Opinion

In Re RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION

287 F.R.D. 1
2012 WL 2870207

Court: District Court, District of Columbia
Filed: Jul 13, 2012
Status: Published
Author: Friedman
On the bench: Judge Paul L. Friedman
Nature of suit: Magistrate Case
Cited by: 32 cases
Authority: More cited than 77.1%

Vacated on other grounds by In Re Rail Freight Fuel Surcharge Antitrust Litigation, 725 F.3d 244 (2013)

stating “many liability questions” regarding the plaintiffs’ 23 RICO claims “can be resolved on a class-wide basis, including whether defendant was part 24 of an association-in-fact enterprise operating an alleged scheme to defraud the class 25 member.”

How later courts described this case

stating “many liability questions” regarding the plaintiffs’ 23 RICO claims “can be resolved on a class-wide basis, including whether defendant was part 24 of an association-in-fact enterprise operating an alleged scheme to defraud the class 25 member.”
finding that plaintiffs’ expert’s use of regression analysis was a generally accepted basis for certifying a class
holding that common proof could be used to prove injury by raising the starting point for negotiations
“the fact that named plaintiffs must rely on their own testimony as 11 proof of their purchases will not put them in conflict with absent class members, many of whom 12 will also lack receipts for such minor purchases, and may have to proceed on the same evidentiary 13 proffer”

Written by the judges who cited it.

The opinion

OPINION

PAUL L. FRIEDMAN, District Judge.

TABLE OF CONTENTS

Section Page

I. INTRODUCTION..........................................................10

II. BACKGROUND............................................................11

A. The Alleged Conspiracy..................................................13

B. Surface Transportation Board Proceedings and 18 Class Action Lawsuits......15

C. Class Certification Papers and Supplemental Briefing Before and After the Motions Hearing...................................................17

D. “Interline-Related” Communications.......................................19

III. LEGAL STANDARD FOR CLASS CERTIFICATION UNDER RULE 23(b)(3) OF THE FEDERAL RULES OF CIVIL PROCEDURE...............20

A. Requirements of Rule 23(a) and (b)(3)......................................20

B. Resolution of Factual Disputes and Standard of Proof........................21

1. Factual Disputes and Dueling Experts .................................22

2. Standard of Proof....................................................24

a. Facts Bearing on Rule 23.........................................24

b. Expert Opinions and Regression Analyses ..........................25

IV. RULE 23(a) FINDINGS AND CONCLUSIONS................................28

A. Two Implied Requirements...............................................28

1. Class Definition.....................................................28

2. Named Representatives Within the Putative Class.......................30

B. Four Express Requirements..............................................31

1. Numerosity.........................................................31

2. Commonality........................................................31

3. Typicality...........................................................32

4. Adequacy of Representation ..........................................34

V. RULE 23(b)(3) FINDINGS AND CONCLUSIONS.............................35

A. Predominance ..........................................................35

1. Violation of Antitrust Law............................................36

2. Impact.............................................................36

a. Uninjured Class Members........................................39

b. “Presumption” of Common Impact.................................40

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c. Antitrust Injury..................................... 41

d. Injury-In-Fact...................................... 43

i. Payment of an allegedly conspiratorial fuel surcharge 45

ii. Component of the total price of shipping........... 55

iii. Expert opinions on injury-in-fact.................. 61

3. Damages............................................... 71

B. Superiority................................................. 73

VI. CONCLUSION..................... 74

I. INTRODUCTION

This matter is before the Court on the motion of the direct purchaser plaintiffs for class certification under Rule 23(b)(3) of the Federal Rules of Civil Procedure. Also before the Court is the motion of the defendants to exclude what they refer to as “interline-related communications” from consideration for class certification or for any other purpose under 49 U.S.C. § 10706 . The Court heard oral argument on both motions on October 6 and 7, 2010, and took them under advisement. The Court delayed decision on the motions until after the Supreme Court decided

Wal-Mart Stores, Inc. v. Dukes,

— U.S. -, 131 S.Ct. 2541 , 180 L.Ed.2d 374 (2011), and then invited the parties to file supplemental briefs discussing the impact of the

Wal-Mart

decision on the class certification question in this case. Those briefs have been filed, and the motions now are ripe.

Upon consideration of the parties’ papers, the oral arguments presented by counsel, the relevant legal authorities, and the entire extensive record in this case, the Court finds by a preponderance of the evidence that the direct purchaser plaintiffs have satisfied all of the requirements of Rule 23. The Court therefore will grant the direct purchaser plaintiffs’ motion for class certification; will certify this case as a class action under Rule 23(b)(3) for purposes of litigation and trial; will define the class as proposed by the direct purchaser plaintiffs in their motion for class certification; will certify for class treatment the direct purchaser plaintiffs’ claim for price fixing in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 ; will designate the eight named plaintiffs as the class representatives; and will appoint Quinn Emanuel Urquhart & Sullivan, LLP and Hausfled LLP as co-lead class counsel. The Court concludes that it need not rule at this time on the defendants’ motion to exclude interline-related communications.

*11

II. BACKGROUND

The Court previously has described the background of this case.

See In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight I”),

587 F.Supp.2d 27, 29-31 (D.D.C.2008);

In re Rail Freight Fuel Surcharge Antitrust Litig. (“Rail Freight II ”),

593 F.Supp.2d 29, 32, 34-35 (D.D.C.2008),

affd, Fayus Enters, v. BNSF Ry. Co.,

602 F.3d 444, 445-46, 454 (D.C.Cir.2010). It therefore will limit its discussion accordingly.

This case involves the claim that defendants — BNSF Railway Company (“BNSF”); CSX Transportation, Inc. (“CSX”); Norfolk Southern Railway Company (“NS”); and Union Pacific Railroad Company (“UP”) — en

*12

gaged in a price fixing conspiracy to coordinate their fuel surcharge programs as a means to impose supra-competitive total price increases on their shipping customers.

See

2d Am. Compl. ¶¶ 1-2; Class Mem. at 1. As plaintiffs describe it, a rail fuel surcharge “is a separately-identified fee that is charged by the railroads for ... agreed-upon transportation [services], purportedly to compensate for increases in the cost of fuel.” 2d Am. Compl. ¶2. Plaintiffs allege, however, that the four defendants, through their collective action, “conspired to impose Rail Fuel Surcharges that far exceeded any of the Defendants’ fuel costs, and thereby collected billions of dollars of additional profits during the ... conspiracy.”

Id.

Plaintiffs have been divided into two putative classes: (1) the direct purchasers — those who allegedly purchased rail freight transportation from defendants from July 1, 2003 until December 31, 2008 and who were assessed a rail fuel surcharge for the transportation; and (2) the indirect purchasers— those who allegedly purchased rail freight transportation services indirectly from defendants.

See Rail Freight I,

587 F.Supp.2d at 29 . Plaintiffs in both putative classes allege that defendants violated Section 1 of the Sherman Act, 15 U.S.C. § 1 , by conspiring to fix prices through use of their fuel surcharges, and seek recovery under Section 4 of the Clayton Act, 15 U.S.C. § 15 .

See Rail Freight I,

587 F.Supp.2d at 29 ; 2d Am. Compl. ¶ 33.

In 2008, defendants moved to dismiss the claims of both putative classes. On November 7, 2008, the Court denied defendants’ motion regarding the direct purchaser plaintiffs, concluding that the direct purchasers had sufficiently alleged an agreement in restraint of trade.

See Rail Freight I,

587 F.Supp.2d at 32 . Shortly thereafter, on December 28, 2008, the Court denied in part and granted in part defendants’ motion regarding the indirect purchaser plaintiffs, concluding that the indirect purchasers’ state law claims were preempted and must be dismissed, but that the indirect purchasers’ federal antitrust claim for injunctive relief could proceed.

See Rail Freight II,

593 F.Supp.2d at 32, 43 . The United States Court of Appeals for the District of Columbia Circuit affirmed this Court’s dismissal of the indirect purchasers’ state law claims.

See Fayus Enters, v. BNSF Ry. Co.,

602 F.3d at 454 .

The direct purchaser plaintiffs (hereinafter, “plaintiffs” unless otherwise specified) now move for class certification. Specifically, plaintiffs move this Court under Rule 23(b)(3) of the Federal Rules of Civil Procedure for certification of a class of

All entities or persons that at any time from July 1, 2003 until December 31, 2008 (the “Class Period”) purchased rate-unregulated rail freight transportation services directly from one or more of the Defendants, as to which Defendants assessed a stand-alone rail freight fuel surcharge applied as a percentage of the base rate for the freight transport (or where some or all of the fuel surcharge was included in the base rate through a method referred to as “rebasing”) (“Fuel Surcharge”).

*13

entered into before July 1, 2003, and (ii) provided for a stand-alone Fuel Surcharge to be paid under a predetermined formula specifically set forth in the contract.

Class Mot. at 1.

Plaintiffs request that this ease be certified as a class action for litigation and trial of plaintiffs’ claim for price fixing under Section 1 of the Sherman Act, 15 U.S.C. § 1 , and that the eight named plaintiffs — Dust Pro, Inc.; Carter Distributing Company; Dakota Granite Company; Donnelly Commodities, Inc.; U.S. Magnesium LLC; Nyrstar Taylor Chemicals, Inc.; Olin Corporation; and Strates Shows, Inc. — be designated as class representatives. Class Mot. at 1. Plaintiffs further request that Quinn Emanuel Urquhart & Sullivan, LLP and Hausfeld LLP be designated as co-lead class counsel under Rule 23(g) of the Federal Rules of Civil Procedure. Defendants oppose plaintiffs’ motion for class certification, arguing that plaintiffs have failed to satisfy the requirements of Rule 23.

A. The Alleged Conspiracy

Plaintiffs allege that in early 2003 defendants, the four largest Class I railroads in the continental United States,

see

2d Am. Compl. ¶ 1, conspired to increase their total revenues through the use of standardized, uniform, and supra-competitive fuel surcharges.

Rail Freight I,

587 F.Supp.2d at 29 . A Class I railroad is a large freight railway company that has “annual carrier operating revenues of at least $250 million.” 1st Rausser Report at 20. Together, defendants comprise just one percent of all the freight railroads, see

id.,

but control about 90 percent of rail freight traffic in the United States. 2d Am. Compl. ¶ 4;

see

Class Mem. at 7. BNSF and UP operate in the western United States; CSX and NS operate in the east.

See

1st Rausser Report at 30-31; Wil-lig Report ¶ 166.

Before Congress passed the Staggers Rail Act in 1980, defendants would have had to apply to the Interstate Commerce Commission (“ICC”) for approval of an across-the-board rate increase.

