§ 11708. Voluntary arbitration of certain rail rates and practices disputes (2024)

Not later than 1 year after the date of the enactment of the Surface Transportation Board Reauthorization Act of 2015, the Board shall promulgate regulations to establish a voluntary and binding arbitration process to resolve rail rate and practice complaints subject to the jurisdiction of the Board.

The voluntary and binding arbitration process established pursuant to subsection (a)—

shall apply to disputes involving—

(A) rates, demurrage, accessorial charges, misrouting, or mishandling of rail cars; or

(B) a carrier’s published rules and practices as applied to particular rail transportation;

shall not apply to disputes—

(A) to obtain the grant, denial, stay, or revocation of any license, authorization, or exemption;

(B) to prescribe for the future any conduct, rules, or results of general, industry-wide applicability;

(D) that are solely between 2 or more rail carriers; and

(3) shall not prevent parties from independently seeking or utilizing private arbitration services to resolve any disputes the parties may have.

The Board—

(A) may make the voluntary and binding arbitration process established pursuant to subsection (a) available only to the relevant parties;

(B) may make the voluntary and binding arbitration process available only—(i) after receiving the written consent to arbitrate from all relevant parties; and(ii)(I) after the filing of a written complaint; or(II) through other procedures adopted by the Board in a rulemaking proceeding;

(C) with respect to rate disputes, may make the voluntary and binding arbitration process available only to the relevant parties if the rail carrier has market dominance (as determined under section 10707); and

(D) may initiate the voluntary and binding arbitration process not later than 40 days after the date on which a written complaint is filed or through other procedures adopted by the Board in a rulemaking proceeding.

(2) Limitation.—Initiation of the voluntary and binding arbitration process shall preclude the Board from separately reviewing a complaint or dispute related to the same rail rate or practice in a covered dispute involving the same parties.

(3) Rates.—In resolving a covered dispute involving the reasonableness of a rail carrier’s rates, the arbitrator or panel of arbitrators, as applicable, shall consider the Board’s methodologies for setting maximum lawful rates, giving due consideration to the need for differential pricing to permit a rail carrier to collect adequate revenues (as determined under section 10704(a)(2)).

Any decision reached in an arbitration process under this section—

(1) shall be consistent with sound principles of rail regulation economics;

(2) shall be in writing;

(3) shall contain findings of fact and conclusions;

(4) shall be binding upon the parties; and

(5) shall not have any precedential effect in any other or subsequent arbitration dispute.

The evidentiary process of the voluntary and binding arbitration process shall be completed not later than 90 days after the date on which the arbitration process is initiated unless—

(1) Selection.—An arbitrator or panel of arbitrators shall be selected not later than 14 days after the date of the Board’s decision to initiate arbitration.

The evidentiary process of the voluntary and binding arbitration process shall be completed not later than 90 days after the date on which the arbitration process is initiated unless—

(A) a party requests an extension; and

(B) the arbitrator or panel of arbitrators, as applicable, grants such extension request.

(3) Decision.—The arbitrator or panel of arbitrators, as applicable, shall issue a decision not later than 30 days after the date on which the evidentiary record is closed.

(4) Extensions.—The Board may extend any of the timelines under this subsection upon the agreement of all parties in the dispute.

If the parties agree to select a panel of arbitrators, instead of a single arbitrator, the panel shall be selected under this subsection as follows:

(1) In general.—Unless otherwise agreed by all of the parties, an arbitration under this section shall be conducted by an arbitrator or panel of arbitrators, which shall be selected from a roster, maintained by the Board, of persons with rail transportation, economic regulation, professional or business experience, including agriculture, in the private sector.

(2) Independence.—In an arbitration under this section, the arbitrators shall perform their duties with diligence, good faith, and in a manner consistent with the requirements of impartiality and independence.

If the parties agree to select a panel of arbitrators, instead of a single arbitrator, the panel shall be selected under this subsection as follows:

(A) In general.—If the parties cannot mutually agree on an arbitrator, or the lead arbitrator of a panel of arbitrators, the parties shall select the arbitrator or lead arbitrator from the roster by alternately striking names from the roster until only 1 name remains meeting the criteria set forth in paragraph (1).

(B) Panel of arbitrators.—If the parties agree to select a panel of arbitrators, instead of a single arbitrator, the panel shall be selected under this subsection as follows:(i) The parties to a dispute may mutually select 1 arbitrator from the roster to serve as the lead arbitrator of the panel of arbitrators.(ii) If the parties cannot mutually agree on a lead arbitrator, the parties shall select a lead arbitrator using the process described in subparagraph (A).(iii) In addition to the lead arbitrator selected under this subparagraph, each party to a dispute shall select 1 additional arbitrator from the roster, regardless of whether the other party struck out the arbitrator’s name under subparagraph (A).

(4) Cost.—The parties shall share the costs incurred by the Board and arbitrators equally, with each party responsible for paying its own legal and other associated arbitration costs.

