On November 18, 2020, the Senate confirmed Michelle Schultz and Robert Primus to five-year terms to the Surface Transportation Board. 

Ms. Schultz was first nominated in 2018, her seat is a new position following the expansion of the Board from three to five members.  Ms. Schultz has been a Deputy General Counsel with the Southeastern Pennsylvania Transit Authority (SEPTA) since 2006.  In addition to her JD, Ms. Schultz holds a Master’s Degree in Government Administration from the University of Pennsylvania.

The Federal Motor Carrier Safety Administration (“FMCSA”) requested public comments on petitions for rulemaking backed by owner-operator/small-fleet groups to address the transparency of broker rates. The notice is in response to petitions filed by the Owner-Operator Independent Drivers Association (“OOIDA”) and the Small Business in Transportation Coalition (“SBTC,” and, together with OOIDA, the “Petitioners”). 

49 C.F.R. 371.3(a) requires brokers to maintain detailed records of their brokered transactions, including the amount of compensation received by the broker for the brokerage service performed and the name of the payer, and the amount of any freight charges collected by the broker and the date of payment to the carrier. 49 C.F.R. 371.3(c) gives each party to a brokered transaction the right to review the record of the transaction required to be kept. 

The Federal Motor Carrier Safety Administration (“FMCSA”) requested public comments on petitions for rulemaking backed by owner-operator/small-fleet groups to address the transparency of broker rates. The notice is in response to petitions filed by the Owner-Operator Independent Drivers Association (“OOIDA”) and the Small Business in Transportation Coalition (“SBTC,” and, together with OOIDA, the “Petitioners”).   

On September 1, 2020, Petitioners Union Pacific Railroad Company (UP), Norfolk Southern Railway Company (NS), and the U.S. rail operating affiliates of Canadian National Railway Company (collectively, CN) filed a joint petition urging the Surface Transportation Board (STB or Board) to initiate a rulemaking proceeding to adopt rules that would revise and modernize annual revenue adequacy determinations under 49 U.S.C. § 10704(a).  Joint Petition for Rulemaking to Modernize Annual Revenue Adequacy Determinations, Ex Parte 766 (filed Sept. 1, 2020).

Petitioners stated that Congress charged the Board with annually measuring the financial health of the rail industry and assisting each railroad in achieving revenue adequacy, and the Board has committed itself to “evidence-based decision-making,” using tools that were designed three decades ago.  Id., slip op. at 1.  According to Petitioners, the Board currently relies on accounting measures of return on investment (ROI), rather than the current economic value of those investment assets, then removes billions of dollars of accumulated deferred taxes from that investment base, which adds yet another distortion, and analyzes these findings without considering evidence about typical rates of return for the companies with which railroads compete for capital.  Id., slip op. at 1-2.

On July 31, 2020, five Class I railroads, Canadian National Railway Company (CN), CSX Transportation, Inc. (CSX), Norfolk Southern Corporation (NS), Union Pacific Railroad Company (UP), and the Kansas City Southern Railway Company (KCS) (collectively, Petitioners), submitted a joint petition requesting that the Surface Transportation Board (STB or Board) initiate a rulemaking proceeding to establish a new voluntary arbitration program for small rate disputes.  Joint Petition for Rulemaking to Establish an Alternative Voluntary Arbitration Program for Small Rate Disputes, Ex Parte 765 (filed July 31, 2020).

Petitioners stated that Congress had instructed the Board to develop “simplified and expedited methods for determining the reasonableness of challenged rates in those cases in which a full stand-alone cost presentation is too costly, given the value of the case.”  Id., slip op. at 1.  Over the last thirty years, “the Board has responded by creating multiple new simplified, and increasingly less precise, rate review methodologies.”  Id.  However, some stakeholders in the shipping community have continued to complain that the Board’s implied methodologies are insufficient in regard to flexibility, cost, and speed.  Id.

The International Maritime Organization (“IMO”) acknowledges that the increasing prevalence of cyberattacks on ships constitutes an inherent risk to the safety of vessels, crewmembers,  passengers, cargo, and the marine environment.  Both the IMO Maritime Safety Committee and Facilitation Committee have focused their attention on the urgent need to raise awareness of the need to (1)  identify vulnerable systems, and (2) create procedures to thwart and recover from malicious cyberattacks.  

