Expediting Rate Cases, 16550-16558 [2017-06718]
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Federal Register / Vol. 82, No. 64 / Wednesday, April 5, 2017 / Proposed Rules
(b) When an order for a U.S. pilot’s
service is cancelled, the vessel can be
charged for the pilot’s reasonable travel
expenses for travel that occurred to and
from the pilot’s base, and the greater
of—
(1) Four hours; or
(2) The time of cancellation and the
time of the pilot’s scheduled arrival, or
the pilot’s reporting for duty as ordered,
whichever is later.
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■ 5. Revise § 401.450 as follows:
■ a. Redesignate paragraphs (b) through
(j) as paragraphs (c) through (k),
respectively; and
■ b. Add new paragraph (b) to read as
follows:
§ 401.450
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(b) Pilotage demand and the base
seasonal work standard are based on
available and reliable data, as so
deemed by the Director, for a multi-year
base period. The multi-year period is
the 10 most recent full shipping
seasons, and the data source is a system
approved under 46 CFR 403.300. Where
such data are not available or reliable,
the Director also may use data, from
additional past full shipping seasons or
other sources, that the Director
determines to be available and reliable.
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■ 10. Revise § 404.104 to read as
follows:
Pilotage change points.
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(b) The Saint Lawrence River between
Iroquois Lock and the area of
Ogdensburg, NY beginning January 31,
2017;
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PART 403—GREAT LAKES PILOTAGE
UNIFORM ACCOUNTING SYSTEM
6. The authority citation for part 403
continues to read as follows:
■
Authority: 46 U.S.C. 2103, 2104(a), 9303,
9304; Department of Homeland Security
Delegation No. 0170.1(II)(92.a), (92.f).
7. Revise § 403.300(c) to read as
follows:
■
§ 403.300 Financial reporting
requirements.
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(c) By January 24 of each year, each
association must obtain an unqualified
audit report for the preceding year that
is audited and prepared in accordance
with generally accepted accounting
principles by an independent certified
public accountant. Each association
must electronically submit that report
with any associated settlement
statements and all accompanying notes
to the Director by January 31.
PART 404—GREAT LAKES PILOTAGE
RATEMAKING
8. The authority citation for part 404
continues to read as follows:
■
Authority: 46 U.S.C. 2103, 2104(a), 9303,
9304; Department of Homeland Security
Delegation No. 0170.1(II)(92.a), (92.f).
9. Revise § 404.103 as follows:
a. In paragraph (a), following the
words ‘‘dividing each area’s’’ remove
the word ‘‘peak’’ and add, in its place,
the word ‘‘seasonal’’; and
■ b. Revise paragraph (b) to read as
follows:
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§ 404.104 Ratemaking step 4: Determine
target pilot compensation benchmark.
At least once every 10 years, the
Director will set a base target pilot
compensation benchmark using the
most relevant available non-proprietary
information. In years in which a base
compensation benchmark is not set,
target pilot compensation will be
adjusted for inflation using the CPI for
the Midwest region or a published
predetermined amount. The Director
determines each pilotage association’s
total target pilot compensation by
multiplying individual target pilot
compensation by the number of pilots
projected under § 404.103(d) of this
part.
§ 404.105
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§ 404.103 Ratemaking step 3: Determine
number of pilots needed.
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[Amended]
11. In § 404.105, remove the words
‘‘return on investment’’ and add, in
their place, the words ‘‘working capital
fund.’’
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■ 12. Revise § 404.107 to read as
follows:
■
§ 404.107 Ratemaking step 7: Initially
calculate base rates.
The Director initially calculates base
hourly rates by dividing the projected
needed revenue from § 404.106 of this
part by averages of past hours worked in
each district’s designated and
undesignated waters, using available
and reliable data for a multi-year period
set in accordance with § 404.103(b) of
this part.
■ 13. Revise § 404.108 to read as
follows:
§ 404.108 Ratemaking step 8: Calculate
average weighting factors by Area.
The Director calculates the average
weighting factor for each area by
computing the 10-year rolling average of
weighting factors applied in that area,
beginning with the year 2014. If less
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than 10 years of data are available, the
Director calculates the average
weighting factor using data from each
year beginning with 2014.
■ 14. Add § 404.109 as follows:
§ 404.109 Ratemaking step 9: Calculate
revised base rates.
The Director calculates revised base
rates for each area by dividing the initial
base rate (from Step 7) by the average
weighting factor (from Step 8) to
produce a revised base rate for each
area.
■ 15. Add § 404.110 as follows:
§ 404.110 Ratemaking step 10: Review and
finalize rates.
The Director reviews the base pilotage
rates calculated in § 404.109 of this part
to ensure they meet the goal set in
§ 404.1(a) of this part, and either
finalizes them or first makes necessary
and reasonable adjustments to them
based on requirements of Great Lakes
pilotage agreements between the United
States and Canada, or other supportable
circumstances.
Dated: March 30, 2017.
Michael D. Emerson,
Director, Marine Transportation Systems,
U.S. Coast Guard.
[FR Doc. 2017–06662 Filed 4–4–17; 8:45 am]
BILLING CODE 9110–04–P
SURFACE TRANSPORTATION BOARD
49 CFR Parts 1104, 1109, 1111, 1114,
and 1130
[Docket No. EP 733]
Expediting Rate Cases
Surface Transportation Board.
Notice of proposed rulemaking.
AGENCY:
ACTION:
Pursuant to Section 11 of the
Surface Transportation Board
Reauthorization Act of 2015 (STB
Reauthorization Act), the Surface
Transportation Board (Board) is
proposing changes to its rules pertaining
to its rate case procedures to help
improve and expedite the rate review
process.
SUMMARY:
Comments are due by May 15,
2017. Reply comments are due June 14,
2017.
ADDRESSES: Comments and replies may
be submitted either via the Board’s efiling format or in the traditional paper
format. Any person using e-filing should
attach a document and otherwise
comply with the instructions at the ‘‘E–
FILING’’ link on the Board’s Web site,
at ‘‘https://www.stb.gov.’’ Any person
submitting a filing in the traditional
DATES:
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Federal Register / Vol. 82, No. 64 / Wednesday, April 5, 2017 / Proposed Rules
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paper format should send an original
and 10 copies to: Surface Transportation
Board, Attn: Docket No. EP 733, 395 E
Street SW., Washington, DC 20423–
0001. Copies of written comments and
replies will be available for viewing and
self-copying at the Board’s Public
Docket Room, Room 131, and will be
posted to the Board’s Web site.
FOR FURTHER INFORMATION CONTACT:
Sarah Fancher, (202) 245–0355.
Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at
(800) 877–8339.
SUPPLEMENTARY INFORMATION: Section 11
of the STB Reauthorization Act, Public
Law 114–110, 129 Stat. 2228 (2015)
directs the Board to ‘‘initiate a
proceeding to assess procedures that are
available to parties in litigation before
courts to expedite such litigation and
the potential application of any such
procedures to rate cases.’’ In addition,
Section 11 requires the Board to comply
with a new timeline in Stand-Alone
Cost (SAC) cases.
In advance of initiating this
proceeding, Board staff held informal
meetings with stakeholders1 to explore
and discuss ideas on: (1) How
procedures to expedite court litigation
could be applied to rate cases, and (2)
additional ways to move SAC cases
forward more expeditiously. The Board
issued an Advance Notice of Proposed
Rulemaking (ANPRM) on June 15, 2016,
seeking formal comment on specific
ideas raised in the informal meetings as
well as comments on any other relevant
matters.
The Board received comments on the
ANPRM from the following
organizations: The Rail Customer
Coalition; Samuel J. Nasca on behalf of
SMART/Transportation Division, New
York State Legislative Board (SMART/
TD–NY); the Association of American
Railroads (AAR); the Western Coal
Traffic League, American Public Power
Association, Edison Electric Institute,
National Association of Regulatory
Utility Commissioners, National Rural
Electric Cooperative Association, and
1 Board staff met with individuals either
associated with and/or speaking on behalf of the
following organizations: American Chemistry
Council; Archer Daniels Midland Company; CSX
Transportation, Inc.; Economists Incorporated; Dr.
Gerald Faulhaber; FTI Consulting, Inc.; GKG Law,
P.C.; Growth Energy; Highroad Consulting; L.E.
Peabody; LaRoe, Winn, Moerman & Donovan;
consultant Michael A. Nelson; Norfolk Southern
Railway Company; Olin Corporation; POET Ethanol
Products; Sidley Austin LLP; Slover & Loftus LLP;
Steptoe & Johnson LLP; The Chlorine Institute; The
Fertilizer Institute; The National Industrial
Transportation League; and Thompson Hine LLP.
We note that some participants expressed
individual views, not on behalf of the
organization(s) with which they are associated.
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Freight Rail Customer Alliance
(collectively, Coal Shippers/NARUC);
CSX Transportation, Inc. (CSXT); the
American Chemistry Council, the Dow
Chemical Company, and M&G Polymers
USA, LLC (Joint Carload Shippers);
Norfolk Southern Railway Company
(NSR); Union Pacific Railroad Company
(UP); and Oliver Wyman.
Based on the comments, the Board is
now proposing specific changes
intended to help improve the rate
review process and expedite rate cases.2
In Section I, the Board addresses the
comments and how they have formed
the basis of the rules proposed here. In
Section II, the Board explains the newly
proposed rules. Note, these proposed
rules are not intended to be a
comprehensive response to the
comments received in this docket, nor
are they the final action the Board plans
to take to improve the Board’s rate
review processes for all shippers. The
Board will continue to evaluate the
comments received and review its
regulations generally, and may propose
additional revisions at a later date.
I. Comments in Response to the
ANPRM
Pre-Complaint Period. In the ANPRM,
the Board noted that several
stakeholders suggested that the Board
could require a complainant, before
filing its SAC complaint, to file a notice
similar to that required in the context of
major and significant mergers before the
Board. See 49 CFR 1180.4(b). One of the
purposes of the pre-complaint filing
would be to provide the railroad with
time to start preparing for litigation,
including gathering documents and data
necessary for the discovery stage, which
in turn could benefit both parties by
accelerating the discovery process.
ANPRM, slip op. at 3. Accordingly, the
Board sought comments on the merits of
adopting a pre-filing requirement in
SAC cases, and, if a pre-filing notice
were adopted, the information that
should be contained in that notice and
the appropriate time period for filing the
notice (e.g., 30 or 60 days prior to filing
a complaint). The Board also sought
comments on the idea of offering or
requiring mediation during a precomplaint period.
Several railroad and shipper interests
generally support the requirement of a
2 Although many of the proposals pertain
specifically to SAC cases—the Board’s methodology
for large rate cases—some of the proposals would
also benefit cases filed under the Board’s other
methodologies. In those instances we specify that
a particular proposal would also apply in, for
example, Simplified-SAC or Three-Benchmark
cases (collectively, simplified standards). See
Simplified Standards for Rail Rate Cases, EP 646
(Sub-No. 1) (STB served Sept. 5, 2007).
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pre-filing notice. (CSXT Comments 7,
AAR Comments 6, Joint Carload
Shippers Comments 4–5.) CSXT and
Joint Carload Shippers comment that
the filing would provide early notice of
impending discovery obligations. (CSXT
Comments 7–10, Joint Carload Shippers
Comments 4–5.) CSXT also comments
that a pre-filing notice could allow the
parties to agree on a protective order
that could be in place at the outset of
the case. (CSXT Comments 8.)
Conversely, NSR and Coal Shippers/
NARUC comment that a pre-filing
notice in and of itself likely would not
do much to expedite rate cases. (NSR
Comments 35, Coal Shippers/NARUC
Comments 33.) NSR argues that, even
with such a notice, the railroad can only
begin to gather the necessary documents
and data once the shipper has filed its
case, indicating whether it is a SAC,
Simplified-SAC, or Three-Benchmark
case, and the shipper has served its
discovery requests, informing the
railroad of the time frame for discovery
materials and identified the segments of
the railroad for which discovery is
sought. (NSR Comments 35.) Coal
Shippers/NARUC comment that once a
shipper has decided to file a SAC case,
it is ready to do so immediately, and
because of the negotiations between the
shipper and rail carriers where a
potential SAC case is in play, many rail
carriers start gathering the necessary
SAC information without any pre-filing
requirement. (Coal Shippers/NARUC
Comments 33–34.) Coal Shippers/
NARUC comment that the only
potential benefit of a pre-filing
requirement is one that includes a
response deadline—e.g., requiring a rail
carrier to produce specified SAC
information no later than 30 days after
the complaint is filed. Coal Shippers/
NARUC suggest that the Board consider
a procedure where the pre-filing
requirement is at the complainant
shipper’s option, and, if the shipper so
elects, the respondent rail carrier is
required to provide information at a
specified date after the complaint is
filed. (Coal Shippers/NARUC Comments
34.)
Regarding whether mediation should
be conducted during a pre-complaint
period, CSXT and Joint Carload
Shippers comment that doing so would
be beneficial in that it would allow
parties to focus exclusively on litigation
after the complaint has been filed.
(CSXT Comments 9–10, Joint Carload
Shippers Comments 4–5.) AAR
comments that mediation at the outset
of the process could allow the parties to
avoid litigation altogether, though it
would not actually expedite the rate
case itself once it is filed. (AAR
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Federal Register / Vol. 82, No. 64 / Wednesday, April 5, 2017 / Proposed Rules
Comments 6.) Coal Shippers/NARUC
comment that no coal rate cases have
settled because of the Board’s mediation
process, and that mandatory mediation
has driven up the costs associated with
pursing relief from the Board. (Coal
Shippers/NARUC Comments 40.) Coal
Shippers/NARUC suggest eliminating
mandatory mediation of SAC disputes
entirely, though leaving the option open
for the parties if they jointly agree to
engage in mediation at any time during
the SAC case process. (Coal Shippers/
NARUC Comments 40.)
