HOT!!! HOT!!! HOT!!!
HOT!!! HOT!!! HOT!!! S u r f a c e Tra n s p o r t a t i o n B o a r d P r o c e e d i n g s o f Interest March 2014 – March 2015
ROSE-MICHELE NARDI SHAREHOLDER TRANSPORT COUNSEL PC
MARK H. SIDMAN GENERAL COUNSEL, ANACOSTIA RAIL HOLDINGS COMPANY
SHAREHOLDER, TRANSPORT COUNSEL PC
FIREBALL ON THE HORIZON: INCREASED INSURANCE REQUIREMENTS
Post Lac-Megantic, some Class I’s reportedly requiring small railroads to obtain +/- $100 million liability insurance if the short line handles unit trains of crude oil or ethanol
Insurance provisions in new leases, trackage rights agreements, etc. require much higher liability limits; Class Is are now exercising contractual rights to re-set insurance limits
Insurance requirements in connection with operations in PTC territory may also be significant
FIREBALL ON THE HORIZON: INSURANCE Insurance Market Limitations Cont’d For some short lines, high limit coverage is unaffordable For some short lines, high limit coverage is unavailable Approaches such as creatively structured excess policies may be a solution for larger companies, but the primary policy limit will present problems for smaller companies ASLRRA is working on potential solutions – but the issue is challenging
FIREBALL ON THE HORIZON: INSURANCE Insurance Cost-Recovery Limitations Cont’d Increased insurance costs may not be recoverable Short line may have low volume of TIH/Ethanol – and thus the cost of high limit insurance cannot be amortized over a large volume of revenue carloads There is no revenue bump associated with the costs of PTC compliance In any event, many short lines do not have pricing authority – and thus may have limited ability to recoup insurance costs through rate increases
FIREBALL ON THE HORIZON: INSURANCE STB MAY BE AN AVENUE OF RELIEF Cont’d At some point, unobtainable or unaffordable insurance requirements will adversely affect short lines and their customers – i.e., certain traffic may stop moving Filing of a complaint at the STB may be an avenue of relief- absent legislative solution Depending on how third parties go about imposing insurance requirements, there may be theories of relief for short lines under ICCTA
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) In 2013, STB rejected a UP petition for declaratory order that the indemnification provisions in its TIH/PIH tariff were reasonable STB found the indemnification provisions overbroad: Covered losses not attributable to TIH/PIH Covered losses covered by UP Insurance STB stated increased insurance costs due to shipper-caused TIH/PIH incidents could recouped through rates STB denied UP’s petition
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d UP amended its tariff to address the TIH/PIH causation issue, but left the rest largely the same American Chemistry Council, Chlorine Institute, Fertilizer Institute and NITL filed a motion for show cause order directing UP to demonstrate its revised tariff is reasonable STB denied the motion for show cause order because denial of UP’s original Petition for Declaratory Order did not impose obligations on UP or find its tariff unreasonable – UP simply did not meet its burden of proof for declaratory order stating the tariff was reasonable
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d STB invited American Chemistry Council, et al. to ask Board to treat motion for a show cause order as an unreasonable practice complaint American Chemistry Council, et al. declined the STB’s offer
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d Unclear how the STB’s denial of the UP petition affects short lines For many short lines, the range of insurable losses is a very narrow one and adverse claims history can make coverage unavailable Short lines that are handling line carriers have no ability to use rates as a means of recovering increased insurance costs (or addressing a loss of coverage)
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Issue: Should the bill of lading continue to be the operable document to determine the party liable for demurrage Split by the 3rd and 11th circuits over liability of intermediaries that accepted cars highlighted STB’s need to address this issue. STB Response: No. Any receiver of rail cars would be liable for demurrage if the railroad had provided the receiver with notice of the demurrage tariff. The bill of lading would no longer determine demurrage liability.
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Cont’d Revisions/Clarification to Proposed Rule (2012) 1. 2.
