In re All

• Decision Date: 03 September 2013
• Docket Number: Misc. No. 07–0489 (PLF).,MDL Dkt. No. 1869.
• Citation: 965 F.Supp.2d 104
• Parties: In re RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION. This document relates to: All Cases.
• Court: U.S. District Court — District of Columbia

965 F.Supp.2d 104

In re RAIL FREIGHT FUEL SURCHARGE ANTITRUST LITIGATION. This document relates to: All Cases.

MDL Dkt. No. 1869.

Misc. No. 07–0489 (PLF).

United States District Court, District of Columbia.

Sept. 3, 2013.

Arthur N. Bailey, Jr., Hausfeld LLP, San Francisco, CA, Michael P. Lehmann, Cohen Milstein Sellers & Toll, PLLC, Steig D. Olson, Joseph D. Hammond, Kyle R. Taylor, Sami H. Rashid, Quinn Emanuel Urquhart & Sullivan LLP, David M. Peterson, Peterson & Associates, PC, Joseph A. Kronawitter, Horn, Aylward & Bandy, LLP, R. Keith Johnston, Walters Bender Strohbehn & Vaughan, PC, Kansas City, MO, Joseph M. Barton, Paul F. Bennett, Gwendolyn R. Giblin, Steven O. Sidener, Thomas C. Bright, Gold Bennett Cera & Sidener LLP, San Francisco, CA, James Joseph Pizzirusso, Michael D. Hausfeld, William P. Butterfield, Hausfeld LLP, Benjamin D. Brown, Cohen Milstein Sellers & Toll PLLC, Roger M. Adelman, Law Offices of Roger M. Adelman, Paul M. Donovan, Laroe Winn, Moerman & Donovan, Sathya S. Gosselin, Seth R. Gassman, Hausfeld, LLP, Barry J. Nace, Paulson & Nace, Paul M. Donovan, Laroe Winn, Moerman & Donovan, Michelle A. Parfitt, Ashcraft & Gerel, Craig L. Briskin, Mehri & Skalet, PLLC, Washington, DC, Richard M. Hagstrom, Zelle, Hofmann, Voelbel & Mason LLP, Scott W. Carlson, Vincent J. Esades, Heins, Mills & Olson, P.L.C., Minneapolis, MN, Allen D. Black, Fine, Kaplan & Black, Brent W. Landau, Hausfeld LLP, Patrick Howard, Saltz, Mongeluzzi, Barrett & Bendesky, P.C., Jeffrey B. Gittleman, Barrack, Rodos & Bacine, Eugene A. Spector, Spector, Roseman and Kodroff PC, Jay S. Cohen, William G. Caldes, Spector, Roseman & Kodroff & Willis, P.C., Philadelphia, PA, Douglas A. Millen, Freed Kanner London & Millen LLC, Bannockburn, IL, Steven A. Kanner, Much Shelist Freed Denenberg & Ament, P.C., James Shedden, Lawrence W. Schad, Matthew S. Burns, Tony Kim, Schad Diamond & Shedden P.C., Chicago, IL, Thomas A. Muzilla, The Muzilla Law Firm, LLC, Cleveland, OH, Mark A. Griffin, Raymond J. Farrow, T. David Copley, Keller Rohrback L.L.P., Seattle, WA, Krishna B. Narine, Law Office of Krishna B. Narine, P.C., Huntingdon Valley, PA, Joanne Zack, Joshua D. Snyder, Michael J. Boni, Boni & Zack LLC, Bala Cynwyd, PA, Steven A. Kanner, Much Shelist Freed Denenberg & Ament, P.C., Mary Jane Fait, Wolf Haldenstein Adler Freeman & Herz, LLC, Chicago, IL, Joe R. Whatley, Jr., Whatley Drake & Kallas, LLC, Marc L. Greenwald, Stephen R. Neuwirth, Daniel Brockett, Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York, NY, Richard P. Rouco, Whatley Drake & Kallas, LLC, Birmingham, AL, Daniel Paul Dietrich, Williams Schifino Mangione & Steady, PA, Tampa, FL, Matthew H. Armstrong, Armstrong Law Firm LLC, St. Louis, MO, Susan Carole Minkin, Ashcraft & Gerel, Alexandria, VA, for Plaintiffs.

