[Federal Register Volume 61, Number 160 (Friday, August 16, 1996)]
[Notices]
[Pages 42676-42677]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20915]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board 1
[Section 10706(a)(5)(A) Application No. 11]
Carbon Black Producers Pooling Agreement
AGENCY: Surface Transportation Board.
\1\ The ICC Termination Act of 1995, Pub. L. No. 104-88, 109
Stat. 803 (ICCTA), which was enacted on December 29, 1995, and took
effect on January 1, 1996, abolished the Interstate Commerce
Commission (ICC) and transferred certain functions and proceedings
to the Surface Transportation Board (Board). Section 204(b)(1) of
the ICCTA provides, in general, that proceedings pending before the
ICC on the effective date of that legislation shall be decided under
the law in effect prior to January 1, 1996, insofar as they involve
functions retained by the ICCTA. This notice relates to a proceeding
that was pending with the ICC prior to January 1, 1996, and to
functions that are subject to Board jurisdiction pursuant to 49
U.S.C. 10706(a)(5)(A). Therefore, this notice applies the law in
effect prior to the ICCTA, and citations are to the former sections
of the statute, unless otherwise indicated.
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ACTION: Notice of filing of agreement and request for comments.
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SUMMARY: On May 23, 1996, Degussa Corp. and Columbian Chemicals Company
(applicants) supplemented the application they originally filed on
December 27, 1995, seeking approval of a shipper agreement under 49
U.S.C. 10706(a)(5)(A). Under the proposed agreement, applicants and any
other participating carbon black producers would be permitted: (1) To
discuss among themselves issues relating to the compensation railroads
pay for use of producer-owned or leased cars, and to the producers'
cost of car ownership and operation; and (2) to pool the freight cars
they use to transport carbon black. The Board seeks public comment
prior to acting on the application.
DATES: Comments must be filed by September 16, 1996, and applicants may
file a reply by October 7, 1996.
ADDRESSES: Send pleadings referring to Section 10706(a)(5)(A)
Application No. 11 to: (1) Surface Transportation Board, Office of the
Secretary, Case Control Branch, 1201 Constitution Avenue, NW.,
Washington, DC 20423; and (2) Charles A. Spitulnik and Alicia M.
Serfaty, Hopkins & Sutter, 888 16th Street, NW., Washington, DC 20006.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5660. [TDD for
the hearing impaired: (202) 927-5721.]
SUPPLEMENTARY INFORMATION: Under 49 U.S.C. 10706(a)(5)(A), shippers
must obtain Board approval of any agreements to discuss among
themselves the compensation to charge rail carriers for the use of
privately owned or leased freight cars. The Board will approve an
agreement only if it furthers the rail transportation policy of 49
U.S.C. 10101a. When necessary, additional conditions may be imposed by
the Board to further that policy. If an agreement is approved, the
antitrust laws do not apply to parties and other persons with respect
to the making and carrying out of the agreement.
Under Shippers Equitable Compensation Action Committee, 365 I.C.C.
939 (1982) (SECAC), collective agreements for shippers, at a minimum,
must contain three basic safeguards to be found consistent with the
public interest: (1) an unrestricted guarantee of the right of
independent action by both members and non-members; (2) a requirement
for open meetings with a correlative requirement for reasonable notice
to members and other interested noncarrier owners or rail cars lessees;
and (3) a requirement for formal recordkeeping of all meetings by
transcript or sound recording.2
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\2\ See American Petroleum Institute, Section 10706(a)(5)(A)
Application No. 4 (ICC served Nov. 18, 1982, and July 22, 1983);
Chemical Manufacturers Association, 367 I.C.C. 290 (1983); Institute
of Shortening and Edible Oils, Inc., Section 10706(a)(5)(A)
Application No. 6 (ICC served Mar. 22 and Dec. 7, 1983); and U.S.
Clay Producers Traffic Association, Inc., Section 10706(a)(5)(A)
Application No. 10 (ICC served Mar. 21, 1985).
These are the same standards and requirements that are applied
to rail carrier rate bureau applications. See Western Railroads--
Agreement, 364 I.C.C. 1 (1980).
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In a decision served April 3, 1996, we held this proceeding in
abeyance to give
[[Page 42677]]
applicants an opportunity to incorporate these basic SECAC safeguards
into their application, agreement, and by-laws. Additionally, we
directed applicants to clarify whether they were seeking approval for
the pooling aspects of the proposed agreement, and, if they were, we
asked them to address: (1) the substantive scope of an approval under
section 10706(a)(5)(A); 3 and (2) whether our authority under 49
U.S.C. 11342 to approve pooling agreements extends beyond rail carrier
agreements.4
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\3\ We noted that, in Western Railroads--Agreement, 1 I.C.C.2d
131, 133 n.3 (1984), the ICC, in addressing the scope of the
immunity it could grant, stated:
The statute, in 49 U.S.C. 10706(a)(5)(A), provides for immunity
under approved agreements between shippers to discuss the
compensation to be paid shippers by rail carriers for use of rolling
stock owned or leased by the shippers. It does not, however, provide
immunity to shipper associations for other activities or for the
discussion of rates generally.
