STB Repeals Rail Competition Rules, Rejects UP-NS Merger
Summary
The Surface Transportation Board issued a Notice of Proposed Rulemaking proposing to repeal 49 C.F.R. Part 1144, which governs prescription of reciprocal switching, through routes, and through rates for railroads. The Board simultaneously rejected as incomplete the Union Pacific and Norfolk Southern merger application and granted Metra terminal trackage rights over Union Pacific lines. The proposed repeal would restore the Board's discretion to consider competitive access remedies without the current anticompetitive conduct test that shippers argue has been an unrealistically high bar.
What changed
The STB has issued an NPRM proposing to repeal 49 C.F.R. Part 1144, the regulation adopted in 1985 that narrowed the Board's statutory discretion to grant competitive access remedies by requiring a showing of anticompetitive conduct. The Board notes that Part 1144 has been rarely invoked and has never resulted in a prescription, indicating the framework is overly restrictive. If adopted, the repeal would restore the Board's full discretion under 49 U.S.C. § 11102(c) and 49 U.S.C. § 10705(a) to consider competitive access remedies.\n\nRailroads and shippers should monitor this NPRM closely, as the repeal would remove a layer of regulatory oversight affecting reciprocal switching arrangements and joint rate prescriptions. Shippers who relied on Part 1144's framework to challenge inadequate rail service or unreasonable through-rate terms may face fewer formal remedies available under the Board's rules. The STB's simultaneous rejection of the UP-NS merger application signals continued scrutiny of railroad consolidation.
What to do next
- Monitor for updates on the STB NPRM to repeal Part 1144
- Review competitive access remedy options in light of potential regulatory changes
Archived snapshot
Apr 16, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Summary
- A review of the STB recently issued Notice of Proposed Rulemaking, proposing to repeal its regulations on intramodal rail competition.
- A summary of the STB’s decision rejecting as incomplete the Union Pacific and Norfolk Southern merger application.
- An overview of the STB’s decision granting the Commuter Rail Division of the Regional Transportation Authority d/b/a/ Metra’s application for terminal trackage rights over Union Pacific lines.
Gary Yeowell via Getty Images
Introduction
The Surface Transportation Board (Board or STB) recently issued a Notice of Proposed Rulemaking (NPRM), proposing to repeal its regulations on intramodal rail competition. The Board also issued a decision rejecting as incomplete the Union Pacific and Norfolk Southern merger application. Additionally, in federal court, Union Pacific is seeking judicial review of the Board’s decision granting the Commuter Rail Division of the Regional Transportation Authority d/b/a/ Metra’s (Metra) application for terminal trackage rights over Union Pacific lines.
Recent STB Regulatory Developments
Ex Parte Proceedings
The Board Issues an NPRM Proposing to Repeal its Regulations on Intramodal Rail Competition, 49 C.F.R. Part 1144
On January 7, 2026, the Board issued an NPRM, proposing the repeal of 49 C.F.R. Part 1144, which governs the prescription of reciprocal switching, through routes, and through rates. 1
The NPRM recounts that 49 C.F.R. Part 1144 was adopted in 1985 following a joint request from the National Industrial Transportation League and the Association of American Railroads, for the Interstate Commerce Commission (ICC) to adopt regulations that would provide standards for the cancellation of through routes and joint rates, and the prescription of through routes, through rates, and reciprocal switching. 2 By adopting these regulations, the ICC narrowed its statutory discretion to grant competitive access remedies. 3 Relief under Part 1144 has been available only when “necessary to remedy or prevent an act contrary to the competition policies of 49 U.S.C. 10101 or which is otherwise anticompetitive.” 4 ** The essential questions for this “anticompetitive conduct” test are: “(i) whether the railroad has used its market power to extract unreasonable terms on through movements; or (ii) whether because of the railroad’s monopoly position it has shown a disregard for the shipper’s needs by rendering inadequate service.” 5 Petitioners must also meet additional requirements, including a “standing” requirement, to obtain relief. 6
Over the years, shippers, shipper groups, and other stakeholders have argued that Part 1144’s requirement of anticompetitive conduct has “set an unrealistically high bar” for shippers to obtain competitive access and has “effectively operated as a bar to relief rather than as a standard under which relief could be granted.” 7 The NPRM states that “Part 1144 has been rarely invoked, and the agency has never issued a prescription under its framework.” 8