The ATLP Transportation Forum XVII webinar series starts next Thursday, November 5 at 2 pm EST and runs every Thursday at 2:00 pm EST except for Thanksgiving and Friday, Dec. 4^th. Over the years, this one-day event has been hosted by the Surface Transportation Board in Washington, DC. This year, you can participate from the comfort of, what is now, your “favorite chair!”



This year’s Forum program will include:

The U.S. Department of Transportation (DOT) requires drug and alcohol testing for personnel performing safety-sensitive functions in the transportation industry, such as truck drivers holding a Commercial Driver’s License who operate a truck that requires a hazardous materials placard (49 C.F.R. Part 382) and operators of natural gas and other hazardous liquids pipelines (49 C.F.R. Part 199).

On October 5, 2020, the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) announced an award package totaling $7,810,213 to fund 10 pipeline safety research and development (R&D) projects. The projects will support pipeline safety priorities including Damage/Threat Prevention, Leak Detection, Anomaly Detection/Characterization, Liquefied Natural Gas (LNG), and Improved Materials. The projects were selected by the Merit Review Panel, which consists of 28 members from PHMSA, the Federal Energy Regulatory Commission, and members of the pipeline and LNG industry.

This promises to be a time of quickly accelerating changes in labor relations, catalyzed in part by remote work in the context of Covid-19 and, parallel to that, the potential for new structures for labor relations if a new Congress advances the re-writing of traditional labor relations envisioned in the so-called “PRO” Act, amending the National Labor Relations Act, the Labor Management Relations Act, 1947, and the Labor-Management Reporting and Disclosure Act of 1959, inter alia. The latter matters because we may see reversals of decade long entrenched employer protections in those statutes, a novel penalty scheme, and, for the first time, private rights of action.

Introduction

Recent news in the passenger rail transportation regulatory field includes the following:

♦   FRA Awards $47.5M to CRISI Grant to NCDOT
♦   FRA Plans Releases Final Rule of Particular Applicability and Record of Decision for Texas Central Railroad
♦   Massachusetts’ Lawmakers Push for State Acquisition of Pan Am Railways
♦   Colorado Receives Funding for Passenger Rail Study
♦   Montana Hosts Virtual Rail Passenger Summit

Read on for details.

Association Highlights is off this week, but we thought you might enjoy a brief post on presidential whistle-stop campaigns. 

The morning after Tuesday’s presidential debate between President Trump and Vice President Biden, Mr. Biden is hitting the campaign trail via train departing from Cleveland and making five stops in Alliance, Ohio; Pittsburgh; Greensburg, Pa.; and Latrobe, Pa., and ending in Johnstown, Pa.

Presidential campaigns have long utilized train travel to connect with voters.  According to the Constitution Center, William Henry Harrison was the first to do so in a losing bid for the presidency in 1936.  Although, he lost that race, he won in 1940 and traveled by rail to Washington, D.C. 

The U.S. Court of Appeals, District of Columbia Circuit recently affirmed a District Court’s decision to dismiss claims arising from the mysterious disappearance of Malaysia Airlines flight MH 370 on forum non conveniens grounds.[1]  The flight disappeared without any known cause over the Southern Indian Ocean on March 8, 2014.  An extensive search of over four years yielded no known cause of the tragedy.  All onboard are presumed dead.

Representatives of the passengers filed lawsuits in the United States asserting claims against Malaysia Airlines Systems Berhad (“MAS”)[2], the name of Malaysia’s national airline at the time of the flight, the airline’s insurers and Boeing, the aircraft manufacturer.  The District Court dismissed all claims on forum non conveniens grounds, and the Court of Appeals affirmed, finding that the District Court did not abuse its discretion. 

In the alphabet soup of federal transportation agencies– DOT, FRA, FHWA, TSA, STB – only one can be said to capture the attention of the general public.  The NTSB.  No other transportation agency possesses a first responder like presence on the scene of a transportation disaster and no other transportation agency looks quite as commanding as the NTSB does in its prominent blue windbreakers emblazoned with the agency’s initials across the back. 

