(The following story by John D. Boyd appeared on The Journal of Commerce website on November 19, 2009.)
WASHINGTON, D.C. — Montana is suing BNSF Railway over payments for a short line’s grain shipments, while BNSF is saying “our actions are legal” and that it is trying to offer the state’s shippers transparency in their freight rates.
The suit is the latest in a series of actions involving the railroad, the state and its grain shippers. Early this year, Montana’s attorney general issued a report saying the state’s rail customers pay the highest rail rates in the nation and said BNSF controls 95 percent of their rail service.
Now, reports say state attorneys filed suit Nov. 10 charging BNSF was effectively trying to create a monopoly in central Montana.
BNSF had earlier operated a short line segment called the Geraldine Line after its former owner went bankrupt. Later, the large carrier opted out of that service, and the Associated Press said it agreed in a 1984 settlement to pay a state-owned short line operator, Central Montana Railroad, a fee for each grain carload it hauled.
A Montana spokesman told AP that BNSF at the start of this month stopped making required payments, and the suit calls its actions “predatory.”
But in a formal statement it issued in response to reports of the suit, BNSF said the state’s filing “primarily deals with issues that have already been before federal courts for the past four years. Many of these issues were resolved in BNSF’s favor by the federal court and arbitration panels.”
Meantime, BNSF said, “we intend to continue these efforts to demonstrate that our actions are legal, designed to provide Montana producers with rate transparency and protect Montana producers from excessive rail rates.”
The suit also comes as Congress is trying to quietly craft a package of rail regulatory reforms, and hoping to get agreement both from railroads and major customer groups before a bill is formally introduced.