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Fourth Circuit Affirms That Continuing Violation Doctrine Does Not Preserve Time-Barred Antitrust Claims Without “New” Harm Or Injury Within The Limitations Period
09/18/2024On August 29, 2024, the Fourth Circuit affirmed a district court’s decision granting summary judgment and dismissing antitrust claims by CSX Transportation, Inc. (“CSX” or “Plaintiff”) against Norfolk Southern Railway Company (“Norfolk Southern”) and Norfolk & Portsmouth Belt Line Railroad Company (“Belt Line”) (collectively, “Defendants”) for alleged exclusionary fees, finding that CSX’s claims were untimely and could not be saved by the “continuing violation” doctrine. CSX Transp., Inc. v. Norfolk S. Ry. Co., et al., No. 23-1537 (4th Cir. 2024).
CSX and Norfolk Southern compete in domestic transportation services, moving international shipping containers that are delivered to and from various East Coast ports over U.S. railway lines. Belt Line owns and/or operates railway lines that connect to the Norfolk International Terminal of the Port of Virginia and facilitates the interchange of railroad cars among the railroads to provide access to the terminal. It charges a fee for each train car “well” that it moves between lines, called a “switch rate.” CSX alleged that Norfolk Southern and Belt Line conspired to exclude CSX from the international shipping market at the Norfolk International Terminal of the Port of Virginia by imposing an exclusionary “switch rate” of $210 per well beginning in 2010 and continuing to present day. In 2018, CSX filed a lawsuit alleging that this rate made it economically impractical for it to access the terminal, causing ongoing injury to its business.
On summary judgment, the U.S. District Court for the Eastern District of Virginia considered whether the continuing violation doctrine preserves Plaintiff’s claims—filed almost nine years after the switch rate was implemented—from the Sherman Act’s four-year statute of limitations. The Court found it did not.
Generally, a federal antitrust cause of action accrues and the statute of limitations begins to run when a defendant commits an act that injures a plaintiff’s business. The “continuing violation” or “continuing conspiracy” doctrine provides a limited exception to the accrual rule where each new unlawful act in furtherance of the conspiracy that causes new injury to a plaintiff tolls the four-year statute of limitations, even if the alleged initial conspiracy was hatched outside the limitations period.
Plaintiff argued that each day the exclusionary switch rate remained in effect constituted a new injurious act that restarts the statute of limitations. Plaintiff further alleged “new acts” by defendants within the limitations period, such as actions in 2015 such as (i) being “forced” to pay the switch rate due to heavy shipping traffic across the East Coast, making it more difficult for plaintiff to move shipping containers via other means, and (ii) interference with its operations (e.g., Defendants obstructing movements of Plaintiff’s trains). Plaintiff also pointed to proposals it made in 2018 to reduce the switch rate and establish a rate committee, which defendants ignored. The district court was unpersuaded that plaintiff suffered antitrust injury from this 2015 conduct or that defendants’ inaction in response to plaintiff’s 2018 proposals constituted an overt act under the continuing violation doctrine.
The district court ultimately granted summary judgment in favor of defendants, holding that plaintiff’s claims were time-barred and that the continuing violation doctrine did not apply because maintaining the switch rate did not constitute a “new act” causing new injury within the limitations period.
The Fourth Circuit affirmed, finding plaintiff’s claims accrued in 2010 when defendants implemented the allegedly exclusionary switch rate, and thus were time-barred when Plaintiff filed its suit in 2018. According to the Circuit Court, to establish a continuing violation that tolls the statute of limitations, a plaintiff must allege an affirmative act committed within the limitations period in furtherance of the conspiracy. Even if defendants committed affirmative acts in furtherance of the conspiracy in 2015, plaintiff failed to offer sufficient evidence of antitrust injury resulting from that conduct and instead attempted to “bootstrap” its theory of damages to the allegedly exclusionary rate. As a consequence, the Circuit Court agreed with the district court that plaintiff “doom[ed] its ability to present to the jury a non-speculative damages case arising from [defendants’] 2015 conduct.”
