Out on the High Plains, a group of western Kansas and eastern Colorado farmers is hauling a rail fight into federal court, saying a hidden charge has quietly kneecapped their newly revived shipping route and sliced into local grain profits. Joined by Weskan Grain and the Colorado Pacific Railroad, the farmers accuse Union Pacific and the Kansas & Oklahoma Railroad of using a steep interchange fee that makes the Towner Line a nonstarter for westbound grain and forces longer, more expensive detours.
According to the complaint filed in U.S. District Court for the District of Kansas, 13 farmers, Weskan Grain, and Colorado Pacific Railroad say Kansas & Oklahoma Railroad and Union Pacific are conspiring to “stifle competition” and keep a grip on westbound grain traffic. The case, listed as No. 2:26‑cv‑02053, lays out claims under Sections 1 and 2 of the Sherman Act and seeks both damages and injunctive relief, according to the complaint filed by plaintiffs' counsel.
The "paper barrier" and the $500 fee
The filing says the trouble started after Colorado Pacific bought and reopened the Towner Line in 2018. In 2019, according to the complaint, Union Pacific and K&O quietly amended a 1997 lease to tack on an interchange fee believed to top $500 per car, a contractual tweak the plaintiffs call a "paper barrier" that effectively walls off competitors. As reported by KCTV5, the complaint notes that not a single westbound railcar from the affected market has moved over the Towner Line since that fee kicked in, a result the farmers say is exactly the point.
What's at the elevators
On paper, the local setup looks tailor-made for competition. Weskan’s trackside complex near Stockton and other elevators was built to load full 110‑car unit trains, a design that is supposed to give farmers a shorter, more direct pipeline to Pueblo and on to Pacific export markets. Weskan’s own site describes the revived Colorado Pacific connection, and local reporting, including the Denver Gazette, notes the company runs roughly 11 locations with about 6.3 million bushels of upright storage plus around 6 million bushels of ground pile capacity. Plaintiffs say a big chunk of that capacity sits underused while the western route is priced out by the disputed fee.
Legal context
The complaint frames all of this as a straight-up antitrust problem. It alleges violations of Sections 1 and 2 of the Sherman Act and related state competition laws, arguing the interchange fee drags down the local cash "basis" that farmers receive and shifts income away from hometown elevators. A Kansas State University extension briefing explains that the case lands squarely where antitrust law and rail regulation intersect, with recent Surface Transportation Board rulemaking potentially reshaping how judges and regulators look at contractual "paper barriers." Plaintiffs, the briefing notes, may see federal court as especially attractive because antitrust law allows for treble damages. Industry analysts say that if the case gets to discovery, internal emails and other communications about the lease amendments could become the sought-after "smoking gun," a theme already picked up in regional trade coverage.
Defendants' response and next steps
Union Pacific has rejected the allegations and says it will lay out its position both in court and before the Surface Transportation Board. Watco, the parent of K&O, has likewise said it will defend itself through legal channels, according to local reports. There is no trial date on the calendar yet, and Colorado Pacific has also asked the STB to review the interchange setup, so the fight is likely to unfold on two tracks, judicial and regulatory, at the same time.
For farmers scattered across the High Plains, this case is more than a paperwork skirmish. The litigation is a test of whether private money poured into rural rail lines can survive contractual clauses that, in the plaintiffs’ telling, give established carriers tools to choke off competition. "Someone had to stand up to the railroads," Stefan Soloviev said, according to the Denver Gazette. The next rounds of court filings and any decisions that come out of the STB will show whether that stand changes how grain moves off the Plains.
