District Of Columbia Holds Later Complaint In Rail Freight Fuel Surcharge MDL Not Time-Barred
07/06/2023On June 21, 2023, the United States District Court for the District of Columbia denied defendant railroads’ motion to dismiss an allegedly time-barred complaint brought by a single plaintiff in a multidistrict litigation alleging a conspiracy to increase the price of rail freight transport. In re: Rail Freight Fuel Surcharge Antitrust Litigation (No. II), 20-mc-00008-BAH, ECF No. 916, (D.D.C. June 21, 2023) (the “Opinion”).
This long-running litigation began in 2007. At that time, plaintiffs, a group of freight rail shippers, alleged that defendants, the four largest domestic railroads, conspired to increase the price of rail freight transport through a coordinated effort to change an industry cost index to exclude the cost of fuel and then together implement artificially inflated fuel surcharges, in violation of Section 1 of the Sherman Act and Section 4 of the Clayton Act. Those claims were eventually consolidated as a multidistrict litigation in the District of Columbia, where plaintiffs sought class certification. However, class certification was denied on predominance grounds in 2017 and the D.C. Circuit affirmed on August 16, 2019. Plaintiffs then began filing individual cases containing the same price-fixing allegations; these were consolidated into the present action. Environmental Protection & Improvement Company, LLC (“EPIC”)—who had been a member of the putative class in the initial MDL—filed its complaint on July 29, 2022, and alleged the same price-fixing conspiracy between 2003 and “at least December 31, 2008.” Ignoring any potential tolling, EPIC’s claims would have had to be brought by December 31, 2012, under the Clayton Act’s four-year statute of limitations. The railroad defendants moved to dismiss on the basis that EPIC’s complaint was time-barred.
In their motion to dismiss, defendant railroads argued that EPIC should not enjoy equitable tolling under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), because it did not conduct itself as a “diligent” plaintiff in pursuing its claim since it waited three years after the denial of class certification to file its lawsuit. The Court disagreed. Explaining American Pipe’s statute of limitation exceptions for former putative class members, the Court held that “the limitations period is … tolled for all members of the putative class until class certification is denied … at which time class members may choose to bring a separate lawsuit or to file a motion to intervene in the former class action.” Opinion at 12 (internal quotations and citations omitted). Importantly, American Pipe tolling does not require “courts to conduct an individualized inquiry as to each plaintiff’s diligence.” Id. at 17. The Court further pushed back on defendants’ arguments, noting that a “diligence” analysis would undermine American Pipe’s bright-line tolling rule, incentivizing putative class members to file duplicative “just in case” litigation to protect their rights and undermining the judicial efficiency that “Federal Rule of Civil Procedure 23 was designed to service.” Id. at 20, 22 (internal quotations and citations omitted).
After finding that EPIC was entitled to American Pipe tolling, the Court turned to the question of how much time EPIC had to file its complaint. Defendants advocated for a case-specific approach, again pointing to EPIC’s lack of diligence. The Court rejected this, instead holding that American Pipe and its progeny used a “stop-clock” approach, where filing a class action “functions as a pause button for the claims of all purported class members.” Id. at 24 (internal quotations and citations omitted). On that basis, EPIC’s complaint was not time-barred by the Clayton Act’s four-year statute of limitations, since it had from August 16, 2019, until August 16, 2023, to bring its claims.