In a 26-page decision issued June 9, a federal appeals court rejected disparate petitions from shipper organizations, including the NGFA, and railroads, letting stand the federal Surface Transportation Board’s current rules that apply to small rail rate cases.
The disappointing decision, issued by the U.S. Court of Appeals for the District of Columbia Circuit, means the agency's procedures governing rate-relief claims of less than $5 million will remain in place. The court ruled that the STB had acted within its statutory authority, and was neither arbitrary nor capricious in setting out its rules.
The shippers' arguments received the vast majority of the court's attention, particularly arguments raised regarding the inadequacy of the relief limits provided by the STB in its small rail rate case proceedings. The appellate court conceded that shipper groups had brought "an intriguing but ultimately unavailing challenge." The court ultimately ruled that the agency sufficiently had addressed the shippers' arguments. The court admitted that the STB's analysis was "qualitative" rather than "quantitative," but indicated that such a "qualitative" analysis was appropriate given its need to make a "judgment call" on a matter of "policy." The appellate court then discussed in some detail the shippers' arguments concerning the need to forego a significant portion of relief in a range of cases under the STB's chosen relief caps, but again deferred to the agency given what the court called the "ambiguity inherent in this statutory language," which requires the court to "uphold the Board's interpretation unless it is unreasonable." The appellate court also deferred to the agency when rejecting the shippers' challenge to the STB's simplified stand-alone-cost procedures and the agency's failure to test those procedures.
Similarly, the appellate court rejected all of the railroads' challenges to the STB's rules.