Challenge to Surface Transportation Board's Order on Railroad Rates - DC Circuit
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Challenge to Surface Transportation Board's Order on Railroad Rates

BNSF Rwy. Co. v. Surface Transp. Bd., No. 09-1092, involved a petition for review of the decision of the Surface Transportation Board (Board) that rates challenged in 2004 by fuel companies were unreasonably high maximum reasonable rates, prescribing future maximum rates, and ordering petitioner to pay reparations.  The D.C. Circuit granted the petition in part, holding that the Board failed appropriately to consider economies of density and artificially inflated the revenues attributable to the stand-alone railroad at issue.  However, the court denied the petition in part, on the grounds that 1) petitioner forfeited its statutory argument by failing to raise it in a timely manner before the Board; and 2) the Board's determination invoked its expertise, and the court found no fault with the Board's reasoning.

As the court wrote:  "BNSF Railway Company ("BNSF") petitions for review of the decision of the Surface Transportation Board ("Board") that rates challenged in 2004 by Western Fuels Association, Inc., and Basin Electric Power Cooperative, Inc. (hereinafter, collectively, "WFA") are unreasonably high maximum reasonable rates, prescribing future maximum rates, and ordering BNSF to pay reparations.  BNSF contends that the Board's decision was contrary to law because the three-year limit in 49 U.S.C. § 11701(c) had expired before its February 17, 2009 Decision, and so the Board's orders prescribing maximum reasonable rates and ordering the payment of reparations must be vacated and the proceeding dismissed. Alternatively, BNSF contends there was a reopening after the Board's September 7, 2007 Decision,2 and hence any reparations would be limited from that time forward. On the merits, BNSF contends the Board was arbitrary and capricious by allowing WFA to revise its traffic route in response to the Board's adoption of new retroactive methodologies for calculating rates, and by modifying the average total cost methodology for allocating revenue from cross-over traffic."

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