Ex Parte Communications in Informal Rulemaking Proceedings, 9222-9232 [2018-04411]
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§ 225.19 Primary groups of accidents/
incidents.
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(c) Group II—Rail equipment. Rail
equipment accidents/incidents are
collisions, derailments, fires,
explosions, acts of God, and other
events involving the operation of ontrack equipment (standing or moving)
that result in damages higher than the
current reporting threshold (i.e., $6,700
for calendar years 2002 through 2005,
$7,700 for calendar year 2006, $8,200
for calendar year 2007, $8,500 for
calendar year 2008, $8,900 for calendar
year 2009, $9,200 for calendar year
2010, $9,400 for calendar year 2011,
$9,500 for calendar year 2012, $9,900
for calendar year 2013, $10,500 for
calendar year 2014, $10,500 for calendar
year 2015, $10,500 for calendar year
2016, and $10,700 for calendar years
2017 and beyond, until revised) to
railroad on-track equipment, signals,
tracks, track structures, or roadbed,
including labor costs and the costs for
acquiring new equipment and
material.
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(e) The reporting threshold is $6,700
for calendar years 2002 through 2005,
$7,700 for calendar year 2006, $8,200
for calendar year 2007, $8,500 for
calendar year 2008, $8,900 for calendar
year 2009, $9,200 for calendar year
2010, $9,400 for calendar year 2011,
$9,500 for calendar year 2012, $9,900
for calendar year 2013, $10,500 for
calendar year 2014, $10,500 for calendar
year 2015, $10,500 for calendar year
2016, and $10,700 for calendar years
2017 and beyond, until revised. The
procedure for determining the reporting
threshold for calendar years 2006 and
beyond appears as paragraphs 1–8 of
appendix B to part 225.
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Juan D. Reyes, III,
Chief Counsel.
[FR Doc. 2018–04349 Filed 3–2–18; 8:45 am]
BILLING CODE 4910–06–P
SURFACE TRANSPORTATION BOARD
49 CFR Part 1102
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[Docket No. EP 739]
Ex Parte Communications in Informal
Rulemaking Proceedings
Surface Transportation Board.
Final rule.
AGENCY:
ACTION:
In this decision, the Surface
Transportation Board (the Board)
modifies its regulations to permit,
subject to disclosure requirements, ex
SUMMARY:
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parte communications in informal
rulemaking proceedings. The Board also
adopts other changes to its ex parte
rules that would clarify and update
when and how interested persons may
communicate informally with the Board
regarding pending proceedings other
than rulemakings. The intent of the
modified regulations is to enhance the
Board’s ability to make informed
decisions through increased stakeholder
communications while ensuring that the
Board’s record-building process in
rulemaking proceedings remains
transparent and fair.
DATES: This rule is effective on April 4,
2018.
ADDRESSES: Requests for information or
questions regarding this final rule
should reference Docket No. EP 739 and
be in writing addressed to: Chief,
Section of Administration, Office of
Proceedings, Surface Transportation
Board, 395 E Street SW, Washington, DC
20423–0001.
FOR FURTHER INFORMATION CONTACT:
Jonathon Binet at (202) 245–0368.
Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at
(800) 877–8339.
SUPPLEMENTARY INFORMATION: The
Board’s current regulations at 49 CFR
1102.2 generally prohibit most informal
communications between the Board and
interested persons concerning the merits
of pending Board proceedings. These
regulations require that communications
with the Board or Board staff regarding
the merits of an ‘‘on-the-record’’ Board
proceeding not be made on an ex parte
basis (i.e., without the knowledge or
consent of the parties to the
proceeding).1 See 49 CFR 1102.2(a)(3),
(c). The current regulations detail the
procedures required in the event an
impermissible communication occurs
and the potential sanctions for
violations. See 49 CFR 1102.2(e), (f).
In 1977, the Board’s predecessor
agency, the Interstate Commerce
Commission (ICC), determined that the
general prohibition on ex parte
communications in proceedings should
include the informal rulemaking
proceedings the Board uses to
promulgate regulations.2 See Revised
1 ‘‘On-the-record proceeding’’ means ‘‘any matter
described in Sections 556–557 of the
Administrative Procedure Act [(APA)] (5 U.S.C.
556–557) or any matter required by the
Constitution, statute, Board rule, or by decision in
the particular case, that is decided solely on the
record made in a Board proceeding.’’ 49 CFR
1102.2(a)(1).
2 The APA, 5 U.S.C. 551–559, governs two
categories of agency rulemaking: Formal and
informal. Formal rulemaking is subject to specific
procedural requirements, including hearings,
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Rules of Practice, 358 I.C.C. 323, 345
(1977).3 At that time, several court
decisions expressed the view that ex
parte communications in informal
rulemaking proceedings were inherently
suspect.4 Accordingly, it has long been
the agency’s practice to prohibit
meetings with individual stakeholders
on issues that are the topic of pending
informal rulemaking proceedings.
At the same time, however, other
court decisions were more tolerant of ex
parte communications in informal
rulemaking proceedings, so long as the
proceedings were not quasi-adjudicative
in nature and the process remained
fair.5 In 1981, in Sierra Club v. Costle,
657 F.2d 298 (D.C. Cir. 1981), the U.S.
Court of Appeals for the District of
Columbia Circuit significantly clarified
and liberalized treatment of this issue.
In that case, the court considered the
‘‘timing, source, mode, content, and the
extent of . . . disclosure’’ of numerous
written and oral ex parte
communications received after the close
of the comment period to determine
whether those communications violated
the governing statute or due process. Id.
at 391. The court held that, because the
agency docketed most of the ex parte
communications and none of the
comments were docketed ‘‘so late as to
presiding officers, and a strict ex parte prohibition.
See 5 U.S.C. 556–57. But most federal agency
rulemakings, including the Board’s, are informal
rulemaking proceedings subject instead to the less
restrictive ‘‘notice-and-comment’’ requirements of 5
U.S.C. 553.
3 In Revised Rules of Practice, the ICC stated ‘‘ex
parte communication during a rulemaking is just as
improper as it is during any other proceeding. The
Commission’s decisions should be influenced only
by statements that are a matter of public record.’’
358 I.C.C. at 345.
4 See, e.g., Home Box Office v. Fed. Commc’ns
Comm’n, 567 F.2d 9, 51–59 (D.C. Cir. 1977) (finding
that ex parte communications that occurred after
the notice of proposed rulemaking (NPRM) violated
the due process rights of the parties who were not
privy to the communications because the written
administrative record would not reflect the possible
‘‘undue influence’’ exerted by those stakeholders
who had engaged in ex parte communications);
Nat’l Small Shipments Traffic Conference v. ICC,
590 F.2d 345, 351 (D.C. Cir. 1978) (finding ex parte
communications ‘‘violate[d] the basic fairness of a
hearing which ostensibly assures the public a right
to participate in agency decision making,’’
foreclosing effective judicial review); Sangamon
Valley Television Corp. v. United States, 269 F.2d
221, 224 (D.C. Cir. 1959) (finding that undisclosed
ex parte communications between agency
commissioners and a stakeholder were unlawful
because the informal rulemaking involved
‘‘resolution of conflicting private claims to a
valuable privilege, and that basic fairness requires
such a proceeding to be carried on in the open’’).
5 See, e.g., Action for Children’s Television v. Fed.
Commc’ns Comm’n, 564 F.2d 458 (D.C. Cir. 1977)
(upholding the agency’s decision not to issue
proposed rules and finding no APA violation for ex
parte discussions where the agency provided a
meaningful opportunity for public participation and
the proceeding did not involve competing claims
for a valuable privilege).
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preclude any effective public
comment,’’ the agency satisfied its
statutory requirements. Id. at 398. The
court also declined to prohibit ex parte
communications in informal
rulemakings on constitutional due
process grounds, and even held that not
all ex parte communications must
necessarily be docketed (implicitly
concluding that whether such
communications require docketing
depends on case-specific
circumstances). Id. at 402–04. Today,
Sierra Club is considered the most
recent influential decision on ex parte
communications in informal
rulemakings and is often cited by courts
for the proposition that ex parte
communications in informal agency
rulemaking are generally permissible.6
More recently, in 2014, the
Administrative Conference of the
United States (ACUS), the body charged
by Congress with recommending agency
best practices, provided guidance to
agencies indicating that a general
prohibition on ex parte communications
in informal rulemaking proceedings is
neither required nor advisable. Ex Parte
Commc’ns in Informal Rulemaking
Proceedings (2014 ACUS
Recommendation), 79 FR 35988, 35994
(June 25, 2014). ACUS concluded that
ex parte communications in informal
rulemaking proceedings ‘‘convey a
variety of benefits to both agencies and
the public,’’ although it acknowledged
that fairness issues can arise if certain
groups have, or are perceived to have,
‘‘greater access to agency personnel than
others.’’ Id. However, in balancing these
competing considerations, ACUS urged
agencies to consider placing few, if any,
restrictions on ex parte communications
that occur before an NPRM is issued
because communications at this early
stage are less likely to cause harm and
more likely to ‘‘help an agency gather
essential information, craft better
regulatory proposals, and promote
consensus building among interested
persons.’’ Id. ACUS further
6 See, e.g., Tex. Office of Pub. Util. Counsel v.
Fed. Commc’ns Comm’n, 265 F.3d. 313, 327 (5th
Cir. 2001) (‘‘Generally, ex parte contact is not
shunned in the administrative agency arena as it is
in the judicial context. In fact, agency action often
demands it.’’); Ammex, Inc. v. United States, 23 Ct.
Int’l Trade 549, 569 n.16 (1999) (noting that the
decision at issue ‘‘constitutes an exercise of
‘informal’ rulemaking under the [APA] and, as
such, is not subject to the prohibition on ex parte
communications set forth in 5 U.S.C. 557(d)(1)
(1994)’’); Portland Audubon Soc. v. Endangered
Species Comm., 984 F.2d 1534, 1545–46 (9th Cir.
1993) (‘‘The decision in [Sierra Club] that the
contacts were not impermissible was based
explicitly on the fact that the proceeding involved
was informal rulemaking to which the APA
restrictions on ex parte communications are not
applicable.’’).
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recommended that agencies establish
clear procedures ensuring that all ex
parte communications occurring after
an NPRM is issued, whether planned or
unplanned, be disclosed.
Starting in 2015, the Board began to
look at the possibility of conducting ex
parte meetings to gain more stakeholder
input in the informal rulemaking
process. As a result, the Board waived
the ex parte prohibition to permit Board
Members or designated Board staff to
participate in ex parte communications
in two proceedings.7 See Reciprocal
Switching, EP 711 (Sub-No. 1), slip op.
at 28–29 (STB served July 27,
2016); 8 U.S. Rail Serv. Issues—
Performance Data Reporting, EP 724
(Sub-No. 4), slip op. at 2–3 (STB served
Nov. 9, 2015). Many stakeholders in
these proceedings expressed
appreciation for the opportunity to meet
with Board Members or Board staff
regarding the merits of the proposed
rules and expressed the hope to interact
with the Board informally in the future
as well.9 In these meetings, parties have
been able to respond directly to
questions from Board Members and
Board staff on the feasibility and utility
of certain aspects of the Board’s
proposals.
Based on the developments in case
law related to ex parte communications
and the Board’s own experiences
waiving its ex parte prohibitions in the
two recent proceedings, the Board
determined that it was appropriate to
revisit the agency’s strict prohibition on
ex parte communications in informal
rulemaking proceedings. The Board also
determined that certain other aspects of
its ex parte regulations that apply to
proceedings other than rulemakings
could be clarified and updated to reflect
current practices and better guide
7 Greater use of ex parte meetings in Board
rulemaking proceedings was also a topic of the U.S.
Senate Committee on Commerce, Science, and
Transportation’s August 11, 2016 hearing. See
Freight Rail Reform: Implementation of the STB
Reauthorization Act of 2015: Field Hearing Before
the S. Comm. on Commerce, Sci., & Transp., 114th
Cong. 32, 35, 46, 50–52, 57, 69, 72 (2016), https://
www.gpo.gov/fdsys/pkg/CHRG-114shrg23228/pdf/
CHRG-114shrg23228.pdf.
8 In the Board’s July 27, 2016 decision, which
embraced Petition for Rulemaking to Adopt Revised
Competitive Switching Rules, Docket No. EP 711,
the Board terminated the proceeding in Docket No.
EP 711, and all meetings with Board Members are
taking place under Reciprocal Switching, Docket
No. EP 711 (Sub-No. 1).
9 See, e.g., Summary of Ex Parte Meeting Between
Packaging Corp. of Am. & Board Member Begeman
at 3, Aug. 3, 2017, Reciprocal Switching, EP 711
(Sub-No. 1); Summary of Ex Parte Meeting Between
the Am. Chemistry Council & Board Member Miller
at 1, Mar. 22, 2017, Reciprocal Switching, EP 711
(Sub-No. 1); Summary of Ex Parte Meeting Between
CSX Transp. & STB Staff at 1, Dec. 16, 2015, U.S.
Rail Serv. Issues—Performance Data Reporting, EP
724 (Sub-No. 4).
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stakeholders and agency personnel.
Accordingly, the Board issued an NPRM
on September 28, 2017, proposing to: (1)
Modify its regulations to permit, subject
to disclosure requirements, ex parte
communications in informal rulemaking
proceedings, and (2) change its ex parte
rules to clarify and update when and
how interested persons may
communicate informally with the Board
regarding pending proceedings other
than rulemakings. See Ex Parte
Commc’ns in Informal Rulemaking
Proceedings (NPRM), EP 739 (STB
served Sept. 28, 2017). The Board
received nine opening comments and
three reply comments on the NPRM.10
Below, the Board addresses the
comments submitted by parties in
response to the NPRM and discusses
clarifications and modifications being
adopted in the final rule. The text of the
final rule is also below.
Changes to Definitions. In the NPRM,
the Board proposed to add two new
definitions to section 1102.2(a):
‘‘informal rulemaking proceeding’’ and
‘‘covered proceedings.’’ ‘‘Informal
rulemaking proceeding’’ would include
any proceeding to issue, amend, or
repeal rules pursuant to 49 CFR part
1110 and 5 U.S.C. 553. ‘‘Covered
proceedings’’ would encompass both
on-the-record proceedings and informal
rulemaking proceedings following the
issuance of an NPRM.11 The Board
10 Comments were received from the following
organizations: The American Chemistry Council,
the Fertilizer Institute, the National Industrial
Transportation League, American Fuel and
Petrochemical Manufacturers, Independent
Lubricant Manufacturers Association, International
Warehouse Logistics Association, American Forest
& Paper Association, Alliance for Rail Competition,
Private Railcar Food and Beverage Association,
Glass Packaging Institute, National Association of
Chemical Distributors, the Chlorine Institute,
Alliance of Automobile Manufacturers, Association
of Global Automakers, American Petroleum
Institute, American Malting Barley Association,
Corn Refiners Association, Portland Cement
Association, and Plastics Industry Association
(collectively the Rail Customer Coalition or RCC);
the American Short Line and Regional Railroad
Association (ASLRRA); the Association of
American Railroads (AAR); BNSF Railway
Company (BNSF); the Freight Rail Customer
Alliance (FRCA); the George Mason University
Antonin Scalia Law School Administrative Law
Clinic (GMU); the National Grain and Feed
Association (NGFA); Samuel J. Nasca on behalf of
SMART/Transportation Division, New York State
Legislative Board (SMART); and the Western Coal
Traffic League (WCTL). On November 1, 2017, the
Board also received a letter from NGFA informing
the Board that the following national agricultural
producer and agribusiness organizations notified
NGFA that they support NGFA’s opening
comments: National Association of State
Departments of Agriculture, National Council of
Farmer Cooperatives, National Farmers Union,
National Oilseed Processors Association, and North
American Millers’ Association.
11 Accordingly, the Board proposed to replace
references to ‘‘on-the-record proceedings’’ with
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further proposed, as discussed in more
detail below, that ex parte
communications would be permitted in
informal rulemaking proceedings
(subject to disclosure requirements for
those communications occurring postNPRM), but would remain prohibited in
on-the-record proceedings.
Additionally, the Board proposed
redefining an ‘‘ex parte communication’’
as ‘‘an oral or written communication
that concerns the merits or substantive
outcome of a pending proceeding; is
made without notice to all parties and
without an opportunity for all parties to
be present; and could or is intended to
influence anyone who participates or
could reasonably be expected to
participate in the decision.’’ This
proposed new definition would alter the
existing definition in two ways; first, by
removing the existing concept that
communications are only ex parte if
made ‘‘by or on behalf of a party’’ and
second, by removing the suggestion that
an ex parte communication that is made
with the ‘‘consent of any other party’’
could be permissible.
The Board noted in the NPRM that
these revisions would not change the
generally understood concept that
certain communications, by their very
nature, do not concern the merits or
substantive outcome of pending
proceedings or are not made to Board
Members or staff who are reasonably
expected to participate in Board
decisions. Such permissible
communications include, for example,
communications about purely
procedural issues; public statements or
speeches by Board Members or staff that
merely provide general and publicly
available information about a
proceeding; communications that solely
concern the status of a proceeding; and
communications with the Board’s Rail
Customer and Public Assistance
Program.
ASLRRA, NGFA, and RCC support the
proposed changes to the definitions.
(ASLRRA Comments 3; NGFA
Comments 5; RCC Comments 7.)