Andrew Santo Tulumello Gibson, Dunn & Crutcher, L.L.P. Richard Joseph Favretto, Michael E. Lackey, Jr., Mayer Brown LLP, Linda Sue Stein, Samuel M. Sipe, Jr., Steptoe & Johnson, L.L.P., Shari Ross Lahlou, Crowell & Moring LLP, Washington, DC, David G. Meyer, Tyrone R. Childress, David G. Meyer, Jones Day, Los Angeles, CA, Randy M. Mastro, Gibson, Dunn & Crutcher, L.L.P., New York, NY, Robert C. Walters, Veronica S. Lewis, Gibson, Dunn & Crutcher LLP, Dallas, TX, David Daniel Cross, Kent Alan Gardiner, George D. Ruttinger, Kathryn D. Kirmayer, Michael Wyld Lieberman, Richard McMillan, Jr., Shari Ross Lahlou, Crowell & Moring LLP, Claudia R. Higgins, Kaye Scholer, LLP, John Murray Nannes, Tara L. Reinhart, Sean M. Tepe, Skadden, Arps, Slate, Meagher & Flom, LLP, Alan Mitchell Wiseman, Thomas Adam Isaacson, Covington & Burling LLP, James Scott Ballenger, Latham & Watkins LLP, Washington, DC, Jennifer B. Patterson, Saul P. Morgenstern, Kaye Scholer LLP, New York, NY, Alfred C. Pfeiffer, Jr., Daniel M. Wall, Gregory P Lindstrom, Timothy L. O'Mara, Latham & Watkins, San Francisco, CA, for Defendants.

Roger M. Adelman, Law Offices of Roger M. Adelman, Washington, DC, Richard P. Rouco, Whatley Drake & Kallas, LLC, Birmingham, AL, for Rail Freight Fuel Surcharge Antitrust Litigation—MDL No. 1869.

OPINION

PAUL L. FRIEDMAN, District Judge.

In this case, thirty-one named plaintiffs have alleged a far-reaching price-fixing conspiracy by the four largest rail freight carriers in the United States: BNSF Railway Company, CSX Transportation, Inc., Norfolk Southern Railway Company, and Union Pacific Railroad Company, which together account for nearly 90 percent of rail freight traffic in the country. On June 21, 2012, the Court certified a class consisting of approximately 30,000 shippers—a class that likely includes Oxbow Carbon & Minerals LLC and five of its affiliated companies (together, “Oxbow”).¹In re Rail Freight Fuel Surcharge Antitrust Litig., 287 F.R.D. 1, 10 (D.D.C.2012). On August 9, 2013, the United States Court of Appeals for the District of Columbia Circuit vacated this Court's class certification decision and remanded the case to permit the Court to reconsider that decision in light of the Supreme Court's recent decision in Comcast Corp. v. Behrend, ––– U.S. ––––, 133 S.Ct. 1426, 185 L.Ed.2d 515 (2013). In re Rail Freight Fuel Surcharge Antitrust Litig.–MDL No. 1869, 725 F.3d 244, 255 (D.C.Cir.2013).

This matter is before the Court on Oxbow's motion to disqualify Latham & Watkins LLP (“Latham”) as counsel for defendant Union Pacific Railroad Company (“UP”) in this case, sometimes referred to herein as “the MDL”. Oxbow requests that the Court disqualify Latham as counsel for UP on the ground that Latham's representation of UP in this case is tainted by a conflict of interest. After careful consideration of the parties' arguments presented in their briefs and at oral argument on July 9, 2013, the numerous declarations submitted by the parties, including declarations of eminent experts in legal ethics, and the relevant legal authorities, the Court concludes that Latham's representation of UP in this case does not present a disqualifying conflict of interest and will deny Oxbow's motion to disqualify counsel.²

I. BACKGROUND

Because the sequence of events is highly relevant to the Court's determination of whether the Rules of Professional Conduct have been breached, the following discussion presents the pertinent events chronologically.

