[Federal Register Volume 62, Number 58 (Wednesday, March 26, 1997)]
[Proposed Rules]
[Pages 14385-14388]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7663]
[[Page 14385]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Parts 1002 and 1108
[STB Ex Parte No. 560]
Arbitration of Certain Disputes Subject to the Statutory
Jurisdiction of the Surface Transportation Board
AGENCY: Surface Transportation Board (Board).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In this proceeding, the Board is seeking public comments on
proposed rules recommended by the Railroad-Shipper Transportation
Advisory Council (RSTAC) that would provide a means for the binding,
voluntary arbitration of certain disputes subject to the statutory
jurisdiction of the Board.
DATES: Written comments on the proposed rules must be filed with the
Board no later than April 25, 1997.
ADDRESSES: An original and 10 copies of all documents must refer to STB
Ex Parte No. 560 and must be sent to the Office of the Secretary, Case
Control Unit, ATTN: STB Ex Parte No. 560, Surface Transportation Board,
1925 K Street, NW., Washington, DC 20423-0001, and serve a copy on each
member of the Railroad-Shipper Transportation Advisory Council, as
follows:
Mr. Randy G. Craver, Manager of Transportation, Coastal Coal Sales,
Inc., P.O. Box 1871, Roanoke, VA 24008
Mr. Jarvis Haugeberg, General Manager, BTR Farmers Co-Op, P.O. Box 158,
Churches Ferry, ND 58325
Mr. Jim Johnson, Traffic Manager, Empire Wholesale Lumber Co., P.O. Box
249, 162 Gault Street, Akron, OH 44309
Mr. Kevin D. Kaufman, Vice President, Louis Dreyfus Corporation, 10
West Port Road, Wilton, CT 06897-0810
Mr. Ronald A. Lane, Vice President and General Counsel, Illinois
Central Corporation, 455 N. Cityfront Plaza, Chicago, IL 60611
Mr. Anthony Lomangino, President, Waste Management of New York, 123
Varic Avenue, Brooklyn, NY 11237
Ms. Kimberly Madigan, Director, Emons Transportation Group, 122 C
Street, NW., Suite 850, Washington, DC 20001
Mr. John H. Marino, President and COO, RailAmerica, Inc., 1800 Diagonal
Road, Suite 150, Alexandria, VA 22314
Mr. James W. McClellan, Vice President-Strategic Planning, Norfolk
Southern Corporation, 3 Commercial Avenue, Norfolk, VA 23510
Mr. J.C. ``Pete'' McIntyre, President and CEO, Dakota, Minnesota &
Eastern Railroad Corporation, P.O. Box 178, Brookings Rd., SD 57066
Mr. Fred Simpson, Executive Vice President, Montana Rail Link, Inc.,
101 International Way, P.O. Box 8779, Missoula, MT 59807
Mr. Gregory T. Swienton, Senior Vice President, Coal and Agriculture
Commodities Business Unit, Burlington Northern Santa Fe Corporation,
Fort Worth, TX 76161-0051
Mr. Edwin E. Vigneaux, Manager, Rail Transportation, Reagent Chemical &
Research, Inc., 1300 Post Oak Blvd., Suite 680, Houston, TX 77056
Ms. Sheryl W. Washington, Vice President, United Parcel Service, 316
Pennsylvania Avenue, SE., Suite 300, Washington, DC 20003
Mr. Edward Wytkind, Executive Director of the Transportation Trades
Department, AFL-CIO (TTD), 400 North Capitol Street, NW., Suite 861,
Washington, DC 20001
FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1613. [TDD
for the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION: On February 19, 1997, the RSTAC, which was
established pursuant to section 726 of the ICC Termination Act of 1995,
Public Law 104-88, 109 Stat. 803, to advise the Chairman of the Surface
Transportation Board, the Secretary of Transportation, and
Congressional oversight committees with respect to rail transportation
policy issues of particular importance to small shippers and small
railroads,1 recommended that the Board adopt rules providing for
informal dispute resolution through arbitration. We agree with this
recommendation and propose to adopt formal rules along the lines of
those recommended to us by the RSTAC.