Clarified that the rules were not limited to intermediaries Clarified these rules provided sole legal basis for collecting demurrage; bill of lading did not provide an alternative basis 3. Applies to both railroad-owned cars and privately owned cars held on carrier property 4. Removed the agency exception exception had stated if receiver was acting as an agent, receiver would not be responsible for demurrage if receiver (a) provided railroad with notice of agency status, and (b) identified the principal Would undermine efforts to simply/clarify responsibility for demurrage; agency issues best addressed by commercial agreements
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Cont’d 5. Reaffirmed importance of “actual” notice: railroads must provide notice of demurrage tariffs directly to receivers required that notice be in written or electronic form 6. Declined expanding rules to address (a) proper notice of constructive placement, and (b) bunching and other railroad actions that could result in demurrage; these issues best addressed on case-by-case basis 7. Clarified demurrage rules are default rules; parties free to enter into private contracts
ICCTA PREEMPTION WITH A TWIST
In the past year, there were several case in which STB was asked to determine if a state or local action would be preempted by ICCTA One recent case raised this issue with a twist Issue: Could a locally-created regulation survive a preemption claim if it obtained the force of a federal law? STB Response: Probably not FD 35803, US EPA – Petition for Declaratory Order, served December 30, 2014, appeal filed in 9th Circuit, Feb. 26, 2015
ICCTA PREEMPTION WITH A TWIST Cont’d CA regional air quality management district created certain local regulations regarding locomotive idling IN 2007, AAR, BNSF and UP successfully argued in a CA District Court that the rules were preempted by ICCTA The preemption ruling was affirmed by the 9th Circuit in 2009
ICCTA PREEMPTION WITH A TWIST Cont’d BUT, 9th Circuit noted if the rules became part of the CA State Implementation Plan (SIP) under the Clean Air Act, and were approved by the EPA, they would be treated as federal law, and federal laws were subject to a different ICCTA preemption standard CA district submitted the rules to the EPA, and the EPA filed its petition with the STB on ICCTA preemption
ICCTA PREEMPTION WITH A TWIST Cont’d STB determined that issuing an order would be premature, because the railroad-related parties questioned whether EPA had authority to approve the rules, and this issue was outside the STB’s jurisdiction However, STB provided guidance on the ICCTA preemption issue
ICCTA PREEMPTION WITH A TWIST Cont’d STB noted the following: 1. Regulations under federal statutes may directly conflict with ICCTA; in such cases, the conflicting federal statutes must be harmonized if possible 2. ICCTA Preemption likely would occur because regulations at issue would “directly interfere” with purpose of 10501(b) of ICCTA by permitting a patchwork of state/local regulations 3. Even record-keeping obligations would likely interfere with rail operations because of the potential to subject the railroad to a patchwork of such local requirements 4. May conflict with other federal laws – e.g., EPA and FRA
TALES OF THE BIZARRE: RAIL-TERM (FD 35582)
STB denied petition for reconsideration of its decision (“Rail Carrier Decision”) that a supplier of contract dispatching services is a “common carrier” under ICCTA Rail Carrier Decision: Rail-Term is a carrier because it performs the essential function of dispatching Rail Carrier Decision: Outsourcing physical operation and control of trains is “a sharp break for historic practice.” STB says its decision was intended “to prevent the creation of disaggregated rail carriers”
TALES OF THE BIZARRE : RAIL-TERM (FD 35582) Cont’d Rail Carrier Decision noted Rail-Term dispatchers do not report to its railroad clients – it had “ultimate control” of train movements STB found an “imputed holding out” as a result of providing “integral transportation service” STB expressed concern in the Rail Carrier Decision with use of contracting out to evade “labor, safety, and other laws”
]
TALES OF THE BIZARRE: RAIL-TERM (FD 35582) Cont’d Petition for Reconsideration raised following issues with the: Rail Carrier Decision ignored plain language of ICCTA Misapplied precedent No limiting principle No STB authority to consider issues of railroad benefits and labor law
STB rejected these arguments Definition of “common carrier” in ICTTA does not turn on ownership of rail assets and reaches entities that perform critical functions related to train movement Distinguished transloading cases and State of Maine decision Clarified limiting principle: ruling limited to services involved in physical direction and control of trains RTP allows STB to consider labor and benefit issues
TALES OF THE BIZARRE : RAIL-TERM (FD 35582) Cont’d Rail-Term has appealed to the D.C. Circuit Pending outcome of appeal, agreements with contractors should clarify reporting obligations and not give the contractor “ultimate control” over critical functions Good news is that STB clarified that the Rail Carrier Decision “should not be read as calling into question the RRB’s many decisions finding that independent contractors providing rail services that do not involve the physical operation and control of train movements are not rail carriers.”
