Railroads run into new regulators: State, local governments try for more oversight
Published by Florida Times-Union on March 13, 2005.
When New York Attorney General Eliot Spitzer told CSX Corp. that he was investigating the railroad because of safety issues at railway crossings, CSX responded that the state didn't have the right to do so -- and then settled with Spitzer last week for $1.5 million.
When the city council of Washington, D.C., voted last month to ban trains carrying hazardous materials from travelling through the city, the railroad said the city didn't have that right -- and this time went to court to back up its position.
In both cases, Jacksonville-based CSX and the rest of the railroad industry is running into a group of regulators it hasn't had to deal with for more than a century: state and local governments.
Railroads have been regulated by the federal government since 1887, when Congress created the Interstate Commerce Commission, a move made in part because of public concern over railroad safety and a lack of oversight. (When the ICC was terminated a decade ago, its duties were transferred to the National Surface Transportation Board and the Federal Railroad Administration.)
But those federal regulators aren't doing their job, according to critics like Spitzer, who said the Federal Railroad Administration's oversight was an "abject failure."
"Where has the FRA been?" Spitzer asked during a press conference announcing the settlement, which came a year after two people died when their car was hit by a freight train. "Why has it failed to look at issues of critical importance to the safety of the public?"
Federal oversight has produced results, counters Steve Kulm, a spokesman for the Federal Railroad Administration, pointing out that fines levied by the FRA grew from $4.3 million in 2001 to $10.4 million last year.
"We've put more inspectors out, we've conducted more inspections and we've collected more money," Kulm said.
The D.C. city council expressed similar concerns, saying hazardous materials should not be travelling through the city because of security concerns, and that federal assurances that the city would be kept safe didn't suffice.
" 'Trust us -- we're the government' is not good enough," said council member Phil Mendelson, according to The Washington Post.
But letting entities other than the federal government regulate railroads would create more safety hazards and confusion, said Tom White, spokesman for the American Association of Railroads.
"A railroad or trucking company is going through a multitude of jurisdictions," he said. "If each one goes out and starts regulating to its own heart's content, you have a multitude of regulations and it becomes impossible to move things."
Railroads might have to move shipments onto tracks that aren't suited for them, said CSX spokesman Gary Sease, and more chemicals would be moved by trucks, which have more accidents than trains. "State and local regulation of the railroad would be counterproductive in many senses, particularly to the economy of the United States," he said. "Safe and efficient transportation would be in jeopardy because of a patchwork of regulation."
Industry experts said they expect the D.C. ban, scheduled to go into affect Monday to be thrown out by either U.S. District Court or the Surface Transportation Board, the two places CSX is fighting the resolution, with the support of the Justice, Homeland Security and Transportation departments.
"The law is very clear that the authority rests with the executive branch of the federal government," said Robert Gallamore, a professor in the Kellogg School of Management and director of the Transportation Center at Northwestern University. "The Constitution's commerce clause says explicitly that Congress has the right and obligation to regulate interstate commerce."
If the ban isn't tossed out, other cities, including Baltimore and Pittsburgh have said they would consider passing similar resolutions, a move that Sease said points up the danger of city-level regulation.
"I think the actions of other communities are making our point for us," the CSX spokesman said. "It would have a domino affect and shift the risk to other communities."