Freight Rail

Operational Issues

Our team regularly provides legal counsel on daily operational issues common to freight rail operators. We help clients draft and negotiate all types of contracts and agreements, including rail transportation contracts, interchange agreements, haulage agreements, run-through agreements, joint facility agreements, terminal services agreements, equipment contracts, locomotive purchase agreements, container purchase agreements, drayage agreements, intermodal agreements (domestic and international), leases and easements, lift services agreements, equipment maintenance and repair agreements, and bilateral agreements between rail carriers involving car hire, UMLER-registered equipment and Circular OT-10 issues.

We frequently assist clients with matters involving the Association of American Railroads (AAR) Interchange Rules and the Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) concerning the interchange and use of intermodal equipment.

In addition, we regularly advise clients on the terms and conditions of their respective rules circulars, including limitation of liability language in the wake of U.S. Supreme Court decisions, cross-border transactions, on-dock rail operations and ongoing regulatory matters.

Transactional Matters

Members of our team have extensive experience handling transactional matters on behalf of freight rail clients. Our recent experience includes representing a Class 1 railroad in its negotiation of rail transportation contracts governing coal, metals, crude oil, intermodal and other products, as well as two major commuter rail transactions involving complex issues related to the sale of land, track and improvements to a state-owned agency for the purpose of developing or enlarging commuter rail operations, subject to a retained freight easement to provide common carrier service, including the transactional, real estate, environmental, labor and regulatory issues associated with those transactions.

We also have extensive experience in railroad-focused real estate issues, including easements, crossing agreements, railbanking matters, valuation map issues, railroad property title matters and condemnation and preemption issues.

In addition, we have represented publicly traded corporations in the sale of numerous short line railroads and have represented Class 1 and Class 2 railroads with a wide variety of vendor contracts, including those related to "green locomotive" initiatives.

International Matters

Our team is experienced in legal issues related to the cross-border carriage of freight. We regularly assist clients with customs issues, including the Customs-Trade Partnership Against Terrorism (C-TPAT) and other practical and legal issues arising out of trade with Canada and Mexico.

Regulatory Matters

Freight rail operators are subject to myriad regulations imposed by the U.S. government and its agencies. These regulations can be complex, and experienced legal counsel is vital to avoid possible missteps. Our team frequently provides advice on railroad regulatory matters, including analysis of the Federal Railroad Administration’s (FRA) rulemaking concerning Positive Train Control (PTC), a safety-oriented regulation of the movement of trains that will affect a large proportion of the rail industry.

In addition, we regularly advise on Surface Transportation Board (STB) regulatory proceedings and filings concerning trackage rights, abandonment, discontinuance, contract carriage, preemption, demurrage, competition, re-regulation and other areas affecting railroad operations.

We also have experience representing Class 1 railroads on responses to the U.S. Government Accountability Office (GAO) questionnaire on the liability and indemnity agreements in use with shared assets and commuter/Amtrak/freight rail corridors.

National Transportation Safety Board (NTSB)

A member of our Transportation Team is a recent former general counsel of the NTSB who supported every NTSB rail investigation over the course of his five-year tenure with the agency. He has extensive knowledge of the party and investigative processes, from both the railroad and the NTSB point of view.

Dispute Resolution: Litigation and Arbitration

As with all business operations, disputes are a common challenge facing freight rail operators. Our team includes attorneys who focus their practices on litigation and other methods of dispute resolution, including commercial arbitration. Because dispute resolution can be costly and time consuming, we seek to resolve disputes at the earliest possible stage of the conflict. However, if litigation or arbitration cannot be avoided or is determined to be the best course of action, we are prepared to aggressively defend the interests of our clients.

We have represented rail clients in a wide range of complex litigation and arbitration matters, including:

• Contract and Tort Disputes: Our team represented a Class 2 railroad in a complex arbitration arising out of a haulage agreement with a Class 1 railroad that was being misused by the Class 1 railroad to the detriment of the intermodal business of our client and in violation of the agreement. We recovered money damages in excess of $1 million, defeated a $250,000 counterclaim and, more importantly, convinced the arbitrator to terminate the agreement, relieving our client from years of less than adequate compensation for its services. Our team represented a Class 1 railroad in a complex contract and tort dispute claim in Alabama arising out of the acquisition of property for use as a manufacturing plant, including an appeal from our successful motion for summary judgment in our client’s favor.
• Cargo Litigation: Our team is well versed in the defense of significant cargo matters arising under the Carmack Amendment or pursuant to rail transportation contracts under title 49 U.S.C. 10709.
• Worker Classification: A number of our freight railroad clients offer to arrange “door to door” service or otherwise engage independent owner-operators of motor vehicles. We have advised our clients or their affiliates on the terms of those leases and in the defense of purported class actions filed with respect to the classification of those independent contractors.
• Preemption and Condemnation: We represented a Class 1 railroad in a federal court dispute involving the interplay of STB abandonment proceedings and state law eminent domain issues resulting in a dismissal for lack of subject matter jurisdiction of a condemnation action brought against our client.
• Condemnation: Members of our team served as primary counsel on condemnation issues on behalf of a Class 1 railroad involving land necessary for expansion and improvement of its rail services and facilities, successfully negotiating agreements and avoiding significant litigation.
• Slander and Tortious Interference: We represented a railroad in its defense of a significant litigation matter in the Southern District of New York involving allegations by a customer of slander and tortious interference.
• Alleged Railcar Conversion: Our team represented a railroad in a complicated matter involving the alleged conversion of a passenger railcar and was successful in negotiating a favorable resolution prior to significant litigation time and costs.
• Environmental Regulations: We handled the defense of an administrative claim asserting that our client had violated certain environmental regulations when it sprayed chemicals and removed vegetation encroaching on the railroad’s right-of-way impeding the freight rail operations. Following extensive negotiations, the matter was settled without the necessity of filing a declaratory judgment action raising federal preemption bases in support of the rail carrier’s actions. In a separate dispute, on behalf of the same client, we successfully resolved, out of court, a case brought by a customer asserting that the railroad had failed and refused to provide railroad service upon reasonable request.
• Insurance Coverage: We have assisted a Class 1 railroad with disputes relating to its insurance coverage.
• Intellectual Property: Defense of a Class 1 railroad in an intellectual property lawsuit pending in federal court.

Client Service is a Top Priority

Our freight transportation attorneys, including some previously employed by railroads, have a thorough understanding of the industry and place a heavy emphasis on providing client-focused counsel to this vital transportation component of our economy. We have seconded firm lawyers to work in house at a Class 1 railroad to provide assistance on a broad range of transportation matters. This intense focus on client service has received national recognition, including one of our team members earning the BTI Client Service All-Star award.