Track Check

A broad-gauge look at the latest trends in U.S. railroad law.

Infrastructure Under Trump 2019

Steptoe & Johnson LLP’s railroad practice is recognized in virtually every area of rail regulatory activity. The team’s experience in high-profile cases gives it a thorough understanding of the complex and evolving issues in rail transportation law. We anticipate that over the next year federal appointments will prompt an uptick in rulemaking activity and that new trends, including short-line spinoffs and the development of innovative passenger rail projects, will continue to make news.

Open STB Slots Might Soon Be Filled

The U.S. Surface Transportation Board is the federal agency tasked with the economic regulation of railroads. Its rulemaking activity has decreased somewhat in recent years due in part to three vacancies on its five-member board. A number of rulemaking proceedings initiated by the STB before 2017 have been placed on hold until those vacancies are filled, including ones concerning fuel surcharges, competitive access, regulatory exemptions, and alternative rate-regulation standards.

President Trump recently named three individuals to complete the board. Those nominations have been approved by the Senate Committee on Commerce, Science, and Transportation, but as of this writing the full Senate has yet to act. Once a full board is in place, we expect that the STB will move forward on its pending regulatory proceedings.

A New Era of Rail Line Sales?

Partial deregulation of the American railroad industry via the Staggers Rail Act of 1980 spurred many large railroads to divest unprofitable line segments to dozens of newly created short-line railroads. After this initial burst, line sales slowed as large railroads consolidated and sought to improve their financial health. Now, however, a new era of short-line spinoffs may be emerging.

In connection with a new operating plan focused on cost reduction, CSX Transportation has been evaluating its approximately 21,000-mile rail network for potential sales to short-line operators. Earlier this year, CSX offered for sale eight separate line segments totaling more than 1,000 miles throughout the East. As of this writing, most of these sales have not yet gone through, and CSX may identify additional divestible lines. Other large railroads looking to cut costs may follow suit.

Beyond Amtrak: The Future of Intercity Passenger Rail

Nearly a half-century ago, the federal government created the National Railroad Passenger Corporation (better known as Amtrak) in an effort to preserve U.S. intercity passenger rail as private railroads, facing bankruptcy, dropped service. Now a new generation of intercity projects has emerged to supplement Amtrak’s service. A number of higher-speed rail systems in various stages of planning are using a mix of public and private financing tools and innovative project delivery mechanisms. Some notables:

  • California High-Speed Rail. Approved by Golden State voters in 2008, this project is an ambitious effort, led by a state agency, to link San Francisco and Los Angeles in under three hours at speeds up to 220 mph. The initial 119-mile Central Valley segment, from Bakersfield to Madera, is under construction, with completion targeted for 2022. The state plans to extend that segment north to San Francisco by upgrading existing track for a “Silicon Valley to Central Valley” line, ostensibly to be finished in 2029. Connections south to L.A. will likely follow; the current estimated cost for the entire route is $77.3 billion. Further connections to Sacramento and San Diego are possible, though numerous funding, engineering, legal, and political challenges remain.

  • Brightline. Backed by private equity giant Fortress Investment Group, Brightline is the nation’s only privately owned and operated intercity passenger rail service. Despite some lingering political and legal opposition, Brightline started service in early 2018 a shared freight rail corridor from Miami to West Palm Beach, with future extensions to Orlando and possibly Tampa in the works. The company has invested more than $1.9 billion of private funds into its Florida line so far, assisted by tax-exempt private activity bonds issued to finance rail infrastructure.

Most recently, Brightline announced the acquisition of XpressWest, a high-speed rail project with rights to develop a line along the I-15 corridor connecting Southern California with Las Vegas. Brightline has also indicated it would like to develop other intercity projects across North America.

  • Texas Central Railway. Texas Central Partners has advanced plans to build a dedicated 240-mile high-speed passenger rail line between Dallas and Houston using Japanese Shinkansen bullet-train technology. The latest cost estimates are in the $12–$15 billion range, with completion in 2024. The developers plan to construct and operate the line using private financing but have indicated interest in using federal government loan programs available to private infrastructure projects.

Texas Central recently announced that it has secured a $300 million loan from two Japanese government agencies to help defray initial expenses. Some landowners along the corridor oppose the project, and litigation thus far has focused on the extent of Texas Central’s eminent domain authority.

Related Articles

Brick to Click

by Lindsay Mesh Lotito

Trends in commercial real estate have been fast-tracked by the pandemic. Here’s what lenders and borrowers must do to ensure their viability in a rapidly changing world.