]
A STICKY WICKET: NORTH AMERICAN FREIGHT CAR ASS’N v. UP (NOR 42119) NAFCA challenged provisions of a UP tariff that imposed $650 surcharge on loaded or empty rail cars tendered by a customer with residue (e.g., petroleum, molasses, lard, etc.) on the exterior of railcars Surcharge applied to (i) tendered cars, (ii) cars switched from the spot tendered but still within the facility where they were loaded or unloaded, and (iii) railcars discovered to have residue on the exterior while en route Tariff also provided that the assessment and/or payment of the surcharges do not relieve the customer for liability attributable to leakage or residue on the exterior of the railcar, and UP’s acceptance of a leaking railcar or railcar with residue on the exterior is not a waiver by UP of the customer’s obligation to tender safe cars
A STICKY WICKET: NORTH AMERICAN FREIGHT CAR ASS’N v. UP (NOR 42119) Cont’d STB found the surcharge provisions, including the liability provision, were not unreasonable to the extent they applied to cars tendered by the customer or still within the customer’s facility
The STB found the surcharge applied to railcars en route to be unreasonable
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES
Finance Docket 35841, Piedmont & Atlantic Railroad Co and Norfolk Southern (Motion to strike information provided under the interchange commitment rules)
Issue: Does an interchange commitment exist if a shortline has no third party connection and no reasonable possibility of such a connection?
STB Response: Yes
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES Cont’d Facts: 1. The lease agreement contained a lease-credit rental mechanism (e.g., credit toward annual lease payment for each car interchanged with Class I lessor) 2. RRs argued lease-credit provision was not an interchange commitment because leased line did not connect to any third party lines and no such connection could occur without significant construction or unauthorized use of other lessor connecting lines 3. RRs argued if there was no option of a third party connection, the lease credit provision did not limit or foreclose any of lesssee’s interchange options
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES Cont’d
STB stated that even if a lease-credit mechanism did not currently pose competition concerns, such concerns might arise in the future, and the determination of whether a reasonable future connection existed was subjective and potentially non-definitive.
Commissioner Begeman dissented: the majority is taking a “you never know” viewpoint, and is retaining information without regard to whether such retention is necessary or reasonable.
AGAINST THE SPREAD: FUEL SURCHARGES (EP 661 SAFE HARBOR) In Cargill, Inc. v. BNSF (NOR 42120), shipper alleged that BNSF’s reliance on the fuel surcharge safe harbor index (HDF Index) established by the STB in 2007 was resulting in surcharges that materially exceeded the carrier’s actual incremental fuel cost Cargill’s claim of unreasonable practice was rejected because BNSF was entitled to rely on the safe harbor index established in Rail Fuel Surcharges, EP 661 But, the STB investigated and found that BNSF’s fuel surcharges exceeded its incremental fuel cost over a 5-year period by $181 million STB invited comments on whether the fuel surcharge safe harbor in EP 661 should be modified or removed [EP 661]. The comment period ended on October 15, 2014. No decision yet.
THE LINGERERS Current Status: 1. FD 30186, Tongue River Railroad; procedural schedule still being tweaked, most recently in a March 17, 2015, decision 2. FD 35087, CN control of EJ&E: STB extended oversight period until January 23, 2017 3. FD 32760, UP/SP merger: STB denied petition for reconsideration by BNSF and G3 Enterprises. The petitioners had requested the STB to enforce its UP/SP merger decision by permitting BNSF to serve G3 under a reciprocal switch arrangement; Petitioners filed an appeal in 9th Circuit on Feb. 26, 2015 4. FD 32760 (Sub-No. 46), BNSF Railway, terminal trackage rights application (filed Feb. 27, 2013): mandatory mediation failed and STB adopted procedural schedule; BNSF rebuttal is due March 31, 2015 5. EP 711, Competitive Switching Rules: STB began proceeding on competitive switching standards in July 2012; STB held hearings March 25 and 26, 2014.
