[Federal Register Volume 81, Number 94 (Monday, May 16, 2016)]
[Proposed Rules]
[Pages 30229-30236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11238]
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DEPARTMENT OF TRANSPORATION
Surface Transportation Board
49 CFR Parts 1108 and 1115
[Docket No. EP 730]
Revisions to Arbitration Procedures
AGENCY: Surface Transportation Board.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Surface Transportation Board (Board or STB) is proposing
to amend its arbitration procedures to conform to the requirements of
the Surface Transportation Board Reauthorization Act of 2015.
DATES: Comments are due by June 13, 2016. Replies are due by July 1,
2016.
ADDRESSES: Comments on this proposal may be submitted either via the
Board's e-filing format or in the traditional paper format. Any person
using e-filing should attach a document and otherwise comply with the
instructions at the E-FILING link on the Board's Web site, at
[[Page 30230]]
http://www.stb.dot.gov. Any person submitting a filing in the
traditional paper format should send an original and 10 copies to:
Surface Transportation Board, Attn: Docket No. EP 730, 395 E Street
SW., Washington, DC 20423-0001. Copies of written comments will be
available for viewing and self-copying at the Board's Public Docket
Room, Room 131, and will be posted to the Board's Web site. Information
or questions regarding this proposed rule should reference Docket No.
EP 730 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: Amy C. Ziehm at 202-245-0391.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1800-877-8339.]
SUPPLEMENTARY INFORMATION: Under Section 13 of the STB Reauthorization
Act (codified at 49 U.S.C. 11708), the Board must ``promulgate
regulations to establish a voluntary and binding arbitration process to
resolve rail rate and practice complaints'' that are subject to the
Board's jurisdiction. Section 11708 sets forth specific requirements
and procedures for the Board's arbitration process. While the Board's
existing arbitration regulations are for the most part consistent with
the new statutory provisions, certain changes are needed so that the
Board's regulations conform to the requirements under Sec. 11708.\1\
Accordingly, the Board is proposing to modify its existing arbitration
regulations, set forth at 49 CFR 1108 and 1115.8, to conform to the
provisions set forth by the statute and to make other minor clarifying
changes. The most significant changes in these proposed rules are
discussed below.
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\1\ In Assessment of Mediation & Arbitration Procedures, EP 699
(STB served May 13, 2013), the Board adopted new rules governing the
use of mediation and arbitration to resolve matters before the
Board. The rules established a new arbitration program under which
shippers and carriers may voluntarily agree in advance to arbitrate
certain disputes with clearly defined limits of liability.
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Eligible Matters. Under section 11708(b), rate disputes (i.e.,
disputes involving the reasonableness of a rail carrier's rates) are
eligible for arbitration. Accordingly, rate disputes would now be added
to the list of matters that are eligible for arbitration under the
arbitration program, which currently includes disputes relating to
demurrage; accessorial charges; misrouting or mishandling of rail cars;
and disputes involving a carrier's published rules and practices as
applied to particular rail transportation. The rules would continue to
allow parties to agree to arbitrate most other matters on a case-by-
case basis, subject to some exceptions. See 49 CFR 1108.4(e).
Specifically, the current rules expressly prohibit use of the Board's
arbitration process to enforce labor protective conditions; to obtain
the grant, denial, stay, or revocation of any license, authorization
(e.g., construction, abandonment, purchase, trackage rights, merger,
pooling), or exemption related to such matters; and to arbitrate
matters outside the statutory jurisdiction of the Board. 49 CFR
1108.2(b). In accordance with section 11708(b)(2), two additional
matters would be added to the list of matters not eligible for
arbitration: Disputes to prescribe for the future any conduct, rules,
or results of general, industry-wide applicability; and disputes that
are solely between two or more rail carriers.
Rate Disputes. For rate disputes, arbitration is available to the
relevant parties only if the rail carrier has market dominance (as
determined under 49 U.S.C. 10707). Section 11708(c)(1)(C).\2\ Section
10707 states that ``the Board shall determine whether the rail carrier
proposing the rate has market dominance over the transportation to
which the rate applies,'' and it defines market dominance as ``an
absence of effective competition from other rail carriers or modes of
transportation for the transportation to which a rate applies.''
Section 10707(a), (b). For this reason, as discussed below, the Board
proposes a separate timetable for initiating arbitration in rate cases.
Nevertheless, the Board recognizes that making arbitration available
only after it determines that a rail carrier has market dominance--as
required by the statute--may significantly delay the arbitration
process. Given that the arbitration process is voluntarily entered into
by parties, the Board seeks comment on whether parties should be given
the option to concede market dominance when agreeing to arbitrate a
rate dispute (thereby forgoing the need for a determination from the
Board) or, alternatively, whether the Board should limit the
availability of the arbitration process in rate disputes to cases where
market dominance is conceded. In addition, the Board seeks comments on
other possible approaches that would help facilitate the commencement
of arbitrating a rate dispute, given the need to make a market
dominance determination under section 10707.
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\2\ Additionally, section 11708(c)(3) requires arbitrator(s)
handling rate disputes to ``consider the Board's methodologies for
setting maximum lawful rates, giving due consideration to the need
for differential pricing to permit a rail carrier to collect
adequate revenues (as determined under Sec. 10704(a)(2)).''
