Friday, October 9, 2015

STB to Act on PTC Related Rail Service Suspension Issue

The Surface Transportation Board (STB) published a notice in today’s Federal Register (80 FR 61271-61272) that the Board is instituting a declaratory order proceeding in response to a petition by the American Chemistry Council, the Chlorine Institute, and the Fertilizer Institute. That petition requested that the STB issue an order to require Class I railroads to transport toxic inhalation hazard (TIH) chemicals over mainlines even though those railroads may not have installed positive train control (PTC) systems on those lines by December 31st, 2015 in accordance with 49 USC 20157(a).

The STB Order initiating this process was actually issued on October 6th. The STB has given interested parties until October 23 to submit replies to the ACC petition. Rebuttals to those replies must be filed by November 2nd. The STB docket number for this action is FD 35694 and submissions may be filed through the STB web site.


In 2008 the Congress passed the Rail Safety Improvement Act of 2008 (PL 110-432). One of the requirements of that Act was that all Class I railroad had to install a positive train control system on mainlines that either carried passenger rail traffic or minimum amounts of TIH chemicals. The deadline for installing and operating these PTC systems is December 31st, 2015. None of the Class I railroads will have anywhere near complete PTC coverage over the designated sections of track by the deadline.

There have been a number of reasons for the delay in getting the PTC system installed and operational. Some of them have been government related (most famously problems with the FCC over communications frequency issues and infrastructure permitting issues) that were not foreseen when Congress set the deadline. There have also been technology development and compatibility issues (Congress did not mandate a specific PTC technology and different systems used by the various Class I railroads have got to be able to interact where their rail systems cross and/or interchange railcars).

Recent letters from various Class I railroads (BNSF, CSX and NS for instance) to Sen. Thune (R,SD), Chair of the Senate Commerce, Science and Transportation Committee, provide additional details about the efforts made to date by the railroads to comply with the PTC deadline and the problem that they have faced.

Those same letters also outline the railroads’ dilemma with deciding how they are going to have to deal with the consequences of failing to meet the December 31st deadline. If they continue to operate freight trains and allow the operation of passenger trains on rail lines on which there is no operational PTC system they will be in violation of 49 USC 20157(a) and subject to fines from the Federal Railroad Administration. More importantly they are concerned about their legal liability if an accident occurs on stretch of mainline not covered by an operational PTC system. Tort law provides for the award of substantial punitive damages where an accident is the result of a willful disobedience of law.

Those letters also describe the railroads likely response to this problem. Both CSX and NS indicate that they will probably stop carrying TIH chemicals over segments of their mainlines that do not have operational PTC systems. BNSF takes the broader view that they will have to halt all freight traffic on such lines. Their stand is based on the fact that historical TIH traffic is only used to establish which lines must have operational PTC systems and that all trains operating over those lines (including Class II and Class III railroad trains) must operate in the PTC mode. The other two railroads would apparently argue that the cessation of TIH traffic on those lines would negate the need for operational PTC system.

The Dispute

The plaintiffs in this case argue that 49 USC 11l0l(a), requires a Class I railroad to transport toxic inhalation hazard ("TIH") materials over main lines. This ‘common carrier’ obligation was written into law because railroad operate what is essentially a monopoly over much of its tracks. Refusal of a railroad to carry appropriately offered freight rail traffic would leave the offeror no alternative means of transporting that rail traffic.

The railroads position is centered on the first sentence in paragraph (a): “A rail carrier providing transportation or service subject to the jurisdiction of the Boardunder this part shall provide the transportation or service on reasonable request [emphasis added].” They argue that a request that requires them to violate federal law is, upon its face, unreasonable.

Daniel Elliot, the current STB Chair, in a letter to Thune, notes that this is a complex issue with little precedent for the STB to use as guidance. He noted that:

“Because prior safety-related curtailment-of-service cases often involved services that complied with comprehensive safety regimes administered by FRA (and the Pipeline and Hazardous Materials Safety Administration), a carrier-initiated curtailment of service due to a failure to comply with RSIA would present a case of first impression before the Board. I cannot predict the outcome of such a case. My expectation is that the views of the FRA, which has primary jurisdiction over rail safety in general and over implementing RSIA in particular, would be a critical consideration.”

Congressional Action

The simplest fix to this problem from the point of view of both the railroads and the shippers would be for Congress to take cognizance of the reasons for the delays in PTC implementation and to extend the deadline. HR 22, as amended and passed in the Senate before the summer recess, would extend the installation deadline until 2018 as part of the surface transportation authorization package. HR 3651, introduced last week, would do the same thing in a standalone bill.

There are concerns in the safety community, however, that the railroads may not have done as much as they could have to complete the implementation of the PTC requirements. These folks are objecting to a blanket extension without some sort assurance that the railroads will not just require another extension in three years. Congressional negotiators are working to resolve those concerns.

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