Rail Freight I,

587 F.Supp.2d at 29-30 . Following the deregulation of the railroad industry, at least 80 percent of all rail shipments now move under private transportation contracts, which are not rate regulated, or are otherwise exempt from rate regulation.

Id.

Plaintiffs allege that defendants ultimately determined that the most efficient way to increase their profits was through the imposition of an across-the-board, artificially high, and uniform fuel surcharge,

see id.

at 30 , instead of attempting to renegotiate all of their individual contracts,

id.,

or attempting to fix each base rate separately, which plaintiffs say “would have been extremely complex, highly costly and effectively unmanageable.” 1st Rausser Report at 52 n. 118.

The total freight price for a shipping customer, that is, the all-in rate, consists of a base rate (also referred to as a line-haul rate) and any percentage fuel surcharge applied to the base rate.

See

Willig Report ¶ 18; Class Opp. at 3 (all-in price includes the base rate, fuel surcharge, and other charges and elements of value). The base rate

includes fixed cost (or overhead) elements, such as the cost of organizing a particular shipment[,] ---- the large fixed costs of building and maintaining track, bridges, and other structures to achieve long-run sustainability[,] ____ [and] the railroad’s markup of price over costs, i.e., the profitability element of pricing.

1st Rausser Report at 62. Plaintiffs allege that defendants imposed “an across-the-board artificially high and uniform fuel surcharge” as a percentage multiplier of the base rate, thereby permitting defendants “to raise total freight prices widely by a given percentage.”

Rail Freight I,

587 F.Supp.2d

*14

at 30;

see also

1st Rausser Report at 50 (“[Ajdding a percentage fuel surcharge on top of line-haul rates or base rates is by its very nature a general price increase.”). In effect, according to plaintiffs, the allegedly conspiratorial fuel surcharges operated like a tax, increasing the total price of shipping by a set percentage. 1st Rausser Report at 80. Plaintiffs contend that this “approach yielded defendants billions of dollars of additional profits because the surcharge raised rates far beyond the real increased cost of fuel.”

Rail Freight I,

587 F.Supp.2d at 30 .

According to plaintiffs, it took defendants some trial and error to reach the point of conspiracy. Before the class period, plaintiffs say that defendants “operated as a price-discriminating, interdependent, but non-collusive oligopoly.” Class Mem. at 8. And for many years before the class period, defendants “confronted a long-term, structural decline in rail freight rates.”

Id.

“Between 2000 and early 2003, the three-year period preceding the Class Period,” plaintiffs contend that defendants “unilaterally took various actions designed to increase rail freight prices and revenues.”

Id.

at 9. As plaintiffs describe it, “[t]hese uncoordinated actions included, among other things, unilateral attempts to apply stand-alone fuel surcharges, which were designed ‘to take advantage of future rising fuel prices’ and intended as ‘revenue enhancement steps.’ ”

Id.

(quoting RD Ex. 9, E-mail from C. Adams, at UPFSC 0147060, Dec. 5, 2002; RD Ex. 163, NS 2000 Annual Report, at 3). But plaintiffs contend that defendants “acting on their own had limited success when trying to boost revenues through fuel surcharges.”

Id.

Plaintiffs contend that these pre-class period “fuel surcharges were applied only sporadically to a limited number of shippers,” because defendants were concerned about competition — “losing business to other [railroads] that did not apply fuel surcharges[.]”

Id.

at 9-10.

Another barrier to broad application of fuel surcharges during the pre-class period, according to plaintiffs, was wide use of “the so-called Rail Cost Adjustment Factor, or ‘RCAF.’ ” Class Mem. at 31. The RCAF “is a weighted index that accounts for all significant input costs, including fuel.”

Id.; see also

Willig Rep. ¶ 63 (“RCAF measures changes in the prices of major components of the railroad industry’s operating expenses, including labor, fuel, materials, equipment rents, depreciation, interest and other expenses.”). According to plaintiffs, wide use of the RCAF impeded broad application of fuel surcharges because defendants “recognized that imposing a stand-alone fuel surcharge where fuel price increases were already covered by the RCAF would be perceived by shippers as double dipping.” Class Mem. at 11 (quotations omitted).

Thus, plaintiffs contend that before the class period

the number of shippers covered by standalone, rate-based fuel surcharges was relatively low ..., and fuel surcharges did not contribute significantly to Defendants’ revenues or bottom lines. Defendants were unable to meet their respective revenue enhancement goals through the use of uncoordinated fuel surcharges.

Class Mem. at 12.

But all of this allegedly changed in 2003. Plaintiffs contend that beginning in the spring of 2003 “[t]he four Defendants agreed to create and apply a common Fuel Surcharge” — linked to the price of oil on one of two oil indexes, the On-Highway Diesel Fuel (“HDF”) index or the West Texas Intermediate (“WTI”) index — “based on a percentage of base rates on an across-the-board basis to all members of’ plaintiffs’ putative class. Class Mem. at 19. Under CSX’s new, allegedly conspiratorial fuel surcharge program, the railroad would assess a 0.4 percent surcharge when the price of oil on the WTI index exceeded $23 per barrel, and an additional 0.4 percent for every dollar above $23.

Id.

at 19. Plaintiffs say that “[u]nlike its predecessor program, which required the price of oil to exceed the threshold price ($28 per barrel under the old program) for 30 consecutive days, CSX’s new program would be based on the average price of oil from the preceding month.”

Id.

at 19-20. And plaintiffs allege that BNSF, UP, and NS adopted “essentially uniform” programs, and all four

*15

defendants “remained in synch through the class period.”

Id.

at 24.

As plaintiffs describe it,

“[t]he only differences in the Defendants’ programs concerned the indices used and the thresholds chosen. The two indices chosen were closely related. The western railroads (BNSF and the UP) linked their fuel surcharge to the on-highway diesel fuel (HDF) index, whereas the eastern railroads (CSX and NS) linked their fuel surcharge to the [WTI] index.”

Class Mem. at 24 n. 76 (quoting 1st Rausser Report at 54-55). Although UP and BNSF used slightly different thresholds in their fuel surcharge programs, plaintiffs allege that this difference “had no practical effect”:

“The UP applied a fuel surcharge when the HDF was above the threshold of $1.35 per gallon and the BNSF applied a Fuel Surcharge when the HDF index was above $1.25 per gallon. CSX and NS both applied fuel surcharges when the WTI index was above $23 per barrel. The different thresholds used by UP and BNSF were not relevant to fuel surcharge amounts during the class period, because the indices were all above the threshold values for the entire Class Period. Consequently, the UP and BNSF Fuel Surcharge programs provided for identical fuel surcharge percentages once the $1.35 threshold was reached.”

Id.

(quoting 1st Rausser Report at 55).

The next step in the alleged conspiracy, according to plaintiffs, was defendants’ agreement and collective action to cause the American Association of Railroads (“AAR”) to create a new cost escalation index, the All Inclusive Index Less Fuel (“AIILF”), that removed fuel costs from the prior cost escalation index, the All Inclusive Index (“AII”), on which the RCAF was based.

See Rail Freight I,

587 F.Supp.2d at 30 ;

see

Class Mem. at 27. Plaintiffs say that defendants reached this agreement during the October and December 2003 meetings of the AAR; the AIILF index was published in December 2003.

Rail Freight I,

587 F.Supp.2d at 30 ;

see

Class Mem. at 29. As plaintiffs describe it, “[t]he magnitude of this accomplishment from Defendants’ perspective cannot be understated.” Class Mem. at 29. Plaintiffs point to a letter written by BNSF’s chief economist, Sam Kyei, in which he stated:

“In December 2003 [Matt Rose, BNSF’s chief executive officer], single-handedly got the A.A.R. to establish a non-fuel RCAF index, now called the All-Inclusive Index Less Fuel____In my 18-year railroad career, no one had ever succeeded in steering the A.A.R. to do this____[T]he combination of sound price escalation using this index and a fuel surcharge should tremendously help our bottom-line for years to come. In fact, ... the entire rail industry should benefit from the escalation options the index provides.”

Class Mem. at 29-30 (quoting RD Ex. 122, Letter from S. Kyei, at BNSF-0070502, Mar. 15, 2005).

At this point, plaintiffs allege that defendants, having coordinated their fuel surcharges and created and published the AIILF, “worked tirelessly to achieve 100% Fuel Surcharge coverage across their customers.” Class Mem. at 31. Plaintiffs say that following defendants’ agreement to coordinate their fuel surcharges, defendants’ fuel surcharge revenue “skyrocketed”: as an example, plaintiffs state that NS saw fuel surcharge revenue for certain businesses grow exponentially from about $11.6 million in 2002 to about $61.7 million, $208 million, $650 million, and $974 million in 2003, 2004, 2005, and 2006, respectively.

Id.

at 42-43 . Plaintiffs say that because of the conspiracy, defendants “were able to reverse the long-term downward trend in rail freight rates and move rates sharply upward[,]”

id.

at 43 , at the expense of putative class members.

Id.

at 45 .

B. Surface Transportation Board Proceedings and 18 Class Action Lawsuits

Eventually, shippers of both rate-regulated and rate-unregulated freight traffic complained about defendants’ use of fuel surcharges, arguing that the surcharges recovered far more than the incremental cost of fuel, and that the surcharges had become non-negotiable. Shippers of rate-regulated traffic expressed their complaints to the Sur

*16

face Transportation Board (“STB”),

see

2d Am. Compl. ¶ 96; Class Mem. at 47, an agency that regulates certain aspects of the railroad industry.

See Manufacturers Ry. Co. v. Surface Transp. Bd.,

676 F.3d 1094, 1095 (D.C.Cir.2012). In response, the STB “instituted [a] proceeding to inquire into rail earner practices related to fuel surcharges.”

Rail Fuel Surcharges,

Ex Parte No. 661, 2007 WL 201205 , at *1 (S.T.B. Jan. 26, 2007).

As the STB made clear, its proceedings on fuel surcharges and its ultimate decision on the matter related only to

rate-regulated

freight traffic.

See Rail Fuel Surcharges,

2007 WL 201205 , at *10 (“Under 49 U.S.C. 10709, we have no authority to regulate rail rates and services that are governed by a contract. Therefore, our findings and actions here apply only to regulated common carrier traffic.”);

see also

Order at 1-2, Oct. 5, 2010 [Dkt. No. 445] (listing topics and schedule of argument).

