The U.S. Court of Appeals for the Fourth Circuit, in CSX Transportation Inc. v. Norfolk Southern Railway Co. et al., case number 23-1537, ruled Aug. 29 that CSX’s antitrust case against Norfolk Southern over ‘exclusionary’ fees charged by Norfolk & Portsmouth Belt Line Railroad, a Virginia S&T (switching and terminal) railroad they jointly own, was filed outside the statute of limitations, reported Law 360.
CSX accused Norfolk Southern in its 2018 suit of abusing its 57% ownership stake in the 26-mile Belt Line interchange, of which CSX holds the other 43% stake and holds two of six board positions, and raising prices to cut off CSX’s access to Norfolk International Terminals, the Virginia Port Authority’s largest marine termonal, in violation of antitrust law, wrote Law 360’s Matthew Perlman, Bryan Koenig, Christopher Cole, Katie Buehler and Jared Foretek.
“A three-judge panel—U.S. Circuit Judges Albert Diaz, A. Marvin Quattlebaum Jr. and Allison Jones Rushing—affirmed in a published opinion a lower court’s summary judgment ruling that ended CSX’s antitrust claims over fees charged by the Belt Line Railroad to access [this] major port,” the report noted. “U.S. Circuit Judge Albert Diaz wrote for the unanimous panel that while the Belt Line started charging the switching fees at issue in 2009—nine years before CSX sued—the railroad argued that it suffers each day the rate remains in effect. This would mean the four-year statute of limitations for the antitrust claims is constantly reset, but the panel said CSX has not shown the ‘continuing violation’ doctrine applies. ‘The decision to keep the allegedly exclusionary switch rate in place didn’t trigger the doctrine because that conduct didn’t inflict new harm causing new injury to CSX within the limitations period,’ the opinion said. The panel said an ‘affirmative’ act supporting the conspiracy needs to be alleged to restart the limitations period; simply continuing to charge the same rate is not enough. CSX argued that ‘extracting an inflated payment’ is equivalent to denying it access to the market, but the panel said there were no claims about new harm being inflicted after the price was set. ‘Instead, CSX’s exclusion from the intermodal shipping market at Norfolk International Terminal following the defendants’ imposition of the exclusionary rate was ‘final in its impact,’ the opinion said.”
A CSX spokesperson told Law 360 in a statement that the Class I “is disappointed in the court’s ruling. CSX is evaluating all options as we remain committed to gaining competitive access at [Norfolk International Terminals], the Virginia Port Authority’s largest marine terminal, so that we can best serve our customers.”
According to CSX’s lawsuit, NS used its control of the Belt Line to raise prices and effectively cut off CSX’s access to the port, violating antitrust law by restraining trade and monopolizing the international shipping market at the Norfolk port, Law 360 reported. But the Fourth Circuit Court “ruled that CSX did not initially pay the fees and used trucks to access the port between 2010 and 2015. But in 2015, CSX had to use the Belt Line because heavy shipping traffic on the East Coast made it too difficult to move shipping containers via truck. The [court] said in a footnote it doesn’t know how many times CSX paid the fee. CSX contends that even paying the fee once in 2015 restarted the limitations period, but the [court] said CSX did not sue as a purchaser of Belt Line’s services; it sued as a competitor to Norfolk Southern. This distinction matters, the [court] said, because purchasers are injured each time they pay an anticompetitive price, but competitors are injured when they get excluded from a market.”
In addition to the fee, CSX accused NS and Belt Line of causing delays and obstructing its operations when it did have to use the railroad. But the court said that CSX has not shown how the alleged delays caused it injury and that the only calculations CSX offered show “hundreds of millions of dollars” of harm since 2009. “Rather than specifying the damages the defendants caused CSX within the limitations period, the evidence bootstraps all the injury CSX suffered since defendants’ initial, pre-limitations violation,” the court ruled
“CSX also contended that Norfolk Southern used its majority ownership of the Belt Line to refuse proposals to lower the rates or establish an independent committee to set the rates,” Law 360 reported. “The [court] said those proposals, made in 2018, [also] do not save the case, because there’s no evidence that CSX did anything to move them forward.”
U.S. District Judge Mark S. Davis denied a dismissal bid from NS in May 2021 in which the railroad argued it is immune from the antitrust claims due to a 1982 regulatory approval issued when it acquired a majority stake in the Belt Line through a broader merger, Law 360 noted. But Davis also stayed the proceeding and referred a question to the Surface Transportation Board about whether regulators ever approved NSs control of the Belt Line. The STB replied in June 2022 that it never authorized NS to control the Belt Line, meaning it is not immune from CSX’s claims. The D.C. Circuit later affirmed those findings, and the U.S. Supreme Court declined an NS petition for review in April. Davis, meanwhile, granted summary judgment in favor of NS on the antitrust claims in January 2023, finding them untimely, and laterdismissed CSX’s remaining state law claims.
Norfolk Southern had its bid for $14 million in fees rejected in September 2023. NS representatives did not respond to Law 360’s request for comment.
CSX is represented by Robert W. McFarland and Benjamin L. Hatch of McGuireWoods LLP and Michael A. Scodro, Charles A. Rothfeld, Evan M. Tager and Carmen N. Longoria-Green of Mayer Brown LLP. Norfolk Southern is represented by Alan D. Wingfield, Michael E. Lacy, Megan Burns, John C. Lynch and Kathleen M. Knudsen of Troutman Pepper and Shay Dvoretzky, Parker Rider-Longmaid and Steven Marcus of Skadden Arps Slate Meagher & Flom LLP. Norfolk & Portsmouth Belt Line is represented by James L. Chapman IV, W. Ryan Snow and Alexander R. McDaniel of Crenshaw Ware & Martin PLC.