The National Transportation Safety Board plays a unique role in transportation policymaking in that it serves as an investigative body following transportation disasters and it is an advocacy organization promoting safety recommendations.  The NTSB holds no authority to require agencies to adopt its recommendations.  Instead, it uses its “Most Wanted List” as an advocacy tool to advance transportation safety policies. 

I wanted to learn more about how the NTSB works, so I reached out to NTSB Board Member, Jennifer Homendy.  She is the 44th member of the NTSB, she took the oath of office in August 2018.  Prior to that Member Homendy spent 14 years as the Democratic Staff Director of the House Subcommittee on Railroads, Pipelines, and Hazardous Materials.  During her career at Railroads, Pipelines, and Hazardous Materials she worked on transportation reauthorizations and major transportation safety legislation including the 2008 Rail Safety Improvement Act that mandated Positive Train Control (“PTC”) on the nation’s railroads.  

What you will find in this conversation is – not only – a discussion of the NTSB, but an inside look at how transportation safety legislation becomes law.  We discussed a range of topics including the NTSB’s early advocacy for PTC technology:

A proposed high-speed passenger railroad between Dallas and Houston has successfully convinced the federal Surface Transportation Board (STB) that it has jurisdiction over the proposed Texas rail line. While STB jurisdiction will greatly aid the rail line by generally preempting state and local regulation, the STB's order has added federal requirements that will have to be addressed. FD 36025 (STB Served July 16, 2020)

Texas Central Railroad and Infrastructure Inc. and its subsidiary, Texas Central Railroad LLC (Texas Central), had lost an initial effort to secure federal jurisdiction over its planned line of railroad in 2016. That's when the STB found that Texas Central's operation, as then presented, would be purely in intrastate commerce. With this most recent decision, the STB rules that Texas Central's new plans will make it part of the "interstate rail network" and place it squarely in the realm of interstate commerce and the STB's exclusive jurisdiction.

In June, a United States District Court for the District of Columbia, held that it lacked subject matter jurisdiction to review the Department of Transportation (“DOT”) and  Maritime Administration’s (“MARAD”) decision that the citizenship of a vessel satisfied the requirements of 46 U.S.C. § 50501.  In Matson Navigation Co, Inc. v U.S. Department of Transportation et. al—F. Supp. 3d—(D.C. 2020), the court ruled that the Court of Appeals had exclusive jurisdiction pursuant to the Hobbs Act, 28 U.S.C. § 2342, to review MARAD’s 2015 decision that a commercial vessel satisfied the citizenship requirements to enroll in the Maritime Security Program, 46 U.S.C. §§ 53101 – 53111.

On July 8, the United States Court of Appeals for the Ninth Circuit issued a decision affirming a district court ruling in favor of BNSF Railway Company (BNSF) regarding the railroad’s challenge to Oregon’s tax on intangible personal property as a discriminatory tax on railroads in violation of the Railroad Revitalization and Regulatory Reform Act (4-R Act).  BNSF Ry. Co. v. Or. Dep’t of Revenue, 965 F.3d 681 (9th Cir. 2020).

The Board adopted a final rule establishing a streamlined approach for pleading market dominance in rate reasonableness proceedings.  Market Dominance Streamlined Approach, Ex Parte 756 (STB served Aug. 3, 2020).  This decision finalized a notice of proposed rulemaking (NPRM) served in this proceeding on September 12, 2019.  The Board received comments from over 20 entities on the NPRM.  As explained below, the Board in the final rule adopted the NPRM proposals with minor modifications.

On June 23, the Board withdrew its proposal to revise its methodology for calculating the cost-of-equity component of the railroad industry’s cost of capital by incorporating a third model, based on comments and replies the Board received in response to the notice of proposed rulemaking (NPRM).  Revisions to the Board’s Methodology for Determining the R.R. Indus.’s Cost of Capital, Ex Parte 664 (Sub-No. 4) (STB served June 23, 2020). 

In our March 6, 2020 hazardous materials Highlight post, we shared the US Department of Transportation - Office of Inspector General’s (“DOT-OIG”) website, www.oig.dot.gov, which provides up-to-date information on recent hazmat transportation civil and criminal enforcement actions.  Practitioners can stay informed of these developments in real-time by signing up for the DOT-OIG’s email notification list. Below are two recent enforcement actions that caught our attention.