House Panel Passes Bill Stripping Rail Antitrust Exemptions

The House Judiciary Committee on Wednesday passed legislation to strip longstanding antitrust exemptions for freight railroad companies, sending the bill to the full House for consideration.

Lawmakers on both sides of the aisle, however, suggested that the bill needs additional work and will see some changes before it appears on the House floor.

The bill would repeal legal provisions that make certain railroad transactions exempt from review by antitrust regulators. And importantly, the legislation would provide that in legal disputes, federal trial judges would not have to defer to the jurisdiction of the Surface Transportation Board, whose oversight has been criticized as too friendly to the railroads.

The legislation also would give private litigants the ability to seek court injunctions to block conduct by the rail companies.

The House panel approved the legislation on a voice vote.

Supporters of the bill say antitrust exemptions for railroads contribute to higher shipping prices that translate into higher prices for consumers.

The railroads say the legislation would discourage private investment in the industry and harm the public.

The prospects for any congressional passage of a rail antitrust bill this year are cloudy, in part because railroad legislation is in limbo in the Senate.

The Senate canceled a vote on a similar rail bill in June after Sen. John Rockefeller, D-W.Va., a key player on the issue, withdrew his support for the legislation.

Rockefeller instead plans to offer broader legislation that would overhaul the Surface Transportation Board, which regulates rail competition. The senator has agreed to include some, but not all, provisions of the antitrust bill.

Rockefeller has not yet introduced his legislation.

Four rail companies dominate the rail shipping business: Norfolk Southern Corp. (NSC), Burlington Northern Santa Fe Corp. (BNI), CSX Corp. (CSX) and Union Pacific (UNP).

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; [e-mail]