[Federal Register Volume 63, Number 11 (Friday, January 16, 1998)]
[Rules and Regulations]
[Pages 2638-2639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1066]



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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1111

[STB Ex Parte No. 527 (Sub-No. 1)]


Expedited Procedures for Processing Simplified Rail Rate 
Reasonableness Proceedings

AGENCY: Surface Transportation Board, DOT.

ACTION: Final rule.

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SUMMARY: The Board amends its complaint and investigation regulations 
at 49 CFR part 1111 to reflect the adoption of Simplified Rate 
Guidelines.<SUP>1</SUP>

    \1\ Rate Guidelines--Non-Coal Proceedings, Ex Parte No. 347 
(Sub-No. 2) (STB served Dec. 31, 1996), __ S.T.B. __ (1996), pet. 
for judicial review pending sub nom. Association of Am. Railroads v. 
Surface Transp. Bd., No. 97-1020 (D.C. Cir. filed Jan. 10, 1997).

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EFFECTIVE DATE: February 17, 1998.

FOR FURTHER INFORMATION CONTACT: Thomas J. Stilling, (202) 565-1567. 
(TDD for the hearing impaired: (202) 565-1695.)

SUPPLEMENTARY INFORMATION: In a Notice of Proposed Rulemaking (NPR) 
served September 24, 1997, and published in the Federal Register on 
September 26, 1997 (62 FR 50550), we proposed to include in our 
regulations a list of the information that a complainant should supply 
when seeking to challenge the reasonableness of a rail rate using the 
Simplified Rate Guidelines. We also proposed to determine within 50 
days of the filing of a complaint whether the Simplified Rate 
Guidelines could be used in a particular case. We indicated, however, 
that we were not inclined at this time to adopt a general procedural 
schedule for processing rate complaints under the Simplified Rate 
Guidelines until we gained more experience using those guidelines. The 
Association of American Railroads (AAR) and the National Industrial 
Transportation League (NITL) filed comments in response to the NPR.

Evidentiary Factors

    Both AAR and NITL support the proposal to list in our regulations 
the nine evidentiary factors that a complaint seeking to use the 
Simplified Rate Guidelines should address.<SUP>2</SUP> AAR suggests 
that the regulations also explicitly require a complainant to provide 
the assumptions, calculations and workpapers on which the information 
on factors (6) through (9) is based.<SUP>3</SUP>
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    \2\ The evidentiary factors are set forth in Simplified Rate 
Guidelines, slip op. at 37-38.
    \3\ Factors (6) through (9) are:
    (6) The feasibility and anticipated cost of preparing a stand-
alone cost presentation in the case.
    (7) An estimate of the other costs to be incurred in pursuing 
the rate complaint, including preparing necessary jurisdictional 
threshold and market dominance evidence.
    (8) The relief sought, including all reparations as well as the 
level and duration of any rate prescription.
    (9) The present value of the relief sought.
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    In our proposal, we assumed that a complainant would provide 
sufficient support for its responses to the evidentiary factors. 
Without adequate support, it would be difficult for us to determine 
whether use of the simplified guidelines should be permitted in a 
particular case. To ensure that adequate information is supplied to 
enable us quickly to decide the appropriateness of using the simplified 
guidelines, we will add a tenth factor requiring that ``the 
assumptions, calculations and any documentation necessary to support 
the responses to the above listed factors'' also be provided.

Use of Simplified Procedures

    In Simplified Rate Guidelines, slip op. at 38, we noted that a 
decision as to whether to apply the simplified guidelines or the more 
sophisticated constrained market pricing procedures (specifically the 
stand-alone cost test) for evaluating the reasonableness of a 
challenged rate needs to be determined at the outset of a 
case.<SUP>4</SUP> We also suggested that a reasonable time frame for 
making such a determination appeared to be within 45 days after the 
filing of the complaint. In its original comments responding to the 
Advanced Notice of Proposed Rulemaking (ANPR) in this proceeding, AAR 
complained that a 45-day time frame would be too tight, as it would 
provide a defendant railroad only two weeks to respond to a 
complainant's request to use the simplified guidelines. To afford the 
railroad more time to prepare its response and to allow that response 
to be filed together with the answer to the rate complaint, in the NPR 
we proposed a 50-day period instead. NITL asserts that the initial 45-
day schedule is sufficient and that the additional five days are 
unnecessary.
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    \4\ Constrained market pricing, including the stand-alone cost 
test, was adopted in Coal Rate Guidelines--Nationwide, 1 I.C.C.2d 
520 (1985), aff'd sub nom. Consolidated Rail Corp. v. United States, 
812 F.2d 1444 (3d Cir. 1987).
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    We adopt the 50-day schedule proposed in the NPR. The additional 
five days will not unduly prolong the process. As indicated in the NPR, 
it should also alleviate some administrative burden by allowing a 
railroad to simultaneously answer the complaint and respond to the 
request for using the simplified guidelines, rather than requiring the 
filing of separate pleadings 5 days apart.