After the class certification motions hearing, the Court, on its own review of the Supreme Court’s oral argument transcript in

Wal-Mart Stores, Inc. v. Dukes,

provided the parties with the opportunity for further supplemental briefing. As the Court explained, although plaintiffs’ class certification motion involves Rule 23(b)(3), and the certification question in

Wal-Mart Stores, Inc. v. Dukes

involved Rule 23(b)(2), “a review of the oral argument transcript in

Wal-Mart ...

suggested] that the Supreme Court’s decision in that case may have a bearing on this case.” Order at 1, Apr. 7, 2011 [Dkt. No. 504], Thus, the Court ordered the parties to meet and confer and file a joint report with the Court 30 days after the Supreme Court issued its decision in

Wal-Mart,

stating whether either side believed that supplemental briefing was necessary and, if so, listing the proposed topics and proposing a briefing schedule.

Id.

at 1-2.

On June 20, 2011, the Supreme Court issued its decision in

Wal-Mart Stores, Inc. v. Dukes,

and one month later the parties agreed that supplemental briefing was necessary and submitted a joint report listing three proposed topics.

See

Joint Report Pursuant to April 7, 2011 Order at 1-2, July 20, 2011 [Dkt. No. 519]. The Court approved the parties’ joint proposal and ordered sup

*19

plemental briefing on the following three questions:

(1) Whether

Walr-Mart

provides guidance with respect to the standards to be applied in determining whether to certify a class here.

(2) Whether

Wal-Mart

has any implications for the plaintiffs’ ability to satisfy the requirements of Rule 23(b)(3), in light of the facts of this case, plaintiffs’ claims and defendants’ asserted defenses.

(3) Whether

Wal-Mart

has any implication for this Court’s evaluation of the parties’ expert evidence submitted in connection with the pending class certification motion.

Order at 1, July 20, 2011 [Dkt. No. 520]. That supplemental briefing now is complete.

D. “Interline-Related,” Communications

One final matter requires preliminary discussion. In the course of briefing on plaintiffs’ motion for class certification, defendants filed a motion to exclude what they refer to as “interline-related” communications from consideration for class certification or for any other purpose under 49 U.S.C. § 10706 . Interline Mot. at 1. According to defendants, plaintiffs devote substantial class certification briefing “to the merits of this case” and “repeatedly cite to evidence of communications between Defendants related to interline traffic,” defined by defendants as “traffic that originates on the line of one rail carrier but must be handed off to one or more other rail carriers to reach a destination point.” Interline Mem. at 1. Defendants argue that “Congress, by statute, has banned such evidence in antitrust cases because it regards such communications as necessary and perfectly lawful, and wanted to protect rail carriers from false allegations of antitrust violations.”

Id.

The relevant statute is 49 U.S.C. § 10706 , and defendants say that Congress enacted it specifically

to prevent plaintiffs from inferring an unlawful agreement “from evidence that two or more rail carriers acted together with respect to an interline rate or related matter and that a party to such action took similar action with respect to a rate or related matter on another route or traffic,” and

to provide that “evidence of a discussion or agreement between or among such rail carrier and one or more other rail carriers, or of any rate or other action resulting from such discussion or agreement, shall not be admissible if the discussion or agreement ... concerned an interline movement of the rail carrier, and the discussion or agreement would not, considered by itself, violate the [antitrust] laws.”

Interline Mem. at 1 (quoting 49 U.S.C. § 10706 (a)(3)(B)(ii)) (alteration in original).

Plaintiffs oppose defendants’ motion on procedural and substantive grounds.

See

Interline Opp. at 1-2. As for the latter, plaintiffs argue that

to the extent it applies at all, the limited scope of § 10706(a)(3)(B)(ii)’s evidentiary protection is clear. That subsection does not — as Defendants assert — immunize any discussion or agreement relating in any way to anything having to do with interline traffic. Rather, it narrowly protects only a discussion or agreement that concerned a specific “interline movement of the rail carrier.”

Id.

at 4 (quoting 49 U.S.C. § 10706 (a)(3)(B)(ii)(II)). Plaintiffs therefore contend that 49 U.S.C. § 10706 does not preclude the admissibility of the evidence that defendants purport to challenge.

See id.

at 10 .

The parties agree that the question whether there was a conspiracy can be established by common proof, so it is not an issue in dispute for purposes of class certification.

See infra

at 35-36. Thus, defendants note that they “expect that at this stage of the case the Court will not find it necessary to consider any of the [interline-related communications] evidence that Plaintiffs have cited to support their claim that Defendants engaged in an unlawful conspiracy.” Interline Mem. at 27;

see id.

(describing as “legally immaterial” plaintiffs’ argument in their certification briefs referencing purported interline communications);

see also

Oct. 6 Tr. at 44. Consequently, the parties also agree that the Court need only rule on defendants’

*20

motion before relying on any such disputed evidence.

See

Oct. 6 Tr. at 44.

At the Court’s direction, after the class certification hearing defendants provided the Court with the list of specific objections to documents and deposition testimony that plaintiffs submitted in support of their motion for class certification, as well as annotated copies of relevant excerpts from Dr. Raus-ser’s two reports that purportedly rely on interline-related communications.

See

Defs. Interline Objections at 1;

see also

1 McLaughlin on Class Actions § 3:12 (“The Supreme Court recently cemented consensus that recently emerged among the United States Courts of Appeal. Virtually every circuit had expressly adopted standards that require a district court considering class certification to consider evidence” and “resolve factual disputes that are relevant to Rule 23’s criteria[.]”).

The required rigorous factual review that a court must perform in examining whether the requirements of Rule 23(a) and (b) have been met similarly applies to disputes among experts relevant to class certification. As the Third Circuit stated in

In re Hydrogen Peroxide Antitrust Litig.:

“Expert opinion with respect to class certification, like any matter relevant to a Rule 23 requirement, calls for rigorous analysis.”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 323 . Nothing in Rule 23 distinguishes expert evidence from other types of evidence.

Under Rule 23 the district court must be “satisfied,” ... or “persuaded,” ... that each requirement is met before certifying a class. Like any evidence, admissible expert opinion may persuade its audience, or it may not. This point is especially important to bear in mind when a party opposing certification offers expert opinion. The district court may be persuaded by the testimony of either (or neither) party’s expert with respect to whether a certification requirement is met. Weighing conflicting expert testimony at the certification stage is not only permissible; it may be integral to the rigorous analysis Rule 23 demands.

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 323 (quoting

General Tel. Co. of the Sw. v. Falcon,

457 U.S. at 161 , 102 S.Ct. 2364 ;

In re Initial Pub. Offerings Sec. Litig.,

471 F.3d at 41 );

see also

Daniel L. Rubinfeld, Reference Guide on Multiple Regression 305-08 (Fed. Judicial Center, 3d ed. 2011). In this case, plaintiffs’ expert, Dr. Gordon Rausser, has developed two multiple regression models, a common factor model and a damage model, that, in his opinion, together reveal that impact can be established at trial with evidence common to the class.

See

2d Rausser Report at 91-92, 99-100;

see also

Oct. 6 Tr. at 137. Defendants’ expert, Dr. Robert Willig, disagrees with Dr. Rausser’s analysis and concludes that Dr. Rausser’s regressions suffer from fatal flaws.

See generally

Willig Report.

Where, as here, experts disagree on the ultimate question whether an economic regression model shows that impact is capable of proof at trial through evidence common to the class, that disagreement must be resolved by a court at the class certification stage: a court must determine “which expert is correct” about whether “the injury-in-fact question is common to the class.”

Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 107 ;

see In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at

*26

324. To answer that question, the Third Circuit instructed in

In re Hydrogen Peroxide Antitrust Litig.

that a court must apply a two prong test, examining (1) whether the plaintiffs have established that their expert’s theory of common impact is “plausible”; and, if so, (2) whether the plaintiffs have established by a preponderance of the evidence that the expert’s plausible theory is “susceptible to proof at trial through available evidence common to the class.”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 325 ;

see Behrend v. Comcast Corp.,

655 F.3d at 192-93 .

The Third Circuit recognized in

In re Hydrogen Peroxide Antitrust Litig.,

and then reaffirmed in

Behrend v. Comcast Corp.,

that an expert’s theory that impact is capable of common proof at trial — by means of regression analysis or other common evidence — is not a question of fact necessarily capable of resolution by a preponderance of the evidence. The plausibility standard falls below a requirement of perfection,

see Behrend v. Comcast Corp.,

655 F.3d at 204 n. 13 (a court need not determine that a regression model “is perfect at the certification stage”), and above a “threshold,”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 321 (quotations omitted), or a “not fatally flawed” standard.

In re Initial Pub. Offerings Sec. Litig.,

471 F.3d at 42 . Plausibility depends on the “ability to establish — whether through mathematical models or further data or other means — the key logical steps behind [the] theory.”

In re New Motor Vehicles Canadian Exp. Antitrust Litig.,

522 F.3d 6, 25-26 (1st Cir.2008).

By way of illustration, Dr. Willig criticizes Dr. Rausser’s common factor regression model for looking at only a snapshot in time and therefore purportedly failing to examine changes in freight rates over time.

See

Wil-lig Report ¶213. Whether this purported error discredits Dr. Rausser’s common factor model is not a question that readily lends itself to resolution by a preponderance of the evidence; indeed, such a standard has not been adopted by any court and lacks intuitive force.

See

Oct. 6 Tr. at 20 (plaintiffs’ counsel noting that “there has been no direction by any circuit, let alone this district or the Supreme Court that applies an evidentiary type standard to the assessment by the court as a whole of an expert report directed at proof of impact or fact of damage and amount of damage”). Instead, applying the first prong of the test set forth in

In re Hydrogen Peroxide Antitrust Litig.,

the Court will evaluate whether this purported error precludes a determination that Dr. Rausser’s theory of proof is “plausible,”

Behrend v. Comcast Corp.,

655 F.3d at 204 n. 13;

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 325 , or “viable,”

In re New Motor Vehicles Canadian Exp. Antitrust Litig.,

522 F.3d at 25 (1st Cir.2008); and that his regression analysis is “feasible,”

In re EPDM Antitrust Litig.,

256 F.R.D. at 96 , or “workable.”

In re Amaranth Natural Gas Commodities Litig.,

269 F.R.D. 366 , 383 & n. 118 (S.D.N.Y.2010);

see In re Ready-Mixed Concrete Antitrust Litig.,

261 F.R.D. 154, 171 (S.D.Ind.2009).

If a court determines that the plaintiffs have established that their expert’s theory of proof is plausible and that their expert’s regression analysis, if any, is workable, then the next question for the court to resolve is whether the plaintiffs have established by a preponderance of the evidence that the plausible theory and workable regression are “susceptible to proof at trial through available evidence common to the class.”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 325 ;

see Behrend v. Comcast Corp.,

655 F.3d at 192-93 . In assessing that question in this ease, the Court will resolve all factual disputes bearing on Dr. Rausser’s and Dr. Willig’s analyses — including what the parties refer to as subsidiary factual disputes underlying the experts’ opinions — by a preponderance of the evidence.