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Arbitration Commencement Procedures. The Board's current
regulations are consistent with section 11708(c), which makes the
arbitration process available only after the Board receives written
consent to arbitrate from all relevant parties and after the filing of
a written complaint.\3\ Under the statute, in lieu of a written
complaint, the arbitration process also may be made available ``through
other procedures adopted by the Board in a rulemaking proceeding.''
Section 11708(c)(1)(B)(ii)(II). To encourage greater use of arbitration
to resolve disputes, the Board proposes here that, as an alternative to
filing a written complaint, parties may submit a joint notice to the
Board, indicating the consent of both parties to submit an issue in
dispute to the Board's arbitration program.\4\ The joint notice would
allow parties to utilize the arbitration process, even if the dispute
is not pending before the Board (assuming that the other criteria for
arbitration are met). In the joint notice, parties would state the
issue(s) that they are willing to submit to arbitration. The notice
would contain a statement that would indicate that all relevant parties
are participants in the Board's arbitration program pursuant to Sec.
1108.3(a), or, if they are not participants, that they are nonetheless
willing to voluntarily arbitrate a matter pursuant to the Board's
arbitration procedures. The notice would indicate whether parties have
agreed to a three-member arbitration panel or a single arbitrator
(discussed in more detail below). The notice would also indicate the
relief requested and whether the parties have mutually agreed to a
lower amount of potential liability in lieu of the monetary award cap
that would otherwise be applicable.
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\3\ Under 49 CFR 1108.5, arbitration commences with a written
complaint that contains a statement that the relevant parties are
participants in the Board's arbitration program, or that the
complainant is willing to arbitrate the dispute pursuant to the
Board's arbitration procedures. The respondent's answer to the
written complaint must then indicate the respondent's participation
in the Board's arbitration program or its willingness to arbitrate
the dispute at hand pursuant to the Board's arbitration procedures.
\4\ These proposed rules seek to expand, not replace, the
current rules set forth at 49 CFR 1180.3 that govern the Board's
arbitration program, under which shippers and carriers may
voluntarily agree in advance to arbitrate certain disputes.
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Monetary Relief Available. In accordance with section 11708(g), the
maximum amount of relief that could be awarded under the arbitration
program, which is currently capped at $200,000,
[[Page 30231]]
would be raised to $25,000,000 in rate disputes and $2,000,000 in
practice disputes (i.e., disputes involving demurrage; accessorial
charges; misrouting or mishandling of rail cars; and disputes involving
a carrier's published rules and practices as applied to particular rail
transportation). The $2,000,000 monetary award cap would also apply to
other disputes that parties seek to arbitrate under Sec. 1180.4(e)
that are not specifically listed as arbitration-eligible matters (yet
also not expressly prohibited). The proposed rules would allow parties
to mutually agree to a lower monetary award cap.
Arbitrator Roster. Section 11708(f) provides that, unless parties
otherwise agree, an arbitrator or panel of arbitrators shall be
selected from a roster maintained by the Board. Therefore, we propose
rules to establish a process for creating and maintaining a roster of
arbitrators and selecting arbitrators from the roster in accordance
with the statutory requirements.\5\
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\5\ Under our current rules, parties select arbitrators from a
list of five neutral arbitrators compiled by the Board for a
particular arbitration proceeding. These proposed rules replace the
selection process with the process set forth at section 11708(f).
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Creating and Maintaining the Roster. The Board proposes that an
initial roster be compiled by the Chairman, who would seek notice from
all interested, qualified persons, as described below, who wish to be
placed on the Board's arbitration roster. Under the proposed rules, the
Chairman could augment the roster at any time to include other eligible
arbitrators and remove from the roster any arbitrators who are no
longer available or eligible. The roster would be made available on the
Board's Web site. To ensure that the roster remains current, the
Chairman would update it every year, seeking public comment on any
modifications that should be made to the roster, including updates from
arbitrators appearing on the roster to confirm that the biographical
information on the file with the Board (as discussed below) remains
accurate. Arbitrators who wish to remain on the roster would be
required to notify the Board of their continued availability.
Arbitrator Qualifications. Under section 11708(f)(1), arbitrators
on the roster must be ``persons with rail transportation, economic
regulation, professional or business experience, including agriculture,
in the private sector.'' Additionally, under the proposed rules,
persons seeking to be included on the roster would be required to have
training in dispute resolution and/or experience in arbitration or
other forms of dispute resolution. The Chairman shall have discretion
as to whether an individual meets the qualifications to be added to the
roster. The Board's roster would provide a brief biographical sketch of
each arbitrator, including information such as background, experience,
and geographical location, as well as general contact information,
based on the information supplied by the arbitrator.
The Parties' Selection of Arbitrators. In accordance with section
11708(f)(3)(A), we are proposing revisions to our arbitrator selection
process so that, if parties cannot mutually agree on a single
arbitrator or lead arbitrator of a panel of arbitrators, the parties
would select the single or lead arbitrator from the roster maintained
by the Board by alternately striking names from the roster until only
one name remains.\6\
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\6\ Under the Board's current regulations, a panel of three
arbitrators resolves all matters unless parties mutually agree to
use a single arbitrator. 49 CFR 1108.6(a).
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To make the strike process more practicable and efficient, we
propose that the Board, through the Director of the Office of
Proceedings, would provide parties a list of arbitrators culled from
the Board's roster. This culled list would include not more than 15
arbitrators to limit the number of strikes each party would have to
make. In culling the list, the Board would consider a variety of
factors, including relevant background and experience, acceptability,
geographical location, and any expressed preferences of the parties.
