Rail Antitrust Law a Mistake, Buttrey Says

W. Douglas Buttrey, until recently a member of the Surface Transportation Board, said proposed antitrust legislation to strip the STB of some of its special authority in rail issues is “bizarre” and “dangerous.”

Buttrey was an STB member from 2004 until last month, and chaired the board for eight months in 2006.

On March 5, the Senate Judiciary Committee approved a bill by Sen. Herb Kohl, D-Wis., that would take away the STB’s exclusive power over rail mergers and subject them to review by the Justice department and Federal Trade Commission, as with other industries. That measure would also allow some antitrust challenges in courts by states and shippers.

The railroad industry is opposing it, in contrast to the rails’ posture of trying to negotiate proposed competition legislation.

Buttrey left the STB on March 13, and later told JOC “I think that legislation is unnecessary, number one. And, number two, is very harmful.”

Currently, federal rail regulation pre-empts state and local authority in most instances, but new antitrust rules could allow those governments to weigh in more heavily.

“Any attempt by anyone to chip away at preemption,” Buttrey said, “and give the states authority over railroad regulation I think is a very dangerous step. I think it’s one that, if done, would be sorely regretted before very long.”

As for the Justice and FTC merger reviews, “taking the STB’s antitrust jurisdiction away, and taking it away from one federal agency and giving it to two … is bizarre to me,” he said.

Buttrey insisted that the STB is particularly well suited to handle rail issues as “the repository of railroad regulation knowledge.”

As for the idea that shippers or others might file rail antitrust cases in court, he said “the federal court docket is already crowded enough without adding more to it, and giving the jurisdiction to people who are not basically students of the railroad industry and railroad regulation . . . I think that would be a serious mistake.”

Contact John D. Boyd at jboyd@joc.com.