Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations 46217

Issued in Washington, DC, on August 22,

1997, under authority delegated in 49 CFR

Part 1.

Kelley S. Coyner,

Acting Administrator.

[FR Doc. 97–23083 Filed 8–29–97; 8:45 am]

BILLING CODE 4910–60–P

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.

ACTION: Final rules.

SUMMARY: The Surface Transportation

Board (Board) adopts rules providing a

means for the binding, voluntary

arbitration of certain disputes subject to

the statutory jurisdiction of the Board.

EFFECTIVE DATE: October 2, 1997.

FOR FURTHER INFORMATION CONTACT:

Ellen Hanson, (202) 565–1558. (TDD for

the hearing impaired: (202) 565–1695.)

SUPPLEMENTARY INFORMATION: The

Railroad-Shipper Transportation

Advisory Council (RSTAC)

recommended that the Board adopt

rules providing for informal dispute

resolution through arbitration. In a

notice of proposed rulemaking

published March 26, 1997 (62 FR

14385), we proposed rules along the

lines of those recommended by the

RSTAC. We have received comments on

the proposed rules from various

shipper, carrier, and other interests,

offering suggestions to enhance, modify,

or clarify the proposed rules. We have

incorporated many, but not all, of their

suggestions.

This arbitration is designed 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

that is subject to the statutory

jurisdiction of the Board. We believe

that this arbitration alternative will save

costs and reduce litigation burdens on

parties to disputes that might otherwise

have to be brought to the Board for

formal resolution. It will enable the

parties to resolve those disputes

themselves informally, with only

limited Board involvement.

Additional information is contained

in the Board’s decision served on

September 2, 1997. To purchase a copy

of the decision, write to, call, or pick up

in person from DC New & Data, Inc.,

Room 210, 1925 K St. NW., Washington

DC 20423, phone (202) 289–4357.

List of Subjects

49 CFR Part 1002

Administrative practice and

procedure, User fees.

49 CFR Part 1008

Administrative practice and

procedure, Railroads.

Decided: August 25, 1997.

By the Board, Chairman Morgan and Vice

Chairman Owen.

Vernon A. Williams,

Secretary.

For the reasons set forth in the

preamble, and under the authority of 49

U.S.C. 721(a), title 49, chapter X, of the

Code of Federal Regulations is amended

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 is amended by

adding a new paragraph (f)(87) to read

as follows:

§ 1002.2 Filing fees.

* * * * *

(f) * * *

(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), Unless

Declining to Submit to Any Arbitration ........................................... $75

(iii) Third Party Complaint ............. $75

(iv) Third Party Answer (per defendant), Unless Declining to

Submit to Any Arbitration .......... $75

(v) Appeals of Arbitration Decisions or Petitions to Modify or

Vacate an Arbitration Award ...... $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).

§ 1108.1 Definitions.

(a) Arbitrator means an arbitrator

appointed pursuant to these provisions.

(b) ICC means the Interstate

Commerce Commission.

(c) Interstate Commerce Act means

the Interstate Commerce Act as

amended from time to time, including

the amendments made by the ICC

Termination Act of 1995.

(d) RSTAC means the Rail-Shipper

Transportation Advisory Council

established pursuant to 49 U.S.C. 726.

(e) STB means the Surface

Transportation Board.

(f) Statutory jurisdiction means the

jurisdiction conferred on the STB by the

Interstate Commerce Act, including

jurisdiction over rail transportation or

services that have been exempted from

regulation.

§ 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 obtain the grant, denial, stay

or revocation of any license,

authorization (e.g., construction,

abandonment, purchase, trackage rights,

merger, pooling) or exemption, or to

prescribe for the future any conduct,

rules, or results of general, industrywide applicability. Nor are they

available for arbitration that is

conducted pursuant to labor protective

conditions. 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.

(c) 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.

(d) On January 1, 1996, the STB

replaced the ICC. For purposes of these

procedures, it is immaterial whether an

exemption from regulation was granted

by the ICC or the STB.
46218 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations

§ 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 § 1108.2 hereof, may be processed

pursuant to the provisions of this Part

1108, if all necessary parties voluntarily

subject themselves to arbitration under

these provisions after 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 procedural rules or

regulations adopted by the STB for the

resolution of similar disputes, except as

specifically provided in this part 1108;

provided, however, that the Arbitrator

will be guided by the Interstate

Commerce Act and by STB and ICC

precedent.

§ 1108.4. Relief.

(a) Subject to specification in the

complaint, as provided in § 1108.7

herein, an Arbitrator may grant the

following types of relief:

(1) Monetary damages, to the extent

available under the Interstate Commerce

Act, with interest at a reasonable rate to

be specified by the Arbitrator.

(2) Specific performance of statutory

obligations (including the prescription

of reasonable rates), 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 on materially

changed circumstances or the criteria

for vacation of an award contained in 9

U.S.C. 10.

(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.

§ 1108.5 Fees and costs.

