OK, I royally screwed up the post above. The content was correct, but I jumbled the subject and author fields.

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The Class ones are NOT suing other railroads! The suit is against the State of Tennessee Revenue Department.

Quote:

The Tennessean
A federal judge in Nashville this week sided with CSX Corp. in its suit against the state Revenue Department, prompting the state to freeze the assets in its Short Line Equity Fund, which gets its money from the state’s tax on diesel fuel, leaving operators such as the Nashville and Eastern Railroad Authority without money to pay their bills.

[www.tennessean.com]

The real issue (from the Class One point of view) is that the diesel tax is only on RAILROAD diesel, and not on competing modes of freight transportation, such as trucking or barges.

Note that the Class Ones have used this same argument in other states, and been successful in Federal court. Here is what happened with Alabama's similar tax:
[blog.al.com]