ASLRRA argues that the proposed
definitions and amendments preserve
the transparency and fairness of the
rulemaking process. (ASLRRA
Comments 3.)
WCTL supports the Board’s proposed
changes to the definition of ‘‘ex parte
communication.’’ (WCTL Comments 23;
WCTL Reply 9.) WCTL agrees with the
Board that ex parte communications can
be made by non-parties and that the
definition of ‘‘ex parte communication’’
should encompass communications
‘‘covered proceedings,’’ as appropriate, throughout
section 1102.2.
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made by these non-parties. (WCTL
Reply 9.) WCTL argues, however, that
the Board should amend the definition
of ‘‘on-the-record proceeding’’ to
expressly include rate reasonableness
and unreasonable practice
adjudications. (WCTL Comments 19.)
According to WCTL, rate reasonableness
and unreasonable practice cases may
not technically be formal ‘‘on-therecord’’ proceedings within the meaning
of the APA, and adding the suggested
text would remove any uncertainty. (Id.
at 20.) AAR states that it does not
oppose WCTL’s suggestion. (AAR Reply
5.)
The final rule will adopt the proposal
as set forth in the NPRM. It is not
necessary to amend the definition of
‘‘on-the-record proceeding’’ to
specifically include rate reasonableness
and unreasonable practice
adjudications, as WCTL suggests.
Although rate reasonableness and
unreasonable practice formal
complaints may not technically be
covered by the APA definition of onthe-record proceedings, the definition of
that term in the Board’s regulations is
sufficient to cover those types of
proceedings, which are decided solely
on the record. See 49 CFR 1102.2(a)(1).
Communications That Are Not
Prohibited. The Board also proposed in
the NPRM to modify section 1102.2(b) to
include additional categories of ex parte
communications that are permissible
and would not be subject to the
disclosure requirements of proposed
section 1102.2(e) and (g), discussed in
more detail below. Specifically, the
Board proposed adding to this category
communications related to an informal
rulemaking proceeding prior to the
issuance of an NPRM; 12
communications related to the Board’s
implementation of the National
Environmental Policy Act and related
environmental laws; and
communications concerning judicial
review of a matter that has already been
decided by the Board made between
parties to the litigation and the Board or
Board staff involved in that litigation.
Additionally, the Board proposed to
modify the existing regulations to
remove from section 1102.2(b)(1) the
language permitting any communication
‘‘to which all the parties to the
proceeding agree.’’
NGFA, RCC, and WCTL support
including environmental review and
judicial review communications within
the scope of permitted ex parte
12 For example, informal communications
following a notice of intent to institute a rulemaking
proceeding or an advance notice of proposed
rulemaking (ANPRM) would not be prohibited. See
49 CFR 1110.3(b).
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communications. (NGFA Comments 5;
RCC Comments 7; WCTL Comments 2;
WCTL Reply 2, 10.) ASLRRA, NGFA,
and RCC also support the proposal to
permit ex parte communications prior to
the issuance of an NPRM. (ASLRRA
Comments 3; NGFA Comments 3; RCC
Comments 7.) ASLRRA argues that
allowing undisclosed ex parte
communications prior to the issuance of
an NPRM would enable the Board to
obtain helpful stakeholder input,
particularly in the preliminary stages of
a rulemaking proceeding, without
adversely implicating due process or
raising administrative concerns.
(ASLRRA Comments 3.) NGFA likewise
supports permitting undisclosed ex
parte communications before the
issuance of an NPRM. (NGFA
Comments 3.) According to NGFA, the
information the Board gathers prior to
the issuance of an NPRM would be
evident within the NPRM itself. (Id.)
NGFA, however, suggests that the Board
adopt the practice of including in the
NPRM a list of the identities of all
stakeholders who provided input, as the
Board did in Expediting Rate Cases, EP
733, slip op. at 2 n.3 (STB served June
15, 2016). (Id.)
AAR, FRCA, SMART, and WCTL
object to the Board’s proposal to permit
undisclosed ex parte communications
prior to the issuance of an NPRM. (See
AAR Comments 5–6; FRCA Comments
1; SMART Comments 10; WCTL
Comments 21; AAR Reply 4.) AAR
argues that the Board should require the
disclosure of ex parte contacts occurring
after the issuance of an ANPRM. (AAR
Comments 5–6.) For cases initiated by a
petition for rulemaking, AAR suggests
that ex parte communications should be
permitted, subject to disclosure
requirements, once that petition has
been filed and docketed. (AAR Reply 5.)
AAR argues that such a rule would be
consistent with Department of
Transportation (DOT) policy that
recommends disclosure of ex parte
communications upon issuance of an
ANPRM, and Federal Aviation
Administration rules that require
disclosure of ex parte communications
before an ANPRM or an NPRM. (AAR
Comments 6.) According to AAR,
permitting such ex parte
communications without disclosure
may discourage stakeholder
participation on the record. (AAR
Comments 6; AAR Reply 4–5.) 13
13 AAR also asks the Board to clarify whether ex
parte communications would be permitted in major
rail merger proceedings and suggests that the Board
add a new paragraph section 1102.2(b)(7)
permitting, as a communication that is not
prohibited, ‘‘[a]ny communication permitted by
statute.’’ (AAR Comments 7.) WCTL objected to
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WCTL likewise argues that the Board
should apply ex parte communication
disclosure rules and limitations to all
publicly-docketed informal rulemaking
proceedings where the Board has sought
public comments (e.g., if the Board
initiates a docketed proceeding using an
ANPRM, the ex parte communication
rules would apply starting when the
ANPRM is docketed). (WCTL Comments
21; WCTL Reply 3–4.) WCTL argues that
this would better advance the Board’s
objective of ‘‘free flowing’’
communications by allowing all
interested members of the public to see
what others are saying in ex parte
meetings and to then respond to these
communications. (WCTL Comments 21;
WCTL Reply 4.) According to WCTL,
permitting undisclosed ex parte
communications prior to the issuance of
an NPRM would discourage parties from
filing detailed comments in response to
ANPRMs and similar forms of preNPRM notices when those comments
may be rejected based on ex parte
communications that the parties were
unaware of and had no opportunity to
rebut. (WCTL Comments 21.) FRCA
agrees with WCTL that disclosure
requirements ‘‘should not become
operative only after an [NPRM] is
served.’’ (FRCA Comments 1.) Lastly,
SMART argues that the 2014 ACUS
Recommendation raises potential harms
that would apply to ex parte
communications prior to issuance of an
NPRM (although the alleged potential
harms are not specified by SMART).
(SMART Comments 9–10 (citing 2014
ACUS Recommendation, 79 FR 35993–
95).)
Having reviewed the comments, the
Board continues to believe that the
benefits of not requiring disclosure for
ex parte communications prior to the
issuance of an NPRM outweigh the
potential harms. Regarding the benefits,
the Board agrees with ASLRRA that
such communication would enable the
Board to obtain helpful stakeholder
input in crafting proposed regulations.
Informal communications with
stakeholders prior to issuance of an
NPRM provide an opportunity for the
Board to obtain useful information and
AAR’s suggestion, arguing that it does not comply
with the provisions of 49 U.S.C. 11324(f) and
conflicts with the Board’s 1996 determination not
to exercise its statutory authority under section
11324(f) to permit ex parte communications in
merger cases. (WCTL Reply 8–9 (citing Pet. of
Fieldston Co. to Establish Procedures Regarding Ex
Parte Commc’ns in R.R. Merger Proceedings, 1
S.T.B. 1083, 1084–85 (1996)).) The Board finds that
this request, related to major merger proceedings, is
outside the scope of this proceeding, which focuses
primarily on informal rulemaking proceedings;
however, parties are free to raise the issue of the
permissibility of ex parte communications in
individual major merger proceedings.
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input that would inform the
development of the Board’s proposal
and help identify the issues the agency
should consider. In fact, the final report
to ACUS, on which the 2014 ACUS
Recommendation is based, states that
‘‘pre-NPRM ex parte communications
are generally beneficial and do not
implicate administrative and due
process principles.’’ Esa L. SferraBonistalli, Ex Parte Commc’ns in
Informal Rulemaking Final Report
(Final Report), 69 (May 1, 2014)
(prepared for consideration of the
Admin. Conference of the U.S.), https://
www.acus.gov/report/final-ex-partecommunications-report. The report
continued, stating that ‘‘[r]ather than
restricting [ex parte] communications,
agencies should experiment with how
they can capitalize on the
communications’ value.’’ Id. at 85.
Thus, permitting informal
communications pre-NPRM, without
restrictions, such as disclosure and
timing requirements, could lead to
better policy-making by enabling a freer
flow of communication during the
preliminary, exploratory phase of a
rulemaking proceeding.
The Board believes that these benefits
outweigh any potential harms. SMART’s
claim—that the ACUS report raises
some important potential and
anticipated harms that would apply to
ex parte communications prior to
issuance of an NPRM—is inconsistent
with the conclusion of ACUS’s
recommendations. ACUS expressly
states that ‘‘[b]efore an agency issues [an
NPRM], few if any restrictions on ex
parte communications are desirable.’’
2014 ACUS Recommendation, 79 FR
35994. ACUS further states that preNPRM communications are ‘‘less likely’’
to pose the same harms as ex parte
communications that take place later in
the process, and ‘‘can help an agency
gather essential information, craft better
regulatory proposals, and promote
consensus building among interested
persons.’’ Id.
In addition, the potential harm
identified by both WCTL and AAR—
that commenters would be less likely to
file comments on the record during a
proceeding—seems unlikely. In a recent
case where the Board invited and/or
received informal stakeholder
communications prior to the initiation
of a proceeding, participation in the
subsequent proceeding remained at a
high level. See, e.g., Expediting Rate
Cases, Docket No. EP 733 (25 comments
received following informal
communications). The Board believes
that stakeholders will continue to weigh
in on proposed rules (through written
comments and/or disclosed ex parte
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9225
communications) even where they have
had an opportunity to share general and
preliminary views with the agency preNPRM. Additionally, as the Board noted
in the NPRM, any information gathered
in a pre-NPRM meeting that the Board
incorporates or relies upon in its
proposal will be evident in the NPRM
itself. See NPRM, EP 739, slip op. at 10.
The public would have an opportunity
to examine and respond to that
information.14 The Board believes that
parties will still have the incentive to
participate through written comments
following informal ex parte
communications to ensure that the
Board has a record that reflects their
views.
For these reasons, the final rule will
adopt the proposal regarding
communications that are not prohibited
as set forth in the NPRM.
Communications That Are Prohibited.
In the NPRM, the Board proposed to
modify section 1102.2(c)(1) by adding
the introductory clause, ‘‘[e]xcept to the
extent permitted by these rules’’ to
reflect the fact that the revised rules
would now govern, but not entirely
prohibit, ex parte communications.
The Board also proposed amending
section 1102.2(d) to clarify when ex
parte prohibitions would take effect and
how long they would remain in effect.
Specifically, the NPRM provided that
the prohibitions against ex parte
communications in on-the-record
proceedings would begin when the first
filing or Board decision in a proceeding
is posted to the public docket or when
the person responsible for a
communication knows that the first
filing has been filed with the Board,
whichever occurs first. The Board
further proposed that, in informal
rulemaking proceedings, except as
provided in the new section 1102.2(g),
discussed in more detail below, the
prohibitions on ex parte
communications would begin when the
Board issues an NPRM. Lastly, the
Board proposed to clarify that ex parte
prohibitions in covered proceedings
would remain in effect until the
proceeding is no longer subject to
administrative reconsideration under 49
U.S.C. 1322(c) or judicial review.
14 For example, as the Board noted in the NPRM,
in Docket No. EP 733, Expediting Rate Cases, where
Board staff held informal meetings with
stakeholders with the goal of enhancing the Board
staff’s perspective on strategies and pathways to
expedite and streamline rate cases, parties were
permitted to comment on the details of the
proposal, including those stemming from feedback
gathered in the informal meetings. See NPRM, EP
739, slip op. at 10 n.12; see also Expediting Rate
Cases, EP 733, slip op. at 1 (STB served June 15,
2017).
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Commenters generally support this
proposal. ASLRRA states that it
supports the proposed changes to
section 1102.2(d), which clarify when
ex parte prohibitions would begin.
(ASLRRA Comments 3.) Likewise,
NGFA states that it supports changing
the provision on when ex parte
prohibitions begin to better reflect the
various ways Board proceedings are
initiated. (NGFA Comments 5.) NGFA
and RCC also both support application
of the ex parte prohibitions when the
first filing or Board decision is posted to
the public docket in an on-the-record
proceeding. (Id.; RCC Comments 7–8.)
No commenters raised specific
objections to this aspect of the Board’s
proposal. Accordingly, the final rule
will adopt the proposal as set forth in
the NPRM.
Procedures Upon Receipt of
Prohibited Ex Parte Communications.
The Board also proposed to revise
section 1102.2(e) and (f), which entail
the procedures required of Board
Members and employees upon receipt of
prohibited ex parte communications
and sanctions, to reflect the fact that
some ex parte communications would
now be permissible under the revised
regulation. First, the proposed rules
clarified that the procedures in section
1102.2(e)(1) and (2) would apply to
‘‘[a]ny Board Member, hearing officer or
Board employee’’ who receives an ex
parte communication. Second, the
proposal clarified that the procedures
set forth in the existing section 1102.2(e)
and (f) would apply only to
communications not otherwise
permitted by the regulation. Lastly, the
Board proposed to amend the provision
in section 1102.2(e)(1)—that currently
requires the Chief of the Office of
Proceedings’ Section of Administration
to place any written communication or
a written summary of an oral
communication not permitted by these
regulations in the public
correspondence file—to also require that
such placements be made ‘‘promptly’’
and contain a label indicating that the
prohibited ex parte communication is
not part of the decisional record of the
proceeding.
The only comment in response to this
aspect of the proposal was from WCTL,
which states that it agrees with the
Board’s proposal to clarify the
procedures the Board should follow if a
Board Member or Board staff receives a
prohibited ex parte communication.
(WCTL Comments 24; WCTL Reply 10.)
No commenters objected to the
proposal. Accordingly, the final rule
will adopt the proposal as set forth in
the NPRM.
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Ex Parte Communications in Informal
Rulemaking Proceedings. In the NPRM,
the Board proposed to add a new
section 1102.2(g) specifically governing
ex parte communications in informal
rulemaking proceedings that occur
following the issuance of an NPRM, at
which point disclosure requirements
would attach. Under the proposed rule,
ex parte communications with Board
Members in informal rulemaking
proceedings following the issuance of
an NPRM would be permitted, subject to
disclosure requirements, until 20 days
before the deadline for reply comments
to the NPRM, unless otherwise specified
by the Board. The proposed rules
provided that Board Members may
delegate their participation in such ex
parte communications to Board staff.
Under the proposed rules, ex parte
communications in informal rulemaking
proceedings that occur outside of the
permitted meeting period, that are made
to Board staff where such participation
has not been delegated by the Board, or
that do not comply with the required
disclosure requirements would be
subject to the sanctions provided in
section 1102.2(f). Further, the proposed
rules provided that, to schedule an ex
parte meeting, parties should contact
the Board’s Office of Public Assistance,
Governmental Affairs, and Compliance
at (202) 245–0238 or the Board Member
office with whom the meeting is
requested, unless otherwise specified by
the Board.
The proposed rules also required that
the substance of each ex parte meeting
be disclosed by the Board by posting in
the docket of the proceeding a written
meeting summary of the arguments,
information, and data presented at each
meeting and a copy of any handouts
given or presented. The proposed
meeting summary would also disclose
basic information about the meeting,
including the date and location of the ex
parte communication (or means of
communication in the case of telephone
calls or video-conferencing) and a list of
attendees/participants. The proposed
rules further provided that the meeting
summaries would have to be sufficiently
detailed to describe the substance of the
ex parte communication. Under the
proposed rules, presenters could be
required to resubmit summaries that are
insufficiently detailed or that contain
inaccuracies as to the substance of the
presentation.
The proposed rules also provided that
a single meeting summary could be
submitted to the Board even if multiple
parties, persons, or counsel were
involved in the same ex parte meeting.
In such instances, it would be the
responsibility of the person submitting
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the summary to ensure that all other
parties at the meeting agree to the form
and content of the summary. The
proposed rules would permit parties to
present confidential information during
ex parte meetings. Under the proposed
rules, if the presentations contain
material that a party asserts is
confidential under an existing
protective order governing the
proceeding, parties would be required to
present a public version and a
confidential version of ex parte
summaries and any handouts. If a
protective order has not been issued in
the proceeding at the time the presenter
seeks to file a meeting summary or
handout containing confidential
information, the proposed rules
provided that the presenting party
would have to file a request with the
Board seeking such an order no later
than the date it submits its meeting
summary. The proposed rules also
required parties to submit summaries
within two business days of an ex parte
presentation or meeting. Under the
proposed rules, the Board would post
the summaries within seven days of
submission of a summary that is
complete for posting.
