The District of Columbia District Court recently issued the first judicial interpretation of 49 US Code Section 10706(a)(3)(B)(ii), which sets out an evidentiary exemption relating to certain agreements among railroads. On its face, the decision's reach appears limited. However, the opinion provides insight into the judicial interpretation of antitrust exemptions and practical reminders for rail and other industries that have legitimate, and sometimes legally protected, communications with competitors.
Staggers Act
In 1980 Congress enacted the Staggers Rail Act as part of the deregulation of the rail industry to allow for more competition between railroads and between rail and other modes of transport such as trucking. Section 10706(a)(3)(B)(ii), recodified without substantive changes in the Interstate Commerce Commission Termination Act 1995, provides for the exclusion of evidence relating to and bars inferences arising from discussions and agreements coordinating so-called 'interline' movements. Interline movements are shipments carried over two or more railroads to get to the shipment destination. Carriers do not compete with one another for carriage of interline traffic but act as a sort of joint venture for the movement, which necessitates cooperation and agreements on terms and rates (eg, fuel surcharges).