Surface Transportation Board Sets New Timetable to Review Large Rate Cases
The Surface Transportation Board published new rules intended to speed up the consideration and resolution of large rate cases, implementing one of the requirements contained in the STB Reauthorization Act that became law last year.
The rail regulatory agency, which has been directed by Congress to improve its efficiency, announced that on April 8 it will begin considering those cases on a 485-day schedule from initial filing until the final decision. There was no previous upper time limit for such reviews.
The speed of handling of rail regulatory cases has been controversial for the past three decades, in part because of a grain shipping case that was filed before the now-defunct Interstate Commerce Commission and decided by the STB 15 years later, one year after it replaced the ICC. Since then, the agency has made other efforts to accelerate case reviews. However, Sen. John Thune (R-S.D.) led efforts to change previous STB practices in 2014 after delays of grain, automotive and other freight on the U.S. rail system prompted widespread customer complaints.
Large rate cases, which have resulted in damage awards ranging up to nearly $350 million, use the agency’s “stand-alone cost” test, which requires shippers that challenge rates to calculate the cost to move freight on a hypothetical railroad and to show that the actual rates being paid are unreasonable. Such cases can cost more than $4 million to develop and present.
“The timelines in [stand-alone cost] rate case proceedings ... have been significantly shortened, including limits on the time allowed for discovery and the time allowed for development of the evidentiary record,” the agency’s statement said.
The new schedule allows 150 days for discovery, 185 days for follow-up filings and 150 days for STB to review the case. Cases that were filed before Dec. 18 will be decided under the previous schedule.
STB also said it will conduct “informal meetings” with interested parties to familiarize themselves with the changes.
The law passed in December gives STB power for the first time to investigate rail issues, refine its arbitration process and increase its size to five members from three. None of those other steps has been completed. The Senate will have to approve nominations of the additional two commissioners.
