On July 28, 2022, the U.S. Department of Transportation’s Federal Railroad Administration (FRA) published a Notice of Proposed Rulemaking to establish minimum train crew sizes and other requirements related to train crew staffing (87 Fed. Reg. 45564).  The Proposed Rule would require a minimum of two crewmembers on most trains traveling on the interstate rail network.  It would, however, provide ten categorical exceptions for circumstances in which the FRA has deemed one-person crew operations to pose a low risk to railroad employees, the public, and the environment.  The Proposed Rule would also allow railroads to seek approvals for legacy one-person crew operations on a case-by-case basis.

On May 6, 2022, the Surface Transportation Board (Board) issued a decision ordering certain reporting from Class I carriers, in response to concerns raised at the public hearing held on April 26 and 27, 2022 on urgent issues in freight rail service.  Urgent Issues in Freight Rail Service, EP 770 (Sub-No. 1) (STB served May 6, 2022).

On July 1, 2022, the Board issued a decision accepting for consideration the responsive applications filed by Canadian National Railway Company (CNR) and its rail carrier affiliate, Illinois Central Railroad Company (ICRR) (collectively, CN), and by Norfolk Southern Railway Company (NSR), in the CP/KCS merger proceeding.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served July 1, 2022).

The U.S. Supreme Court recently denied the California Trucking Association’s (CTA) petition for certiorari related to a case involving federal preemption of California Assembly Bill 5 (AB-5), a law that changed the legal requirements for independent contractor status in California that was targeted in large measure at the trucking industry’s use of independent contractor owner-operator drivers.  There are approximately 70,000 independent owner-operators within California who will be impacted by the law, which could cause additional supply chain disruptions at a time in which the industry is already facing challenges.  The decision spurred protests that shut down the Port of Oakland for 5 days, and the future of the prominent use of independent contractor drivers in the trucking industry faces a grim future in California. 

As brief background, AB-5 went into effect Jan. 1, 2020. AB-5 codified the "ABC" test for employee versus independent contractor classification adopted by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (Dynamex), 4 Cal. 5th 903 (2018).  It is very common in the trucking industry for independent owner-operator drivers to drive their own truck for a motor carrier under the motor carrier’s operating authority.  AB-5 makes it very challenging for an independent driver to work for a motor carrier without being considered an employee.  This is because under the “B” prong of the ABC test, in order to be an independent contractor, the driver must “perform work that is outside the hiring entity's business.”  It is hard – if not impossible – for a driver for a motor carrier to satisfy this standard.

In an unusual action, the U.S. District Court for the Eastern District of New York recently held that the Airline Deregulation Act of 1978 (“ADA”) preempted and barred an action by a passenger on a Caribbean Airlines (“CAL”) flight, wherein the passenger claimed that CAL had negligently allowed someone to plant two kilograms of cocaine in his luggage.¹  The passenger traveled from Guyana to New York on a CAL flight in 2018.  After passing through security, he turned over his suitcase to Guyanese officials and boarded the subject flight without incident.  When he arrived in New York, he retrieved his suitcase and went through U.S. Customs, where he was selected for inspection.  Customs found two kilograms of cocaine in his suitcase. 

On June 16, 2022, the Commandant of the U.S. Coast Guard, Office of Design and Engineering Standards (ENG-3) published a Maritime Safety Information Bulletin No. 05-22 (MSIB) for tank vessels.¹ Specifically, the MSIB authorized and approved double block and bleed systems for the Inert Gas Systems on tanks vessels that are designed, installed, and operated in compliance with 74 Safety of Life at Sea Convention (SOLAS) (14) II-2/5.5 pursuant to 46 CFR §32.53-10(b). The significance of the MSIB is that shipowners and operators with SOLAS-compliant double block and bleed systems for Inert Gas Systems on tank vessels do not need approval for their system by the Coast Guard Marine Safety Center.

[On June 27, 2022 at ATLP’s 93rd Annual Meeting held in Kansas City, Missouri Jameson Rice passed the ATLP’s president’s gavel to Louis Amato-Gauci.  Louis delivered the following remarks to the assembled members.]]

