(The following story by John D. Boyd appeared on The Journal of Commerce website on September 17, 2009.)
WASHINGTON, D.C. — The House Judiciary Committee passed an antitrust bill that railroads oppose, as it would put them under the same antitrust provisions faced by other industries, but any similar measure in the Senate awaits an overall rail competition bill.
The House panel’s measure would strip freight railroads of what industry critics say is a limited exemption from normal antitrust reviews, because rail mergers and most economic disputes with customers must go first to the Surface Transportation Board.
STB decisions are subject to challenge in the U.S. Court of Appeals, but are rarely overturned. Removing that exemption would subject railroads to more challenges in federal district courts and allow the Department of Justice to review mergers.
The house panel approved the bill in a voice vote, clearing it for a possible vote by the full House. It is a match to legislation previously offered in the Senate by Herb Kohl, D-Wis., after passage by the Senate Judiciary Committee, but Kohl removed his from the Senate docket just before a scheduled vote June 1.
Instead, Kohl and Sen. Jay Rockefeller — who chairs the Commerce, Science and Transportation Committee — reached agreement to include antitrust language in a broader reform of rail competition regulation the Commerce Committee is drafting.
Rockefeller has yet to offer that measure, but said this week he is “very close.” It is expected to expand the STB, and rewrite the agency’s legal directive to shift regulatory policies more toward shippers.
Railroads fought the Kohl antitrust bill partly because it gives a role to the Federal Trade Commission. They also say a pending lawsuit accusing them of setting rail surcharges in tandem, which is working its way through federal district court, shows they are already subject to antitrust cases.
Stock analyst Jon Langenfeld of Robert W. Baird told clients passage of the antitrust measure by the House committee is “not meaningful” because of what is taking place in the Senate.
He said Rockefeller’s “comprehensive Senate bill is the focus for investors.” Langenfeld said while some of Kohl’s antitrust bill will probably be in it, “we continue to believe such legislation will provide shippers concessions but will not be overly onerous for railroads.”