In the NPRM, the Board emphasized that neither 49 U.S.C. § 11102(c) nor 49 U.S.C. § 10705(a) require a showing of anticompetitive conduct; both provisions are “cast in discretionary terms.” 9 The Board further noted that if the agency could narrow its discretion in 1985, “it must also be able to broaden its discretion” when it now “has sound reasons for changing course.” 10 The Board stated that it “sees no compelling reason to keep in place a rule that substantially narrows the set of cases that may be brought” under these statutory provisions, particularly given that the industry’s financial health has improved and competitive dynamics have shifted. 11 The Board pointed to the “dearth of cases” brought under Part 1144 and the fact that no prescriptions have ever been issued as evidence that the current framework is overly restrictive. 12
If adopted, the repeal of Part 1144 would restore the Board’s discretion to consider petitions “on a case-by-case basis” under the applicable statutory standards at 49 U.S.C. §§ 10705(b) and 11102(c), which may be further refined through agency adjudication under the standards set forth in the Administrative Procedure Act, 5 U.S.C. § 706. 13 In the NPRM, the Board also noted that “by acting through adjudication here, the Board would have the opportunity to consider parties’ legal and policy arguments and to identify relevant factors in the context of specific circumstances.” 14 The Board further noted that it “anticipates continuing to conduct such proceedings expeditiously, even if that commitment is not memorialized in a regulation.” 15
Comments on the NPRM are due by March 10, 2026, and reply comments are due by April 24, 2026. 16 The Board is also specifically seeking comments on whether repeal should be limited to reciprocal switching provisions, leaving Part 1144’s through route and through rate regulations intact. 17
In a press release, Chairman Patrick J. Fuchs stated: “This proposal would embrace market forces, enable meaningful choice for American businesses as provided under the statutes, and eliminate regulatory barriers unnecessarily stifling rail competition.” 18 Chairman Fuchs further noted that, “[b]y proposing to remove these regulations, the Board would return to the text of statutes that advance excellence, entrepreneurship, and innovation to support economic growth and supply chain resilience.” 19
Adjudicatory Proceedings
The Board Rejects as Incomplete the UP/NS Merger Application
On January 16, 2026, the Surface Transportation Board (STB or Board) issued a decision in which the Board rejected as incomplete the application seeking approval for Union Pacific to acquire control of Norfolk Southern. 20
On July 30, 2025, Union Pacific Corporation (UPC) and Union Pacific Railroad Company (UP), together with Norfolk Southern Corporation (NSC) and Norfolk Southern Railway Company (NS) (collectively, Applicants), notified the Board of their intent to file an application seeking authority under 49 U.S.C. §§ 11323-25 for the acquisition of control by UPC, through its wholly owned subsidiary Ruby Merger Sub 1 Corporation, of NSC, and through it of NS, and for the resulting common control by UPC of UP and NS. 21
On August 28, 2025, the Board issued a decision providing notice of receipt of Applicants’ prefiling notification. 22 The Board stated that it “finds that this is a major transaction under 49 C.F.R. 1180.2(a), as it is a control transaction involving two or more Class I railroads.” 23 The Board also assigned the proceeding to an administrative law judge for the handling of all discovery matters and initial resolution of all discovery disputes. 24
Additionally, the Board stated that, as provided for in 49 C.F.R. 1180.4(c)(2)(v) and pursuant to the Board’s authority in 49 U.S.C. 1321(b), the Board will require Applicants to file certain additional information by September 29, 2025, including information related to: 1) timetables, station lists, and track charts; 2) geospatial information system maps; 3) joint facilities; and 4) interchange commitments. 25
On September 26, 2025, the Board issued a decision inviting public comments on a procedural schedule for the proceeding. 26 The Board noted that it had proposed certain modifications to the procedural schedule proposed by Applicants, “[g]iven the high level of interest in this proceeding, and the potential for numerous and highly complex issues to arise.” 27 The Board ordered that comments on the Board’s proposed schedule must be filed by October 16, 2025. 28
On September 29, 2025, Applicants submitted additional information to the Board, in response to the Board’s August 28, 2025 decision.