The End
ROSE-MICHELE NARDI SHAREHOLDER TRANSPORT COUNSEL PC
MARK H. SIDMAN GENERAL COUNSEL, ANACOSTIA RAIL HOLDINGS COMPANY
SHAREHOLDER, TRANSPORT COUNSEL PC
ROSE-MICHELE NARDI SHAREHOLDER TRANSPORT COUNSEL PC
MARK H. SIDMAN GENERAL COUNSEL, ANACOSTIA RAIL HOLDINGS COMPANY
SHAREHOLDER, TRANSPORT COUNSEL PC
FIREBALL ON THE HORIZON: INCREASED INSURANCE REQUIREMENTS
Post Lac-Megantic, some Class I’s reportedly requiring small railroads to obtain +/- $100 million liability insurance if the short line handles unit trains of crude oil or ethanol
Insurance provisions in new leases, trackage rights agreements, etc. require much higher liability limits; Class Is are now exercising contractual rights to re-set insurance limits
Insurance requirements in connection with operations in PTC territory may also be significant
FIREBALL ON THE HORIZON: INSURANCE Insurance Market Limitations Cont’d For some short lines, high limit coverage is unaffordable For some short lines, high limit coverage is unavailable Approaches such as creatively structured excess policies may be a solution for larger companies, but the primary policy limit will present problems for smaller companies ASLRRA is working on potential solutions – but the issue is challenging
FIREBALL ON THE HORIZON: INSURANCE Insurance Cost-Recovery Limitations Cont’d Increased insurance costs may not be recoverable Short line may have low volume of TIH/Ethanol – and thus the cost of high limit insurance cannot be amortized over a large volume of revenue carloads There is no revenue bump associated with the costs of PTC compliance In any event, many short lines do not have pricing authority – and thus may have limited ability to recoup insurance costs through rate increases
FIREBALL ON THE HORIZON: INSURANCE STB MAY BE AN AVENUE OF RELIEF Cont’d At some point, unobtainable or unaffordable insurance requirements will adversely affect short lines and their customers – i.e., certain traffic may stop moving Filing of a complaint at the STB may be an avenue of relief- absent legislative solution Depending on how third parties go about imposing insurance requirements, there may be theories of relief for short lines under ICCTA
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) In 2013, STB rejected a UP petition for declaratory order that the indemnification provisions in its TIH/PIH tariff were reasonable STB found the indemnification provisions overbroad: Covered losses not attributable to TIH/PIH Covered losses covered by UP Insurance STB stated increased insurance costs due to shipper-caused TIH/PIH incidents could recouped through rates STB denied UP’s petition
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d UP amended its tariff to address the TIH/PIH causation issue, but left the rest largely the same American Chemistry Council, Chlorine Institute, Fertilizer Institute and NITL filed a motion for show cause order directing UP to demonstrate its revised tariff is reasonable STB denied the motion for show cause order because denial of UP’s original Petition for Declaratory Order did not impose obligations on UP or find its tariff unreasonable – UP simply did not meet its burden of proof for declaratory order stating the tariff was reasonable
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d STB invited American Chemistry Council, et al. to ask Board to treat motion for a show cause order as an unreasonable practice complaint American Chemistry Council, et al. declined the STB’s offer
TIH/PIH RISK DILEMMA: UP PETITION FOR DELCARATORY ORDER (FD 35504) Cont’d Unclear how the STB’s denial of the UP petition affects short lines For many short lines, the range of insurable losses is a very narrow one and adverse claims history can make coverage unavailable Short lines that are handling line carriers have no ability to use rates as a means of recovering increased insurance costs (or addressing a loss of coverage)
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Issue: Should the bill of lading continue to be the operable document to determine the party liable for demurrage Split by the 3rd and 11th circuits over liability of intermediaries that accepted cars highlighted STB’s need to address this issue. STB Response: No. Any receiver of rail cars would be liable for demurrage if the railroad had provided the receiver with notice of the demurrage tariff. The bill of lading would no longer determine demurrage liability.
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Cont’d Revisions/Clarification to Proposed Rule (2012) 1. 2.