The culled list would have an odd number of arbitrators to ensure that
parties have the same number of strikes.
To select the other members for a panel of arbitrators, these rules
propose that each party to the dispute would select one additional
arbitrator from the roster, regardless of whether the selected
arbitrator was included in the culled list or struck from the culled
list by another party. See section 11708(f)(3)(B).
These proposed rules also provide that parties share the costs
incurred by the Board and arbitrators equally, with each party
responsible for paying its own legal and other associated arbitration
costs, in accordance with section 11708(f)(4).\7\
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\7\ This rule would replace the current method of cost allotment
under 49 CFR 1108.6 and 1108.12.
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Arbitration Decisions. These rules propose to modify our current
regulations regarding arbitration decisions. In accordance with section
11708(d), an arbitration decision would: (1) Be consistent with sound
principles of rail regulation economics; (2) be in writing; (3) contain
findings of facts and conclusions; (4) be binding upon the parties; and
(5) not have any precedential effect in any other or subsequent
arbitration disputes.
In accordance with section 11708(h), if a party appeals an arbitral
decision, the Board would review the decision to determine if: (1) The
decision is consistent with sound principles of rail regulation
economics; (2) a clear abuse of arbitral authority or discretion
occurred; (3) the decision directly contravenes statutory authority; or
(4) the award limitation was violated.\8\
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\8\ As discussed below, in Assessment of Mediation & Arbitration
Procedures, the Board amended the standard of review for arbitration
decisions set forth at 49 CFR 1115.8 and inadvertently omitted the
standard of review for labor arbitration cases. This decision
addresses that omission.
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Initiation of the Arbitration Process and Timelines. Under section
11708(e), deadlines for the selection of arbitrators, the close of the
evidentiary process, and the arbitration decision are calculated from
the date the Board ``initiate[s] . . . the arbitration process,'' which
would occur ``not later than 40 days after the date on which a written
complaint is filed or through other procedures adopted by the Board in
a rulemaking proceeding.'' Section 11708(c)(1)(D). Specifically,
arbitrators must be selected not later than 14 days after the Board
decides to initiate the arbitration process. The evidentiary process
must be completed not later than 90 days after the date on which the
arbitration process is initiated. An arbitration decision must be
issued not later than 30 days after the date on which the evidentiary
period is closed.
Accordingly, with the exception of rate dispute proceedings, these
proposed rules provide that the Board would issue a decision to
initiate the arbitration process within 40 days after submission of a
written complaint, or the joint notice described above. In rate dispute
proceedings, the Board must determine if the rail carrier has market
dominance before making the arbitration process available. 49 U.S.C
11708(c)(1)(C). Such a determination would likely require substantial
additional time in cases where market dominance is contested.
Accordingly, these rules propose that, unless the comments offer
persuasive reasons to exclude from the arbitration program rate cases
where market dominance is contested, the Board would initiate the
arbitration process within 10 days after the Board issues a decision
determining that the rail carrier in a rate dispute has market
dominance.
After the Board initiates the arbitration process, if parties
cannot mutually agree on an arbitrator or lead
[[Page 30232]]
arbitrator of a panel of arbitrators, the Board would then provide
parties with a list of arbitrators within seven days of initiating the
arbitration process. Parties would then have seven days to select an
arbitrator or panel of arbitrators. Section 11708(e)(1). In accordance
with section 11708(e)(2), parties would have 90 days from the
initiation date to conclude the evidentiary process, unless a party
requests an extension, and the arbitrator or panel of arbitrators, as
applicable, grants the extension request. The lead or single arbitrator
would then have 30 days from the close of the evidentiary process to
issue the decision. Section 11708(e)(3).
In accordance with section 11708(e)(4), these proposed rules
provide that the Board may extend any portion of the timetable upon
agreement of all parties in the dispute, thus providing more
flexibility than our rules currently allow.\9\
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\9\ This replaces the current regulation at 49 CFR 1108.7(c),
which provides that petitions to extend the timetable will only be
considered in cases of arbitrator incapacitation.
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Other Matters. In adopting final rules in Assessment of Mediation &
Arbitration Procedures, the Board inadvertently omitted the standard of
review for labor arbitration cases in 49 CFR 1115.8. It was not the
intention of the Board to alter the standard of review for labor
arbitration cases. The narrow standard articulated in the final rules,
and codified at 49 CFR 1108.11(b), was intended to apply solely to
reviews of arbitral decisions brought under 49 CFR pt. 1108.\10\ The
standard of review articulated in the final rules was not intended to
replace the Board's standard of review in labor arbitration cases,
which was previously codified at 49 CFR 1115.8. In adopting the new
arbitration program, Sec. 1115.8 should have reflected both the
standard of review for arbitrations conducted pursuant to 49 CFR pt.
1108 and the standard of review for labor arbitration cases. This
decision corrects that omission.
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\10\ In the final rules, the Board adopted a standard of review
of arbitral decisions made under 49 CFR pt. 1108. The Board stated
that, upon petition by one or more parties to the arbitration, the
Board reserves the right to review, modify, or vacate any
arbitration award. The final rules clarify that the Board will apply
a narrow standard of review, but which is somewhat broader than
originally proposed, and will grant relief only on grounds that the
award reflects a clear abuse of arbitral authority or discretion, or
directly contravenes statutory authority.
