US freight railroads lose appeal challenging new rule requiring at least two-person crews

LOS ANGELES, Aug. 11 (Reuters) - Six U.S. railroads and two industry groups lost their appeal challenging a new rule that would require many trains to operate with at least two crew members, according to a ruling filed by the U.S. Court of Appeals for the 11th Circuit on Tuesday.

The nation's freight railroads, including Union Pacific and Berkshire Hathaway-owned BNSF, opposed the Federal Railroad Administration’s crew requirements.

The rule came after organized labor fought to maintain crew levels amid intense scrutiny of railroad safety following a 2023 derailment in East Palestine, Ohio, that caused cars carrying toxic vinyl chloride and other hazardous chemicals to spill and catch fire.

Among other things, the railroads argued the crew-size rule fell outside the FRA's general rule-making power.

They also said the agency refused to consider what the rule would cost railroads that would otherwise have shifted to a one-person crew. Not considering that major category of costs made the final rule arbitrary and capricious, they said.

The court rejected the railroads' arguments and denied their petitions to review the rule.

One judge dissented, saying the FRA's research and other evidence did not support a minimum-crew-size rule, and its cost-benefit analysis failed to account for labor costs that railroads would incur when complying with the rule.