See In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at

*27

320-25;

see

Oet. 6 Tr. at 30-31. And ultimately, the Court will determine which expert is correct, Dr. Rausser or Dr. Willig, on the question whether a workable regression model can be used to establish by a preponderance of the evidence that impact can be proven at trial with common evidence.

See, e.g., Behrend v. Comcast Corp.,

655 F.3d at 192-93 ;

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 325 ;

Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 107 .

To summarize, the Court will resolve factual disputes relevant to Rule 23 requirements, and the Court will apply a preponderance of the evidence standard in examining whether plaintiffs have satisfied each of the requirements of Rule 23. Accordingly, in order to certify plaintiffs’ putative class, the Court “must find that the evidence more likely than not establishes each fact necessary to meet the requirements of Rule 23.”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 320 ;

see also

1st Rausser Report at 89 (noting that “the data supplied by BNSF ... records whether the shipment was regulated or not”). Dr. Willig’s report therefore belies defendants’ claim that it is too difficult to determine whether rail traffic qualifies as rate-unregulated.

Defendants’ second argument focuses on plaintiffs’ proposed inclusion of shippers who paid “rebased” rates. As plaintiffs describe it, at some point during the alleged conspiracy NS “engaged in something that has come to be known in this case as rebasing; namely folding at least part of the fuel surcharge into the base rate.” Oct. 6 Tr. at 133. Defendants contend that plaintiffs “do not identify ... shippers” who paid a re-based rate “or propose any methodology for doing so.” Class Opp. at 76. And in the absence of any viable methodology, defendants contend that it is impossible to determine what shippers are in the class due to rebasing.

Id.

The Court disagrees with defendants. Plaintiffs assert that shippers who paid a rebased rate simply paid a new base rate with a portion of the previous supra-competitive fuel surcharge “bake[d]” in. Class Reply at 40 (citing HD Ex. 83, Lawson Dep. at 72);

see

Class Mot. at 48. As Dr. Rausser explains it, NS’ rebasing strategy “effectively made permanent a surcharge based on a WTI of $64 by folding that amount into base rates, and supplemented that with a new stand-alone fuel surcharge anytime the WTI exceeded $64.” 1st Rausser Report at 117 n. 250. And Dr. Rausser has accounted for NS’ alleged rebasing in his analysis.

See id.

(“As my analysis considers the gross price it will not be affected by NS’ change to their fuel surcharge program” by means of rebased rates.);

see also

Willig Report ¶ 24 (“For the class period as a whole, there were nearly 30,000 shippers of unregulated traffic with revenue-based FSCs[.]”). “When the class is large” — here, in the tens of thousands — “numbers alone are dispositive[.]”

Meijer, Inc. v. Warner Chilcott Holdings Co. Ill,

246 F.R.D. at 306 . The Court therefore finds that plaintiffs have satisfied their burden of showing by a preponderance of the evidence that the putative class “is so numerous that joinder of all members is impracticable[.]” Fed.R.Civ.P. 23(a)(1).

2. Commonality

The second express requirement of Rule 23(a) is commonality: there must be “questions of law or fact common to the class[.]” Fed.R.Civ.P. 23(a)(2). “Not every issue of law or fact [need] be the same for each member.”

Lindsay v. Government Emps. Ins. Co.,

251 F.R.D. a,t 55 (quotations omitted) (alteration in original). “Rather, the commonality test is met when there is at least one issue ... the resolution of which will affect all or a significant number of the putative class members.”

Id.

(quotations omitted) (alteration in original).

Because the commonality requirement is satisfied “by a single common issue,” courts have noted that it often is easily met.

Taylor v. District of Columbia Water & Sewer Autk,

241 F.R.D. 33, 37 (D.D.C.2007). But as the Supreme Court recently made clear, what matters for purposes of commonality “is not the raising of common questions — even in droves — but, rather the capacity of a class-wide proceeding to generate common

answers

apt to drive the resolution of the litigation.”

Wal-Mart Stores, Inc. v. Dukes,

131 S.Ct. at 2551 (quotations omitted).

In antitrust class actions, “numerous courts have held that allegations concerning the existence, scope, and efficacy of an alleged antitrust conspiracy present important common questions sufficient to satisfy the commonality requirement[.]”

Meijer, Inc. v. Warner Chilcott Holdings Co. Ill,

246 F.R.D. at 300 (quotations omitted). As plaintiffs assert, and as defendants do not dispute, the question whether defendants engaged in a conspiracy — the first element of plaintiffs’ claim — is an issue that is common to all class members because the answer to that question will focus exclusively on defendants’ conduct.

See

Class Mem. at 57;

see also

Oct. 7 Tr. at 161 (defendants’ counsel, acknowledging that “whether there was or was not a conspiracy is in fact capable of common proof’). The Court therefore finds by a preponderance of the evidence that “there are questions of law or fact common to the elass[.]” Fed.R.Civ.P. 23(a)(2).

*32

3. Typicality

The third express requirement of Rule 23(a) is typicality: “the claims or defenses of the representative parties [must be] typical of the claims or defenses of the class[.]” Fed.R.Civ.P. 23(a)(3). Typicality is “intended to assess whether the action can be efficiently maintained as a class and whether the named pláintiffs have incentives that align with those of the absent class members so as to assure that the absentees’ interests will be fairly represented.”

Pigford v. Glickman,

182 F.R.D. at 349 (quotations omitted). “[I]f the class representative’s claims arise from the same events, practice, or conduct, and are based on the same legal theory as those of other class members, the typicality requirement is satisfied.”

Lindsay v. Government Emps. Ins. Co.,

251 F.R.D. at 55 (quotations omitted);

see Pigford v. Glickman,

182 F.R.D. at 349 .

“The facts and claims of each class member do not have to be identical to support a finding of typicality ..., rather, the requirement goes to whether the named plaintiffs claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.”

Meijer, Inc. v. Warner Chilcott Holdings Co. III,

246 F.R.D. at 301 (citation and quotations omitted);

see also Johnson v. District of Columbia,

248 F.R.D. at 53 . “The requirement has been liberally construed by courts ... [and] in the antitrust context, typicality will be established by plaintiffs and all class members alleging the same antitrust violations by defendants.”

Meijer, Inc. v. Warner Chilcott Holdings Co. III,

246 F.R.D. at 301 (alternations in original) (quotations omitted).

Plaintiffs contend that the typicality requirement easily is satisfied in this case because “all named Plaintiffs and all Class members seek overcharge damages pursuant to an identical price-fixing claim under Section 1 of the Sherman Act.” Class Mem. at 58. As plaintiffs describe it, “[t]he claims of the named Plaintiffs and the absent Class members alike arose out of the same course of events: Defendants’ conspiracy to impose stand-alone, rate-based Fuel Surcharges in order to raise shipping prices across the board.”

Id.

Defendants disagree. They argue that none of the eight proposed class representatives is typical.

See

Class Opp. at 79. First, defendants argue that shippers that paid a fuel surcharge before July 1, 2003 are not properly members of the class, and shippers that are served by only one defendant can have no claim because there was no competition among defendants for their business that could have been affected by the alleged conspiracy.

See id.

According to defendants, this disqualifies all of the eight proposed class representatives.

Id.

The Court finds defendants’ arguments in-apposite because the typicality requirement focuses on the

“claims

of the representative, not the individual characteristics of the [named] plaintiff[s].”

Meijer, Inc. v. Warner Chilcott Holdings Co. III,

246 F.R.D. at 301 (quotations omitted) (emphasis added). The claims of the eight named plaintiffs and those of the absentee class members arose from the same course of events: defendants’ alleged conspiracy to impose supra-competitive fuel surcharges across-the-board on all shippers. And the eight named plaintiffs and the absentee class members seek the same relief: overcharge damages under Section 1 of the Sherman Act.

Next, defendants target two of the named representatives, Dust Pro and Nystar, arguing that each one faces a disqualifying problem. As for Dust Pro, defendants argue that the shipper “generally did not pay for its shipments — it liquidated the business while owing a substantial debt to UP — and has no evidence that the dollar total of fuel surcharges it actually paid even approached the amount of its unpaid debt[.]” Class Opp. at 79 n. 89. Defendants, however, cite no authority for their claim that Dust Pro’s alleged “non-payment” should disqualify it as a class representative. Nor can the Court surmise any reason why Dust Pro should be disqualified.

Regarding Nystar, defendants argue that this named plaintiff should be disqualified because, according to defendants, it spoliated evidence. Class Opp. at 80-81. “The requirement that the proposed repre

*33

sentatives not be subject to

unique defenses

” — which includes spoliation — “can be seen as an offshoot of the requirement that the representative have circumstances that are sufficiently similar to those of the class.”

In re Sobering Plough Corp. ERISA Litig.,

589 F.3d 585, 598 (3d Cir.2009) (emphasis in original). Because Rule 23 requires that both the claims and the defenses be typical, a proposed class representative will not satisfy Rule 23(a)(3) “if the representative is subject to a unique defense that is likely to become a major focus of the litigation.”

Id.

(quotations omitted);

see also Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

903 F.2d 176, 180 (2d Cir.1990) (“[T]here is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.”).

Spoliation of evidence constitutes a unique defense, and courts have concluded that in some circumstances defending against a charge of spoliation of evidence can render a plaintiff an inadequate class representative.

See, e.g., Falcon v. Philips Elees. N. Am. Corp.,

304 Fed.Appx. 896 , 897 (2d Cir.2008) (district court did not abuse its discretion in concluding that defending against a charge of spoliation rendered a plaintiff an inadequate class representative). The presence of a unique defense, however, “will not ... destroy typicality [unless it] will skew the focus of the litigation and create a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.”

Meijer, Inc. v. Warner Chilcott Holdings Co. III,

246 F.R.D. at 302 (quotations omitted) (alteration in original). In this ease, the Court agrees with plaintiffs that at this stage the spoliation issue is hypothetical and speculative,

see

Class Reply at 39, and the Court is satisfied that this alleged unique defense presents a question of law and fact “that can readily be resolved by the Court without skewing the focus of the litigation or creating a significant danger of distracting [plaintiffs’] ability to pursue the interests of the absent class members.”

Meijer, Inc. v. Warner Chilcott Holdings Co. III,

246 F.R.D. at 302 (quotations omitted).

Finally, defendants argue that a “significant number” of putative class members’ contracts include broad arbitration clauses.