I’m deeply honoured to serve as president of this venerable association, the oldest organization of its kind in North America. I am excited about this upcoming year, and confident that I can count on all of you to help make it a resounding success.

I joined ATLP as a relatively young lawyer, who was just beginning to explore the boundaries of transportation law. I attended the ATLP annual meeting in Memphis, met a few folks and marveled at the depth of their expertise in this niche area of practice, but really had no idea what it takes to make an organization like this run smoothly.

I quickly discovered that much of the credit for the continued success of ATLP is due to the efforts of Lauren Michalski, our Executive Director for many, many years, who has truly been the heartbeat, life and soul of the association. There is something magical about Lauren. I met her when she and I sat at the back of the bus – where all the rowdy kids sat – heading to the midnight tour of the FedEx Hub. By the time that trip ended she had me signed up as a speaker for the next event, followed in rapid succession by an invitation to: (i) publish a paper in the Journal; (ii) serve on the program committee for the next meeting; (iii) co-chair the committee with Jameson for another meeting; and the rest is history.

This article is intended as a strategy guide for in-house and outside general counsel but comments from the Plaintiffs bar are equally appreciated. It is intended to digest the Court’s thoughtful opinion into core decision points.

In this passenger rail update we cover the Federal Railroad Administration’s (“FRA”) new regulations concerning fatigue management and FRA’s introduction of the new intercity passenger Corridor Identification and Development Program. We also provide an update on the Amtrak Gulf Coast proceedings currently pending before the Surface Transportation Board (“STB” or “Board”).

FRA Amends Regulations to Implement Statutory Requirements for Fatigue Management

Pursuant to the requirements of Section 103 of the Rail Safety Improvement Act of 2008 (“RSIA”), 49 U.S.C. § 20156, on June 13, 2022, FRA issued a Notice of Final Rule in the Federal Register requiring that certain railroads include “fatigue management plans” in their safety risk reduction plans (87 Fed. Reg. 35,660).  This requirement applies specifically to Class I railroads, railroads that have been deemed by the Secretary of the Department of Transportation to have inadequate safety performance, and intercity passenger and commuter railroads.  Under current FRA regulations, Class I railroads and those deemed to have inadequate safety performance are required to submit Risk Reduction Program (“RRP”) plans to the FRA while intercity passenger and commuter railroads are required to submit System Safety Program (“SSP”) plans.  However, Section 20156 also requires that fatigue management plans be included in a railroad’s safety risk reduction plan (either an RRP or SSP), which had not previously been included in the applicable regulations (49 C.F.R. Part 270 and Part 271), thus prompting this rulemaking.

As many ATLP members are aware, Canadian Pacific Railway (“CP”) and Kansas City Southern Railway (“KCS”) filed a merger Application with the Surface Transportation Board (“STB”) on October 29, 2021, in Finance Docket 36500.  The transaction would involve CP acquiring KCS and its rail operations in the United States.  This blog post details the possible implications of the proposed merger on HazMat shipments.

The continuing armed conflict between Russia and Ukraine has disrupted commercial maritime trade and stranded ships as well as their crew in the Black Sea and the Sea of Azov.  This region historically has been an important area for maritime trade.

The Southwest Airlines Pilots Association (“SWAPA”) sued Boeing in late-2019 in the 160th District Court in Dallas County, Texas, seeking damages arising from the world-wide grounding of 737 MAX aircraft.  Southwest Airlines flies a fleet consisting exclusively of Boeing 737 aircraft, had already taken delivery of many MAX aircraft before the grounding, and was expecting to take delivery of a significantly greater number of MAX aircraft during the two-year grounding.  The grounding reduced Southwest’s fleet and thus its pilots’ opportunities to earn income, and based on that reduced income, reduced the revenue of the union, to which pilots pay dues as a percentage of income.   

The Federal Motor Carrier Safety Administration (FMCSA) issued a notice of supplemental proposed rulemaking on May 4, 2022 (87 FR 26317).  This proposed rule is part of the regulatory hokey-pokey between administrations: the Obama Administration put it in, the Trump Administration took it out, and now the Biden Administration is putting it in again. 

