[Congressional Record Volume 152, Number 87 (Thursday, June 29, 2006)]
[Senate]
[Pages S6794-S6796]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KOHL (for himself and Mr. Feingold):
  S. 3612. A bill to amend the Federal antitrust laws to provide 
expanded coverage and to eliminate exemptions from such laws that are 
contrary to the public interest with respect to railroads; to the 
Committee on the Judiciary.
  Mr. KOHL. Mr. President, I rise to introduce the Railroad Antitrust 
Enforcement Act of 2006. This legislation will eliminate obsolete 
antitrust exemptions that protect freight railroads from competition. 
The unneeded exemptions stand in stark contrast to the historical basis 
for antitrust law and once again allow railroads to abuse their 
dominant market power and raise rates for those who rely on them.
  Antitrust law was born out of these same circumstances. Rail barons 
abused the power they had over shippers--especially farmers. Any 
American history student can describe the anti-consumer policies that 
led to the birth of the Sherman Act and later the Clayton Act--the 
building blocks of today's antitrust law.
  The historical ties between the railroads and the birth of antitrust 
law make the situation we face today remarkable. I have heard from a 
growing number of shippers in Wisconsin--and I know many of my 
colleagues have heard from their shippers in their States--about the 
monopolistic practices in which the freight railroads are currently 
engaged. Consolidation in the railroad industry, allowed under 
antitrust exemptions my legislation would repeal, has resulted in only 
four class I railroads providing over 90 percent of the Nation's rail 
transportation.
  Many industries--known as ``captive shippers''--are served by only 
one railroad. These captive shippers face constantly rising rail rates. 
They are the victims of monopolistic practices and price gouging by the 
single railroad that serves them, price increases which they are forced 
to pass along into the price of their products and, ultimately, to 
consumers. And in many cases, the ordinary protections of antitrust law 
are unavailable to these captive shippers--instead, the railroads are 
protected by a series of exemptions from the normal rules of antitrust 
law to which all other industries must abide.
  In Wisconsin, victims of a lack of railroad competition abound. In 
fact, a coalition has formed, consisting of more than thirty affected 
organizations--Badger CURE. From Dairyland Power Cooperative in La 
Crosse to Wolf River Lumber in New London, companies in my State are 
feeling the crunch of years of railroad consolidation. The reliability, 
efficiency, and affordability of freight rail have all declined, and 
Wisconsin consumers feel the pinch.
  There is no better example than Wisconsin's electric utilities. 
Dairyland Power serves the electricity needs of more than 575,000 
people. As of January of this year, they faced a 93 percent average 
increase in rail rates. According to Dairyland, it will now cost about 
$80 million to ship $35 million worth of coal, costs that Wisconsin 
consumers

