(The following story by John D. Boyd appeared on The Journal of Commerce website on May 5, 2010.)
WASHINGTON, D.C. — Pending legislation in the Senate to add shipper-friendly competition rules on the rail industry won’t move ahead unless it also strips railroads of exemptions they enjoy from antitrust law, said Sen. Herb Kohl, D-Wis.
He told a gathering of rail freight customers May 5 he and his staff “have made plain that we will not consent to any rail bill moving forward on the Senate floor that does not contain such antitrust provisions.”
Kohl last year authored an exemption-repeal measure that passed the Judiciary Committee and was headed toward the Senate floor. He pulled it after striking a deal to instead attach the antitrust language to the broader rail competition bill being drafted in the Commerce, Science and Transportation Committee.
That competition measure passed the Commerce panel in December as a priority of its chairman, Sen. Jay Rockefeller, D.-W.Va., and with strong bipartisan backing. Rockefeller said he had to leave off the antitrust provision to get the bill through his committee, but would add it to a final bill before it goes to a full Senate vote.
Railroads have strongly criticized the Commerce bill as threatening to upset rules under which they brought their industry back to financial health since 1980 deregulation. One of their complaints has been the potential antitrust language.
Carriers now can escape challenge in state and federal district courts under antitrust law, because the Surface Transportation Board has jurisdiction over many rate and service issues. Its decisions can then be challenged in the U.S. Court of Appeals.
It is not a blanket exemption, however, and an antitrust case over fuel surcharges has been moving through federal courts in recent years. Still, shippers say current law prevents them from challenging many rail practices they see as unfair except at the STB, where they complain the process favors railroads.
Kohl said his office continues to work with Rockefeller’s staff on how best to repeal “this special and undeserved immunity the railroad industry has from antitrust law.”
His denial of consent to move the final bill forward without that repeal probably refers to a “hold” under which a senator can stop legislation from proceeding to a vote until his or her concerns are resolved.
Kohl told the shippers who were gathered for a day of lobbying congressional offices, “While the prospects for this bill are bright, we cannot expect the railroad industry to give up its special antitrust exemption easily.”