(a) Fees will be utilized to defray the

costs of the STB in administering this

alternate dispute resolution program in

accordance with 31 U.S.C. 9701. The

fees for filing a complaint, answer, third

party complaint, third party answer,

appeals of arbitration decisions, and

petitions to modify or vacate an

arbitration award will be as set forth in

49 CFR 1002.2(f)(87). All fees are nonrefundable except as specifically

provided and are due with the paying

party’s first filing in any proceeding.

(b) The parties may agree among

themselves who will bear the expenses

of arbitration, including compensation

of the arbitrator. Absent an agreement,

each party will bear its own expenses,

including, without limitation, fees of

experts or counsel. Absent an

agreement, 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, absent an agreement

otherwise.

§ 1108.6 Arbitrators.

(a) Arbitration shall be conducted by

an arbitrator (or panel of arbitrators)

selected, as provided herein, from a

roster of persons (other than active

government officials) experienced in rail

transportation or economic issues

similar to those capable of arising before

the STB. The initial roster of arbitrators

shall be established by the RSTAC in

consultation with the Chairman of the

STB, and shall contain not fewer than

21 names. The roster shall thereafter be

maintained by the Chairman of the STB,

who may augment the roster at any time

to include other eligible arbitrators and

may remove from the roster any

arbitrators who are no longer available.

The initial roster shall be published;

thereafter the roster shall be available to

the public, upon request, at all times.

For each arbitrator on the roster, the

roster shall disclose the level of the fee

(or fee range) charged by that arbitrator.

(b) The parties to a dispute may select

an arbitrator (or panel of arbitrators) and

submit the name(s) (and, if not already

on the roster of arbitrators, the

qualifications) of the agreed-upon

person(s) in writing to the Chairman of

the STB. Any person(s) so designated

who is not already on the roster, if

found to be qualified, will be added to

the roster and may be used as the

arbitrator(s) for that dispute.

(c) If the parties cannot agree upon an

arbitrator (or panel of arbitrators), then

each party shall, using the roster of

arbitrators, strike through the names of

any arbitrators to whom they object,

number the remaining arbitrators on the

list in order of preference, and submit

its marked roster to the Chairman of the

STB. The Chairman will then designate

the arbitrator (or panel of arbitrators, if

mutually preferred by the parties) in

order of the highest combined ranking

of all of the parties to the arbitration.

(d) The process of selecting an

Arbitrator pursuant to this section shall

be conducted confidentially following

the completion of the Arbitration

Commencement Procedures set forth in

§ 1108.7 hereof.

(e) If, at any time during the

arbitration process, a selected Arbitrator

becomes incapacitated, unwilling or

unable to fulfill his/her duties, or if both

parties agree that the arbitrator should

be replaced, a replacement Arbitrator

will be promptly selected under the

process set forth in paragraphs (b) and

(c) of this section.

§ 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 (on a

responsible official at his or her usual

place of business), and an original and

two copies on the STB, accompanied by

the filing fee prescribed under

§ 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 this part 1108.

(c) Any defendant willing to enter

into arbitration under these rules must,

within 30 days of the date of a
Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations 46219

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 patent 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. 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 § 1108.11(c), for the

purpose of subjecting the arbitration

award to the provisions of 9 U.S.C. 9

(court enforcement of an arbitration

award), and 9 U.S.C. 10 (vacation of an

arbitration award by a court on certain

limited grounds).

§ 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, and

the arbitrator’s decision will be issued

within 30 days from the close of the

record. The parties may agree to vary

these timetables, however, subject to the

approval of the arbitrator. Matters

handled through arbitration under these

rules are exempted from any applicable

statutory time limits, pursuant to 49

U.S.C. 10502.

(2) Discovery will be available only

upon the agreement of the parties.

(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 or by agreement of the parties

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 complainant will

then be given an opportunity to submit

a reply. 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. Page 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.

Discovery should be sufficient to enable

parties to meet these standards.

(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 considered in

the decision, but the Arbitrator will

make every effort to omit confidential

information from his/her written

decision.

§ 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. At the same time, the arbitrator

shall notify the STB, in writing, that a

decision has been rendered.

(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.

§ 1108.10 Precedent.

Decisions rendered by arbitrators

pursuant to these procedures shall have

no precedential value.

§ 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 on

the STB, together with a copy of the

arbitration decision. Replies to such

appeals may be filed within 20 days of

the filing of the appeal with the Board.
46220 Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / Rules and Regulations

An appeal or a reply under this

paragraph shall not exceed 20 pages in

length. The parties shall furnish to the

STB an original and 10 copies of

appeals and replies filed pursuant to

this section. The filing fee for an 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 this § 1108.11,

automatically will stay an arbitration

decision pending disposition of the

appeal. The STB will decide any such

appeal within 50 days after the appeal

is filed. Such decision by the STB shall

be served in accordance with normal

STB service procedures.

(c) The STB will review, and 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

Interstate Commerce Act.

(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, except

that an STB decision vacating an

arbitration award is reviewable under

the Hobbs Act, 28 U.S.C. 2321, 2342.

§ 1108.12 Additional matters.

Where an arbitration demand is filed

by one or more complainants against

one or more defendants, the

complainants 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. 97–23056 Filed 8–29–97; 8:45 am]

BILLING CODE 4915–00–P