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10/9/2002



Rail News: Rail Industry Trends

U.S. appellate court backs STB's decision to bag competitive factors in rate-complaint cases


On Oct. 8, U.S. Court of Appeals for the District of Columbia Circuit upheld Surface Transportation Board's decision not to consider product and geographic competition as part of market dominance analyses during rate complaint cases, and denied a railroad petition for judicial review.


By law, the board was required to first determine that a railroad had market dominance, or an absence of effective competition from other railroads or transportation modes, before it could review the reasonableness of a challenged rate.


Before 1999, STB permitted railroads to avoid regulatory review of a rate by proving that effective competition existed, or that a shipper could avoid using its service by shipping or receiving a substitute product, by obtaining its product from a different source, or shipping it to a different destination.


STB later decided to exclude product and geographic competition as factors in market dominance analyses, ruling that those factors unduly burdened shippers attempting to dispute rates.


The appellate court ruled that STB's decision would expeditiously move rate cases forward, help formulate appropriate measures for avoiding case delays and provide shippers that lack competition better access to the rate-complaint process.


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