Farmers Sue Rail Giants, Allege Antitrust Plot Squeezing Profits

NEW YORK, NY – January 28, 2026 – A coalition of thirteen farmers from Kansas and Colorado, joined by subsidiaries of the Soloviev Group, has filed a major antitrust lawsuit against two of the nation's railroad operators, including the industry's largest player, Union Pacific Railroad. The suit, lodged in the U.S. District Court for the District of Kansas, alleges that Union Pacific (UP) and the Kansas & Oklahoma Railroad (K&O) conspired to crush competition, artificially inflate transportation costs, and cut into the profits of local grain producers.

The legal action, brought forth by Weskan Grain and Colorado Pacific Railroad (CXR), accuses the rail giants of creating a "secret agreement" designed "to stifle competition from a newly rehabilitated rail line and preserve control over westward shipments of grain." This case shines a spotlight on the immense power wielded by major railroads and raises critical questions about fair access and competition in the arteries of American commerce, particularly for the agricultural heartland.

The Heart of the Complaint: A 'Paper Barrier'

At the core of the 29-page complaint is the allegation of a "paper barrier"—a contractual roadblock designed to make a competing rail line economically unviable. The dispute centers on the Towner Line, a stretch of track purchased and rehabilitated by Colorado Pacific Railroad between 2018 and 2019. After years of disuse, the line was poised to offer farmers in western Kansas and eastern Colorado a new, more direct route to lucrative West Coast markets.

However, the lawsuit alleges that just as this new competitive option became available, UP and K&O secretly amended a long-standing lease agreement. This amendment introduced what the plaintiffs describe as a "significant interchange fee" on any railcar moving between the K&O-operated track and the newly opened Towner Line.

According to the complaint, this fee, believed to exceed $500 per railcar, is "cost-prohibitive." The effect has been absolute. "In fact, no westbound railcar carrying any commodity has shipped from the Relevant Market and travelled over the Towner Line in the more than six years since the Interchange Fee was adopted," the filing states. The plaintiffs argue this fee is not a standard operational charge but a deliberate, anti-competitive weapon.

"Through a secret agreement...Union Pacific Railroad Company has erected competitive and financial barriers on the railroad tracks it owns in the region that increase transportation costs and transit times," stated Tom Ajamie, a managing partner at Ajamie LLP, one of the firms representing the plaintiffs. Ajamie argues this prevents "farmers and everyone else from obtaining lower prices."

Harvest Under Siege: The Impact on Farmers

For the thirteen farming operations named as plaintiffs, the lawsuit is about more than corporate maneuvering; it's about their livelihood. The complaint argues that grain producers in the region are captive to the railroads. Accessing West Coast mills and ports is essential to remain competitive, and due to the high cost of trucking over long distances, rail is the only feasible option.

By allegedly blocking the more efficient Towner Line, the defendants have forced grain shipments onto their own more expensive or circuitous routes. This, the lawsuit claims, has directly "decreased the amount Farmer Plaintiffs receive for their grain." In a business of tight margins, any increase in transportation costs is felt directly at the farm gate, reducing profits and threatening the viability of family-run operations.

The economic pressure on the agricultural sector is a well-documented concern. Studies from agricultural economists have previously shown that limited rail competition and increased transportation costs can lead to significant income losses for farmers and even impact land values. This lawsuit brings that academic concern into a real-world legal battle, positioning the farmers as victims of a system they claim is rigged against them.

Stefan Soloviev, Chairman of the plaintiff companies Weskan Grain and Colorado Pacific Railroad, framed the action in broader terms. "This is not about attacking railroads," Soloviev stated. "It is about restoring balance, transparency, and accountability to a system that rural America depends on. Fair access and fair pricing are essential if we want agriculture in this country to thrive for generations to come."

A Battle for the Rails: Competition and Consolidation

The lawsuit lands at a pivotal moment for the U.S. railroad industry and for Union Pacific in particular. The company is actively pursuing a landmark, $85 billion merger with Norfolk Southern to form the nation's first transcontinental freight railroad. UP has publicly justified the merger by citing the need to eliminate bottlenecks and improve efficiency across the national rail network.

The plaintiffs and their lawyers have seized on this apparent contradiction. "With this lawsuit, Weskan Grain and Colorado Pacific Railroad also seek to make freight rail transportation more efficient by making it easier for rail traffic to move east to west on multiple lines, not just those owned by Union Pacific Railroad Company," Ajamie noted.

The legal claims invoke Sections 1 and 2 of the Sherman Antitrust Act, foundational U.S. laws designed to prohibit anti-competitive agreements and unilateral conduct that monopolizes or attempts to monopolize a market. The use of "paper barriers" has been a long-standing point of contention with federal bodies like the Surface Transportation Board (STB) and the U.S. Department of Agriculture expressing concerns that such contractual limits can harm competition. This case may serve as a critical test of how those concerns are adjudicated under antitrust law.

Further complicating the landscape for Union Pacific, its initial merger application was rejected by the STB just this month for being incomplete. While the company plans to refile, this lawsuit adds another significant hurdle, providing powerful ammunition for merger opponents who argue that further consolidation in the rail industry will only exacerbate anti-competitive behavior like that alleged in the complaint.

The Towner Line Gambit: An Investment Stalled

The story of the Towner Line's revival is a central part of the narrative. The Soloviev Group, a major U.S. landowner with deep interests in agriculture, invested in purchasing and restoring the dilapidated line with the explicit goal of creating competition. The line, which had been out of service for over two decades, represented a significant capital investment aimed at providing a logistical lifeline to regional farmers.

From the plaintiffs' perspective, this was a clear attempt to introduce a market-based solution to a local logistics problem. The result, they allege, was not a welcome increase in efficiency but a swift and calculated move by incumbents to protect their dominance. The complaint asserts that UP and K&O's actions have "significantly reduced the amount of revenue that CXR generates from the Towner Line," effectively stranding the investment and neutralizing the competitive threat it posed.

The lawsuit seeks not only damages for lost profits but also an injunction to dismantle the alleged "paper barrier," which could finally open the Towner Line to the traffic it was rebuilt to carry. As the case proceeds through the federal court system, it will be closely watched by farmers, shippers, and regulators across the country, serving as a high-stakes referendum on the future of competition on the American rails.