Comments in Support. Most
commenters were supportive of the
Board’s proposal to permit, subject to
disclosure requirements, ex parte
communications in informal rulemaking
proceedings. (See AAR Comments 2;
ASLRRA Comments 1; BNSF Comments
1; GMU Comments 1; RCC Comments
3.) AAR and ASLRRA state that the
Board should adopt the proposed rules
because they will lead to better reasoned
decision-making and more informed
rules. (AAR Comments 3; see also
ASLRRA Comments 4.) AAR argues that
the relatively modest burdens that ex
parte meetings might place on
stakeholders participating in rulemaking
proceedings would be outweighed by
the benefits of improved flow of
relevant information to Board decision
makers. (AAR Reply 3.) According to
AAR, face-to-face communications
would allow the Board to ensure that its
data and information have not grown
stale over time, and even when
communications do not provide new
information, face-to-face conversations
summarizing and highlighting points of
emphasis can provide value to decisionmakers. (AAR Comments 4.) AAR also
noted that the NPRM is responsive to
stakeholder requests for more
interaction with Board Members and
staff. (Id.) ASLRRA also supports the
proposed process for ex parte
communications during informal
rulemaking proceedings, stating that it
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would ensure transparency and fairness.
(ASLRRA Comments 3.) According to
ASLRRA, the Board’s proposal meets its
goals of enhancing its ability to make
informed decisions in informal
proceedings while ensuring its recordbuilding in rulemaking proceedings
remains transparent and fair. (Id. at 1.)
BNSF likewise supports the Board’s
proposal, stating that increased
communications with the Board
regarding informal rulemakings will
provide value to both the Board and its
stakeholders. (BNSF Comments 2.)
According to BNSF, the Board’s current
ex parte regulations reflect the outdated
and overly restrictive view of the
Board’s predecessor agency, the ICC,
and are ‘‘out of step’’ with long-held
doctrines of administrative law, the ex
parte rules generally under the APA,
and procedures of other federal
agencies. (Id. at 1–2; see also AAR
Comments 1 (‘‘[T]he Board’s application
of its current regulations unnecessarily
prohibits most informal
communications with the Board and its
staff in the informal rulemaking
context.’’).) BNSF argues that
modernizing the Board’s ex parte rules
to permit an increased flow of
information and technical expertise
between the Board and its stakeholders
during informal rulemaking proceedings
will enable the Board to engage in more
reasoned policymaking and should
produce regulatory policies that are
more grounded in the complex
operational and market realities
currently facing the rail industry. (BNSF
Comments 1.)
GMU asserts that the Board’s
proposed changes to the procedures for
ex parte communications would
promote responsible governance by
facilitating promulgation of informed
substantive rules while preserving
transparency. (GMU Comments 1.)
According to GMU, relaxing the Board’s
ex parte regulations would remove a
procedural hurdle, making it easier for
the Board to engage in informed noticeand-comment proceedings, which in
turn encourages transparency. (Id. at 2.)
GMU further argues that the Board has
the statutory authority to change its ex
parte communications regulations in the
context of a notice-and-comment
rulemaking, noting that both the APA
notice-and-comment requirements and
the statutory provisions governing the
Board permit ex parte communications
during informal rulemaking
proceedings. (Id. at 2–3.)
RCC agrees that ex parte
communications should be permitted in
informal rulemaking proceedings if
appropriate safeguards to preserve
fairness and transparency also are
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adopted. (RCC Comments 3.) RCC states
that ex parte communications in
informal rulemakings would ultimately
produce better outcomes. (Id.)
According to RCC, face-to-face dialogue
facilitates a more efficient exchange of
information, development of ideas,
explanation of concepts, and
responsiveness to questions and would
allow the Board to probe more deeply
into subjects based upon the comments
submitted. (Id. at 3–4.) RCC further
states that the Board would also benefit
from clarification of concepts and
proposals submitted in written
comments, especially in proceedings
that implicate complex technical
matters. (Id. at 4.)
As further support for the Board’s
proposal, a number of commenters cite
their positive experiences participating
in ex parte meetings in recent Board
proceedings where the agency waived
the ex parte prohibition. (See, e.g.,
BNSF Comments 2 (noting that the ex
parte meetings in U.S. Rail Serv.
Issues—Performance Data Reporting,
Docket No. EP 724 (Sub-No. 4), better
informed the Board about highly
technical service reporting issues and
resulted in regulations that were more
efficiently tailored to the realities of
railroad operations); NGFA Comments
2–3 (stating that its ex parte meeting in
U.S. Rail Serv. Issues—Performance
Data Reporting, Docket No. EP 724
(Sub-No. 4), was extremely beneficial
because it allowed NGFA to explain the
details of their railroad service needs
and concerns and to answer Board
staff’s questions in a more effective
manner); RCC Comments 1–2 (noting
positive experiences with ex parte
meetings in Reciprocal Switching,
Docket No. EP 711 (Sub-No. 1), and U.S.
Rail Serv. Issues—Performance Data
Reporting, Docket No. EP 724 (Sub-No.
4), as well as the informal meetings in
Expediting Rate Cases, Docket No. EP
733).)
Comments Requesting Modifications.
Several commenters, while expressing
overall support for the Board’s proposal,
suggest modifications that they argue
would improve the rule. RCC urges the
Board to be mindful of informal
rulemaking proceedings that are closely
associated with pending adjudicatory
proceedings. (RCC Comments 6.) In that
regard, RCC suggests that the Board
establish safeguards against parties
using permissible ex parte
communications in the rulemaking
proceedings to circumvent the
prohibition of the same in adjudicatory
proceedings. (Id.; see also WCTL
Comments 18; AAR Reply 5.) RCC
suggests that the most effective potential
modifications would be to either: (1)
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9227
Not allow ex parte communications in
rulemakings that are closely associated
with pending cases, or (2) not apply any
rules that were developed in a
rulemaking that utilized ex parte
communications in pending
adjudications. (RCC Comments 6.)
NGFA and RCC both suggest that the
Board modify the period during which
ex parte communications would be
permitted. (NGFA Comments 4; RCC
Comments 5–6.) Specifically, they
suggest that the Board permit ex parte
communications for a specified time
(e.g., 30 days) after the deadline for
filing reply comments—subject to the
same disclosure requirement contained
in the NPRM—and permit written
responses confined specifically to the
content of the ex parte communication
within 10 days thereafter. (NGFA
Comments 4; RCC Comments 5–6.)
According to both commenters, under
the Board’s proposal, which would
prohibit ex parte communications
within 20 days of the deadline for
written reply comments, stakeholders
would not have enough time to both
participate in ex parte meetings and also
review and prepare responses to other
parties’ written comments. (NGFA
Comments 4; RCC Comments 4–5.) RCC
adds that, in those proceedings where
the Board solicits three rounds of
comments, rather than the usual two
rounds, the Board could apply its 20day rule to the third round of comments
and still preserve most of the benefits
from ex parte communications. (RCC
Comments 6.) RCC requests that, at a
minimum, the Board express its
willingness to extend the 20-day
deadline on a case-by-case basis when
appropriate to realize the benefits of ex
parte communications in informal
rulemakings. (Id.) AAR concurs in a
modification that would permit ex parte
communications for a specific time after
the submission of at least two rounds of
comments, stating that this change
would allow meetings held with Board
Members or staff to reflect all the issues
in the record and would not create any
incentives for parties to hold evidence
or arguments back for the reply round.
(AAR Reply 4.)
WCTL, however, opposes allowing ex
parte communications following the
written comment period because it
claims that doing so would add
unnecessary cost and delay to
rulemaking proceedings. (WCTL Reply
7–8.) WCTL also notes that ex parte
communications conducted after the
comment period has closed are
disfavored by ACUS. (Id. at 8 (citing
2014 ACUS Recommendation, 79 FR
35994).)
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Additionally, AAR states that the
proposal in section 1102.2(g)(1), which
authorizes the Board to delegate its
participation in such ex parte
communications to Board staff, implies
that such a delegation would require an
entire board decision, which AAR
argues would be unnecessarily
formalistic. (AAR Comments 7.) AAR
suggests that the Board should expand
the proposed rules to indicate that
communications with staff during the
appropriate period are permissible,
subject to disclosure rules. (Id.) AAR
indicates there are many instances
where technical information could be
best explained to staff responsible for
the subject matter, like financial
reporting, costing, or railroad
operations. (Id.)
Regarding the proposed disclosure
requirements, NGFA states that it
supports the Board’s proposals
concerning the preparation and
disclosure of ex parte meeting
summaries that are detailed sufficiently
to describe the substance of the
communication, but recommends that
the Board shorten the period for posting
the meeting summaries from seven
calendar days (as the Board proposed) to
two business days. (NGFA Comments 4–
5.) NGFA argues that this change would
align with the two-business-day
requirement for meeting summaries to
be submitted by the participants in the
ex parte communication and would
provide for more timely transparency
and opportunity for review by interested
parties. (Id. at 5.)
Comments in Opposition. Some
commenters object to the idea of
allowing ex parte communication in
informal rulemaking proceedings or
suggest that, if allowed, such
communications be utilized more
sparingly. SMART states that railroad
employees, represented by SMART,
would be adversely affected by a
‘‘ ‘closed door’ and secret [Board]
tribunal.’’ (SMART Comments 4.)
According to SMART, the Board’s
proposal would ‘‘abolish[ ]’’ the
prohibition on ex parte communications
in most, if not all rulemakings, since the
terms ‘‘informal’’ and ‘‘formal’’
rulemakings are not in the APA.
(SMART Comments 3 n.2.) SMART
argues that ‘‘unrestricted’’ and ‘‘wideranging’’ ex parte communications
would be ‘‘prejudicial to parties and
counsel situated at a distance,’’ because
the Board does not have regional offices
and rarely sets hearings outside the
Washington, DC area. (SMART
Comments 7.) It contends that
telephonic communications are ‘‘not a
satisfactory alternative for face-to-face
participation.’’ (Id.) SMART further
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argues that ‘‘[t]here is nothing to suggest
that face-to-face communication will
better promote efficiency so as to
substitute for the written word in the
decisionmaking process’’; rather, the
‘‘real impact of ex parte communication
repeal would be to limit the audience,
restrict the spread of knowledge, and
* * * impair the final action.’’ (SMART
Reply 4.) SMART also argues that joint
meetings conducted with other parties
and agency personnel could be
problematic. (SMART Comments 8.)
According to SMART, the Board need
not adopt the proposed rule because it
may continue to waive its ex parte
prohibition, as it has done in two recent
proceedings. (Id. at 7.) SMART also
argues that the benefit of oral
communication can be achieved
through oral argument. (SMART Reply
5.)
WCTL argues that the Board’s
proposal would increase the cost of
participating in a rulemaking
proceeding, (WCTL Comments 15), and
likely result in substantial
administrative delay, (Id. at 16). WCTL
argues that the proposal would lead
parties to believe they must participate
in the ex parte communication process
or they will be ‘‘left out.’’ (Id. at 15.)
WCTL also argues that shippers, unlike
large railroads, frequently lack the time
and financial resources to participate in
ex parte meetings, which can create the
perception of an unlevel playing field.
(Id. at 17.) WCTL further argues that, in
many proceedings, the Board may have
more efficient administrative tools to
address concerns with the record, such
as the use of technical conferences. (Id.
at 16.) According to WCTL, unless the
Board requires that ex parte sessions be
video-taped and then makes the tapes
publicly available, the perception may
continue to be that deals are being done
‘‘behind closed doors,’’ not in open fora.
(Id. at 17.) WCTL argues that the Board
should instead continue to allow ex
parte communications in informal
rulemaking proceedings on a case-bycase basis. (Id. at 1, 14, 18; WCTL Reply
2, 5.) WCTL asserts that a case-by-case
approach would address concerns
raised by other commenters in this
proceeding. (WCTL Reply 6–7.)
FRCA agrees with WCTL that the
Board should determine whether to
permit ex parte communications on a
case-by-case basis, although FRCA also
acknowledges the benefits of ex parte
communications in rulemakings
generally. (FRCA Comments 1.)
According to FRCA, permitting ex parte
communications should not be the
‘‘automatic default’’ until the Board has
accumulated more experience with ex
parte communications. (Id.)
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AAR disagrees with WCTL that ex
parte communications could result in
administrative delay. (AAR Reply 5.)
According to AAR, WCTL’s suggestion
of using technical conferences instead of
ex parte meetings does not have to be
an ‘‘either/or’’ proposition, as greater
use of technical conferences could
supplement NPRM proposals. (Id. at 3.)
AAR also disagrees with WCTL’s
suggestion that the Board should permit
ex parte communications in informal
rulemaking proceedings on a case-bycase basis. (Id. at 2.) AAR argues that
stakeholders will be best equipped to
fully participate in a rulemaking when
the rules for such participation are
known in advance. (Id.) AAR notes that
pre-established rules would save the
Board from expending its limited time
and resources on ad hoc determinations
related to ex parte communications in
every rulemaking proceeding on its
docket. (Id. at 2–3.) AAR further asserts
that the proposed rules would allow the
Board, on a case-by-case basis, to restrict
communications in a particular
proceeding, if the concerns cited by
WCTL or others present themselves. (Id.
at 3.)
Board Determination. After
considering all of the comments, the
Board concludes that direct
communications with stakeholders in
informal rulemaking proceedings, in
accordance with a transparent and fair
record-building process, would enhance
the Board’s consideration of issues and
better enable it to promulgate the most
effective regulations. The Board will
first address the arguments of
commenters that oppose the proposed
rule. Then, the Board will address the
suggested modifications to the proposed
rule.
The commenters that urge the Board
to withdraw the proposal in favor of
continuing to prohibit ex parte
communications in rulemakings have
not identified a potential or likely harm
that outweighs the benefits of such
communications. Specifically, the Board
disagrees with SMART that permitting
ex parte communications in informal
rulemaking proceedings would create a
‘‘secret [Board] tribunal’’ and with
WCTL that ex parte sessions must be
video-taped and made publicly
available in order not to be perceived as
‘‘behind closed doors.’’ The final rule
incorporates safeguards to ensure the
rulemaking process remains fair and
transparent, such as requiring the
written and public disclosure of ex parte
communications received after a rule is
proposed and providing parties an
opportunity to submit written
comments in response to those
summaries. The Board agrees with RCC
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that the safeguards the Board has
proposed are sufficient to preserve
fairness and transparency in informal
rulemakings. As noted above, the Board
has gained familiarity in recent
proceedings with developing such
safeguards and has used that experience
to develop the proposed rules.
Additionally, as several commenters
noted, the final rule is consistent with
the practices of other agencies and the
best practices guidelines published by
ACUS.15
The Board also disagrees that the
proposal would disadvantage witnesses
and counsel located outside the
Washington, DC area, as SMART asserts.
As indicated in the NPRM, EP 739, slip
op. at 8, 13, parties will be permitted to
participate in ex parte meetings via
telephone or videoconferencing. Indeed,
ex parte meetings have been conducted
remotely, and the Board does not
believe that there is any significant
difference in the effectiveness of the
interaction between face-to-face
meetings and meetings occurring via
telephone or videoconferencing.
Additionally, in response to SMART’s
argument that there is no evidence that
direct communication will promote
more efficiency in the decision-making
process than written comments, the
Board notes that ex parte
communications are not intended to
replace written comments in a
rulemaking. Rather, ex parte
communications are a supplement to
the written record and provide parties
with yet another avenue for
communicating their needs and
concerns to the Board. Ex parte
communications would actually
enhance the usefulness of written
comments, as such communications
would allow Board Members to obtain
clarification and seek additional
information regarding arguments
contained in the written opening
comments.
The Board is not persuaded that
WCTL’s argument that parties will
believe they must participate in the ex
parte communication process to avoid
having less access than others warrants
limiting all parties’ access to this
communication tool. A party’s decision
15 SMART’s assertion that the proposed rule
improperly would ‘‘abolish[]’’ the prohibition on ex
parte communications in most, if not all,
rulemakings is not relevant to this proceeding. The
APA prohibits ex parte communications in formal
proceedings, but not in informal rulemaking
proceedings. See Sierra Club, 657 F.2d at 402
(noting that Congress declined to extend the ex
parte prohibition applicable to formal rulemakings
to informal rulemakings despite being urged to do
so). Should the Board conduct a rulemaking that is
subject to the APA restriction, the rules proposed
here would not apply.
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whether or not to engage in ex parte
communications is not much different
than having to decide whether to
participate through more traditional
means, such as submitting written
comments or participating in a hearing.
In fact, unlike a traditional hearing, the
proposal here would allow parties to
participate remotely, as the Board is
permitting ex parte meetings to be
conducted via telephone and
videoconference, which could reduce a
party’s cost to participate in a
proceeding. The Board is confident that
parties will be able to assess the
appropriate level of participation for
their organization based on their
particularized interest in the subject
matter. The Board’s intention here is to
provide stakeholders with increased
access to the Board while maintaining a
fair and transparent record-building
process, and, for the reasons discussed
in this decision, the Board believes the
final rule achieves that goal.
Additionally, the Board is not
persuaded that permitting ex parte
communications in informal rulemaking
proceedings will result in ‘‘significant
administrative delay,’’ as WCTL claims.
While WCTL is correct that permitting
ex parte communications necessarily
will add some time to rulemaking
proceedings, the Board believes that the
benefit of the additional information
provided will outweigh the
disadvantages of a slightly longer
procedural schedule. Based on the
Board’s experiences, incorporating ex
parte communication into the informal
rulemaking process results in final rules
that better reflect the needs and
concerns of the Board’s stakeholders.
(See AAR Comments 3; ASLRRA
Comments 4; BNSF Comments 2; NGFA
Comments 2–3; RCC Comments 1–2, 3;
AAR Reply 3); see also 2014 ACUS
Recommendation, 79 FR 35994.