Assessment of Mediation & Arbitration Procedures, EP 699, slip
op. at 17 (STB served May. 13, 2013); see 49 CFR 1108.11(b).
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The proposed rules, which would govern arbitration in Board
proceedings, are set forth below.
Conclusion
Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980,
5 U.S.C. 601-612, generally requires a description and analysis of
rules that would have significant economic impact on a substantial
number of small entities. In drafting rules an agency is required to:
(1) Assess the effect that its regulation would have on small entities;
(2) analyze effective alternatives that might minimize a regulation's
impact; and (3) make the analysis available for public comment. 5
U.S.C. 601-604. In its notice of proposed rulemaking, the agency must
either include an initial regulatory flexibility analysis, 5 U.S.C.
603(a), or certify that the proposed rules will not have a
``significant impact on a substantial number of small entities,'' 5
U.S.C. 605(b). The impact must be a direct impact on small entities
``whose conduct is circumscribed or mandated'' by the proposed rules.
White Eagle Coop. Ass'n v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).
The Board certifies under 5 U.S.C. 605(b) that these proposed
rules, if promulgated, will not have a significant economic impact on a
substantial number of small entities within the meaning of the
Regulatory Flexibility Act. The proposed rules, if promulgated, would
amend the existing procedures for arbitrating disputes before the Board
so that the Board's regulations conform to the statutory requirements
under 49 U.S.C. 11708.
Although some carriers and shippers impacted by the proposed rules
may qualify as a ``small business'' within the meaning of 5 U.S.C.
601(3), we do not anticipate that our revised arbitration procedures
would have a significant economic impact on a large number of small
entities. To the extent that the rules have any impact, it would be to
provide faster resolution of a controversy at a lower cost. The relief
that could be accorded by an arbitrator would presumably be similar to
the relief shippers could obtain through use of the Board's existing
formal adjudicatory procedures, and at a greater net value considering
that the arbitration process is designed to consume less time and
likely will be less costly. Therefore, we do not believe that a
substantial number of small entities would be significantly impacted.
Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act
(PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB)
regulations at 5 CFR 1320.8(d)(3), the Board seeks comments about each
of the proposed collections regarding: (1) Whether the collection of
information, as modified in the proposed rule and further described
below, is necessary for the proper performance of the functions of the
Board, including whether the collection has practical utility; (2) the
accuracy of the Board's burden estimates; (3) ways to enhance the
quality, utility, and clarity of the information collected; and (4)
ways to minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology, when appropriate. Information
pertinent to these issues is included in the Appendix. This proposed
rule will be submitted to OMB for review as required under 44 U.S.C.
3507(d) and 5 CFR 1320.11. Comments received by the Board regarding the
information collection will also be forwarded to OMB for its review
when the final rule is published.
List of Subjects
49 CFR Part 1108
Administrative practice and procedure, Railroads.
49 CFR Part 1115
Administrative practice and procedure.
It is ordered:
1. The Board proposes to amend its rules as set forth in this
decision. Notice of the proposed rules will be published in the Federal
Register.
2. Comments regarding the proposed rules are due by June 13, 2016.
Replies are due by July 1, 2016.
3. This decision is effective on the day of service.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Decided: May 6, 2016.
Jeffrey Herzig,
Clearance Clerk.
For the reasons set forth in the preamble, under the authority of
49 U.S.C. 1321, title 49, chapter X, parts 1108 and 1115 of the Code of
Federal Regulations are proposed to be amended as follows:
PART 1108--ARBITRATION OF CERTAIN DISPUTES SUBJECT TO THE STATUTORY
JURISDICTION OF THE SURFACE TRANSPORTATION BOARD
0
1. Revise the authority citation for part 1108 to read as follows:
Authority: 49 U.S.C. 11708, 49 U.S.C. 1321(a) and 5 U.S.C. 571
et seq.
0
2. Amend Sec. 1108.1, as follows:
[[Page 30233]]
0
a. In paragraph (b) add the words ``from the roster'' after the word
``selected'' and remove the word ``neutral'' and add in its place
``lead''.
0
b. In paragraph (d) add the word ``rates,'' after ``subjects:''.
0
c. In paragraph (g) add the words ``and the Surface Transportation
Board Reauthorization Act of 2015,'' after ``1995''.
0
d. Revise paragraphs (h) and (i).
0
e. Redesignate paragraphs (j) and (k) as paragraphs (k) and (l).
0
f. Revise newly redesignated paragraph (k).
0
g. Add paragraph (m).
The revisions and addition read as follows:
Sec. 1108.1 Definitions.
* * * * *
(h) Lead arbitrator or single arbitrator means the arbitrator
selected by the strike methodology outlined in Sec. 1108.6(c).
(i) Monetary award cap means a limit on awardable damages of
$25,000,000 in rate disputes, including any rate prescription, and
$2,000,000 in practice disputes, unless the parties mutually agree to a
lower award cap. If parties bring one or more counterclaims, such
counterclaims will be subject to a separate monetary award cap.
* * * * *
(k) Practice disputes are disputes involving demurrage; accessorial
charges; misrouting or mishandling of rail cars; and disputes involving
a carrier's published rules and practices as applied to particular rail
transportation.
* * * * *
(m) Rate disputes are disputes involving the reasonableness of a
rail carrier's rates.