Online Shopping Shifts Commercial Real Estate

Announcing the 2022 Best Lawyers: Real Estate and Infrastructure Publication

by Best Lawyers

Featuring the top legal talent from The Best Lawyers in America, Best Lawyers: Ones to Watch in America and "Lawyer of the Year" recipients for real estate and infrastructure as well as thought leadership from some of the nation's top lawyers.

Real Estate and Infrastructure Publication

A Sea Change on Land

by Linda A. Klein and Suneel Gupta

Autonomous vehicles will revolutionize almost every area of the law. Here’s a look at what’s rapidly approaching.

Legal Considerations for Autonomous Vehicles

Jamie Gorelick Gets It Right

by Meredith Hinshaw-Chaney

Jamie Gorelick on politics, justice, and the rule of law.

Jamie Gorelick on the Rule of Law

Trending Articles

Johnny Depp and Amber Heard: The Best Lawyers Honorees Behind the Litigation

by Gregory Sirico

Best Lawyers takes a look at the recognized legal talent representing Johnny Depp and Amber Heard in their ongoing defamation trial.

Lawyers for Johnny Depp and Amber Heard

The Real Camille: An Interview with Johnny Depp’s Lawyer Camille Vasquez

by Rebecca Blackwell

Camille Vasquez, a young lawyer at Brown Rudnick, sat down with Best Lawyers CEO Phillip Greer to talk about her distinguished career, recently being named partner and what comes next for her.

Camille Vasquez in office

Announcing The Best Lawyers in The United Kingdom™ 2023

by Best Lawyers

The results include an elite field of top lawyers and firms from the United Kingdom.

The Best Lawyers in The United Kingdom 2023

Announcing The Best Lawyers in France™ 2023

by Best Lawyers

The results include an elite field of top lawyers and firms from France.

Blue, white and red strips

Announcing The Best Lawyers in Germany™ 2023

by Best Lawyers

The results include an elite field of top lawyers and firms from Germany.

Black, red and yellow stripes

Education by Trial: Cultivating Legal Expertise in the Courtroom

by Margo Pierce

The intricacies of complex lawsuits require extensive knowledge of the legal precedent. But they also demand a high level of skill in every discipline needed to succeed at trial, such as analyzing technical reports and deposing expert witnesses.

Cultivating Legal Expertise in the Courtroom

Announcing the 2022 Best Lawyers® in the United States

by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Announcing The Best Lawyers in Belgium™ 2023

by Best Lawyers

The results include an elite field of top lawyers and firms from Belgium.

Black, yellow and red stripes

Announcing the 2022 Best Lawyers™ in France

by Best Lawyers

The results include an elite field of top lawyers and firms, including our inaugural Best Lawyers: Ones to Watch recipients.

Announcing the 2022 Best Lawyers™ in France

We Are Women, We Are Fearless

by Deborah S. Chang and Justin Smulison

Athea Trial Lawyers is a female owned and operated law firm specializing in civil litigation, catastrophic energy, wrongful death and product liability.

Athea Trial Law Female Leadership and Success

Choosing a Title Company: What a Seller Should Expect

by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

What If Johnny Depp and Amber Heard Had a Premarital Agreement?

by John M. Goralka

Oh, the gritty details we’re learning from the latest court battle between Johnny Depp and Amber Heard. This unfortunate airing of dirty laundry may have been avoided with a prenup. Should you think about getting one yourself?

What If Johnny Depp & Amber Heard Had Prenup?

Announcing the 2022 Best Lawyers™ in Germany

by Best Lawyers

The results include an elite field of top lawyers and firms, including our inaugural Best Lawyers: Ones to Watch recipients.

Announcing the 2022 Best Lawyers™ in Germany

U.K. Introduces Revisions to Right-to-Work Scheme and Immigration Rules

by Gregory Sirico

Right-to-Work Scheme and Immigration Rules in

What the Courts Say About Recording in the Classroom

by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

Destiny Fulfilled

by Sara Collin

Was Angela Reddock-Wright destined to become a lawyer? It sure seems that way. Yet her path was circuitous. This accomplished employment attorney, turned mediator, arbitrator and ADR specialist nonpareil discusses her career, the role of attorneys in society, the new world of post-pandemic work and why new Supreme Court Justice Ketanji Brown Jackson represents the future.

Interview with Lawyer Angela Reddock-Wright