With respect to the timing of the prefiling notice, both CSXT and Joint
Carload Shippers argue that 60 days
prior to the filing of a SAC complaint
probably would be optimal, and Joint
Carload Shippers assert that this would
afford sufficient time for scheduling and
conducting mediation. (CSXT
Comments 10, Joint Carload Shippers
Comments 5.) Although Coal Shippers/
NARUC oppose the requirement of a
pre-filing notice, they argue that, if one
is mandated by the Board, it should be
filed no later than 30 days prior to the
date the complaint is filed. (Coal
Shippers/NARUC Comments 38–39.)
Concerning the content of the prefiling notice, parties suggest that the
pre-filing notice could include: (1) The
rate that will be challenged; (2) the
origin-destination pair(s) being
challenged; (3) the commodities at
issue; (4) the states the shipper expects
its SARR may traverse; and (5) other
pertinent information. (See CSXT
Comments 11, Joint Carload Shippers
Comments 5, AAR Comments 6; Coal
Shippers/NARUC Comments 38–39 3.)
The Board is persuaded that
establishing a pre-complaint period,
during which parties engage in
mediation without the burden of
simultaneous litigation and discovery,
outweighs any burden the precomplaint period may add. The Board
believes that such a requirement would
help the case proceed more efficiently
and quickly once the complaint is filed
because the pre-filing notice would put
the parties on notice as to what they
likely will need to produce in discovery.
When the Board first codified
mandatory mediation in SAC cases in
Procedures to Expedite Resolution of
Rail Rate Challenges to be Considered
Under the Stand-Alone Cost
Methodology, EP 638, slip op. at 2–3,
13–14 (STB served Apr. 3, 2003), the
Board believed that the most
appropriate time to mediate was after
the complaint was filed. Now, with the
benefit of more than a decade of
experience with mediation, the Board is
convinced that pre-complaint mediation
would be more beneficial to SAC
litigants.4
With respect to the timing of the prefiling notice, the Board believes that a
longer period of 70 days is appropriate
to accommodate the full schedule of
mediation so that parties will have the
time to focus on resolutions before
litigation begins. The Board welcomes
comment on this proposed longer
period. With respect to the contents of
the notice, the Board believes that the
most useful elements are: (1) The rate to
be challenged; (2) the origin/destination
pair(s) to be challenged; and (3) the
commodities at issue. The Board also
sees the benefit of having a protective
order in place as early as possible, and
thus requiring the shipper to include
with its pre-filing notice a motion for
protective order. Accordingly, as
discussed in Section II, the Board
proposes to require a complainant to
submit a pre-filing notice and motion
for protective order 70 days before filing
a SAC complaint.
The Board recognizes Coal Shippers/
NARUC’s concerns that, once shippers
have considered filing a SAC case, they
may wish to litigate immediately, but
the Board believes that the benefits of
engaging in early mediation,
establishing a protective order, and
providing early notice of impending
discovery obligations outweigh that
delay. The Board does not agree with
the Coal Shippers/NARUC’s suggestion
that the Board eliminate mandatory
mediation of SAC disputes altogether,
given the potential benefit of mediation
in SAC cases. Contrary to Coal
Shippers/NARUC’s claim, mandatory
mediation did result in a settlement in
a rate case involving coal. See NRG
Power Marketing LLC v. CSX Transp.,
Inc., NOR 42122, slip op. at 1 (STB
served July 8, 2010.)
Discovery. The Board also sought
comment on several ways in which the
Board could change its discovery
procedures to help improve and
expedite rate cases.
a. Service of initial discovery requests.
The Board sought comment on requiring
parties to either serve standard
discovery requests or disclosures of
information with the filing of their
complaints and answers, as is done in
some federal courts. ANPRM, slip op. at
3–4. NSR strongly supports the concept
3 Again, Coal Shippers/NARUC oppose the
requirement of a pre-filing notice, but offer
suggestions in the event that the Board were to
require a pre-filing notice.
4 The existence of the pre-filing requirement
would not affect the statutory requirement that a
complaint must be filed within two years after the
claim accrues.
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of standardizing initial discovery
requests for both the complainant and
the defendant and further supports the
concept of requiring these initial
discovery requests to be served
concurrently with the complaint or
answer, as applicable. (NSR Comments
36.) Joint Carload Shippers also support
standardized disclosures, although they
state that there is not much merit to
standardized discovery requests, as the
time savings is not in the
standardization of discovery requests,
but in requiring automatic and earlier
production of responsive information.
(Joint Carload Shippers Comments 6–7.)
Joint Carload Shippers focus on the
potential time savings from the
standardization of traffic and revenue
data. (Joint Carload Shippers Comments
7–9.)
CSXT does not take a position on
standardizing discovery requests, but
cautions that discovery requests, while
relatively consistent from case to case,
evolve over time. (CSXT Comments 23–
24.) Coal Shippers/NARUC do not
support standardized discovery
requests, and comment that SAC
discovery questions have evolved over
time, and should continue to do so to
meet shippers’ discovery needs and to
address the technological changes in
how rail carriers collect, store, and
maintain data. (Coal Shippers/NARUC
Comments 43.) Coal Shippers/NARUC
also do not support the use of
standardized disclosures. (Coal
Shippers/NARUC Comments 43.) They
note that while the specific categories of
information that shippers need—what
they term ‘‘Core SAC Data’’—generally
remains the same from case to case, the
exact set of responsive information coal
shippers need can change over time
based on case-specific needs and
changes in how rail carriers maintain
and update their internal databases.
(Coal Shippers/NARUC 43.) Thus,
instead of standardized disclosures,
Coal Shippers/NARUC suggest the
following process: (1) Require the
complainant shipper to file its initial
discovery requests along with its
complaint; (2) require Board staff to
hold a technical discovery conference
with the parties no later than 15 days
after the initial discovery requests are
filed, at which the complainant shipper
will identify those questions seeking
Core SAC Data, and discuss logistical
issues about producing this data; and (3)
require that, following the conference,
the Board issue an order directing the
defendant rail carrier to respond to the
complainant shipper’s specific requests
seeking Core SAC Data no later than 60
days after the initial discovery requests
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were filed. (Coal Shippers/NARUC
Comments 45.) Coal Shippers/NARUC
further suggest that the Board should
require submission of discovery by rail
carriers no later than 20 days after the
shipper’s complaint is filed. Coal
Shippers/NARUC also propose that the
Board allow rail carrier requests for staff
conferences regarding discovery
requests at any time after 40 days have
elapsed since filing of a complaint.
(Coal Shippers/NARUC Comments 47.)
The Board is persuaded that the value
of allowing discovery requests and
information disclosed in SAC cases to
evolve outweighs the potential time
saved by standardizing discovery
requests or standardized disclosures.
Accordingly, the Board will not propose
to change the SAC case regulations in
this manner. However, the Board agrees
with the general consensus among
commenters that beginning discovery as
soon as possible will help expedite SAC
cases. Therefore, the Board proposes
requiring a complainant to certify that it
has served its initial discovery requests
with its complaint and requiring a
defendant to certify that it has served its
initial discovery requests with its
answer.
We do not see the need to adopt Coal
Shippers/NARUC’s proposed process
involving a technical conference at
which the shipper would identify the
discovery requests seeking Core SAC
Data in discovery served with the
complaint at this time. The Board
believes this should be evident from the
discovery itself. However, as discussed
further below, the Board encourages
additional use of conferences between
the parties and Board staff to promptly
resolve any disputes that arise and
parties could request a conference early
in the discovery process if necessary in
a particular case.
b. Meet and confer requirement. The
Board sought comment on the merits of
a requirement, similar to Federal Rule of
Civil Procedure 37, that any party filing
a motion to compel certify that it has
attempted to confer with the opposing
party first. ANPRM, slip op. at 5.
Railroad and shipper interests
generally support such a meet and
confer requirement. (CSXT Comments
28–29, Coal Shippers/NARUC
Comments 51, NSR Comments 41–42,
Joint Carload Shippers Comments 16.)
Coal Shippers/NARUC suggest that any
such rule also address what they claim
is continuing confusion over the Board’s
procedural rule that requires the filing
of motions to compel in certain
instances no later than 10 days after an
insufficient response is received. See 49
CFR 1114.31(a). Specifically, Coal
Shippers/NARUC also suggest that the
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Board confirm that the 10-day rule does
not apply to requests for document
production. (Coal Shippers/NARUC
Comments 51–52.) In addition, Coal
Shippers/NARUC suggest that the 10day rule be changed to 14 days for other
covered discovery to allow a moving
party sufficient time to adhere to any
new ‘‘confer first’’ rule. (Coal Shippers/
NARUC Comments 51–52.) Joint
Carload Shippers comment that there
must be an exception for situations
where consultation is not practical due
to time constraints. (Joint Carload
Shippers Comments 16.) NSR suggests
that, rather than imposing a meet-andconfer requirement, the Board should
require Board staff to ‘‘convene a
conference with the parties to discuss’’
a motion to compel, rather than making
it optional, as is currently done in the
existing regulations. (NSR Comments
41–42.) 5
The Board agrees with the majority of
comments that adding a meet-andconfer requirement would help to
reduce the number of disputes that
reach the Board and thus expedite rate
cases. The Board acknowledges Joint
Carload Shippers’ concern that there are
situations where consultation may be
difficult due to time constraints, but
does not believe that the best way of
handling those instances is to create an
exception to the rule. Instead, the Board
proposes a requirement modeled on
Federal Rule of Civil Procedure 37,
which requires that the movant certify
that it has in good faith met and
conferred or attempted to meet and
confer with the person or party failing
to answer discovery to resolve the issue
without Board intervention.
The Board is not convinced that it
needs to extend its 10-day rule if it
adopts a meet-and-confer requirement.
The Board believes that 10 days is
sufficient time to confer or attempt to
confer with an unresponsive party, and
extending that period any further would
unnecessarily delay discovery.6
5 NSR also suggests that the Board codify that ‘‘a
party seeking to compel discovery must show (1)
that it needs the information to make its case, (2)
that the information cannot be readily obtained
through other means, and (3) that the request is not
unduly burdensome.’’ (NSR Comments 30 (citing
Procedures to Expedite, EP 638, slip op. at 4 (STB
served Apr. 3, 2003).) The Board does not believe
that its current standard for ruling on motions to
compel is flawed or that NSR’s proposal would
expedite the decision-making process.
6 In addition, Coal Shippers/NARUC suggest that
the Board confirm that the 10-day rule in 49 CFR
1114.31(a) does not apply to requests for document
production. However, because this is a change to
the regulations that would impact more than just
rate reasonableness cases, the Board does not
believe that it is appropriate to address Coal
Shippers/NARUC’s concern in this proceeding,
which is limited specifically to procedures in rate
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Additionally, the Board does not agree
with NSR that there is a need to modify
49 CFR 1114.31(a)(3) to make a staff
conference mandatory. Certain disputes
may be resolved more efficiently by a
decision issued by the Director of the
Office of Proceedings under 49 CFR
1114.31(a)(4) without the need for a staff
conference. However, the Board will
continue to convene staff conferences
when appropriate, and encourages any
party that believes such a conference
would aid in resolving a dispute to
request the Board convene a staff
conference at any point in the
proceeding.
Evidentiary Submissions. The Board
also sought comment on whether it
should consider staggering the filing of
public and highly confidential versions
of the parties’ pleadings to give parties
more time to ensure that public versions
of filings are appropriately redacted
without delaying the case. ANPRM, slip
op. at 7. Additionally, the Board
suggested that it could limit final briefs
to certain subjects on which the Board
would like further argument rather than
allowing generalized argument.
ANPRM, slip op. at 6.
a. Staggered filings and confidential
designations. Several comments from
railroad and shipper interests support
the idea of staggering public and highly
confidential versions of the parties’
pleadings. (CSXT Comments 39, Coal
Shippers/NARUC Comments 61, NSR
Comments 48, Joint Carload Shippers
Comments 26.) Coal Shippers/NARUC
propose three business days for the
staggering of the filings. (Coal Shippers/
NARUC Comments 61.) CSXT cautions,
however, that the delay in filing the
public versions would delay the ability
of in-house personnel to begin analyzing
the filings and suggests that parties
identify the information in filings that
can be shared with in-house personnel
simultaneously with highly confidential
submissions. (CSXT Comments 39.)
CSXT argues that any delay in providing
evidence to parties’ in-house experts
and personnel may require extending a
case’s procedural schedule. (CSXT
Comments 40.) NSR notes that this
proposal likely would do more to ensure
proper redactions than to expedite rate
cases. (NSR Comments 48.)
CSXT also recommends that the
Board create a standard rule for
identifying highly confidential and
confidential materials in parties’
pleadings. (CSXT Comments 40.) CSXT
asserts that it and other parties have
used the convention of double braces for
cases. In any event, although Coal Shippers/NARUC
claim that this regulation has created confusion in
rate cases, it does not cite any examples.
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highly confidential material (e.g.,
{{highly confidential}}) and single
braces for confidential material (e.g.,
{confidential}), but others have
designated material in a more
haphazard way, which makes it difficult
to identify materials that can be shared
with in-house personnel. (CSXT
Comments 40.)
The Board acknowledges CSXT’s
concern that delaying the submission of
public filings delays the ability of inhouse personnel to review and respond
to the filings. However, the Board
believes the appropriate remedy is to set
a delay of three business days, as
suggested by Coal Shippers/NARUC,
rather than have parties identify the
information in filings that can be shared
with in-house personnel simultaneously
with the highly confidential submission.