---------------------------------------------------------------------------
\1\ See Notice of Establishment of Railroad-Shipper
Transportation Advisory Council and Request for Recommendation of
Candidates for Membership, STB Ex Parte No. 526 (STB served and
published Jan. 29, 1996) (61 FR 2866).
---------------------------------------------------------------------------
The proposed rules will provide an alternative for parties to use
binding, voluntary arbitration to resolve certain disputes subject to
the statutory jurisdiction of the Board. These procedures shall not be
available to grant any license (e.g., construction, abandonment,
purchase, trackage rights, merger, pooling) or exemption or to
prescribe for the future any conduct, rules, or results of general,
industry-wide applicability. These procedures are intended for the
resolution of specific disputes between specific parties involving the
payment of money or involving rates or practices related to rail
transportation or service subject to the statutory jurisdiction of the
Board.
We believe that the procedure will increase cost-savings and
decrease litigation burdens on the parties. We are proposing these
rules with the expectation that their adoption would enable parties to
disputes that might otherwise have to be brought to the Board for
formal resolution instead to resolve the disputes themselves informally
with limited Board involvement.
Request for Comments
We invite comments on all aspects of the proposed regulations. We
are proposing nominal filing fees of $75 for each complaint and answer
filed under the proposed arbitration procedure and a filing fee of $150
for appeals to the Board of arbitration decisions. The proposed filing
fee for appeals would be the same as the fee for labor arbitration
appeals, appeals to Board decisions, and petitions to revoke. See 49
CFR 1002.2(f)(60) and (61). We encourage commenters to submit comments
as computer data on a 3.5-inch floppy diskette formatted for
WordPerfect 5.1, or formatted so that it can be readily converted into
WordPerfect 5.1. Any such diskette submission (one diskette should be
sufficient) should be in addition to the written submission (an
original and 10 copies).
Small Entities
The Board preliminarily concludes that these rules, if adopted,
would not have a significant economic effect on a substantial number of
small entities. Nonetheless, the Board seeks comment on whether there
would be effects on small entities that should be considered. If
comments provide information that there would be significant effects on
small entities, the Board will prepare a regulatory flexibility
analysis at the final rule stage.
Environment
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
List of Subjects
49 CFR Part 1002
Administrative practice and procedure, Common carriers, Freedom of
information, User fees.
49 CFR Part 1108
Arbitration, Dispute resolution.
Decided: March 12, 1997.
[[Page 14386]]
By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
For the reasons set forth in the preamble, the Board proposes to
amend part 1002 and to add a new part 1108 to title 49, chapter X, of
the Code of Federal Regulations to read as follows:
PART 1002--FEES
1. The authority citation for part 1002 continues to read as
follows:
Authority: 5 U.S.C. 552(a)(4)(A) and 553; 31 U.S.C. 9701; and 49
U.S.C. 721(a).
2. Section 1002.2(f) is amended by adding a new paragraph (87) to
read as follows:
Sec. 1002.2 Filing fees.
* * * * *
(f) * * *
* * * * *
Part VI * * *
(87) Arbitration of Certain Disputes Subject to the Statutory
Jurisdiction of the Surface Transportation Board under 49 CFR part
1108:
(i) Complaint................................................... $75
(ii) Answer (per defendant)..................................... 75
(iii) Third Party Complaint..................................... 75
(iv) Third Party Answer (per defendant)......................... 75
(v) Appeals of Arbitration Decisions............................ 150
* * * * *
3. A new part 1108 is added to read as follows:
PART 1108--ARBITRATION OF CERTAIN DISPUTES SUBJECT TO THE STATUTORY
JURISDICTION OF THE SURFACE TRANSPORTATION BOARD
Sec.
