Amtrak is on notice by the Surface Transportation Board (STB) that should it discriminate against other railroads sharing access to Amtrak’s wholly owned Chicago Union Station (CUS), it could face regulatory discipline.
The Aug. 22 STB decision responds to an April filing by commuter operator Chicago Metra (Metra) seeking a declaratory order that STB oversight extends to CUS, notwithstanding Amtrak’s statutory immunity from federal economic regulation.
Amtrak acquired CUS decades ago from defunct Penn Central, a common-carrier railroad, whose operations—including track, yards, terminals and stations—were subject to federal economic regulation.
In May 2017, without seeking STB authority, Amtrak merged CUS into itself, causing Metra—which is in negotiations with Amtrak over CUS-access terms and fees—to fear that the merger would extinguish for Metra and other non-Amtrak users of such an essential facility regulatory redress should Amtrak seek to restrict access as negotiating leverage.
In a decision that denied either side a complete victory, the STB punted—but still made clear that Metra could renew its petition at a later date and perhaps prevail. Meanwhile, both sides are apparently precluded from now seeking judicial review of the STB decision because the STB did not issue a declaratory order; the statute says judicial review is not available for matters committed to agency discretion.
The STB held that there is no current ripe dispute between Metra and Amtrak warranting STB involvement, and declaratory orders are discretionary on the STB’s part.
However, the STB issued guidance to both sides should they fail to come to terms.
As for Amtrak, the STB ruled it would need to show that the statutory language exempting it from economic regulation “specifically enables it to take actions that cause another regulated carrier’s facilities [CUS] to be removed” from STB jurisdiction without STB review or approval. Metra alleges that such was the intent of Amtrak when it absorbed CUS, which historically was considered a common carrier subject to regulatory oversight.
As for Metra, the STB ruled it would have to show whether, prior to its merger with Amtrak, CUS was indeed a rail carrier subject to STB jurisdiction, as there are prior decisions, in unrelated cases—never contested—referring to CUS “both as a carrier and a noncarrier.” Also, Metra would have to demonstrate it is eligible to invoke a statutory provision permitting the STB to “require terminal facilities owned by a rail carrier [subject to STB jurisdiction] to be used by another rail carrier.”
Additionally, “Metra would need to explain how the merger of Amtrak and CUS could be an event requiring STB authorization, and why Amtrak’s exemption did not extend to CUS,” which is Amtrak’s wholly owned subsidiary. Of note, railroad mergers can be challenged post-merger as occurred with Berkshire-Hathaway’s acquisition of BNSF when it was disclosed that Berkshire-Hathaway was in violation of a statutory provision. The STB did not overturn the merger, but did order a remedy.
This is not Amtrak’s first alleged attempt to remove from STB oversight a passenger station it owns. In September 2015, Railway Age exposed a legislative attempt to redefine the Northeast Corridor (exempt from economic regulation) so as to include Washington Union Station and thus exempt the station from STB regulation. Had the legislative provision not been pulled from a highway spending bill following the Railway Age revelation, Amtrak would have gained over commuter operator Virginia Railway Express similar contract leverage as Metra asserts would occur should CUS no longer be subject to STB oversight.
There is an irony in the CUS and Washington Union Station situations because Amtrak has aggressively sought legislative and regulatory relief from alleged freight rail discrimination adversely affecting on-time performance of Amtrak passenger trains operating on freight railroad track. That judicial donnybrook is the subject of Railway Age’s Watching Washington Watch for the September print issue.
The decision to punt was signed by STB Chairman Ann D. Begeman, a Republican, and Vice Chairman Deb Miller, a Democrat. Recognize that if this issue comes around again, at least three new regulators will decide—and each of those three brings a specific perspective established through work experience. Whether any will be asked to recuse themselves—or voluntarily recuse themselves because of this—is to be learned.
Awaiting Senate confirmation to the STB are Democrat Martin J. Oberman, a former chairman of Metra; Democrat Michelle A. Schultz, an attorney with a potentially similarly affected Philadelphia-area rail transit agency (SEPTA, which operates out of Amtrak-owned 30th Street Station); and Republican Patrick J. Fuchs, who participated in crafting the Fixing America’s Surface Transportation (FAST) Act, which invited private-sector operation for up to three of Amtrak’s long-distance routes that could be users of CUS.
Editor’s note: Frank Wilner’s September 2015 Washington Watch column (“No fingerprints on NEC track grab”) first broke news of Amtrak’s attempt to evade economic regulation over access to its station facilities, and the fees charged:
Wilner’s June 2018 Washington Watch column (“Amtrak as bully”) detailed Amtrak’s attempt to avoid economic regulation of access to Chicago Union Station:
Frank N. Wilner is author of six books, including Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and Railroad Mergers: History, Analysis, Insight, all published by Simmons-Boardman Books. Wilner earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Change (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.