The Board believes that the evolution of
rate case practice makes this change
appropriate now, even though the Board
rejected such a proposal in Procedures
to Expedite, EP 638 (STB served June 6,
2003), reconsideration denied (STB
served July 31, 2003). When the Board
held in Procedures to Expedite that
parties must file a public version of
their submissions simultaneously with
any highly confidential or confidential
version they might also choose to file,
the Board suggested that parties ‘‘should
propose procedural schedules that allow
the time they will need to comply with
the redaction requirements by the due
dates for their filings with the Board.’’
Procedures to Expedite, EP 638, slip op.
at 5. Over a decade of rate case
experience has demonstrated that this is
not a practicable solution, and the Board
is persuaded that staggered filings are
appropriate. Therefore, as discussed
below, the Board proposes allowing
parties to submit public versions of their
filings three business days after the
submission of the highly confidential
versions in all rate case proceedings.
The Board also agrees with CSXT’s
comment that standardizing the
identification of public, confidential,
and highly confidential material will
reduce confusion. Therefore, in Section
II, the Board proposes creating standard
identifying markers that would be
applied in all rate case proceedings. The
Board also proposes standard markers
for sensitive security information.7
b. Limits on final briefs. Coal
Shippers/NARUC comment that,
generally, limiting final briefs to specific
issues of concern to the Board is a good
way to make the briefs more useful to
the Board and perhaps reduce the costs
7 Protective orders in SAC cases generally
distinguish between ‘‘confidential,’’ ‘‘highly
confidential,’’ and ‘‘sensitive security information.’’
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that the parties otherwise would incur
in presenting a brief that addresses a
much wider swath of case issues. (Coal
Shippers/NARUC Comments 60–61.)
Joint Carload Shippers support limiting
the final briefs to specific subjects
identified by the Board based upon its
review of the evidence, or, as an
alternative, staggering the briefing
schedule, to allow the complainant,
which has the burden of proof, the
opportunity to respond to the
defendant’s surrebuttal arguments.
(Joint Carload Shippers Comments 25.)
NSR comments that while final briefs
could be limited to subjects on which
the Board would like further
information, the Board would benefit
from building in some flexibility for the
parties to highlight issues they believe
are important. (NSR Comments 47.)
The Board believes that selection of
the topics for final briefs could be
beneficial, however, it would require a
Board decision following the close of
evidence. The Board is concerned that
this additional step would curtail the
already shortened period available to
the Board for issuing a decision on the
merits in SAC cases. More importantly,
the Board believes that the better
approach for encouraging parties to
focus on the most important issues in
SAC and Simplified-SAC cases is to
limit the length of final briefs. The
Board has on occasion, in individual
cases, imposed page limits on final
briefs. See, e.g., Consumers Energy Co.
v. CSX Transp., Inc., NOR 42142, slip
op. at 1 (STB served June 3, 2016); Total
Petrochems. & Ref. USA, Inc. v. CSX
Transp., Inc., NOR 42121, slip op. at 4
(STB served Sept. 26, 2013). Based on
the Board’s prior experience, the Board
proposes to limit final briefs to 30 pages,
inclusive of exhibits, in all SAC and
Simplified-SAC cases. The Board
believes that this is sufficient space for
the parties to articulate their final
concerns, but limited enough to prevent
further argument on all issues and
surrebuttal.
Interaction with Board Staff. The
Board sought comment on the increased
use of written questions and technical
conferences in SAC cases, starting with
an early technical conference to
establish ground rules and issue-specific
Board expectations. ANPRM, slip op. at
7. The Board also suggested that it could
provide advance notice of the topics to
be discussed in a technical conference
to promote an efficient and productive
conference. ANPRM, slip op. at 7.
Finally, the Board suggested that it
could appoint a liaison to the parties to
answer questions about the process and
to intervene informally (e.g., hold status
conferences) if it would help discovery
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or other matters move more smoothly.
ANPRM, slip op. at 7.
Several railroads and shipper interests
supported the idea of increased staff
involvement. (AAR Comments 8; CSXT
Comments 40–41; NSR Comments 12;
Joint Carload Shippers Comments 26–
28.) Coal Shippers/NARUC agree that
increased staff involvement, as outlined
by the Board in the ANPRM, would be
very useful to the parties and should
help advance the submission, and
decision, of rate cases in an expeditious
manner. (Coal Shippers/NARUC
Comments 62.) Joint Carload Shippers
argue that greater interaction through
technical conferences and written
interrogatories could have several
benefits associated with many of the
other subjects in the ANPRM.8 CSXT
supports the idea of a liaison to the
parties as a way to resolve disputes
short of formal motions to compel.
(CSXT Comments 40–41.)
The Board is convinced that increased
staff involvement at all stages of a rate
case, both through technical
conferences/written questions and a
Board-appointed liaison to the parties,
would reduce the number of disputes
between the parties and thus expedite
the rate case process.9 Thus, the Board
proposes to appoint a liaison to the
parties within 10 business days of the
submission of the pre-filing notice in
SAC cases, and within 10 business days
of the filing of the complaint in
Simplified-SAC and Three-Benchmark
cases. The liaison would not be recused
from handling substantive elements of
the case. In addition, the Board intends
to make greater use of written questions
from staff and technical conferences
with the parties at every stage of the
case. When a technical conference is
requested by a party or parties or
convened by the Board, the Board
intends to provide advance notice of the
topics to be discussed to promote an
efficient and productive conference. The
Board believes that increased
communication between the parties and
the Board would expedite rate cases by
reducing the number of disputes
between the parties and thus the
8 For example, Joint Carload Shippers note that a
pre-trial conference with Board staff would serve
many of the same functions of Federal Rule of Civil
Procedure 16, and it supports greater use of
technical conferences during Board review of the
parties’ evidence. (Joint Carload Shippers
Comments 26–28.)
9 In the ANPRM, the Board sought comment on
the increased use of written questions and technical
conferences in SAC cases in particular; however,
the Board believes that increased staff involvement
would help to improve and expedite rate cases
under other methodologies as well.
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number of issues that must be decided
by the Board.
II. The Proposed Rules
The proposed rules contain changes
to the Board’s regulations at 49 CFR
parts 1104, 1109, 1111, 1114, and 1130,
which are set out below. In proposing
these changes, the Board has considered
the suggestions from commenters on the
ANPRM, incorporated those suggestions
where appropriate, and modified them
where necessary to propose changes to
the regulations that the Board believes
would best help to improve and
expedite the rate case process.
Pre-Complaint Period. The proposed
rules include changes creating and
detailing a pre-complaint period in SAC
cases intended to provide parties with
an opportunity to mediate the dispute
and prepare for litigation.
1. Pre-filing Notice. First, the Board
proposes to create a pre-complaint
period at newly redesignated 49 CFR
1111.1 by requiring a SAC complainant
to submit a pre-filing notice at least 70
days prior to filing its complaint. The
Board proposes that the pre-filing notice
contain the rate and origin/destination
pair(s) to be challenged, the
commodities at issue, and a motion for
protective order pursuant to 49 CFR
1104.14(c). This requirement would
accomplish several goals. It would put
the defendant on notice of the
impending complaint such that it can
begin to prepare for discovery and
litigation. In addition, the early
submission of a motion for protective
order would allow a protective order to
be in place at the outset of a case, thus
expediting discovery production and
disclosures. Finally, it would allow the
parties to engage in mediation precomplaint, as described below.
2. Mandatory Mediation. Second, the
Board proposes to revise 49 CFR 1109.4
to move mandatory mediation in SAC
cases to the pre-complaint period. This
change to the regulations would not
impose new requirements, but would
require mediation to take place earlier to
allow parties to focus on the mediation
process without the distractions of
litigation. The Board intends for
mediation to be complete prior to the
filing of the complaint; however,
consistent with current procedures, the
rules will allow for an extension of time
via Board order.
3. Appointment of a Board Liaison to
the Parties. Third, under 49 CFR 1111.1,
the Board proposes in SAC cases to
appoint a liaison to the parties within
10 business days of the complainant’s
submission of the pre-filing notice. The
Board proposes to amend the newly
redesignated 49 CFR 1111.10(a) to
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appoint a liaison within 10 business
days of the filing of the complaint in
cases using simplified standards. With
this addition to the regulations, the
Board intends to improve
communication between the parties and
the Board by providing the parties with
a point of contact to whom they can
address questions or disputes.
Discovery. The proposed rules include
changes to the Board’s discovery
regulations intended to streamline
discovery in rate cases.
1. Initial Discovery Requests. First, the
Board proposes to add 49 CFR 1111.2(f)
and amend 49 CFR 1114.21(d) & (f) to
require a complainant in a SAC
proceeding to certify that it has served
its initial discovery requests
simultaneously with its complaint. The
Board also proposes to add 49 CFR
1111.5(f) and amend 49 CFR 1114.21(d)
& (f) to require a defendant in a SAC
proceeding to certify that it has served
its initial discovery requests
simultaneously with its answer. To
address the filing of an amended or
supplemental complaint, the Board
proposes to amend the newly
redesignated 49 CFR 1111.3(b) to
require the complainant to certify that it
has served on the defendant any initial
discovery requests affected by the
amended or supplemental complaint, if
any. The Board proposes a
corresponding requirement at 49 CFR
1111.5(f), in which a defendant
responding to an amended or
supplemental complaint must certify
that it has served on the complainant
any discovery requests affected by the
amended or supplemental complaint, if
any. With these changes, the Board
intends to expedite discovery, and thus
the rate case, by beginning discovery
with the complaint. These changes
would eliminate the current potential
gap between the filing of the complaint
and the beginning of discovery.
2. Meet and Confer Requirement.
Second, the Board proposes to amend
49 CFR 1114.31(a) to include a
certification that the party filing a
motion to compel has in good faith
conferred or attempted to confer with
the party serving discovery to settle the
dispute over those terms without Board
intervention. The requirement would
apply in SAC cases and cases filed
under simplified standards. The Board
believes that this requirement will
encourage parties to resolve disputes
without involving the Board, thereby
expediting litigation of a rate case by
reducing the number of necessary Board
decisions.
Evidentiary Submissions. The
proposed rules include changes to the
Board’s evidentiary regulations
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16555
intended to improve and expedite the
presentation of evidence in rate cases.
1. Stagger the Submission of Public
and Highly Confidential Versions of
Filings. First, in both SAC and
simplified standards cases, the Board
proposes to allow parties to submit
highly confidential versions of the
filings according to the procedural
schedule in a particular case, and
submit public versions of those filings
within three business days after the
filing of the highly confidential
versions. With this change the Board
intends to allow parties a reasonable
amount of time to ensure confidentiality
after submitting the highly confidential
version of each filing.10
2. Standard Convention for
Identifying Confidential, Highly
Confidential, and Sensitive Security
Information. Second, the Board
proposes to revise 49 CFR 1104.14 to
create standard identifying markers set
forth in protective orders for the
submission of confidential, highly
confidential, and sensitive security
information in rate cases. The Board
proposes that all confidential
information be contained in single
braces, i.e., {X}, all highly confidential
information be contained in double
braces, i.e., {{Y}}, and all sensitive
security information to be contained in
triple braces, i.e., {{{Z}}}. This change
would eliminate any confusion caused
by parties using different methods of
identification and would apply in both
SAC and simplified standards cases.
3. Limits on Final Briefs. Third, the
Board proposes to limit the length of
final briefs to 30 pages, inclusive of
exhibits. With this change the Board
intends to have the parties focus on the
most important issues, and eliminate
additional time otherwise used by the
Board selecting certain issues or issuing
decisions to limit the length of final
briefs.
Technical Modifications. In addition,
the Board proposes two modifications in
the existing regulations. Specifically,
the Board proposes to amend the newly
redesignated 49 CFR 1111.11(b) to apply
the requirement that the parties confer
to SAC complaints in addition to
simplified standards complaints. The
Board also proposes to amend 49 CFR
1130.1 to include the correct reference
to the newly redesignated 49 CFR
1111.2(a).
10 In the Board’s experience, parties to rate cases
typically do not submit confidential versions of
their filings in addition to the highly confidential
and public versions. It is the Board’s understanding
that parties would continue to do so, and properly
identify all confidential, highly confidential, and
sensitive security information in the first filing
according to the convention described below.
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The Board seeks comments from all
interested persons on these proposed
rules. Importantly, the Board encourages
interested persons to propose and
discuss potential modifications or
alternatives to the proposed rule. The
Board will consider all recommended
proposals in an effort to establish the
most useful changes to improve and
expedite the rate review process.
Regulatory Flexibility Act. The
Regulatory Flexibility Act of 1980
(RFA), 5 U.S.C. 601–612, generally
requires a description and analysis of
new rules that would have a significant
economic impact on a substantial
number of small entities. In drafting a
rule, an agency is required to: (1) Assess
the effect that its regulation will have on
small entities; (2) analyze effective
alternatives that may minimize a
regulation’s impact; and (3) make the
analysis available for public comment.
Sections 601–604. In its notice of
proposed rulemaking, the agency must
either include an initial regulatory
flexibility analysis, section 603(a), or
certify that the proposed rule would not
have a ‘‘significant impact on a
substantial number of small entities.’’
Section 605(b). The impact must be a
direct impact on small entities ‘‘whose
conduct is circumscribed or mandated’’
by the proposed rule. White Eagle Coop.
v. Conner, 553 F.3d 467, 480 (7th Cir.
2009).
The Board’s proposed changes to its
regulations here are intended to
improve and expedite its rate case
procedures and do not mandate or
circumscribe the conduct of small
entities. Effective June 30, 2016, for the
purpose of RFA analysis for rail carriers
subject to our jurisdiction, the Board
defines a ‘‘small business’’ as only
including those rail carriers classified as
Class III rail carriers under 49 CFR
1201.1–1. See Small Entity Size
Standards Under the Regulatory
Flexibility Act, EP 719 (STB served June
30, 2016) (with Board Member Begeman
dissenting).11 The changes proposed
here are largely procedural or codify
existing practice, and would not have a
significant economic impact on small
entities. Furthermore, since the
inception of the Board in 1996, only
three of the 51 cases filed challenging
the reasonableness of freight rail rates
11 Class III carriers have annual operating
revenues of $20 million or less in 1991 dollars, or
$36,633,120 or less when adjusted for inflation
using 2015 data. Class II rail carriers have annual
operating revenues of less than $250 million but in
excess of $20 million in 1991 dollars, or
$457,913,998 and $36,633,120 respectively, when
adjusted for inflation using 2015 data. The Board
calculates the revenue deflator factor annually and
publishes the railroad revenue thresholds on its
Web site. 49 CFR 1201.1–1.