0
3. Amend Sec. 1108.2, as follows:
0
a. In paragraph (a) introductory text remove ``$200,000'' and add in
its place ``$25,000,000 in rate disputes, including any rate
prescription, and $2,000,000 in other disputes'' and remove the word
``different'' and add in its place ``lower''.
0
b. In paragraph (a)(1) remove the word ``different'' and add in its
place ``lower''.
0
c. Revise paragraph (b) to read as follows:
Sec. 1108.2 Statement of purpose, organization, and jurisdiction.
* * * * *
(b) Limitations to the Board's Arbitration Program. These
procedures shall not be available:
(1) To resolve disputes involving labor protective conditions;
(2) To obtain the grant, denial, stay or revocation of any license,
authorization (e.g., construction, abandonment, purchase, trackage
rights, merger, pooling), or exemption related to such matters;
(3) To prescribe for the future any conduct, rules, or results of
general, industry-wide applicability;
(4) To resolve disputes that are solely between two or more rail
carriers.
Parties may only use these arbitration procedures to arbitrate
matters within the statutory jurisdiction of the Board.
0
4. Amend Sec. 1108.3 as follows:
0
a. In paragraph (a) introductory text remove the word ``either''.
0
b. In paragraph (a)(1)(ii) remove the words ``different monetary award
cap'' and add in their place ``lower monetary award cap than the
monetary award caps provided in this part.''
0
c. Revise paragraph (a)(2).
0
d. Remove paragraph (a)(2)(i).
0
e. Add paragraph (a)(3).
0
f. In paragraph (b), add ``itself'' after ``not'' and remove ``within
that'' and add in its place ``prior to the end of the''.
0
g. In paragraph (c), remove ``on a case-by-case basis'' and add in its
place ``only for a particular dispute''.
The revision and addition read as follows:
Sec. 1108.3 Participation in the Board's arbitration program.
* * * * *
(a) * * *
(2) Participants to a proceeding, where one or both parties have
not opted into the arbitration program, may by joint notice agree to
submit an issue in dispute to the Board's arbitration program. The
joint notice must clearly state the issue(s) which the parties are
willing to submit to arbitration and the corresponding maximum monetary
award cap if the parties desire to arbitrate for a lower amount than
the monetary award cap that would otherwise be applicable.
(3) Parties to a dispute may jointly notify the Board that they
agree to submit an eligible matter in dispute to the Board's
arbitration program, where no formal proceeding has begun before the
Board. The joint notice must clearly state the issue(s) which the
parties are willing to submit to arbitration and the corresponding
maximum monetary award cap if the parties desire to arbitrate for a
lower amount than the applicable monetary award cap.
* * * * *
0
5. Amend Sec. 1108.4 as follows:
0
a. In paragraph (a) add ``rates,'' before the word ``demurrage''.
0
b. In paragraph (b) introductory text remove ``may not exceed'' and add
in its place ``will be subject to'' and remove ``$200,000'' and add in
its place ``$25,000,000, including any rate prescription,'' and remove
``arbitral proceeding'' and add in its place ``rate dispute and
$2,000,000 per practice dispute''.
0
c. In paragraph (b)(1) remove the word ``different'' and add in its
place ``lower''.
0
d. In paragraph (b)(2) remove the word ``different'' and add in its
place ``lower''.
0
e. In paragraph (b)(3) remove ``$200,000'' and add in its place
``$25,000,000, including any rate prescription,''; remove ``case'' and
add in its place ``rate dispute and $2,000,000 per practice dispute'';
and remove ``different'' and add in its place ``lower''.
0
f. In paragraph (c) remove the words ``arising in a docketed
proceeding'' and add ``for a particular dispute'' after ``consent to
arbitration''.
0
g. Amend paragraph (e) by adding a new sentence after the second
sentence and remove ``which'' and add in its place ``that''.
0
h. Add paragraph (g).
The revision and addition read as follows:
Sec. 1108.4 Use of arbitration.
* * * * *
(e) * * * Such disputes are subject to a monetary award cap of
$2,000,000 or to a lower cap agreed upon by the parties in accordance
with paragraph (b)(2) of this section.
(g) Rate disputes. Arbitration of rate disputes will only be
available to parties if the rail carrier has market dominance as
determined by the Board under 49 U.S.C. 10707. In rate disputes, the
arbitrator or panel of arbitrators, as applicable, shall consider the
Board's methodologies for setting maximum lawful rates, giving due
consideration to the need for differential pricing to permit a rail
carrier to collect adequate revenues (as determined under 49 U.S.C.
11704(a)(2)).
0
6. Amend Sec. 1108.5 as follows:
0
a. In paragraph (a) introductory text, add ``Except as provided in
paragraph (e) of this section,'' to the beginning of the first
sentence, and remove ``Arbitration'' and add in its place
``arbitration''.
0
b. In paragraph (a)(1) remove the word ``single-neutral'' and add in
its place ``single''.
0
c. In paragraph (a)(3) remove the word ``different'' and add in its
place ``lower'' and remove ``$200,000'' and add ``that would otherwise
apply'' after ``cap''.
0
d. In paragraph (b)(1) remove the word ``single-neutral'' and add in
its place ``single'' wherever it appears.
0
e. In paragraph (b)(1) introductory text, remove the words ``the
request'' and add in their place ``that request''.
[[Page 30234]]
0
f. In paragraph (b)(1)(i) remove the word ``single-neutral'' and add in
its place ``single''.
