A second class action lawsuit has been filed against the two national railways over grain freight rates.
A statement of claim filed in Court of Queen’s Bench in Regina Oct. 15 asks that Canadian National Railway and Canadian Pacific Railway be ordered to compensate western Canadian grain shippers for overcharging them on freight since 1983.
A similar action was filed in December 2008 in Saskatoon by Gordon Wallace of Unity, Sask., and is still working its way through the courts.
This latest lawsuit doesn’t request a specific amount of damages, but lawyer Tony Merchant said it will be substantial.
Read Also
August rain welcome, but offered limited relief
Increased precipitation in August aids farmers prior to harvest in southern prairies of Canada.
“We’re confident in the view that this claim will exceed $1 billion,” he said.
The statement of claim says the two railways have misstated and exaggerated the costs of moving grain and as a result have been unjustly enriched.
“In an egregious, high-handed and oppressive manner, CN and CP willfully charged transport rates that they knew were based on dishonest and inaccurate cost submissions to the CTA (Canadian Transportation Agency), upon which the CTA relied,” the statement said.
A statement of claim includes claims and allegations that have not been tested in court.
A CN spokesperson said the company doesn’t comment on cases that are before the courts.
A CPR spokesperson said the railway had not had a chance to review the lawsuit and had no comment at this time.
George Hickie, a semi-retired farmer from Melville, Sask., is one of five plaintiffs named in the lawsuit. He said it’s time the railways were held accountable for abusing their market power.
“We’ve been overcharged for a long time on grain hauling and I believe we have a just case here,” he said.
“The railways should provide farmers with compensation to balance things out.”
The other plaintiffs are Boyd and Colleen Bianchi of Coutts, Alta., John Jackson of Sinclair, Man., and Renova Holdings Ltd. of Dawson Creek, B.C.
The statement of claim alleges that under various rate regimes in place since 1983, the railways collected more for hauling grain than they were entitled.
It cites a 2008 CTA report that said the railways pocketed $72.2 million more than they should have in 2007-08 as a result of being overpaid under the grain freight revenue cap for hopper car maintenance costs.
Merchant said the fact a regulatory agency has already ruled that the railways have taken in more revenue than they were entitled to bodes well for the outcome of lawsuit.
The next step in the process is to have the case certified by the court as a class action suit, which Merchant hopes will happen within two to three months. Both railways would be expected to argue against certification.
Merchant said there is an urgency to moving ahead quickly, given that farmers continue to pay more than they should.
“The wrongdoing is continuing and ongoing,” he said.
The other class action suit, not yet certified, also named the government of Canada and the CTA as defendants.
Merchant said he decided against that on the grounds that the more defendants there are, the more complicated things become.
“We just weren’t anxious to clutter it up, which would have created delays,” he said.
The Wallace suit has been delayed by a dispute over whether his law firm,
McKercher LLP, can act against CN, for which it has done legal work.
A Saskatoon judge has said it can’t, a ruling that the law firm has appealed.
Merchant said his firm was contacted by people who didn’t want to lose the opportunity to proceed with a class action suit over an unrelated issue. If McKercher is successful in its appeal, there would be two potential class action suits before the courts.
“We’d confer with them (McKercher) and sort it out somehow,” Merchant said.
The law firm would like to hear from other farmers with information about their grain shipping history for possible inclusion in the lawsuit, he added.
Under Saskatchewan law, members of a class action lawsuit are automatically included unless they specifically opt out by a certain date.
Merchant has proposed an opt-out date of July 31, 2010.
