing, under

which rates are dependent on factors other than costs, [for rate-regulated traffic] a surcharge that

is tied to the level of the base rate, rather than to fuel consumption for the movement to which

the surcharge is applied, cannot fairly be described as merely a cost recovery mechanism.”). The

STB directed rate-regulated carriers to “change this practice,” id. at *1, but explicitly

differentiated other FSC options, such as mileage-based FSCs, which they suggested were a

reasonable alternative, id. at *6. The STB also noted particular concern with the practice of

“double dipping,” wherein railroads would sometimes “apply[] to the same traffic both a fuel

surcharge and a rate increase that is based on a cost index that includes a fuel component, such as

the [RCAF].” Id. at *1. Railroads were instructed to “change th[at] practice as well.” Id.

Although the shippers had requested both a prospective rule and retroactive damages, the

STB rejected the damages request, making clear it was “not awarding any remedies for rate-

based fuel surcharges that may have been used in the past.” Id. at *5. In fact, the STB

recognized that “[i]n view of the long history of rate-based fuel surcharges in the rail industry,”

railroads could not “be faulted for assuming that fuel surcharges calculated as a percentage of the

6

Generally, “captive shippers,” those who do not have transportation alternatives to rail, are subject to

regulated rates. See U.S. GOV’T ACCOUNTABILITY OFF., GAO-17-166, Freight Rail Pricing: Contracts Provide

Shippers and Railroads Flexibility, but High Rates Concern Some Shippers at i (Dec. 2016),

https://www.gao.gov/assets/gao-17-166.pdf. The largest industries for regulated traffic are agriculture, chemicals,

coal, food, and nonmetallic minerals. Id. at 2.

20

base rate were permissible.” Id. at *7. The STB also specified that its ruling had no bearing on

unregulated traffic, which the STB has “no authority to regulate” and thus no basis upon which

to opine that pricing practices are “unreasonable.” Id. at *10. For rail pricing “governed by a

contract,” railroads and shippers could continue to negotiate mutually agreeable arrangements to

allocate fuel costs and manage fluctuations without STB interference and regardless of whether

such agreements reflected the railroads’ variable costs. Id. Despite the limits of the STB’s

decision to the specific context of rate-regulated traffic and its rejection of retroactive damages,

shippers of unregulated freight traffic were nonetheless motivated to make a similar challenge to

the use of FSCs on unregulated traffic in a judicial forum, seeking damages in suits eventually

consolidated in the instant multi-district litigation.

Defendants around that time responded to the STB decision by adjusting their FSC

formulas for both rate-regulated and unregulated traffic. Specifically, in March 2007, CSX

announced a mileage-based surcharge for its rate-regulated traffic and also applied this surcharge

to new private contracts for non-intermodal traffic. Defs.’ SUMF ¶ 52.2; Pls.’ Objs. & Resp.

¶ 52 at 248-49 (disputing only how quickly and effectively the mileage-based FSCs were

actually applied to unregulated traffic). UP announced the same approach as CSX the same

month. Defs.’ SUMF ¶ 52.3; Pls.’ Objs. & Resp. ¶ 52 at 248-49 (not disputing that fact). UP

“rebased”—increasing its base rate while raising the trigger price so that more of the fuel cost

would be recovered by the base rate. Defs.’ SUMF ¶ 52.3; Pls.’ Objs. & Resp. ¶ 52 at 249-50

(disputing only that this marked a shift away from conspiratorial rates and emphasizing this shift

was revenue neutral). BNSF expanded its existing mileage-based FSC to cover regulated traffic.

Defs.’ SUMF ¶¶ 52.5-52.6; Pls.’ Objs. & Resp. ¶ 52 at 249 (not disputing the expansion). NS

eliminated FSCs on regulated shipments but continued with its 2006 “rebased” formula for

21

unregulated shipments. Defs.’ SUMF ¶ 52.8; Pls.’ Objs. & Resp. ¶ 52 at 251-52 (not disputing

NS’s formula).

5. Summary Charts

The below tables summarize defendants’ FSCs for carload, coal, and intermodal traffic

from 2000 until early 2007 (the time of the STB decision), with comparative terms outlined. See

Defs.’ Mem. at 33-35, 72. Plaintiffs confirm that they do not dispute the formulas themselves or

the dates as represented in these charts. See Hearing (June 18, 2025) on Mots. for Summ. J.

Transcript (“MSJ Hr’g Tr.”) at 65:21-24, ECF No. 1263.

Carload and Coal FSCs

BNSF CSX NS UP

2000- Oct. 1, 2000 Oct. 25, 2000 Jun. 30, 2000 Dec. 1, 2002

2002

WTI benchmark SAME SAME SAME

$28/bbl trigger SAME SAME SAME

2.0% surcharge at trigger SAME SAME SAME

$2.50/bbl increment $5/bbl increment $5/bbl increment $5/bbl increment

1.0% surcharge increment 2.0% surcharge increment 2.0% surcharge increment 2.0% surcharge increment

Monthly average index Index per prior 30 consec. Index per prior 30 consec. Index per prior 30 consec. days

days days

Jul. 1, 2001

HDF Benchmark

$1.30/gal

1.0% surcharge at trigger

$0.05/gal increment

0.5% surcharge increment

Monthly average index

2003 May 7, 2003 (ann.); Mar. 20, 2003 (ann.); Dec. 2003 (ann.); May 9, 2003 (ann.);

Jun. 1, 2003 (eff.) Jun. 1, 2003 (eff.) Mar. 1, 2004 (eff.) Jun. 1, 2003 (eff.)

HDF benchmark WTI benchmark WTI benchmark HDF benchmark

$1.25/gal trigger $23.01/bbl trigger $23.01/bbl trigger $1.35/gal

0.5% surcharge at trigger 0.4% surcharge at trigger 0.4% surcharge at trigger 1.5% surcharge at trigger

22

$0.05/gal increment $1/bbl increment $1/bbl increment $0.05/gal increment

0.5% surcharge increment 0.4% surcharge increment 0.4% surcharge increment 0.5% surcharge increment

Monthly average index Monthly average index Monthly average index Monthly average index

Note: Apr. 4, 2003, announced

matching CSX.

2004 Coal-specific surcharge Coal-specific surcharge

Jun. 2004 (ann.); July 1, Oct. 2004 (ann.); Nov. 2004

2004 (eff.) (eff.)

HDF benchmark HDF benchmark

$1.24/gal trigger $1.35/gal trigger

0.5% surcharge at trigger 1.5% surcharge at trigger

$0.04/gal increment $0.05/gal increment

0.5% surcharge increment 0.5% surcharge increment

Monthly average index Monthly average index

Second tier:

$1.60/gal trigger

4.25% surcharge at trigger

$0.05/gal increment

0.75% surcharge increment

Monthly average index

2005 MILEAGE-based surcharge

applied to Coal

Mar. 2005 (ann.); Jan. 1,

2006 (eff.)

HDF benchmark

$1.25/gal trigger

$0.01/mile surcharge at

trigger

$0.06/gal increment

$0.01/mile surcharge

increment

Monthly average index

2006 Jul. 2006

WTI benchmark

23

$64/bbl trigger

1.0% surcharge at trigger

$1/bbl increment

0.3% surcharge increment

Monthly average index

Increase in base rate of

16.4%

Intermodal FSCs

BNSF CSX NS UP

NS Domestic NS Int’l

2000- Mar. 1, 2000 Apr. 1, 2000 Mar. 20, 2000 Mar. 1, 2001 Nov. 1, 2000

2002

HDF benchmark HDF benchmark HDF benchmark HDF benchmark HDF benchmark

$1.10/gal trigger ((HDF on last Mon of 4% flat rate $1.30/gal trigger (HDF price/$1.292 –

month - 1)*20.0% [the fuel

0.5% surcharge at trigger $1.10)/$1.10)*0.10*100 1.0% surcharge weight]

$0.05/gal increment $0.10/gal increment

0.5% surcharge increment 1.0% surcharge incr.

Weekly average index Daily fuel price Weekly average index Previous 3 weeks

avg. index Monthly avg. index

Late 2001 Apr. 1, 2002 Oct. 9, 2001

HDF Benchmark HDF benchmark HDF benchmark

$1.24/gal $1.24/gal (HDF price/$1.253 –

1)*20.0% [the fuel

1.0% surcharge at trigger 1.0% surcharge weight]

$0.04/gal increment $0.04/gal increment

0.5% surcharge increment 0.5% surcharge incre.

Weekly average index Weekly average index Monthly avg. index

2003

2004 October 4, 2004

HDF benchmark

$1.24/gal trigger

1.0% surcharge at trigger

$0.04/gal increment

0.5% surcharge increment

24

Last Mon. of previous

month

2005 Apr. 1, 2005

HDF benchmark

(HDF price/$1.593 –

1)*18.5% [the fuel

weight]

Monthly avg. index

2006 Aug. 21, 2006 Oct. 1, 2006

HDF benchmark HDF benchmark

$1.24/gal trigger (HDF price/$1.253 –

1)*16.5 [the fuel

1.0% surcharge weight]

$0.04/gal increment

0.5% surcharge incr.

Weekly avg. index Monthly avg. index

C. Procedural Background

Given the nearly eighteen-year-long pendency of this litigation, the procedural history is

extensive. Only the key elements are outlined here, with more detail available in the cited prior

decisions.

1. Procedural History

The first plaintiff shippers challenged the four defendant railroad companies’ FSCs in a

lawsuit filed in the District of New Jersey on May 14, 2007, a few months after the STB

decision. See Defs.’ SUMF ¶ 53; Pls.’ Objs. & Resp. ¶ 53 at 254 (in agreement). Plaintiffs

alleged that defendants’ executives agreed to impose artificially high and uniform FSCs on

shippers and achieved the express goal of 100% FSC coverage and virtually identical fuel

surcharges, in part, by settling on common trigger points and pressuring the Association of

American Railroads (“AAR”) to create a new cost index, the All Inclusive Index Less Fuel

(“AIILF”) to replace the preexisting index. MDL I MTD Order (Direct Purchasers), 587 F.

25

Supp. 2d at 30-31; In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL I Class Cert. I”),

287 F.R.D. 1, 47 (D.D.C. 2012). Eighteen separate class actions were filed in six districts that

year before they were consolidated by the MDL Panel into MDL I, MDL No. 1869, D.D.C. Misc.

No. 7-489, in November 2007. That MDL was assigned to Judge Paul L. Friedman in the

District Court for the District of Columbia. See MDL I MTD Order (Direct Purchasers), 587 F.

Supp. 2d at 29. These claims involved only carload and coal traffic, not intermodal shipments.

See id.; Consolidated Am. Class Action Compl., ECF No. 91-1; Indirect Purchasers Consolidated

Am. Compl., ECF No. 93. Plaintiffs were divided into two putative classes—direct purchasers

and indirect purchasers—and the claims of both groups survived motions to dismiss. See MDL I

MTD Order (Direct Purchasers), 587 F. Supp. 2d at 29; In re Rail Freight Fuel Surcharge

Antitrust Litig. (“MDL I MTD Order (Indirect Purchasers)”), 593 F. Supp. 2d 29, 32 (D.D.C.

2008) (dismissing only state-law claims due to preemption), aff’d sub. nom. Fayus Enters. v.

BNSF Ry. Co., 602 F.3d 444 (D.C. Cir. 2010).

In 2011, another antitrust suit alleging price-fixing conspiracy claims against only UP

and BNSF was filed in this Court by certain plaintiffs, and that case was transferred to Judge

Friedman as related to MDL I. See Order Transferring Case, Oxbow, 11-cv-1049, ECF No. 37.

The claims of those plaintiffs also survived a motion to dismiss. See Oxbow Carbon & Minerals

LLC v. Union Pac. R.R. Co., 81 F. Supp. 3d 1, 16 (D.D.C. 2015).

Plaintiffs did not succeed in certifying a class action. Initially, the district court granted

class certification for direct purchaser plaintiffs in MDL I, but that decision was vacated on

appeal. See MDL I Class Cert. I, 287 F.R.D. 1 (granting class certification for direct purchasers

and appointing Quinn Emmanuel and Hausfeld LLP as co-lead class counsel); MDL I Class Cert.

II, 725 F.3d at 255 (vacating and remanding class certification because the damages model put

26

forth by plaintiffs failed to show that all plaintiffs were harmed by the alleged conspiracy—13%

were uninjured in the experts’ model). On remand, the district court denied class certification as

to direct purchasers, finding that plaintiffs failed to establish that common questions of law or

fact predominated as to this putative class and that plaintiffs’ damages regression model was

flawed as a means of demonstrating such predominance, a decision affirmed on appeal. See

MDL I Class Cert. III, 292 F. Supp. 3d 14, aff’d 934 F.3d 619 (D.C. Cir. 2019).