0
g. In paragraph (b)(1)(ii) remove the word ``single-neutral'' and add
in its place ``single'' wherever it appears and remove ``Sec.
1108.6(a)-(c)'' and add in its place ``Sec. 1108.6(a)-(d)'' and remove
the word ``matter'' and add in its place ``case'' and add ``by the
Board'' after ``adjudication''.
0
h. Revise paragraph (b)(2).
0
i. In paragraph (b)(3) remove the word ``different'' and add in its
place ``lower'' and remove ``$200,000'' and add in its place ``
otherwise applicable''.
0
j. Revise paragraph (e).
0
j. Add paragraphs (f) and (g).
The revisions and additions are as follows:
Sec. 1108.5 Arbitration commencement procedures.
* * * * *
(b) * * *
(2) When the complaint limits the arbitrable issues, the answer
must state whether the respondent agrees to those limitations or, if
the respondent is already a participant in the Board's arbitration
program, whether those limitations are consistent with the respondent's
opt-in notice filed with the Board pursuant to Sec. 1108.3(a)(1)(i).
If the answer contains an agreement to arbitrate some but not all of
the arbitration-program-eligible issues in the complaint, the
complainant will have 10 days from the date of the answer to advise the
respondent and the Board in writing whether the complainant is willing
to arbitrate on that basis.
* * * * *
(e) Jointly-filed notice. In lieu of a formal complaint proceeding,
arbitration under these rules may commence with a jointly-filed notice
by parties agreeing to submit an eligible matter in dispute to the
Board's arbitration program under Sec. 1108.3(a)(3). The notice must:
(1) Contain a statement that all relevant parties are participants
in the Board's arbitration program pursuant to Sec. 1108.3(a), or that
the relevant parties are willing to arbitrate voluntarily a matter
pursuant to the Board's arbitration procedures, and the relief
requested;
(2) Indicate whether parties have agreed to a three-member
arbitration panel or a single arbitrator;
(3) Indicate if the parties have agreed to a lower amount of
potential liability in lieu of the otherwise applicable monetary award
cap.
(f) Arbitration initiation. When the parties have agreed upon
whether to use a single arbitrator or a panel of arbitrators, the
issues(s) to be arbitrated, and the monetary limit to any arbitral
decision, the Board shall initiate the arbitration under Sec.
1108.7(a) and provide a list of arbitrators as described in Sec.
1108.6.
(g) Arbitration agreement. Shortly after the panel of arbitrators
or arbitrator is selected, the parties to arbitration together with the
lead or single arbitrator, as applicable, shall create a written
arbitration agreement, which at a minimum will state with specificity
the issues to be arbitrated and the corresponding monetary award cap to
which the parties have agreed. The agreement may also contain other
mutually agreed upon provisions.
(1) Any additional issues selected for arbitration by the parties,
that are not outside the scope of these arbitration rules as explained
in Sec. 1108.2(b), must be subject to the Board's statutory authority.
(2) These rules shall be incorporated by reference into any
arbitration agreement conducted pursuant to an arbitration complaint
filed with the Board.
0
7. Amend Sec. 1108.6 as follows:
0
a. In paragraph (a), remove ``Sec. 1108.5(a)(1)'' and add in its place
``Sec. 1108.5(a)(1) and agreed to by all parties to the arbitration''.
0
b. Revise paragraph (b).
0
c. Revise paragraph (c) introductory text.
0
d. In paragraph (c)(1) remove the word ``neutral'' wherever it appears
and in the second sentence add ``lead'' in its place.
0
e. Revise paragraph (c)(2).
0
f. Remove paragraph (c)(3).
0
g. Revise paragraph (d).
0
h. Redesignate paragraph (e) as paragraph (f).
0
i. Add a new paragraph (e).
0
j. In newly redesignated paragraph (f)(1) remove ``Sec. 1108.6(b)''
and add in its place ``Sec. 1108.6(d)''.
0
k. Revise newly redesignated paragraph (f)(2).
The revisions read as follows:
Sec. 1108.6 Arbitrators.
* * * * *
(b) Roster. Arbitration shall be conducted by an arbitrator (or
panel of arbitrators) selected, as provided herein, from a roster of
persons with rail transportation, economic regulation, professional or
business experience, including agriculture, in the private sector.
Persons seeking to be included on the roster must have training in
dispute resolution and/or experience in arbitration or other forms of
dispute resolution. The initial roster of arbitrators shall be
established and maintained by the Chairman of the STB, who may augment
the roster at any time to include other eligible arbitrators and may
remove from the roster any arbitrators who are no longer available. The
Board's roster will provide a brief biographical sketch of each
arbitrator, including information such as background, experience, and
geographical location, as well as general contact information, based on
the information supplied by the arbitrator. The roster shall be
published on the Board's Web site. The Chairman will update the roster
every year. The Chairman will seek public comment on any modifications
that should be made to the roster, including requesting the names and
qualifications of new arbitrators who wish to be placed on the roster,
and updates from arbitrators appearing on the roster to confirm that
the biographical information on file with the Board remains accurate.
Arbitrators who wish to remain on the roster must notify the Board of
their continued availability.