On April 7, 2022, the Surface Transportation Board (Board) issued a decision announcing that it will hold a public hearing on April 26 and 27, 2022, concerning recent rail service issues and recovery efforts involving several Class I carriers.  Urgent Issues in Freight Rail Service, EP 770, slip op. at 1 (STB served Apr. 7, 2022).

On April 1, 2022, the Surface Transportation Board (Board) issued a decision seeking public comment on a petition for rulemaking filed on July 26, 2021 by the North America Freight Car Association, The National Grain and Feed Association, The Chlorine Institute, and The National Oilseed Processors Association (collectively, Petitioners), requesting that the Board exercise its authority under 49 U.S.C. § 11122(a)(2) to promulgate regulations governing the use of private railcars by railroads.  Petition for Rulemaking to Adopt Rules Governing Private Railcar Use by Railroads, EP 768 (STB served Apr. 1, 2022). 

On March 15 and 16, 2022, the Surface Transportation Board (Board) held a public hearing concerning the reciprocal switching regulations that it proposed in this proceeding.  See Reciprocal Switching¸ EP 711 (Sub-No. 1) (STB served Mar. 1, 2022). 

On February 15, 2022, the Surface Transportation Board (Board) commenced the initial phase of the public hearing regarding the March 16, 2021 application by the National Railroad Passenger Corporation (Amtrak) for an order allowing additional train operations over CSX Transportation, Inc. (CSXT) and Norfolk Southern Railway Company (NSR) lines along the Gulf Coast.  See Application of the Nat’l Passenger R.R. Corp. Under 49 U.S.C. § 24308(E)—CSX Transp., Inc. & Norfolk S. Ry. Co., FD 36496 (STB served Feb. 11, 2022).  The second phase, an evidentiary hearing, commenced on April 4, 2022.  See Application of the Nat’l Passenger R.R. Corp. Under 49 U.S.C. § 24308(E)—CSX Transp., Inc. & Norfolk S. Ry. Co., FD 36496 (STB served Mar. 23, 2022). 

On April 14, 2022, the Surface Transportation Board (Board) issued a decision approving the revised application seeking approval for: (1) CSX Corporation (CSXC), CSX Transportation, Inc. (CSXT), and 747 Merger Sub 2, Inc. (747 Merger Sub 2) to control the railroads controlled by Pan Am Systems, Inc. (Systems) and Pan Am Railways, Inc. (PAR); and (2) CSXT to merge certain PAR subsidiaries into CSXT (the Merger Transaction).  CSX Corp.—Control and Merger—Pan Am Systems, Inc., FD 36472 (STB served Apr. 14, 2022).

On March 16, 2022, the Board issued a decision directing the applicants in the proposed Kansas City Southern and Canadian Pacific merger proceeding to address an apparent inconsistency in traffic density data submitted to the Board.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served Mar. 16, 2022).  The Board also provided an opportunity for other parties to reply to the applicants’ submission and suspended the procedural schedule.

Allison Ishihara Fultz is no stranger to the ATLP community.  Prior to joining the Federal Railroad Administration (“FRA”) as its Chief Counsel, Allison has served as a passenger rail editor to Highlights, a chair of the program committee, and as a vice president and treasurer of ATLP’s board of directors.  Allison stepped down from ATLP this past fall to assume her role at FRA.  Allison and I recently spoke on the phone to discuss her career in transportation, her transition from private practice to a safety regulator, and current events at the FRA.

One issue that Allison says is an FRA priority in implementing the Infrastructure Investment and Jobs Act, or Bipartisan Infrastructure Law (“BIL”) is ensuring that the agency provides accessible guidance to all potential organizations seeking funds under the new legislation.  Allison says FRA understands that sophisticated organizations know how to navigate the federal government’s grant making process.  But FRA also wants to ensure that other entities, such as small municipalities – less familiar with the granting process – can access funds to address pressing rail infrastructure issues.

Prior to earning her law degree from the American University Washington College of Law, Allison trained to become an architect by earning her AB and Master of Architecture degrees from Princeton University and then practiced architecture for 13 years, designing and directing construction projects and feasibility studies.