See

Class Opp. at 78. Defendants state that they “intend, as they have a right to do, to rely on [those putative class members’] agreements to arbitrate,” which would include, according to defendants, the Sherman Act claim alleged in this case.

Id. at

78-79. Thus, defendants argue that shippers whose contracts include arbitration provisions cannot pursue their claims in this Court and, as a result, cannot be part of the class that plaintiffs seek to certify here.

Id.

at 79. And defendants assert that the Court should consider these agreements to arbitrate — constituting, as defendants see it, affirmative defenses — in making its class certification decision.

Id.

(citing

Rodney v. Northwest Airlines, Inc.,

146 Fed.Appx. 783, 786 (6th Cir.2005)). Defendants do not assert, however, that any of the eight named plaintiffs have contracts containing arbitration clauses; nor do defendants assert that they have initiated any arbitrations.

See

Class Reply at 40.

While defendants do not suggest under what part of Rule 23 the Court should consider their argument regarding arbitration, courts generally have considered the question of defenses in the context of examining the typicality and commonality requirements of Rule 23(a), as well as the predominance requirement of Rule 23(b)(3).

See, e.g., In re Schering Plough Corp. ERISA Litig.,

589 F.3d at 598 (question of unique defenses is an offshoot of typicality requirement);

Gene & Gene LLC v. BioPay LLC,

541 F.3d 318, 327 (5th Cir.2008) (“[T]he predominance of individual issues necessary to decide an affirmative defense may preclude class certification.”) (quotations omitted);

Gunnells v. Healthplan Servs., Inc.,

348 F.3d 417 , 438 (4th Cir.2003) (“[Affirmative defenses must be factored into the calculus of whether common issues predominate.”). Regardless of which part of Rule 23 applies, however, the Court concludes that “the

possible

arbitration of some class members” does not, “by itself, defeat class certification.”

Lemer v. Haimsohn,

126 F.R.D. 64, 66 (D.Colo.1989) (emphasis added). Neither plaintiffs nor defendants have initiated arbitration, and the Court concludes that defendants’ assertion regarding their “inten[t]” to

*34

initiate arbitration, Class Opp. at 78, is too speculative to defeat predominance, much less commonality or typicality.

The Court finds that the claims of the eight named class representatives arise from the “same events, practice, or conduct, and are based on the same legal theory as those of other class members.”

Lindsay v. Government Emps. Ins. Co.,

251 F.R.D. at 55 (quotations omitted). Consequently, plaintiffs have satisfied their burden of showing by a preponderance of the evidence that “the claims or defenses of the representative parties are typical of the claims or defenses of the class[.]” Fed.R.Civ.P. 23(a)(3).

4. Adequacy of Representation

The fourth and final express requirement of Rule 23(a) is adequacy. It requires that “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). Thus, this requirement “necessitates an inquiry into the adequacy of representation, including the quality of class counsel, any disparity of interest between class representatives and members of the class, communication between class counsel and the class and the overall context of the litigation.”

Pigford v. Glickman,

182 F.R.D. at 350 . “A proposed representative is ‘adequate’ if (1) his interests do not conflict with those of other class members, and (2) he will vigorously prosecute the interests of the class through qualified counsel.”

Lindsay v. Government Emps. Ins. Co.,

251 F.R.D. at 55 .

Plaintiffs assert that the eight named representative plaintiffs have shown a willingness to step forward, incur substantial discovery burdens, and prosecute this case in the best interests of the members of the putative class. Class Mem. at 61. Furthermore, plaintiffs assert that there are no conflicts with the unnamed members of the class that would warrant denial of class certification.

Id.

Finally, plaintiffs contend that they have protected the interests of absent class members through the selection of qualified class counsel. As plaintiffs describe it, interim co-lead class counsel Quinn Emanuel and Hausfeld

—firms that have extensive experience in both antitrust litigation in particular and class action litigation generally — have vigorously prosecuted this action, expending substantial time and resources in investigating the claims, overseeing the production and review of documents, taking and defending of depositions, working with experts, and briefing and arguing motions.

Id.

at 62 . Defendants present mostly the same arguments regarding adequacy as they did for typicality.

See

Class Opp. at 79-80. For the reasons just discussed,

see supra

at 32-34, the Court rejects them.

In addition, defendants argue that Donnelly Commodities, Inc. should be disqualified because it filed for bankruptcy and is currently under the control of an appointed trustee. Class Opp. at 81-82. According to defendants, when a class representative has filed for bankruptcy under Chapter 7 and has had a trustee appointed, an “ ‘inherent’ conflict of interest exists.”

Id.

at 82 (quoting

Dechert v. Cadle Co.,

333 F.3d 801 , 803 (7th Cir.2003)). As defendants see it, this is because of the trustee’s “‘dual role as class representative and creditors’ representative.’ ”

Id.

(quoting

Dechert v. Cadle Co.,

333 F.3d at 803). But the authority upon which defendants rely for that proposition,

Dechert v. Cadle Co.,

rejected a “flat rule that a trustee in a bankruptcy ... can never be a class representative.”

Dechert v. Cadle Co.,

333 F.3d at 803. And other courts have allowed such representation where, as here, “an additional representative [is designated] to appear as plaintiff along with the Trustee[.]”

Ernst & Ernst v. U.S. Dist. Court for the S. Dist. of Tex.,

457 F.2d 1399 , 1400 (5th Cir.1972). In this case, of course, there are eight representative plaintiffs only one of which, Donnelly Commodities, Inc., is under the control of a trustee in bankruptcy. The Court therefore sees no basis at this stage to disqualify Donnelly Commodities, Inc. as a named representative.

Finally, as for the quality of class counsel, the Court agrees with plaintiffs’ undisputed assertion that they have protected the interests of absent class members through the selection of class counsel.

See

Class Mem. at 62-63. As the Court previously has stated, the firms Quinn Emanuel and Hausfeld both

*35

have sufficient resources and expertise to prosecute this matter in the putative class’ best interests.

See

Memorandum Op. & Order at 3, Mar. 13, 2009 [Dkt. No. 232], As plaintiffs state:

Quinn Emanuel and Hausfeld LLP have already demonstrated their ability to work well together, coordinate the efforts of the various other firms also representing plaintiffs in this multidistrict litigation, and generate work product at the highest professional levels. Together, these firms are extraordinarily well situated to assess how Plaintiffs’ case will be presented at trial, and will be prepared to try this case should that be necessary.

Class Mem. at 63. Defendants do not disagree, and neither does this Court.

The Court finds that plaintiffs have met their burden of showing by a preponderance of the evidence that “the representative parties will fairly and adequately protect the interests of the class,” Fed.R.Civ.P. 23(a)(4), because the interests of the eight named representatives do not conflict with those of other class members, and because they will vigorously prosecute the interests of the class through qualified counsel.

Lindsay v. Government Emps. Ins. Co.,

251 F.R.D. at 55 .

V. RULE 23(b)(3) FINDINGS AND CONCLUSIONS

Because plaintiffs have satisfied all of the threshold Rule 23(a) requirements by a preponderance of the evidence, the Court now must conduct a “rigorous analysis” of the requirements of Rule 23(b)(3).

See In re Zum Pex Plumbing Prods. Liab. Litig.,

644 F.3d at 611 ;

Madison v. Chalmette Refining, L.L.C.,

637 F.3d 551, 554 (5th Cir.2011);

see also Wal-Mart Stores, Inc. v. Dukes,

131 S.Ct. at 2551. In examining whether plaintiffs have satisfied their burden under Rule 23(b)(3), the Court has resolved the factual disputes between the parties and their experts that are relevant to the requirements for class certification — even when such resolution requires considerations enmeshed in the factual and legal issues comprising the plaintiffs’ claim on the merits- — and the Court has applied a preponderance of the evidence standard of proof in doing so.

A. Predominance

Rule 23(b)(3) requires that the Court “find[] that the questions of law or fact common to class members predominate over any questions affecting only individual members!.]” Fed.R.Civ.P. 23(b)(3). As discussed,

see supra

at 21, in examining the predominance requirement under Rule 23(b)(3), a court’s rigorous analysis “ ‘begins ... with the elements of the underlying cause of action.’ ”

Messner v. Northshore Univ. HealthSystem,

669 F.3d at 815 (quoting

Erica P. John Fund, Inc. v. Halliburton, Co.,

131 S.Ct. at 2184). The Court must “scrutiniz[e] plaintiffs’ legal causes of action to determine whether they are suitable for resolution on a classwide basis.”

McCarthy v. Kleindienst,

741 F.2d 1406 , 1412 n. 6 (D.C.Cir.1984). The Court therefore examines “the elements of plaintiffs’ claim through the prism of Rule 23 to determine” whether plaintiffs have satisfied the predominance requirement.

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 311 (quotations omitted). If proof of the essential elements of the claim requires individual treatment, then common questions do not predominate and class certification is “unsuitable.”

Id.

(quotations omitted).

In this ease, plaintiffs allege that defendants engaged in price fixing, in violation of Section 1 of the Sherman Act. Thus, to prevail on the merits of their claim at trial, plaintiffs will have to prove three elements: (1) a violation of the antitrust laws — here, Section 1 of the Sherman Act; (2) individual impact resulting from that violation; and (3) measurable damages.

See In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 311 . At the class certification stage, plaintiffs’ burden is different: plaintiffs must show by a preponderance of the evidence that the elements of their claim are

“capable of proof

*36

trial through evidence that is common to the class rather than individual to its members.”

Id.

at 311-12 (emphasis added).

1. Violation of Antitrust Law

Plaintiffs have alleged that defendants engaged in a horizontal price fixing conspiracy to coordinate their fuel surcharge programs in order to effect an overall supraeompetitive total price increase on their customers, in violation of Section 1 of the Sherman Act.

See

Am. Compl. ¶¶ 1-2. A horizontal price fixing conspiracy, as alleged here, is a

per se

violation of the Sherman Act.

See, e.g., Texaco Inc. v. Dagher,

547 U.S. 1, 5 , 126 S.Ct. 1276 , 164 L.Ed.2d 1 (2006);

NYNEX Corp. v. Discon, Inc.,

525 U.S. 128, 133-34 , 119 S.Ct. 493 , 142 L.Ed.2d 510 (1998);

Jacobs v. Tempur-Pedic Inti, Inc.,

626 F.3d 1327, 1334 (11th Cir.2010). And the parties agree that this element of plaintiffs’ claim is capable of proof at trial through evidence that is common to the class.