Following denial of class certification, additional claims were filed in 31 actions in 16

districts, alleging the same price-fixing conspiracy by the four defendant freight railroads to

coordinate their FSC programs. These new plaintiffs alleged a conspiracy period of 2003 to

2008 and encompassing carload, coal, and intermodal shipments. See Preliminary Rep. at 1,

MDL II, 20-mc-8, ECF No. 78. The parties’ positions diverged on how best to address these new

actions: Defendants wanted these cases transferred to a new MDL, but plaintiffs wanted them

consolidated with the existing MDL I, before Judge Friedman. The MDL Panel determined that,

since the newly filed actions were in an earlier procedural posture, they should not be

consolidated, but that centralization in the same district could have same benefits because of

efficiencies and the need to avoid inconsistent rulings. See MDL Panel Transfer Order, MDL II,

20-mc-8, ECF No. 1 (Feb. 6, 2020). This second MDL, MDL II, MDL No. 2925, 20-mc-8, was

assigned to this Court, while the original MDL I proceeded before Judge Friedman.

On motions to dismiss in MDL II, defendants contended that certain of the complaints

filed in that litigation were time-barred because they did not fall within the four-year statute of

limitations for antitrust claims. See MDL II MTD Order on Time-Barred Claims, No. 20-mc-8

(BAH), 2020 WL 5016922, at *10 (D.D.C. Aug. 25, 2020). Plaintiffs argued that their claims

were tolled based on claims brought in the putative class in MDL I, which put defendants on

27

notice and fell within the American Pipe tolling doctrine. See id. at *10-11; Am. Pipe & Constr.

Co. v. Utah, 414 U.S. 538 (1974). The Court agreed generally with plaintiffs, as defendants

conceded, that the core of these plaintiffs’ claims could proceed. See MDL II MTD Order on

Time-Barred Claims, 2020 WL 5016922, at *12. Some plaintiffs, however, brought “novel”

allegations beyond that core, id., namely that “three additional railroads participated,” that

“defendants coordinated the uniform implementation of mileage-based surcharges,” and

“defendants’ conspiratorial conduct” extended “outside of the 2003-2008 period defining the

MDL I putative class,” id. at *1. These additional allegations about new defendants, mileage-

based surcharges, and new conspiratorial conduct after 2008 were found to be untimely and not

tolled by the original allegations of the putative classes. See id. at *17-27. At the same time, to

the extent that post-2008 allegations “simply set forth a more complete picture of how the

conspiracy alleged by the putative class was able to operate, without altering the scope of

defendants’ potential liability,” such allegations were held to be permissible, as were allegations

of harm that occurred before 2008 and simply had lingering effects into later years. See id. at

*26. This decision was reaffirmed in a denial of a motion for reconsideration. See In re Rail

Freight Surcharge Antitrust Litig. (No. II) (“MDL II Reconsideration Time-Barred Claims”), No.

20-mc-8 (BAH), 2020 WL 6198487 (D.D.C. Oct. 22, 2020).

Those three matters—MDL I, MDL II, and Oxbow—encompass all of the related antitrust

claims against these four defendants. After the initial motions to dismiss were resolved, the

parties in all three matters engaged in extensive discovery, resulting in multiple disputes resolved

by both the district court judges and magistrate judges in numerous opinions after thorough

consideration, including in several in-person hearings. In MDL I, discovery began in 2009 and

extended through 2021. See Scheduling Order, ECF No. 296 (commencing discovery summer of

28

2009); Stipulated Order, ECF No. 1049 (ordering expert discovery and reports completed by

December 2021). Judicial input was obtained on over a dozen discovery disputes in MDL I. 7 In

MDL II, discovery opened in 2020 and closed in 2023 and required two hearings over disputes

before this Court. See Scheduling Order, MDL II, ECF No. 102; Min. Entry (3/26/2021); Min.

Entry (9/13/2022); Min. Order (11/8/2022) (issuing scheduling order extending the end of

discovery through 2023); Min. Order (8/8/2023) (modifying schedule for finishing fact and

expert discovery by end of 2023). In Oxbow, discovery opened in 2016 and eventually extended

through 2020 and likewise involved a discovery hearing. See Order, Oxbow, ECF No. 97

(setting deadline for discovery as end of 2016); Scheduling Order, ECF No. 165 (extending

discovery until end of 2020); Min. Entry (8/24/2017) (discovery hearing before M.J. Harvey). In

MDL II alone, the parties conducted 373 depositions. Joint Status Report at 2, MDL II, ECF No.

925. The parties thus had ample opportunity to obtain a wealth of documents, amounting to

millions of pages, see Mem. Op., MDL I, ECF No. 534 (noting that as of only late 2011, millions

of documents had already been exchanged), with over 50,000 pages produced as exhibits for the

pending motions—20,613 on the part of defendants and 29,538 on the part of plaintiffs.

In March 2024, MDL I and Oxbow were transferred from Judge Friedman to this Court.

See Order Reassigning Litigation, MDL I, 7-mc-489, ECF No. 1129; Order Reassigning

Litigation, Oxbow, 11-cv-1049, ECF No. 278.

7

See, e.g., Mem. Op. Denying Defs.’ Mot. for Phased Discovery, MDL I, ECF No. 291 (Facciola, M.J.);

Mem. Op. Grant’g in Part and Denying in Part Pls.’ Mot. to Compel, ECF No. 313 (Facciola, M.J.); Mem. Op.

Grant’g in Part and Denying in Part Pls.’ Second Mot. to Compel, ECF No. 371 (Facciola, M.J.); Mem. Order

Grant’g in Part and Denying in Part Pls.’ Mot. for In Camera Rev. of Withheld Docs, ECF No. 374 (Facciola, M.J.);

Mem. Order Denying Third-Party Mot. to Quash Subpoena, ECF No. 418 (Facciola, M.J.); Mem. Op. Re: In

Camera Rev., ECF No. 436 (Facciola, M.J.); Mem. Order Re: Scope of 30(b) Depositions, ECF No. 487 (Facciola,

M.J.); Mem. Op. Grant’g in Part and Denying in Part Defs.’ Mot. to Compel, ECF No. 534 (Facciola, M.J.); Mem.

Op. & Order Grant’g Defs.’ Mot. to Compel, ECF No. 699 (Facciola, M.J.); Op. & Order Grant’g Pls.’ Leave to File

Supp’l Expert Rep., ECF No. 756 (Friedman, J.); Mem. Op. & Order Denying Defs.’ Mot. for Leave to File Late

Dec. of Dr. Eakin, ECF No. 786 (Friedman, J.).

29

While many other motions have been decided over the lengthy pendency of these cases,

as referenced, one additional motion is notable. In preparation for dispositive motions briefing in

MDL I, defendants revived, in 2020, an issue that had previously been the subject of defendants’

motion raised at the class certification stage but never decided, namely, to exclude interline-

related communications from any prohibited purpose in accord with 49 U.S.C. § 10706. See

Defs.’ Mot. to Exclude Interline-Related Communications, MDL I, ECF No. 927; see also Defs.’

Mot. to Exclude Interline-Related Communications from Consideration for Class Certification,

ECF No. 417; In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL I Section 10706

Decision I”), 520 F. Supp. 3d 1, 9 (D.D.C. 2021) (explaining that the court “did not reach

defendants’ [prior] Section 10706 motion”). In 2021, the district court denied defendants’

motion to exclude such evidence and bar certain inferences. See MDL I Section 10706 Decision

I, 520 F. Supp. 3d at 38. That decision was appealed to the D.C. Circuit, which vacated and

remanded the district court’s opinion and gave further guidance on application of section 10706.

See MDL I Section 10706 Decision II, 34 F.4th at 5.

Judge Friedman then ordered the parties to meet and confer, considering that the “D.C.

Circuit ha[d] made clear how to read and apply Section 10706 in this case” so the “parties should

[have] be[en] able to determine by mutual agreement—without any involvement of the Court—

which documents relating to the pending summary judgment motions should be excluded, in

whole or in part.” See Mem. Op. & Order at 2, MDL I, ECF No. 1088. Despite significant

agreement, the parties still needed judicial guidance as to some documents. See Joint Status

Rep., ECF No. 1094. After reviewing the disputed documents and ordering further briefing in

2023, Judge Freidman granted in part and denied in part defendants’ request to exclude certain

evidence early the next year. See In re Rail Freight Fuel Surcharge Antitrust Litig. (“MDL I

30

Section 10706 Decision III”), 721 F. Supp. 3d 16 (D.D.C. 2024) (reviewing all of the evidence

submitted by the parties in joint status report, ECF No. 1094, which outlined the documents

relevant to the summary judgment motions). In general, that opinion excluded records about

freight movements constituting solely shared interline traffic, any discussions of interline traffic,

and any documents about such discussions. Id. Any deviations from interline discussions must

have been fleeting or inconsequential to be excluded under § 10706. See MDL I Section 10706

Decision, 721 F. Supp. 3d at 22-23 (D.D.C. 2024). The parties have affirmed that although

Section 10706-excluded material may remain in expert reports or elsewhere in the record, they

have not relied on such material in their briefs in support of their pending dispositive and related

motions. See Defs.’ Mem. at 8 n.2; Pls.’ Opp’n at 140.

2. Pending Motions

Pursuant to a scheduling order issued by this Court shortly after transfer of MDL I and

Oxbow, defendants moved for summary judgment in 2024. See Scheduling Order, MDL I, ECF

No. 1148; Min. Order (June 28, 2024) (amending that schedule). The parties briefed the issues,

as well as related motions across the three dockets, MDL I, MDL II, and Oxbow. See supra n.1.

Defendants filed individual motions for summary judgment, see NS’s Mot. for Summ. J., ECF

No. 1155 (sealed); UP’s Mot. for Summ. J., ECF No. 1157 (sealed); BNSF’s Mot. for Summ. J.,

No. 1158 (sealed); CSX’s Mot. for Summ. J., ECF No. 1160 (sealed), with a common

memorandum in support, ECF No. 1163. Plaintiffs filed a common opposition, ECF No. 1218,

and defendants filed a common reply, Defs.’ Reply in Supp. of Summ. J. (“Defs.’ Reply”), ECF

No. 1048 (sealed). Defendants also filed in MDL II a partial motion for summary judgment

based on allegedly time-barred damages claims. See MDL II, ECF No. 983.

In addition to defendants’ combined and separate motions for summary judgment, seven

additional motions are pending. Defendants filed three motions to exclude certain opinions or

31

evidence, including (1) to exclude plaintiffs’ expert’s average damages opinions, under Federal

Rules of Evidence 702 and 403, see Defs.’ Mot. to Exclude Avg. Dam. Ops., ECF No. 1169

(sealed); Pls.’ Opp’n to Defs.’ Mot. to Exclude Avg. Dam. Ops., ECF No. 1196 (sealed); Defs.’

Reply in Supp. Mot. to Exclude Avg. Dam. Ops., ECF No. 1234 (sealed); (2) to exclude

plaintiffs’ positive econometric overcharge models, under Rule 702 and Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579 (1993), see Defs.’ Mot. to Exclude Overcharge Models,

ECF No. 1165 (sealed); Pls.’ Opp’n to Defs.’ Mot. to Exclude Overcharge Models, ECF No.

1195 (sealed); Defs.’ Reply in Supp. Mot. to Exclude Overcharge Models, ECF No. 1240

(sealed); and (3) to exclude expert reliance on improper evidence, invoking Federal Rule of

Evidence 702 and the statutory use bar in 49 U.S.C. § 10706, see Defs.’ Mot. to Exclude Expert

Reliance, ECF No. 1167 (sealed). The last defense motion concerning purportedly “improper

evidence” focuses on expert testimony about the existence of the alleged conspiracy, testimony

on defendants’ alleged state of mind and intentions, testimony providing improper factual

narratives, and testimony covering inadmissible material under § 10706. See id.; see also Pls.’

Opp’n to Defs.’ Mot. to Exclude Expert Reliance, ECF No. 1196 (sealed); Defs.’ Reply in Supp.

Mot. to Exclude Expert Reliance, ECF No. 1236 (sealed).

For their part, plaintiffs filed four motions to exclude certain opinions or declarations,

including (1) to exclude, under Rules 702 and Daubert, the opinion of defendants’ expert, Joseph

Dettmar, who they argue improperly opines on the STB’s encouragement and endorsement of

cooperative arrangements like interline alliances, see Pls.’ Mot. to Exclude Dettmar, ECF No.

1171 (sealed); Defs.’ Opp’n to Pls.’ Mot. to Exclude Dettmar, ECF No. 1192 (sealed); Pls.’

Reply in Supp. Mot. to Exclude Dettmar, ECF No. 1244 (sealed); (2) to exclude, under Rules

702 and Daubert, defendants’ rebuttal expert, Avram Tucker, who was retained to analyze the

32

reliability and reasonableness of plaintiffs’ experts’ methods and opinions, see Pls.’ Mot. to

Exclude Tucker, ECF No. No. 1175 (sealed); Defs.’ Opp’n to Pls.’ Mot. to Exclude Tucker, ECF

No. 1189 (sealed); Pls.’ Reply in Supp. Mot. to Exclude Tucker, ECF No. 1248 (sealed); (3) to

strike, as improper, under Federal Rule of Evidence 1006, two declarations—those of Eric

Fanchiang and Kelsey Bryan, which summarize information about defendants’ price authorities,

see Pls.’ Mot. to Strike, ECF No. 1197 (sealed); Defs.’ Opp’n to Pls.’ Mot. to Strike, ECF No.

