Texas court throws out DOT 111 surcharge case

31.03.16. A US district judge has sided with rail company BNSF in its legal battle with the American Fuel & Petrochemical Manufacturers (AFPM) trade group.
AFPM sued BNSF, the largest carrier of crude oil in North America, in federal court in the Southern District of Texas for alleged violations of the Hazardous Materials Safety Act.
AFPM claimed that a US$1,000 charge BNSF imposed for the carriage of crude oil in DOT 111 tank cars amounts to a surcharge in violation of BNSF’s common carrier duty to provide service under the Interstate Commerce Commission Termination Act. BNSF, which does not own the tank cars themselves, claimed that the DOT 111s were “the oldest, least safe tank cars currently authorized to haul crude oil.”
The federal agency with authority over use of the cars had already promulgated new rules calling for the gradual phasing out of DOT 111s following a number of high profile accidents involving the tanks. AFPM alleged that BNSF imposed its charge to force the DOT 111s into “premature retirement” by making their use “financially impractical.”
BNSF’s lawyers Smyser, Kaplan and Veselka (SKV), along with co-counsel Steptoe & Johnson, filed a Motion to Dismiss for Lack of Subject Matter Jurisdiction, alleging that AFPM’s complaint is actually a challenge to BNSF’s rates rather than its common carrier obligation.
BNSF asserted that the case should be heard by the Surface Transportation Board (STB) because the STB has exclusive jurisdiction over railroad rates. Furthermore, the rail company argued that the Complaint failed to state a claim under federal law, and, alternatively, if the Court determined it had subject matter jurisdiction, the Court should dismiss in deference to the STB’s primary jurisdiction.
On 11 March 2016, the Court granted BNSF’s Motion to Dismiss for Lack of Subject Matter Jurisdiction. The Court held that the case in fact was a dispute over BNSF’s rates and thus falls under the exclusive jurisdiction of the STB.