BNSF Wins Appeal of U.S. Rule Lowering Coal Rail Rates

BNSF Railroad Co., the carrier owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), won an appeal of a U.S. Surface Transportation Board ruling that its rates for shipping Western coal were too high.

The U.S. Court of Appeals in Washington today sent the case back to the board to consider arguments by BNSF that the formula the agency used to determine that the railroad overcharged shippers didn’t accurately measure variations in costs or the proper effect traffic volume should have on rates.

Today’s decision is the second time the dispute has come before the court and been returned to the agency. The board, which regulates railroad rates,originally ordered BNSF to repay $345 million to shippers represented by the Western Fuels Association Inc. and Basin Electric Power Cooperative Inc. The court today directed the board to explain why its decisions were reasonable, in addition to weighing more data.

Circuit Judge A. Raymond Randolph dissented from the three-judge panel’s decision, writing that BNSF “forfeited its current slate of arguments when it failed to raise them in previous petitions for review.”

Dennis Watson, a spokesman for the Surface Transportation Board, said the agency is studying the ruling and has no comment on it.

Mark Pettibone, a spokesman for Westminster, Colorado-based Western Fuels, which intervened in the case, didn’t immediately respond to an e-mail requesting comment.

The case is BNSF v. Surface Transportation Board, 12-1327, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

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