Subject to the limitations set forth in paragraphs (2) and (3), an arbitral decision under this section may award the payment of damages or rate prescriptive relief.

(1) In general.—Subject to the limitations set forth in paragraphs (2) and (3), an arbitral decision under this section may award the payment of damages or rate prescriptive relief.

(2) Practice disputes.—The damage award for practice disputes may not exceed $2,000,000.

The damage award for rate disputes, including any rate prescription, may not exceed $25,000,000.

(A) Monetary limit.—The damage award for rate disputes, including any rate prescription, may not exceed $25,000,000.

(B) Time limit.—Any rate prescription shall be limited to not longer than 5 years from the date of the arbitral decision.

If a party appeals a decision under this section to the Board, the Board may review the decision under this section to determine if—

(1) the decision is consistent with sound principles of rail regulation economics;

(2) a clear abuse of arbitral authority or discretion occurred;

(3) the decision directly contravenes statutory authority; or

(4) the award limitation under subsection (g) was violated.

(Added Pub. L. 114–110, § 13(a), Dec. 18, 2015, 129 Stat. 2235.)

§ 11708. Voluntary arbitration of certain rail rates and practices disputes (2024)

FAQs

Do you have to accept arbitration? ›

You have a difficult decision to make, although it may not matter whether you sign the “agreement” or not. If you continue to work after you are informed that a forced arbitration agreement governs your employment, you may be bound by it, even if you refuse to sign it.

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Should you go to arbitration? ›

Quicker Resolution: One of the biggest benefits of arbitration is how quickly disputes can be settled. Without the need for a drawn-out litigation process, parties can expect a faster resolution. Lower Cost: Arbitration is generally considered less expensive than going through the courts.

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What is the difference between arbitration and voluntary arbitration? ›

Mandatory arbitration means that the parties must use arbitration to resolve any dispute, while voluntary arbitration means that the parties can explore other options for resolving their dispute before going through arbitration.

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What are the consequences of arbitration? ›

The disadvantages of arbitration

Both sides give up their right to an appeal, which means one party could end up feeling slighted. If the matter is complicated but the amount of money involved is modest, the arbitrator's fee may make arbitration uneconomical.

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Do both parties have to agree to arbitration? ›

Arbitration can be voluntary (the parties agree to do it) or mandatory (required by law).

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Who usually wins in arbitration? ›

An empirical study conducted by economic firm ndp | analytics and released by ILR shows that employees and consumers win more money, more often, and more quickly in arbitration than in a lawsuit. Employees were more likely to win in arbitration (almost 38 percent) than in a lawsuit (almost 11 percent).

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What happens if you refuse arbitration? ›

An arbitrator may hold a hearing in the absence of one party so long as the absent party received fair notice of the date, time, and place of the hearing but refused to attend.

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Is it better to settle or go to arbitration? ›

Arbitration tends to be less expensive than litigation because it typically involves fewer procedural hurdles and streamlined processes. Additionally, arbitration can be faster, often resolving disputes more quickly than court cases, which can drag on for years.

What are two disadvantages of arbitration? ›

Disadvantages

Questionable Fairness. Mandatory arbitration. ...
Finality: No appeals. While this may be a positive if you find the arbitration decision favorable, you should be aware that if arbitration is binding, both sides give up their right to an appeal. ...
Can be more expensive. ...
Unpredictability: Unconventional outcomes.

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Who pays for arbitration? ›

The parties each pay their own costs to conduct their case. Parties will likely not encounter all of the above costs on every case, and the amount of these costs, and which party must pay them, is different depending on the case and the rules that apply.

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Can you sue after arbitration? ›

In some instances, you may be able to sue if you signed a valid arbitration agreement. While courts generally favor arbitration agreements, they will allow you to file a lawsuit if either you didn't understand your rights or your claims fall outside the arbitration provision's scope.

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Can a company force you to use arbitration? ›

If your employer asks you to sign an arbitration agreement, you can refuse, but that may put your job in jeopardy. Usually, an employer can rescind an employment offer if a prospective employee refuses to sign the arbitration agreement. And an employer can fire an at-will employee who refuses to sign one.

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How to get out of arbitration? ›

Some contracts give you the right to opt out of the forced arbitration clause within a certain period of time, often 30 to 60 days, after signing the agreement by notifying the company that you wish to opt out. Check your contract for the deadline and for specific instructions for opting out.

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Should I have a lawyer for arbitration? ›

In arbitration, you don't have to have a lawyer represent you (unless state law requires it), but it's important to know that arbitration is a final and binding process that can affect your rights. So, if you are considering representing yourself, it's a good idea to talk to a lawyer.

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What happens if you lose in arbitration? ›

If you lose the case, it's very hard to challenge a decision the arbitrator has made. You can't appeal if you simply disagree with the decision. If you think the case wasn't handled properly, you should get advice about what to do next. You may be able to make an appeal to court on a point of law.

Can you ignore arbitration? ›

A party who agrees to arbitrate cannot avoid an adverse arbitration award by ignoring the arbitration proceedings.