1227 (sealed); Pls.’ Reply in Supp. of Pls.’ Mot. to Strike, ECF No. 1231 (sealed); and (4) in the

Oxbow case, to exclude, under Federal Rules of Evidence 403 and 702, the opinions of

defendants’ experts, Dr. Edward Snyder and Dr. Lauren Stiroh, whose opinions pertained at least

in part to claims that were dismissed pursuant to a stipulation and, in plaintiffs’ view, express

opinions that are now irrelevant, see Pls.’ Mot. to Exclude Snyder & Stiroh, Oxbow, ECF No.

309 (sealed); Defs.’ Opp’n to Pls.’ Mot. to Exclude Snyder & Stiroh, ECF No. 324 (sealed); Pls.’

Reply in Supp. Mot. to Exclude Snyder & Stiroh, ECF No. 367 (sealed). 8

II. LEGAL STANDARD

In general, a court must “grant summary judgment if the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of

law.” FED. R. CIV. P. 56(a). “As to materiality, the substantive law will identify which facts are

material. Only disputes over facts that might affect the outcome of the suit under the governing

law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant

or unnecessary will not be counted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

As to a genuine dispute, the “evidence [must be] such that a reasonable jury could return a

verdict for the nonmoving party.” Id. At the summary judgment stage, “courts are required to

8

The expert reports challenged by the parties are not relied upon in reaching the findings and conclusions on

the defendants’ summary judgment motions addressed in this Memorandum Opinion.

33

view the facts and draw reasonable inferences ‘in the light most favorable to the party opposing

the [summary judgment] motion.’” Scott v. Harris, 550 U.S. 372, 378 (2007) (alterations in

original) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).

Section 1 of the Sherman Act forbids any “contract, combination in the form of trust or

otherwise, or conspiracy, in restraint of trade or commerce.” 15 U.S.C. § 1. To survive a motion

for summary judgment in a section 1 Sherman Act case, plaintiffs “must establish that there is a

genuine issue of material fact as to whether [defendants’] entered into an illegal conspiracy that

caused [plaintiffs] to suffer a cognizable injury.” Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 585-86 (1986); see also Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S.

752, 764 (1984) (plaintiffs must prove a “conscious commitment to a common scheme designed

to achieve an unlawful objective”).

Although “‘on summary judgment the inferences to be drawn from the underlying facts

. . . must be viewed in the light most favorable to the party opposing the motion[,]’ . . . antitrust

law limits the range of permissible inferences from ambiguous evidence in a § 1 case.”

Matsushita, 475 U.S. at 587-88 (quoting Diebold, Inc., 369 U.S. at 655). For instance, “if the

claim is one that simply makes no economic sense[,] [plaintiffs] must come forward with more

persuasive evidence to support their claim than would otherwise be necessary.” Id. at 587.

Moreover, “conduct as consistent with permissible competition as with illegal conspiracy

does not, standing alone, support an inference of antitrust conspiracy.” Id. at 588. This means

that plaintiffs’ evidence must support an inference of conspiracy that is “reasonable in light of

the competing inferences of independent action or collusive action,” by “‘tend[ing] to exclude

the possibility’ that the alleged conspirators acted independently.” Id. (quoting Monsanto Co.,

465 U.S. at 764). By tending to exclude the possibility of independent action, plaintiffs’

34

evidence need not render such an inference completely impossible, since “[r]equiring a plaintiff

to ‘exclude’ or ‘dispel’ the possibility of independent action places too heavy a burden on the

plaintiff.” In re Publ’n Paper Antitrust Litig., 690 F.3d 51, 63 (2d Cir. 2012) (further instructing

that “if a plaintiff relies on ambiguous evidence to prove its claim, the existence of a conspiracy

must be a reasonable inference that the jury could draw from that evidence; it need not be

the sole inference”).

Still, plaintiffs’ evidence must make the inference of a conspiracy more “attractive” than

the alternative inference of independent action. See Fed. Prescription Serv., Inc. v. Am. Pharm.

Ass’n, 663 F.2d 253, 267 (D.C. Cir. 1981) (“Although parallel behavior may support an

inference of conspiracy when the alleged co-conspirators have acted in a way inconsistent with

independent pursuit of economic self-interest, that inference is warranted only when a theory of

rational, independent action is less attractive than that of concerted action.”); see also Blomkest

Fertilizer, Inc. v. Potash Corp. of Saskatchewan, 203 F.3d 1028, 1032 (8th Cir. 2000) (en banc)

(“[I]f it is as reasonable to infer from the evidence a price-fixing conspiracy as it is to infer

permissible activity, then the plaintiff’s claim, without more, fails on summary judgment.”);

Kleen Prods. LLC v. Ga.-Pac. LLC, 910 F.3d 927, 934 (7th Cir. 2018) (“The [plaintiffs] need

evidence that would allow a trier of fact to nudge the ball over the 50-yard line and rationally to

say that the existence of an agreement is more likely than not.”); Anderson News, L.L.C. v. Am.

Media, Inc., 899 F.3d 87, 98 (2d Cir. 2018) (“[I]f the evidence is in equipoise, then summary

judgment must be granted against the plaintiff.”); In re Text Messaging Antitrust Litig. (“Text

Messaging”), 782 F.3d 867, 879 (7th Cir. 2015) (Posner, J.) (“The plaintiffs have presented

circumstantial evidence consistent with an inference of collusion, but that evidence is equally

35

consistent with independent parallel behavior. . . . The district court had therefore no alternative

to granting summary judgment in favor of the defendants.”).

This requirement does not establish a “special burden” on plaintiffs in antitrust cases.

Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 468 (1992). Matsushita simply

demands that the nonmoving party’s inferences be reasonable in order to reach a jury, in light of

the alternative inferences and economic realities. See id. at 468-69.

The reason why plaintiffs’ evidence must tend to exclude an inference of independent

action, or show that an inference of conspiracy from a pattern of behavior could be found to be

more likely than not, is that “conscious parallelism,” where firms “in a concentrated market . . .

recognize their shared economic interests and their interdependence with respect to price and

output decisions,” but act without an agreement, is not unlawful. Bell Atl. v. Twombly, 550 U.S.

544, 553-54 (2007). “[P]arallel conduct or interdependence, without more, . . . [is] just as much

in line with a wide swath of rational and competitive business strategy” as with “conspiracy.” Id.

at 554. Thus, the Supreme Court has instructed that even “[t]acit collusion, sometimes called

oligopolistic price coordination or conscious parallelism . . . by which firms in a concentrated

market might in effect share monopoly power, setting their prices at a profit-maximizing,

supracompetitive level by recognizing their shared economic interests and their interdependence

with respect to price and output decisions,” is a “process, not in itself unlawful.” Brooke Grp. v.

Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993). Instead, some agreement,

whether “tacit or express,” must be evinced to prove a conspiracy. Twombly, 550 U.S. at 553

(quoting Theatre Enters., Inc. v. Paramount Film Distrib. Corp., 346 U.S. 537, 541 (1954))

(explaining that something evincing a meeting of the minds is necessary); see also United States

v. Gen. Motors Corp., 284 U.S. 127, 142-43 (1966) (explaining that a showing of an express

36

agreement is not necessary); In re Chocolate Confectionary Antitrust Litig. (“Chocolate”), 801

F.3d 383, 395 (3d Cir. 2015) (“An important corollary to the agreement requirement is that § 1

liability cannot be predicated on a defendant’s unilateral actions, no matter its anticompetitive

motivations.”).

III. DISCUSSION

Plaintiffs have not provided evidence tending to exclude the possibility of independent

action or indicating that an inference of an agreement is more plausible than that of unilateral

decision-making. Plaintiffs rely on circumstantial evidence yet cannot demonstrate that

defendants even acted in a parallel fashion, let alone that their decisions were motivated by an

illicit agreement as opposed to self-interested decision-making in an interdependent oligopoly.

Defendants provide ample evidence to suggest instead that independent decision-making drove

defendants’ choices and that elevated FSCs and expanded FSC application were economically

rational. Plaintiffs point to several meetings and communications among defendants, actions

taken through their trade association (the AAR), and industry and market conditions conducive

to collusion, but even all of these circumstances together do not suggest that defendants

conspired rather than acted independently. Just as for carload and coal traffic, plaintiffs likewise

cannot point to evidence tending to exclude independent action for intermodal traffic.

Defendants’ motions for summary judgment are therefore granted, as a reasonable jury

could not conclude that defendants’ approaches to FSCs in the early to mid-2000s were the result

of a conspiracy. The parties’ seven related motions to exclude evidence, opinions, and

declarations are denied as moot.

A. Proving a Conspiracy

To meet their burden of demonstrating that an inference of conspiracy is more likely than

one of independent action, plaintiffs may present either direct or circumstantial evidence.

37

Monsanto, 465 U.S. at 764. “Direct evidence explicitly refers to an understanding between the

alleged conspirators, while circumstantial evidence requires additional inferences.” Golden

Bridge Tech., Inc. v. Motorola, Inc., 547 F.3d 266, 271 (5th Cir. 2008). The strongest evidence

would be a manifest agreement not to compete, such as proof that defendants got together and

exchanged assurances of common action. See In re Flat Glass Antitrust Litig. (“Flat Glass”),

385 F.3d 350, 361 (3d Cir. 2004). Alternatively, plaintiffs may use circumstantial evidence to

show an inference of independent action is less persuasive than one of conspiracy by

demonstrating parallel conduct buttressed by certain “plus factors,” such as a motive to conspire,

actions against self-interest, and other evidence implying a traditional conspiracy. Chocolate,

801 F.3d at 398; In re Baby Food Antitrust Litig. (“Baby Food”), 166 F.3d 112, 132-33 (3d Cir.

1999) (“[A] conspiracy based on consciously parallel behavior requires a plaintiff not only to

show parallel behavior and awareness in their decision making, but also certain plus factors.”).

Some of those factors, however, may be equally consistent with lawful interdependence

and thus not add anything to the parallel conduct in aid of an inference of conspiracy. See Flat

Glass, 385 F.3d at 360-61 (noting that motive to conspire and actions against self-interest

“largely restate the phenomenon of interdependence” and thus “may not suffice—by

themselves—to defeat summary judgment on a claim of horizontal price-fixing among

oligopolists”). Accordingly, a factor is only considered a true “plus factor,” something more

beyond the parallel conduct, if it “tends to exclude the possibility that the alleged conspirators

acted independently.” In re Domestic Airline Travel Antitrust Litig. (“Domestic Airline Travel”),

691 F. Supp. 3d 175, 192 (D.D.C. 2023); City of Moundridge v. Exxon Mobil Corp., No. 4-cv-

940 (RWR), 2009 WL 5385975, at *4 (D.D.C. 2009) (“[P]lus factors” are meant to “indicate the

existence of a conspiracy by ruling out the legitimate explanation for parallel behavior” and

38

“suggest[ing] that an alleged conspirator’s actions are ‘inconsistent with independent pursuit of

economic self-interest.’” (quoting Fed. Prescription Serv., 663 F.2d at 267)), aff’d 409 F. App’x

362 (D.C. Cir. 2011). “[I]f a benign explanation for the action is equally or more plausible than

a collusive explanation, the action cannot constitute a plus factor.” Williamson Oil Co., Inc. v.

Philip Morris USA, 346 F.3d 1287, 1310 (11th Cir. 2003).

The “economic theory of interdependence . . . recognizes the differences between

competitive markets (markets with many smaller firms) and oligopolistic markets (concentrated

markets with only a few firms)” and explains why parallel conduct, without more, is not

probative of conspiracy. Chocolate, 801 F.3d at 397. In an oligopolistic market, “a single firm’s

change in output or price ‘will have a noticeable impact on the market and on its rivals.’” Id.

(quoting Flat Glass, 385 F.3d at 359). “Any rational decision” made, therefore, by an

oligopolist, “must take into account the anticipated reaction of the other firms.” Id. (alterations

in original) (quoting Flat Glass, 385 F.3d at 359). As the Third Circuit has explained, the

“upshot is oligopolists may maintain supracompetitive prices through rational, interdependent

decision-making as opposed to unlawful concerted action, if the oligopolists independently

conclude that the industry as a whole would be better off by raising prices. Even though this

practice of parallel pricing, known as ‘conscious parallelism,’ produces anticompetitive

outcomes, it is lawful under the Sherman Act.” Id. Conscious parallelism is lawful because

rather than “an agreement,” this is a “necessary fact of life in oligopolies,” id. (second passage

quoting Baby Food, 166 F.3d at 122), for which “courts have no effective remedy,” id. at 397-98.

So, plaintiffs must provide evidence—characterized as “plus factors” or otherwise—that goes

beyond conscious parallelism, which “cannot alone create a reasonable inference of conspiracy.”

