Latham & Watkins is fighting to remain lead trial counsel for a freight rail company in a case billed as one of the largest antitrust matters of all time.

Four of the top freight rail companies in the country are accused of orchestrating a scheme to raise customer rates through fuel surcharges. One of the defendants, Union Pacific Railroad Co., hired Latham in October — to the dismay of ex-Latham clients who are plaintiffs in the case.

In the push to disqualify the law firm, the former Latham clients, petroleum byproducts distributor Oxbow Carbon LLC and its subsidiaries, argued the firm violated its duty of care by agreeing to represent Union Pacific. Oxbow is an unnamed class member in the multidistrict litigation and is pursuing a separate, but related, lawsuit against Union Pacific.

Latham, in a brief filed May 17 in U.S. district court in Washington, claimed Oxbow dropped many of its arguments for disqualification after facing pushback from the firm. "Moving to disqualify a law firm is a serious matter, and it is unacceptable that Oxbow did so with a set of arguments so weak that substantially all of them had to be abandoned after Latham’s opposition," Latham partner Daniel Wall wrote in court papers.

It’s a fraught time for Union Pacific for other reasons. The defendants are waiting for a decision by the U.S. Court of Appeals for the D.C. Circuit in a joint challenge to class certification. A June 2012 ruling approving the class pushed potential damages into the billions of dollars. The rail companies argued the decision was legally unsound and would unfairly force them to settle. A three-judge panel heard arguments on May 3.

An Oxbow spokesman and Oxbow’s lead attorney, Troutman Sanders litigation partner John Gerstein, declined to comment. Wall, an antitrust lawyer and lead counsel for Latham in the case, also declined to comment.

The Oxbow companies were among thousands of plaintiffs that shipped products through Union Pacific and the three other freight rail companies targeted in the litigation. The plaintiffs accused the companies of violating federal antitrust laws by working together to increase rates through "aggressive" fuel surcharges. The rail companies denied wrongdoing.


In a separate lawsuit Oxbow filed against Union Pacific and BNSF Railway Co. — also a defendant in the multidistrict litigation — Oxbow claimed its related business paid more than $30 million in allegedly unlawful fuel surcharges.

According to Oxbow, Latham represented its related companies beginning in 2004, earning more than $4.6 million in fees. Oxbow said firm attorneys had access to "sensitive and confidential information."

Latham began representing Union Pacific — another longtime client, according to briefs — in the multidistrict litigation in October 2012, joining Covington & Burling and Jones Day as lead counsel. In February, Oxbow moved to disqualify Latham, arguing that the firm’s representation of Union Pacific was "directly adverse" to Oxbow.

Oxbow cited sections of the D.C. Rules of Professional Conduct barring lawyers from taking certain new clients if it would be "adverse" to another client or significantly affect its interests, without consent from the affected clients.

Latham attorneys argued the firm need withdraw only if there were a conflict with a named plaintiff, a group that didn’t include Oxbow; the firm declined to represent Union Pacific against Oxbow’s separate lawsuit because of the conflict. It would be "practically impossible" for law firms to defend antitrust class actions if they had to check for conflicts with every class member, the firm said.

Latham also disputed that firm attorneys had access to confidential information that would be relevant to Union Pacific’s defense and accused Oxbow of failing to offer specific examples, except for future projections about shipping activity.

"This motion is just a parting shot to punish Latham for perceived ­disloyalty to Oxbow’s business interests," Wall wrote. With the underlying case moving forward — a judge denied a request to put the proceedings on hold while the D.C. Circuit decided class certification — Latham said it would be unfair to force Union Pacific to bring in new lead trial counsel.

Oxbow countered that it wasn’t "some nameless, faceless, passive class member." The company agreed it would be "virtually impossible" for law firms to check for conflicts with all unnamed class members. However, Oxbow said, its position was different because of its separate lawsuit against Union Pacific and participation in the class action. Latham knew what Oxbow was doing, Oxbow’s lawyers said, and nonetheless agreed to help Union Pacific develop a defense strategy.

"Here, before Latham entered its appearance in this Court, it knew about Oxbow’s claims against [Union Pacific], and it knew that Oxbow was a client," the company argued.

In its latest filing, Latham accused Oxbow’s attorneys of making up rules, saying it was "settled law" that a firm could represent a class action defendant when another client was an unnamed plaintiff, barring other ethical concerns. Under the case law, the firm said, it didn’t matter if Latham knew Oxbow was an unnamed class member. And Oxbow’s separate lawsuit against Union Pacific couldn’t create a conflict because it differed in meaningful ways from the class action, the firm argued.

Latham claimed Oxbow conceded several points, including that Latham lacked access to relevant confidential information. Oxbow said in reply that because Latham’s role as Union Pacific’s counsel was adverse to Oxbow, the court need not address the confidential-information issue.

The dispute is before U.S. District Senior Judge Paul Friedman.

Contact Zoe Tillman at