1108.1 Definitions.
1108.2 Statement of purpose, organization, and jurisdiction.
1108.3 Matters subject to arbitration.
1108.4 Relief.
1108.5 Fees and costs.
1108.6 Arbitrators.
1108.7 Arbitration commencement procedures.
1108.8 Arbitration procedures.
1108.9 Decisions.
1108.10 Precedent.
1108.11 Enforcement and appeals.
1108.12 Additional matters.
Authority: 49 U.S.C. 721(a).
Sec. 1108.1 Definitions.
(a) Arbitrator means an arbitrator appointed pursuant to these
provisions.
(b) ICA means the Interstate Commerce Act administered by the ICC.
(c) ICC means the Interstate Commerce Commission.
(d) ICCTA means the ICC Termination Act of 1995, Pub. L. No. 104-
88.
(e) RSTAC means the Rail-Shipper Transportation Advisory Council
established by the ICCTA.
(f) STB means the Surface Transportation Board.
(g) Statutory jurisdiction means the jurisdiction conferred on the
STB by the ICCTA, as amended from time to time, including jurisdiction
over rail transportation or services that have been exempted from
active regulation.
Sec. 1108.2 Statement of purpose, organization, and jurisdiction.
(a) These provisions are intended to provide a means for the
binding, voluntary arbitration of certain disputes subject to the
statutory jurisdiction of the STB, either between two or more railroads
subject to the jurisdiction of the STB or between any such railroad and
any other person.
(b) These procedures shall not be available to grant any license
(e.g., construction, abandonment, purchase, trackage rights, merger,
pooling) or exemption or to prescribe for the future any conduct,
rules, or results of general, industry-wide applicability.
(c) These procedures are intended for the resolution of specific
disputes between specific parties involving the payment of money or
involving rates or practices related to rail transportation or service
subject to the statutory jurisdiction of the STB.
(d) The alternative means of dispute resolution provided for herein
are established pursuant to the authority of the STB to take such
actions as are necessary and appropriate to fulfill its jurisdictional
mandate and not pursuant to the Administrative Dispute Resolution Act,
5 U.S.C. 571, et seq.
(e) On January 1, 1996, the STB replaced the ICC and the ICCTA
replaced the ICA. For purposes of these procedures, it is immaterial
whether an exemption from active regulation was granted by the ICC or
the STB.
Sec. 1108.3 Matters subject to arbitration.
(a) Any controversy between two or more parties, subject to
resolution by the STB, and subject to the limitations in Sec. 1108.2,
may be processed pursuant to the provisions of part 1108, if all
necessary parties voluntarily subject themselves to arbitration under
these provisions after adequate notice as provided herein.
(b) Arbitration under these provisions is limited to matters over
which the STB has statutory jurisdiction and may include disputes
arising in connection with jurisdictional transportation, including
service being conducted pursuant to an exemption. An Arbitrator should
decline to accept, or to render a decision regarding, any dispute that
exceeds the STB's statutory jurisdiction. Such Arbitrator may resolve
any dispute properly before him/her in the manner and to the extent
provided herein, but only to the extent of and within the limits of the
STB's statutory jurisdiction. In so resolving any such dispute, the
Arbitrator will not be bound by any rules or regulations adopted by the
STB for the resolution of similar disputes, except as specifically
provided in part 1108.
Sec. 1108.4 Relief.
(a) Subject to specification in the complaint, as provided in
Sec. 1108.7, an Arbitrator may grant the following types of relief:
(1) Monetary damages, with interest at a reasonable rate to be
specified by the Arbitrator; and
(2) Specific performance of statutory obligations, but for a period
not to exceed 3 years from the effective date of the Arbitrator's
award.
(b) A party may petition an Arbitrator to modify or vacate an
arbitral award in effect that directs future specific performance,
based solely on materially changed factual circumstances.
(1) A petition to modify or vacate an award in effect should be
filed with the STB. The petition will be assigned to the Arbitrator
that rendered the award unless that Arbitrator is unavailable, in which
event the matter will be assigned to another Arbitrator.