Id. at 398; see also Brooke Grp., 509 U.S. at 227 (describing the lawful process of conscious

39

parallelism); PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW: AN ANALYSIS OF

ANTITRUST PRINCIPLES AND THEIR APPLICATION ¶ 1433a (2025) (“The courts are nearly

unanimous in saying that mere interdependent parallelism does not establish the contract,

combination, or conspiracy required by Sherman Act § 1.”).

In short, “[t]he crucial question is whether each defendant’s conduct stemmed from an

independent decision or from an agreement, though such agreement need not be express, and it

may be inferred from all of the circumstances.” Domestic Airline Travel, 691 F. Supp. 3d at 194

(quoting Standard Iron Works v. ArcelorMittal, 639 F. Supp. 2d 877, 894-95 (N.D. Ill. 2009)).

On this question, defendants insist that “tacit collusion” does not constitute a Sherman Act

conspiracy, Defs.’ Reply at 4 (quoting Text Messaging, 782 F.3d at 872); see also Brooke Grp.,

509 U.S. at 227, while plaintiffs posit that the conspiracy may be tacit or express, Pls.’ Opp’n at

9 (citing Twombly, 550 U.S. at 553). Both sides are correct, as the parties and their respective

preferred cases recognize in focusing on the critical factual issue of the existence of an

agreement, a meeting of the minds. Defs.’ Reply at 4; Pls.’ Opp’n at 9; Text Messaging, 782

F.3d at 879 (“Collusion is illegal only when based on agreement. Agreement can be proved by

circumstantial evidence.”). Twombly instructs that the agreement may be the result of an

exchange of words or other circumstances leading to a meeting of the minds, 550 U.S. at 553,

while Text Messaging reminds that conscious parallelism, without a meeting of the minds, does

not constitute such an agreement, 782 F.3d at 879.

When evaluating whether plaintiffs have made such a showing, a “court must look to the

evidence as a whole and consider any single piece of evidence in the context of other evidence.”

Flat Glass, 385 F.3d at 369; Williamson Oil, 346 F.3d at 1301 (“[T]he district court is obligated

to give the price fixing plaintiff(s) ‘the full benefit of their proof without tightly

40

compartmentalizing the various factual components and wiping the slate clean” after scrutinizing

each. (quoting Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699

(1962))). Though a court should not weigh conflicting evidence, which is “the job of the jury,” if

no single item of undisputed evidence presented by plaintiffs points unequivocally to conspiracy,

the court must also avoid the cursory conclusion that the evidence as a whole cannot defeat

summary judgment. In re High Fructose Corn Syrup, 295 F.3d 651, 655 (7th Cir. 2002). 9

Rather, discrete evidentiary facts must be viewed collectively to ensure the whole picture is

fairly assessed.

B. Plaintiffs Have No Direct Evidence of Conspiracy.

Plaintiffs have not pointed to any admission or “smoking gun” kind of evidence here that

proves a conspiracy without the necessity of any inferences. Nor do plaintiffs even squarely

assert that they have direct evidence. See Pls.’ Opp’n at 14 (stating that plaintiffs’ evidence is

sufficient, however characterized); Defs.’ Reply at 6; see also MSJ Hr’g Tr. at 73:21-74:9

(plaintiffs’ counsel stating, “We are proceeding under Matsushita. We are not claiming the

Court needs to look at one document . . .”); id. at 21:13-22:2 (defendants’ counsel expressing that

plaintiffs have not “responded” to defendants’ contention that plaintiffs have only put forth

circumstantial evidence “by saying no, no, no, this is direct evidence of the agreement,

everybody wrote down what they were going to charge or everybody got together and said this is

9

Defendants have cited the Ninth Circuit’s two-part framework to explain the test for summary judgment in

a section 1 Sherman Act case. Defs.’ Mem. at 16-17 (citing In re Citric Acid Litig., 191 F.3d 1090, 1094 (9th Cir.

1999) (describing the inquiry as (1) whether the defendant can “rebut an allegation of conspiracy by showing a

plausible and justifiable reason for its conduct that is consistent with proper business practice” and (2) whether

plaintiff can provide “specific evidence tending to show that the defendant was not engaging in permissible

competitive behavior” (first passage quoting Richards v. Neilsen Freight Lines, 810 F.2d 898, 902 (9th Cir. 1987))).

While that test does not appear to be inconsistent with the framework articulated by the Supreme Court or by other

circuits, the Ninth Circuit’s approach has not been universally adopted, including not by the D.C. Circuit, cf.

generally Kreuzer v. Am. Acad. of Periodontology, 735 F.2d 1479 (D.C. Cir. 1984), so that two-step analysis is not

applied here.

41

what the formula is going to be or something. And they couldn’t have . . .”). Plaintiffs therefore

must demonstrate through circumstantial evidence that an inference of conspiracy is more

reasonable than that of independent action.

C. Plaintiffs Cannot Demonstrate that Defendants’ Conduct was Parallel as to

Carload and Coal Traffic.

When relying on “circumstantial evidence of conscious parallelism” to prove a section 1

claim, a plaintiff must “first demonstrate that the defendants’ actions were parallel,” as all parties

here agree. Domestic Airline Travel, 691 F. Supp. 3d at 194 (second passage quoting In re Beef

Indus. Antitrust Litig., 907 F.2d 510, 514 (5th Cir. 1990)); Williamson Oil Co., 346 F.3d at 1301

(“First, the court must determine whether the plaintiff has established a pattern of parallel

behavior.”); MSJ Hr’g Tr. at 34:6-8 (defendants’ representation that circumstantial evidence

likely cannot overcome lack of parallelism); id. at 106:14-19 (plaintiffs’ representation that they

are not arguing the law does not require parallel conduct). In part because parallel conduct alone

is not sufficient to establish a conspiracy—only parallel conduct in the presence of additional

plus factors suffices—caselaw explicating the minimum degree of parallelism required for a

conspiracy is not easily distilled, as may be expected with such a fact intensive inquiry. See,

e.g., Williamson, 346 F.3d at 1304-05 (only considering the plus factors because “no party

contests the satisfaction of the first prong of our inquiry, viz., the existence of parallel pricing

behavior”); Tera Grp., Inc. v. Citigroup, Inc., No. 24-135, 2024 WL 4501967, at *3 (2d Cir. Oct.

16, 2024) (affirming a dismissal of a complaint for failure to plead a section 1 Sherman Act

claim but “assuming arguendo that [plaintiff] . . . sufficiently pled one or more acts of parallel

conduct”). Generally, parallelism is shown by the same or very similar behavior over the same

general timeframe. See Anderson News, 899 F.3d at 104.

42

Pricing and strategy changes and other policy and practice adjustments that align can all

qualify as parallel behavior. See In re RealPage, Inc., Rental Software Antitrust Litig. (No. II),

709 F. Supp. 3d 478, 505 (M.D. Tenn. 2023) (“Courts accept allegations of parallel pricing and

parallel changes in policies or strategies as evidence of parallel conduct.”); see, e.g., Domestic

Airline Travel, 691 F. Supp. 3d at 202-03 (discussing defendants’ capacity changes as part of the

alleged conspiracy). With respect to pricing, “[d]iscernible parallel conduct requires more than

simply indefinite ‘higher’ prices . . . alone.” Domestic Airline Travel, 691 F. Supp. 3d at 194

(quoting Baby Food, 166 F.3d at 129-130); Baby Food, 166 F.3d at 129-130 (“[R]ising prices do

not themselves permit an inference of a collusive market dynamic.” (alteration in original)

(quoting Brooke Grp., 509 U.S. at 237)). Though “parallel pricing does not require ‘uniform

prices,’” the pricing must at least be “within an agreed upon range.” Baby Food, 166 F.3d at 132

(quoting United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 222 (1940)). The pricing

changes should also be more similar than the general alignment that is expected among

competitors. See In re Pork Antitrust Litig. (“Pork”), -- F. Supp. 3d --, 2025 WL 1224694, at

*27 (D. Minn. 2025) (suggesting that converging around certain prices may not be enough to

demonstrate parallelism because “given the competitive nature of the pork market, one would

expect competitors’ prices to generally move in parallel” but still finding parallelism based on

other evidence); see also Baby Food, 166 F.3d at 135 (“Parallel pricefixing must be so unusual

that in the absence of an advance agreement, no reasonable firm would have engaged in it.”). 10

Multiple price changes over time that defendants are shown to be uniformly tracking one another

further help demonstrate parallelism. See, e.g., In re Titanium Dioxide Antitrust Litig., 959 F.

10

As this cited remark made in the context of discussing “the plus factors” in Baby Food, 166 F.3d at 135,

illustrates, when examining the degree of parallelism among defendants, the threshold parallel conduct inquiry may

bleed into the plus factors because particularly parallel conduct—of the kind that would not be expected from mere

interdependence alone—may also tend to exclude an inference of independent action.

43

Supp. 2d 799, 825 (D. Md. 2013) (noting the “pervasive[ness]” of the “parallel price increases,”

i.e., 25 over the course of eight years).

Regarding timing, parallel conduct generally occurs over a “time period suggestive of

prearrangement.” Anderson News, 899 F.3d at 104. That time period may differ depending on

the context. See, e.g., Park Irmat Drug Corp. v. Express Scripts Holding Co., 911 F.3d 505, 517

(8th Cir. 2018) (“We do not hold that actions taken within six months of each other can never

constitute parallel conduct, but only that the terminations here, executed under dissimilar

circumstances and separated by six months, did not constitute parallel conduct.”). While

simultaneity of price increases is not necessary to showing parallelism, simultaneity is

considered a plus factor that leans in favor of inferring a conspiracy. See In re Musical

Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1195-96 (9th Cir. 2015); Christopher R.

Leslie, The Factor/Element Distinction in Antitrust Litigation, 64 WM. & MARY L. REV. 585,

625-26 (2023).

Applying these lessons regarding pricing, strategy, or practice changes over time leads

inexorably to the conclusion that defendants did not take parallel action during the alleged

conspiracy period in changing their FSC programs with respect to either their formulas or

coverage policies. Their formulas prior to the start of the alleged conspiracy period were more

uniform than their formulas after defendants made changes in 2003, and the timing of

defendants’ decisions does not demonstrate coordinated action. Likewise, defendants’ coverage

policies, i.e., their approach to how frequently and uniformly FSCs must be imposed in

unregulated freight contracts, were adopted at different times and lacked uniformity throughout

the alleged conspiracy period.

44

1. Defendants’ FSC Formulas Differed More During the Conspiracy

Period than Before.

Plaintiffs argue that defendants engaged in coordinated action with respect to their

unregulated carload and coal freight traffic by lowering their trigger prices, escalating FSC

percentages at smaller increments on the HDF and WTI indices, resulting in higher FSCs at

every interval, and changing the method of determining whether the trigger price was met (e.g.,

based on the average of the prior month’s prices or other calculation). Pls.’ Opp’n at 36-39, 114.

While defendants did make changes to their FSC formulas in 2003 and 2004, they do not evince

parallel action. Prior to the alleged conspiracy, three of the four defendants (UP, CSX, and NS)

had identical formulas for carload and coal freight traffic. See supra Parts I.B.1-I.B.2, I.B.5.

Plaintiffs, indeed, admit that the defendants’ FSC formulas were closely aligned before the

alleged conspiracy period. See MSJ Hr’g Tr. at 70:21-71:2 (Court: “Q. . . . I think in the pre-

conspiracy period, based on the charts that are in the record, there was a fairly close alignment

among the defendants in their FSC formulas. Wouldn’t you agree on that?” to which plaintiffs’

counsel responded, “I would agree . . . I would agree on that.”). After 2003, only CSX and NS

had the same formula. See id. Defendants’ changes during the alleged conspiracy period

therefore made their formulas more dissimilar. See PX989 ¶ 75, Pls.’ App’x Vol. 19B, ECF No.

1224-2 (sealed) (revised reply report of plaintiffs’ expert, Dr. Allen E. Jacobs, Fig. II.10,

demonstrating that average FSC rates pre-conspiracy period were 1.2% for all defendants except

BNSF, for which they were 1.6%, and during the alleged-conspiracy period, FSCs were more

variable: 13.4% for BNSF and UP carload, 16.9% for BNSF coal, 18.5% for UP coal, and 16.3%

for CSX and NS).

After initially announcing that UP would follow CSX, UP went in a different direction

entirely, separating from CSX and NS by adopting the HDF index. See supra Parts I.B.1, I.B.5.

45

Although BNSF also had the HDF index, UP adopted a different formula from BNSF’s: a higher

$1.35/gal trigger point for application of a fuel surcharge instead of BNSF’s $1.25/gal trigger

point—meaning the UP surcharge would kick in when fuel costs were higher than for shippers

using BNSF. Compare DA4603, Defs.’ App’x Vol. 12 (May 7, 2003, BNSF Rules Book 6100-

A), with DA1573 at 1574-75, Defs.’ App’x Vol. 2, ECF No. 1172-2 (sealed) (May 12, 2003,

internal UP email from Christine Stenger-Bleske to UP listservs, with attached UP

announcement of modifications to FSC). Leadership at BNSF observed this difference, noting in

July 2003 that UP would be “very competitive at lower Highway Diesel Fuel (HDF) prices.”