Procedural Schedule

    NITL expresses concern that, without a general procedural schedule, 
the processing of cases will be unduly delayed. NITL suggests that 
cases processed under the simplified guidelines be handled under the 
basic structure of the procedures used to process stand-alone cost 
cases.
    We appreciate NITL's concern that these cases be expedited, but we 
believe that expedition can best be accomplished, at least at the 
outset, on a case-by-case basis. Absent experience processing cases 
under the Simplified Rate Guidelines, we cannot practically establish a 
general schedule to govern the filing of evidence for all cases. To 
facilitate the prompt establishment of appropriate procedural schedules 
in individual cases, the parties are expected to discuss, and if 
possible agree on, a procedural schedule at the conference of the 
parties that is to be convened no later than 12 days after the 
defendant files an answer to the complaint.<SUP>5</SUP> Under the 
regulations we are adopting, the parties are to file a report on the 
issues discussed at the conference within 19 days of the filing of an 
answer, and this report should include a proposed procedural schedule. 
Following receipt of this report, we will move quickly to establish the 
procedural schedule for the filing of evidence.<SUP>6</SUP>
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    \5\ Both AAR and NITL support the NPR proposal concerning a 
conference of the parties.
    \6\ 49 U.S.C. 10704(c)(2) requires us to decide the rate 
reasonableness issue within months after the close of the 
administrative record.
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Waybill Access

    In response to the ANPR, NITL suggested that our Rules of Practice 
governing the filing of a rate complaint cross reference the 
regulations at 49 CFR 1244.8 concerning access to the Waybill Sample. 
In its comments on the NPR, NITL repeated its cross-referencing 
suggestion. In light of NITL's position that a cross reference may 
``avoid confusion that may create delays and subsequent difficulties in 
meeting the procedural schedule,'' we will include a new paragraph (d) 
in part 1111.1 referencing our regulation regarding access to the 
Waybill Sample.
    The Board certifies that these rules will not have a significant 
economic effect on a substantial number of small entities. The rules 
should result in the

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more expeditious processing of rail complaints using the simplified 
procedures.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects in 49 CFR Part 1111

    Administrative practice and procedure, Investigations.

    Decided: January 7, 1998.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.

    For the reasons set forth in the preamble, title 49 chapter X, Part 
1111 of the Code of Federal Regulations is amended as follows:

PART 1111--COMPLAINT AND INVESTIGATION PROCEDURES

    1. The authority citation for part 1111 is revised to read as 
follows:

    Authority: 49 U.S.C. 721, 10704, and 11701.

    2. Section 1111.1 is amended by revising the last two sentences of 
paragraph (a), adding paragraphs (a)(1) through (a)(10), and adding new 
paragraph (d) to read as follows:


Sec. 1111.1  Content of formal complaints; joinder.

    (a) * * * In a complaint challenging the reasonableness of a rail 
rate, the complainant should indicate whether, in its view, the 
reasonableness of the rate should be examined using constrained market 
pricing or using the simplified standards adopted pursuant to 49 U.S.C. 
10701(d)(3). If the complainant seeks to use the simplified standards, 
it should support this request by submitting, at a minimum, the 
following information:
    (1) A general history of the traffic at issue, including how the 
traffic has moved in the past, how it currently moves, and how it can 
and will be moved in the future. This information should address not 
only the physical movement of the traffic, but the type and level of 
rates actually used. It should include all carriers (rail and nonrail) 
that have participated in the transportation of this traffic or could 
do so.
    (2) The specific commodity description(s) for the traffic at issue, 
the shipping characteristics and requirements of the traffic, and the 
type of railroad cars required or used for the traffic.
    (3) All origins, destinations, and origin-destination (O-D) pairs 
involved in the complaint, by commodity type.
    (4) The amount of traffic involved (by commodity type), including 
total annual carloadings, average tons per car, number of carloads per 
shipment, and number of carloads per week or month.
    (5) Total or average revenue per carload paid to the defendant 
railroad(s), by commodity type.
    (6) The feasibility and anticipated cost of preparing a stand-alone 
cost presentation in the case.
    (7) An estimate of the other costs to be incurred in pursuing the 
rate complaint, including preparing necessary jurisdictional threshold 
and market dominance evidence.
    (8) The relief sought, including all reparations as well as the 
level and duration of any rate prescription.
    (9) The present value of the relief sought.
    (10) The assumptions, calculations and any documentation necessary 
to support the responses to the above listed factors.
* * * * *
    (d) Request for access to waybill data. Parties needing access to 
the Waybill Sample to prepare their case should follow the procedures 
set forth at 49 CFR 1244.8.
    3. Section 1111.8 is amended by removing the phrase ``section 
1111.9(b)'' and adding the phrase ``Sec. 1111.10(b)'' in its place.
    4. Section 1111.9 is redesignated as section 1111.10 and a new 
section 1111.9 is added to read as follows:


Sec. 1111.9  Procedural schedule to determine whether to use simplified 
procedures.

    Absent a specific order by the Board, the following procedural 
schedule will apply in determining whether to grant a request under 
Sec. 1111.1(a) to use the simplified procedures (with the remainder of 
the procedural schedule to be determined on a case-by-case basis):

Day 0--Complaint filed, discovery period begins.
Day 20--Defendant's answer to complaint and opposition to use of 
simplified procedures due.
Day 30--Complainant's response to use of simplified procedures due.
Day 50--Board's determination of whether simplified procedures should 
be used.

    5. In newly designated Sec. 1111.10, paragraph (a) is revised to 
read as follows:


Sec. 1111.10  Meeting to discuss procedural matters.

    (a) Generally. In all complaint proceedings, other than those 
challenging the reasonableness of a rail rate based on stand-alone 
cost, the parties shall meet, or discuss by telephone, discovery and 
procedural matters within 12 days after an answer to a complaint is 
filed. Within 19 days after an answer to a complaint is filed, the 
parties, either jointly or separately, shall file a report with the 
Board setting forth a proposed procedural schedule to govern future 
activities and deadlines in the case.
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[FR Doc. 98-1066 Filed 1-15-98; 8:45 am]
BILLING CODE 4915-00-P