(2) Any such award shall continue in effect pending disposition of
the request to modify or vacate. Any such request shall be handled as
expeditiously as practicable with due regard to providing an
opportunity for the presentation of the parties' views.
Sec. 1108.5 Fees and costs.
(a) Fees will be utilized to defray the costs of the STB in
administering this program in accordance with 31 U.S.C. 9701. The fees
for filing a complaint, answer, third party complaint, third party
answer, and appeals of arbitration decisions will be as set forth in 49
CFR 1002.2(f)(87). All fees are non-refundable except as specifically
provided and are due with the paying party's first filing in any
proceeding.
(b) Each party will bear its own expenses, including, without
limitation, fees of experts or counsel. The fees of the Arbitrator will
be paid by the party or parties losing an arbitration entirely. If no
party loses an arbitration entirely (as determined by the Arbitrator),
the parties shall share equally (or pro rata if more than two parties)
the fees and expenses, if any, of the Arbitrator. Any fees for
petitions to modify or vacate an
[[Page 14387]]
arbitration award, as provided in Sec. 1108.4(b), may be established by
the STB and will be assessed against the party filing such petition at
the time it is filed.
Sec. 1108.6 Arbitrators.
(a) Arbitration shall be conducted by a single arbitrator who shall
be selected, as provided herein, from a roster of active or retired
federal administrative law judges or other senior officials experienced
in rail transportation or economic issues similar to those capable of
arising before the STB. The roster of Arbitrators shall be established
by the RSTAC in consultation with the Chairman of the STB and shall
contain not fewer than 12 names. The RSTAC shall update the list of
Arbitrators annually. In the event that the RSTAC fails to maintain the
roster of Arbitrators, the STB shall do so.
(b) The Arbitrator shall be selected by the Chairman of the STB
from the roster established under paragraph (a) of this section on a
random basis, so far as is practicable.
(c) The process of selecting an Arbitrator pursuant to this
paragraph (c) shall be conducted confidentially following the
completion of the Arbitration Commencement Procedures set forth in
Sec. 1108.7. Each time the Chairman of the STB is called upon to select
an Arbitrator, the nomination promptly shall be transmitted in writing
to the parties. Upon receipt of such name, the parties shall have 7
calendar days to notify the Chairman of the STB whether the Arbitrator
so nominated is acceptable to that party. If any party finds an
Arbitrator to be unacceptable for the arbitration at hand, the Chairman
of the STB shall repeat the nomination process. No party may find more
than one Arbitrator to be unacceptable in any arbitration, except upon
a showing that an Arbitrator nominee is likely to have views highly
prejudicial to a party. The name of the Arbitrator finally agreed upon
by the Chairman of the STB and the parties shall not be made public
until this selection process is complete. Neither a party nor the
Chairman of the STB shall identify publicly any party that has found an
Arbitrator to be unacceptable.
(d) If, at any time during the arbitration process, a selected
Arbitrator becomes incapacitated or unable to fulfill his/her duties, a
replacement Arbitrator will be promptly selected under the process set
forth in paragraphs (b) and (c) of this section.
(e) If all parties to a dispute agree among themselves on the
selection of an Arbitrator from the roster, the parties shall submit in
writing to the Chairman of the STB the name of the Arbitrator agreed
to.
Sec. 1108.7 Arbitration commencement procedures.
(a) Each demand for arbitration shall be commenced with a written
complaint. Because arbitration under these procedures is both voluntary
and binding, the complaint must set forth in detail the nature of the
dispute, the statutory basis of STB jurisdiction, a clear, separate
statement of each issue as to which arbitration is sought, and the
specific relief sought. Each complaint shall contain a sworn, notarized
verification, by a responsible official of the complaining party, that
the factual allegations contained in the complaint are true and
accurate. Each complaint must contain a statement that the complainant
is willing to arbitrate pursuant to these arbitration rules and be
bound by the result thereof in accordance with those rules, and must
contain a demand that the defendants likewise agree to arbitrate and be
so bound.
