The Energy Transportation Systems Inc. (ETSI) pipeline project is suing Chicago-based Santa Fe Southern Pacific and Santa Fe Railroad over a proposed $3 billion pipeline designed to transport coal slurry from the Powder River Basin in Wyoming to utility companies in Texas and Oklahoma.
Attorneys have taken more than 300 depositions in 23 states since the original suit was filed in U.S. District Court in Beaumont in October 1984, and the trial is expected to last at least two months, lawyers said.
In the 1984 suit, ETSI named a total of eight companies as defendants, including Union Pacific Railroad Co., Kansas City Southern Railway Co. and Burlington Northern Inc. But attorneys for ETSI have settled with all parties except Santa Fe.
The suit alleges that Santa Fe violated the Sherman Act from 1974-1984 by conspiring to block the pipeline and 'restrain interstate commerce of the United States by eliminating ETSI as a competitor.'
ETSI is a joint venture including several major utilities and subsidiaries of Houston-based IntTexas Eastern Corp.,ernorth Inc., K.N. Energy Co. Inc. and Bechtel Petroleum, Inc. ETSI planned to use the pipeline to transport slurry -- crushed coal suspended in water -- to the Gulf Coast from the Powder River Basin, located in coal-rich northeastern Wyoming and southeastern Montana.
'Our claims are that the railroads conspired to destroy the project to avoid competition,' said Harry Reasoner, an attorney with Vinson and Elkins, one of the firms representing ETSI. 'We say it (the pipeline) would have been a far more efficient way to transfer coal and could have saved the consumers billions of dollars.'
Texas Eastern has already reached a $60 million out-of-court settlement with Kansas City Southern in its portion of the dispute over the pipeline.
ETSI also agreed to settlements ith Union Pacific Corp. and the Chicago and Northwestern railroads in late 1987 and with Burlington-Northern Railroad Co. in November 1988, attorneys for both sides said.
The case is one of the larger antitrust cases to go to trial in the last few years, Reasoner said.
The suit was filed in Beaumont because Beaumont-based Gulf States Utilities Co. is one of the utilities which would have received coal from the Powder River Basin pipeline. The federal court docket in Beaumont is also considered one of the lightest in the nation, meaning the case came to trial much faster than if it was filed in most other districts, attorneys said.
Jury selection is expected to begin Wednesday with opening statements starting on Friday, said Gilbert I. Low, a Beaumont attorney also representing ETSI.
Low said about 30 attorneys will be trying the case before U.S. District Judge Robert Parker.