Contrary to SMART’s and WCTL’s
arguments, the Board does not intend ex
parte communications to be a substitute
for oral argument or technical
conferences in informal rulemaking
proceedings. Rather, ex parte
communications would supplement the
tools currently available in rulemaking
proceedings. If the Board believes oral
argument or technical conferences
would be useful, it may decide to
include those steps as a supplement to
(or even in lieu of, if the circumstances
warrant) ex parte communications.
To the extent that SMART and WCTL
argue that the Board’s recent practice of
waiving the ex parte prohibition in
particular proceedings is superior to the
proposed rules, the Board agrees with
AAR that stakeholders will be better
equipped to fully participate in an
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9229
informal rulemaking when the rules for
participation are well-established. As
AAR notes, pre-established rules would
save the Board from expending time and
resources on ex parte determinations in
every rulemaking proceeding.
Additionally, as several parties note, the
Board by decision could restrict
communications in a particular
proceeding, where appropriate. Thus,
the Board will not accept WCTL’s and
SMART’s recommendation that the
Board continue to waive its ex parte
regulations on a case-by-case basis,
rather than adopting changes to its ex
parte regulations permitting ex parte
regulations in informal rulemaking
proceedings.
Several parties proposed
modifications to the Board’s proposed
ex parte communication procedures,
which the Board addresses below. With
regard to the most appropriate deadline
for the conclusion of ex parte meetings
in an informal rulemaking proceeding,
the Board continues to believe that the
cutoff should be 20 days before the
reply comment deadline. NGFA’s,
RCC’s, and AAR’s suggestions—that the
Board permit ex parte communications
for a specified time after the deadline
for filing reply comments—would add
an additional round of comments and
result in a longer proceeding than under
the Board’s proposal. Indeed, as WCTL
argues, post-comment period ex parte
communications are disfavored by
ACUS given the propensity of those
communications to delay proceedings if
significant information is presented to
the agency late in the process. (See
WCTL Reply 8; see also 2014 ACUS
Recommendation, 79 FR 35994.) ACUS
notes in 2014 ACUS Recommendation
that ‘‘the dangers associated with
agency reliance on privately-submitted
information become more acute’’ after
the comment period closes and may
require an agency to reopen the
comment period. Post-comment period
ex parte communications are also
generally discouraged at several other
agencies. See Final Report at 57, 59–60,
64 (noting prohibition or
discouragement of post-comment period
ex parte contacts at DOT, the U.S. Coast
Guard, the Department of Education and
the Federal Trade Commission). In
addition, RCC’s suggestion that the
Board could permit written responses
limited to just the ex parte
communication meeting summaries
could lead to disputes between
commenters as to whether the response
is properly limited to the summaries
and put the Board in the position of
having to resolve such disputes, which
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would only add to the complexity of the
rulemaking process.
However, considering NGFA’s and
RCC’s arguments that parties may have
insufficient time during the comment
period to both prepare written
comments and participate in ex parte
meetings, the Board will be cognizant of
such constraints when establishing
reply comment period deadlines in
rulemaking proceedings. Also, in
particular proceedings, if a party is
unable to both prepare written
comments and participate in ex parte
meetings within this deadline, it may
seek an extension. Additionally, if the
Board concludes in a particular
proceeding that ex parte discussions
would be more beneficial following the
submission of written comments (e.g., in
highly technical rulemakings where
post comment ex parte communication
would be beneficial to ensure the Board
understands the complex, technical data
and arguments), the Board may modify
the procedural schedule to permit such
discussion. See infra App. A, section
1102.2(g)(1) (‘‘unless otherwise
specified by the Board in procedural
orders governing the proceeding’’).
The Board agrees with RCC that the
Board must be mindful of informal
rulemaking proceedings that are closely
associated with pending adjudicatory
proceedings to ensure that permissible
ex parte communications in the
rulemaking proceedings are not used to
circumvent the prohibition of the such
communications in the related
adjudicatory proceedings. If the Board
determines that ex parte
communications are not appropriate for
a particular rulemaking proceeding
based on this concern, it can issue an
order declining to permit such meetings
in that particular proceeding. And if the
Board concludes that ex parte meetings
can be used, the Board may provide
additional guidelines in its procedural
order and inform parties of its
expectations at the beginning of ex parte
meetings.
AAR raises a concern that the
proposed language in section
1102.2(g)(1) implies that Board staff may
only participate in ex parte
communications after a delegation of
authority through an ‘‘entire board’’
decision. The Board clarifies here that,
under the proposal, no delegation
would be required for Board staff to
attend ex parte meetings scheduled with
a Board Member (at that Member’s
request). A delegation of authority
would be required only where the ex
parte meetings would occur solely with
staff (i.e., no Board Member in
attendance), such as the ex parte
meetings that occurred in U.S. Rail
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Service Issues—Performance Data
Reporting, Docket No. EP 724
(Sub No. 4). Thus, it is the Board’s
determination that ex parte meetings
will be conducted under the auspices of
the Board Members’ offices, unless the
Board determines otherwise. AAR’s
suggestion that the Board permit, as a
default option, ex parte communications
with any Board staff could render the
disclosure process—which is essential
to maintaining fairness and
transparency—unduly complicated.
Under the AAR’s proposal, the number
of potential stakeholder meetings could
increase exponentially, and after every
such meeting, each individual staff
contact would be required to be
summarized and disclosed in a meeting
summary that would be posted to the
public docket, to which other parties
would then have to review and possibly
file responses. The Board, however,
recognizes AAR’s concern that there
may be instances where interaction with
Board technical staff would be
beneficial. The Board anticipates that
individual Members will make a
concerted effort to include relevant staff
in ex parte meetings or delegate the
meetings to Board staff, when
appropriate.
In response to NGFA’s request that
the Board shorten the time permitted for
meeting summaries to be posted by the
Board, the Board will reduce the
allotted time from within seven days of
submission to within five days of
submission. The Board believes that
fewer than five days would not provide
sufficient time for the Board to confirm
that a meeting summary is sufficiently
detailed to describe the substance of the
presentation and request resubmissions,
if necessary. However, the Board will
endeavor to post meeting summaries as
soon as they are ready. Thus, the final
rule will adopt the proposal as set forth
in the NPRM with this one modification.
Application of the Final Rule. In its
comments, WCTL argues that new ex
parte communication rules should not
be retroactively applied to pending
proceedings. (WCTL Comments 22.)
WCTL is concerned generally that the
retroactive application of the new rules
in pending proceedings would delay
Board action in those proceedings. (Id.
at 23; WCTL Reply 9 n.22.) AAR states
that it does not disagree with WCTL and
notes that if the Board believes that
further communications would be
beneficial in ongoing proceedings, the
Board could issue waivers in those
proceedings on a going-forward basis.
(AAR Reply 5.) RCC, however, requests
that the Board retroactively apply its
new ex parte communications rules in
one pending rulemaking proceeding,
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Review of Commodity, Boxcar, and
TOFC/COFC Exemptions, Docket No. EP
704. (RCC Comments 7.) According to
RCC, permitting ex parte meetings to
occur in that rulemaking proceeding
would ensure that the benefits and
impacts of any final Board decision are
fully understood by the Board and
would, given the anticipated changes to
the make-up of the Board since the
proceeding was first instituted, help in
briefing and educating any newly
confirmed Board Members in their
understanding of the issues. (Id.)
The final rule will not be applied
retroactively to pending proceedings.
Rather, the final rule adopted here will
apply to proceedings newly initiated
following the effective date of the final
rule. The Board, however, may waive
the prohibition on ex parte
communications in pending informal
rulemaking proceedings on a case-bycase basis, as it did prior to the final
rule. In such instances, the Board will
set out the procedures that will govern
such communications in an order.
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 final rule, the
agency must either include a final
regulatory flexibility analysis, section
604(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).
In the NPRM, the Board certified
under 5 U.S.C. 605(b) that the proposed
rule would not have a significant
economic impact on a substantial
number of small entities within the
meaning of the RFA.16 The Board
16 Effective June 30, 2016, for the RFA analysis for
rail carriers subject to Board jurisdiction, the Board
defines a ‘‘small business’’ as only 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). Class III carriers have annual
operating revenues of $20 million or less in 1991
dollars, or $35,809,698 or less when adjusted for
inflation using 2016 data. Class II rail carriers have
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explained that the proposed regulations
provide for participation in ex parte
communications with the Board in
informal rulemaking proceedings to
provide stakeholders with an alternative
means of communicating their interests
to the Board in a transparent and fair
manner. When a party chooses to engage
in ex parte communications with the
Board in an informal rulemaking
proceeding, the requirements contained
in these proposed regulations do not
have a significant impact on
participants, including small entities.
The Board noted that, while the
proposed rules would require parties to
provide written summaries of the ex
parte communications, based on the
Board’s experiences in Reciprocal
Switching, Docket No. EP 711 (Sub-No.
1), and U.S. Rail Service Issues—
Performance Data Reporting, Docket No.
EP 724 (Sub-No. 4), the summary
documentation is a minimal burden.
The meeting summaries are generally
only a few pages long (excluding copies
of handouts from the meetings that were
attached). For example, the meeting
summaries the Board received in U.S.
Rail Service Issues—Performance Data
Reporting, Docket No. EP 724 (Sub-No.
4), ranged from two to six pages in
length. Of those summaries, nearly half
were just two pages long. Likewise, in
Reciprocal Switching, Docket No. EP
711 (Sub-No. 1), the meeting summaries
ranged from one to four pages in length,
with the majority of those summaries
being three or fewer pages long.
Therefore, the Board certified under 5
U.S.C. 605(b) that these proposed rules,
if promulgated, would not place any
significant burden on a substantial
number of small entities.
The final rule adopted here revises
the rules proposed in the NPRM;
however, the same basis for the Board’s
certification of the proposed rule
applies to the final rule. Thus, the Board
again certifies under 5 U.S.C. 605(b) that
the final rule will not have a significant
economic impact on a substantial
number of small entities within the
meaning of the RFA. A copy of this
decision will be served upon the Chief
Counsel for Advocacy, Office of
Advocacy, U.S. Small Business
Administration, Washington, DC 20416.
List of Subjects in 49 CFR part 1102
Administrative practice and
procedure.
It is ordered:
annual operating revenues of less than $250 million
in 1991 dollars or less than $447,621,226 when
adjusted for inflation using 2016 data. The Board
calculates the revenue deflator factor annually and
publishes the railroad revenue thresholds on its
website. 49 CFR 1201.1–1.
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1. The Board adopts the final rule as
set forth in this decision. Notice of the
adopted rule will be published in the
Federal Register.
2. This decision is effective April 4,
2018.
3. A copy of this decision will be
served upon the Chief Counsel for
Advocacy, Office of Advocacy, U.S.
Small Business Administration.
Decided: February 27, 2018.
By the Board, Board Members Begeman
and Miller.
Brendetta S. Jones,
Clearance Clerk.
For the reasons set forth in the
preamble, the Surface Transportation
Board amends 49 CFR part 1102 as
follows:
PART 1102—COMMUNICATIONS
1. The authority citation for part 1102
is revised to read as follows:
■
Authority: 49 U.S.C. 1321.
2. Amend § 1102.2 as follows:
a. Revise the section heading;
b. Redesignate paragraphs (a)(2) and
(3) as paragraphs (a)(4) and (5) and add
new paragraphs (2) and (3);
■ c. Revise newly redesignated
paragraph (a)(5);
■ d. Revise paragraphs (b) through (e);
■ e. In paragraph (f)(1), remove
‘‘concerning the merits of a
proceeding’’;
■ f. In paragraph (f)(2), add ‘‘covered’’
before the word ‘‘proceeding’’;
■ g. Revise paragraph (f)(3); and
■ h. Add paragraph (g).
The revisions and additions read as
follows:
■
■
■
§ 1102.2 Procedures governing ex parte
communications.
(a) * * *
(2) ‘‘Informal rulemaking proceeding’’
means a proceeding to issue, amend, or
repeal rules pursuant to 5 U.S.C. 553
and part 1110 of this chapter.
(3) ‘‘Covered proceedings’’ means onthe-record proceedings and informal
rulemaking proceedings following the
issuance of a notice of proposed
rulemaking.
*
*
*
*
*
(5) ‘‘Ex parte communication’’ means
an oral or written communication that
concerns the merits or substantive
outcome of a pending proceeding; is
made without notice to all parties and
without an opportunity for all parties to
be present; and could or is intended to
influence anyone who participates or
could reasonably be expected to
participate in the decision.
(b) Ex parte communications that are
not prohibited and need not be
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9231
disclosed. (1) Any communication that
the Board formally rules may be made
on an ex parte basis;
(2) Any communication occurring in
informal rulemaking proceedings prior
to the issuance of a notice of proposed
rulemaking;
(3) Any communication of facts or
contention which has general
significance for a regulated industry if
the communicator cannot reasonably be
expected to have known that the facts or
contentions are material to a substantive
issue in a pending covered proceeding
in which it is interested;
(4) Any communication by means of
the news media that in the ordinary
course of business of the publisher is
intended to inform the general public,
members of the organization involved,
or subscribers to such publication with
respect to pending covered proceedings;
(5) Any communications related
solely to the preparation of documents
necessary for the Board’s
implementation of the National
Environmental Policy Act and related
environmental laws, pursuant to part
1105 of this chapter;
(6) Any communication concerning
judicial review of a matter that has
already been decided by the Board made
between parties to the litigation and the
Board or Board staff who are involved
in that litigation.
(c) General prohibitions. (1) Except to
the extent permitted by the rules in this
section, no party, counsel, agent of a
party, or person who intercedes in any
covered proceeding shall engage in any
ex parte communication with any Board
Member, hearing officer, or Board
employee who participates, or who may
reasonably be expected to participate, in
the decision in the proceeding.
(2) No Board Member, hearing officer,
or Board employee who participates, or
is reasonably expected to participate, in
the decision in a covered proceeding
shall invite or knowingly entertain any
ex parte communication or engage in
any such communication to any party,
counsel, agent of a party, or person
reasonably expected to transmit the
communication to a party or party’s
agent.
(d) When prohibitions take effect. In
on-the-record proceedings, the
prohibitions against ex parte
communications apply from the date on
which the first filing or Board decision
in a proceeding is posted to the public
docket by the Board, or when the person
responsible for the communication has
knowledge that such a filing has been
filed, or at any time the Board, by rule
or decision, specifies, whichever occurs
first. In informal rulemaking
proceedings, except as provided in
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paragraph (g) of this section, the
prohibitions against ex parte
communications apply following the
issuance of a notice of proposed
rulemaking. The prohibitions in covered
proceedings continue until the
proceeding is no longer subject to
administrative reconsideration under 49
U.S.C. 1322(c) or judicial review.
(e) Procedure required of Board
Members and Board staff upon receipt
of prohibited ex parte communications.
(1) Any Board Member, hearing officer,
or Board employee who receives an ex
parte communication not permitted by
these regulations must promptly
transmit either the written
communication, or a written summary
of the oral communication with an
outline of the surrounding
circumstances to the Chief, Section of
Administration, Office of Proceedings,
Surface Transportation Board. The
Section Chief shall promptly place the
written material or summary in the
correspondence section of the public
docket of the proceeding with a
designation indicating that it is a
prohibited ex parte communication that
is not part of the decisional record.
(2) Any Board Member, hearing
officer, or Board employee who is the
recipient of such ex parte
communication may request a ruling
from the Board’s Designated Agency
Ethics Official as to whether the
communication is a prohibited ex parte
communication. The Designated Agency
Ethics Official shall promptly reply to
such requests. The Chief, Section of
Administration, Office of Proceedings,
shall promptly notify the Chairman of
the Board of such ex parte
communications sent to the Section
Chief. The Designated Agency Ethics
Official shall promptly notify the
Chairman of all requests for rulings sent
to the Designated Agency Ethics
Official. The Chairman may require that
any communication be placed in the
correspondence section of the docket
when fairness requires that it be made
public, even if it is not a prohibited
communication. The Chairman may
direct the taking of such other action as
may be appropriate under the
circumstances.
(f) * * *
(3) The Board may censure, suspend,
dismiss, or institute proceedings to
suspend or dismiss any Board employee
who knowingly and willfully violates
the rules in this section.
(g) Ex parte communications in
informal rulemaking proceedings;
disclosure requirements. (1)
Notwithstanding paragraph (c) of this
section, ex parte communications with
Board Members in informal rulemaking
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proceedings are permitted after the
issuance of a notice of proposed
rulemaking and until 20 days before the
deadline for reply comments set forth in
the notice of proposed rulemaking,
unless otherwise specified by the Board
in procedural orders governing the
proceeding. The Board may delegate its
participation in such ex parte
communications to Board staff. All such
ex parte communications must be
disclosed in accordance with paragraph
(g)(4) of this section. Any person who
engages in such ex parte
communications must comply with any
schedule and additional instructions
provided by the Board in the
proceeding. Communications that do
not comply with this section or with the
schedule and instructions established in
the proceeding are not permitted and
are subject to the procedures and
sanctions in paragraphs (e) and (f) of
this section.
(2) To schedule ex parte meetings
permitted under paragraph (g)(1) of this
section, parties should contact the
Board’s Office of Public Assistance,
Governmental Affairs, and Compliance
or the Board Member office with whom
the meeting is requested, unless
otherwise specified by the Board.
(3) Parties seeking to present
confidential information during an ex
parte communication must inform the
Board of the confidentiality of the
information at the time of the
presentation and must comply with the
disclosure requirements in paragraph
(g)(4)(iv) of this section.