See

Class Mem. at 65-66;

see

Oct. 7 Tr. at 161 (defendants’ counsel, acknowledging that “whether there was or was not a conspiracy is in fact capable of common proof, so that’s really not at issue in the predominance analysis”). That is because plaintiffs’ allegations of price fixing indisputably “will focus on the actions of the defendants, and, as such, proof for these issues will not vary among class members.”

In re Vitamins Antitrust Litig.,

209 F.R.D. at 264 ;

see Meijer, Inc. v. Warner Chilcott Holdings Co. Ill,

246 F.R.D. at 308 (because alleged violation of the antitrust laws “relates solely to Defendants’ conduct ... proof for [this] issue will not vary among class members”) (quotations omitted) (alteration in original). The Court therefore finds by a preponderance of the evidence that the first element of plaintiffs’ claim is capable of proof at trial through evidence that is common to the class rather than individual to its members.

2. Impact

In this case, as in many antitrust cases, the second element of plaintiffs’ claim — individual impact resulting from the alleged conspiratorial conduct (also referred to by the parties as “injury”) — is the central issue.

See

Oct. 6 Tr. at 9; Defs.

WaV-Mart

Reply Brief at 1 (“The parties ... agree that the central question here is whether Plaintiffs have met their burden ... to show that common questions predominate over individual ones, which in turn requires that they proffer a viable classwide method for proving injury at trial.”);

see also In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 311 .

In examining whether impact is capable of common proof; it is important to note at the outset that this element involves two distinct components: injury-in-fact; and antitrust injury.

See Bassett v. National Collegiate Athletic Ass’n,

528 F.3d 426, 434 (6th Cir.2008) (“[A] private antitrust plaintiff, in addition to having to show injury-in-fact and proximate cause, must allege, and eventually prove, antitrust injury.”) (quotations omitted);

Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 106 ;

see also In re Currency Conversion Fee Antitrust Litig.,

264 F.R.D. at 114 ;

Mazanderan v. Independent Taxi Owners’ Ass’n, Inc.,

700 F.Supp. 588, 590 (D.D.C.1988) (discussing the “two-fold requirement of individual economic injury to [a] plaintiff that is grounded in the antitrust laws”). These two components pose “two distinct questions”: injury-in-fact presents the “familiar factual question whether the plaintiff has indeed suffered harm,” whereas antitrust injury presents “the legal question whether any such injury is the ‘injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.’”

Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 106 (quoting

Brunswick Corp. v. Pueblo Bowlr-OMat, Inc.,

429 U.S. 477, 489 , 97 S.Ct. 690 , 50 L.Ed.2d 701 (1977)). Antitrust injury is injury to competition, not just injury to an individual.

Andrx Pharms., Inc. v. Biovail Corp. Inti,

256 F.3d 799, 812 (D.C.Cir.2001). And the reason an antitrust plaintiff is required to prove antitrust injury is to ensure that a plaintiff can recover “only if the loss stems from a competition

-reducing

aspect or effect of the defendant’s behavior.”

Atlantic Richfield Co. v. USA Petroleum Co.,

495 U.S. 328, 334 , 110 S.Ct. 1884 , 109 L.Ed.2d 333 (1990) (emphasis in original).

*37

1. Injury-in-fact.

The primary dispute in this case relates to the injury-in-fact component of the impact element. The parties vigorously dispute whether injury-in-fact can be established at trial with common evidence, and they have submitted expert reports by distinguished economists that reach diametrically opposed conclusions. Plaintiffs contend that they will prove injury-in-fact on a class-wide basis at trial “by showing that Defendants’ conspiracy caused the Class members to pay supra-eompetitive prices during the Class Period.” Class Mem. at 67. According to plaintiffs, the effect of defendants’ alleged conspiracy was to impose “on all Class members coordinated Fuel Surcharges that rose in lockstep and resulted in across-the-board prices increases.”

Id.

at 68.

Plaintiffs assert that they will show injury-in-fact “with public information, Defendants’ documents, and witness testimony” — -all of which, they contend, will be evidence that is common to the class. Class Mem. at 70. Specifically, plaintiffs assert that common evidence will show at trial that

• Defendants intended to use their coordinated Fuel Surcharge programs not as a means solely to recover fuel costs, but as a means to raise revenues and profits.

• Defendants[ ] intended their coordinated fuel surcharge programs to be applied across-the-board.

• Defendants each, and in coordination with each other, undertook during the Class Period to monitor success in achieving broad application o[f] the Fuel Surcharges.

• Defendants during the Class Period adopted policies precluding discounting to offset the Fuel Surcharges.

• Defendants recognized in internal documents that during the Class Period, the Fuel Surcharges generated revenues by raising prices paid by the Class far beyond Defendants’ actual fuel costs.

• During the Class Period, the Fuel Surcharges were responsible in large part for very large increases in Defendants’ revenues and profits.

Id.

(citations omitted).

Plaintiffs further contend that the analysis of their expert, Dr. Gordon Rausser, confirms that injury-in-fact can be established at trial with common evidence and economic analysis.

See

Class Mem. at 71.

Dr. Raus-ser explains that he has examined the rail freight industry and concludes that certain structural factors make it so that “had a conspiracy occurred it would have succeeded in subjecting the Class to a common” injury-in-fact. 2d Rausser Report at 80;

see

1st Rausser Report at 7-8. Furthermore, Dr. Rausser has developed two economic regression models and has analyzed 100 percent of defendants’ transaction data during the alleged conspiracy, 2d Rausser Report at 91-92, 96. Dr. Rausser’s regression analyses purportedly substantiate his theory of common proof, showing that

• [Defendants] did implement a common rate increase across the Class through their use of the fuel surcharge applied as a percentage of base rates.

• Common factors such as shipment weight, distance, route and commodity type, among others, predominate over individual factors in the determination of freight rates. These common factors can be measured using the Defendants’ transaction data and used in a common analysis to identify and quantity the harm experienced by the Class.

• Defendants’ transaction data reveals that there was no material discounting of base rates to offset the fuel surcharges that were applied to shipments made by

*38

the Class. As a result, Class members commonly experienced price increases from the Defendants’ actions irrespective of the commodity they were shipping. ...

• Class members paid significantly higher prices to Defendants for rail freight transportation during the Class Period than before and that these higher prices are not explainable by price determinants other than the conspiracy.

1st Rausser Report at 7-8. Thus, according to Dr. Rausser, “[t]here was a common impact of Defendants’ alleged conspiracy on the Plaintiffs and the Class which can be demonstrated through evidence and economic analysis common to the Class[J” 1st Rausser Report at 4.

Defendants disagree that injury-in-fact can be proven at trial with common evidence. As defendants frame the issues, in order to demonstrate that plaintiffs’ claims are suited for class treatment

Plaintiffs must prove ... that they have a method of providing a common answer to each of the core questions each class member would have to answer had it brought its own claim: (i)

Did i pay a fuel surcharge (or higher fuel surcharge) because of the alleged conspiracy?

and (ii)

Did payment of a fuel surcharge cause me to pay more for shipping than it would have otherwise paid?

Defs.

Wal-Mart

Brief at 2 (emphasis in original). Defendants contend that the facts in this case make clear that rate-based fuel surcharges were widely used before the start of the alleged conspiracy; that the use of fuel surcharges was growing; and that even Dr. Rausser concedes that some class members would have paid rate-based fuel surcharges absent the alleged conspiracy.

See id.

Given these proffered facts, among others, defendants conclude that neither plaintiffs nor their expert “has offered any way to use common evidence to show that, absent the alleged conspiracy, every shipper would have paid a lower fuel surcharge or none at all.”

Id.

According to defendants, plaintiffs therefore have failed to show that they have a common answer to the first question quoted above.

Id.

As for the second question quoted above, defendants contend that it, too, cannot be answered with common evidence. According to defendants, the facts show that “many shippers received contract concessions, including lower base rates than the railroads initially offered, in exchange for accepting a fuel surcharge[J” Defs.

Wal-Mart

Brief at 6. Because the alleged conspiracy was only directed at a portion of the total price of shipping, defendants say that any class member who obtained anything of value in exchange for accepting a fuel surcharge may not have suffered injury-in-fact.

See

Class Opp. at 41. And in view of the purported evidence that “some (but not all) shippers made trade-offs for fuel surcharges,”

id.,

defendants contend that individualized issues predominate because “it is necessary to examine the circumstances and negotiating history of each shipper to prove that it did not negotiate offsetting savings and therefore pay a higher all-in price for shipping as a result of its having agreed to a fuel surcharge.” Defs.

Wal-Mart

Brief at 2.

In support of their position that class certification is inappropriate in this case, defendants have submitted the expert report of Dr. Robert Willig.

As Dr. Willig explains, he was asked by defendants to address from an economic perspective “whether it is feasible for plaintiffs to demonstrate through common proof that members of the proposed class suffered economic injury”; “whether it is feasible to estimate each class member’s

*39

damages on a class-wide basis”; and “to evaluate the damage methodology proposed by Professor Rausser as well as the analyses that support his conclusions.” Willig Report ¶11.

As for the issue of injury-in-fact, Dr. Wil-lig’s overall conclusion is that assessing injury-in-fact “requires an in-depth individualized inquiry into the circumstances of the particular shipper.” Willig Report ¶ 15. In arriving at this conclusion, Dr. Willig makes six principal points:

• First, “[t]he fact that shippers paid FSCs [fuel surcharges] is not common evidence of class-wide impact or damages assessment.” Willig Report at 13.

• Second, “[t]he levels of the FSCs paid by shippers provide no common evidence of class-wide impact or damages assessment.”

Id.

at 14.

• Third, “[t]he processes by which FSCs were applied to shipper rates preclude common evidence of class-wide impact or damages assessment.”

Id.

at 16.

• Fourth, “[a]ll-in rates varied widely and contradict the possibility of common evidence showing class-wide impact.”

Id.

at 18.

• Fifth, “Professor Rausser’s attempts to show that common evidence can establish class-wide impact and assessment of damages fail to support his conclusion.”

Id.

at 22.

• Sixth, “[m]embers of the proposed class have conflicting economic interests.”

Id.

at 28.

2. Antitrust injury.

Although it was not initially apparent from defendants’ papers that they also dispute whether antitrust injury can be established at trial with common evidence,

see

Class Opp. at 50-56 (seemingly equating antitrust injury with injury-in-fact arguments);

see also

Oct. 7 Tr. at 172, defendants’ counsel stated at oral argument that defendants do argue that some class members — specifically, captive shippers — cannot suffer antitrust injury.

See

Oct. 7 Tr. at 171-73. As discussed, antitrust injury is “ ‘injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.’”