(b) The complaining party shall serve, by overnight mail or hand
delivery, a signed and dated original of the complaint on each
defendant (through its legal representatives, if known, or on a
responsible official at his or her usual place of business) and on the
STB, accompanied by the filing fee prescribed under Sec. 1108.5(a) and
set forth in 49 CFR 1002.2(f)(87). Each complaint served on a defendant
shall be accompanied by a copy of part 1108.
(c) Any defendant willing to enter into arbitration under these
rules must, within 30 days of the date of a complaint, answer the
complaint in writing. The answer must contain a statement that the
defendant is willing to arbitrate each arbitration issue set forth in
the complaint or specify which such issues the defendant is willing to
arbitrate. If the answer contains an agreement to arbitrate some but
not all of the arbitration issues in the complaint, the complainant
will have 10 days from the date of the answer to advise the defendant
and the STB in writing whether the complainant is willing to arbitrate
on that basis. Upon the agreement of the parties to arbitrate, these
rules will be deemed incorporated by reference into the arbitration
agreement.
(d) The answer of a party willing to arbitrate shall also contain
that party's specific admissions or denials of each factual allegation
contained in the complaint, affirmative defenses, and any counterclaims
or set-offs which the defendant wishes to assert against the
complainant. The right of a defendant to advance any counterclaims or
set-offs, and the capacity of an Arbitrator to entertain and render an
award with respect thereto, is subject to the same jurisdictional
limits as govern the complaint.
(e) A defendant's answer must be served on the complainant, other
parties, and the STB in the same manner as the complaint.
(f) A defendant willing to enter into arbitration under these
procedures only if it is able to obtain cross-relief against another
defendant or a non-party may serve an answer containing an agreement to
arbitrate that is conditioned upon the willingness of any such third
party to enter into arbitration as a third party defendant.
Simultaneously with the service of any such conditional answer, the
defendant making such answer shall serve a complaint and demand for
arbitration on the party whose presence that defendant deems to be
essential, such complaint and demand to be drawn and served in the same
manner as provided in paragraphs (a) and (b) of this section. A
defendant receiving such a complaint and demand for arbitration and
that is willing to so arbitrate shall respond in the same manner as
provided in paragraphs (c), (d), and (e) of this section.
(g) Upon receipt of a complaint and demand for arbitration served
by a complainant on a defendant, or by a defendant on a third-party
defendant, the STB promptly will notify the parties serving and
receiving such documents of any deficiencies, jurisdictional or
otherwise, which the STB deems fatal to the processing of the complaint
and will suspend the timetable for processing the arbitration until
further notice. If the complainant is unwilling or unable to remedy
such deficiencies to the satisfaction of the STB within such time as
the STB may specify, the complaint shall be deemed to be withdrawn
without prejudice and one-half of the complaint filing fee shall be
refunded to the complainant. Upon satisfaction that two or more parties
have unconditionally agreed to arbitrate under these procedures, the
STB will so notify the parties and commence procedures for the
selection of an Arbitrator.
(h) An agreement to arbitrate pursuant to these rules will be
deemed a contract to arbitrate, subject to limited review by the STB
pursuant to Sec. 1108.11(c), for the purpose of subjecting the
arbitration award to the provisions of 9 U.S.C. 9, allowing a judgment
of a court to be entered upon an arbitration award, and 9 U.S.C. 10,
allowing a court to vacate
[[Page 14388]]
an arbitration award on certain limited grounds.
Sec. 1108.8 Arbitration procedures.
(a) The Arbitrator will establish rules, including timetables, for
each arbitration proceeding.
(1) The evidentiary process will be completed within 90 days from
the start date established by the Arbitrator. The Arbitrator's decision
will be issued within 30 days from the close of the record.
(2) Discovery will be permitted only with the agreement of the
parties or as directed by the Arbitrator.