(c) Selecting the lead arbitrator. If the parties cannot mutually
agree on a lead arbitrator for a panel of arbitrators, the Board,
through the Director of the Office of Proceedings, shall provide the
parties with a list of not more than 15 arbitrators selected from the
Board's roster within seven days of the Board initiating the
arbitration process. When compiling a list of arbitrators for a
particular arbitration proceeding, the Board will consider a variety of
factors, including relevant background and experience, likely
acceptability, geographical location, and any expressed preferences of
the parties. The parties will have seven days from the date the Board
provides them with this list to select a lead arbitrator using a single
strike methodology. The list will have an odd number of arbitrators to
ensure that parties have the same number of strikes. The complainant
will strike one name from the list first. The respondent will then have
the opportunity to strike one name from the list. The process will then
repeat until one individual on the list remains, who shall be the lead
arbitrator.
(c) * * *
(2) The lead arbitrator appointed through the strike methodology
shall serve as the head of the arbitration panel and will be
responsible for ensuring that the tasks detailed in Sec. Sec. 1108.7
and 1108.9 are accomplished.
(d) Party-appointed arbitrators. The party or parties on each side
of an arbitration dispute shall select one arbitrator from the roster,
regardless of whether the arbitrator's name appears on the list of 15
potential lead
[[Page 30235]]
arbitrators and regardless of whether the other party struck the
arbitrator's name in selecting a lead arbitrator. The party or parties
on each side will have seven days from the date the Board provides them
with the list described in paragraph (c) of this section to appoint
that side's own arbitrator. Parties on one side of an arbitration
proceeding may not challenge the arbitrator selected by the opposing
side.
(e) Use of a single arbitrator. Parties to arbitration may request
the use of a single arbitrator. Requests for use of a single arbitrator
must be included in a complaint or an answer as required in Sec.
1108.5(a)(1), or in the joint notice filed under Sec. 1108.5(e).
Parties to both sides of an arbitration dispute must agree to the use
of a single arbitrator in writing. If the single-arbitrator option is
selected, and if parties cannot mutually agree on a single arbitrator,
the arbitrator selection procedures outlined in paragraph (c) of this
section shall apply.
* * * * *
(f) * * *
(2) If the incapacitated arbitrator was the lead or single
arbitrator, the parties shall promptly inform the Board of the
arbitrator's incapacitation and the selection procedures set forth in
paragraph (c) of this section shall apply.
0
8. Revise Sec. 1108.7 to read as follows:
Sec. 1108.7 Arbitration procedures.
(a) Initiation. With the exception of rate dispute arbitration
proceedings, the Board shall initiate the arbitration process within 40
days after submission of a written complaint or joint notice filed
under Sec. 1108.5(e). In arbitrations involving rate disputes, the
Board shall initiate the arbitration process within 10 days after the
Board issues a decision determining that the rail carrier has market
dominance.
(b) Arbitration evidentiary phase timetable. Whether the parties
select a single arbitrator or a panel of three arbitrators, the lead or
single arbitrator shall establish all rules deemed necessary for each
arbitration proceeding, including with regard to discovery, the
submission of evidence, and the treatment of confidential information,
subject to the requirement that this evidentiary phase shall be
completed within 90 days from the date on which the arbitration process
is initiated, unless a party requests an extension, and the arbitrator
or panel of arbitrators, as applicable, grants such extension request.
(c) Written decision timetable. The lead or single arbitrator will
be responsible for writing the arbitration decision. The unredacted
arbitration decision must be served on the parties within 30 days of
completion of the evidentiary phase. A redacted copy of the arbitration
decision must be served upon the Board within 60 days of the close of
the evidentiary phase for publication on the Board's Web site.
(d) Extensions to the arbitration timetable. The Board may extend
any deadlines in the arbitration timetable provided in this part upon
agreement of all parties to the dispute.
(e) Protective orders. Any party, on either side of an arbitration
proceeding, may request that discovery and the submission of evidence
be conducted pursuant to a standard protective order agreement.
Sec. 1108.9 Decisions.
0
9. Amend Sec. 1108.9 as follows:
0
a. Revise paragraph (a).
0
b. In paragraph (b) remove the word ``neutral'' and add in its place
``lead or single''.
0
c. In paragraph (d) remove the heading ``Neutral arbitrator authority''
and add in its place ``Lead or single arbitrator authority'' and remove
the word ``neutral'' from the first sentence and add in its place
``lead or single'' and add ``, if any,'' after ``what''.
0
d. In paragraph (e) remove the word ``neutral'' wherever it appears and
add in its places ``lead or single'' and remove ``Sec. 1108.7(b)'' and
add in its place ``Sec. 1108.7(c)''.
0
e. In paragraph (f) remove the word ``neutral'' and add in its place
``lead or single''.
The revision reads as follows:
Sec. 1108.9 Decisions.
(a) Decision requirements. Whether by a panel of arbitrators or a
single arbitrator, all arbitration decisions shall be in writing and
shall contain findings of fact and conclusions of law. All arbitration
decisions must be consistent with sound principles of rail regulation
economics. The arbitrator shall provide an unredacted draft of the
arbitration decision to the parties to the dispute, in accordance with
Sec. 1108.7.
* * * * *
0
10. Amend Sec. 1108.11 by revising paragraph (b) introductory text to
read as follows.
Sec. 1108.11 Enforcement and appeals.
* * * * *
(b) Board's standard of review. On appeal, the Board's standard of
review of arbitration decisions will be narrow. The Board will review a
decision to determine if the decision is consistent with sound
principles of rail regulation economics, a clear abuse of arbitral
authority or discretion occurred; the decision directly contravenes
statutory authority; or the award limitation was violated. Using this
standard, the Board may modify or vacate an arbitration award in whole
or in part.
