STB proposes streamlined process for small rate disputes

The Surface Transportation Board (STB) announced yesterday an advanced notice of proposed rulemaking (ANPR) for a new "streamlined" procedure to resolve small rate disputes between shippers and Class Is.

The proposed rules are an outgrowth of the board's effort to make its rate case procedures more fair and accessible to grain shippers, according to an STB press release.

Although the proposed rules reflect the agricultural community's concerns, the STB "also recognizes that for small rate disputes, regardless of commodity, the litigation costs required to bring a case under the board's existing rate reasonableness methodologies can quickly exceed the value of the case," the release stated.

Under the ANPR, the STB would design a "comparison group" of similar rail shipments against which it would judge the reasonableness of the rate being challenged. Having the board — rather than the parties — design the comparison group would streamline the process compared to the board's existing "three-benchmark methodology," STB officials said.

In addition, the ANPR calls for a final evidentiary hearing before STB staff, rather than the existing procedure that has the board receiving rebuttal submissions and closing briefs.

The new procedure may feature other measures such as mandatory initial disclosures by the parties, elimination of discovery or limits on discovery, and limits on the length of evidentiary submissions (for example, a maximum of 1,000 words). These measures also would reduce litigation expenses and improve the pace of the rate challenge, STB officials said.

Moreover, the STB is considering a preliminary screen to ensure that the challenged traffic meets threshold criteria for review, which could allow for more streamlined  market dominance and rate reasonableness presentations than in other rate case methodologies. Also, as a result of the shortened process, the STB would limit the amount of relief available.

"The new approach described in [the] decision is intended to create a cost-effective pathway to resolve small rate disputes," said STB Chairman Daniel Elliott. "It has been a key objective of my tenure as Chairman to re-invent the rate case process, and [yesterday's] decision is a significant part of that effort."