Oxbow Price-Fixing Suit Against Buffett’s BNSF Dismissed

Oxbow Carbon & Minerals LLC’s price- fixing suit against Union Pacific Railroad Co. (UNP) and Warren Buffett’s Burlington Northern Santa Fe railway was dismissed by a federal judge, who ruled the mineral company hadn’t shown that the rail carriers engaged in monopolistic behavior.

Oxbow “failed to allege adequate facts to state claims” under the Sherman Antitrust Act, U.S. District Judge Paul Friedman in Washington said in a ruling released today.

While Oxbow claimed that Union Pacific and Burlington Northern conspired to monopolize rail transportation services for coal and petroleum coke in the western U.S., “the complaint lacks factual allegations about how the alleged agreement came about, the basic terms of the agreement itself, or how the defendants used the agreement to monopolize the rail freight market,” Friedman wrote.

Six related Oxbow companies, which brought the suit, didn’t each explain how they were harmed by the railroads’ behavior, including the allegedly improper imposition of more than $30 million in fuel surcharges, according to Friedman’s ruling.

Address Shortcomings

Friedman said Oxbow could refile the suit to address the shortcomings he cited, saying “it is possible, of course, that plaintiffs will be able to cure these defects by amendment.”

Brad Goldstein, a spokesman for Oxbow, declined in an e-mail to comment on the ruling. Tom Lange, a spokesman for Union Pacific, of Omaha, Nebraska, didn’t immediately respond to a phone message requesting comment.

Steve Forsberg, spokesman for Forth Worth, Texas-based Burlington Northern, said in a phone interview that company attorneys are reviewing the ruling, “but the initial feeling is they are pleased with the judge’s action.”

Buffett’s Berkshire Hathaway Inc. (BRK/B), based in Omaha, bought Burlington Northern in 2010.

Closely held West Palm Beach, Florida-based Oxbow, which mines and markets coal and natural gas, was founded by William Koch, son of the founder of Koch Industries Inc.

The case is Oxbow v. Union Pacific, 11-01049, U.S. District Court, District of Columbia (Washington)

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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