\4\ We noted that, in The Baltimore and Ohio Railroad Company,
Et Al.--Pooling of Car Service Regarding Multi-Level Cars, Finance
Docket No. 29653 (Sub-No. 4) (ICC served Apr. 26, 1988), the ICC
found that its authority did not extend beyond rail carriers. There,
the railroad pool members requested an exemption from 49 U.S.C.
11342 to permit them to amend their agreement to include a Shipper
Executive Committee within the existing pool management structure.
The request was dismissed for lack of jurisdiction either to approve
the proposed amendment or to exempt it from regulation. The decision
specifically noted that, while the dismissal did not preclude the
formation of a shipper committee, the shipper committee would not be
immunized from the antitrust laws.
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In their supplemental filing, applicants state that the proposed
agreement was revised to comply fully with the SECAC standards and
procedural requirements. As to the pooling aspects of the proposed
agreement, applicants acknowledge that 49 U.S.C. 11342 is limited to
approving agreements between or among carriers. Asserting that they
seek approval under 49 U.S.C. 10706(a)(5)(A), and not under section
11342, applicants state that their application referred to section
11342 only to compare the benefits of coordination that are available
to carriers with the benefits coordination would make available to
applicants.
Applicants state that the primary objective of the proposed freight
car pool is to eliminate the costly and inefficient 100% empty car
return practice that characterizes the rail movement of carbon black
and has become embedded in the overall rate structure (including car
compensation) that applies to the movement of carbon black in producer-
owned and leased cars. While acknowledging that activities under the
proposed pool may resemble those of a typical rail pool, applicants
contend that these activities in fact differ because they are integral
to the producers' ability to discuss among themselves car compensation
rates and the specific factors (including utilization and maintenance)
that affect these rates. Accordingly, applicants state that they seek,
and maintain that the Board may issue, approval and antitrust immunity
for all of the activities set forth in the proposed agreement,
including those related to the proposed freight car pool.5
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\5\ The agreement calls for a pooled fleet of freight cars to
move carbon black. The pool is to be managed and distributed by a
Pool Operator who is charged with seeking optimal operating
efficiency, consistent with the equitable treatment of all pool
participants. A car contribution plan is to be devised, and rules,
procedures, and formulas are to be developed to govern: (1) either
the calculation and processing of allowances or the collection and
distribution of compensation; and (2) the apportionment of
maintenance and repair expenses.
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Interested persons are invited to comment on whether the Board may
approve the proposed agreement, under 49 U.S.C. 10706(a)(5)(A), and
whether approval will confer antitrust immunity on the agreement's
pooling aspects, or whether approval can or should be granted under 49
U.S.C. 11342 to make available the antitrust immunity conferred by 49
U.S.C. 11341(a). Also, comments are invited on the proposed agreement,
as revised, with special attention to the following issues and how they
may be affected if the proposed freight car pool is, or is not,
immunized from the antitrust laws:
(1) How will the agreement further the rail transportation policy
of 49 U.S.C. 10101a?
(2) Are there any anticompetitive effects that may result from the
agreement?
(3) Are any additional safeguards necessary to ensure that the
agreement will not have undesirable anticompetitive effects or suppress
competition among pool members?
(4) What other matters should the Board consider in determining
whether to approve the agreement?
Copies of the original and revised applications under 49 U.S.C.
10706(a)(5)(A) may be obtained free of charge by contacting applicants'
representatives. In the alternative, the applications may be inspected
at the offices of the Surface Transportation Board, Room 1221, during
normal business hours. [Assistance for the hearing impaired is
available through TDD service on (202) 927-5721.]
While it does not appear that this action will have a significant
effect on the quality of the human environment or conservation of
energy resources, comments on these issues are also invited.
A copy of this notice will be served on the: (1) Department of
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue, N.W.,
Washington, DC 20530; (2) Federal Trade Commission, Bureau of
Competition, 6th Street & Pennsylvania Avenue, N.W., Washington, DC
20580; and (3) Department of Transportation, 400 Seventh Street, S.W.,
Washington, DC 20590.
Authority: 49 U.S.C. 10706(a)(5)(A).
Decided: August 1, 1996.
By the Board, Chairman Morgan, Vice Chairman Simmons, and
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-20915 Filed 8-15-96; 8:45 am]
BILLING CODE 4915-00-P