In 1997, Latham began representing UP. Ballenger Decl. ¶ 2. Since that time, Latham has represented UP in at least thirty-two separate matters, including litigation and environmental matters. Id.

In 2004, Latham began representing Oxbow on a variety of corporate transactions. Clark Decl. ¶ 2. Over the last nine years, Latham has advised Oxbow on more than twenty-three separate matters. Id. ¶¶ 2–3. The parties agree that none of these matters involved Oxbow's relationship with UP or Oxbow's domestic rail freight needs, although Oxbow asserts that Latham had access to a wide range of confidential documents, including documents relating to Oxbow's purchases of rail transportation services. See id. ¶¶ 2, 5; Oxbow Mot. at 2–4; Wyman Decl. ¶ 5; Sheridan Decl. ¶¶ 5–7; Van Driesen Decl. ¶¶ 8–10; Barrett Decl. ¶¶ 5–7; Della Rocca Decl. ¶¶ 6–8; Schindler Decl. ¶¶ 6–8.

In January 2007, the Surface Transportation Board (“STB”) concluded an investigation of the leading railroads' practice of imposing rate-based fuel surcharges on top of the base rates charged to customers for rail freight services. Rail Fuel Surcharges, Ex Parte No. 661, 2007 WL 201205 (S.T.B. Jan. 25, 2007); see also In re Rail Freight Fuel Surcharge Antitrust Litig.–MDL No. 1869, 725 F.3d at 247–249. This practice, which was infrequent in the early–2000s, had become ubiquitous by the middle of the decade. In re Rail Freight Fuel Surcharge Antitrust Litig.–MDL No. 1869, 725 F.3d at 248–49. Troubled by the disconnect between the purported rationale for the surcharge, as a recovery mechanism for fuel costs, and the manner in which the surcharge was applied regardless of marginal fuel costs, the STB terminated the practice with respect to rail freight traffic within its regulatory authority. See id. at 248–49;Rail Fuel Surcharges, 2007 WL 201205, at *4. Following the STB's decision, purchasers of rate-unregulated rail freight began to sue the defendant railroads, alleging that those railroads had illegally conspired to impose supra-competitive rates through the uniform application of the rate-based fuel surcharge. In re Rail Freight Fuel Surcharge Antitrust Litig.–MDL No. 1869, 725 F.3d at 248–49.

On November 6, 2007, eighteen of those cases, pending in six districts, were consolidated and transferred to this Court by the Panel on Multidistrict Litigation. See In re Rail Freight Fuel Surcharge Antitrust Litig., 587 F.Supp.2d 27, 29 (D.D.C.2008). The consolidated cases involve common allegations that UP, along with the three other defendant railroads, engaged in price-fixing by conspiring to fix fuel surcharges on rail transportation in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). See generally Second Consol. Am. Class Action Compl., Dkt. No. 324. Initially, only Jones Day and Covington & Burling LLP (“Covington”) represented UP in the MDL.

On June 7, 2011, Oxbow filed a separate lawsuit in this Court against UP and BNSF Railway Company. See Oxbow Carbon & Minerals LLC v. Union Pac. R.R., Civil Action No. 11–1049 (referred to herein as the “Related Case”). Oxbow alleges virtually the same Section 1 fuel surcharge conspiracy as that alleged in the MDL; in addition, Oxbow alleges Section 2 monopoly violations. Oxbow Carbon & Minerals LLC v. Union Pac. R.R., 926 F.Supp.2d 36, 39–40 (D.D.C.2013). In the Related Case, UP has been represented only by Jones Day and Covington. Wall Decl. ¶ 8.

While, as noted, Latham had represented Oxbow on various matters since 2004, on October 3, 2011, Latham solicited an engagement letter (the “Engagement Letter”) from Oxbow Carbon & Minerals LLC for legal work performed in connection with the permitting of new and...