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have involved a Class III rail carrier as
a defendant. Those three cases involved
a total of 13 Class III rail carriers. The
Board estimates that there are
approximately 656 Class III rail carriers.
Therefore, the Board certifies under 5
U.S.C. 605(b) that these proposed rules,
if promulgated, would not have a
significant economic impact on a
substantial number of small entities
within the meaning of the RFA. The
proposed rules, if promulgated, would
amend the existing procedures for filing
and litigating a rate case, as directed by
Section 11 of the STB Reauthorization
Act.
Paperwork Reduction Act. Pursuant to
the Paperwork Reduction Act (PRA), 44
U.S.C. 3501–3549, and Office of
Management and Budget (OMB)
regulations at 5 CFR 1320.8(d)(3), the
Board seeks comments about each of the
proposed collections regarding: (1)
Whether the collection of information,
as modified in the proposed rule and
further described below, is necessary for
the proper performance of the functions
of the Board, including whether the
collection has practical utility; (2) the
accuracy of the Board’s burden
estimates; (3) ways to enhance the
quality, utility, and clarity of the
information collected; and (4) ways to
minimize the burden of the collection of
information on the respondents,
including the use of automated
collection techniques or other forms of
information technology, when
appropriate. The Board estimates these
new requirements would add a total
annual hour burden of eight hours and
no total annual ‘‘non-hour burden’’ cost
under the PRA. Information pertinent to
these issues is included in the
Appendix. This proposed rule will be
submitted to OMB for review as
required under 44 U.S.C. 3507(d) and 5
CFR 1320.11. Comments received by the
Board regarding the information
collection will also be forwarded to
OMB for its review when the final rule
is published.
It is ordered:
1. Comments are due by May 15,
2017. Reply comments are due by June
14, 2017.
2. A copy of this decision will be
served upon the Chief Counsel for
Advocacy, Office of Advocacy, U.S.
Small Business Administration.
3. Notice of this decision will be
published in the Federal Register.
4. This decision is effective on its
service date.
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List of Subjects
49 CFR Part 1104
Administrative practice and
procedure.
49 CFR Part 1109
Administrative practice and
procedure, Maritime carriers, Motor
carriers, Railroads.
49 CFR Part 1111
Administrative practice and
procedure, Investigations.
49 CFR Part 1114
Administrative practice and
procedure.
49 CFR Part 1130
Administrative practice and
procedure.
Decided: March 30, 2017.
By the Board, Board Members Begeman,
Elliott, and Miller.
Raina S. Contee,
Clearance Clerk.
For the reasons set forth in the
preamble, the Surface Transportation
Board proposes to amend title 49,
chapter X, parts 1104, 1109, 1111, 1114,
and 1130 of the Code of Federal
Regulations as follows:
PART 1104—FILING WITH THE
BOARD-COPIES-VERIFICATIONSERVICE-PLEADINGS, GENERALLY
1. The authority citation for part 1104
is revised to read as follows:
■
Authority: 5.U.S.C. 553 and 559; 18 U.S.C.
1621; and 49 U.S.C. 1321.
2. In § 1104.14, add paragraph (c) to
read as follows:
■
§ 1104.14 Protective orders to maintain
confidentiality.
*
*
*
*
*
(c) Requests for protective orders in
stand-alone cost and simplified
standards cases. A motion for protective
order in stand-alone cost and simplified
standards cases shall specify that
evidentiary submissions will designate
confidential material within single
braces (i.e., {X}), highly confidential
material within double braces (i.e.,
{{Y}}), and sensitive security
information within triple braces (i.e.,
{{{Z}}}). In stand-alone cost cases, the
motion for protective order shall be filed
together with the notice pursuant to 49
CFR 1111.1.
PART 1109—USE OF MEDIATION IN
BOARD PROCEEDINGS
3. The authority citation for part 1109
is revised to read as follows:
■
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Authority: 49 U.S.C. 1321(a) and 5 U.S.C.
571 et seq.
§ 1111.2
joinder.
4. In § 1109.4, revise paragraphs (a),
(b), and (g) to read as follows:
*
■
§ 1109.4 Mandatory mediation in rate
cases to be considered under the standalone cost methodology.
(a) Mandatory use of mediation. A
shipper seeking rate relief from a
railroad or railroads in a case involving
the stand-alone cost methodology must
engage in non-binding mediation of its
dispute with the railroad upon
submitting a pre-filing notice under 49
CFR part 1111.
(b) Assignment of mediators. Within
10 business days after the shipper
submits its pre-filing notice, the Board
will assign one or more mediators to the
case. Within 5 business days of the
assignment to mediate, the mediator(s)
shall contact the parties to discuss
ground rules and the time and location
of any meeting.
*
*
*
*
*
(g) Procedural schedule. Absent a
specific order from the Board granting
an extension, the mediation will not
affect the procedural schedule in standalone cost rate cases set forth at 49 CFR
1111.9(a).
PART 1111—COMPLAINT AND
INVESTIGATION PROCEDURES
5. The authority citation for part 1111
continues to read as follows:
■
Authority: 49 U.S.C. 10704, 11701, and
1321.
§§ 1111.1 through 1111.10 [Redesignated
as §§ 1111.2 through 1111.11]
6. Redesignate §§ 1111.1 through
1111.10 as §§ 1111.2 through 1111.11,
respectively.:
■ 7. Add new § 1111.1 to read as
follows:
■
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§ 1111.1 Pre-filing procedures in standalone cost cases.
(a) General. At least 70 days prior to
the proposed filing of a complaint
challenging the reasonableness of a rail
rate to be examined under constrained
market pricing, complainant shall file a
notice with the Board. The notice shall:
(i) Identify the rate to be challenged;
(ii) Identify the origin/destination
pair(s) to be challenged;
(iii) Identify the affected commodities;
and
(iv) Include a motion for protective
order as set forth at 49 CFR 1104.14(c).
(b) Liaison. Within 10 days of the
filing of the pre-filing notice, the Board
shall appoint a liaison to the parties.
■ 8. Add paragraph (f) to newly
redesignated 1111.2 to read as follows:
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Content of formal complaints;
*
*
*
*
(f) Discovery in stand-alone cost
cases. Upon filing its complaint, the
complainant shall certify that it has
served its initial discovery requests on
the defendant.
■ 9. Revise newly redesignated § 1111.3
to read as follows:
§ 1111.3 Amended and supplemental
complaints.
(a) Generally. An amended or
supplemental complaint may be
tendered for filing by a complainant
against a defendant or defendants
named in the original complaint, stating
a cause of action alleged to have accrued
within the statutory period immediately
preceding the date of such tender, in
favor of complainant and against the
defendant or defendants. The time
limits for responding to an amended or
supplemental complaint are computed
pursuant to §§ 1111.5 and 1111.6 of this
part, as if the amended or supplemental
complaint was an original complaint.
(b) Stand-alone cost. If a complainant
tenders an amended or supplemental
complaint in a stand-alone cost case, the
complainant shall certify that it has
served on the defendant those initial
discovery requests affected by the
amended or supplemental complaint, if
any.
(c) Simplified standards. A complaint
filed under the simplified standards
may be amended once before the filing
of opening evidence to opt for a
different rate reasonableness
methodology, among Three-Benchmark,
Simplified-SAC, or Full-SAC. If so
amended, the procedural schedule
begins again under the new
methodology as set forth at §§ 1111.9
and 1111.10. However, only one
mediation period per complaint shall be
required.
■ 10. Add paragraph (f) to newly
redesignated 1111.5 to read as follows:
§ 1111.5
Answers and cross complaints.
*
*
*
*
*
(f) Discovery in stand-alone cost
cases. Upon filing its answer, the
defendant shall certify that it has served
its initial discovery requests on the
complainant. If the complainant tenders
an amended or supplemental complaint
to which the defendant must reply,
upon filing the answer to the amended
or supplemental complaint, the
defendant shall certify that it has served
on the complainant those initial
discovery requests affected by the
amended or supplemental complaint, if
any.
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16557
11. Revise newly redesignated
§ 1111.10(a) to read as follows:
■
§ 1111.10 Procedural schedule in cases
using simplified standards.
(a) * * *
(1) In cases relying upon the
Simplified-SAC methodology:
*
*
*
*
*
In addition, the Board will appoint a
liaison within 10 business days of the
filing of the complaint.
(2) In cases relying upon the ThreeBenchmark methodology:
*
*
*
*
*
In addition, the Board will appoint a
liaison within 10 business days of the
filing of the complaint.
(b) Staggered filings; final briefs. (1)
The parties may submit highly
confidential versions of filings on the
dates identified in the procedural
schedule, and submit public versions of
those filings within three business days
thereafter.
(2) In cases relying upon the
Simplified-SAC methodology, final
briefs are limited to 30 pages, inclusive
of exhibits.
■ 12. Amend § 1111.9 as follows:
■ a. Revise newly redesignated
paragraph (a).
■ b. Further redesignate the newly
redesignated paragraph (b) as paragraph
(c), and revise newly redesignated
paragraph (c).
■ c. Add new paragraph (b).
The additions and revisions read as
follows:
§ 1111.9 Procedural schedule in standalone cost cases.
(a) Procedural schedule. Absent a
specific order by the Board, the
following general procedural schedule
will apply in stand-alone cost cases after
the pre-complaint period initiated by
the pre-filing notice:
Day 0—Complaint filed, discovery
period begins.
Day 7 or before—Conference of the
parties convened pursuant to
§ 1111.11(b).
Day 20—Defendant’s answer to
complaint due.
*
*
*
*
*
(b) Staggered filings; final briefs. (1)
The parties may submit highly
confidential versions of filings on the
dates identified in the procedural
schedule, and submit public versions of
those filings within three business days
thereafter.
(2) Final briefs are limited to 30 pages,
inclusive of exhibits.
*
*
*
*
*
■ 13. Amend § 1111.10 as follows:
■ a. Further redesignate the newly
redesignated paragraphs (b), (c), and (d)
as (c), (d) and (e) respectively.
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Federal Register / Vol. 82, No. 64 / Wednesday, April 5, 2017 / Proposed Rules
■ b. Add new paragraph (b) to read as
follows:
(b) Staggered filings; final briefs. (1)
The parties may submit highly
confidential versions of filings on the
dates identified in the procedural
schedule, and submit public versions of
those filings within three business days
thereafter.
(2) In cases relying upon the
Simplified-SAC methodology, final
briefs are limited to 30 pages, inclusive
of exhibits.
■ 14. Revise newly redesignated
§ 1111.11(b) to read as follows:
§ 1111.11
matters.
Meeting to discuss procedural
*
*
*
*
*
(b) Stand-alone cost or simplified
standards complaints. In complaints
challenging the reasonableness of a rail
rate based on stand-alone cost or the
simplified standards, the parties shall
meet, or discuss by telephone or
through email, discovery and
procedural matters within 7 days after
the complaint is filed in stand-alone
cost cases, and 7 days after the
mediation period ends in simplified
standards cases. The parties should
inform the Board as soon as possible
thereafter whether there are unresolved
disputes that require Board intervention
and, if so, the nature of such disputes.
PART 1114—EVIDENCE; DISCOVERY
15. The authority citation for part
1114 is revised to read as follows:
■
Authority: 5 U.S.C. 559; 49 U.S.C. 1321.
16. Amend § 1114.21 as follows:
a. Revise paragraph (d).
b. Revise the first sentence of
paragraph (f).
The revisions read as follows:
■
■
■
jstallworth on DSK7TPTVN1PROD with PROPOSALS
14:58 Apr 04, 2017
Jkt 241001
Failure to respond to discovery.
(a) Failure to answer. If a deponent
fails to answer or gives an evasive
answer or incomplete answer to a
question propounded under
§ 1114.24(a), or a party fails to answer
or gives evasive or incomplete answers
to written interrogatories served
pursuant to § 1114.26(a), the party
seeking discovery may apply for an
order compelling an answer by motion
filed with the Board and served on all
parties and deponents. Such motion to
compel an answer must be filed with
the Board and served on all parties and
deponents. In stand-alone cost and
simplified standards cases, such motion
to compel an answer must include a
certification that the movant has in good
faith conferred or attempted to confer
with the person or party failing to
answer discovery to obtain it without
Board intervention. Such motion to
compel an answer must be filed with
the Board within 10 days after the
failure to obtain a responsive answer
upon deposition, or within 10 days after
expiration of the period allowed for
submission of answers to
interrogatories. On matters relating to a
deposition on oral examination, the
proponent of the question may complete
or adjourn the examination before he
applies for an order.
*
*
*
*
*
PART 1130—INFORMAL COMPLAINTS
18. The authority citation for Part
1130 is revised to read as follows:
Authority: 49 U.S.C. 1321, 13301(f), 14709.
*
*
*
*
(d) Sequence and timing of discovery.
Unless the Board upon motion, and
subject to the requirements at 49 CFR
1111.2(f) and 1111.5(f) in stand-alone
cost cases, for the convenience of parties
and witnesses and in the interest of
justice, orders otherwise, methods of
discovery may be used in any sequence
and the fact that a party is conducting
discovery, whether by deposition or
otherwise, should not operate to delay
any party’s discovery.
*
*
*
*
*
(f) Service of discovery materials.