(4) The following disclosure
requirements apply to ex parte
communications permitted under
paragraph (g)(1) of this section:
(i) Any person who engages in ex
parte communications in an informal
rulemaking proceeding shall submit to
the Board Member office or delegated
Board staff with whom the meeting was
held a memorandum that states the date
and location of the communication; lists
the names and titles of all persons who
attended (including via phone or video)
or otherwise participated in the meeting
during which the ex parte
communication occurred; and
summarizes the data and arguments
presented during the ex parte
communication. Any written or
electronic material shown or given to
Board Members or Board staff during
the meeting must be attached to the
memorandum.
(ii) Memoranda must be sufficiently
detailed to describe the substance of the
presentation. Board Members or Board
staff may ask presenters to resubmit
memoranda that are not sufficiently
detailed.
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(iii) If a single meeting includes
presentations from multiple parties,
counsel, or persons, a single summary
may be submitted so long as all
presenters agree to the form and content
of the summary.
(iv) If a memorandum, including any
attachments, contains information that
the presenter asserts is confidential, the
presenter must submit a public version
and a confidential version of the
memorandum. If there is no existing
protective order governing the
proceeding, the presenter must, at the
same time the presenter submits its
public and redacted memoranda, file a
request with the Board seeking such an
order pursuant to § 1104.14 of this
chapter.
(v) Memoranda must be submitted to
the Board in the manner prescribed no
later than two business days after the ex
parte communication.
(vi) Ex parte memoranda submitted
under this section will be posted on the
Board’s website in the docket for the
informal rulemaking proceeding within
five days of submission. If a presenter
has requested confidential treatment for
all or part of a memorandum, only the
public version will appear on the
Board’s website. Persons seeking access
to the confidential version must do so
pursuant to the protective order
governing the proceeding.
[FR Doc. 2018–04411 Filed 3–2–18; 8:45 am]
BILLING CODE 4915–01–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 635
[Docket No. 150121066–5717–02]
RIN 0648–XG061
Atlantic Highly Migratory Species;
Atlantic Bluefin Tuna Fisheries;
General Category Fishery
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Temporary rule; General
category January fishery for 2018;
inseason bluefin tuna quota transfer and
closure.
AGENCY:
NMFS transfers 10 metric
tons (mt) of Atlantic bluefin tuna (BFT)
quota from the Reserve category to the
January 2018 subquota period (from
January 1 through March 31, 2018, or
until the available subquota for this
period is reached, whichever comes
SUMMARY:
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]]>Agencies
[Federal Register Volume 83, Number 43 (Monday, March 5, 2018)]
[Rules and Regulations]
[Pages 9222-9232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-04411]
=======================================================================
-----------------------------------------------------------------------
SURFACE TRANSPORTATION BOARD
49 CFR Part 1102
[Docket No. EP 739]
Ex Parte Communications in Informal Rulemaking Proceedings
AGENCY: Surface Transportation Board.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this decision, the Surface Transportation Board (the Board)
modifies its regulations to permit, subject to disclosure requirements,
ex parte communications in informal rulemaking proceedings. The Board
also adopts other changes to its ex parte rules that would clarify and
update when and how interested persons may communicate informally with
the Board regarding pending proceedings other than rulemakings. The
intent of the modified regulations is to enhance the Board's ability to
make informed decisions through increased stakeholder communications
while ensuring that the Board's record-building process in rulemaking
proceedings remains transparent and fair.
DATES: This rule is effective on April 4, 2018.
ADDRESSES: Requests for information or questions regarding this final
rule should reference Docket No. EP 739 and be in writing addressed to:
Chief, Section of Administration, Office of Proceedings, Surface
Transportation Board, 395 E Street SW, Washington, DC 20423-0001.
FOR FURTHER INFORMATION CONTACT: Jonathon Binet at (202) 245-0368.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at (800) 877-8339.
SUPPLEMENTARY INFORMATION: The Board's current regulations at 49 CFR
1102.2 generally prohibit most informal communications between the
Board and interested persons concerning the merits of pending Board
proceedings. These regulations require that communications with the
Board or Board staff regarding the merits of an ``on-the-record'' Board
proceeding not be made on an ex parte basis (i.e., without the
knowledge or consent of the parties to the proceeding).\1\ See 49 CFR
1102.2(a)(3), (c). The current regulations detail the procedures
required in the event an impermissible communication occurs and the
potential sanctions for violations. See 49 CFR 1102.2(e), (f).
---------------------------------------------------------------------------
\1\ ``On-the-record proceeding'' means ``any matter described in
Sections 556-557 of the Administrative Procedure Act [(APA)] (5
U.S.C. 556-557) or any matter required by the Constitution, statute,
Board rule, or by decision in the particular case, that is decided
solely on the record made in a Board proceeding.'' 49 CFR
1102.2(a)(1).
---------------------------------------------------------------------------
In 1977, the Board's predecessor agency, the Interstate Commerce
Commission (ICC), determined that the general prohibition on ex parte
communications in proceedings should include the informal rulemaking
proceedings the Board uses to promulgate regulations.\2\ See Revised
Rules of Practice, 358 I.C.C. 323, 345 (1977).\3\ At that time, several
court decisions expressed the view that ex parte communications in
informal rulemaking proceedings were inherently suspect.\4\
Accordingly, it has long been the agency's practice to prohibit
meetings with individual stakeholders on issues that are the topic of
pending informal rulemaking proceedings.
---------------------------------------------------------------------------
\2\ The APA, 5 U.S.C. 551-559, governs two categories of agency
rulemaking: Formal and informal. Formal rulemaking is subject to
specific procedural requirements, including hearings, presiding
officers, and a strict ex parte prohibition. See 5 U.S.C. 556-57.
But most federal agency rulemakings, including the Board's, are
informal rulemaking proceedings subject instead to the less
restrictive ``notice-and-comment'' requirements of 5 U.S.C. 553.
\3\ In Revised Rules of Practice, the ICC stated ``ex parte
communication during a rulemaking is just as improper as it is
during any other proceeding. The Commission's decisions should be
influenced only by statements that are a matter of public record.''
358 I.C.C. at 345.
\4\ See, e.g., Home Box Office v. Fed. Commc'ns Comm'n, 567 F.2d
9, 51-59 (D.C. Cir. 1977) (finding that ex parte communications that
occurred after the notice of proposed rulemaking (NPRM) violated the
due process rights of the parties who were not privy to the
communications because the written administrative record would not
reflect the possible ``undue influence'' exerted by those
stakeholders who had engaged in ex parte communications); Nat'l
Small Shipments Traffic Conference v. ICC, 590 F.2d 345, 351 (D.C.
Cir. 1978) (finding ex parte communications ``violate[d] the basic
fairness of a hearing which ostensibly assures the public a right to
participate in agency decision making,'' foreclosing effective
judicial review); Sangamon Valley Television Corp. v. United States,
269 F.2d 221, 224 (D.C. Cir. 1959) (finding that undisclosed ex
parte communications between agency commissioners and a stakeholder
were unlawful because the informal rulemaking involved ``resolution
of conflicting private claims to a valuable privilege, and that
basic fairness requires such a proceeding to be carried on in the
open'').
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At the same time, however, other court decisions were more tolerant
of ex parte communications in informal rulemaking proceedings, so long
as the proceedings were not quasi-adjudicative in nature and the
process remained fair.\5\ In 1981, in Sierra Club v. Costle, 657 F.2d
298 (D.C. Cir. 1981), the U.S. Court of Appeals for the District of
Columbia Circuit significantly clarified and liberalized treatment of
this issue. In that case, the court considered the ``timing, source,
mode, content, and the extent of . . . disclosure'' of numerous written
and oral ex parte communications received after the close of the
comment period to determine whether those communications violated the
governing statute or due process. Id. at 391. The court held that,
because the agency docketed most of the ex parte communications and
none of the comments were docketed ``so late as to
[[Page 9223]]
preclude any effective public comment,'' the agency satisfied its
statutory requirements. Id. at 398. The court also declined to prohibit
ex parte communications in informal rulemakings on constitutional due
process grounds, and even held that not all ex parte communications
must necessarily be docketed (implicitly concluding that whether such
communications require docketing depends on case-specific
circumstances). Id. at 402-04. Today, Sierra Club is considered the
most recent influential decision on ex parte communications in informal
rulemakings and is often cited by courts for the proposition that ex
parte communications in informal agency rulemaking are generally
permissible.\6\
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\5\ See, e.g., Action for Children's Television v. Fed. Commc'ns
Comm'n, 564 F.2d 458 (D.C. Cir. 1977) (upholding the agency's
decision not to issue proposed rules and finding no APA violation
for ex parte discussions where the agency provided a meaningful
opportunity for public participation and the proceeding did not
involve competing claims for a valuable privilege).
\6\ See, e.g., Tex. Office of Pub. Util. Counsel v. Fed.
Commc'ns Comm'n, 265 F.3d. 313, 327 (5th Cir. 2001) (``Generally, ex
parte contact is not shunned in the administrative agency arena as
it is in the judicial context. In fact, agency action often demands
it.''); Ammex, Inc. v. United States, 23 Ct. Int'l Trade 549, 569
n.16 (1999) (noting that the decision at issue ``constitutes an
exercise of `informal' rulemaking under the [APA] and, as such, is
not subject to the prohibition on ex parte communications set forth
in 5 U.S.C. 557(d)(1) (1994)''); Portland Audubon Soc. v. Endangered
Species Comm., 984 F.2d 1534, 1545-46 (9th Cir. 1993) (``The
decision in [Sierra Club] that the contacts were not impermissible
was based explicitly on the fact that the proceeding involved was
informal rulemaking to which the APA restrictions on ex parte
communications are not applicable.'').
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More recently, in 2014, the Administrative Conference of the United
States (ACUS), the body charged by Congress with recommending agency
best practices, provided guidance to agencies indicating that a general
prohibition on ex parte communications in informal rulemaking
proceedings is neither required nor advisable. Ex Parte Commc'ns in
Informal Rulemaking Proceedings (2014 ACUS Recommendation), 79 FR
35988, 35994 (June 25, 2014). ACUS concluded that ex parte
communications in informal rulemaking proceedings ``convey a variety of
benefits to both agencies and the public,'' although it acknowledged
that fairness issues can arise if certain groups have, or are perceived
to have, ``greater access to agency personnel than others.'' Id.
However, in balancing these competing considerations, ACUS urged
agencies to consider placing few, if any, restrictions on ex parte
communications that occur before an NPRM is issued because
communications at this early stage are less likely to cause harm and
more likely to ``help an agency gather essential information, craft
better regulatory proposals, and promote consensus building among
interested persons.'' Id. ACUS further recommended that agencies
establish clear procedures ensuring that all ex parte communications
occurring after an NPRM is issued, whether planned or unplanned, be
disclosed.
Starting in 2015, the Board began to look at the possibility of
conducting ex parte meetings to gain more stakeholder input in the
informal rulemaking process. As a result, the Board waived the ex parte
prohibition to permit Board Members or designated Board staff to
participate in ex parte communications in two proceedings.\7\ See
Reciprocal Switching, EP 711 (Sub-No. 1), slip op. at 28-29 (STB served
July 27, 2016); \8\ U.S. Rail Serv. Issues--Performance Data Reporting,
EP 724 (Sub-No. 4), slip op. at 2-3 (STB served Nov. 9, 2015). Many
stakeholders in these proceedings expressed appreciation for the
opportunity to meet with Board Members or Board staff regarding the
merits of the proposed rules and expressed the hope to interact with
the Board informally in the future as well.\9\ In these meetings,
parties have been able to respond directly to questions from Board
Members and Board staff on the feasibility and utility of certain
aspects of the Board's proposals.
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\7\ Greater use of ex parte meetings in Board rulemaking
proceedings was also a topic of the U.S. Senate Committee on
Commerce, Science, and Transportation's August 11, 2016 hearing. See
Freight Rail Reform: Implementation of the STB Reauthorization Act
of 2015: Field Hearing Before the S. Comm. on Commerce, Sci., &
Transp., 114th Cong. 32, 35, 46, 50-52, 57, 69, 72 (2016), https://www.gpo.gov/fdsys/pkg/CHRG-114shrg23228/pdf/CHRG-114shrg23228.pdf.
\8\ In the Board's July 27, 2016 decision, which embraced
Petition for Rulemaking to Adopt Revised Competitive Switching
Rules, Docket No. EP 711, the Board terminated the proceeding in
Docket No. EP 711, and all meetings with Board Members are taking
place under Reciprocal Switching, Docket No. EP 711 (Sub-No. 1).
\9\ See, e.g., Summary of Ex Parte Meeting Between Packaging
Corp. of Am. & Board Member Begeman at 3, Aug. 3, 2017, Reciprocal
Switching, EP 711 (Sub-No. 1); Summary of Ex Parte Meeting Between
the Am. Chemistry Council & Board Member Miller at 1, Mar. 22, 2017,
Reciprocal Switching, EP 711 (Sub-No. 1); Summary of Ex Parte
Meeting Between CSX Transp. & STB Staff at 1, Dec. 16, 2015, U.S.
Rail Serv. Issues--Performance Data Reporting, EP 724 (Sub-No. 4).
---------------------------------------------------------------------------
Based on the developments in case law related to ex parte
communications and the Board's own experiences waiving its ex parte
prohibitions in the two recent proceedings, the Board determined that
it was appropriate to revisit the agency's strict prohibition on ex
parte communications in informal rulemaking proceedings. The Board also
determined that certain other aspects of its ex parte regulations that
apply to proceedings other than rulemakings could be clarified and
updated to reflect current practices and better guide stakeholders and
agency personnel. Accordingly, the Board issued an NPRM on September
28, 2017, proposing to: (1) Modify its regulations to permit, subject
to disclosure requirements, ex parte communications in informal
rulemaking proceedings, and (2) change its ex parte rules to clarify
and update when and how interested persons may communicate informally
with the Board regarding pending proceedings other than rulemakings.
See Ex Parte Commc'ns in Informal Rulemaking Proceedings (NPRM), EP 739
(STB served Sept. 28, 2017). The Board received nine opening comments
and three reply comments on the NPRM.\10\
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\10\ Comments were received from the following organizations:
The American Chemistry Council, the Fertilizer Institute, the
National Industrial Transportation League, American Fuel and
Petrochemical Manufacturers, Independent Lubricant Manufacturers
Association, International Warehouse Logistics Association, American
Forest & Paper Association, Alliance for Rail Competition, Private
Railcar Food and Beverage Association, Glass Packaging Institute,
National Association of Chemical Distributors, the Chlorine
Institute, Alliance of Automobile Manufacturers, Association of
Global Automakers, American Petroleum Institute, American Malting
Barley Association, Corn Refiners Association, Portland Cement
Association, and Plastics Industry Association (collectively the
Rail Customer Coalition or RCC); the American Short Line and
Regional Railroad Association (ASLRRA); the Association of American
Railroads (AAR); BNSF Railway Company (BNSF); the Freight Rail
Customer Alliance (FRCA); the George Mason University Antonin Scalia
Law School Administrative Law Clinic (GMU); the National Grain and
Feed Association (NGFA); Samuel J. Nasca on behalf of SMART/
Transportation Division, New York State Legislative Board (SMART);
and the Western Coal Traffic League (WCTL). On November 1, 2017, the
Board also received a letter from NGFA informing the Board that the
following national agricultural producer and agribusiness
organizations notified NGFA that they support NGFA's opening
comments: National Association of State Departments of Agriculture,
National Council of Farmer Cooperatives, National Farmers Union,
National Oilseed Processors Association, and North American Millers'
Association.
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Below, the Board addresses the comments submitted by parties in
response to the NPRM and discusses clarifications and modifications
being adopted in the final rule. The text of the final rule is also
below.
Changes to Definitions. In the NPRM, the Board proposed to add two
new definitions to section 1102.2(a): ``informal rulemaking
proceeding'' and ``covered proceedings.'' ``Informal rulemaking
proceeding'' would include any proceeding to issue, amend, or repeal
rules pursuant to 49 CFR part 1110 and 5 U.S.C. 553. ``Covered
proceedings'' would encompass both on-the-record proceedings and
informal rulemaking proceedings following the issuance of an NPRM.\11\
The Board
[[Page 9224]]
further proposed, as discussed in more detail below, that ex parte
communications would be permitted in informal rulemaking proceedings
(subject to disclosure requirements for those communications occurring
post-NPRM), but would remain prohibited in on-the-record proceedings.
---------------------------------------------------------------------------
\11\ Accordingly, the Board proposed to replace references to
``on-the-record proceedings'' with ``covered proceedings,'' as
appropriate, throughout section 1102.2.
---------------------------------------------------------------------------
Additionally, the Board proposed redefining an ``ex parte
communication'' as ``an oral or written communication that concerns the
merits or substantive outcome of a pending proceeding; is made without
notice to all parties and without an opportunity for all parties to be
present; and could or is intended to influence anyone who participates
or could reasonably be expected to participate in the decision.'' This
proposed new definition would alter the existing definition in two
ways; first, by removing the existing concept that communications are
only ex parte if made ``by or on behalf of a party'' and second, by
removing the suggestion that an ex parte communication that is made
with the ``consent of any other party'' could be permissible.