Clarified that the rules were not limited to intermediaries Clarified these rules provided sole legal basis for collecting demurrage; bill of lading did not provide an alternative basis 3. Applies to both railroad-owned cars and privately owned cars held on carrier property 4. Removed the agency exception exception had stated if receiver was acting as an agent, receiver would not be responsible for demurrage if receiver (a) provided railroad with notice of agency status, and (b) identified the principal Would undermine efforts to simply/clarify responsibility for demurrage; agency issues best addressed by commercial agreements
BILL OF LADING DEMOTED: DEMURRAGE LIABILITY FINAL RULE (April 2014) Cont’d 5. Reaffirmed importance of “actual” notice: railroads must provide notice of demurrage tariffs directly to receivers required that notice be in written or electronic form 6. Declined expanding rules to address (a) proper notice of constructive placement, and (b) bunching and other railroad actions that could result in demurrage; these issues best addressed on case-by-case basis 7. Clarified demurrage rules are default rules; parties free to enter into private contracts
ICCTA PREEMPTION WITH A TWIST
In the past year, there were several case in which STB was asked to determine if a state or local action would be preempted by ICCTA One recent case raised this issue with a twist Issue: Could a locally-created regulation survive a preemption claim if it obtained the force of a federal law? STB Response: Probably not FD 35803, US EPA – Petition for Declaratory Order, served December 30, 2014, appeal filed in 9th Circuit, Feb. 26, 2015
ICCTA PREEMPTION WITH A TWIST Cont’d CA regional air quality management district created certain local regulations regarding locomotive idling IN 2007, AAR, BNSF and UP successfully argued in a CA District Court that the rules were preempted by ICCTA The preemption ruling was affirmed by the 9th Circuit in 2009
ICCTA PREEMPTION WITH A TWIST Cont’d BUT, 9th Circuit noted if the rules became part of the CA State Implementation Plan (SIP) under the Clean Air Act, and were approved by the EPA, they would be treated as federal law, and federal laws were subject to a different ICCTA preemption standard CA district submitted the rules to the EPA, and the EPA filed its petition with the STB on ICCTA preemption
ICCTA PREEMPTION WITH A TWIST Cont’d STB determined that issuing an order would be premature, because the railroad-related parties questioned whether EPA had authority to approve the rules, and this issue was outside the STB’s jurisdiction However, STB provided guidance on the ICCTA preemption issue
ICCTA PREEMPTION WITH A TWIST Cont’d STB noted the following: 1. Regulations under federal statutes may directly conflict with ICCTA; in such cases, the conflicting federal statutes must be harmonized if possible 2. ICCTA Preemption likely would occur because regulations at issue would “directly interfere” with purpose of 10501(b) of ICCTA by permitting a patchwork of state/local regulations 3. Even record-keeping obligations would likely interfere with rail operations because of the potential to subject the railroad to a patchwork of such local requirements 4. May conflict with other federal laws – e.g., EPA and FRA
TALES OF THE BIZARRE: RAIL-TERM (FD 35582)
STB denied petition for reconsideration of its decision (“Rail Carrier Decision”) that a supplier of contract dispatching services is a “common carrier” under ICCTA Rail Carrier Decision: Rail-Term is a carrier because it performs the essential function of dispatching Rail Carrier Decision: Outsourcing physical operation and control of trains is “a sharp break for historic practice.” STB says its decision was intended “to prevent the creation of disaggregated rail carriers”
TALES OF THE BIZARRE : RAIL-TERM (FD 35582) Cont’d Rail Carrier Decision noted Rail-Term dispatchers do not report to its railroad clients – it had “ultimate control” of train movements STB found an “imputed holding out” as a result of providing “integral transportation service” STB expressed concern in the Rail Carrier Decision with use of contracting out to evade “labor, safety, and other laws”
]
TALES OF THE BIZARRE: RAIL-TERM (FD 35582) Cont’d Petition for Reconsideration raised following issues with the: Rail Carrier Decision ignored plain language of ICCTA Misapplied precedent No limiting principle No STB authority to consider issues of railroad benefits and labor law
STB rejected these arguments Definition of “common carrier” in ICTTA does not turn on ownership of rail assets and reaches entities that perform critical functions related to train movement Distinguished transloading cases and State of Maine decision Clarified limiting principle: ruling limited to services involved in physical direction and control of trains RTP allows STB to consider labor and benefit issues
TALES OF THE BIZARRE : RAIL-TERM (FD 35582) Cont’d Rail-Term has appealed to the D.C. Circuit Pending outcome of appeal, agreements with contractors should clarify reporting obligations and not give the contractor “ultimate control” over critical functions Good news is that STB clarified that the Rail Carrier Decision “should not be read as calling into question the RRB’s many decisions finding that independent contractors providing rail services that do not involve the physical operation and control of train movements are not rail carriers.”