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will absorb if Congress does not take action soon. And this problem is 
not unique to Wisconsin--shippers across the Nation suffer from 
monopolistic practices of the dominant railroads in their regions.
  That is why I am introducing the Railroad Antitrust Enforcement Act 
of 2006. This legislation will force railroads to play by the rules of 
free competition like all other businesses.
  The current antitrust exemptions protect a wide range of railroad 
industry conduct from scrutiny by governmental antitrust enforcers. 
Railroad mergers and acquisitions are exempt from antitrust law and are 
reviewed solely by the Surface Transportation Board. Railroads that 
engage in collective ratemaking are also exempt from antitrust law. 
Railroads subject to the regulation of the Surface Transportation Board 
are also exempt from private antitrust lawsuits seeking the termination 
of anti-competitive practices via injunctive relief. Our bill will 
eliminate these exemptions.
  No good reason exists for them. While railroad legislation in recent 
decades including most notably the Staggers Rail Act of 1980--
deregulated much railroad rate setting from the oversight of the 
Surface Transportation Board, these obsolete antitrust exemptions 
remained in place, insulating a consolidating industry from obeying the 
rules of fair competition.
  Our bill will bring railroad mergers and acquisitions under the 
purview of the Clayton Act, allowing the Federal Government, state 
attorneys general, and private parties to file suit to enjoin anti-
competitive mergers and acquisitions. It will restore the review of 
these mergers to the agencies where they belong--the Justice 
Department's Antitrust Division and the Federal Trade Commission. It 
will eliminate the exemption that prevents FTC's scrutiny of railroad 
common carriers. It will eliminate the antitrust exemption for railroad 
collective ratemaking. It will allow state attorneys general and other 
private parties to sue railroads for treble damages and injunctive 
relief for violations of the antitrust laws, including collusion that 
leads to excessive and unreasonable rates.
  In sum, by clearing out this thicket of outmoded antitrust 
exemptions, railroads will be subject to the same laws as the rest of 
the economy. Government antitrust enforcers will finally have the tools 
to prevent anti-competitive transactions and practices by railroads. 
Likewise, private parties will be able to utilize the antitrust laws to 
deter anti-competitive conduct and to seek redress for their injuries.
  As ranking member on the Antitrust Subcommittee, I have found--in 
industry after industry--that vigorous application of our Nation's 
antitrust laws is the best way to eliminate barriers to competition, to 
end monopolistic behavior, to keep prices low and quality of service 
high. The railroad industry is no different. All those who rely on 
railroads to ship their products--whether it is an electric utility for 
its coal, a farmer to ship grain, or a factory to acquire its raw 
materials or ship out its finished product--deserve the full 
application of the antitrust laws to end the anti-competitive abuses 
all too prevalent in this industry today. I urge my colleagues support 
the Railroad Antitrust Enforcement Act of 2006.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3612

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Railroad Antitrust 
     Enforcement Act of 2006''.

     SEC. 2. INJUNCTIONS AGAINST RAILROAD COMMON CARRIERS.

       The proviso in section 16 of the Clayton Act (15 U.S.C. 26) 
     ending with ``Code.'' is amended to read as follows: 
     ``Provided, That nothing herein contained shall be construed 
     to entitle any person, firm, corporation, or association, 
     except the United States, to bring suit for injunctive relief 
     against any common carrier that is not a railroad subject to 
     the jurisdiction of the Surface Transportation Board under 
     subtitle IV of title 49, United States Code.''.

     SEC. 3. MERGERS AND ACQUISITIONS OF RAILROADS.

       The sixth undesignated paragraph of section 7 of the 
     Clayton Act (15 U.S.C. 18) is amended to read as follows:
       ``Nothing contained in this section shall apply to 
     transactions duly consummated pursuant to authority given by 
     the Secretary of Transportation, Federal Power Commission, 
     Surface Transportation Board (except for agreements described 
     in section 10706 of title 49, United States Code, and 
     transactions described in section 11321 of that title), the 
     Securities and Exchange Commission in the exercise of its 
     jurisdiction under section 10 (of the Public Utility Holding 
     Company Act of 1935), the United States Maritime Commission, 
     or the Secretary of Agriculture under any statutory provision 
     vesting such power in the Commission, Board, or Secretary.''.

     SEC. 4. LIMITATION OF PRIMARY JURISDICTION.

       The Clayton Act is amended by adding at the end thereof the 
     following:
       ``Sec. 29.  In any civil action against a common carrier 
     railroad under section 4, 4C, 15, or 16 of this Act, the 
     district court shall not be required to defer to the primary 
     jurisdiction of the Surface Transportation Board.''.

     SEC. 5. FEDERAL TRADE COMMISSION ENFORCEMENT.

       (a) Clayton Act.--Section 11(a) of the Clayton Act (15 
     U.S.C. 21(a)) is amended by striking ``subject to 
     jurisdiction'' and all that follows through the first 
     semicolon and inserting ``subject to jurisdiction under 
     subtitle IV of title 49, United States Code (except for 
     agreements described in section 10706 of that title and 
     transactions described in section 11321 of that title);''.
       (b) FTC Act.--Section 5(a)(2) of the Federal Trade 
     Commission Act (15 U.S.C. 44(a)(1)) is amended by striking 
     ``common carriers subject'' and inserting ``common carriers, 
     except for railroads, subject''.

