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In Re: Rail Freight Fuel Surcharge Antitrust Litigation

November 30, 2011

IN RE: RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION


The opinion of the court was delivered by: John M. Facciola United States Magistrate Judge

Misc. No. 07-489 (PLF/AK/JMF)

This Document Relates To: ALL DIRECT PURCHASER CASES MEMORANDUM ORDER

Now pending before the Court is Plaintiffs' Motion to Re-Open Fact Discovery for Limited Deposition Discovery Due To Defendant Union Pacific Railroad Company's Production of Critical "Alliance" Meeting Documents on the Last Day of Fact Discovery and Supporting Memorandum [#511]. For the following reasons, Plaintiffs' motion will be granted in part and denied in part.

This is an action in which the gravamen of the plaintiffs' complaint is that the defendants agreed to impose fuel surcharges on plaintiffs, their customers, in violation of the antitrust laws. A central dividing line between the parties is the significance of meetings between the representatives of connecting railroads such as a western railroad, Union Pacific, and an eastern one, Norfolk Southern. Defendants insist that these meetings are a perfectly legitimate means of discussing business they share so that they can meet a statutory mandate that requires their cooperation on certain issues. See Defendant Union Pacific Railroad Company's Opposition to Plaintiffs' Motion to Re-Open Fact Discovery for Limited Deposition Discovery [#516] at 4, n.1. Indeed, defendants have moved the presiding judge, Judge Friedman, to exclude all "interline related" communications in his consideration of plaintiffs' pending motion for class certification.

See Defendants' Memorandum in Support of Motion to Exclude Interline-Related Communications From Consideration for Class Certification or any Other Purpose Prohibited by 49 U.S.C. § 10706*fn1 [#420]. Plaintiffs, of course, resist that motion, insisting that they can and will produce evidence of an industry wide determination and agreement to impose fuel surcharges that violated the law. Thus, information pertaining to meetings among the defendants has proven to be an important part of discovery.

The parties and their counsel have cooperated in an exemplary manner in this complicated MDL case but there have been a few bumps along the road. This one deals with information pertaining to a meeting held on May 14, 2003. A section of the minutes of that meeting states:

Discussion on fuel surcharges and various application processes as used by different roads. Consensus was reached that it would be a positive outcome if all roads had the same process in the eyes of our customers. There was some question as to whether or not the industry can work together on this opportunity, probably through the AAR, or do roads have to handle the opportunity on a bilateral basis. Follow up: UP [i.e. Union Pacific]-Jack Koraleski/Mike Hemmer, NS [i.e Norfolk Southern] Don Seale/Greg Summy. [#516] at 4-5.

Union Pacific explains that "Hemmer" and "Summy" mentioned in the notes are in house counsel for Union Pacific and Norfolk Southern and that the minutes reflect that whether to impose a uniform industry fuel surcharge was referred to them and "[n]othing came of the notion." Id. at 5, n.2.

It is not disputed that Union Pacific made these minutes available to plaintiffs in a production of documents in February 2009*fn2 and that plaintiffs used these minutes during the depositions it took of some of the defendants' officers and employees. Id. at 5.

The minutes identified a man named Brad King as a participant and another document indicated that a Norfolk Southern officer returned a draft of the minutes of this meeting to King and a man named Woody Sutton. Id. During his deposition, Don Seale, the Chief Marketing Officer of Norfolk Southern, was questioned about this transmittal and explained who King and Sutton were and their positions. Id. at 6.

Plaintiffs complain that defendants did not name King or Sutton initially as custodians whose files were to be searched. Plaintiffs' Reply in Support of Motion to Re-Open Fact Discovery for Limited Deposition Discovery Due to Defendant Union Pacific Railroad Company's Production of Critical "Alliance" Meeting Documents on the Last Day of Discovery [#518] at 4. Plaintiffs also complain that there were given only what they call "sanitized meeting 'minutes'" of what are called "'Alliance' meetings" (an apparent reference to meetings among all the defendants) in the documents that were produced and that the defendants' officers and employees, when deposed, disclaimed any knowledge of any one being assigned to take notes during alliance meetings. Id. at 6, n.5.

In May 2010, plaintiffs added four custodians to the list of custodians whose files were to be produced by the defendants; two of them were King and Sutton. [#516] at 7.

By June, 2010 Union Pacific had identified the existence of Alliance meeting files "that contained contemporaneous records of the Alliance meetings." Id.

That same month, plaintiffs demanded to know who was the author of certain handwritten notes concerning an Alliance meeting that had taken place on June 3, 2003. In response, Union Pacific indicated that the notes were prepared by Sutton and that Alliance meeting files ...


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