The Board noted in the NPRM that these revisions would not change
the generally understood concept that certain communications, by their
very nature, do not concern the merits or substantive outcome of
pending proceedings or are not made to Board Members or staff who are
reasonably expected to participate in Board decisions. Such permissible
communications include, for example, communications about purely
procedural issues; public statements or speeches by Board Members or
staff that merely provide general and publicly available information
about a proceeding; communications that solely concern the status of a
proceeding; and communications with the Board's Rail Customer and
Public Assistance Program.
ASLRRA, NGFA, and RCC support the proposed changes to the
definitions. (ASLRRA Comments 3; NGFA Comments 5; RCC Comments 7.)
ASLRRA argues that the proposed definitions and amendments preserve the
transparency and fairness of the rulemaking process. (ASLRRA Comments
3.)
WCTL supports the Board's proposed changes to the definition of
``ex parte communication.'' (WCTL Comments 23; WCTL Reply 9.) WCTL
agrees with the Board that ex parte communications can be made by non-
parties and that the definition of ``ex parte communication'' should
encompass communications made by these non-parties. (WCTL Reply 9.)
WCTL argues, however, that the Board should amend the definition of
``on-the-record proceeding'' to expressly include rate reasonableness
and unreasonable practice adjudications. (WCTL Comments 19.) According
to WCTL, rate reasonableness and unreasonable practice cases may not
technically be formal ``on-the-record'' proceedings within the meaning
of the APA, and adding the suggested text would remove any uncertainty.
(Id. at 20.) AAR states that it does not oppose WCTL's suggestion. (AAR
Reply 5.)
The final rule will adopt the proposal as set forth in the NPRM. It
is not necessary to amend the definition of ``on-the-record
proceeding'' to specifically include rate reasonableness and
unreasonable practice adjudications, as WCTL suggests. Although rate
reasonableness and unreasonable practice formal complaints may not
technically be covered by the APA definition of on-the-record
proceedings, the definition of that term in the Board's regulations is
sufficient to cover those types of proceedings, which are decided
solely on the record. See 49 CFR 1102.2(a)(1).
Communications That Are Not Prohibited. The Board also proposed in
the NPRM to modify section 1102.2(b) to include additional categories
of ex parte communications that are permissible and would not be
subject to the disclosure requirements of proposed section 1102.2(e)
and (g), discussed in more detail below. Specifically, the Board
proposed adding to this category communications related to an informal
rulemaking proceeding prior to the issuance of an NPRM; \12\
communications related to the Board's implementation of the National
Environmental Policy Act and related environmental laws; and
communications concerning judicial review of a matter that has already
been decided by the Board made between parties to the litigation and
the Board or Board staff involved in that litigation. Additionally, the
Board proposed to modify the existing regulations to remove from
section 1102.2(b)(1) the language permitting any communication ``to
which all the parties to the proceeding agree.''
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\12\ For example, informal communications following a notice of
intent to institute a rulemaking proceeding or an advance notice of
proposed rulemaking (ANPRM) would not be prohibited. See 49 CFR
1110.3(b).
---------------------------------------------------------------------------
NGFA, RCC, and WCTL support including environmental review and
judicial review communications within the scope of permitted ex parte
communications. (NGFA Comments 5; RCC Comments 7; WCTL Comments 2; WCTL
Reply 2, 10.) ASLRRA, NGFA, and RCC also support the proposal to permit
ex parte communications prior to the issuance of an NPRM. (ASLRRA
Comments 3; NGFA Comments 3; RCC Comments 7.) ASLRRA argues that
allowing undisclosed ex parte communications prior to the issuance of
an NPRM would enable the Board to obtain helpful stakeholder input,
particularly in the preliminary stages of a rulemaking proceeding,
without adversely implicating due process or raising administrative
concerns. (ASLRRA Comments 3.) NGFA likewise supports permitting
undisclosed ex parte communications before the issuance of an NPRM.
(NGFA Comments 3.) According to NGFA, the information the Board gathers
prior to the issuance of an NPRM would be evident within the NPRM
itself. (Id.) NGFA, however, suggests that the Board adopt the practice
of including in the NPRM a list of the identities of all stakeholders
who provided input, as the Board did in Expediting Rate Cases, EP 733,
slip op. at 2 n.3 (STB served June 15, 2016). (Id.)
AAR, FRCA, SMART, and WCTL object to the Board's proposal to permit
undisclosed ex parte communications prior to the issuance of an NPRM.
(See AAR Comments 5-6; FRCA Comments 1; SMART Comments 10; WCTL
Comments 21; AAR Reply 4.) AAR argues that the Board should require the
disclosure of ex parte contacts occurring after the issuance of an
ANPRM. (AAR Comments 5-6.) For cases initiated by a petition for
rulemaking, AAR suggests that ex parte communications should be
permitted, subject to disclosure requirements, once that petition has
been filed and docketed. (AAR Reply 5.) AAR argues that such a rule
would be consistent with Department of Transportation (DOT) policy that
recommends disclosure of ex parte communications upon issuance of an
ANPRM, and Federal Aviation Administration rules that require
disclosure of ex parte communications before an ANPRM or an NPRM. (AAR
Comments 6.) According to AAR, permitting such ex parte communications
without disclosure may discourage stakeholder participation on the
record. (AAR Comments 6; AAR Reply 4-5.) \13\
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\13\ AAR also asks the Board to clarify whether ex parte
communications would be permitted in major rail merger proceedings
and suggests that the Board add a new paragraph section 1102.2(b)(7)
permitting, as a communication that is not prohibited, ``[a]ny
communication permitted by statute.'' (AAR Comments 7.) WCTL
objected to AAR's suggestion, arguing that it does not comply with
the provisions of 49 U.S.C. 11324(f) and conflicts with the Board's
1996 determination not to exercise its statutory authority under
section 11324(f) to permit ex parte communications in merger cases.
(WCTL Reply 8-9 (citing Pet. of Fieldston Co. to Establish
Procedures Regarding Ex Parte Commc'ns in R.R. Merger Proceedings, 1
S.T.B. 1083, 1084-85 (1996)).) The Board finds that this request,
related to major merger proceedings, is outside the scope of this
proceeding, which focuses primarily on informal rulemaking
proceedings; however, parties are free to raise the issue of the
permissibility of ex parte communications in individual major merger
proceedings.
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[[Page 9225]]
WCTL likewise argues that the Board should apply ex parte
communication disclosure rules and limitations to all publicly-docketed
informal rulemaking proceedings where the Board has sought public
comments (e.g., if the Board initiates a docketed proceeding using an
ANPRM, the ex parte communication rules would apply starting when the
ANPRM is docketed). (WCTL Comments 21; WCTL Reply 3-4.) WCTL argues
that this would better advance the Board's objective of ``free
flowing'' communications by allowing all interested members of the
public to see what others are saying in ex parte meetings and to then
respond to these communications. (WCTL Comments 21; WCTL Reply 4.)
According to WCTL, permitting undisclosed ex parte communications prior
to the issuance of an NPRM would discourage parties from filing
detailed comments in response to ANPRMs and similar forms of pre-NPRM
notices when those comments may be rejected based on ex parte
communications that the parties were unaware of and had no opportunity
to rebut. (WCTL Comments 21.) FRCA agrees with WCTL that disclosure
requirements ``should not become operative only after an [NPRM] is
served.'' (FRCA Comments 1.) Lastly, SMART argues that the 2014 ACUS
Recommendation raises potential harms that would apply to ex parte
communications prior to issuance of an NPRM (although the alleged
potential harms are not specified by SMART). (SMART Comments 9-10
(citing 2014 ACUS Recommendation, 79 FR 35993-95).)
Having reviewed the comments, the Board continues to believe that
the benefits of not requiring disclosure for ex parte communications
prior to the issuance of an NPRM outweigh the potential harms.
Regarding the benefits, the Board agrees with ASLRRA that such
communication would enable the Board to obtain helpful stakeholder
input in crafting proposed regulations. Informal communications with
stakeholders prior to issuance of an NPRM provide an opportunity for
the Board to obtain useful information and input that would inform the
development of the Board's proposal and help identify the issues the
agency should consider. In fact, the final report to ACUS, on which the
2014 ACUS Recommendation is based, states that ``pre-NPRM ex parte
communications are generally beneficial and do not implicate
administrative and due process principles.'' Esa L. Sferra-Bonistalli,
Ex Parte Commc'ns in Informal Rulemaking Final Report (Final Report),
69 (May 1, 2014) (prepared for consideration of the Admin. Conference
of the U.S.), https://www.acus.gov/report/final-ex-parte-communications-report. The report continued, stating that ``[r]ather
than restricting [ex parte] communications, agencies should experiment
with how they can capitalize on the communications' value.'' Id. at 85.
Thus, permitting informal communications pre-NPRM, without
restrictions, such as disclosure and timing requirements, could lead to
better policy-making by enabling a freer flow of communication during
the preliminary, exploratory phase of a rulemaking proceeding.
The Board believes that these benefits outweigh any potential
harms. SMART's claim--that the ACUS report raises some important
potential and anticipated harms that would apply to ex parte
communications prior to issuance of an NPRM--is inconsistent with the
conclusion of ACUS's recommendations. ACUS expressly states that
``[b]efore an agency issues [an NPRM], few if any restrictions on ex
parte communications are desirable.'' 2014 ACUS Recommendation, 79 FR
35994. ACUS further states that pre-NPRM communications are ``less
likely'' to pose the same harms as ex parte communications that take
place later in the process, and ``can help an agency gather essential
information, craft better regulatory proposals, and promote consensus
building among interested persons.'' Id.
In addition, the potential harm identified by both WCTL and AAR--
that commenters would be less likely to file comments on the record
during a proceeding--seems unlikely. In a recent case where the Board
invited and/or received informal stakeholder communications prior to
the initiation of a proceeding, participation in the subsequent
proceeding remained at a high level. See, e.g., Expediting Rate Cases,
Docket No. EP 733 (25 comments received following informal
communications). The Board believes that stakeholders will continue to
weigh in on proposed rules (through written comments and/or disclosed
ex parte communications) even where they have had an opportunity to
share general and preliminary views with the agency pre-NPRM.
Additionally, as the Board noted in the NPRM, any information gathered
in a pre-NPRM meeting that the Board incorporates or relies upon in its
proposal will be evident in the NPRM itself. See NPRM, EP 739, slip op.
at 10. The public would have an opportunity to examine and respond to
that information.\14\ The Board believes that parties will still have
the incentive to participate through written comments following
informal ex parte communications to ensure that the Board has a record
that reflects their views.
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\14\ For example, as the Board noted in the NPRM, in Docket No.
EP 733, Expediting Rate Cases, where Board staff held informal
meetings with stakeholders with the goal of enhancing the Board
staff's perspective on strategies and pathways to expedite and
streamline rate cases, parties were permitted to comment on the
details of the proposal, including those stemming from feedback
gathered in the informal meetings. See NPRM, EP 739, slip op. at 10
n.12; see also Expediting Rate Cases, EP 733, slip op. at 1 (STB
served June 15, 2017).
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For these reasons, the final rule will adopt the proposal regarding
communications that are not prohibited as set forth in the NPRM.
Communications That Are Prohibited. In the NPRM, the Board proposed
to modify section 1102.2(c)(1) by adding the introductory clause,
``[e]xcept to the extent permitted by these rules'' to reflect the fact
that the revised rules would now govern, but not entirely prohibit, ex
parte communications.
The Board also proposed amending section 1102.2(d) to clarify when
ex parte prohibitions would take effect and how long they would remain
in effect. Specifically, the NPRM provided that the prohibitions
against ex parte communications in on-the-record proceedings would
begin when the first filing or Board decision in a proceeding is posted
to the public docket or when the person responsible for a communication
knows that the first filing has been filed with the Board, whichever
occurs first. The Board further proposed that, in informal rulemaking
proceedings, except as provided in the new section 1102.2(g), discussed
in more detail below, the prohibitions on ex parte communications would
begin when the Board issues an NPRM. Lastly, the Board proposed to
clarify that ex parte prohibitions in covered proceedings would remain
in effect until the proceeding is no longer subject to administrative
reconsideration under 49 U.S.C. 1322(c) or judicial review.
[[Page 9226]]
Commenters generally support this proposal. ASLRRA states that it
supports the proposed changes to section 1102.2(d), which clarify when
ex parte prohibitions would begin. (ASLRRA Comments 3.) Likewise, NGFA
states that it supports changing the provision on when ex parte
prohibitions begin to better reflect the various ways Board proceedings
are initiated. (NGFA Comments 5.) NGFA and RCC also both support
application of the ex parte prohibitions when the first filing or Board
decision is posted to the public docket in an on-the-record proceeding.
(Id.; RCC Comments 7-8.) No commenters raised specific objections to
this aspect of the Board's proposal. Accordingly, the final rule will
adopt the proposal as set forth in the NPRM.
Procedures Upon Receipt of Prohibited Ex Parte Communications. The
Board also proposed to revise section 1102.2(e) and (f), which entail
the procedures required of Board Members and employees upon receipt of
prohibited ex parte communications and sanctions, to reflect the fact
that some ex parte communications would now be permissible under the
revised regulation. First, the proposed rules clarified that the
procedures in section 1102.2(e)(1) and (2) would apply to ``[a]ny Board
Member, hearing officer or Board employee'' who receives an ex parte
communication. Second, the proposal clarified that the procedures set
forth in the existing section 1102.2(e) and (f) would apply only to
communications not otherwise permitted by the regulation. Lastly, the
Board proposed to amend the provision in section 1102.2(e)(1)--that
currently requires the Chief of the Office of Proceedings' Section of
Administration to place any written communication or a written summary
of an oral communication not permitted by these regulations in the
public correspondence file--to also require that such placements be
made ``promptly'' and contain a label indicating that the prohibited ex
parte communication is not part of the decisional record of the
proceeding.
The only comment in response to this aspect of the proposal was
from WCTL, which states that it agrees with the Board's proposal to
clarify the procedures the Board should follow if a Board Member or
Board staff receives a prohibited ex parte communication. (WCTL
Comments 24; WCTL Reply 10.) No commenters objected to the proposal.
Accordingly, the final rule will adopt the proposal as set forth in the
NPRM.
Ex Parte Communications in Informal Rulemaking Proceedings. In the
NPRM, the Board proposed to add a new section 1102.2(g) specifically
governing ex parte communications in informal rulemaking proceedings
that occur following the issuance of an NPRM, at which point disclosure
requirements would attach. Under the proposed rule, ex parte
communications with Board Members in informal rulemaking proceedings
following the issuance of an NPRM would be permitted, subject to
disclosure requirements, until 20 days before the deadline for reply
comments to the NPRM, unless otherwise specified by the Board. The
proposed rules provided that Board Members may delegate their
participation in such ex parte communications to Board staff.
Under the proposed rules, ex parte communications in informal
rulemaking proceedings that occur outside of the permitted meeting
period, that are made to Board staff where such participation has not
been delegated by the Board, or that do not comply with the required
disclosure requirements would be subject to the sanctions provided in
section 1102.2(f). Further, the proposed rules provided that, to
schedule an ex parte meeting, parties should contact the Board's Office
of Public Assistance, Governmental Affairs, and Compliance at (202)
245-0238 or the Board Member office with whom the meeting is requested,
unless otherwise specified by the Board.
The proposed rules also required that the substance of each ex
parte meeting be disclosed by the Board by posting in the docket of the
proceeding a written meeting summary of the arguments, information, and
data presented at each meeting and a copy of any handouts given or
presented. The proposed meeting summary would also disclose basic
information about the meeting, including the date and location of the
ex parte communication (or means of communication in the case of
telephone calls or video-conferencing) and a list of attendees/
participants. The proposed rules further provided that the meeting
summaries would have to be sufficiently detailed to describe the
substance of the ex parte communication. Under the proposed rules,
presenters could be required to resubmit summaries that are
insufficiently detailed or that contain inaccuracies as to the
substance of the presentation.
The proposed rules also provided that a single meeting summary
could be submitted to the Board even if multiple parties, persons, or
counsel were involved in the same ex parte meeting. In such instances,
it would be the responsibility of the person submitting the summary to
ensure that all other parties at the meeting agree to the form and
content of the summary. The proposed rules would permit parties to
present confidential information during ex parte meetings. Under the
proposed rules, if the presentations contain material that a party
asserts is confidential under an existing protective order governing
the proceeding, parties would be required to present a public version
and a confidential version of ex parte summaries and any handouts. If a
protective order has not been issued in the proceeding at the time the
presenter seeks to file a meeting summary or handout containing
confidential information, the proposed rules provided that the
presenting party would have to file a request with the Board seeking
such an order no later than the date it submits its meeting summary.
The proposed rules also required parties to submit summaries within two
business days of an ex parte presentation or meeting. Under the
proposed rules, the Board would post the summaries within seven days of
submission of a summary that is complete for posting.
Comments in Support. Most commenters were supportive of the Board's
proposal to permit, subject to disclosure requirements, ex parte
communications in informal rulemaking proceedings. (See AAR Comments 2;
ASLRRA Comments 1; BNSF Comments 1; GMU Comments 1; RCC Comments 3.)