Cordes & Co. Fin. Servs., Inc. v. A. G. Edwards & Sons, Inc.,

502 F.3d at 106 (quoting

Brunswick Corp. v. Pueblo Bowlr-O-Mat, Inc.,

429 U.S. at 489 , 97 S.Ct. 690 ). As defendants see it, certain shippers in plaintiffs’ putative class are “captive shippers,” also referred to synonymously as “sole served” shippers. Oct. 6 Tr. at 30. Because of various factors, including geographic location, these shippers have “no option but to use a single railroad when it ships out of its place[.]” Oct. 7 Tr. at 172. Defendants contend that these captive shippers cannot as a matter of law suffer antitrust injury because they have “no reduction in competition”— having had no competition in the first place— “as a result of the alleged wrong.”

Id.

And defendants argue that identifying such captive shippers requires individualized inquiry.

Plaintiffs disagree. Plaintiffs contend that defendants themselves, as well as defendants’ expert, Dr. Willig, admit that captives shippers are subject to competitive pressures,

see

Oct. 7 Tr. at 304, and that Dr. Rausser’s analysis confirms what defendants themselves have admitted.

Id.

at 304-05.

The Court first addressees two preliminary legal issues regarding the impact element: the number of uninjured class members sufficient to preclude a finding of predominance, and the “presumption” of common impact. The Court then examines the parties’ and the experts’ arguments regarding whether antitrust injury and injury-in-faet are capable of proof at trial through evidence that is common to the class.

a. Uninjured Class Members

The first preliminary legal issue regarding impact involves a dispute between the parties over the number of uninjured class members sufficient to preclude a finding of predominance. Defendants contend that plaintiffs “must proffer a valid method for proving ... injury to all or virtually all class members on a simultaneous, class-wide basis[.]” Class Opp. at 26-27 (quotations omitted). Defendants acknowledge that “[s]ome cases have suggested a more relaxed requirement in which inability to show injury as to a few does not defeat class certification where the

*40

plaintiffs can show widespread injury to the class.”

Id.

at 27 n. 39 (quotations omitted);

see

Oct. 7 Tr. at 258 (defendants’ counsel, acknowledging that “the case law ... is mixed on the issue of whether every single class member must be injured or whether there’s some negligible number”);

see also Kottaras v. Whole Foods Mkh, Inc.,

281 F.R.D. at 22-24 (discussing cases addressing number of uninjured class members sufficient to preclude a finding of predominance). Defendants assert, however, that this “relaxed requirement” has not been adopted by the D.C. Circuit, and argue that, in any event, plaintiffs have failed to meet either standard in this case.

See

Class Opp. at 27; Oct. 7 Tr. at 258.

The Court concludes that defendants are incorrect about the legal standard for impact. “Class certification is not precluded simply because a class may include persons who have not been injured by the defendants’ conduct.”

Mims v. Stewart Title Guar. Co.,

590 F.3d 298, 308 (5th Cir.2009) (citing

Kohen v. Pacific Inv. Mgmt. Co.,

571 F.3d 672, 677 (7th Cir.2009)). As the Seventh Circuit stated in

Kohen v. Pacific Investment Management Co.:

[A] class will often include persons who have not been injured by the defendant’s conduct; indeed this is almost inevitable because at the outset of the case many of the members of the class may be unknown, or if they are known still the facts bearing on their claims may be unknown. Such a possibility or indeed inevitability does not preclude class certification^]

Kohen v. Pacific Inv. Mgmt. Co.,

571 F.3d at 677 ;

see Messner v. Northshore Univ. HealthSystem,

669 F.3d at 823 (citing and quoting

Kohen v. Pacific Inv. Mgmt. Co.,

571 F.3d at 677 ). Thus, the “inability to show injury as to a few does not defeat class certification where the plaintiffs can show widespread injury to the class.”

Meijer, Inc. v. Warner Chilcott Holdings Co. Ill,

246 F.R.D. at 310 (quotations omitted). Only when it is apparent that “a great many persons” have not been impacted should a court deny class certification.

Kohen v. Pacific Inv. Mgmt. Co.,

571 F.3d at 677 . “There is no precise measure for ‘a great many.’ Such determinations are a matter of degree, and will turn on the facts as they appear from case to case.”

Messner v. Northshore Univ. HealthSystem,

669 F.3d at 825 (quoting

Ko-hen v. Pacific Inv. Mgmt. Co.,

571 F.3d at 677 ).

b. “Presumption” of Common Impact

The second preliminary legal issue involves what the parties refer to as a “presumption” of common impact. Class Mem. at 69; Class Opp. at 27 n. 40. “Some courts have found a presumption of common impact in cases involving allegations of horizontal price-fixing.”

In re Vitamins Antitrust Litig.,

209 F.R.D. at 266 (citing

e.g., In re Master Key Antitrust Litig.,

528 F.2d 5, 12, n. 11 (2d Cir. 1975);

In re Auction Houses Antitrust Li-tig.,

193 F.R.D. 162,166 (S.D.N.Y.2000)). As the Third Circuit stated in

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

“[i]n antitrust class actions, injury may be presumed when it is clear the violation results in harm to the entire class.”

Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,

259 F.3d 154 ,179 n. 21 (3d Cir.2001).

Plaintiffs contend that applying a presumption of common impact in this case would be warranted, because if “Plaintiffs prove that Defendants coordinated their Fuel Surcharge programs in an anticompetitive manner, then it would make basic economic sense to recognize that all Class members, all of whom paid Fuel Surcharges that were either imposed for the first time, or increased by the conspiracy, were impacted by the conspiracy.” Class Mem. at 69-70. Plaintiffs, however, make clear that they “do not rest on such a presumption,” asserting that they need not do so in view of the evidence in the record in support of their claim of common impact.

Id.

Although several judges in this district have mentioned this presumption in passing, none actually has applied it.

See, e.g., Mei-jer, Inc. v. Warner Chilcott Holdings Co. Ill,

246 F.R.D. at 308 n. 16 (concluding that “[n]o ... presumption is required ... because [plaintiffs have established that common proof will predominate over individual issues”). And as the Third Circuit more recently stated in

In re Hydrogen Peroxide

*41

Antitrust Litig.:

“Applying a presumption of impact based solely on an unadorned allegation of price-fixing would appear to conflict with the 2003 amendments to Rule 23, which emphasize the need for a careful, fact-based approach, informed, if necessary, by discovery.”

In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 326 . To the extent that any such presumption of common impact remains valid law, see

id.

at 327 (stating that district court, on remand, could consider whether presumption of common impact “is compatible with the record of th[e] case”), it appears to be some sort of presumption-plus, requiring “some additional amount of empirical evidence.”

American Seed Co., Inc. v. Monsanto Co.,

271 Fed.Appx. 138, 141 (3d Cir.2008).

The Court agrees with the reasoning set forth by the Third Circuit in

In re Hydrogen Peroxide Antitrust Litig.

and concludes that applying a presumption of impact based on an unadorned allegation of price fixing appears inconsistent with the rigorous analysis that must be performed in examining whether the requirements of Rule 23(b)(3) have been met. And whatever remains of any such presumption or presumption-plus under the law, the Court concludes that no presumption is required in this case, as plaintiffs themselves make clear that they do not rely on it. Nor do they need to.

Antitrust Injury

In order to establish antitrust injury, the legal component of the impact element, at trial, plaintiffs “must prove that the defendants engaged in an anti-competitive manipulation of the markets.”

In re EPDM Antitrust Litig.,

256 F.R.D. at 87 . In examining this legal component at the class certification stage, the Second Circuit held in

Cordes & Co. Financial Services, Inc. v. A.G. Edwards & Sons, Inc.

that the plaintiffs successfully established that antitrust injury was common to the class and predominated over individual questions because the plaintiffs alleged only one type of injury in the complaint: “overcharges paid to a horizontal price-fixing conspiracy.”

Cordes & Co. Fin. Servs., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 107 . As the Second Circuit stated in

Cordes:

“Because each class member allegedly suffered the same type of injury, the legal question of whether such an injury is ‘of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful,’ ... is a common one.”

Id.

(quoting

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. at 489 , 97 S.Ct. 690 ). As in

Cordes,

the Court concludes that plaintiffs have satisfied the first part of the impact element by showing that the legal question of antitrust injury is common to the class and predominates over individual issues.

Plaintiffs have alleged only one type of injury in their second amended consolidated complaint: that defendants’ price fixing conspiracy imposed supra-competitive total price increases on the putative class, in violation of Section 1 of the Sherman Act.

See

2d Am. Compl. ¶¶ 1-2; Class Mem. at 1. Plaintiffs contend that the type of supra-competitive overcharges allegedly imposed in this case “clearly constitute antitrust injury.” Class Mem. at 65 n. 221. Defendants disagree as to a subset of putative class members, arguing that so-called captive shippers cannot suffer antitrust injury.

As defendants’ counsel described it at oral argument, antitrust injury is the injury that flows from the harm that the antitrust laws are intended to prevent, and the antitrust laws are intended to prevent only a reduction in competition.

See

Oct. 7 Tr. at 172-73. Consequently, if there is “no competition in the first instance for a customer’s business, that customer cannot suffer antitrust injury.”

Id.

at 173. Defendants and Dr. Willig contend that shippers served by only one railroad do not benefit from rail-to-rail competition, and, as a result,

the railroad serving such a shipper would be expected to attempt to extract the maximum possible rate given the shipper’s non-rail alternatives and the value the shipper derives from rail service. A conspiracy among railroads does not enable the serving railroad to extract more than the maximum rates from such a shipper. For shippers served by only one railroad, any attempt by the serving railroad to impose an FSC that is not desired by that shipper would be expected to require that

*42

the railroad make a concession with respect to base rate or another dimension of contract.

Willig Report ¶ 132. Dr. Willig contends that any claim that captive shippers enjoy competition “is contradicted by the well-recognized fact that ‘captive’ shippers experience higher prices than shippers that face head-to-head rail competition.”

Id.

¶ 135.

The antitrust laws were enacted for “ ‘the protection of

competition[.]

’ ”

Andrx Pharms., Inc. v. Biovail Corp. Int’l,

256 F.3d at 812 (quoting

Brunsivick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. at 488 , 97 S.Ct. 690 ) (emphasis in original). Defendants therefore are correct that “where there [is] no competition, there [is] no antitrust injury.”

City of Pittsburgh v. West Penn Power Comp.,

147 F.3d 256, 266-67 (3d Cir.1998). In other words, “[without demonstrating that there was competition, a plaintiff cannot show that the defendants’ actions have had or will have anticompetitive effects.”

Id.

