Not With a Bang, but a Whimper

by Jim Mathews / President & CEO

“Pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), Plaintiff United States of America, and Defendants Norfolk Southern Corporation and Norfolk Southern Railway Company, hereby stipulate to the dismissal of this action with prejudice, with each party to bear its own attorneys’ fees and costs.”

There. That’s it. What might have been the first real chance for a Federal court to truly define what passenger-rail “preference” means and to what degree host railroads should be made to honor the preference clause they agreed to in exchange for their Federal bailout in 1971...ends with a single sentence, filed today in U.S. District Court in Washington, D.C.

It’s not completely surprising, but it sure is disappointing. Early this summer I told all of you that the Dept. of Justice and Norfolk Southern had met several times in person since last Fall to try to hammer out an “amicable settlement” to resolve the case.

DOJ told the Court in May that “the Parties were unable to reach agreement on all material issues” during the October and December meetings. But after the Trump Administration took over from the Biden Administration, there were two more in-person meetings, and tbe new-look DOJ told Judge Amy Berman Jackson that “the Government is currently reviewing a proposal by Defendants” to dismiss the case or transfer jurisdiction.

Norfolk Southern, it’s important to note, is looking to merge with Union Pacific in about 18 months’ time or so. UP settled its enforcement case with Amtrak before the Surface Transportation Board earlier this year, and now N-S is clearing its own decks just in time for the mega-merger talks to begin in earnest.

So far this morning, we haven’t seen the terms the Trump Administration agreed to in settlement, but I’m not hopeful there’s any good news for passengers who want to see more trains run on time.

I laid all this out in June, but because people often don’t click back to references, I’ll repeat it here.

Just as in the Amtrak versus Union Pacific case at STB, the outcome would have turned on the question of what Congress meant when it used the word “preference” in the statute – 49 U.S.C. § 24308(c). That 52-year-old law reads that host railroads must give Amtrak “preference over freight transportation in using a rail line, junction, or crossing” unless: (1) there is an emergency; or (2) a host railroad asks the STB for relief, and the STB orders otherwise.

The Class I freight railroads have adopted the position that Amtrak is using “preference” to demand a kind of “presidential motorcade” level of exclusive track access diverting all other traffic, which Norfolk Southern and others argue is impossible.

This Association, Amtrak, and until now the Justice Dept., each countered that in practice nobody is actually adopting that sweeping a view of preference and that, in any case, the requirement for six months of sustained failure is a safeguard against one-time delay events being weaponized into unreasonable claims against host railroads.

Moreover, if the freight railroads were really experiencing unreasonable demands from Amtrak for “presidential motorcade”-style access, then why have none of them ever sought relief from the STB over the half-century of the law’s existence? The Justice Dept. noted in its own action filed last summer against Norfolk Southern that “no host railroad has ever sought, let alone been granted, such relief from STB.” If it was a problem, ask for relief. Nobody did. For decades.

Meanwhile, the data show that Norfolk Southern’s Crescent delays were often avoidable, the result of dispatching decisions and not weather or geometry. In the five months after the Justice Dept. filed its action last year, Customer on-time performance for the Crescent rebounded from a low of 33 percent to 82 percent in November. That was good enough to meet the 80 percent standard set out in the new passenger metrics and standards regulations (rules that were issued, incidentally, during the final month of the first Trump Administration in 2020).

Norfolk Southern has been doing a better job lately of trying to keep Amtrak trains running on time. Maybe they’ll keep doing that, at least for now, as a way of maintaining good will while their transaction is pending. Or maybe they’ll even commit to it long term because in the end it’s good business and the mark of being a good corporate citizen?

Or, more likely, dispatching preference – despite the law – will remain subject to the whims and good will (or malevolence) of whichever management team is running the show at a host railroad in any given moment. What a way to run a railroad...