[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Rules and Regulations]
[Pages 46217-46220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23056]


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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.

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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:


Sec. 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).


Sec. 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.


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 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, industry-wide 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.

[[Page 46218]]

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 
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.


Sec. 1108.4.  Relief.

    (a) Subject to specification in the complaint, as provided in 
Sec. 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.


Sec. 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 non-refundable 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.


Sec. 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 Sec. 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.


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 (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 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 this part 1108.
    (c) Any defendant willing to enter into arbitration under these 
rules must, within 30 days of the date of a

[[Page 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 Sec. 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).


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, 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.


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. 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.


Sec. 1108.10  Precedent.

    Decisions rendered by arbitrators 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 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.

[[Page 46220]]

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 
Sec. 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.


Sec. 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