Following the conclusion of the federal government shutdown, the Board issued a decision on November 14, 2025, stating that comments on the Board’s proposed procedural schedule would be due November 20, 2025. 29
On December 19, 2025, Applicants filed their application (Application). Applicants explained that they are seeking approval under 49 U.S.C. §§ 11323-25 for (1) the acquisition of control by UPC of NSC, and through NSC of NS and NS’s rail carrier subsidiaries, and (2) the resulting common control by UPC of UP and NS and the consolidation of the rail operations of UP and NS. 30 Included with the Application were two related applications for Applicants’ acquisitions of control of the Peoria and Pekin Union Railway Company in Docket No. FD 36873 (Sub-No. 1) and the Terminal Railroad Association of St. Louis in Docket No. FD 36873 (Sub-No. 2). 31
On December 19, 2025, the Board issued a decision establishing December 29, 2025 as the deadline for the submission of comments limited to whether the Application contains the information required in 49 C.F.R. Part 1180. 32 The Board also stated that Applicants could file a reply by January 2, 2026. 33
On January 16, 2026, the Board issued a decision rejecting the Application. 34 The Board found that “the Application is incomplete because it does not contain certain information required by the Board’s regulations.” 35 Specifically, the Board stated that “the Application is incomplete because its impact analyses required by 49 C.F.R. § 1180.7(b) do not contain market share projections for the entity to be created by the Transaction that are consistent with the claims elsewhere in the Application that the new entity would experience growth by diverting traffic from trucks and other rail carriers.” 36 Additionally, the Board stated that “[t]he Application is also incomplete because it does not contain the entire merger agreement required by 49 C.F.R. § 1180.6(a)(7)(ii), including certain documents that are expressly defined to be part of the merger agreement and that define Applicants’ obligations under it.” 37
The Board stated that, given its finding that these deficiencies render the Application incomplete, the Board must reject the Application. 38
The Board further stated that Applicants are permitted to file a revised application remedying the deficiencies identified in the Board’s decision. 39 The Board directed Applicants to file a letter by February 17, 2026, indicating whether, and if so, when, they anticipate refiling an application. 40 The Board stated that any revised application is due by June 22, 2026. 41
In its decision, the Board also rejected the related applications filed in Docket Nos. FD 36873 (Sub-No. 1) and FD 36873 (Sub-No. 2), without prejudice to refiling. 42
On February 17, 2026, Applicants filed a letter in the primary docket, informing the Board that they anticipate filing a revised application on April 30, 2026.
