Does the STB face information overload?

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Written by

Frank N. Wilner, Capitol Hill Editor

“18 lawyers, each armed with a small summary of eighteen hundred sheets, rise like 18 hammers in a pianoforte, make 18 bows and fall into their 18 places of darkness. “Several members of the bar have yet to be heard, I believe?” said the Chancellor with a faint smile. – excerpt from “Bleak House”, by Charles Dickens

One might as well ask who threw the overalls into Ms. Murphy’s chowder as one might ask what more the Surface Transportation Board (STB) might learn from additional public hearings into whether the Canadian Pacific and Kansas Railroads City Southern should be allowed to merge, and under what conditions.

The answer “I don’t know” would suffice for both questions, as the STB is already awash with thousands of pages of explanatory stories, charts, images, tables, charts and affidavits from recognized experts.

Yet three days of public hearings, September 28-30, proved insufficient, as the Council extended these formal discussions to seven days, adding October 3, 4, 6, and 7. Only those who live in the trees do not seem to have been allowed. speaking slots.

“What do you mean, I can’t testify about this merger?! Wikimedia Commons/Daniella Maraschiello

In his novel, ‘Bleak House’, Charles Dickens painted a picture of a 19e English court of the century of which these minutes of the STB reproduce the image: “18 lawyers, each armed with a small summary of eighteen hundred sheets, rise like 18 hammers in a piano-forte, make 18 bows and fall in their 18 places of darkness. “Several members of the bar have yet to be heard, I believe?” said the chancellor with a faint smile.

In fact, the STB is an agency with a strong procrastination culture. In determining the level of reasonable maximum freight rates, the STB allowed shippers and railroad fighters to argue almost endlessly over details such as the appropriate number of printer cables and lavatory stalls. in a wayside installation.

Still residing in battered filing cabinets somewhere in Washington, D.C. — a capital where even distracted scribbles are salvaged for safekeeping — are 89,000 pages of transcribed testimony, 20,000 pages of legal briefs, 2,100 exhibits, and possibly- even be a decomposed unfinished ham. on-rye from a 1929 proceeding before the Interstate Commerce Commission, predecessor to the STB, known as Docket 17000.

The ICC dithered so long over a proposed merger involving Chicago, Rock Island & Pacific Railroad (Rock Island) that by the time the marriage license was approved 12 years later – years, not months – in 1974, the Union Pacific suitor skipped the wedding in favor of returning to the dating scene, with Rock Island declaring bankruptcy the following year, followed by liquidation.

The file of this procedure, developed during 279 days of public hearings, contained 200,000 pages of testimony. One of the 500 participating lawyers said the age of the railway, “It’s the closest our profession has to guaranteed lifelong employment.”

Barron’s Financial Weekly criticized the ICC for its reluctance to demand witnesses, “shut up”, alleging that the agency, through the delay, “may have done more damage to the railroads of the country than marauding Confederate and Union armies combined”. The St. Louis Globe Democrat editorialized newspaper, “Compared to the ICC, the three-toed sloth moves like a cheetah.”

During deliberations on the merger of the New York Central and Pennsylvania railroads into Penn Central, ICC Member William H. Tucker was quoted on February 13, 1967, The age of the railway that “there is no conceivable reason for a merger case to look like a first-degree homicide trial, with a dozen prosecutors and dozens of defense attorneys nitpicking at every statement.”

In 1995, Congress sought to expedite agency decision-making by imposing time constraints. Yet in 1999, the agency found a way around this intrusion by announcing a 15-month moratorium on further rail mergers while it revised its rules affecting approval.

A pending merger request by CN and BNSF was stopped dead in its tracks, with the plaintiffs canceling it due to uncertainty of the STB’s future actions and impatience from the backers. BNSF CEO Rob Krebs said: “Several years ago I was in favor of transferring jurisdiction over the railways to the Department of Justice. Today, I would have liked to work harder to get there.

Among the differences between the Justice Department and the STB’s assessment of mergers is the heightened emphasis the Justice Department’s Antitrust Division places on competitive impacts. The STB, while also weighing the impacts on competition, takes into account network efficiencies and the long-term financial health of the applicants and all other railways.

Although the STB encouraged a difficult record even for those who devoured Leo Tolstoy’s “War and Peace” and James Joyce’s “Ulysses”, the agency is under statutory time constraints to read, score and internally digest this produced quickly, although further issues, with their own expanding registrations, are pending. Warnings of “just the facts, please” remain elusive for railway regulators.

Regardless of the information overload, the law governing the STB provides that a final decision on this Canadian Pacific/Kansas City Southern merger application be made within 90 days of the impending closing of the evidentiary record and the completion an environmental assessment nearing completion.

At the end of the week and on the sixth day of these grueling proceedings, Commission members may well wonder whether former STB President Linda J. Morgan was prescient in her opposition to the public hearings, having called them a “useless government”. Perhaps only lawyers and consultants appearing as panelists will object. After all, even when they sit silently watching proceedings, they enjoy eye-popping hourly rates, even for Wall Street bankers.

Frank N. Wilner

Railway Age Capitol Hill Contributing Editor Frank N. Wilner is a former White House appointed chief of staff at the STB. He was assistant vice president for policy at the Association of American Railroads and past president of the ICC and STB bars.