Motives Matter: A Meditation On ‘Good Faith’

By Jim Mathews / President & CEO

I’ve spent a lot of time this week ruminating over the idea of “good faith” – what it means, how it plays out in the real world, and the degree to which a chronic shortage of it seems to underpin nearly all of our current controversies in passenger rail.

Are freight railroads negotiating in “good faith” when they claim that the cost of infrastructure investment needed to restore service to Mobile, Ala., from New Orleans is 19.5 times higher than the DOT’s estimate? Are Senators acting in good faith when they agree to shower money on new passenger-rail service but won’t get behind a simple amendment that would ensure that those new trains run on time? Or how about what should be the very simple nomination of Karen Hedlund to a slot on the Surface Transportation Board – an eminently qualified and obviously non-controversial nominee who could nonetheless face a Senate “hold” until the Utah delegation gets an STB vote to go its way.

Beliefs held sincerely and actions taken, even if they turn out to be mistaken, can be insulated by the “good-faith” argument.

In commercial and business law, for example, if a shady operator sells stolen goods to a merchant who genuinely believes that the seller is above board then that buyer can’t be held responsible for trafficking in stolen goods unless the circumstances of the sale itself were shady. The buyer made her purchase in “good faith,” with honest motives and no intent to do anything untoward. Labor law requires that employers and unions bargain “in good faith,” meaning that both sides are expected to genuinely seek some kind of agreement and work to secure that agreement rather than just going through the motions. And so on.

Motives mean much. What are CSX and N-S really after in their long-standing opposition to the Gulf Coast restoration? The STB docket is stuffed to the brim with data and history showing that the questions CSX and N-S are posing were already asked and answered. Multiple times. They just don’t like the answer and will keep the billable hours flowing to top-notch law firms until they finally get that one study (study #2,456 perhaps?) that gives them the cover to stop the restoration.

As it happens, this morning the STB has decided it’s time for CSX and N-S to put up or shut up. The Board denied CSX’s motion to dismiss the Gulf Coast restoration dispute, about a month after CSX and N-S – staring down the barrel of an adverse STB decision – relented somewhat and offered Amtrak “limited” access to begin the process of restoring service. The overall dispute remains, however, and STB has scheduled a formal proceeding where CSX and N-S will be forced to put evidence on the table that meets the test of legal sufficiency to block restoration. (See separate blog post here.)

Opposition to Sen. Richard Durbin’s measure that would grant Amtrak a private right of action to vindicate passengers’ rights to be on time seems similarly tough to read fairly. Decades of interaction with freight railroads demonstrate that whenever their arguments to Amtrak about on-time performance get addressed, they shift gears to find a new argument.

Freight railroads claim that giving Amtrak the right to haul bad actors to court to enforce a law that has already been on the books for half a century is bad public policy, proposing instead that Amtrak just keep padding schedules. But look at what happens when we do that. Union Pacific and Amtrak agreed in the mid-2000s that it was okay for passengers on the already-miserable Sunset Limited be three hours later than they already were. That was supposed to magically improve All-Stations On-Time Performance (All Stations OTP). Instead, sidelining passengers for an extra three hours only produced a four percent improvement in OTP. Sunset passengers were late 84% of the time after Amtrak gave UP what it wanted.

The 1971 “preference” requirement generates similar agita among railroaders. Since we launched our effort to educate our members about Durbin’s proposal, we’ve heard from folks who point out the very real daily difficulty of moving trains around the country, of juggling priorities and preference when two trains are nose-to-nose (virtually) and one is out of slot, of coping with the physical and geometric realities of ensuring a fluid railroad in territories dominated by single tracks.

All of this is true, but here again, history shows us that preference performance is every bit as much about choice and policy as it is about physics and geometry. CP has a tremendous track record (if you’ll pardon the pun) of honoring the preference requirement while still running a good freight railroad. Norfolk Southern’s performance improved overnight after a court ruling a decade ago. The only way overnight improvements happen is by choice.

More capacity is the answer, goes the railroads’ reply. Norfolk Southern pointed to the tangle of its own rights-of-way in and around Chicago as an example of where good service was only possible for a price. So, the Obama Administration and Congress called their bluff, coughing up cash to relieve bottlenecks. Taxpayers paid $200 million to increase capacity on Norfolk Southern’s Chicago-area property, eliminating an at-grade crossing with the Englewood Flyover and building seven miles of additional track, seven crossovers and four added or improved sidings as part of the Indiana Gateway Project. Today, N-S now says it needs a different answer: add more pad.

Time and again we see that solving the problem is not the point. Degrading the service is. That’s what lawyers mean when they talk about not acting in good faith.

Which brings me to the plight of a particular lawyer that got me ruminating on good faith in the first place. Karen Hedlund has been nominated for a spot on the Surface Transportation Board. She is knowledgeable, experienced, and exquisitely qualified. She was at one time the deputy administrator of the Federal Railroad Administration and FRA’s chief counsel. She also spent time as chief counsel for the Federal Highway Administration. Lately she’s been the top policy adviser and Vice President at WSP, the big railroad consultancy. I’ve spoken at events alongside her on panels and been part of committees working with her. She is a professional’s professional and I admire her greatly.

As Railway Age columnist Frank Wilner points out, Hedlund faces the prospect of a hold even though she has not expressed any kind of opinion about matters pending before the Surface Transportation Board. That’s a good thing, she shouldn’t. If she had offered some thought about the issue that has the Utah congressional delegation in high dudgeon perhaps some of this controversy would be justified. But she hasn’t. Instead, the Utah foes appear to have calculated that she might not vote the way that they would prefer on a project to build a new 85-mile short line to carry fracked crude oil. Their calculation would appear to be based on the fact that Hedlund and STB Chair Martin Oberman know each other and are both from Chicago. And Chair Oberman wants to know more about the Utah project before voting in favor of a certificate of “convenience and necessity.” Uh-oh. Better prep that “Hold.”

I won’t repeat Frank’s excellent column here. You can go read it for yourself. But after you’ve finished, I think you’ll start thinking about the term “good faith,” too. A lot of the big problems we have in passenger rail today, whether starting new service, restoring previous service or getting there on time, would benefit greatly from a return to good faith debate and discussion. What do you think?