Regulatory Matters

Despite “deregulation” the railroad industry remains one of the most regulated industries in the country.

As regulatory counsel, Fletcher & Sippel helps guide our railroad clients through the maze of federal and state regulatory requirements affecting their business. The firm’s regulatory attorneys help clients accomplish their objectives within this arcane and often complicated regulatory structure. The value of this expertise expands well beyond regulatory proceedings. The knowledge of the regulatory process enables our attorneys to provide valuable insight on how to structure deals, draft contracts, operate business and negotiate disputes.

Contract Issues and
the Business of Railroading

Although providing advice and representation on regulatory matters is an important part of the firm’s practice, we are more than regulatory counsel — we are railroad counsel familiar with the business of railroad transportation. This requires knowledge of the structure of the industry, railroad operations, marketing and finance, competition, ratemaking, equipment and organization. It also requires an understanding of the relationships among multiple carriers, between carriers and their customers, and between carriers and their suppliers. The firm’s senior attorneys have extensive in-house railroad experience assisting large and small railroads in all aspects of their business and in each of these relationships.

  • Services Include:

    This includes providing advice, resolving disputes and negotiating, drafting, interpreting and enforcing contracts of all kinds, such as:

    • Trackage rights agreements
    • Switching agreements
    • Interlocking and crossing agreements
    • Interchange agreements
    • Haulage agreements
    • Transportation contracts with shippers
    • Purchase and sale agreements
    • Equipment leases
    • Sidetrack agreements
    • Transloading agreements
    • Voting trust agreements
    • Pooling agreements
    • Amtrak and commuter service agreements

    Our attorneys also have extensive experience with AAR rules and agreements, including the Interchange Rules and the Car Service and Car Hire Rules.

Railroad Retirement Board

The Railroad Retirement Board (“RRB”) administers retirement and unemployment-sickness benefit programs for railroad workers and their families under the Railroad Retirement and Railroad Unemployment Insurance Acts. As part of its responsibilities, the RRB makes employer and employee coverage decisions, conducts audits on covered employers, and conducts investigations relating to coverage and benefit issues. Rail carriers are not the only businesses subject to railroad retirement taxes. An entity which is under common control with a rail carrier can also be considered an employer for railroad retirement purposes, depending on the services that the entity provides. Likewise, an employee of a third party can be considered an employee of a carrier, and thus subject to railroad retirement taxes, depending on the worker’s duties and the carrier’s control of the worker. We advise clients how to structure corporate entities, transactions, and business relationships to achieve favorable railroad retirement tax treatment, and offer unparalleled expertise in guiding clients through RRB proceedings, including investigations, audits, and coverage determinations.

Federal Railroad

The FRA promulgates and enforces rail safety regulations and administers railroad assistance programs. Our attorneys have a breadth of knowledge regarding FRA regulations, investigations, funding and development programs, and rule making proceedings.

STB Matters

Fletcher & Sippel’s regulatory attorneys have been involved on behalf of railroad clients in every aspect of regulation by the Surface Transportation Board and its predecessor the Interstate Commerce Commission. Our experience encompasses the wide variety of projects for which STB approval or exemption is required.

  • Projects Include:

    • Line sales, acquisitions and leases
    • Line abandonments (exempt, non-exempt and adverse abandonments, including environmental and historic preservation requirements and offers of financial assistance)
    • Mergers and consolidations
    • Line constructions (including build-ins and build-outs , “forced” rail crossings, and reactivations)
    • Joint relocation projects
    • Trackage rights (including “forced” or terminal trackage rights) and joint use arrangements
    • Directed service and emergency service orders
    • Pooling arrangements

Common Carriage Issues

There are a variety of common carriage and legal issues unique to rail freight transportation. Our regulatory lawyers frequently handle matters in which these issues arise, including matters involving bills of lading, loss and damage, embargoes, rates and divisions, demurrage and storage, hazardous materials and solid waste.

State Regulators

While federal regulation of railroading is extensive, there are several areas left to regulation by state DOTs, utility commissions, and other state agencies. For example, the opening and closing of grade crossings, promulgation and enforcement of certain rail safety regulations; administration of local railroad assistance programs; conducting research and development in support of improved railroad safety; are traditionally state-regulated functions. Several of our attorneys have expertise in state agency proceedings related to opening or closing grade crossings, warning devices at crossings, and other safety issues within the police power of the state. State or local agencies sometimes attempt to exceed their regulatory authority in areas regulated by the federal government, e.g., local attempts to regulate blocked grade crossings or to zone or require permits for railroad activity. In many instances, we have been successful in educating the agency to convince them that their planned action exceeds their regulatory authority. In other instances, we have successfully litigated the limits of state and local regulatory efforts.