(citing

Continental Cablevision of Ohio, Inc. v. American Elec. Power Co.,

715 F.2d 1115, 1119-20 (6th Cir.1983));

see also In re Tobacco/Govemmental Health Care Costs Litig.,

83 F.Supp.2d 125, 134-35 (D.D.C.1999) (“The antitrust laws were not intended to prevent losses that result from increased competition but those resulting from activity that may tend to lessen competition----The reason an antitrust plaintiff is required to plead antitrust injury is to assure that a plaintiff can recover only if the loss stems from a competition

reducing

aspect or effect of the defendant’s behavior.”) (quotations omitted) (alteration and emphasis in original).

The Court, however, disagrees with defendants and Dr. Willig that captive shippers are not subject to competitive forces — a claim that is contradicted by the statements of defendants’ own executives. NS’ chief executive officer, Charles W. Moorman, testified before Congress in 2007 that even captive shippers are subject to “competitive constraints [that] are real,” and he expressly acknowledged that “even where there is only one railroad serving a facility, there are market factors at play.” Corrected HD Ex. 36, Written Statement of Charles W. Moorman, at 16, Sept. 20, 2007. Similarly, UP’s chief executive officer, James Young, agreed that railroads place “competitive constraints” on each other, even in the case of captive shippers. HD Ex. 66, Young Dep. at 201. And CSX has acknowledged in internal documents that “[s]tudies have shown that, in aggregate, captive shippers don’t pay higher prices than non-captive shippers,” and that “CSX[] sets prices based on all competitive factors.” HD Ex. 37, CSX Talking Points Response to Escalation Resource — Fuel Surcharge Alert, at CSXFSC000153187.

That captive shippers enjoy competition is further reflected by the experience of one of the named plaintiffs in this case before and during the class period. U.S. Magnesium has an operating facility outside of Salt Lake City, Utah. As plaintiffs’ counsel stated at oral argument, that plant is truly captive— “[t]here is ... a single rail line coming up to the plant, which is owned by [UP].” Oct. 6 Tr. at 92-93. In December 2002, before the class period, U.S. Magnesium

negotiated out

of the application of a fuel surcharge.

See

RD Ex. 10, at USM005647 (UP proposing to U.S. Magnesium a 4 percent increase on all rates and application of a fuel surcharge, but ultimately agreeing to a 4 percent across the board increase without a fuel surcharge). But one year later, during the period when plaintiffs say that defendants were conspiring to impose fuel surcharges uniformly as to all shippers, the application of a fuel surcharge was “mandate[d] by UP management[.]” RD Ex. 72, at USM005663.

Moreover, defendants’ executives expressly have denied in their depositions taken in this ease that they would have tried to impose more aggressive programs on captive shippers than they were able to impose on non-captive shippers. BNSF’s chief executive officer, Matthew K. Rose, stated that BNSF had never considered having a higher or more onerous fuel surcharge for captive shippers, and that such an approach would “violate [BNSF] principle.” HD Ex. 72, Rose Dep. at 232. UP’s chief financial officer, Robert Knight, Jr., acknowledged that he was unaware of any discussions on the topic of having separate fuel surcharge programs for captive shippers. HD Ex. 70,

*43

Knight Dep. at 64. These statements are consistent with Dr. Rausser’s analysis and conclusion, which the Court finds persuasive, that defendants’ transaction data show that “so-called captive shippers paid the same Fuel Surcharge as others” during the class period. 2d Rausser Report at 23.

The Court therefore finds by a preponderance of the evidence that railroads are affected by competitive constraints that apply to both captive and non-captive shippers, and that plaintiffs have satisfied the first part of the impact element for all putative class members, including captive shippers, by showing that the legal question of antitrust injury is common to the class and predominates over individual issues.

See Cordes & Co. Fin. Sens., Inc. v. A.G. Edwards & Sons, Inc.,

502 F.3d at 107 .

d. Injury-In-Fact

The Court now addresses whether injury-in-fact is capable of proof at trial with evidence common to the class rather than individual to its members.

See In re Hydrogen Peroxide Antitrust Litig.,

552 F.3d at 311— 12. The Court finds by a preponderance of the evidence that it is.

“It is a basic tenet of antitrust law that a cause of action will not lie if the plaintiff has not been harmed.”

Warren Gen. Hosp. v. Amgen Inc.,

643 F.3d 77, 92 (3d Cir.2011). Thus, in order to prevail at trial on their Sherman Act claim plaintiffs must prove not only an antitrust violation— here, that defendants’ conspired on their fuel surcharge programs — but also a “causal link between the violation and an injury to ... business or property.”

Federal Prescription Sen., Inc. v. American Pharm. Ass’n,

663 F.2d 253, 268 (D.C.Cir.1981);

see Taylor Publ’g Co. v. Jostens, Inc.,

216 F.3d 465, 485 (5th Cir.2000) (“[T]he fact of damages ... means that the antitrust violation must cause injury to the antitrust plaintiff.”) (quotations omitted);

see also

1st Rausser Dep. at 94; 2d Rausser Dep. at 119-21.

The Court finds by a preponderance of the evidence that the fuel surcharge programs applied before the class period were nothing like the widespread and uniform application of standardized fuel surcharges during the class period. Before the alleged conspiracy, defendants’ differentiated fuel surcharges were subject to competition and negotiation ■with shippers, were less aggressive, and were applied only sporadically. Furthermore, these pre-class period fuel surcharges were only “theoretically billable.” HD Ex. 65, Glennon Dep. at 26 (manager of NS pricing systems (now retired) acknowledging that before the class period “the fuel surcharge was theoretically billable, so I would say that ... customers might not resist it as much”). That is, these pre-class period fuel surcharges often were not triggered or applied, and when they were they were small.

See

HD Ex. 66, Young Dep. at 24-25 (UP chief executive officer stating that before the class period “[w]e had fuel surge (sic) programs in many contracts, but because fuel had not run up, they were never implemented”);

id.

at 28 (agreeing that fuel surcharges triggered “during the 2000 through 2002 time period never reached significant percentage levels”); HD Ex. 70, Knight Dep. at 24 (UP chief financial officer stating that during the 2000 through 2002 time period UP did not have a company-wide policy on fuel surcharges: “[tjhere were some isolated situations where there were surcharges, but ... no policy position”); HD Ex. 68, Lanigan Dep. at 27 (BNSF executive vice president and chief marketing officer stating that BNSF’s fuel surcharge participation rates in January 2003 were “low,” in the “25 to 30 percent rage”); HD Ex. 69, Gooden Dep. at 101 (CSX executive vice president of sales and marketing agreeing that the “fuel surcharge revenue [CSX] was generating prior to adoption of this new program in March of 2003” was “[l]ow — relatively low to where it needed to be”); HD Ex. 71, McNulty Dep. at 118-19 (CSX director of marketing, agricultural products discussing “fairly minimal” fuel sur-chargers in 2001 and 2002).

The fuel surcharges that defendants put in place in the spring of 2003 were of a different breed.

See

Class Reply at 7 (fuel surcharges were different “both in design and application from those that came before”). The evidence shows that defendants employed these fuel surcharges in lockstep, lowered the trigger price for the imposition of the fuel surcharge, and adjusted the fuel surcharge based on the 30-day average fuel price rather than only when the trigger was exceeded for 30 (or more) consecutive days.

See

1st Rausser Report at 54-60. Defendants’ own executives admitted that the new fuel surcharge programs applied by the defendants during the class period were different — that is, they were more aggressive and yielded more revenue than earlier programs. For example, UP’s chief executive officer, James Young, testified that compared to the pre-2003 time period,

the impact of fuel surcharges on customers ... was greater in '03, it was greater in

*49

'04, it was greater in '05 because, again, the percent of recovery. And in negotiating contracts, [UP was] able to get a fuel surcharge included in those contracts so you were having a — having a greater recovery each year.

HD Ex. 66, Young Dep. at 57. Patrick Glen-non, a manager of pricing systems for NS (now retired), testified that the new fuel surcharge program was “not the same” as before, HD Ex. 65, Glennon Dep. at 67, admitting that it “definitely was more aggressive,” and “definitely yielded more revenue.”

Id.

at 42;

see id.

at 67. Indeed, as Mr. Glennon described the new program in an internal NS e-mail: “By dropping the base to $23 per barrel, raising the percentage yield and taking it sooner, the change is in fact a blatant general rate increase!.]” HD Ex. 30, E-mail from P. Glennon, at NS-0310004522, Apr. 29, 2003. Internal CSX e-mails similarly stated that although the new fuel surcharge program may “seem[ ] somewhat benevolent, it is actually a large increase in fuel surcharge billings — maybe as much as 100%.” RD Ex. 23, E-mail from J. Couch, at CSX000326, Mar. 19, 2003.

Not only were defendants’ class period fuel surcharges more aggressive than before, but they also were standardized and uniformly applied across all or virtually all shippers— regardless of whether such shippers were legacy or captive shippers. BNSF’s chief financial officer testified before the STB in 2006 that “[o]ur surcharge program is the same for all customers[.]” HD Ex. 9, Testimony of Tom Hunt, at 272, May 11, 2006. UP told a major customer, [redacted] in 2005 that it was “uniformly requiring” its “standard fuel surcharge program ... of all of [its] customers.” HD Ex. 149, Letter from J. Koraleski, at UPFSC 0342883, Apr. 22, 2005.

Defendants and Dr. Willig, relying heavily on 21 declarations submitted by railroad executives, contend that the evidence of aggressive, uniform, and standardized fuel surcharges is not reflective of reality.

See

Class Opp. at 21-22, 56-58; Willig Report at 54-55.

According to defendants, their fuel surcharge programs during the class period “varied widely from railroad to railroad as well as by shipper and commodity.” Class Opp. at 21, 56-58. Defendants say that

[i]t is an indisputable fact that the Defendants used dozens of fuel surcharges during the Class Period. NS alone applied fifty distinct fuel surcharge formulas during the Class Period, Lawson Decl. ¶ 14, UP had 90 different fuel surcharges between 2000 and 2008, Adams Decl. ¶ 3, and BNSF had a total of 152 in effect at some point between 2000 and 2007. Jacobowski Decl. ¶ 6.

Class Opp. at 56. Defendants also argue that they had different fuel surcharges for intermodal traffic,

id.

at 21 — that is, traffic that involves “goods shipped in containers or trailers on rail flat cars as part of a continuous movement with another mode of transport, such as truck or steamship.” Class Opp. at 14 n. 18.

In view of these proffered

*50

facts, defendants argue that there is no uniform or standard class-wide fuel surcharge that could be used to demonstrate a common impact.

See id.

at 56.

The Court finds the railroad executives’ declarations unpersuasive. Indeed, the most damning portions of almost every single declaration on whi

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