U.S. Court of Appeals Stops Rail Hikes


North Dakota consumers and our state’s energy industry scored a victory Tuesday when the U.S. Court of Appeals upheld a ruling that Burlington Northern Santa Fe (BNSF) Railway unfairly hiked its rail rates, Congressman Earl Pomeroy said.

The court decision upheld a ruling by the federal Surface Transportation Board (STB) that said BNSF Railway was using its monopoly power to overcharge customers in North Dakota. The ruling ordered BNSF Railway to pay about $345 million in payments and rate reductions to Basin Electric Power Cooperative.

“This ruling is a statement by the U.S. Court of Appeals that big railroads cannot abuse their monopoly power and force North Dakota companies to pay outrageous rates,” Congressman Pomeroy said. “It has taken years and millions of dollars in court costs for Basin Electric to fight these unfair rates. The U.S. Court of Appeals made the right decision today for Basin and for consumers in North Dakota.”

In the STB’s decision, which was announced in February 2009, BNSF was ordered to lower its transportation rates by approximately 60{4d08edaf359bc2115b18a651716ebd427a137946ddca2143fa23b3ea721061e4}, as the Board’s stand-alone cost (SAC) test demonstrated that in 2009 the maximum lawful rate for this traffic cannot exceed a revenue-to-variable cost (R/VC) ratio of 240{4d08edaf359bc2115b18a651716ebd427a137946ddca2143fa23b3ea721061e4}, according to the release issued by the Surface Transportation Board.  BNSF was found to have been charging roughly six times the variable cost of providing service to Basin and Western Fuels.

Pomeroy, along with Representatives Baldwin (Wisconsin) and Alexander (Louisiana) has introduced legislation, The Railroad Antitrust Enforcement Act, to eliminate an antiquated law that has allowed freight railroads to reap record profits while often providing unreliable service and charging exorbitant fees. This exemption from antitrust law has meant declining service, unreliable rail shipments and unreasonably high costs for many public utilities and agriculture producers. 

The Baldwin/Alexander/Pomeroy bill repeals the railroad antitrust exemptions in antitrust and transportation statutes, so that antitrust law fully covers railroads.  The bill will permit the Justice Department and Federal Trade Commission to review railroad mergers under antitrust law and it will eliminate antitrust exemptions for mergers, acquisitions, collective ratemaking and coordination among railroads.  The bill also will allow state Attorneys General and other private parties to sue for treble damages and to sue to halt anticompetitive conduct, both of which are not currently allowed under federal law.

Click here to hear audio from Congressman Pomeroy on this issue.

Source: Office of Congressman Earl Pomeroy

Posted by Kaci Switzer


Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x