Unless otherwise ordered by the Board,
and subject to the requirements at 49
CFR 1111.2(f) and 1111.5(f) in standalone cost cases, depositions,
interrogatories, requests for documents,
VerDate Sep<11>2014
§ 1114.31
■
§ 1114.21 Applicability; general
provisions.
*
requests for admissions, and answers
and responses thereto, shall be served
on other counsel and parties, but shall
not be filed with the Board. * * *
■ 17. In § 1114.31(a) revise paragraph (a)
introductory text to read as follows:
19. In § 1130.1, revise paragraph (a) to
read as follows:
■
§ 1130.1
When no damages sought.
(a) Form and content; copies. Informal
complaint may be by letter or other
writing and will be serially numbered
and filed. The complaint must contain
the essential elements of a formal
complaint as specified at 49 CFR 1111.2
and may embrace supporting papers.
The original and one copy must be filed
with the Board.
*
*
*
*
*
OMB Control Number: 2140–0029.
Form Number: None.
Type of Review: Revision of a currently
approved collection.12
Summary: As part of its continuing effort
to reduce paperwork burdens, and as
required by the Paperwork Reduction Act of
1995, 44 U.S.C. 3501–3521 (PRA), the
Surface Transportation Board (Board) gives
notice that it is requesting from the Office of
Management and Budget (OMB) approval for
the revision of the currently approved
information collection, Complaints under 49
CFR part 1111, OMB Control No. 2140–0029,
as further described below. The requested
revision to the currently approved collection
is necessitated by this Notice of Proposed
Rulemaking, which amends certain
information collected by the Board in standalone cost (SAC) rate cases. All other
information collected by the Board in the
currently approved collection is without
change from its approval.
Respondents: Affected shippers, railroads,
and communities that seek redress for alleged
violations related to unreasonable rates,
unreasonable practices, service issues, and
other statutory claims.
Number of Respondents: Four.
Frequency of Response: On occasion. In
recent years, respondents have filed
approximately four complaints of this type
per year with the Board.
Total Burden Hours (annually including all
respondents): 1,876 (estimated hours per
complaint (469) × total number of complaints
(4)).
Total Annual ‘‘Non-Hour Burden’’ Cost:
$5,848 (estimated non-hour burden cost per
complaint ($1,462) × total number of
complaints (4)).
Needs and Uses: Under the Board’s
regulations, persons may file complaints
before the Board pursuant to 49 CFR part
1111 seeking redress for alleged violations of
provisions of the Interstate Commerce Act,
Public Law 104–88, 109 Stat. 803 (1995). In
the last few years, the most significant
complaints filed at the Board allege that
railroads are charging unreasonable rates or
that they are engaging in unreasonable
practices. See, e.g., 49 U.S.C. 10701, 10704,
and 11701. The collection by the Board of
these complaints, and the agency’s action in
conducting proceedings and ruling on the
complaints, enables the Board to meet its
statutory duty to regulate the rail industry.
[FR Doc. 2017–06718 Filed 4–4–17; 8:45 am]
BILLING CODE 4915–01–P
Note: The following appendix will not
appear in the Code of Federal Regulations.
Appendix
Information Collection
Title: Complaints under 49 CFR 1111.
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12 The Surface Transportation Board filed a 60day notice of intent to seek extension of approval
on November 29, 2016. See 81 FR 86,061.
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]]>Agencies
[Federal Register Volume 82, Number 64 (Wednesday, April 5, 2017)]
[Proposed Rules]
[Pages 16550-16558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06718]
=======================================================================
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SURFACE TRANSPORTATION BOARD
49 CFR Parts 1104, 1109, 1111, 1114, and 1130
[Docket No. EP 733]
Expediting Rate Cases
AGENCY: Surface Transportation Board.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: Pursuant to Section 11 of the Surface Transportation Board
Reauthorization Act of 2015 (STB Reauthorization Act), the Surface
Transportation Board (Board) is proposing changes to its rules
pertaining to its rate case procedures to help improve and expedite the
rate review process.
DATES: Comments are due by May 15, 2017. Reply comments are due June
14, 2017.
ADDRESSES: Comments and replies may be submitted either via the Board's
e-filing format or in the traditional paper format. Any person using e-
filing should attach a document and otherwise comply with the
instructions at the ``E-FILING'' link on the Board's Web site, at
``https://www.stb.gov.'' Any person submitting a filing in the
traditional
[[Page 16551]]
paper format should send an original and 10 copies to: Surface
Transportation Board, Attn: Docket No. EP 733, 395 E Street SW.,
Washington, DC 20423-0001. Copies of written comments and replies will
be available for viewing and self-copying at the Board's Public Docket
Room, Room 131, and will be posted to the Board's Web site.
FOR FURTHER INFORMATION CONTACT: Sarah Fancher, (202) 245-0355.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at (800) 877-8339.
SUPPLEMENTARY INFORMATION: Section 11 of the STB Reauthorization Act,
Public Law 114-110, 129 Stat. 2228 (2015) directs the Board to
``initiate a proceeding to assess procedures that are available to
parties in litigation before courts to expedite such litigation and the
potential application of any such procedures to rate cases.'' In
addition, Section 11 requires the Board to comply with a new timeline
in Stand-Alone Cost (SAC) cases.
In advance of initiating this proceeding, Board staff held informal
meetings with stakeholders\1\ to explore and discuss ideas on: (1) How
procedures to expedite court litigation could be applied to rate cases,
and (2) additional ways to move SAC cases forward more expeditiously.
The Board issued an Advance Notice of Proposed Rulemaking (ANPRM) on
June 15, 2016, seeking formal comment on specific ideas raised in the
informal meetings as well as comments on any other relevant matters.
---------------------------------------------------------------------------
\1\ Board staff met with individuals either associated with and/
or speaking on behalf of the following organizations: American
Chemistry Council; Archer Daniels Midland Company; CSX
Transportation, Inc.; Economists Incorporated; Dr. Gerald Faulhaber;
FTI Consulting, Inc.; GKG Law, P.C.; Growth Energy; Highroad
Consulting; L.E. Peabody; LaRoe, Winn, Moerman & Donovan; consultant
Michael A. Nelson; Norfolk Southern Railway Company; Olin
Corporation; POET Ethanol Products; Sidley Austin LLP; Slover &
Loftus LLP; Steptoe & Johnson LLP; The Chlorine Institute; The
Fertilizer Institute; The National Industrial Transportation League;
and Thompson Hine LLP. We note that some participants expressed
individual views, not on behalf of the organization(s) with which
they are associated.
---------------------------------------------------------------------------
The Board received comments on the ANPRM from the following
organizations: The Rail Customer Coalition; Samuel J. Nasca on behalf
of SMART/Transportation Division, New York State Legislative Board
(SMART/TD-NY); the Association of American Railroads (AAR); the Western
Coal Traffic League, American Public Power Association, Edison Electric
Institute, National Association of Regulatory Utility Commissioners,
National Rural Electric Cooperative Association, and Freight Rail
Customer Alliance (collectively, Coal Shippers/NARUC); CSX
Transportation, Inc. (CSXT); the American Chemistry Council, the Dow
Chemical Company, and M&G Polymers USA, LLC (Joint Carload Shippers);
Norfolk Southern Railway Company (NSR); Union Pacific Railroad Company
(UP); and Oliver Wyman.
Based on the comments, the Board is now proposing specific changes
intended to help improve the rate review process and expedite rate
cases.\2\ In Section I, the Board addresses the comments and how they
have formed the basis of the rules proposed here. In Section II, the
Board explains the newly proposed rules. Note, these proposed rules are
not intended to be a comprehensive response to the comments received in
this docket, nor are they the final action the Board plans to take to
improve the Board's rate review processes for all shippers. The Board
will continue to evaluate the comments received and review its
regulations generally, and may propose additional revisions at a later
date.
---------------------------------------------------------------------------
\2\ Although many of the proposals pertain specifically to SAC
cases--the Board's methodology for large rate cases--some of the
proposals would also benefit cases filed under the Board's other
methodologies. In those instances we specify that a particular
proposal would also apply in, for example, Simplified-SAC or Three-
Benchmark cases (collectively, simplified standards). See Simplified
Standards for Rail Rate Cases, EP 646 (Sub-No. 1) (STB served Sept.
5, 2007).
---------------------------------------------------------------------------
I. Comments in Response to the ANPRM
Pre-Complaint Period. In the ANPRM, the Board noted that several
stakeholders suggested that the Board could require a complainant,
before filing its SAC complaint, to file a notice similar to that
required in the context of major and significant mergers before the
Board. See 49 CFR 1180.4(b). One of the purposes of the pre-complaint
filing would be to provide the railroad with time to start preparing
for litigation, including gathering documents and data necessary for
the discovery stage, which in turn could benefit both parties by
accelerating the discovery process. ANPRM, slip op. at 3. Accordingly,
the Board sought comments on the merits of adopting a pre-filing
requirement in SAC cases, and, if a pre-filing notice were adopted, the
information that should be contained in that notice and the appropriate
time period for filing the notice (e.g., 30 or 60 days prior to filing
a complaint). The Board also sought comments on the idea of offering or
requiring mediation during a pre-complaint period.
Several railroad and shipper interests generally support the
requirement of a pre-filing notice. (CSXT Comments 7, AAR Comments 6,
Joint Carload Shippers Comments 4-5.) CSXT and Joint Carload Shippers
comment that the filing would provide early notice of impending
discovery obligations. (CSXT Comments 7-10, Joint Carload Shippers
Comments 4-5.) CSXT also comments that a pre-filing notice could allow
the parties to agree on a protective order that could be in place at
the outset of the case. (CSXT Comments 8.)
Conversely, NSR and Coal Shippers/NARUC comment that a pre-filing
notice in and of itself likely would not do much to expedite rate
cases. (NSR Comments 35, Coal Shippers/NARUC Comments 33.) NSR argues
that, even with such a notice, the railroad can only begin to gather
the necessary documents and data once the shipper has filed its case,
indicating whether it is a SAC, Simplified-SAC, or Three-Benchmark
case, and the shipper has served its discovery requests, informing the
railroad of the time frame for discovery materials and identified the
segments of the railroad for which discovery is sought. (NSR Comments
35.) Coal Shippers/NARUC comment that once a shipper has decided to
file a SAC case, it is ready to do so immediately, and because of the
negotiations between the shipper and rail carriers where a potential
SAC case is in play, many rail carriers start gathering the necessary
SAC information without any pre-filing requirement. (Coal Shippers/
NARUC Comments 33-34.) Coal Shippers/NARUC comment that the only
potential benefit of a pre-filing requirement is one that includes a
response deadline--e.g., requiring a rail carrier to produce specified
SAC information no later than 30 days after the complaint is filed.
Coal Shippers/NARUC suggest that the Board consider a procedure where
the pre-filing requirement is at the complainant shipper's option, and,
if the shipper so elects, the respondent rail carrier is required to
provide information at a specified date after the complaint is filed.
(Coal Shippers/NARUC Comments 34.)
Regarding whether mediation should be conducted during a pre-
complaint period, CSXT and Joint Carload Shippers comment that doing so
would be beneficial in that it would allow parties to focus exclusively
on litigation after the complaint has been filed. (CSXT Comments 9-10,
Joint Carload Shippers Comments 4-5.) AAR comments that mediation at
the outset of the process could allow the parties to avoid litigation
altogether, though it would not actually expedite the rate case itself
once it is filed. (AAR
[[Page 16552]]
Comments 6.) Coal Shippers/NARUC comment that no coal rate cases have
settled because of the Board's mediation process, and that mandatory
mediation has driven up the costs associated with pursing relief from
the Board. (Coal Shippers/NARUC Comments 40.) Coal Shippers/NARUC
suggest eliminating mandatory mediation of SAC disputes entirely,
though leaving the option open for the parties if they jointly agree to
engage in mediation at any time during the SAC case process. (Coal
Shippers/NARUC Comments 40.)
With respect to the timing of the pre-filing notice, both CSXT and
Joint Carload Shippers argue that 60 days prior to the filing of a SAC
complaint probably would be optimal, and Joint Carload Shippers assert
that this would afford sufficient time for scheduling and conducting
mediation. (CSXT Comments 10, Joint Carload Shippers Comments 5.)
Although Coal Shippers/NARUC oppose the requirement of a pre-filing
notice, they argue that, if one is mandated by the Board, it should be
filed no later than 30 days prior to the date the complaint is filed.
(Coal Shippers/NARUC Comments 38-39.)
Concerning the content of the pre-filing notice, parties suggest
that the pre-filing notice could include: (1) The rate that will be
challenged; (2) the origin-destination pair(s) being challenged; (3)
the commodities at issue; (4) the states the shipper expects its SARR
may traverse; and (5) other pertinent information. (See CSXT Comments
11, Joint Carload Shippers Comments 5, AAR Comments 6; Coal Shippers/
NARUC Comments 38-39 \3\.)
---------------------------------------------------------------------------
\3\ Again, Coal Shippers/NARUC oppose the requirement of a pre-
filing notice, but offer suggestions in the event that the Board
were to require a pre-filing notice.
---------------------------------------------------------------------------
The Board is persuaded that establishing a pre-complaint period,
during which parties engage in mediation without the burden of
simultaneous litigation and discovery, outweighs any burden the pre-
complaint period may add. The Board believes that such a requirement
would help the case proceed more efficiently and quickly once the
complaint is filed because the pre-filing notice would put the parties
on notice as to what they likely will need to produce in discovery.
When the Board first codified mandatory mediation in SAC cases in
Procedures to Expedite Resolution of Rail Rate Challenges to be
Considered Under the Stand-Alone Cost Methodology, EP 638, slip op. at
2-3, 13-14 (STB served Apr. 3, 2003), the Board believed that the most
appropriate time to mediate was after the complaint was filed. Now,
with the benefit of more than a decade of experience with mediation,
the Board is convinced that pre-complaint mediation would be more
beneficial to SAC litigants.\4\
---------------------------------------------------------------------------
\4\ The existence of the pre-filing requirement would not affect
the statutory requirement that a complaint must be filed within two
years after the claim accrues.
