In a decision filed May 11, 2010, the United States Court of Appeals for the District of Columbia Circuit has affirmed in almost all respects the 2009 decision of the federal Surface Transportation Board granting Western Fuels Association, Inc. and Basin Electric Power Cooperative (“WFA/Basin”) approximately $350 million in reparations and rate reductions, as estimated by the STB on a present value basis.

The underlying case on appeal, Western Fuels Ass’n, Inc., and Basin Elec. Power Coop. v. BNSF Ry., STB Docket No 42088 (STB served Feb. 18, 2009), involved a complaint alleging that BNSF Railway Company’s (“BNSF’s”) tariff rates on coal traffic moving from the Wyoming Powder River Basin to WFA/Basin Electric’s Laramie River Station (near Wheatland, Wyoming) were unreasonably high because these rates exceeded the maximums permitted under the Board’s stand-alone cost (“SAC”) constraint.

BNSF filed an appeal of the STB decision, asking that the decision be vacated by the Court on various grounds. WFA/Basin intervened in the appeal in support of the STB’s decision. The States of North Dakota, South Dakota, and Wyoming also entered as Amici Curiae supporting WFA/Basin and affirmance.

In its decision denominated BNSF Ry. Co. v. STB, No. 09-1092 (D.C. Cir May 11, 2010), the Court affirmed the STB on all counts raised by BNSF on appeal, except one, remanding a technical SAC calculation issue on the grounds that the STB had not specifically explained its calculation rationale.'

The reduced Basin Electric freight rates that were prescribed by the STB will benefit hundreds of thousands of electric consumers in nine western states, who bear the burden of the transportation costs as part of their monthly electric bills. The case was the first case decided under new SAC rules established by the STB in 2006.

Slover & Loftus LLP represented WFA/Basin Electric in the case (and on appeal), which the federal Surface Transportation Board described as the “the single largest reduction in rail rates ever awarded by this agency.”

Questions on this decision or on railroad maximum rate reasonableness generally, may be directed to John LeSeur, Chris Mills, Peter Pfohl or any other rail transportation attorney at Slover & Loftus LLP.