2013 Year in Review from Transportation Law Today

2013 will likely be remembered for several significant transportation events, including the Lac Megantic and Metro North rail accidents. As I write today on New Year's Eve an active fire from a train crash and derailment involving crude oil is taking place in Casselton, North Dakota (here is the NTSB's initial press release). The event in South Dakota highlights other major trends from 2013: positive train control and the carriage of crude oil by rail. Finally, a review of 2013 would not be complete without a mention of the regulatory and political environment, significantly because some-what bi-partisan WRRDA bill (which many had great hopes of passage in 2013), will wait until 2014.

MAJOR RAIL ACCIDENTS

The June 2013 accident which destroyed a significant portion of the town of Lac Megantic, Quebec, and claimed over 40 lives, spurred quick action by Canada's rail regulator, and reciprocal action by the FRA. My prior posts explained some of those actions here, and here.

Following Lac Megantic efforts were made to address the classification of crude oil carried by rail, which may again gain more attention given the on-going situation in North Dakota. Crew size was another issue in Lac Megantic, which the regulators also addressed in the context of securing haz mat trains.

The December 1 Metro-North accident in New York city also raised crew size questions, as well as positive train control implementation. See my prior post here.

Although neither the Lac Megantic nor Metro-North accidents have had their investigations concluded, information released indicates likely causes: failure to secure the train on a grade (Lac Megantic), and crew error in Metro-North. Coming in 2014 will be the Rail Safety Advisory Committee recommendations following Lac Megantic, and possibly, action on the Commuter Rail Passenger Safety Act proposed shortly after the Metro-North accident.

POSITIVE TRAIN CONTROL

The state of Positive Train Control, and the current 2015 deadline for implementation, will continue to be a hot topic in the coming year. Even though the GAO acknowledged that many railroads could not meet the 2015 deadline, it seems unlikely any wholesale moving of the deadline will occur given recent high profile train accidents. My best prediction is that some case by case relief for portions of PTC systems or tracks may be granted in an effort to get operational as much as possible by 2015.

CRUDE BY RAIL

I expect growing regulatory and public attention to crude by rail shipments, again highlighted by what is currently happening in North Dakota. Crude by Rail, as with Haz Mat by rail, is clearly a safe mode of transport given the huge volumes moved without incident. However, when accidents occur they tend to be memorable given the product being moved. On-going efforts from the RSAC on operational issues, as well as a renewed focus on tank car safety standards will certainly continue.

WRRDA I HARDLY KNEW YA

Now to the blue and brown water worlds... the continuing fate of the now-termed WRRDA bill and its path through a divided congress will continue into 2014. The bill's remedy for the monumentally over-budget Olmstead Lock and Dam project, aka the "Kentucky Kickback" seems to have survived some initial hype when the deal emerged as part of the government shut-down end. Both houses of Congress have appointed conferees to iron out differences between the Senate bill passed in May 2013, and the later house bill.

Is WRRDA an example of a deeply divided congress prioritizing infrastructure investment? Perhaps, but it also may be low hanging fruit in the sense that WRRDA is what could be accomplished in a bi-partisan way with relatively little controversy. In any event, the bill has yet to be passed by congress, which is likely to happen in early 2014.


Thanks to our readers and best wishes to all for safe and joyful New Year in 2014.

- Paul J. Loftus, December 31, 2013

EPA to Fund Air Quality Improvement Projects at Ports

The Environmental Protection Agency (EPA) has published a Request for Proposals to allocate $4 million for air quality projects at ocean and inland ports under the Diesel Emissions Reduction Act (DERA). The RFP homepage and related information are attached here.

The EPA anticipates awarding funds to public port authorities with jurisdiction over transportation or air quality at ocean or inland ports. Although private entities are not eligible, they may partner with eligible port authorities on projects. EPA, according to the RFP will fund, at various percentage levels, the following types of projects:

- Exhaust Control Technologies
- Certified Engine Upgrades
- Engine Idle Reduction Technologies
- Certified Engine Repower
- Vehicle Replacement (non-road diesel vehicles/drayage trucks)
- Clean Alternative Fuel Conversions

The potential funding does not apply to already mandated emission reductions for certain locomotive and marine engines. (see RFP at pg. 2). Proposals are due February 13, 2014.

NY Rep. Proposes Funding for PTC in Wake of Metro-North Accident

Positive Train Control, and the current statutory deadline for railroads to implement the technology of December 31, 2015, is once again front and center news following the December 1 Metro-North commuter rail accident. The accident, apparently caused by a speeding train, caused 4 deaths and dozens of injuries.

Congressman Sean Patrick Maloney (D-NY) has proposed new legislation titled the "Commuter Rail Passenger Safety Act" in a recent press release. The proposed legislation has not been released, but is intended to assist commuter rail lines in implementing PTC.

Specifically, the proposed law would provide access to Federal Railroad Administration loan guarantees under its Railroad Rehabilitation & Improvement Financing program (RRIF), which provides both direct loans and loan guarantees. Also, the law proposes reauthorizing the Railroad Safety Technology Grant Program, which fell victim to the recent budget battles and expired on October 1, 2013.

Other news related to the Metro-North accident, is the NTSB's revocation of "Party Status" to the investigation of the union which represents the train's engineer. The NTSB removed the Association of Commuter Rail Employees (ACRE) from the investigation for discussing details of the on-going investigation, a violation of the NSTB's "Party Agreement." This NTSB press release explains.

