An Alberta judge has reserved her decision on whether a class action lawsuit against Canada’s two major railway companies can proceed.
Court of Queen’s Bench Justice Sheilah Martin is expected to rule in a few months on whether a suit seeking $577 million in damages from the Canadian National Railway and Canadian Pacific Railway should be heard.
The action, launched on behalf of prairie farmers by Regina lawyer Tony Merchant, claims the railway companies overcharged producers for shipping grain during a 12-year period between August 1995 and August 2007.
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In the statement of claim, Merchant suggested the railways used unfair freight rates that resulted in farmers being overcharged by roughly $1.66 per tonne.
The claim was based on a 2008 decision by the Canadian Transportation Agency, suggesting the railway companies used inflated hopper car maintenance costs to determine their shipping rates.
The CTA ruling implied the railways had been adding annual hopper car maintenance costs of roughly $4,400 per car to their freight rates when the actual cost of maintenance was closer to $1,400 per car.
The CTA ruling was challenged but upheld by the Federal Court of Appeal in November 2008.
The agency subsequently lowered railway revenue caps, which influence how much railway companies can charge farmers. However, the adjusted rates were not applied retroactively, leaving about $577 million collected during the 12-year period in question, Merchant said.