---------------------------------------------------------------------------
With respect to the timing of the pre-filing notice, the Board
believes that a longer period of 70 days is appropriate to accommodate
the full schedule of mediation so that parties will have the time to
focus on resolutions before litigation begins. The Board welcomes
comment on this proposed longer period. With respect to the contents of
the notice, the Board believes that the most useful elements are: (1)
The rate to be challenged; (2) the origin/destination pair(s) to be
challenged; and (3) the commodities at issue. The Board also sees the
benefit of having a protective order in place as early as possible, and
thus requiring the shipper to include with its pre-filing notice a
motion for protective order. Accordingly, as discussed in Section II,
the Board proposes to require a complainant to submit a pre-filing
notice and motion for protective order 70 days before filing a SAC
complaint.
The Board recognizes Coal Shippers/NARUC's concerns that, once
shippers have considered filing a SAC case, they may wish to litigate
immediately, but the Board believes that the benefits of engaging in
early mediation, establishing a protective order, and providing early
notice of impending discovery obligations outweigh that delay. The
Board does not agree with the Coal Shippers/NARUC's suggestion that the
Board eliminate mandatory mediation of SAC disputes altogether, given
the potential benefit of mediation in SAC cases. Contrary to Coal
Shippers/NARUC's claim, mandatory mediation did result in a settlement
in a rate case involving coal. See NRG Power Marketing LLC v. CSX
Transp., Inc., NOR 42122, slip op. at 1 (STB served July 8, 2010.)
Discovery. The Board also sought comment on several ways in which
the Board could change its discovery procedures to help improve and
expedite rate cases.
a. Service of initial discovery requests. The Board sought comment
on requiring parties to either serve standard discovery requests or
disclosures of information with the filing of their complaints and
answers, as is done in some federal courts. ANPRM, slip op. at 3-4. NSR
strongly supports the concept of standardizing initial discovery
requests for both the complainant and the defendant and further
supports the concept of requiring these initial discovery requests to
be served concurrently with the complaint or answer, as applicable.
(NSR Comments 36.) Joint Carload Shippers also support standardized
disclosures, although they state that there is not much merit to
standardized discovery requests, as the time savings is not in the
standardization of discovery requests, but in requiring automatic and
earlier production of responsive information. (Joint Carload Shippers
Comments 6-7.) Joint Carload Shippers focus on the potential time
savings from the standardization of traffic and revenue data. (Joint
Carload Shippers Comments 7-9.)
CSXT does not take a position on standardizing discovery requests,
but cautions that discovery requests, while relatively consistent from
case to case, evolve over time. (CSXT Comments 23-24.) Coal Shippers/
NARUC do not support standardized discovery requests, and comment that
SAC discovery questions have evolved over time, and should continue to
do so to meet shippers' discovery needs and to address the
technological changes in how rail carriers collect, store, and maintain
data. (Coal Shippers/NARUC Comments 43.) Coal Shippers/NARUC also do
not support the use of standardized disclosures. (Coal Shippers/NARUC
Comments 43.) They note that while the specific categories of
information that shippers need--what they term ``Core SAC Data''--
generally remains the same from case to case, the exact set of
responsive information coal shippers need can change over time based on
case-specific needs and changes in how rail carriers maintain and
update their internal databases. (Coal Shippers/NARUC 43.) Thus,
instead of standardized disclosures, Coal Shippers/NARUC suggest the
following process: (1) Require the complainant shipper to file its
initial discovery requests along with its complaint; (2) require Board
staff to hold a technical discovery conference with the parties no
later than 15 days after the initial discovery requests are filed, at
which the complainant shipper will identify those questions seeking
Core SAC Data, and discuss logistical issues about producing this data;
and (3) require that, following the conference, the Board issue an
order directing the defendant rail carrier to respond to the
complainant shipper's specific requests seeking Core SAC Data no later
than 60 days after the initial discovery requests
[[Page 16553]]
were filed. (Coal Shippers/NARUC Comments 45.) Coal Shippers/NARUC
further suggest that the Board should require submission of discovery
by rail carriers no later than 20 days after the shipper's complaint is
filed. Coal Shippers/NARUC also propose that the Board allow rail
carrier requests for staff conferences regarding discovery requests at
any time after 40 days have elapsed since filing of a complaint. (Coal
Shippers/NARUC Comments 47.)
The Board is persuaded that the value of allowing discovery
requests and information disclosed in SAC cases to evolve outweighs the
potential time saved by standardizing discovery requests or
standardized disclosures. Accordingly, the Board will not propose to
change the SAC case regulations in this manner. However, the Board
agrees with the general consensus among commenters that beginning
discovery as soon as possible will help expedite SAC cases. Therefore,
the Board proposes requiring a complainant to certify that it has
served its initial discovery requests with its complaint and requiring
a defendant to certify that it has served its initial discovery
requests with its answer.
We do not see the need to adopt Coal Shippers/NARUC's proposed
process involving a technical conference at which the shipper would
identify the discovery requests seeking Core SAC Data in discovery
served with the complaint at this time. The Board believes this should
be evident from the discovery itself. However, as discussed further
below, the Board encourages additional use of conferences between the
parties and Board staff to promptly resolve any disputes that arise and
parties could request a conference early in the discovery process if
necessary in a particular case.
b. Meet and confer requirement. The Board sought comment on the
merits of a requirement, similar to Federal Rule of Civil Procedure 37,
that any party filing a motion to compel certify that it has attempted
to confer with the opposing party first. ANPRM, slip op. at 5.
Railroad and shipper interests generally support such a meet and
confer requirement. (CSXT Comments 28-29, Coal Shippers/NARUC Comments
51, NSR Comments 41-42, Joint Carload Shippers Comments 16.) Coal
Shippers/NARUC suggest that any such rule also address what they claim
is continuing confusion over the Board's procedural rule that requires
the filing of motions to compel in certain instances no later than 10
days after an insufficient response is received. See 49 CFR 1114.31(a).
Specifically, Coal Shippers/NARUC also suggest that the Board confirm
that the 10-day rule does not apply to requests for document
production. (Coal Shippers/NARUC Comments 51-52.) In addition, Coal
Shippers/NARUC suggest that the 10-day rule be changed to 14 days for
other covered discovery to allow a moving party sufficient time to
adhere to any new ``confer first'' rule. (Coal Shippers/NARUC Comments
51-52.) Joint Carload Shippers comment that there must be an exception
for situations where consultation is not practical due to time
constraints. (Joint Carload Shippers Comments 16.) NSR suggests that,
rather than imposing a meet-and-confer requirement, the Board should
require Board staff to ``convene a conference with the parties to
discuss'' a motion to compel, rather than making it optional, as is
currently done in the existing regulations. (NSR Comments 41-42.) \5\
---------------------------------------------------------------------------
\5\ NSR also suggests that the Board codify that ``a party
seeking to compel discovery must show (1) that it needs the
information to make its case, (2) that the information cannot be
readily obtained through other means, and (3) that the request is
not unduly burdensome.'' (NSR Comments 30 (citing Procedures to
Expedite, EP 638, slip op. at 4 (STB served Apr. 3, 2003).) The
Board does not believe that its current standard for ruling on
motions to compel is flawed or that NSR's proposal would expedite
the decision-making process.
---------------------------------------------------------------------------
The Board agrees with the majority of comments that adding a meet-
and-confer requirement would help to reduce the number of disputes that
reach the Board and thus expedite rate cases. The Board acknowledges
Joint Carload Shippers' concern that there are situations where
consultation may be difficult due to time constraints, but does not
believe that the best way of handling those instances is to create an
exception to the rule. Instead, the Board proposes a requirement
modeled on Federal Rule of Civil Procedure 37, which requires that the
movant certify that it has in good faith met and conferred or attempted
to meet and confer with the person or party failing to answer discovery
to resolve the issue without Board intervention.
The Board is not convinced that it needs to extend its 10-day rule
if it adopts a meet-and-confer requirement. The Board believes that 10
days is sufficient time to confer or attempt to confer with an
unresponsive party, and extending that period any further would
unnecessarily delay discovery.\6\ Additionally, the Board does not
agree with NSR that there is a need to modify 49 CFR 1114.31(a)(3) to
make a staff conference mandatory. Certain disputes may be resolved
more efficiently by a decision issued by the Director of the Office of
Proceedings under 49 CFR 1114.31(a)(4) without the need for a staff
conference. However, the Board will continue to convene staff
conferences when appropriate, and encourages any party that believes
such a conference would aid in resolving a dispute to request the Board
convene a staff conference at any point in the proceeding.
---------------------------------------------------------------------------
\6\ In addition, Coal Shippers/NARUC suggest that the Board
confirm that the 10-day rule in 49 CFR 1114.31(a) does not apply to
requests for document production. However, because this is a change
to the regulations that would impact more than just rate
reasonableness cases, the Board does not believe that it is
appropriate to address Coal Shippers/NARUC's concern in this
proceeding, which is limited specifically to procedures in rate
cases. In any event, although Coal Shippers/NARUC claim that this
regulation has created confusion in rate cases, it does not cite any
examples.
---------------------------------------------------------------------------
Evidentiary Submissions. The Board also sought comment on whether
it should consider staggering the filing of public and highly
confidential versions of the parties' pleadings to give parties more
time to ensure that public versions of filings are appropriately
redacted without delaying the case. ANPRM, slip op. at 7. Additionally,
the Board suggested that it could limit final briefs to certain
subjects on which the Board would like further argument rather than
allowing generalized argument. ANPRM, slip op. at 6.
a. Staggered filings and confidential designations. Several
comments from railroad and shipper interests support the idea of
staggering public and highly confidential versions of the parties'
pleadings. (CSXT Comments 39, Coal Shippers/NARUC Comments 61, NSR
Comments 48, Joint Carload Shippers Comments 26.) Coal Shippers/NARUC
propose three business days for the staggering of the filings. (Coal
Shippers/NARUC Comments 61.) CSXT cautions, however, that the delay in
filing the public versions would delay the ability of in-house
personnel to begin analyzing the filings and suggests that parties
identify the information in filings that can be shared with in-house
personnel simultaneously with highly confidential submissions. (CSXT
Comments 39.) CSXT argues that any delay in providing evidence to
parties' in-house experts and personnel may require extending a case's
procedural schedule. (CSXT Comments 40.) NSR notes that this proposal
likely would do more to ensure proper redactions than to expedite rate
cases. (NSR Comments 48.)
CSXT also recommends that the Board create a standard rule for
identifying highly confidential and confidential materials in parties'
pleadings. (CSXT Comments 40.) CSXT asserts that it and other parties
have used the convention of double braces for
[[Page 16554]]
highly confidential material (e.g., {{highly
confidential{time} {time} ) and single braces for confidential material
(e.g., {confidential{time} ), but others have designated material in a
more haphazard way, which makes it difficult to identify materials that
can be shared with in-house personnel. (CSXT Comments 40.)
The Board acknowledges CSXT's concern that delaying the submission
of public filings delays the ability of in-house personnel to review
and respond to the filings. However, the Board believes the appropriate
remedy is to set a delay of three business days, as suggested by Coal
Shippers/NARUC, rather than have parties identify the information in
filings that can be shared with in-house personnel simultaneously with
the highly confidential submission. The Board believes that the
evolution of rate case practice makes this change appropriate now, even
though the Board rejected such a proposal in Procedures to Expedite, EP
638 (STB served June 6, 2003), reconsideration denied (STB served July
31, 2003). When the Board held in Procedures to Expedite that parties
must file a public version of their submissions simultaneously with any
highly confidential or confidential version they might also choose to
file, the Board suggested that parties ``should propose procedural
schedules that allow the time they will need to comply with the
redaction requirements by the due dates for their filings with the
Board.'' Procedures to Expedite, EP 638, slip op. at 5. Over a decade
of rate case experience has demonstrated that this is not a practicable
solution, and the Board is persuaded that staggered filings are
appropriate. Therefore, as discussed below, the Board proposes allowing
parties to submit public versions of their filings three business days
after the submission of the highly confidential versions in all rate
case proceedings.
The Board also agrees with CSXT's comment that standardizing the
identification of public, confidential, and highly confidential
material will reduce confusion. Therefore, in Section II, the Board
proposes creating standard identifying markers that would be applied in
all rate case proceedings. The Board also proposes standard markers for
sensitive security information.\7\
---------------------------------------------------------------------------
\7\ Protective orders in SAC cases generally distinguish between
``confidential,'' ``highly confidential,'' and ``sensitive security
information.''
---------------------------------------------------------------------------
b. Limits on final briefs. Coal Shippers/NARUC comment that,
generally, limiting final briefs to specific issues of concern to the
Board is a good way to make the briefs more useful to the Board and
perhaps reduce the costs that the parties otherwise would incur in
presenting a brief that addresses a much wider swath of case issues.
(Coal Shippers/NARUC Comments 60-61.) Joint Carload Shippers support
limiting the final briefs to specific subjects identified by the Board
based upon its review of the evidence, or, as an alternative,
staggering the briefing schedule, to allow the complainant, which has
the burden of proof, the opportunity to respond to the defendant's
surrebuttal arguments. (Joint Carload Shippers Comments 25.) NSR
comments that while final briefs could be limited to subjects on which
the Board would like further information, the Board would benefit from
building in some flexibility for the parties to highlight issues they
believe are important. (NSR Comments 47.)