Prior the recent Metro-North accident, there seemed to be consensus that not all railroads would meet the December 2015 PTC deadline, with the GAO recommending that Congress permit the FRA to grant case-by-case extensions and approve alternative technologies (see my post of 9/17/13 on the GAO's report here). In the post Metro-North environment, the question is whether significant extensions to the current PTC deadline will be granted or not.

STB Finds Dispatching Contractor is a Rail Carrier for RRB purposes

The Surface Transportation Board ruled on November 15, 2013 that a contractor that provides rail dispatch services to small and regional railroads is a rail carrier for purposes of the Railroad Retirement Act. The STB decision, which was not unanimous, and contains a well-reasoned dissent, is attached here.

Rutland Vermont-based Rail-Term is small privately owned company that provides rail dispatch services to small and regional rail carriers. Rail-Term has no ownership in its rail customers, nor does it own any tracks, trains, or employ any personnel besides contract dispatchers. The case came before the STB from the U.S. Court of the Appeals for the D.C. Circuit, which was hearing Rail-Term's appeal after the Railroad Retirement Board (RRB) found that Rail Term was a rail carrier and therefore was required to pay RRB taxes for its employees. The Board's decision also comes nearly two years after the D.C. Circuit stayed the case for STB input on the question of rail carrier status.

The Basis for the Board's decision was that Rail-Term, though providing no transportation services itself, did provide services (i.e. dispatching) which are an "essential component of its clients' holding out of interstate common carrier rail transportation." And, those dispatching services are "required" for the actual rail carrier to provide service to its customers. Ultimately, the Board found that the dispatching contractor has "control" over "a key step in the movement of the trains of its rail common carrier customers."

The dissent filed by STB Vice Chair Begeman, questions the factual and legal basis for the Board finding a contractor that does not hold itself out as common carrier, own, or operate trains, is in fact a rail carrier.

The likely result of this decision is increased costs for small railroads that contract out dispatching services, now that contract dispatchers can be considered "carriers" themselves, and subject to the RRB Act. The decision also raises many questions, including whether this decision makes a contractor liable under the Federal Employer's Liability Act, and just what type of contract services will be considered "integral" or "essential" to a carrier's operations to impose carrier status on independent contractors?

Rail Associations Call for Stricter Tank Car Standards

Two industry associations representing virtually all North American Railroads have called for the USDOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) to require tank cars carrying flammable liquids be built to more stringent standards, or be upgraded for existing tank cars. The Association of American Railroads (AAR), and the American Shortline and Regional Railroad Association (ASLRRA), jointly tendered comments to the PHMSA today. A copy of the joint filing is attached here.

Despite the excellent overall safety record of haz mat transport by rail, the Associations cited the recent Lac Megantic catastrophe as motivation for the industry to reevaluate tank car standards, which in fact had been increased just in 2011. Among the proposals AAR and ASLRRA make are to require newly built tank cars carrying flammable liquids to have steel jackets around the tank car, thermal protection, full car-height head shields, and high flow capacity pressure release valves. In addition to newly built cars, the comments call for the retrofit of cars built since 2011, and before, to comply with any new construction standards, and to phase out older cars that cannot be retrofitted.

The PHMSA docket at issue is PHMSA-2012-0082 - "Hazardous Materials: Rail Petitions and Recommendations to Improve the Safety of Rail Tank Car Transportation."

Nearly $3 Billion in Budget Deal Slated for Olmstead Lock and Dam Project

Who said earmarks are dead? Tucked into yesterday's long-anticipated Congressional deal to raise the debt ceiling and end the government shut-down was this seemingly innocuous paragraph:

"Sec. 123. Section 3(a)(6) of Public Law 100-676 is amended by striking the occurrences of "$775,000,000" and inserting in lieu thereof, "$2,918,000,000."


PL 100-676 is the WRDA bill of 1988, which originally authorized the Olmstead lock and dam project at $775 million. The now-approved budget resolution more than triples the authorized expenditures for the cost overrun plagued project on the Ohio River. As you can see from the text of the joint budget resolution, it was not exactly a "clean" resolution, with various other individual funding provisions (including $186 million for Maritime Security - sec. 152).

With the ink apparently still drying in the budget deal, some have already referred to the Olmstead provision as the "Kentucky Kick-Back."

See also, my earlier post on the draft WRRDA bill which attempted to free the Inland Waterways Trust fund from essentially funding only the Olmstead project given its huge costs. Presumably funding Olmstead via the budget resolution solves the problem of Olmstead monopolizing the Inland Waterway Trust Fund.

Joint Rule Requires Truck Clearance At Grade Crossings

The USDOT's Federal Motor Carrier Safety Administration (FMCSA) and Pipeline and Hazardous Materials Safety Administration (PHMSA) have jointly issued a final rule that prohibits truck drivers carrying certain hazardous materials "from entering onto a highway-rail grade crossing unless there is sufficient space to drive completely through the grade crossing without stopping." The rule was published yesterday, and takes effect on October 25, 2013.

The intent of the rule is of course to reduce highway-rail grade crossing crashes, and amends 49 CFR parts 177 and 392, specifically a revision to 49 CFR 177.804, and the creation of 49 CFR 392.12.

The new requirements apply to vehicles transporting a quantify of hazardous materials requiring placarding under 49 CFR 172, or any amount of a material listed as a toxin under 42 CFR 73.