(The Surface Transportation Board issued the following news release on October 30.)
WASHINGTON — The Surface Transportation Board today announced that it has concluded a major rulemaking proceeding to improve the STB’s procedures for deciding large railroad rate cases. The changes adopted in the rulemaking will ensure that the standards both for deciding whether a rate is too high and for setting the floor for rate relief — the lowest level to which rates can be ordered reduced — are applied fairly and in conformity with the agency’s statutory responsibilities.
In commenting on the decision, STB Chairman Charles Nottingham said:
“Today’s announcement marks a significant milestone in the STB’s ongoing effort to reduce litigation costs, create incentives for private settlement of disputes, and shorten the time required to develop and present large rail rate cases to the STB. The procedures established in this rulemaking will save shippers and railroads millions of dollars per case in consultant and legal fees — funds that will now be available for more productive job creation, investment and transportation purposes.”
This new rulemaking updates guidelines that were adopted by the agency 20 years ago to govern large rate disputes. In recent years and in numerous STB cases, it became apparent that the STB’s rate dispute resolution process had evolved into an overly expensive and time consuming process, with cases typically requiring three years or longer to resolve at an estimated cost of over $3 million for each side. These new rules reform STB processes to make its rate docket more manageable — both for the agency and the parties — by placing reasonable restraints on the evidence and arguments it would allow parties to submit in a particular case. With today’s decision, the expense and delay in resolving rate disputes should diminish appreciably, and the results of the rate reasonableness inquiry should become more accurate.
Chairman Nottingham added:
“I congratulate the staff in their dedicated effort to complete the rulemaking within the aggressive schedule promised when the proceeding was begun. I also commend my colleagues for having initiated this important rulemaking earlier this year.”
The STB also announced that it will now turn its attention to the task of reforming its procedures and standards for smaller rate disputes. That effort is already well under way, with final comments on proposed new guidelines due in late December 2006. After the agency reviews the public comments, it expects to issue guidelines for small cases that rely on the same principles used in large cases, albeit in a less expensive, less complex manner.
The STB’s final decision in Major Issues in Rail Rate Cases, STB Ex Parte No. 657 (Sub-No. 1), is available for viewing and downloading via the STB’s Web site at under “E-Library,” then under “Decisions & Notices,” beneath the date “10/30/06.” A printed copy of today’s decision also is available for a fee by contacting ASAP Document Solutions, 9332 Annapolis Rd., Suite 103, Lanham, MD 20706, telephone (202) 306-4004.