* * * * *
0
11. Amend Sec. 1108.12 as follows:
0
a. Revise paragraph (b).
0
b. Remove paragraphs (c) and (d).
Sec. 1108.12 Fees and costs.
* * * * *
(b) Costs. The parties shall share the costs incurred by the Board
and arbitrators equally, with each party responsible for paying its own
legal and other associated arbitration costs.
PART 1115--APPELLATE PROCEDURES
0
12. The authority citation for Part 1115 is revised to read as follows:
Authority: 5 U.S.C. 559; 49 U.S.C. 1321, 49 U.S.C. 11708.
0
13. Revise Sec. 1115.8 to read as follows:
Sec. 1115.8 Petitions to review arbitration decisions.
An appeal of right to the Board is permitted. The appeal must be
filed within 20 days of a final arbitration decision, unless a later
date is authorized by the Board, and is subject to the page limitations
of Sec. 1115.2(d). For arbitrations authorized under part 1108 of this
chapter, the Board's standard of review of arbitration decisions will
be narrow, and relief will only be granted on grounds that the decision
is inconsistent with sound principles of rail regulation economics, a
clear abuse of arbitral authority or discretion occurred, the decision
directly contravenes statutory authority, or the award limitation was
violated. For labor arbitration decisions, the Board's standard of
review is set forth in Chicago and North Western Transportation
Company--Abandonment--near Dubuque & Oelwein, Iowa, 3 I.C.C.2d 729
(1987), aff'd sub nom. International Brotherhood of Electrical Workers
v. Interstate Commerce Commission, 862 F.2d 330 (D.C. Cir. 1988). The
timely filing of a petition will not automatically stay the effect of
the arbitration decision. A stay may be requested under Sec.
1115.3(f).
Note: The following appendix will not appear in the Code of
Federal Regulations.
Appendix
Information Collection 1
Title: Joint Notice for Request of Arbitration.
OMB Control Number: 2140-XXXX.
Form Number: None.
Type of Review: New collection.
[[Page 30236]]
Respondents: Parties seeking to submit to arbitration certain
matters before the Board.
Number of Respondents: 5.
Estimated Time per Response: No more than 1 hour.
Frequency of Response: On occasion.
Total Annual Hour Burden: 5 hours.
Total Annual ``Non-Hour Burden'' Cost: No ``non-cost'' burdens
associated with this collection have been identified.
Needs and Uses: Under 49 CFR 1108.5, arbitration commences with
a written complaint that contains a statement that the relevant
parties are participants in the Board's arbitration program, or that
the complainant is willing to arbitrate the dispute pursuant to the
Board's arbitration procedures. The respondent's answer to the
written complaint must then indicate the respondent's participation
in the Board's arbitration program or its willingness to arbitrate
the dispute at hand pursuant to the Board's arbitration procedures.
The Board proposes here, as an alternative to filing a written
complaint, that parties may submit a joint notice to the Board,
indicating the consent of both parties to submit an issue in dispute
to the Board's arbitration program. In the joint notice, parties
would state the issue(s) that the parties are willing to submit to
arbitration. The notice would also contain a statement that would
indicate that all relevant parties are participants in the Board's
arbitration program pursuant to Sec. 1108.3(a), or that the
relevant parties are willing to arbitrate voluntarily a matter
pursuant to the Board's arbitration procedures, and the relief
requested. The notice would indicate whether parties have agreed to
a three-member arbitration panel or a single arbitrator. And, the
notice would indicate whether the parties have mutually agreed to a
lower amount of potential liability in lieu of the monetary award
cap that would otherwise be applicable. This alternative filing
method would encourage greater use of arbitration to resolve
disputes at the Board.
Information Collection 2
Title: Arbitrator Roster.
OMB Control Number: 2140-XXXX.
Form Number: None.
Type of Review: New collection.
Respondents: Potential arbitrators.
Number of Respondents: 40.
Estimated Time per Response: No more than 1 hour.
Frequency of Response: Annually.
Total Annual Hour Burden: 40 hours.
Total Annual ``Non-Hour Burden'' Cost: No ``non-cost'' burdens
associated with this collection have been identified.
Needs and Uses: Under section 11708, the Board must ``promulgate
regulations to establish a voluntary and binding arbitration process
to resolve rail rate and practice complaints'' that are subject to
the Board's jurisdiction. To facilitate this process, the Board's
proposed rules would establish a process for creating and
maintaining a roster of arbitrators and selecting arbitrators from
the roster in accordance with the statutory requirements.
Pursuant to section 11708(f), unless parties otherwise agree, an
arbitrator or panel of arbitrators would be selected from a roster
maintained by the Board. The Board's roster would provide a brief
biographical sketch of each arbitrator, including information such
as background, experience, and geographical location, as well as
general contact information, based on the information supplied by
the arbitrator. Under the proposed rules, an initial roster would be
compiled by the Chairman, who would seek notice from all interested,
qualified persons who wish to be placed on the Board's arbitration
roster. The Chairman could augment the roster at any time to include
other eligible arbitrators and remove from the roster any
arbitrators who are no longer available or eligible. The roster
would be made available to the public on the Board's Web site.
[FR Doc. 2016-11238 Filed 5-13-16; 8:45 am]
BILLING CODE 4915-01-P