Litigation
UP Seeks Judicial Review of STB Decision Granting Metra’s Application for Terminal Trackage Rights Over UP Lines
On September 29, 2025, Union Pacific Railroad Company (UP) petitioned the United States Court of Appeals for the Eighth Circuit for review of the Board’s September 3, 2025 decision granting Metra’s application for terminal trackage rights over three UP lines used to operate commuter rail service in the Chicago area. 43
On March 7, 2025, Metra filed an application with the Board for terminal trackage rights under 49 U.S.C. § 11102(a) to continue commuter rail service over three lines owned by UP. 44 UP opposed Metra’s application on the merits and moved to dismiss the application on jurisdictional grounds. 45
On June 30, 2025, Metra filed an emergency request, asking the Board to enter an order to maintain the status quo as it existed on June 30, 2025 (i.e., the expiration date of the most recent extension of the parties’ Purchase of Services Agreement (PSA)), until further notice. 46 In response, UP disputed the existence of any emergency or imminent harm. 47 On July 1, 2025, the Board issued a decision denying Metra’s emergency petition, finding no sufficient showing of irreparable harm or emergency circumstances under 49 U.S.C. § 11123. 48
By a decision served on September 3, 2025, the Board granted Metra’s application for terminal trackage rights over the UP lines, finding that Metra’s request satisfies the statutory criteria of 49 U.S.C. § 11102(a). 49 The Board found that: 1) Metra’s system either falls within the Chicago Freight Terminal or consists of mainline track for a reasonable distance outside of the terminal; 2) Metra’s trackage rights would be practicable and would not substantially impair UP’s ability to handle its own business; and 3) there is a compelling reason to award Metra terminal trackage rights over the UP lines and, thus, the public interest standard under § 11102(a) has been met. 50
Regarding compensation and conditions of use, the Board declined to set interim terms and conditions at that time and directed the parties to “submit a joint status report, if possible, or separate reports by November 3, 2025, stating whether they have reached agreement, require additional time, or are unable to agree.” 51 If additional time is required, the parties must file further status reports every 60 days. 52 In the decision, the Board also denied UP’s motion to dismiss, concluding that the Board has jurisdiction to grant Metra’s application. 53
On September 29, 2025, UP filed a petition for interim condition or stay, asking the Board to enter as an interim condition the indemnity, liability allocation, and claims administration provisions of the PSA. 54 Alternatively, UP requested “that the Board stay the effectiveness of the September 3 Decision pending judicial review or until the parties agree on interim indemnity and liability allocation terms.” 55
On September 29, 2025, UP also filed a petition for review in the Eighth Circuit, seeking review of the Board’s September 3, 2025 decision. 56 UP concurrently filed a motion for stay pending review, asking the court to stay the effectiveness of the Board’s September 3 order pending review. 57 UP argued that the Board failed to adopt interim terms to govern the parties’ “now-forced relationship” when making its order effective immediately, and argued that the Board’s decision “produces deep uncertainty and threatens irreparable harm by distorting the balance of ongoing commercial negotiations and preventing Union Pacific from sensibly ordering its affairs.” 58
On September 30, 2025, the Board issued a decision in the STB proceeding stating that it “will temporarily impose, as an interim condition, the indemnification, liability, and claims administration provisions from the PSA as it existed on June 30, 2025.” 59 The Board stated that “[t]he uncertainty facing the parties, the acknowledgment by both parties that establishing such terms and conditions is important, and Metra’s previous consent to be governed by these provisions on an interim basis while it continues to operate over the UP Lines, all support the interim condition.” 60 The Board noted that this interim condition “will remain in effect until the Board has had an opportunity to consider any response filed by Metra and make a further determination on the appropriate interim terms going forward based on a more fully developed record.” 61
On September 30, 2025, the Board also filed in the court proceeding a response to UP’s motion for stay pending review. 62 The Board argued that UP’s motion is moot in light of the Board’s September 30, 2025 decision in the STB proceeding, and argued that UP’s motion does not meet the requirements of Federal Rule of Appellate Procedure 18. 63
On October 1, 2025, the Board filed in the court proceeding an unopposed motion to hold the proceeding in abeyance due to the lapse in appropriations. 64 The Board stated that it “will notify the Court as soon as appropriations have been restored and anticipates requesting at that time that all impacted deadlines be extended commensurate with the duration of the lapse in appropriations.” 65
On October 2, 2025, Metra filed in the court proceeding a motion to intervene as of right in support of the Board, and on October 9, 2025, Metra filed a response opposing UP’s request for stay pending judicial review.