DA4415, Defs.’ App’x Vol. 11, ECF No. 1172-11 (sealed) (July 1, 2003, memorandum from

Kyei to Steve Bobb).

Plaintiffs argue that the formulas during the conspiracy period were functionally

“equivalent,” resulting in the same charges, even if superficially different in how they produced

those outcomes. Pls.’ Opp’n at 91. In other words, despite the differences, plaintiffs essentially

argue the formulas were similar enough to reflect parallel conduct. For example, they portray

UP’s change as “match[ing]” BNSF’s formula, explaining that the terms were identical over the

$1.35 threshold, and they generated the same FSC percentages throughout the conspiracy period.

Id. at 26, 97. Plaintiffs cite deposition testimony and communications where BNSF and UP

leaders recognized the similarity. See, e.g., PX610 at 119, Pls.’ App’x Vol. 10A (Deposition of

John Lanigan, Executive Vice President and Chief Marketing Officer of BNSF (“Lanigan,

BNSF, Dep.”) at 119:14-24, noting that BNSF and UP’s programs are identical above $1.35);

PX401, Pls.’ App’x Vol. 6B, ECF No. 1220-2 (sealed) (May 9, 2003, internal UP email from

Larry Nowakowski to listservs, stating, “UP’s carload surcharge . . . mirrors BNSF’s except that

UP does not apply a 1% surcharge when the price is between $1.30 and $1.349/gallon”); PX502,

46

Pls.’ App’x Vol. 7, ECF No. 1201-4 (sealed) (Oct. 20, 2004, internal UP email from Kurt

Schroeder to Chuck Adams, recognizing that UP changed its surcharge to “match BNSF’s

‘standard’ HDF based surcharge” in June 2003). Plaintiffs even suggest that BNSF and UP’s

formulas were also functionally equivalent to CSX and NS’s, despite the use of different fuel

indices, see Pls.’ Opp’n at 37, 107, further citing comments recognizing rough conversions

between those fuel indices (WTI and HDF) trigger prices, see PX610 at 97, Pls.’ App’x Vol. 10A

(sealed) (Lanigan, BNSF, Dep. at 97:11-21, indicating $1.25 HDF is “roughly equivalent” to $23

WTI); PX84 at 1, Pls.’ App’x Vol. 2, ECF No. 1219-2 (sealed) (undated BNSF email text,

explaining that the new trigger price “reflect[s] the $23 WTI crude strike price being used by UP

in their new carload fuel surcharge table”); PX474, Pls.’ App’x Vol. 7 (June 3, 2003, handwritten

notes from CSX-UP alliance meeting, noting that both roads start at a $23 trigger, despite UP

having adopted a trigger on the HDF scale at that point). Plaintiffs discount the differences in

the formulas as “distinctions without a difference,” MSJ Hr’g Tr. at 72:5-9, reflecting, perhaps,

defendants’ shrewdness in avoiding antitrust scrutiny when forming the conspiracy, id. at 85:19-

25, 86:4-13.

Even assuming that defendants’ pricing formulas were functionally equivalent in terms of

the fuel surcharges produced, defendants’ conduct would not be sufficiently parallel. A

conspiracy requires not just similar price outcomes among defendants, as plaintiffs insist

defendants reached, but parallel price changes—or parallel behavior of some other kind—during

the conspiracy period. See Anderson News, 899 F.3d at 104 (using the term “parallel action”).

Defendants’ formulas already contained the same elements (i.e., trigger price, use of index,

percentage of base price increasing at a given rate, etc.) prior to the alleged conspiracy period

and were also aligned on their substantive terms. During the alleged conspiracy period,

47

defendants at most maintained some general alignment while making some changes to specific

terms that ultimately made the formulas more dissimilar. That does not signify parallel behavior,

especially given that “one would expect competitors’ prices to generally move in parallel” due to

the “competitive nature of the [rail freight] market.” Pork, 2025 WL 1224694, at *27.

Competitors may try to attract customers by offering a pricing regime structured differently than

its peers’ or by offering different discounts, but they will often maintain overall similar prices,

driven by common market factors, similar costs, and comparable profit margin goals. In this

case, because all the formulas were tied in some way to fuel pricing, they generally followed the

price of oil, resulting in a similar trend line. See MSJ Hr’g Tr. at 120:6-19 (defendants’ counsel

describing graph shown at hearing that defendants’ surcharges generally followed the oil price

trend line). 11 Parallel conduct, however, requires pricing decisions so “unusual,” they could not

be expected from an ordinary competitive market. Baby Food, 166 F.3d at 135. That

competitors’ prices were generally on par with one another revenue-wise, despite being

distinguishable facially, is not unusual.

In any event, despite what plaintiffs perceive as functional equivalency in the formulas,

defendants’ pricing mechanisms were fundamentally different. As one exhibit cited by plaintiffs

put it, “WTI increases do not directly translate into HDF market increases. When oil prices

finally begin to decline, WTI provision will probably fall faster than our HDF.” PX502, Pls.’

App’x Vol. 7 (Oct. 20, 2004, internal UP email from Schroeder to Adams). Further, although the

trigger prices for BNSF and UP did not result in significantly different FSCs during the

conspiracy period because fuel costs exceeded UP’s higher trigger point, that result was not

obvious at the time the parties decided their FSC formulas, as they did not know how fuel prices

11

Defendants’ graph mapping their surcharges against oil prices was not in the record as an exhibit and was

not introduced into the record at the hearing.

48

would fluctuate. By adopting different formulas, defendants made different bets on and took

different risks regarding how fuel prices would vary.

Plaintiffs also try to represent UP’s change of course in shifting to a different HDF-based

formula—after announcing that it would match CSX exactly—as “advanc[ing] the conspiracy”

by bringing UP and BNSF, the two Western railroads, in line with one another. Pls.’ Opp’n at

92. Yet, UP did not “match” BNSF at all—UP’s formula had a different and higher trigger price

than BNSF, giving UP customers more of a cushion to avoid paying a fuel surcharge in a

fluctuating fuel price market. UP’s decision thus made defendants’ FSC formulas more distinct

from one another and does not reflect an effort to make its formula the “same” as others’ “in the

eyes of customers,” as plaintiffs contend. Id. (second passage quoting PX241 at ‘361, Pls.’

App’x Vol. 4, ECF No. 1200-4 (sealed) (May 14, 2003, NS/UP Alliance Meeting Notes)). 12

Additionally, plaintiffs’ argument that UP and BNSF’s formulas are fundamentally the

same deteriorates when this same logic is applied more broadly. If UP and BNSF’s formulas

should be considered equivalent with a $0.10 difference in trigger price, BNSF cannot be

considered to have made any meaningful change to its FSC during the alleged conspiracy period

at all—BNSF only changed its trigger price by $0.05 and adjusted its starting surcharge by 0.5%.

See supra Parts I.B.1, I.B.5; Defs.’ Reply at 35-36; contra Pls.’ Opp’n at 25 (insisting that BNSF

12

Plaintiffs explicitly cite a comment in PX241 from the NS-UP Alliance Meeting minutes that “it would be a

positive outcome if all roads had the same process [for FSC application] in the eyes of our customers,” id. at ‘361,

three times in their brief and seven times in their Counterstatement of Facts. See Pls.’ Opp’n at 26, 92, 101; Pls.’

COF at 71, 111, 118, 190, 208, 243-44. Plaintiffs, contending the exhibit serves as practically direct evidence of

conspiracy, see MSJ Hr’g Tr. at 74:4-18, overuse yet under contextualize that statement. The minutes refer to a

general discussion between NS and UP about “fuel surcharges and various application processes as used by different

roads,” and general “consensus” “that it would be” “positive” “if all roads had the same process in the eyes of

customers.” PX241 at ‘361 (emphasis added). Not only does that comment not reflect a desire harbored by

defendants for uniform prices, as plaintiffs suggest—instead referring to customers’ desire for more uniformity in,

and concomitant ease in shippers’ understanding of, the logistics for imposition of FSCs—but it also does not refer

to UP’s recent FSC change and its relation to BNSF’s formula at all. Plaintiffs’ persistent effort to distort this vague

language to their liking is unavailing.

49

made a meaningful change to have its FSC “more closely align[]” with its competition (quoting

PX914 at ‘387, Pls.’ App’x Vol. 15, ECF No. 1204-1 (sealed) (May 1, 2003, BNSF internal draft

of Fuel Surcharge Script)). In fact, this change did not make any difference to FSCs charged at

all during the alleged conspiracy period, given the then-prevailing fuel prices. See BNSF Mem.

in Supp. of Mot. for Summ. J. (“BNSF Mem.”) at 7, ECF No. 1158-1 (sealed) (“In practical

terms, therefore, BNSF’s only change to its published carload rate-based FSCs during the

supposed conspiracy was to add a 0.5% surcharge between $1.25 and $1.30 HDF. And because

HDF never dipped below $1.30 through 2008, BNSF’s old and new programs proved to have

identical effect.”). Plaintiffs’ effort to argue, on the one hand, that small differences are

inconsequential when comparing UP and BNSF surcharge formulas and, on the other, that small

differences are significant when examining BNSF’s pricing alone, is self-defeating and

ultimately unpersuasive in showing parallelism.

BNSF and UP further diverged from other defendants during the alleged conspiracy

period by applying separate formulas to coal traffic, while NS and CSX continued applying their

carload formulas. See supra Parts I.B.2, I.B.5; DA15709 at 15709-10, Defs.’ App’x Vol. 26,

ECF No. 1172-26 (sealed) (June 8, 2004, BNSF Pricing Update, BNSF announcing coal-specific

formula); DA1624 at 1624-25, Defs.’ App’x Vol. 3, ECF No. 1172-3 (sealed) (Oct. 1, 2004,

Letter from Lance Fritz to shippers, UP announcing coal-specific formula). BNSF and UP’s coal

formulas also did not align with one another. BNSF first announced its coal FSC and then UP

conducted its own analysis before also deciding to adopt one. See infra Part III.D.2. UP selected

a different formula, and the two formulas never generated the same FSC percentage during the

alleged conspiracy period. See supra Parts I.B.2, I.B.5; DA24600 at 24601, Defs.’ App’x Vol.

38, ECF No. 1172-38 (sealed) (Report of defendants’ expert, Kevin Murphy, at Exh. 52, graph

50

demonstrating percentage difference between the companies’ coal FSC rates); Pls.’ Opp’n at 117

(asserting that the “average difference between the carriers’ monthly FSCs . . . was just over two

percentage points”). NS considered but never adopted a coal-specific formula during the

conspiracy period. See DA18074 at 18074-77, Defs.’ App’x Vol. 29, ECF No. 1172-29 (sealed)

(July 14, 2004, NS internal memo on FSC Strategies and Options, considering changes to

carload/coal FSCs); DA18072, id. (July 16, 2004, email from Pat Glennon, NS Dir. of Marketing

Systems, to Don Seale, NS EVP and Chief Marketing Officer, et al., discussing potential changes

and recommendation to keep coal FSC the same).

BNSF departed even further from UP and the other defendants when it began applying a

mileage-based formula to its coal traffic in March 2005. See supra Parts I.B.2, I.B.5; DA3099 at

3146, Defs.’ App’x Vol. 5, ECF No. 1172-5 (sealed) (Lanigan, BNSF, Dep. at 241:2-11,

testifying that the announcement for a mileage-based FSC was made March 29, 2005). In fact,

BNSF had already been considering this change to a mileage-based system by the time UP

announced its rate-based coal-specific formula, undercutting any inference that the two firms

were coordinating on coal-specific FSCs. See DA4481, Defs.’ App’x Vol. 12 (Aug. 30, 2004,

internal BNSF email from Kyei to George Pacochoa et al., indicating that Lanigan requested a

new review of a mileage-based surcharge). UP did not follow BNSF and held off on adopting a

mileage-based formula until after the STB decision in 2007. See DA19086 at 19093, Defs.’

App’x Vol. 30 (Mar. 21, 2007, press release).

