CSX, CN Seek to Block New STB Rate Rule

CSX, Canadian National and Union Pacific have gone to court to try to block implementation of a U.S. Surface Transportation Board rule seeking to streamline the settlement of small rate disputes with shippers.

CSX filed suit in the U.S. Court of Appeals for the 11^th Circuit challenging an arbitration process that the STB plans to launch as part of the new rules, which the agency said are designed to make it easier, faster and less expensive for shippers to initiate cases seeking up to $4 million in relief over two years.

The rules were adopted in December as part of a new process called Final Offer Rate Review. The rule drew applause from shippers but was attacked by the Association of American Railroads as unworkable.

UP filed a similar lawsuit in the appeals court for the Eighth Circuit seeking to block the STB rule. CN’s challenge of the rule was filed in the Seventh Circuit appeals court by its U.S. subsidiaries, Illinois Central and Grand Trunk Western.

A sticking point in the small rate case rules is the arbitration component. STB wants all Class 1 railroads to agree to binding arbitration while the railroads have called for voluntary arbitration.

The AAR has argued that the Final Offer Rate Review process exceeds the agency’s legal regulatory authority.

AAR s position is that the effect of the new rule is that regulators will choose and impose the rate proposed by the shipper or the rate offered by the railroad.

The trade association also has been critical of the requirement that all Class 1 railroads must agree to participate.

The STB for its part has sought to frame the new rule as striking a balance between competing interests.

Tags: arbitration, Canadian National, CSX, STB rate cases, STB rules and regulations, STB rules making, U.S. Surface Transportation Board, Union Pacific