AAR and ASLRRA state that the Board should adopt the proposed rules
because they will lead to better reasoned decision-making and more
informed rules. (AAR Comments 3; see also ASLRRA Comments 4.) AAR
argues that the relatively modest burdens that ex parte meetings might
place on stakeholders participating in rulemaking proceedings would be
outweighed by the benefits of improved flow of relevant information to
Board decision makers. (AAR Reply 3.) According to AAR, face-to-face
communications would allow the Board to ensure that its data and
information have not grown stale over time, and even when
communications do not provide new information, face-to-face
conversations summarizing and highlighting points of emphasis can
provide value to decision-makers. (AAR Comments 4.) AAR also noted that
the NPRM is responsive to stakeholder requests for more interaction
with Board Members and staff. (Id.) ASLRRA also supports the proposed
process for ex parte communications during informal rulemaking
proceedings, stating that it
[[Page 9227]]
would ensure transparency and fairness. (ASLRRA Comments 3.) According
to ASLRRA, the Board's proposal meets its goals of enhancing its
ability to make informed decisions in informal proceedings while
ensuring its record-building in rulemaking proceedings remains
transparent and fair. (Id. at 1.)
BNSF likewise supports the Board's proposal, stating that increased
communications with the Board regarding informal rulemakings will
provide value to both the Board and its stakeholders. (BNSF Comments
2.) According to BNSF, the Board's current ex parte regulations reflect
the outdated and overly restrictive view of the Board's predecessor
agency, the ICC, and are ``out of step'' with long-held doctrines of
administrative law, the ex parte rules generally under the APA, and
procedures of other federal agencies. (Id. at 1-2; see also AAR
Comments 1 (``[T]he Board's application of its current regulations
unnecessarily prohibits most informal communications with the Board and
its staff in the informal rulemaking context.'').) BNSF argues that
modernizing the Board's ex parte rules to permit an increased flow of
information and technical expertise between the Board and its
stakeholders during informal rulemaking proceedings will enable the
Board to engage in more reasoned policymaking and should produce
regulatory policies that are more grounded in the complex operational
and market realities currently facing the rail industry. (BNSF Comments
1.)
GMU asserts that the Board's proposed changes to the procedures for
ex parte communications would promote responsible governance by
facilitating promulgation of informed substantive rules while
preserving transparency. (GMU Comments 1.) According to GMU, relaxing
the Board's ex parte regulations would remove a procedural hurdle,
making it easier for the Board to engage in informed notice-and-comment
proceedings, which in turn encourages transparency. (Id. at 2.) GMU
further argues that the Board has the statutory authority to change its
ex parte communications regulations in the context of a notice-and-
comment rulemaking, noting that both the APA notice-and-comment
requirements and the statutory provisions governing the Board permit ex
parte communications during informal rulemaking proceedings. (Id. at 2-
3.)
RCC agrees that ex parte communications should be permitted in
informal rulemaking proceedings if appropriate safeguards to preserve
fairness and transparency also are adopted. (RCC Comments 3.) RCC
states that ex parte communications in informal rulemakings would
ultimately produce better outcomes. (Id.) According to RCC, face-to-
face dialogue facilitates a more efficient exchange of information,
development of ideas, explanation of concepts, and responsiveness to
questions and would allow the Board to probe more deeply into subjects
based upon the comments submitted. (Id. at 3-4.) RCC further states
that the Board would also benefit from clarification of concepts and
proposals submitted in written comments, especially in proceedings that
implicate complex technical matters. (Id. at 4.)
As further support for the Board's proposal, a number of commenters
cite their positive experiences participating in ex parte meetings in
recent Board proceedings where the agency waived the ex parte
prohibition. (See, e.g., BNSF Comments 2 (noting that the ex parte
meetings in U.S. Rail Serv. Issues--Performance Data Reporting, Docket
No. EP 724 (Sub-No. 4), better informed the Board about highly
technical service reporting issues and resulted in regulations that
were more efficiently tailored to the realities of railroad
operations); NGFA Comments 2-3 (stating that its ex parte meeting in
U.S. Rail Serv. Issues--Performance Data Reporting, Docket No. EP 724
(Sub-No. 4), was extremely beneficial because it allowed NGFA to
explain the details of their railroad service needs and concerns and to
answer Board staff's questions in a more effective manner); RCC
Comments 1-2 (noting positive experiences with ex parte meetings in
Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), and U.S. Rail
Serv. Issues--Performance Data Reporting, Docket No. EP 724 (Sub-No.
4), as well as the informal meetings in Expediting Rate Cases, Docket
No. EP 733).)
Comments Requesting Modifications. Several commenters, while
expressing overall support for the Board's proposal, suggest
modifications that they argue would improve the rule. RCC urges the
Board to be mindful of informal rulemaking proceedings that are closely
associated with pending adjudicatory proceedings. (RCC Comments 6.) In
that regard, RCC suggests that the Board establish safeguards against
parties using permissible ex parte communications in the rulemaking
proceedings to circumvent the prohibition of the same in adjudicatory
proceedings. (Id.; see also WCTL Comments 18; AAR Reply 5.) RCC
suggests that the most effective potential modifications would be to
either: (1) Not allow ex parte communications in rulemakings that are
closely associated with pending cases, or (2) not apply any rules that
were developed in a rulemaking that utilized ex parte communications in
pending adjudications. (RCC Comments 6.)
NGFA and RCC both suggest that the Board modify the period during
which ex parte communications would be permitted. (NGFA Comments 4; RCC
Comments 5-6.) Specifically, they suggest that the Board permit ex
parte communications for a specified time (e.g., 30 days) after the
deadline for filing reply comments--subject to the same disclosure
requirement contained in the NPRM--and permit written responses
confined specifically to the content of the ex parte communication
within 10 days thereafter. (NGFA Comments 4; RCC Comments 5-6.)
According to both commenters, under the Board's proposal, which would
prohibit ex parte communications within 20 days of the deadline for
written reply comments, stakeholders would not have enough time to both
participate in ex parte meetings and also review and prepare responses
to other parties' written comments. (NGFA Comments 4; RCC Comments 4-
5.) RCC adds that, in those proceedings where the Board solicits three
rounds of comments, rather than the usual two rounds, the Board could
apply its 20-day rule to the third round of comments and still preserve
most of the benefits from ex parte communications. (RCC Comments 6.)
RCC requests that, at a minimum, the Board express its willingness to
extend the 20-day deadline on a case-by-case basis when appropriate to
realize the benefits of ex parte communications in informal
rulemakings. (Id.) AAR concurs in a modification that would permit ex
parte communications for a specific time after the submission of at
least two rounds of comments, stating that this change would allow
meetings held with Board Members or staff to reflect all the issues in
the record and would not create any incentives for parties to hold
evidence or arguments back for the reply round. (AAR Reply 4.)
WCTL, however, opposes allowing ex parte communications following
the written comment period because it claims that doing so would add
unnecessary cost and delay to rulemaking proceedings. (WCTL Reply 7-8.)
WCTL also notes that ex parte communications conducted after the
comment period has closed are disfavored by ACUS. (Id. at 8 (citing
2014 ACUS Recommendation, 79 FR 35994).)
[[Page 9228]]
Additionally, AAR states that the proposal in section 1102.2(g)(1),
which authorizes the Board to delegate its participation in such ex
parte communications to Board staff, implies that such a delegation
would require an entire board decision, which AAR argues would be
unnecessarily formalistic. (AAR Comments 7.) AAR suggests that the
Board should expand the proposed rules to indicate that communications
with staff during the appropriate period are permissible, subject to
disclosure rules. (Id.) AAR indicates there are many instances where
technical information could be best explained to staff responsible for
the subject matter, like financial reporting, costing, or railroad
operations. (Id.)
Regarding the proposed disclosure requirements, NGFA states that it
supports the Board's proposals concerning the preparation and
disclosure of ex parte meeting summaries that are detailed sufficiently
to describe the substance of the communication, but recommends that the
Board shorten the period for posting the meeting summaries from seven
calendar days (as the Board proposed) to two business days. (NGFA
Comments 4-5.) NGFA argues that this change would align with the two-
business-day requirement for meeting summaries to be submitted by the
participants in the ex parte communication and would provide for more
timely transparency and opportunity for review by interested parties.
(Id. at 5.)
Comments in Opposition. Some commenters object to the idea of
allowing ex parte communication in informal rulemaking proceedings or
suggest that, if allowed, such communications be utilized more
sparingly. SMART states that railroad employees, represented by SMART,
would be adversely affected by a `` `closed door' and secret [Board]
tribunal.'' (SMART Comments 4.) According to SMART, the Board's
proposal would ``abolish[ ]'' the prohibition on ex parte
communications in most, if not all rulemakings, since the terms
``informal'' and ``formal'' rulemakings are not in the APA. (SMART
Comments 3 n.2.) SMART argues that ``unrestricted'' and ``wide-
ranging'' ex parte communications would be ``prejudicial to parties and
counsel situated at a distance,'' because the Board does not have
regional offices and rarely sets hearings outside the Washington, DC
area. (SMART Comments 7.) It contends that telephonic communications
are ``not a satisfactory alternative for face-to-face participation.''
(Id.) SMART further argues that ``[t]here is nothing to suggest that
face-to-face communication will better promote efficiency so as to
substitute for the written word in the decisionmaking process'';
rather, the ``real impact of ex parte communication repeal would be to
limit the audience, restrict the spread of knowledge, and * * * impair
the final action.'' (SMART Reply 4.) SMART also argues that joint
meetings conducted with other parties and agency personnel could be
problematic. (SMART Comments 8.) According to SMART, the Board need not
adopt the proposed rule because it may continue to waive its ex parte
prohibition, as it has done in two recent proceedings. (Id. at 7.)
SMART also argues that the benefit of oral communication can be
achieved through oral argument. (SMART Reply 5.)
WCTL argues that the Board's proposal would increase the cost of
participating in a rulemaking proceeding, (WCTL Comments 15), and
likely result in substantial administrative delay, (Id. at 16). WCTL
argues that the proposal would lead parties to believe they must
participate in the ex parte communication process or they will be
``left out.'' (Id. at 15.) WCTL also argues that shippers, unlike large
railroads, frequently lack the time and financial resources to
participate in ex parte meetings, which can create the perception of an
unlevel playing field. (Id. at 17.) WCTL further argues that, in many
proceedings, the Board may have more efficient administrative tools to
address concerns with the record, such as the use of technical
conferences. (Id. at 16.) According to WCTL, unless the Board requires
that ex parte sessions be video-taped and then makes the tapes publicly
available, the perception may continue to be that deals are being done
``behind closed doors,'' not in open fora. (Id. at 17.) WCTL argues
that the Board should instead continue to allow ex parte communications
in informal rulemaking proceedings on a case-by-case basis. (Id. at 1,
14, 18; WCTL Reply 2, 5.) WCTL asserts that a case-by-case approach
would address concerns raised by other commenters in this proceeding.
(WCTL Reply 6-7.)
FRCA agrees with WCTL that the Board should determine whether to
permit ex parte communications on a case-by-case basis, although FRCA
also acknowledges the benefits of ex parte communications in
rulemakings generally. (FRCA Comments 1.) According to FRCA, permitting
ex parte communications should not be the ``automatic default'' until
the Board has accumulated more experience with ex parte communications.
(Id.)
AAR disagrees with WCTL that ex parte communications could result
in administrative delay. (AAR Reply 5.) According to AAR, WCTL's
suggestion of using technical conferences instead of ex parte meetings
does not have to be an ``either/or'' proposition, as greater use of
technical conferences could supplement NPRM proposals. (Id. at 3.) AAR
also disagrees with WCTL's suggestion that the Board should permit ex
parte communications in informal rulemaking proceedings on a case-by-
case basis. (Id. at 2.) AAR argues that stakeholders will be best
equipped to fully participate in a rulemaking when the rules for such
participation are known in advance. (Id.) AAR notes that pre-
established rules would save the Board from expending its limited time
and resources on ad hoc determinations related to ex parte
communications in every rulemaking proceeding on its docket. (Id. at 2-
3.) AAR further asserts that the proposed rules would allow the Board,
on a case-by-case basis, to restrict communications in a particular
proceeding, if the concerns cited by WCTL or others present themselves.
(Id. at 3.)
Board Determination. After considering all of the comments, the
Board concludes that direct communications with stakeholders in
informal rulemaking proceedings, in accordance with a transparent and
fair record-building process, would enhance the Board's consideration
of issues and better enable it to promulgate the most effective
regulations. The Board will first address the arguments of commenters
that oppose the proposed rule. Then, the Board will address the
suggested modifications to the proposed rule.
The commenters that urge the Board to withdraw the proposal in
favor of continuing to prohibit ex parte communications in rulemakings
have not identified a potential or likely harm that outweighs the
benefits of such communications. Specifically, the Board disagrees with
SMART that permitting ex parte communications in informal rulemaking
proceedings would create a ``secret [Board] tribunal'' and with WCTL
that ex parte sessions must be video-taped and made publicly available
in order not to be perceived as ``behind closed doors.'' The final rule
incorporates safeguards to ensure the rulemaking process remains fair
and transparent, such as requiring the written and public disclosure of
ex parte communications received after a rule is proposed and providing
parties an opportunity to submit written comments in response to those
summaries. The Board agrees with RCC
[[Page 9229]]
that the safeguards the Board has proposed are sufficient to preserve
fairness and transparency in informal rulemakings. As noted above, the
Board has gained familiarity in recent proceedings with developing such
safeguards and has used that experience to develop the proposed rules.
Additionally, as several commenters noted, the final rule is consistent
with the practices of other agencies and the best practices guidelines
published by ACUS.\15\
---------------------------------------------------------------------------
\15\ SMART's assertion that the proposed rule improperly would
``abolish[]'' the prohibition on ex parte communications in most, if
not all, rulemakings is not relevant to this proceeding. The APA
prohibits ex parte communications in formal proceedings, but not in
informal rulemaking proceedings. See Sierra Club, 657 F.2d at 402
(noting that Congress declined to extend the ex parte prohibition
applicable to formal rulemakings to informal rulemakings despite
being urged to do so). Should the Board conduct a rulemaking that is
subject to the APA restriction, the rules proposed here would not
apply.
---------------------------------------------------------------------------
The Board also disagrees that the proposal would disadvantage
witnesses and counsel located outside the Washington, DC area, as SMART
asserts. As indicated in the NPRM, EP 739, slip op. at 8, 13, parties
will be permitted to participate in ex parte meetings via telephone or
videoconferencing. Indeed, ex parte meetings have been conducted
remotely, and the Board does not believe that there is any significant
difference in the effectiveness of the interaction between face-to-face
meetings and meetings occurring via telephone or videoconferencing.
Additionally, in response to SMART's argument that there is no evidence
that direct communication will promote more efficiency in the decision-
making process than written comments, the Board notes that ex parte
communications are not intended to replace written comments in a
rulemaking. Rather, ex parte communications are a supplement to the
written record and provide parties with yet another avenue for
communicating their needs and concerns to the Board. Ex parte
communications would actually enhance the usefulness of written
comments, as such communications would allow Board Members to obtain
clarification and seek additional information regarding arguments
contained in the written opening comments.
The Board is not persuaded that WCTL's argument that parties will
believe they must participate in the ex parte communication process to
avoid having less access than others warrants limiting all parties'
access to this communication tool. A party's decision whether or not to
engage in ex parte communications is not much different than having to
decide whether to participate through more traditional means, such as
submitting written comments or participating in a hearing. In fact,
unlike a traditional hearing, the proposal here would allow parties to
participate remotely, as the Board is permitting ex parte meetings to
be conducted via telephone and videoconference, which could reduce a
party's cost to participate in a proceeding. The Board is confident
that parties will be able to assess the appropriate level of
participation for their organization based on their particularized
interest in the subject matter. The Board's intention here is to
provide stakeholders with increased access to the Board while
maintaining a fair and transparent record-building process, and, for
the reasons discussed in this decision, the Board believes the final
rule achieves that goal.
Additionally, the Board is not persuaded that permitting ex parte
communications in informal rulemaking proceedings will result in
``significant administrative delay,'' as WCTL claims. While WCTL is
correct that permitting ex parte communications necessarily will add
some time to rulemaking proceedings, the Board believes that the
benefit of the additional information provided will outweigh the
disadvantages of a slightly longer procedural schedule. Based on the
Board's experiences, incorporating ex parte communication into the
informal rulemaking process results in final rules that better reflect
the needs and concerns of the Board's stakeholders. (See AAR Comments
3; ASLRRA Comments 4; BNSF Comments 2; NGFA Comments 2-3; RCC Comments
1-2, 3; AAR Reply 3); see also 2014 ACUS Recommendation, 79 FR 35994.
Contrary to SMART's and WCTL's arguments, the Board does not intend ex
parte communications to be a substitute for oral argument or technical
conferences in informal rulemaking proceedings. Rather, ex parte
communications would supplement the tools currently available in
rulemaking proceedings. If the Board believes oral argument or
technical conferences would be useful, it may decide to include those
steps as a supplement to (or even in lieu of, if the circumstances
warrant) ex parte communications.
To the extent that SMART and WCTL argue that the Board's recent
practice of waiving the ex parte prohibition in particular proceedings
is superior to the proposed rules, the Board agrees with AAR that
stakeholders will be better equipped to fully participate in an
informal rulemaking when the rules for participation are well-
established. As AAR notes, pre-established rules would save the Board
from expending time and resources on ex parte determinations in every
rulemaking proceeding. Additionally, as several parties note, the Board
by decision could restrict communications in a particular proceeding,
where appropriate. Thus, the Board will not accept WCTL's and SMART's
recommendation that the Board continue to waive its ex parte
regulations on a case-by-case basis, rather than adopting changes to
its ex parte regulations permitting ex parte regulations in informal
rulemaking proceedings.
