Overview

On May 13, 2013, the Surface Transportation Board (STB) issued a decision adopting revised regulations regarding arbitration and mediation procedures. The new regulations are intended to encourage greater use of arbitration and mediation, potentially saving parties the time and money required to litigate formal disputes at the STB.

Arbitration

The new regulations applicable to arbitrations are limited to specific types of 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 transportation. However, parties may mutually agree to arbitrate other types of matters that are subject to the jurisdiction of the STB, except for licensing and other matters involving regulatory approvals, exemptions or labor-protective conditions. All rail carriers, shippers and other eligible parties must affirmatively opt into the STB's new arbitration program either in advance of a dispute by filing a written notice or after a dispute arises. Parties who opt into arbitration in advance may specify which types of disputes they are willing to arbitrate, and the STB website will include a list of arbitration program participants. Parties who have opted into the arbitration program also may opt out upon 90 days' written notice. Arbitral awards will be limited to $200,000 per case, excluding counterclaims, which would be subject to the same monetary cap, unless the parties mutually agree otherwise. Injunctive relief will not be available under the arbitration program. Arbitration will be heard by a three-person panel unless the parties mutually agree upon use of a single arbitrator. Arbitration decisions may be appealed to the STB but the agency can only overturn a decision that reflects a clear abuse of arbitral authority or discretion, or directly contravenes statutory authority. Alternatively, parties may appeal an arbitration decision in federal court.

Mediation

The STB also revised its mediation regulations. It will be able to order mediation on its own motion, or upon request of one or more parties to a dispute, except those involving licensing, regulatory approval or exemption, or labor protection issues. The new regulations permit the STB to stay underlying proceedings and toll any applicable statutory deadlines during mediation, but such steps cannot be taken when one or more parties do not consent to mediation. Mediation can only be ordered in an existing STB proceeding, will be confidential and will last for up to 30 days unless the STB decides to extend the period upon request of the parties.

The new regulations will be effective on June 12, 2013. The decision adopting the new regulations is known as STB Docket No. E.P. 699, Assessment of Mediation and Arbitration Procedures. The issues in this decision implicate any entity that ships, receives or is affected by railroad transportation.