The Board believes that selection of the topics for final briefs
could be beneficial, however, it would require a Board decision
following the close of evidence. The Board is concerned that this
additional step would curtail the already shortened period available to
the Board for issuing a decision on the merits in SAC cases. More
importantly, the Board believes that the better approach for
encouraging parties to focus on the most important issues in SAC and
Simplified-SAC cases is to limit the length of final briefs. The Board
has on occasion, in individual cases, imposed page limits on final
briefs. See, e.g., Consumers Energy Co. v. CSX Transp., Inc., NOR
42142, slip op. at 1 (STB served June 3, 2016); Total Petrochems. &
Ref. USA, Inc. v. CSX Transp., Inc., NOR 42121, slip op. at 4 (STB
served Sept. 26, 2013). Based on the Board's prior experience, the
Board proposes to limit final briefs to 30 pages, inclusive of
exhibits, in all SAC and Simplified-SAC cases. The Board believes that
this is sufficient space for the parties to articulate their final
concerns, but limited enough to prevent further argument on all issues
and surrebuttal.
Interaction with Board Staff. The Board sought comment on the
increased use of written questions and technical conferences in SAC
cases, starting with an early technical conference to establish ground
rules and issue-specific Board expectations. ANPRM, slip op. at 7. The
Board also suggested that it could provide advance notice of the topics
to be discussed in a technical conference to promote an efficient and
productive conference. ANPRM, slip op. at 7. Finally, the Board
suggested that it could appoint a liaison to the parties to answer
questions about the process and to intervene informally (e.g., hold
status conferences) if it would help discovery or other matters move
more smoothly. ANPRM, slip op. at 7.
Several railroads and shipper interests supported the idea of
increased staff involvement. (AAR Comments 8; CSXT Comments 40-41; NSR
Comments 12; Joint Carload Shippers Comments 26-28.) Coal Shippers/
NARUC agree that increased staff involvement, as outlined by the Board
in the ANPRM, would be very useful to the parties and should help
advance the submission, and decision, of rate cases in an expeditious
manner. (Coal Shippers/NARUC Comments 62.) Joint Carload Shippers argue
that greater interaction through technical conferences and written
interrogatories could have several benefits associated with many of the
other subjects in the ANPRM.\8\ CSXT supports the idea of a liaison to
the parties as a way to resolve disputes short of formal motions to
compel. (CSXT Comments 40-41.)
---------------------------------------------------------------------------
\8\ For example, Joint Carload Shippers note that a pre-trial
conference with Board staff would serve many of the same functions
of Federal Rule of Civil Procedure 16, and it supports greater use
of technical conferences during Board review of the parties'
evidence. (Joint Carload Shippers Comments 26-28.)
---------------------------------------------------------------------------
The Board is convinced that increased staff involvement at all
stages of a rate case, both through technical conferences/written
questions and a Board-appointed liaison to the parties, would reduce
the number of disputes between the parties and thus expedite the rate
case process.\9\ Thus, the Board proposes to appoint a liaison to the
parties within 10 business days of the submission of the pre-filing
notice in SAC cases, and within 10 business days of the filing of the
complaint in Simplified-SAC and Three-Benchmark cases. The liaison
would not be recused from handling substantive elements of the case. In
addition, the Board intends to make greater use of written questions
from staff and technical conferences with the parties at every stage of
the case. When a technical conference is requested by a party or
parties or convened by the Board, the Board intends to provide advance
notice of the topics to be discussed to promote an efficient and
productive conference. The Board believes that increased communication
between the parties and the Board would expedite rate cases by reducing
the number of disputes between the parties and thus the
[[Page 16555]]
number of issues that must be decided by the Board.
---------------------------------------------------------------------------
\9\ In the ANPRM, the Board sought comment on the increased use
of written questions and technical conferences in SAC cases in
particular; however, the Board believes that increased staff
involvement would help to improve and expedite rate cases under
other methodologies as well.
---------------------------------------------------------------------------
II. The Proposed Rules
The proposed rules contain changes to the Board's regulations at 49
CFR parts 1104, 1109, 1111, 1114, and 1130, which are set out below. In
proposing these changes, the Board has considered the suggestions from
commenters on the ANPRM, incorporated those suggestions where
appropriate, and modified them where necessary to propose changes to
the regulations that the Board believes would best help to improve and
expedite the rate case process.
Pre-Complaint Period. The proposed rules include changes creating
and detailing a pre-complaint period in SAC cases intended to provide
parties with an opportunity to mediate the dispute and prepare for
litigation.
1. Pre-filing Notice. First, the Board proposes to create a pre-
complaint period at newly redesignated 49 CFR 1111.1 by requiring a SAC
complainant to submit a pre-filing notice at least 70 days prior to
filing its complaint. The Board proposes that the pre-filing notice
contain the rate and origin/destination pair(s) to be challenged, the
commodities at issue, and a motion for protective order pursuant to 49
CFR 1104.14(c). This requirement would accomplish several goals. It
would put the defendant on notice of the impending complaint such that
it can begin to prepare for discovery and litigation. In addition, the
early submission of a motion for protective order would allow a
protective order to be in place at the outset of a case, thus
expediting discovery production and disclosures. Finally, it would
allow the parties to engage in mediation pre-complaint, as described
below.
2. Mandatory Mediation. Second, the Board proposes to revise 49 CFR
1109.4 to move mandatory mediation in SAC cases to the pre-complaint
period. This change to the regulations would not impose new
requirements, but would require mediation to take place earlier to
allow parties to focus on the mediation process without the
distractions of litigation. The Board intends for mediation to be
complete prior to the filing of the complaint; however, consistent with
current procedures, the rules will allow for an extension of time via
Board order.
3. Appointment of a Board Liaison to the Parties. Third, under 49
CFR 1111.1, the Board proposes in SAC cases to appoint a liaison to the
parties within 10 business days of the complainant's submission of the
pre-filing notice. The Board proposes to amend the newly redesignated
49 CFR 1111.10(a) to appoint a liaison within 10 business days of the
filing of the complaint in cases using simplified standards. With this
addition to the regulations, the Board intends to improve communication
between the parties and the Board by providing the parties with a point
of contact to whom they can address questions or disputes.
Discovery. The proposed rules include changes to the Board's
discovery regulations intended to streamline discovery in rate cases.
1. Initial Discovery Requests. First, the Board proposes to add 49
CFR 1111.2(f) and amend 49 CFR 1114.21(d) & (f) to require a
complainant in a SAC proceeding to certify that it has served its
initial discovery requests simultaneously with its complaint. The Board
also proposes to add 49 CFR 1111.5(f) and amend 49 CFR 1114.21(d) & (f)
to require a defendant in a SAC proceeding to certify that it has
served its initial discovery requests simultaneously with its answer.
To address the filing of an amended or supplemental complaint, the
Board proposes to amend the newly redesignated 49 CFR 1111.3(b) to
require the complainant to certify that it has served on the defendant
any initial discovery requests affected by the amended or supplemental
complaint, if any. The Board proposes a corresponding requirement at 49
CFR 1111.5(f), in which a defendant responding to an amended or
supplemental complaint must certify that it has served on the
complainant any discovery requests affected by the amended or
supplemental complaint, if any. With these changes, the Board intends
to expedite discovery, and thus the rate case, by beginning discovery
with the complaint. These changes would eliminate the current potential
gap between the filing of the complaint and the beginning of discovery.
2. Meet and Confer Requirement. Second, the Board proposes to amend
49 CFR 1114.31(a) to include a certification that the party filing a
motion to compel has in good faith conferred or attempted to confer
with the party serving discovery to settle the dispute over those terms
without Board intervention. The requirement would apply in SAC cases
and cases filed under simplified standards. The Board believes that
this requirement will encourage parties to resolve disputes without
involving the Board, thereby expediting litigation of a rate case by
reducing the number of necessary Board decisions.
Evidentiary Submissions. The proposed rules include changes to the
Board's evidentiary regulations intended to improve and expedite the
presentation of evidence in rate cases.
1. Stagger the Submission of Public and Highly Confidential
Versions of Filings. First, in both SAC and simplified standards cases,
the Board proposes to allow parties to submit highly confidential
versions of the filings according to the procedural schedule in a
particular case, and submit public versions of those filings within
three business days after the filing of the highly confidential
versions. With this change the Board intends to allow parties a
reasonable amount of time to ensure confidentiality after submitting
the highly confidential version of each filing.\10\
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\10\ In the Board's experience, parties to rate cases typically
do not submit confidential versions of their filings in addition to
the highly confidential and public versions. It is the Board's
understanding that parties would continue to do so, and properly
identify all confidential, highly confidential, and sensitive
security information in the first filing according to the convention
described below.
---------------------------------------------------------------------------
2. Standard Convention for Identifying Confidential, Highly
Confidential, and Sensitive Security Information. Second, the Board
proposes to revise 49 CFR 1104.14 to create standard identifying
markers set forth in protective orders for the submission of
confidential, highly confidential, and sensitive security information
in rate cases. The Board proposes that all confidential information be
contained in single braces, i.e., {X{time} , all highly confidential
information be contained in double braces, i.e., {{Y{time} {time} , and
all sensitive security information to be contained in triple braces,
i.e., {{{Z{time} {time} {time} . This change would eliminate any
confusion caused by parties using different methods of identification
and would apply in both SAC and simplified standards cases.
3. Limits on Final Briefs. Third, the Board proposes to limit the
length of final briefs to 30 pages, inclusive of exhibits. With this
change the Board intends to have the parties focus on the most
important issues, and eliminate additional time otherwise used by the
Board selecting certain issues or issuing decisions to limit the length
of final briefs.
Technical Modifications. In addition, the Board proposes two
modifications in the existing regulations. Specifically, the Board
proposes to amend the newly redesignated 49 CFR 1111.11(b) to apply the
requirement that the parties confer to SAC complaints in addition to
simplified standards complaints. The Board also proposes to amend 49
CFR 1130.1 to include the correct reference to the newly redesignated
49 CFR 1111.2(a).
[[Page 16556]]
The Board seeks comments from all interested persons on these
proposed rules. Importantly, the Board encourages interested persons to
propose and discuss potential modifications or alternatives to the
proposed rule. The Board will consider all recommended proposals in an
effort to establish the most useful changes to improve and expedite the
rate review process.
Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980
(RFA), 5 U.S.C. 601-612, generally requires a description and analysis
of new rules that would have a significant economic impact on a
substantial number of small entities. In drafting a rule, an agency is
required to: (1) Assess the effect that its regulation will have on
small entities; (2) analyze effective alternatives that may minimize a
regulation's impact; and (3) make the analysis available for public
comment. Sections 601-604. In its notice of proposed rulemaking, the
agency must either include an initial regulatory flexibility analysis,
section 603(a), or certify that the proposed rule would not have a
``significant impact on a substantial number of small entities.''
Section 605(b). The impact must be a direct impact on small entities
``whose conduct is circumscribed or mandated'' by the proposed rule.
White Eagle Coop. v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).
The Board's proposed changes to its regulations here are intended
to improve and expedite its rate case procedures and do not mandate or
circumscribe the conduct of small entities. Effective June 30, 2016,
for the purpose of RFA analysis for rail carriers subject to our
jurisdiction, the Board defines a ``small business'' as only including
those rail carriers classified as Class III rail carriers under 49 CFR
1201.1-1. See Small Entity Size Standards Under the Regulatory
Flexibility Act, EP 719 (STB served June 30, 2016) (with Board Member
Begeman dissenting).\11\ The changes proposed here are largely
procedural or codify existing practice, and would not have a
significant economic impact on small entities. Furthermore, since the
inception of the Board in 1996, only three of the 51 cases filed
challenging the reasonableness of freight rail rates have involved a
Class III rail carrier as a defendant. Those three cases involved a
total of 13 Class III rail carriers. The Board estimates that there are
approximately 656 Class III rail carriers. Therefore, the Board
certifies under 5 U.S.C. 605(b) that these proposed rules, if
promulgated, would not have a significant economic impact on a
substantial number of small entities within the meaning of the RFA. The
proposed rules, if promulgated, would amend the existing procedures for
filing and litigating a rate case, as directed by Section 11 of the STB
Reauthorization Act.
---------------------------------------------------------------------------
\11\ Class III carriers have annual operating revenues of $20
million or less in 1991 dollars, or $36,633,120 or less when
adjusted for inflation using 2015 data. Class II rail carriers have
annual operating revenues of less than $250 million but in excess of
$20 million in 1991 dollars, or $457,913,998 and $36,633,120
respectively, when adjusted for inflation using 2015 data. The Board
calculates the revenue deflator factor annually and publishes the
railroad revenue thresholds on its Web site. 49 CFR 1201.1-1.
---------------------------------------------------------------------------
Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act
(PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB)
regulations at 5 CFR 1320.8(d)(3), the Board seeks comments about each
of the proposed collections regarding: (1) Whether the collection of
information, as modified in the proposed rule and further described
below, is necessary for the proper performance of the functions of the
Board, including whether the collection has practical utility; (2) the
accuracy of the Board's burden estimates; (3) ways to enhance the
quality, utility, and clarity of the information collected; and (4)
ways to minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology, when appropriate. The Board
estimates these new requirements would add a total annual hour burden
of eight hours and no total annual ``non-hour burden'' cost under the
PRA. Information pertinent to these issues is included in the Appendix.
This proposed rule will be submitted to OMB for review as required
under 44 U.S.C. 3507(d) and 5 CFR 1320.11. Comments received by the
Board regarding the information collection will also be forwarded to
OMB for its review when the final rule is published.
It is ordered:
1. Comments are due by May 15, 2017. Reply comments are due by June
14, 2017.
2. A copy of this decision will be served upon the Chief Counsel
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
3. Notice of this decision will be published in the Federal
Register.
4. This decision is effective on its service date.
List of Subjects
49 CFR Part 1104
Administrative practice and procedure.
49 CFR Part 1109
Administrative practice and procedure, Maritime carriers, Motor
carriers, Railroads.