(b) Evidence will be submitted under oath. Evidence may be
submitted in writing or orally, at the direction of the Arbitrator.
Hearings for the purpose of cross-examining witnesses will be permitted
at the sound discretion of the Arbitrator. The Arbitrator, at his/her
discretion, may require additional evidence.
(c) Subject to alteration by the Arbitrator in individual
proceedings, as a general rule where evidence is submitted in written
form, the complaining party will proceed first, and the defendant will
proceed next. The parties will then be given an opportunity to file
simultaneous replies. At the discretion of the Arbitrator, argument may
be submitted with each evidentiary filing or in the form of a brief
after the submission of all evidence. Pagination limits will be set by
each Arbitrator for all written submissions of other than an
evidentiary nature.
(d) Any written document, such as a common carrier rate schedule,
upon which a party relies should be submitted as part of that party's
proof, in whole or in relevant part. The Arbitrator will not be bound
by formal rules of evidence, but will avoid basing a decision entirely
or largely on unreliable proof.
(e) Where proof submitted to an Arbitrator addresses railroad
costs, such proof should be prepared in accordance with the standards
employed by the STB in ascertaining the costs at issue.
(f) Where the Arbitrator is advised that any party to an
arbitration proceeding wishes to keep matters relating to the
arbitration confidential, the Arbitrator shall take such measures as
are reasonably necessary to ensure that such matters are treated
confidentially by the parties or their representatives and are not
disclosed by the Arbitrator to non-authorized persons. If the
Arbitrator regards any confidential submission as being essential to
his/her written decision, such information may be included in the
decision, but the Arbitrator will make every effort to omit
confidential information from his/her written decision.
Sec. 1108.9 Decisions.
(a) Decisions of the Arbitrator shall be in writing and shall
contain findings of fact and conclusions. All such Decisions shall be
served by the Arbitrator by hand delivery or overnight mail on the
parties and the STB.
(b) By agreeing to arbitrate pursuant to these procedures, each
party agrees that the decision and award of the Arbitrator shall be
binding and judicially enforceable in law and equity in any court of
appropriate jurisdiction, subject to a limited right of appeal to the
STB as provided below.
Sec. 1108.10 Precedent.
Arbitration decisions rendered pursuant to these procedures shall
have no precedential value.
Sec. 1108.11 Enforcement and appeals.
(a) An arbitration decision rendered pursuant to these procedures
may be appealed to the STB within 20 days of service of such decision.
Any such appeal shall be served by hand delivery or overnight mail on
the parties and the STB. Replies to such appeals may be filed within 20
days of service of the appeal. An appeal or a reply under this
paragraph shall not exceed 20 pages in length. The filing fee for such
appeal will be as set forth in 49 CFR 1002.2(f)(87).
(b) The filing of an appeal, as allowed in paragraph (a) of
Sec. 1108.11, automatically will stay an arbitration decision pending
disposition of the appeal. The STB will decide any such appeal within
30 days of the date on which the reply is due. Such decision by the STB
shall be served in accordance with normal STB service procedures.
(c) The STB will only review cases involving issues of general
transportation importance. The STB may vacate or amend an arbitration
award, in whole or in part, only on the grounds that such award:
(1) Exceeds the STB's statutory jurisdiction; or
(2) Does not take its essence from the ICCTA.
(d) Effective arbitration decisions rendered pursuant to these
procedures, whether or not appealed to the STB, may only be enforced in
accordance with 9 U.S.C. 9 and vacated by a court in accordance with 9
U.S.C. 10.
Sec. 1108.12 Additional matters.
Where an arbitration demand is filed by one or more plaintiffs
against one or more defendants, the plaintiffs as a group and the
defendants as a group shall be entitled to exercise those rights, with
respect to the selection of arbitrators, as are conferred on individual
arbitration parties.
[FR Doc. 97-7663 Filed 3-25-97; 8:45 am]
BILLING CODE 4915-00-P
