DOJ: News Release

Bullock to Congress: Protect Farmers from Gouging; Pass Railroad Antitrust Enforcement Act

Attorneys General from around the country join effort spearheaded by Bullock

HELENA – Montana Attorney General Steve Bullock has sent a letter to the leaders of the United States Congress encouraging them to repeal antitrust exemptions that protect freight railroads from competition and lead to higher prices for shippers and consumers.

Bullock’s letter in support of The Railroad Antitrust Enforcement Act of 2009 (S. 146 and H.R. 233) was signed by the attorneys general of 20 states. It was sent this week to Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), Speaker Nancy Pelosi (D-Calif.) and House Minority Leader John Boehner (R-Ohio).

Freight rail companies are currently exempted from federal antitrust laws that govern virtually every other industry, denying shippers the protections that would be available if antitrust laws were in place. Consolidation in the industry—often a symptom of the lack of antitrust enforcement—has led to over 40 major railroads in 1980 becoming four today, and one company controlling 95 percent of freight rail in Montana.

“It’s time that obsolete laws that exempt only one industry from the rules that everyone else has to play by are repealed,” Bullock said. “The lack of rail competition has been a factor in Montana grain farmers paying the highest rail rates in the country. Passing this law won’t fix everything, but it provides one more avenue to protect thousands of small businesses in Montana—family farmers and ranchers.”

Passage of the measure would allow federal agencies, individuals and state attorneys general to challenge anticompetitive business practices—including mergers and acquisitions—in the railroad industry, possibly leading to more competition and lower prices for shippers.

While similar measures have failed in previous years, earlier this month the U.S. Senate Judiciary Committee approved the legislation by a vote of 14 to 0. The act, sponsored by Senator Herb Kohl (D-Wis.), will now be considered by the full Senate. Identical legislation will soon be considered in the U.S. House of Representatives.

Alan Merrill, a Big Sandy farmer and President of the Montana Farmers Union, said that the proposed legislation is necessary to address both rate and service issues.

“Montana farmers are shouldering an unacceptable burden and this legislation is necessary to get one step closer to parity and fairness in the rates we pay. We applaud Steve’s work to make railroads operate under the same rules as every other business in this country,” Merrill said.

Bullock recently released an in-depth report on the rates charged to shippers by railroads in Montana. The report found that in 2006, Burlington Northern Santa Fe Railways (BNSF) overcharged Montana grain farmers between $19 million and $50 million.

Bullock led the effort with Attorneys General Larry Long (R-S.D.) and Richard Cordray (D-Ohio). The letter also was signed by the attorneys general of Arizona, Arkansas, California, Connecticut, Delaware, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma and Utah.

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