Abstract
The Staggers Rail Act of 1980 requires the Surface Transportation Board ("STB ") to be proactive in making sure freight railroads ("carriers") earn adequate revenues. Forty-five years later there is still debate on whether carriers are earning adequate revenues, how adequate revenues are to be defined and calculated, whether the Act allows the STB to put an upper bound on a carrier's revenues when they are determined to be earning adequate revenues, and how revenue adequacy impacts rate setting in market dominant situations.
In exploring these issues, this Article provides the following conclusions and recommendations. First, the STB's annual revenue adequacy determinations are not compliant with what the Staggers Act requires. Therefore, these determinations must be considered worthless for any type of regulatory use. Second, any type of upper bound imposed by the STB on the revenues earned by a carrier is beyond its statutory authority. Third, the use of adequate revenues as a limitation or cap on the STB's determination of a reasonable maximum rate in market dominant situations is also beyond its statutory authority. This leads to the recommendation that the revenue adequacy constraint found in the Coal Rate Guidelines be rescinded. It also leads to the recommendation that the STB 's three-benchmark test be revised so that rate setting under this method is no longer a function of earning adequate revenues
Recommended Citation
Bernard S. Sharfman, The Significance of 'Adequate Revenues' Under the Staggers Rail Act of 1980, 46 Transp. L.J. 1 (2026).
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