As defendants point out, NS also shifted away from the other defendants by moving away

from FSCs in 2006, announcing a new formula that incorporated more of the fuel cost into its

base rate and reduced reliance on FSCs. See NS Mem. in Supp. of Mot. for Summ. J. (“NS

Mem.”) at 1, 12, ECF No. 1155-1 (sealed); DA5191, Defs.’ App’x Vol. 14, ECF No. 1172-14

51

(sealed) (Apr. 24, 2006, NS press release, describing this change with respect to regulated

traffic); DA18281, Defs.’ App’x Vol. 29 (May 8, 2006, internal NS email from Glennon to

Michael Lambert, describing how the initial focus of the change will be on public rates but it will

subsequently be applied to private contracts); PX260, Pls.’ App’x Vol. 4 (May 30, 2006, internal

NS email from Dedra Smith to MKT Industrial Prods. listserv, describing how it should be

implemented in private contracts). Specifically, in mid-2006, NS increased its base rate by

16.4% and adopted a $64 surcharge based on the WTI index with a 0.3% increment for every $1

price increase. PX260, Pls.’ App’x Vol. 4. Plaintiffs discount this change as merely a

perpetuation of the conspiracy because NS locked into its base pricing its over-recovery on fuel

cost, protecting its future profits. Pls.’ Opp’n at 56-57; see also id. at 147-48. Plaintiffs miss the

point. Regardless of whether changes to shift more of the fuel cost into the base rate could be

indicative of some past conspiracy, as discussed infra Part III.E.9, the fact that such a change

occurred during the apparent conspiracy demonstrates, at a minimum, a lack of parallelism

among defendants and independent decision-making on the part of NS, undermining the very

existence of said conspiracy.

Further, plaintiffs discount the differences in formulas—such as BNSF and UP adopting

separate formulas for coal traffic but CSX and NS sticking to their carload formulas for coal

traffic—contending such differences should be disregarded as logical. For instance, BNSF and

UP shipped more coal and shipped longer distances, thus making coal fuel costs more significant

for their business. See Pls.’ Opp’n at 118-19. Ironically, plaintiffs are arguing defendants’ own

point: Defendants took different approaches to their FSC formulas based on their unique

business needs and considerations. See infra Part III.D.1. They did not pursue economically

irrational choices simply to further a conspiracy.

52

The evidence on defendants’ FSCs and the FSC formulas’ increasing dissimilarity, rather

than convergence, during the conspiracy period is virtually indisputable.

2. The Timing of Defendants’ Changes to FSC Formulas Undercuts Any

Parallelism.

Time lags in pricing decisions undermine a finding of parallel behavior and an inference

of conspiracy. See Baby Food, 166 F.3d at 131-32. Where time elapses between defendants’

decisions, they have had a “good deal of time to react to competitors’ moves and consider their

own,” suggesting they were acting unilaterally. See In re Text Messaging Antitrust Litig., 46 F.

Supp. 3d 788, 807-08 (N.D. Ill. 2014) (“[T]he time elapsed between the [price] increases,” seven

months, three months, and two months, among other evidence, was “as equally suggestive of

independent action as collusion,” if not “more suggestive of independent action.”), aff’d, 782

F.3d 867 (7th Cir. 2015). The Third Circuit in Baby Food found three-to-seven-month gaps

between defendants’ implementation of prices to undercut an inference of conspiracy. See 166

F.3d at 131-132. Similarly, the Seventh Circuit in Kleen Products held plaintiffs lacked

evidence of a conspiracy where one defendant did not follow until over a month later. 910 F.3d

at 936.

Here, the timing of defendants’ changes does not allow for a finding of parallel conduct.

Defendants did not rapidly make changes at once or even make them in an efficient fashion.

They adopted their alleged conspiratorial FSCs over the course of nine months, see supra Parts

I.B.1-I.B.2, I.B.5, with NS conducting three internal evaluations before following CSX’s formula

three quarters of a year later, see infra Part III.D.2(d). During this time, NS acted competitively

and incompatibly with a conspiracy, intending to gain market share from CSX by offering lower

FSCs. See DA5574, Defs.’ App’x Vol. 15, ECF No. 1172-15 (sealed) (Apr. 29, 2003, internal

NS email from Glennon to Seale, conveying, “The CSXT formula faces continued opposition

53

. . . . NS can use this as leverage in negotiating larger rate increases into base rates, or additional

traffic.” (emphasis added)). Even CSX, UP, and BNSF, which all made changes to their FSCs in

spring of 2003, made them months apart: CSX in March, UP in April but then changing course

in May, and BNSF in May. See Kleen Prods., 910 F.3d at 936 (noting no evidence of conspiracy

where one defendant followed another over a month later and noting that “[e]ven the attempts

that saw quick turnaround times do little to raise suspicions. If it is in a company’s self-interest

to imitate a price leader’s increase, why wait to enjoy the benefit?”). BNSF and UP also adopted

their coal-specific FSCs four months apart. See supra Parts I.B.2, I.B.5. So even if those FSCs

were sufficiently similar to be deemed parallel, their adoption was far from it.

Plaintiffs rightly point out that “simultaneous action is [] not a requirement” to the

finding of a cartel. Pls.’ Opp’n at 91 (alteration in original) (quoting In re Broiler Chicken, 290

F. Supp. 3d 772, 791 (N.D. Ill. 2017)) (also citing other out-of-circuit district court cases and a

single Fourth Circuit case, SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 429 (4th Cir.

2015)). They emphasize that a few months’ gap between announcements in pricing changes

does not preclude a conspiracy. Indeed, no hard cutoff exists. Nonetheless, gaps in time

between defendants’ decisions do undermine any pattern of parallel behavior, and longer gaps do

so more severely.

Plaintiffs also contend that NS agreed early on to follow CSX but simply faced technical

difficulties that, despite efforts to overcome them, alone resulted in the delay. Pls.’ Opp’n at

100-05 (citing PX320 at ‘632, Pls.’ App’x Vol. 5, ECF No. 1201-1 (sealed); PX366 at ‘216, Pls.’

App’x Vol. 6A, ECF No. 1220-1 (sealed)). They insist that although NS could not bring itself

into alignment with CSX immediately, NS “spent the better part of the year laying the

groundwork to do so as soon as possible.” Id. at 103 (citing PX364 at ‘119, Pls.’ App’x Vol. 6A;

54

PX347 at ‘654-56, Pls.’ App’x Vol. 5; PX270 at ‘523, Pls.’ App’x Vol. 4; and PX325 at ‘466,

Pls.’ App’x Vol. 5). Plaintiffs misrepresent the record. The emails they cite for this contention

clearly indicate that NS did not in fact decide early on to adopt CSX’s formula, nor were

technical concerns dispositive in any such choice. Moreover, NS never resolved the technical

issues it did have, demonstrating that such issues were inconsequential. NS simply used the

same phased-in approach when it implemented the formula in early 2004 that NS would have

used had it adopted the formula in March 2003, without technical systems changes.

Examining plaintiffs’ contentions more closely, the first email plaintiffs cite, sent by

NS’s Director of Marketing Systems, Pat Glennon, on March 20, 2003, lists three pros and five

cons for adopting CSX’s formula—none of which relate to technical considerations. See PX320

at ‘632, Pls.’ App’x Vol. 5. Glennon only mentions technical considerations as an aside at the

bottom of the email. See id. In the second email cited by plaintiffs, sent just a few days later,

Chief Marketing Officer (“CMO”) Don Seale lets Glennon know that he asked someone to look

into whether “accounting/billing for the CSX format would be doable,” but he does not give any

indication that any such challenges would be insurmountable. See PX366 at ‘216, Pls.’ App’x

Vol. 6A.

None of the documents provide any indication that NS actually made a decision—or was

likely to make a decision—to follow CSX until November 2003 and cannot be considered to

have “la[id] the groundwork,” Pls.’ Opp’n at 103, to align with CSX until then. Plaintiffs cite an

email from Glennon reviewing feedback from the Group Vice Presidents and concluding that the

consensus was to delay the switch until 2004 while still laying the groundwork. PX364 at ‘119,

Pls.’ App’x Vol. 6A. Plaintiffs overlook the important context, however, that Glennon’s email

was sent in November and that Glennon’s earlier email (in the same exhibit), asking for feedback

55

on the best course of action, indicates clearly that NS had made no decision yet about switching

to CSX’s formula but merely held it open as one possibility. See id. at ’121 (Nov. 4, 2003,

internal NS email from Glennon to Gary Wendorf et al., expressing, “Should NS adopt the

CSXT FSC? Please provide your feedback by Friday (11/7) on the options listed below,”

including “Retain the current NS standard” and “Adopt UP or BNSF standard”). Another email

cited by plaintiffs from Glennon, telling Seale that the review teams endorsed the option of

“proceed[ing] with the program to remove the full text FSC note from private NS authorities and

position ourselves for a conversion”—in other words, setting NS up to switch to the CSX

formula—likewise was not sent until November 2003 and was merely a recommendation, not a

final decision. PX325 at ‘466, Pls.’ App’x Vol. 5. Finally, plaintiffs cite PX347 at ‘654-66, Pls.’

App’x Vol. 5, an email conveying the actual announcement of NS’s FSC change in January

2004, which plaintiffs describe as “anticipated in April 2003” but that exhibit nowhere suggests

that NS made a decision then, see id. In fact, in April 2003, an NS email following a note from

Glennon states explicitly that NS “seem[ed] to be headed in the direction of not making a change

to the FSC provisions like the new CSX provisions, at least not right away.” PX270 at ‘522,

Pls.’ App’x Vol. 4 (Apr. 30, 2003, internal NS email from unknown to Tom Rappold et al.); id.

(Apr. 29, 2003, email from Glennon to Seale, sharing that “[t]he consensus recommendation is

that we do not adopt the CSXT formula at this time”).

Moreover, plaintiffs’ assumption that NS was delayed only by a technical problem is not

supported by the evidence. NS had contracts that either hard-coded the FSC or that referenced

the conditions of carriage, in a separate terms and conditions document. NS Mem. at 9. NS’s

initial FSC was put in the conditions of carriage. See DA18019 at 18026, Defs.’ App’x Vol. 29

(June 1, 2000, NS Conditions of Carriage # 1-B, Rule 255- Fuel Surcharge). The perceived

56

technical difficulty was that NS would have to update individually the contracts with the hard-

coded FSCs, requiring a phased-in approach to an FSC change. See NS Mem. at 9-10. If NS

had wanted to change its FSC sooner, however, NS could have changed its conditions of carriage

so at least the contracts importing those conditions would have the new formula. NS did not do

so, despite making other changes to its conditions in the summer of 2003. See id.; DA18317 at

18325, Defs.’ App’x Vol. 29 (June 1, 2003, NS Conditions of Carriage #1-E Rule 255);

DA18336 at 18341-42, id. (Aug. 4, 2003, NS Conditions of Carriage #2-D: Coal, Coke and Iron

Ore, Condition 55.2).

In fact, when NS did change its FSC, NS did so without making any changes to its

approach of hard-coding formulas—demonstrating that this structure was not a barrier after all.

NS embraced the phased-in approach: NS announced the new rate, updated carrier conditions,

updated public rate formulas, and then individually changed the hard-coded contracts. NS Mem.

at 10-11; DA18419 at 18423, Defs.’ App’x Vol. 29 (Deposition of Pat Glennon, NS (“Glennon,

NS, Dep.”) at 102:9-23, testifying that “we applied the fuel surcharge on public authorities right

away and then we applied them on private authorities as they came up for renegotiation. That

would have been the approach we would have taken had the condition of carriage issue never

existed”); Defs.’ Reply at 32 (“NS did not overcome th[e] technical obstacles.” (emphasis

omitted)). NS did not even allow contract formulas to change automatically for those that

imported the conditions of carriage, which would have been the most expeditious approach. It

waited until renegotiations. See NS Br. at 10; DA5576 at 5576-77, Defs.’ App’x Vol. 15 (Jan. 8,

2004, internal NS memo from Glennon to Seale et al., conveying, “In connection with private

authorities (contracts and private quotes), NS will opt to delay application of the new FSC until

the current private publications expire or are renegotiated”); DA18284, Defs.’ App’x Vol. 29

57

(Jan. 29, 2004, email from NS Marketing explaining that approach to customers); DA18286, id.

(Mar. 12, 2004, NS letter to customers expressing the same). NS simply did not wish to follow

CSX until its existing formula proved not to be winning greater market share, nine months later.

See infra Part III.D.1(d).

In sum, even if plaintiffs’ contention were accepted that defendants’ formulas were

functionally equivalent in terms of resulting in similar charges and that could be suggestive of

collusive action, the fact that none of the changes occurred in sharp succession, but rather

unfolded over an extensive period of time demonstrates that defendants’ behavior was not

parallel.

3. Defendants’ Approaches to Increasing Coverage Do Not Show Parallel

or Concerted Action.

Plaintiffs, perhaps aware of the lack of uniformity in defendants’ FSC formulas, also

devote significant attention to defendants’ other changes in their approach to their FSC

programs—particularly their efforts to make FSCs “non-negotiable and imposed across-the-

board, with the goal of 100% FSC coverage.” Pls.’ Opp’n at 36. Plaintiffs argue that defendants

engaged in parallel conduct to expand the application of their FSCs, for instance by requiring

employees to add FSCs to all contracts and requiring them to obtain approval by high-level

executives for any exceptions. See Pls.’ Opp’n at 39-45. According to plaintiffs, all four

defendants adopted the same internal policies to that effect during the conspiracy period, which

achieved the desired goal of massive increases in FSC coverage and exorbitant profits. See id. at

42, 46, 48. Whereas before the conspiracy period, defendants did not always impose FSCs and

were amenable to negotiation, plaintiffs contend that defendants were far more stringent during

the alleged conspiracy period. See id. at 43 (arguing that defendants conveyed to plaintiffs that

their FSCs were nonnegotiable).