49 CFR Part 1111
Administrative practice and procedure, Investigations.
49 CFR Part 1114
Administrative practice and procedure.
49 CFR Part 1130
Administrative practice and procedure.
Decided: March 30, 2017.
By the Board, Board Members Begeman, Elliott, and Miller.
Raina S. Contee,
Clearance Clerk.
For the reasons set forth in the preamble, the Surface
Transportation Board proposes to amend title 49, chapter X, parts 1104,
1109, 1111, 1114, and 1130 of the Code of Federal Regulations as
follows:
PART 1104--FILING WITH THE BOARD-COPIES-VERIFICATION-SERVICE-
PLEADINGS, GENERALLY
0
1. The authority citation for part 1104 is revised to read as follows:
Authority: 5.U.S.C. 553 and 559; 18 U.S.C. 1621; and 49 U.S.C.
1321.
0
2. In Sec. 1104.14, add paragraph (c) to read as follows:
Sec. 1104.14 Protective orders to maintain confidentiality.
* * * * *
(c) Requests for protective orders in stand-alone cost and
simplified standards cases. A motion for protective order in stand-
alone cost and simplified standards cases shall specify that
evidentiary submissions will designate confidential material within
single braces (i.e., {X{time} ), highly confidential material within
double braces (i.e., {{Y{time} {time} ), and sensitive security
information within triple braces (i.e., {{{Z{time} {time} {time} ). In
stand-alone cost cases, the motion for protective order shall be filed
together with the notice pursuant to 49 CFR 1111.1.
PART 1109--USE OF MEDIATION IN BOARD PROCEEDINGS
0
3. The authority citation for part 1109 is revised to read as follows:
[[Page 16557]]
Authority: 49 U.S.C. 1321(a) and 5 U.S.C. 571 et seq.
0
4. In Sec. 1109.4, revise paragraphs (a), (b), and (g) to read as
follows:
Sec. 1109.4 Mandatory mediation in rate cases to be considered under
the stand-alone cost methodology.
(a) Mandatory use of mediation. A shipper seeking rate relief from
a railroad or railroads in a case involving the stand-alone cost
methodology must engage in non-binding mediation of its dispute with
the railroad upon submitting a pre-filing notice under 49 CFR part
1111.
(b) Assignment of mediators. Within 10 business days after the
shipper submits its pre-filing notice, the Board will assign one or
more mediators to the case. Within 5 business days of the assignment to
mediate, the mediator(s) shall contact the parties to discuss ground
rules and the time and location of any meeting.
* * * * *
(g) Procedural schedule. Absent a specific order from the Board
granting an extension, the mediation will not affect the procedural
schedule in stand-alone cost rate cases set forth at 49 CFR 1111.9(a).
PART 1111--COMPLAINT AND INVESTIGATION PROCEDURES
0
5. The authority citation for part 1111 continues to read as follows:
Authority: 49 U.S.C. 10704, 11701, and 1321.
Sec. Sec. 1111.1 through 1111.10 [Redesignated as Sec. Sec. 1111.2
through 1111.11]
0
6. Redesignate Sec. Sec. 1111.1 through 1111.10 as Sec. Sec. 1111.2
through 1111.11, respectively.:
0
7. Add new Sec. 1111.1 to read as follows:
Sec. 1111.1 Pre-filing procedures in stand-alone cost cases.
(a) General. At least 70 days prior to the proposed filing of a
complaint challenging the reasonableness of a rail rate to be examined
under constrained market pricing, complainant shall file a notice with
the Board. The notice shall:
(i) Identify the rate to be challenged;
(ii) Identify the origin/destination pair(s) to be challenged;
(iii) Identify the affected commodities; and
(iv) Include a motion for protective order as set forth at 49 CFR
1104.14(c).
(b) Liaison. Within 10 days of the filing of the pre-filing notice,
the Board shall appoint a liaison to the parties.
0
8. Add paragraph (f) to newly redesignated 1111.2 to read as follows:
Sec. 1111.2 Content of formal complaints; joinder.
* * * * *
(f) Discovery in stand-alone cost cases. Upon filing its complaint,
the complainant shall certify that it has served its initial discovery
requests on the defendant.
0
9. Revise newly redesignated Sec. 1111.3 to read as follows:
Sec. 1111.3 Amended and supplemental complaints.
(a) Generally. An amended or supplemental complaint may be tendered
for filing by a complainant against a defendant or defendants named in
the original complaint, stating a cause of action alleged to have
accrued within the statutory period immediately preceding the date of
such tender, in favor of complainant and against the defendant or
defendants. The time limits for responding to an amended or
supplemental complaint are computed pursuant to Sec. Sec. 1111.5 and
1111.6 of this part, as if the amended or supplemental complaint was an
original complaint.
(b) Stand-alone cost. If a complainant tenders an amended or
supplemental complaint in a stand-alone cost case, the complainant
shall certify that it has served on the defendant those initial
discovery requests affected by the amended or supplemental complaint,
if any.
(c) Simplified standards. A complaint filed under the simplified
standards may be amended once before the filing of opening evidence to
opt for a different rate reasonableness methodology, among Three-
Benchmark, Simplified-SAC, or Full-SAC. If so amended, the procedural
schedule begins again under the new methodology as set forth at
Sec. Sec. 1111.9 and 1111.10. However, only one mediation period per
complaint shall be required.
0
10. Add paragraph (f) to newly redesignated 1111.5 to read as follows:
Sec. 1111.5 Answers and cross complaints.
* * * * *
(f) Discovery in stand-alone cost cases. Upon filing its answer,
the defendant shall certify that it has served its initial discovery
requests on the complainant. If the complainant tenders an amended or
supplemental complaint to which the defendant must reply, upon filing
the answer to the amended or supplemental complaint, the defendant
shall certify that it has served on the complainant those initial
discovery requests affected by the amended or supplemental complaint,
if any.
0
11. Revise newly redesignated Sec. 1111.10(a) to read as follows:
Sec. 1111.10 Procedural schedule in cases using simplified
standards.
(a) * * *
(1) In cases relying upon the Simplified-SAC methodology:
* * * * *
In addition, the Board will appoint a liaison within 10 business
days of the filing of the complaint.
(2) In cases relying upon the Three-Benchmark methodology:
* * * * *
In addition, the Board will appoint a liaison within 10 business
days of the filing of the complaint.
(b) Staggered filings; final briefs. (1) The parties may submit
highly confidential versions of filings on the dates identified in the
procedural schedule, and submit public versions of those filings within
three business days thereafter.
(2) In cases relying upon the Simplified-SAC methodology, final
briefs are limited to 30 pages, inclusive of exhibits.
0
12. Amend Sec. 1111.9 as follows:
0
a. Revise newly redesignated paragraph (a).
0
b. Further redesignate the newly redesignated paragraph (b) as
paragraph (c), and revise newly redesignated paragraph (c).
0
c. Add new paragraph (b).
The additions and revisions read as follows:
Sec. 1111.9 Procedural schedule in stand-alone cost cases.
(a) Procedural schedule. Absent a specific order by the Board, the
following general procedural schedule will apply in stand-alone cost
cases after the pre-complaint period initiated by the pre-filing
notice:
Day 0--Complaint filed, discovery period begins.
Day 7 or before--Conference of the parties convened pursuant to
Sec. 1111.11(b).
Day 20--Defendant's answer to complaint due.
* * * * *
(b) Staggered filings; final briefs. (1) The parties may submit
highly confidential versions of filings on the dates identified in the
procedural schedule, and submit public versions of those filings within
three business days thereafter.
(2) Final briefs are limited to 30 pages, inclusive of exhibits.
* * * * *
0
13. Amend Sec. 1111.10 as follows:
0
a. Further redesignate the newly redesignated paragraphs (b), (c), and
(d) as (c), (d) and (e) respectively.
[[Page 16558]]
0
b. Add new paragraph (b) to read as follows:
(b) Staggered filings; final briefs. (1) The parties may submit
highly confidential versions of filings on the dates identified in the
procedural schedule, and submit public versions of those filings within
three business days thereafter.
(2) In cases relying upon the Simplified-SAC methodology, final
briefs are limited to 30 pages, inclusive of exhibits.
0
14. Revise newly redesignated Sec. 1111.11(b) to read as follows:
Sec. 1111.11 Meeting to discuss procedural matters.
* * * * *
(b) Stand-alone cost or simplified standards complaints. In
complaints challenging the reasonableness of a rail rate based on
stand-alone cost or the simplified standards, the parties shall meet,
or discuss by telephone or through email, discovery and procedural
matters within 7 days after the complaint is filed in stand-alone cost
cases, and 7 days after the mediation period ends in simplified
standards cases. The parties should inform the Board as soon as
possible thereafter whether there are unresolved disputes that require
Board intervention and, if so, the nature of such disputes.
PART 1114--EVIDENCE; DISCOVERY
0
15. The authority citation for part 1114 is revised to read as follows:
Authority: 5 U.S.C. 559; 49 U.S.C. 1321.
0
16. Amend Sec. 1114.21 as follows:
0
a. Revise paragraph (d).
0
b. Revise the first sentence of paragraph (f).
The revisions read as follows:
Sec. 1114.21 Applicability; general provisions.
* * * * *
(d) Sequence and timing of discovery. Unless the Board upon motion,
and subject to the requirements at 49 CFR 1111.2(f) and 1111.5(f) in
stand-alone cost cases, for the convenience of parties and witnesses
and in the interest of justice, orders otherwise, methods of discovery
may be used in any sequence and the fact that a party is conducting
discovery, whether by deposition or otherwise, should not operate to
delay any party's discovery.
* * * * *
(f) Service of discovery materials. Unless otherwise ordered by the
Board, and subject to the requirements at 49 CFR 1111.2(f) and
1111.5(f) in stand-alone cost cases, depositions, interrogatories,
requests for documents, requests for admissions, and answers and
responses thereto, shall be served on other counsel and parties, but
shall not be filed with the Board. * * *
0
17. In Sec. 1114.31(a) revise paragraph (a) introductory text to read
as follows:
Sec. 1114.31 Failure to respond to discovery.
(a) Failure to answer. If a deponent fails to answer or gives an
evasive answer or incomplete answer to a question propounded under
Sec. 1114.24(a), or a party fails to answer or gives evasive or
incomplete answers to written interrogatories served pursuant to Sec.
1114.26(a), the party seeking discovery may apply for an order
compelling an answer by motion filed with the Board and served on all
parties and deponents. Such motion to compel an answer must be filed
with the Board and served on all parties and deponents. In stand-alone
cost and simplified standards cases, such motion to compel an answer
must include a certification that the movant has in good faith
conferred or attempted to confer with the person or party failing to
answer discovery to obtain it without Board intervention. Such motion
to compel an answer must be filed with the Board within 10 days after
the failure to obtain a responsive answer upon deposition, or within 10
days after expiration of the period allowed for submission of answers
to interrogatories. On matters relating to a deposition on oral
examination, the proponent of the question may complete or adjourn the
examination before he applies for an order.
* * * * *
PART 1130--INFORMAL COMPLAINTS
0
18. The authority citation for Part 1130 is revised to read as follows:
Authority: 49 U.S.C. 1321, 13301(f), 14709.
0
19. In Sec. 1130.1, revise paragraph (a) to read as follows:
Sec. 1130.1 When no damages sought.
(a) Form and content; copies. Informal complaint may be by letter
or other writing and will be serially numbered and filed. The complaint
must contain the essential elements of a formal complaint as specified
at 49 CFR 1111.2 and may embrace supporting papers. The original and
one copy must be filed with the Board.
* * * * *
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix
Information Collection
Title: Complaints under 49 CFR 1111.
OMB Control Number: 2140-0029.
Form Number: None.
Type of Review: Revision of a currently approved collection.\12\
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\12\ The Surface Transportation Board filed a 60-day notice of
intent to seek extension of approval on November 29, 2016. See 81 FR
86,061.
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Summary: As part of its continuing effort to reduce paperwork
burdens, and as required by the Paperwork Reduction Act of 1995, 44
U.S.C. 3501-3521 (PRA), the Surface Transportation Board (Board)
gives notice that it is requesting from the Office of Management and
Budget (OMB) approval for the revision of the currently approved
information collection, Complaints under 49 CFR part 1111, OMB
Control No. 2140-0029, as further described below. The requested
revision to the currently approved collection is necessitated by
this Notice of Proposed Rulemaking, which amends certain information
collected by the Board in stand-alone cost (SAC) rate cases. All
other information collected by the Board in the currently approved
collection is without change from its approval.
Respondents: Affected shippers, railroads, and communities that
seek redress for alleged violations related to unreasonable rates,
unreasonable practices, service issues, and other statutory claims.
Number of Respondents: Four.
Frequency of Response: On occasion. In recent years, respondents
have filed approximately four complaints of this type per year with
the Board.
Total Burden Hours (annually including all respondents): 1,876
(estimated hours per complaint (469) x total number of complaints
(4)).
Total Annual ``Non-Hour Burden'' Cost: $5,848 (estimated non-
hour burden cost per complaint ($1,462) x total number of complaints
(4)).
Needs and Uses: Under the Board's regulations, persons may file
complaints before the Board pursuant to 49 CFR part 1111 seeking
redress for alleged violations of provisions of the Interstate
Commerce Act, Public Law 104-88, 109 Stat. 803 (1995). In the last
few years, the most significant complaints filed at the Board allege
that railroads are charging unreasonable rates or that they are
engaging in unreasonable practices. See, e.g., 49 U.S.C. 10701,
10704, and 11701. The collection by the Board of these complaints,
and the agency's action in conducting proceedings and ruling on the
complaints, enables the Board to meet its statutory duty to regulate
the rail industry.
[FR Doc. 2017-06718 Filed 4-4-17; 8:45 am]
BILLING CODE 4915-01-P