     SEC. 6. EXPANSION OF TREBLE DAMAGES TO RAIL COMMON CARRIERS.

       Section 4 of the Clayton Act (15 U.S.C. 15) is amended by--
       (1) redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and
       (2) inserting after subsection (a) the following:
       ``(b) Subsection (a) shall apply to common carriers by rail 
     subject to the jurisdiction of the Surface Transportation 
     Board under subtitle IV of title 49, United States Code, 
     without regard to whether such railroads have filed rates or 
     whether a complaint challenging a rate has been filed.''.

     SEC. 7. TERMINATION OF EXEMPTIONS IN TITLE 49.

       (a) In General.--Section 10706 of title 49, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)(A), by striking ``, and the Sherman 
     Act (15 U.S.C. 1 et seq.),'' and all that follows through 
     ``or carrying out the agreement'' in the third sentence;
       (B) in paragraph (4)--
       (i) by striking the second sentence; and
       (ii) by striking ``However, the'' in the third sentence and 
     inserting ``The''; and
       (C) in paragraph (5)(A), by striking ``, and the antitrust 
     laws set forth in paragraph (2) of this subsection do not 
     apply to parties and other persons with respect to making or 
     carrying out the agreement''; and
       (2) by striking subsection (e) and inserting the following:
       ``(e) Application of Antitrust Laws.--
       ``(1) In general.--Nothing in this section exempts a 
     proposed agreement described in subsection (a) from the 
     application of the Sherman Act (15 U.S.C. 1 et seq.), the 
     Clayton Act (15 U.S.C. 12, 14 et seq.), the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.), section 73 or 74 of 
     the Wilson Tariff Act (15 U.S.C. 8 and 9), or the Act of June 
     19, 1936 (15 U.S.C. 13, 13a, 13b, 21a).
       ``(2) Antitrust analysis to consider impact.--In reviewing 
     any such proposed agreement for the purpose of any provision 
     of law described in paragraph (1), the Board and any other 
     reviewing agency shall take into account, among any other 
     considerations, the impact of the proposed agreement on 
     shippers, on consumers, and on affected communities.''.
       (b) Combinations.--Section 11321 of title 49, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``The authority'' in the first sentence and 
     inserting ``Except as provided in sections 4 (15 U.S.C. 15), 
     4C (15 U.S.C. 15c), section 15 (15 U.S.C. 25), and section 16 
     (15 U.S.C. 26) of the Clayton Act (15 U.S.C. 21(a)), the 
     authority''; and
       (B) by striking ``is exempt from the antitrust laws and 
     from all other law,'' in the third sentence and inserting 
     ``is exempt from all other law (except the antitrust laws 
     referred to in subsection (c)),''; and
       (2) by adding at the end the following:
       ``(c) Application of Antitrust Laws.--
       ``(1) In general.--Nothing in this section exempts a 
     transaction described in subsection (a) from the application 
     of the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act (15 
     U.S.C. 12, 14 et seq.), the Federal Trade Commission Act (15 
     U.S.C. 41 et seq.), section 73 or 74 of the Wilson Tariff Act 
     (15 U.S.C. 8-9), or the Act of June 19, 1936 (15 U.S.C. 13, 
     13a, 13b, 21a).
       ``(2) Antitrust analysis to consider impact.--In reviewing 
     any such transaction for the purpose of any provision of law 
     described in paragraph (1), the Board and any other reviewing 
     agency shall take into account, among any other 
     considerations, the impact of the transaction on shippers and 
     on affected communities.''.
       (c) Conforming Amendments.--
       (1) The heading for section 10706 of title 49, United 
     States Code, is amended to read as follows: ``Rate 
     agreements''.

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       (2) The item relating to such section in the chapter 
     analysis at the beginning of chapter 107 of such title is 
     amended to read as follows:

``10706. Rate agreements.''.
                                 ______