58

As an initial matter, defendants argue that plaintiffs’ theory of an independent “coverage”

conspiracy must fail. Defs.’ Reply at 39, 74. If, as the above discussion illustrates, plaintiffs did

not conspire to coordinate FSCs, then “what did they agree to seek to impose widely?” Id. at 74.

Defendants are correct that without an underlying conspiracy over the FSCs themselves,

defendants’ changes in internal policies—designed to maximize profit by applying their own

unique pricing mechanisms more broadly—cannot constitute a conspiracy. At most, plaintiffs’

arguments about coverage serve as evidence, even if unpersuasive, that defendants were

internally enforcing their commitment to impose the supposedly coordinated FSCs, which were

not in fact parallel at all.

Even if defendants’ coverage policies themselves could constitute a conspiracy in

restraint of trade under the Sherman Act or could constitute one in combination with somewhat

parallel pricing decisions, defendants’ policies during the conspiracy period to expand

application of FSCs do not illustrate parallel conduct suggestive of a conspiracy. By the end of

the conspiracy period, all four defendants maintained a policy of including FSCs in every

contract and requiring high-level approval for exceptions, but their adoption of such policies

occurred over the course of years, with some defendants adopting such policies even before the

alleged conspiracy period.

BNSF and UP had broad, universal coverage policies prior to 2003 and made efforts to

further implement those policies to expand their coverage during the alleged conspiracy period.

BNSF stated in 2002 that all contracts should include an FSC and began tracking its progress

toward 100% coverage in 2001. See DA4019 at 4019-20, Defs.’ App’x Vol. 9 (Feb. 15, 2002,

internal BNSF email from Chuck Schultz to Greg Patient describing recommendations from

Kyei, approved by “planners,” and instructing that “every contract should include a fuel

59

surcharge clause. . . . Any deviation from the attached policy should require the approval of the

Business Unit VP”); DA4083, Defs.’ App’x Vol. 10, ECF No. 1172-10 (sealed) (Nov. 4, 2002,

internal BNSF email from George Gillen to Sara Thornsedt, stating, “As you are probably aware,

we are making a concerted effort to increase the application of fuel surcharges to Carload

documents. Effective Oct 1 we started to apply the fuel surcharge to 293 rate documents that

were formerly exempt”); DA3868 at 3874, Defs.’ App’x Vol. 9 (Apr. 9, 2001, Review of BNSF

Fuel Surcharges presentation, showing tracking of percentage of business covered by FSCs);

DA4104 at 4105-07, Defs.’ App’x Vol. 10 (Jan. 21, 2003, Q4 2002 BNSF Earnings Conference

Call, with public reporting of FSC coverage and describing goal of getting more aggressive to

increase coverage). 13

UP, as of late 2002, also adopted a policy of universal coverage and tried to implement

FSCs for all traffic (unless prevented by preexisting contracts) prior to the alleged conspiracy

period. See DA1362 at 1366, Defs.’ App’x Vol. 2 (Oct. 24, 2002, internal UP email from Greg

Sovey to Jack Koraleski, UP CMO et al., attaching procedures stating, “Effective immediately,

all new pricing documents and amendments created must now contain the Fuel Surcharge

language”); id. at 1363 (instructing inclusion of FSC language in “the appropriate rules circulars

and/or tariffs” and “private price documents”). Plaintiffs suggest otherwise, arguing that UP

changed course in 2003, but they focus on the earlier part of the 2000 to 2002 period, not the

time in late 2002 when UP unilaterally decided to focus on increasing coverage. See Pls.’ Opp’n

at 16 (citing PX611 at 23-24, Pls.’ App’x Vol. 10A (Deposition of Robert Knight, UP (“Knight,

13

BNSF’s exhibits reveal further indications that they focused on FSC expansion prior to the alleged start of

the conspiracy, even after the initial announcements of such coverage policies in 2002. See DA7107, Defs.’ App’x

Vol. 17, ECF No. 1172-17 (sealed) (Feb. 13, 2003, internal BNSF email from Kathleen Regan to Todd Olsen

stating, “Focus on Fuel Cost Recovery will be immense in the coming months”); DA3099 at 3106-07, Defs.’ App’x

Vol. 5 (Lanigan, BNSF, Dep. at 26:11-29:5, describing how he made it a goal, upon assuming the role of CMO, by

early 2003, to expand FSC coverage).

60

UP, Dep.”) at 23:14-24:9, describing the lack of an FSC policy but speaking only generally to

the 2000-2002 period); COF ¶ 65 (citing documents from 2000-2001 and the earlier part of 2002,

predating the change in policy)). Plaintiffs’ single example where a shipper negotiated the FSC

out of its contract in December 2002 but was not able to do so a year later is too thin a reed to

find that UP made a significant policy change in Spring 2003. See Pls.’ Opp’n at 42-43; COF

¶ 66; PX600 at 38, Pls.’ App’x Vol. 10A (Deposition of Howard Kaplan, shipper, at 38:11-17);

PX546 at ‘467, Pls.’ App’x Vol. 8, ECF No. 1201-5 (sealed) (Dec. 19, 2002, emails between

Kaplan and UP); PX547, id. (Dec. 22, 2003, emails between Kaplan and UP, noting “all

contracts without fuel language will have fuel language upon renewal” per “a mandate by UP

management”). Instead of what plaintiffs perceive as a significant policy shift during the alleged

conspiracy period, the fact that exceptions to FSC coverage became rarer appears to be due both

to timing, as long-term contracts were renegotiated, and more rigorous enforcement of the

policies already in place.

While both UP and BNSF articulated and doubled down on these FSC coverage policies

during the alleged conspiracy period by adopting requirements for VP approval of exceptions to

applying FSCs, such expressions were not significant changes in course, given the preexisting

policies, and they did not occur in parallel, or in close succession to one another or any other

defendant, at the start of the alleged conspiracy. BNSF adopted the requirement that all

exceptions be approved by VPs in April 2003. See PX50, Pls.’ App’x Vol. 1, ECF No. 1219-1

(sealed) (Apr. 9, 2003, internal BNSF email from Denis Smith to James Obermiller, stating,

“Effective immediately and urgently per John Lanigan. Authority to omit FSC provision is to be

granted to VP’s only (who will also clear with John). This needs to be communicated

immediately as well”); DA4340, Defs.’ App’x Vol. 11 (same); PX122 at ‘919, Pls.’ App’x Vol.

61

2 (Apr. 24, 2003, internal BNSF email from Gillen to William Brown et al., describing the

change in approval level required). BNSF teams had originally approved a similar policy in

February 2002, when evaluating how to achieve the goal of greater coverage. See DA4019,

Defs.’ App’x Vol. 9 (Feb. 15, 2002, internal BNSF email from Patient to Schultz, “Any

deviation from the attached policy should require the approval of the Business Unit VP”);

DA4048 at 4066, 4071, 4080, Defs.’ App’x Vol. 10 (Nov. 1, 2002, presentation on contract audit

action items, emphasizing that FSCs need to be applied in more contracts and including as an

action item the creation of an approval process for not including FSCs); Defs.’ Reply at 43. UP

did not do the same until months later, in June 2003—again, merely facilitating its pre-

conspiracy period policy of universal coverage. See Pls.’ Opp’n at 40-41; PX1111 at ‘922, Pls.’

App’x Vol. 23, ECF No. 1206-1 (sealed) (June 19, 2003, internal UP email from Todd Whitman

to Bob Toy, forwarding messaging stating, “Friendly reminder—surcharge exceptions now

require VP approval”); see also PX414 at ‘597, Pls.’ App’x Vol. 7 (Jan. 5, 2004, email from Toy

to Schroeder, stating, “The Highway Diesel Fuel surcharge policy is required for any new and

renewed contracts . . . . ANY deviation from that policy requires advance sign-off by Bob

Toy”).

The other two defendants did not adopt any kind of similar policies until years after both

UP and BNSF’s original pre-conspiracy-period policies and their reinforcement in the Spring of

2003. NS did not adopt any broad coverage policies or requirements for high-level approval for

exceptions to exclude FSCs until at least early 2004, coinciding with the change to its FSC

formula. See PX326 at ‘841, Pls.’ App’x Vol. 5 (Jan. 8, 2004, email from Glennon to Seale et

al., stating, “Any deviations from the new standard must have GVP approval and must be

reviewed by Pricing Services for applicability”); PX272 at ‘412, Pls.’ App’x Vol. 4 (June 11,

62

2004, email from Tom Bayrer to Danny Smith, stating, “All deals must have the new FSC”);

PX293 at ‘040, Pls.’ App’x Vol. 5 (Mar. 8, 2004, email from Joe Osborne to Seale, stating, “I

assume that in all cases there is to be no deviation from NS’s published FSC without your

approval[,]” with response, “Correct”). 14

CSX did not adopt similar coverage policies until at least late 2005. To the contrary,

CSX continued to allow the inclusion of the RCAF price escalator index as an alternative to

FSCs until then. See DA2802 at 2807, Defs.’ App’x Vol. 5 (June 2003, CSX presentation on

Contract Escalators, describing as the “current policy” that “[a]ll price vehicles must contain fuel

surcharge language or RCAF(u)”); DA2295 at 2300, Defs.’ App’x Vol. 4 (Oct. 31, 2003, internal

CSX email from Frank Onimus to Sales & Marketing team, sharing an attachment entitled

“Policy: Fuel Surcharge Application—Contracts, Quotes, and Price Lists” and dated Apr. 25,

2003, reading “All private prices are subject to either Fuel Surcharge or 100% of the RCAF(u)”);

DA6925 at 6930, Defs.’ App’x Vol. 17, ECF No. 1172-17 (sealed) (June 1, 2005, CSXT

Industrial & Agricultural Products Midyear Review Presentation, stating that RCAF(u) remained

“acceptable as an alternative” to fuel surcharges); DA2672, Defs.’ App’x Vol. 4 (Dec. 21, 2005,

internal CSX email from Clyde McIntyre to Gooden et al., announcing switch to using AIILF

14

Both sides cite ample evidence about NS’s pre-conspiracy period approach to coverage, and this evidence,

on balance, indicates that while NS wanted to implement FSCs broadly, the company was also amenable to

exceptions and discounts. Compare, e.g., DA5612, Defs.’ App’x Vol. 16 (Apr. 21, 2000, internal NS email from

Bob Scharpf to Thomas Brugman stating, “Product Managers should continue to add the fuel surcharge note to all

new/reissued contracts and private quotes (NSSQs) and all new open quotes and tariffs”); DA5613, id. (May 11,

2000, internal NS email from Bob Scharpf to Thomas Brugman, “[The FSC] should rarely be negotiable”); DA6050,

id. (Sep. 27, 2000, internal NS email from D.V. Corcoran to Earl Pinkston et al., stating, “In our conference call this

morning . . ., we were given our charge to work with our customers and secure fuel surcharge increases all [sic] ALL

business”), with DA18017, Defs.’ App’x Vol. 29 (May 30, 2000, email from Brugman to Seale et al., apparently

running an FSC exception by Seale); DA8351 at 8352, Defs.’ App’x Vol. 20, ECF No. 1172-20 (sealed) (June 22,

2000, email from Brugman, NS, to Dale Cox of Cargill, stating, “With Don Seale’s approval we have offered to

waive the surcharge language in exchange for an additional 1% increase across the board”); PX276 at ‘420, Pls.’

App’x Vol. 4 (Apr. 14, 2000, email from Pat Lewis to Brugman instructing to take out the FSC if it is a “deal

buster” but emphasizing that “[t]he fuel surcharge should always be a part of the contract negotiation process”).

NS’s approach in 2004 and after more clearly demonstrated firmer efforts to impose FSCs broadly.

63

index and FSC instead of RCAF(u)). CSX regularly negotiated discounts on its FSCs or offered

RCAF instead of surcharges altogether. See, e.g., CSX Mem. in Supp. of Summ. J. (“CSX

Mem.”) at 13-14 & n.15, ECF No. 1160-1 (sealed) (providing examples of CSX negotiating an

RCAF arrangement instead of a surcharge in 2003, 2004, and 2005); id. at App’x A (asserting

that 33 of MDL I and MDL II plaintiffs’ contracts with CSX had RCAF clauses instead of FSCs);

DA18068, Defs.’ App’x Vol. 29 (Jan. 15, 2004, emails between NS and shipper, demonstrating

that NS gave a discount to a shipper to match CSX’s offer, which was inclusion of RCAF(u)

escalator without an FSC); DA2898, Defs.’ App’x Vol. 5 (July 28, 2006, internal CSX email

from Wayne Flynn to Kyle Hancock, discussing discounting FSC in a contract with a shipper in

order to compete with NS, even after the change in NS’s FSC application policy). CSX likewise

did not require senior management approval for exceptions to FSCs until the end of 2005. See

DA16514, Defs.’ App’x Vol. 27, ECF No. 1172-27 (sealed) (Dec. 12, 2005, internal CSX email

from Dean Piacente to Rich Karn et al., stating, “Any exceptions such as Rcafu must be renewed

with Clarence [Gooden]”); PX193, Pls.’ App’x Vol. 4 (Feb. 12, 2006, internal CSX email from

Hancock to Kathy Halper et al., stating, “NO ONE is authorized to approve a deal WITHOUT

Fuel Surcharge” and articulating process for seeking exceptions).