Several parties proposed modifications to the Board's proposed ex
parte communication procedures, which the Board addresses below. With
regard to the most appropriate deadline for the conclusion of ex parte
meetings in an informal rulemaking proceeding, the Board continues to
believe that the cutoff should be 20 days before the reply comment
deadline. NGFA's, RCC's, and AAR's suggestions--that the Board permit
ex parte communications for a specified time after the deadline for
filing reply comments--would add an additional round of comments and
result in a longer proceeding than under the Board's proposal. Indeed,
as WCTL argues, post-comment period ex parte communications are
disfavored by ACUS given the propensity of those communications to
delay proceedings if significant information is presented to the agency
late in the process. (See WCTL Reply 8; see also 2014 ACUS
Recommendation, 79 FR 35994.) ACUS notes in 2014 ACUS Recommendation
that ``the dangers associated with agency reliance on privately-
submitted information become more acute'' after the comment period
closes and may require an agency to reopen the comment period. Post-
comment period ex parte communications are also generally discouraged
at several other agencies. See Final Report at 57, 59-60, 64 (noting
prohibition or discouragement of post-comment period ex parte contacts
at DOT, the U.S. Coast Guard, the Department of Education and the
Federal Trade Commission). In addition, RCC's suggestion that the Board
could permit written responses limited to just the ex parte
communication meeting summaries could lead to disputes between
commenters as to whether the response is properly limited to the
summaries and put the Board in the position of having to resolve such
disputes, which
[[Page 9230]]
would only add to the complexity of the rulemaking process.
However, considering NGFA's and RCC's arguments that parties may
have insufficient time during the comment period to both prepare
written comments and participate in ex parte meetings, the Board will
be cognizant of such constraints when establishing reply comment period
deadlines in rulemaking proceedings. Also, in particular proceedings,
if a party is unable to both prepare written comments and participate
in ex parte meetings within this deadline, it may seek an extension.
Additionally, if the Board concludes in a particular proceeding that ex
parte discussions would be more beneficial following the submission of
written comments (e.g., in highly technical rulemakings where post
comment ex parte communication would be beneficial to ensure the Board
understands the complex, technical data and arguments), the Board may
modify the procedural schedule to permit such discussion. See infra
App. A, section 1102.2(g)(1) (``unless otherwise specified by the Board
in procedural orders governing the proceeding'').
The Board agrees with RCC that the Board must be mindful of
informal rulemaking proceedings that are closely associated with
pending adjudicatory proceedings to ensure that permissible ex parte
communications in the rulemaking proceedings are not used to circumvent
the prohibition of the such communications in the related adjudicatory
proceedings. If the Board determines that ex parte communications are
not appropriate for a particular rulemaking proceeding based on this
concern, it can issue an order declining to permit such meetings in
that particular proceeding. And if the Board concludes that ex parte
meetings can be used, the Board may provide additional guidelines in
its procedural order and inform parties of its expectations at the
beginning of ex parte meetings.
AAR raises a concern that the proposed language in section
1102.2(g)(1) implies that Board staff may only participate in ex parte
communications after a delegation of authority through an ``entire
board'' decision. The Board clarifies here that, under the proposal, no
delegation would be required for Board staff to attend ex parte
meetings scheduled with a Board Member (at that Member's request). A
delegation of authority would be required only where the ex parte
meetings would occur solely with staff (i.e., no Board Member in
attendance), such as the ex parte meetings that occurred in U.S. Rail
Service Issues--Performance Data Reporting, Docket No. EP 724 (Sub No.
4). Thus, it is the Board's determination that ex parte meetings will
be conducted under the auspices of the Board Members' offices, unless
the Board determines otherwise. AAR's suggestion that the Board permit,
as a default option, ex parte communications with any Board staff could
render the disclosure process--which is essential to maintaining
fairness and transparency--unduly complicated. Under the AAR's
proposal, the number of potential stakeholder meetings could increase
exponentially, and after every such meeting, each individual staff
contact would be required to be summarized and disclosed in a meeting
summary that would be posted to the public docket, to which other
parties would then have to review and possibly file responses. The
Board, however, recognizes AAR's concern that there may be instances
where interaction with Board technical staff would be beneficial. The
Board anticipates that individual Members will make a concerted effort
to include relevant staff in ex parte meetings or delegate the meetings
to Board staff, when appropriate.
In response to NGFA's request that the Board shorten the time
permitted for meeting summaries to be posted by the Board, the Board
will reduce the allotted time from within seven days of submission to
within five days of submission. The Board believes that fewer than five
days would not provide sufficient time for the Board to confirm that a
meeting summary is sufficiently detailed to describe the substance of
the presentation and request resubmissions, if necessary. However, the
Board will endeavor to post meeting summaries as soon as they are
ready. Thus, the final rule will adopt the proposal as set forth in the
NPRM with this one modification.
Application of the Final Rule. In its comments, WCTL argues that
new ex parte communication rules should not be retroactively applied to
pending proceedings. (WCTL Comments 22.) WCTL is concerned generally
that the retroactive application of the new rules in pending
proceedings would delay Board action in those proceedings. (Id. at 23;
WCTL Reply 9 n.22.) AAR states that it does not disagree with WCTL and
notes that if the Board believes that further communications would be
beneficial in ongoing proceedings, the Board could issue waivers in
those proceedings on a going-forward basis. (AAR Reply 5.) RCC,
however, requests that the Board retroactively apply its new ex parte
communications rules in one pending rulemaking proceeding, Review of
Commodity, Boxcar, and TOFC/COFC Exemptions, Docket No. EP 704. (RCC
Comments 7.) According to RCC, permitting ex parte meetings to occur in
that rulemaking proceeding would ensure that the benefits and impacts
of any final Board decision are fully understood by the Board and
would, given the anticipated changes to the make-up of the Board since
the proceeding was first instituted, help in briefing and educating any
newly confirmed Board Members in their understanding of the issues.
(Id.)
The final rule will not be applied retroactively to pending
proceedings. Rather, the final rule adopted here will apply to
proceedings newly initiated following the effective date of the final
rule. The Board, however, may waive the prohibition on ex parte
communications in pending informal rulemaking proceedings on a case-by-
case basis, as it did prior to the final rule. In such instances, the
Board will set out the procedures that will govern such communications
in an order.
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 final rule, the agency must either include a final regulatory
flexibility analysis, section 604(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).
In the NPRM, the Board certified under 5 U.S.C. 605(b) that the
proposed rule would not have a significant economic impact on a
substantial number of small entities within the meaning of the RFA.\16\
The Board
[[Page 9231]]
explained that the proposed regulations provide for participation in ex
parte communications with the Board in informal rulemaking proceedings
to provide stakeholders with an alternative means of communicating
their interests to the Board in a transparent and fair manner. When a
party chooses to engage in ex parte communications with the Board in an
informal rulemaking proceeding, the requirements contained in these
proposed regulations do not have a significant impact on participants,
including small entities. The Board noted that, while the proposed
rules would require parties to provide written summaries of the ex
parte communications, based on the Board's experiences in Reciprocal
Switching, Docket No. EP 711 (Sub-No. 1), and U.S. Rail Service
Issues--Performance Data Reporting, Docket No. EP 724 (Sub-No. 4), the
summary documentation is a minimal burden. The meeting summaries are
generally only a few pages long (excluding copies of handouts from the
meetings that were attached). For example, the meeting summaries the
Board received in U.S. Rail Service Issues--Performance Data Reporting,
Docket No. EP 724 (Sub-No. 4), ranged from two to six pages in length.
Of those summaries, nearly half were just two pages long. Likewise, in
Reciprocal Switching, Docket No. EP 711 (Sub-No. 1), the meeting
summaries ranged from one to four pages in length, with the majority of
those summaries being three or fewer pages long. Therefore, the Board
certified under 5 U.S.C. 605(b) that these proposed rules, if
promulgated, would not place any significant burden on a substantial
number of small entities.
---------------------------------------------------------------------------
\16\ Effective June 30, 2016, for the RFA analysis for rail
carriers subject to Board jurisdiction, the Board defines a ``small
business'' as only 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). Class III carriers
have annual operating revenues of $20 million or less in 1991
dollars, or $35,809,698 or less when adjusted for inflation using
2016 data. Class II rail carriers have annual operating revenues of
less than $250 million in 1991 dollars or less than $447,621,226
when adjusted for inflation using 2016 data. The Board calculates
the revenue deflator factor annually and publishes the railroad
revenue thresholds on its website. 49 CFR 1201.1-1.
---------------------------------------------------------------------------
The final rule adopted here revises the rules proposed in the NPRM;
however, the same basis for the Board's certification of the proposed
rule applies to the final rule. Thus, the Board again certifies under 5
U.S.C. 605(b) that the final rule will not have a significant economic
impact on a substantial number of small entities within the meaning of
the RFA. A copy of this decision will be served upon the Chief Counsel
for Advocacy, Office of Advocacy, U.S. Small Business Administration,
Washington, DC 20416.
List of Subjects in 49 CFR part 1102
Administrative practice and procedure.
It is ordered:
1. The Board adopts the final rule as set forth in this decision.
Notice of the adopted rule will be published in the Federal Register.
2. This decision is effective April 4, 2018.
3. A copy of this decision will be served upon the Chief Counsel
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
Decided: February 27, 2018.
By the Board, Board Members Begeman and Miller.
Brendetta S. Jones,
Clearance Clerk.
For the reasons set forth in the preamble, the Surface
Transportation Board amends 49 CFR part 1102 as follows:
PART 1102--COMMUNICATIONS
0
1. The authority citation for part 1102 is revised to read as follows:
Authority: 49 U.S.C. 1321.
0
2. Amend Sec. 1102.2 as follows:
0
a. Revise the section heading;
0
b. Redesignate paragraphs (a)(2) and (3) as paragraphs (a)(4) and (5)
and add new paragraphs (2) and (3);
0
c. Revise newly redesignated paragraph (a)(5);
0
d. Revise paragraphs (b) through (e);
0
e. In paragraph (f)(1), remove ``concerning the merits of a
proceeding'';
0
f. In paragraph (f)(2), add ``covered'' before the word ``proceeding'';
0
g. Revise paragraph (f)(3); and
0
h. Add paragraph (g).
The revisions and additions read as follows:
Sec. 1102.2 Procedures governing ex parte communications.
(a) * * *
(2) ``Informal rulemaking proceeding'' means a proceeding to issue,
amend, or repeal rules pursuant to 5 U.S.C. 553 and part 1110 of this
chapter.
(3) ``Covered proceedings'' means on-the-record proceedings and
informal rulemaking proceedings following the issuance of a notice of
proposed rulemaking.
* * * * *
(5) ``Ex parte communication'' means an oral or written
communication that concerns the merits or substantive outcome of a
pending proceeding; is made without notice to all parties and without
an opportunity for all parties to be present; and could or is intended
to influence anyone who participates or could reasonably be expected to
participate in the decision.
(b) Ex parte communications that are not prohibited and need not be
disclosed. (1) Any communication that the Board formally rules may be
made on an ex parte basis;
(2) Any communication occurring in informal rulemaking proceedings
prior to the issuance of a notice of proposed rulemaking;
(3) Any communication of facts or contention which has general
significance for a regulated industry if the communicator cannot
reasonably be expected to have known that the facts or contentions are
material to a substantive issue in a pending covered proceeding in
which it is interested;
(4) Any communication by means of the news media that in the
ordinary course of business of the publisher is intended to inform the
general public, members of the organization involved, or subscribers to
such publication with respect to pending covered proceedings;
(5) Any communications related solely to the preparation of
documents necessary for the Board's implementation of the National
Environmental Policy Act and related environmental laws, pursuant to
part 1105 of this chapter;
(6) Any communication concerning judicial review of a matter that
has already been decided by the Board made between parties to the
litigation and the Board or Board staff who are involved in that
litigation.
(c) General prohibitions. (1) Except to the extent permitted by the
rules in this section, no party, counsel, agent of a party, or person
who intercedes in any covered proceeding shall engage in any ex parte
communication with any Board Member, hearing officer, or Board employee
who participates, or who may reasonably be expected to participate, in
the decision in the proceeding.
(2) No Board Member, hearing officer, or Board employee who
participates, or is reasonably expected to participate, in the decision
in a covered proceeding shall invite or knowingly entertain any ex
parte communication or engage in any such communication to any party,
counsel, agent of a party, or person reasonably expected to transmit
the communication to a party or party's agent.
(d) When prohibitions take effect. In on-the-record proceedings,
the prohibitions against ex parte communications apply from the date on
which the first filing or Board decision in a proceeding is posted to
the public docket by the Board, or when the person responsible for the
communication has knowledge that such a filing has been filed, or at
any time the Board, by rule or decision, specifies, whichever occurs
first. In informal rulemaking proceedings, except as provided in
[[Page 9232]]
paragraph (g) of this section, the prohibitions against ex parte
communications apply following the issuance of a notice of proposed
rulemaking. The prohibitions in covered proceedings continue until the
proceeding is no longer subject to administrative reconsideration under
49 U.S.C. 1322(c) or judicial review.
(e) Procedure required of Board Members and Board staff upon
receipt of prohibited ex parte communications. (1) Any Board Member,
hearing officer, or Board employee who receives an ex parte
communication not permitted by these regulations must promptly transmit
either the written communication, or a written summary of the oral
communication with an outline of the surrounding circumstances to the
Chief, Section of Administration, Office of Proceedings, Surface
Transportation Board. The Section Chief shall promptly place the
written material or summary in the correspondence section of the public
docket of the proceeding with a designation indicating that it is a
prohibited ex parte communication that is not part of the decisional
record.
(2) Any Board Member, hearing officer, or Board employee who is the
recipient of such ex parte communication may request a ruling from the
Board's Designated Agency Ethics Official as to whether the
communication is a prohibited ex parte communication. The Designated
Agency Ethics Official shall promptly reply to such requests. The
Chief, Section of Administration, Office of Proceedings, shall promptly
notify the Chairman of the Board of such ex parte communications sent
to the Section Chief. The Designated Agency Ethics Official shall
promptly notify the Chairman of all requests for rulings sent to the
Designated Agency Ethics Official. The Chairman may require that any
communication be placed in the correspondence section of the docket
when fairness requires that it be made public, even if it is not a
prohibited communication. The Chairman may direct the taking of such
other action as may be appropriate under the circumstances.
(f) * * *
(3) The Board may censure, suspend, dismiss, or institute
proceedings to suspend or dismiss any Board employee who knowingly and
willfully violates the rules in this section.
(g) Ex parte communications in informal rulemaking proceedings;
disclosure requirements. (1) Notwithstanding paragraph (c) of this
section, ex parte communications with Board Members in informal
rulemaking proceedings are permitted after the issuance of a notice of
proposed rulemaking and until 20 days before the deadline for reply
comments set forth in the notice of proposed rulemaking, unless
otherwise specified by the Board in procedural orders governing the
proceeding. The Board may delegate its participation in such ex parte
communications to Board staff. All such ex parte communications must be
disclosed in accordance with paragraph (g)(4) of this section. Any
person who engages in such ex parte communications must comply with any
schedule and additional instructions provided by the Board in the
proceeding. Communications that do not comply with this section or with
the schedule and instructions established in the proceeding are not
permitted and are subject to the procedures and sanctions in paragraphs
(e) and (f) of this section.
(2) To schedule ex parte meetings permitted under paragraph (g)(1)
of this section, parties should contact the Board's Office of Public
Assistance, Governmental Affairs, and Compliance or the Board Member
office with whom the meeting is requested, unless otherwise specified
by the Board.
(3) Parties seeking to present confidential information during an
ex parte communication must inform the Board of the confidentiality of
the information at the time of the presentation and must comply with
the disclosure requirements in paragraph (g)(4)(iv) of this section.
(4) The following disclosure requirements apply to ex parte
communications permitted under paragraph (g)(1) of this section:
(i) Any person who engages in ex parte communications in an
informal rulemaking proceeding shall submit to the Board Member office
or delegated Board staff with whom the meeting was held a memorandum
that states the date and location of the communication; lists the names
and titles of all persons who attended (including via phone or video)
or otherwise participated in the meeting during which the ex parte
communication occurred; and summarizes the data and arguments presented
during the ex parte communication. Any written or electronic material
shown or given to Board Members or Board staff during the meeting must
be attached to the memorandum.
(ii) Memoranda must be sufficiently detailed to describe the
substance of the presentation. Board Members or Board staff may ask
presenters to resubmit memoranda that are not sufficiently detailed.
(iii) If a single meeting includes presentations from multiple
parties, counsel, or persons, a single summary may be submitted so long
as all presenters agree to the form and content of the summary.
(iv) If a memorandum, including any attachments, contains
information that the presenter asserts is confidential, the presenter
must submit a public version and a confidential version of the
memorandum. If there is no existing protective order governing the
proceeding, the presenter must, at the same time the presenter submits
its public and redacted memoranda, file a request with the Board
seeking such an order pursuant to Sec. 1104.14 of this chapter.
(v) Memoranda must be submitted to the Board in the manner
prescribed no later than two business days after the ex parte
communication.
(vi) Ex parte memoranda submitted under this section will be posted
on the Board's website in the docket for the informal rulemaking
proceeding within five days of submission. If a presenter has requested
confidential treatment for all or part of a memorandum, only the public
version will appear on the Board's website. Persons seeking access to
the confidential version must do so pursuant to the protective order
governing the proceeding.
[FR Doc. 2018-04411 Filed 3-2-18; 8:45 am]
BILLING CODE 4915-01-P