]
A STICKY WICKET: NORTH AMERICAN FREIGHT CAR ASS’N v. UP (NOR 42119) NAFCA challenged provisions of a UP tariff that imposed $650 surcharge on loaded or empty rail cars tendered by a customer with residue (e.g., petroleum, molasses, lard, etc.) on the exterior of railcars Surcharge applied to (i) tendered cars, (ii) cars switched from the spot tendered but still within the facility where they were loaded or unloaded, and (iii) railcars discovered to have residue on the exterior while en route Tariff also provided that the assessment and/or payment of the surcharges do not relieve the customer for liability attributable to leakage or residue on the exterior of the railcar, and UP’s acceptance of a leaking railcar or railcar with residue on the exterior is not a waiver by UP of the customer’s obligation to tender safe cars
A STICKY WICKET: NORTH AMERICAN FREIGHT CAR ASS’N v. UP (NOR 42119) Cont’d STB found the surcharge provisions, including the liability provision, were not unreasonable to the extent they applied to cars tendered by the customer or still within the customer’s facility
The STB found the surcharge applied to railcars en route to be unreasonable
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES
Finance Docket 35841, Piedmont & Atlantic Railroad Co and Norfolk Southern (Motion to strike information provided under the interchange commitment rules)
Issue: Does an interchange commitment exist if a shortline has no third party connection and no reasonable possibility of such a connection?
STB Response: Yes
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES Cont’d Facts: 1. The lease agreement contained a lease-credit rental mechanism (e.g., credit toward annual lease payment for each car interchanged with Class I lessor) 2. RRs argued lease-credit provision was not an interchange commitment because leased line did not connect to any third party lines and no such connection could occur without significant construction or unauthorized use of other lessor connecting lines 3. RRs argued if there was no option of a third party connection, the lease credit provision did not limit or foreclose any of lesssee’s interchange options
THE “WHAT IF” GAME – APPLYING THE INTERCHANGE COMMITMENT RULES Cont’d
STB stated that even if a lease-credit mechanism did not currently pose competition concerns, such concerns might arise in the future, and the determination of whether a reasonable future connection existed was subjective and potentially non-definitive.
Commissioner Begeman dissented: the majority is taking a “you never know” viewpoint, and is retaining information without regard to whether such retention is necessary or reasonable.
AGAINST THE SPREAD: FUEL SURCHARGES (EP 661 SAFE HARBOR) In Cargill, Inc. v. BNSF (NOR 42120), shipper alleged that BNSF’s reliance on the fuel surcharge safe harbor index (HDF Index) established by the STB in 2007 was resulting in surcharges that materially exceeded the carrier’s actual incremental fuel cost Cargill’s claim of unreasonable practice was rejected because BNSF was entitled to rely on the safe harbor index established in Rail Fuel Surcharges, EP 661 But, the STB investigated and found that BNSF’s fuel surcharges exceeded its incremental fuel cost over a 5-year period by $181 million STB invited comments on whether the fuel surcharge safe harbor in EP 661 should be modified or removed [EP 661]. The comment period ended on October 15, 2014. No decision yet.
THE LINGERERS Current Status: 1. FD 30186, Tongue River Railroad; procedural schedule still being tweaked, most recently in a March 17, 2015, decision 2. FD 35087, CN control of EJ&E: STB extended oversight period until January 23, 2017 3. FD 32760, UP/SP merger: STB denied petition for reconsideration by BNSF and G3 Enterprises. The petitioners had requested the STB to enforce its UP/SP merger decision by permitting BNSF to serve G3 under a reciprocal switch arrangement; Petitioners filed an appeal in 9th Circuit on Feb. 26, 2015 4. FD 32760 (Sub-No. 46), BNSF Railway, terminal trackage rights application (filed Feb. 27, 2013): mandatory mediation failed and STB adopted procedural schedule; BNSF rebuttal is due March 31, 2015 5. EP 711, Competitive Switching Rules: STB began proceeding on competitive switching standards in July 2012; STB held hearings March 25 and 26, 2014.
The End
ROSE-MICHELE NARDI SHAREHOLDER TRANSPORT COUNSEL PC
MARK H. SIDMAN GENERAL COUNSEL, ANACOSTIA RAIL HOLDINGS COMPANY
SHAREHOLDER, TRANSPORT COUNSEL PC