Plaintiffs argue that CSX adopted a requirement that VPs review any exceptions from

FSC application in May 2004, Pls.’ Opp’n at 42, but their citations are inapposite. One of their

exhibits cited in support of that CSX timing, PX193, Pls.’ App’x Vol. 4 (Feb. 12, 2006, email

from Hancock to Halper et al.), is from 2006. Two others are from 2003 but do not reflect

adoption of this policy. One is merely a recommendation for a change in their program. PX181

at ‘493, Pls.’ App’x Vol. 4 (Mar. 11, 2003, internal CSX email from John Couch to Onimus,

with attached PowerPoint reflecting that they “[n]eed a written policy that Fuel Surcharge will

64

apply on all new moves – even those with RCAF(U) [with] exceptions to SVP”). The other

suggests that FSCs “must apply to all rate structures” as of November 2003, but emails in the

same chain confirm that use of the escalator, RCAF(u), at 100% was still an alternative to the

surcharge. PX1159 at ‘623-24, Pls.’ App’x Vol. 24, ECF No. 1225-1 (sealed) (Oct. 31, 2003,

email from Onimus to Gooden et al.). The one exhibit from 2004 is similarly misleading: A

presentation from May of that year merely offers for an internal discussion a change to the policy

such that “[e]verything is subject to fuel surcharge. Long term contracts can have RCAF(u),

AIILF, or fixed increases of at least 5%/year – plus fuel surcharge. Exceptions elevated.”

DA25960 at 25966, Defs.’ App’x Vol. 41, ECF No. 1245-1 (sealed) (May 17, 2004, email from

Couch to Onimus, with attached presentation on Escalators 2004 Discussion); PX170 at ‘574

(same). That same presentation confirms that the “current Fuel surcharge policy” is that “[t]he

fuel cost recovery charge does not apply on contracts that have 100% of the RCAF(u) or CPI or

other index.” DA25960 at 25963, Defs.’ App’x Vol. 41. Later discussion also confirms that no

special exception was needed to omit a surcharge and use RCAF instead in 2004, consistent with

CSX’s longstanding position in the market. See DA7967 at 7968, Defs.’ App’x Vol. 19, ECF

No. 1172-19 (sealed) (May 19, 2004, email from Dwight Price to Bill Hofmann et al.).

Plaintiffs also try to demonstrate uniformity in defendants’ policies for FSC coverage by

pointing to the significant expansion in coverage that occurred during the alleged conspiracy

period, see Pls.’ Opp’n at 17-19, 48-49, 111, 115-16, 126, suggesting that such notable growth

must indicate a conspiratorial scheme. Defendants were unable to impose FSCs effectively with

any regularity prior to conspiring, plaintiffs argue. See id. Then, FSC coverage exploded, with

all four defendants covering the vast majority of their traffic with FSCs by 2007 (between 60 and

65

90% by revenue). See DA21943 at 22036, Defs.’ App’x Vol. 34 (Bernheim & Marx, Pls.’

Expert, Report at Fig. IV-14).

The expansion in coverage itself, however, is not probative of a conspiratorial scheme

nor even parallel conduct for the simple reason that a common effect does not prove a common

cause. The expansion in coverage is explained, at least in part, by the relatively mundane fact

that as term contracts reached their end-dates and renegotiations for renewal terms came due

over the course of the early 2000s, defendants continued to add FSCs, consistent with their self-

interest. See DA25322 at 25333, Defs.’ App’x Vol. 39, ECF No. 1172-39 (sealed) (Deposition

of plaintiffs’ expert Dr. Jeffrey Leitzinger (“Leitzinger, Pls.’ Expert, Dep.”) at 441:20-43:19,

explaining that longer rollout time would be needed for contracts that covered longer time

periods); DA24873 at 24884, id. (Deposition of plaintiffs’ expert Dr. Jacobs (“Jacobs, Pls.’

Expert, Dep.”) at 574:17-75:14, explaining that contracts coming up for renewal may influence

rates of coverage among the defendants); e.g., DA2144 at 2158, Defs.’ App’x Vol. 3 (Oct. 24,

2000, internal CSX email from Jim Mitchell to listservs, attaching presentation instructing

employees to put FSC language in new and renewing contracts). Coverage thus naturally

expanded.

Additionally, the increases in defendants’ FSC coverage were not wholly uniform and the

differences are at least partly explainable by the defendants’ different policies over time. UP’s

coverage increased greatly in late 2002—reaching close to 50% of traffic—just before the start

of the alleged pre-conspiracy period, consistent with its adoption of a universal coverage policy

around that time. See DA713 at 810-11, Defs.’ App’x Vol. 1 (Report of defendants’ expert Dr.

Joseph Kalt (“Kalt, Defs.’ Expert, Report”) ¶ 148, Fig. IV-7A, demonstrating sharp increase in

FSC coverage as percentage of revenue just before start of alleged conspiracy and showing about

66

55% coverage for private transactions); DA21943 at 22036, Defs.’ App’x Vol. 34 (Bernheim &

Marx, Pls.’ Expert, Report at Fig. IV-14, estimating around 45% of FSC coverage on overall

traffic revenue just before the start of the conspiracy); DA20487 at 20673, Defs.’ App’x Vol. 32,

ECF No. 1172-32 (sealed) (Reply Report of plaintiffs’ expert Dr. Gordon Rausser (“Rausser,

Pls.’ Expert, Reply Report”), Fig. 76, demonstrating the same significant increase in coverage in

late 2002 and early 2003 but reaching only about 35% pre-conspiracy period).

CSX had a slower increase in coverage over time than other defendants, peaking at only

60% in 2007, in contrast to NS which hit 90% in 2006 and 2007, and remaining consistently 30-

40 percentage points below NS in 2005 and 2006. See DA21943 at 22036, Defs.’ App’x Vol. 34

(Bernheim & Marx, Pls.’ Expert, Report at Fig. IV-14); DA21312 at 21380, Defs.’ App’x Vol.

33 (Report of Dr. Bernheim, Pls.’ Expert, Fig. 22); see also CSX Mem. at 14-15; DA6450 at

6462, Defs.’ App’x Vol. 16 (Deposition of Dr. Rausser (“Rausser, Pls.’ Expert, Dep.”) at 290:23-

293:12, not disputing the coverage levels provided by defendants’ experts, only the inferences

drawn from them). CSX, in fact, remained below all the other defendants since late 2004. See

DA21943 at 22036, Defs.’ App’x Vol. 34 (Bernheim & Marx, Pls.’ Expert, Report at Fig. IV-

14). That is consistent with CSX’s delay in adopting a universal coverage policy and an

exceptions-approval policy until late 2005, and the other defendants’ adoption of such policies

by 2004.

Finally, plaintiffs emphasize that defendants all began tracking their FSC coverage and

their progress toward 100% during the alleged conspiracy period, Pls.’ Opp’n at 40-41, 45-46,

but such efforts are not probative of conspiratorial or even noteworthy parallel action.

Defendants had to keep track of FSC application for ordinary business (financial, accounting,

etc.) purposes. The record also shows at least some defendants started tracking coverage before

67

the conspiracy period when they first started implementing FSCs. For instance, while plaintiffs

suggest that BNSF began tracking with earnest its FSC coverage in 2003 and 2004, see Pls.’

Opp’n at 40; PX68 at ‘532-33, Pls.’ App’x Vol. 1 (Sep. 10, 2004, internal BNSF email from

Lanigan to David Garin et al., sharing that 92% of contracts signed in 2004 have FSC), the

record indicates that BNSF started monitoring its coverage many years prior, when this company

started expanding FSC coverage, see DA3982 at 3984, Defs.’ App’x Vol. 9 (July 12, 2001,

internal BNSF letter from Paul Anderson to Tom Hund, explaining expectation that FSCs will

double pursuant to “a more aggressive policy” adopted in July 2001); see also, e.g., DA5948,

Defs.’ App’x Vol. 16 (Aug. 4, 2000, internal NS email from Stacia Minton to Seale et al.,

attaching spreadsheets with status of fuel surcharge billing). Moreover, as defendants decided

whether to change their FSCs in 2003 and 2004, they likely paid more attention to statistics like

coverage levels. That is not, however, the kind of pattern of parallel behavior that could serve as

the foundation of a conspiracy.

In sum, defendants’ policy changes over the course of several years, as they increased

their attention to FSCs, do not illustrate a pattern of parallel behavior consistent with coordinated

action. Plaintiffs have insisted that the relevant conspiracy consists of both defendants’ FSC

changes and changes to their policies—an overall agreement to increase all-in freight shipping

rates for all customers—but even taking all of defendants’ actions together, the supposed

parallelism is elusive. CSX announced a change to its FSC formula in March 2003 but did not

apply it universally and continued to allow RCAF escalators as an alternative until 2005. UP

announced it would follow CSX in April 2003 but then changed its mind and adopted a different

formula to compete with BNSF in May 2003. In June, UP decided to change approval policies

to enforce a previously articulated goal of universal coverage. BNSF, tracking these

68

announcements, decided in April 2003 to establish and enforce a universal coverage policy and

high-level approval requirement for exceptions and changed its formula around the same time as

UP the next month—although BNSF’s change was marginally different from its previous

formula and not the same as UP’s. Almost a year later, in early 2004, NS adopted the same

formula as CSX and decided it would apply universally with exceptions requiring high-level

approval.

These “varying courses of action” over 2003, 2004, and 2005—with some defendants

deciding early on to adopt unique formulas and to enforce preexisting policies of universal

coverage and others waiting to make any changes at all—do not constitute parallel conduct. See

Anderson News, 899 F.3d at 105 (holding that defendants’ different approaches to ceasing to do

business with plaintiff over the course of several weeks was not “parallel”). That defendants all

increased prices in some fashion over the course of a year and took efforts to enforce those

higher prices is not enough. See Baby Food, 166 F.3d at 132 (“Although we recognize that

parallel pricing does not require ‘uniform prices,’ . . . defendants’ prices were neither uniform

nor within any agreed upon range of each other.” (quoting Socony-Vacuum, 310 U.S. at 222)).

Without being able to show parallel conduct, plaintiffs cannot circumstantially prove a

conspiracy, and summary judgment is warranted for defendants. See Williamson Oil Co., 346

F.3d at 1301.

D. Even if Defendants’ Conduct was Parallel, Defendants’ Conduct is

Consistent with Lawful Interdependence.

Even if defendants’ conduct were sufficiently parallel with respect to either (or both) the

pricing formulas for FSCs themselves and coverage policies, their conduct would still be more

69

consistent with conscious parallelism than the existence of an unlawful agreement. 15

Defendants’ decisions to raise surcharges and expand FSC coverage are representative of rational

business interests to promote price stability and profit maximization. Defendants have also put

forth extensive evidence of each defendant’s internal analyses and justifications for its decisions.

An inference of unilateral action is thus, at least at the outset, an “attractive” one. See Fed.

Prescription Serv., Inc., 663 F.2d at 267.

1. Defendants Had a Rational Business Motivation for Aggressively

Pursuing Higher FSCs.

The existence of an independent business justification for the defendants’ behavior makes

inferring the requisite illegal conspiratorial agreement for a Sherman Act section 1 violation

more difficult. If an “innocent explanation of the questioned conduct . . . is plausible and more

logical than a theory of concerted action, then a conspiracy may not be found.” Kreuzer v. Am.

Acad. of Periodontology, 735 F.2d 1479, 1488 (D.C. Cir. 1984); Moundridge, 2009 WL

5385975, at *6 (“[W]here there is an independent business justification for the defendant’s

behavior, no inference of conspiracy can be drawn.” (quoting Blomkest, 203 F.3d at 1037));

Golden Bridge Tech., 547 F.3d at 272-73 (“[I]t is not sufficient under Matsushita for [plaintiffs]

to simply propose conceivable motives for conspiratorial conduct” where an “independent

15

Plaintiffs seize on this alternative argument posited by defendants—that if defendants’ conduct was

parallel, such conduct was merely conscious parallelism and not conspiratorial, Defs.’ Mem. at 60-64—as a

concession that defendants’ conduct was indeed parallel, Pls.’ Opp’n at 90, but this characterization is a leap too far.

Contrary to plaintiffs’ position, defendants assume for the sake of argument, as does the Court here, that if they were

acting in a parallel enough fashion, such behavior was due to independent awareness of what was best for the

industry and their individual profits, not due to any illegal agreement.

Moreover, consideration of this alternative argument is prudent. Although plaintiffs have not arg

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