On November 5, 2025, the Eighth Circuit issued an order granting Metra’s motion for leave to intervene and granting the Board’s motion to hold the appeal in abeyance. 66 The court further ordered that UP’s motion for stay is held in abeyance, and the court directed the Board “to provide a status report on this case within ten days of the restoration of appropriations.” 67
On November 13, 2025, Metra filed a letter in the STB proceeding replying to UP’s September 29, 2025 petition for interim condition or stay and the Board’s September 30, 2025 decision imposing an interim condition. Metra stated that it “does not oppose and will comply” with the Board’s decision but argued that Metra should not “accept responsibility for UP’s acts and omissions related to UP’s own operations and unrelated to Metra.” 68
Additionally in the STB proceeding, UP and Metra filed a joint status report on November 13, 2025, stating that the parties have exchanged proposals regarding the conditions and compensation for use of the facilities, and that negotiations continue. 69
On December 1, 2025, Metra filed in the STB proceeding a request for the Board to establish the conditions and compensation for Metra’s use of UP’s terminal facilities. 70 Metra stated that the parties “have been and are unable to reach agreement” on conditions of use and compensation. 71
On December 3, 2025, the Board issued a decision confirming that the indemnity, liability allocation, and claims administration provisions of the PSA as it existed on June 30, 2025 are imposed as an interim condition in this proceeding until final terms are established or this proceeding is otherwise resolved. 72
On December 4, 2025, as corrected on December 17, 2025, the Eighth Circuit issued an order denying UP’s motion for stay pending review. 73 The order stated that this case is no longer held in abeyance. 74
On December 15, 2025, UP filed a reply to Metra’s request to establish conditions and compensation in the STB proceeding. UP argued that Metra’s request should be denied as premature, stating that the parties continue to make progress in their negotiations and that Metra’s request appears to be related to its appellate strategy in the Eighth Circuit proceeding. 75 UP suggested that the Board consider Board-sponsored mediation to facilitate agreement between the parties. 76
Endnotes
Authors
Linda S Stein
Steptoe LLP
Linda S. Stein, a partner in Steptoe’s Washington office, assists clients, primarily in the railroad industry, in regulatory proceedings before the Surface Transportation Board (STB), as well as complex civil litigation and...
View Bio →
Timothy J Strafford
Tim Strafford, a partner in Steptoe’s Washington office, has over twenty-five years of experience in the rail industry. Tim focuses his practice in the rail regulatory space, counselling clients on regulatory and legislative...
View Bio →
Authors
Linda S Stein
Steptoe LLP
Timothy J Strafford
Committees
This content was produced by:
Related Content
Regulation | Specialized Practice Areas | Transportation
Oct 07, 2025
Energy | Regulation | Specialized Practice Areas | Transportation
Apr 06, 2026
Energy | Environment | Regulation | Telecommunications | Transportation
Environmental Law Fall 2025 Report
Oct 09, 2025
Energy | Regulation | Specialized Practice Areas | Transportation
Nuclear Energy Fall 2024 Report
Nov 18, 2024
Regulation | Specialized Practice Areas | Transportation
Nov 18, 2024
Energy | Environment | Regulation | Transportation
Environmental Law Spring 2024 Report
May 15, 2024
CFR references
Named provisions
Related changes
Get daily alerts for ABA Legal News
Daily digest delivered to your inbox.
Free. Unsubscribe anytime.
About this page
Every important government, regulator, and court update from around the world. One place. Real-time. Free. Our mission
Source document text, dates, docket IDs, and authority are extracted directly from ABA.
The summary, classification, recommended actions, deadlines, and penalty information are AI-generated from the original text and may contain errors. Always verify against the source document.
Classification
Who this affects
Taxonomy
Browse Categories
Get alerts for this source
We'll email you when ABA Legal News publishes new changes.
Subscribed!
Optional. Filters your digest to exactly the updates that matter to you.