Senate Judiciary Committee approves rail antitrust bill. What next?

The Senate Judiciary Committee approved legislation today that would remove antitrust exemptions from freight railroads. The bill, S. 49, the “Railroad Antitrust Act of 2011,” would “amend the Federal antitrust laws to provide expanded coverage and to eliminate exemptions from such laws that are contrary to the public interest with respect to railroads.”

In the Democratic-led Senate, S. 49 was approved 14 to 1, with three (3) abstentions. The Yes votes, divided evenly among Republicans and Democrats, were as follows:

Kohl (D-Wisc.); Feinstein (D.-Calif); Schumer (D-N.Y.); Durbin (D.-Ill); Whitehouse (D-R.I.); Klobuchar (D-Minn.); Franken (D-Minn.); Coons (D.-Del.); Blumenthal (D.-Conn.); Grassley (R-Iowa); Hatch (R-Utah); Kyl (R.-Ariz.); Lee (R.-Utah); and Leahy (D-Vt., Chairman).

One lone Republican voted No: Cornyn (R.-Tex.). Three Republicans abstained: Sessions (R.-Ala.); Graham (R.-S.C.); and Coburn (R.-Okla.).

During the hearing leading up to vote, Sen. Mike Lee of Utah (pictured) was the only one speaking about the bill other than Sen. Kohl, who was promoting it. “I have some limited concerns over just a few aspects of the bill,” said Lee, who did not identify what those aspects are. Lee added that before S. 49 goes to the Senate floor for a vote, “I am committed to ensuring it ultimately is drafted in a manner that will best promote competition and consumer rights consistent with the extensive regulatory system that [already] applies to our nation’s railroads. I am very optimistic we can come together to make appropriate revisions to strike the proper balance.”

Lee’s statement appears to be an indication that a deal is in the works with the railroads, represented by the Association of American Railroads, to modify the bill before it goes to the Senate floor. This is the normal course of business in Congress, where every piece of legislation that reaches the President’s desk for signature is hammered out through compromise that some refer to as “horse trading.”

Whatever S. 49 looks like once (or if) it reaches the Senate floor, it will have to pass the muster of the Republican-led House, which is presumably less receptive to enacting additional regulatory measures affecting the railroads. This became clear when Rep. James Oberstar (D.-Minn.), chairman of the House Transportation & Infrastructure Committee, lost his re-election bid in November 2010. Republicans took control of the House, and Rep. John Mica (R.-Fla.) took his place as T&I chairman. Oberstar’s re-regulation bill, which would have been harmful to the industry, died with his ouster from power. And while Sen. Jay Rockefeller (D.-W.Va.) still reins as chair of the Senate Commerce Committee, his power has been weakened by Republican midterm election gains in the Senate. His railroad re-regulation bill is dead as well, though he was able to persuade the Surface Transportation Board to hold a hearing on railroad competition. That hearing is scheduled for June 22.

Though House railroad antitrust legislation would presumably come out of the House Judiciary Committee, there could concurrent jurisdiction in the T&I Committee, depending on the contents of the bill. That determination would be made when a bill actually is introduced in the House. The 2010 bill did have joint jurisdiction, but it never received a hearing in any House committee.

Prior railroad antitrust proposals approved by the Senate Judiciary Committee have failed to become law. Currently, under federal law, railroads have limited antitrust exemption and are able to negotiate rates with customers, as opposed to having rate increases fixed by regulators.

—William C. Vantuono, Editor