[Federal Register Volume 79, Number 245 (Monday, December 22, 2014)]
[Notices]
[Pages 76446-76451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29835]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[Docket No. FD 35873] 1
Norfolk Southern Railway Company--Acquisition and Operation--
Certain Rail Lines of the Delaware and Hudson Railway Company, Inc.
AGENCY: Surface Transportation Board, Department of Transportation.
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\1\ This decision also embraces Norfolk S. Ry.--Trackage Rights
Exemption--Delaware & Hudson Ry., FD 34209 (Sub-No. 1), and Norfolk
S. Ry.--Trackage Rights Exemption--Delaware & Hudson Ry., FD 34562
(Sub-No. 1).
ACTION: Decision No. 1 in Docket No. FD 35873; Notice of Acceptance of
Primary Application and Related Filings; Issuance of Procedural
Schedule.
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SUMMARY: The Surface Transportation Board (Board) is accepting for
consideration the application filed November 17, 2014, by Norfolk
Southern Railway Company (NSR or Applicant), and two related filings.
The primary application seeks Board approval under 49 U.S.C. 11323-25
of the acquisition of control of 282.55 miles of rail line owned by
Delaware and Hudson Railway Company, Inc. (D&H), a wholly owned,
indirect subsidiary of Canadian Pacific Railway Company (CP), by NSR, a
Class I railroad. This proposal is referred to as the Control
Transaction.
The related filings are two notices of exemption filed by NSR to
modify existing trackage rights agreements. The notice of exemption
filed in FD 34209 (Sub-No. 1) provides for the modification of an
existing trackage rights agreement granted by D&H to NSR. This
modification would allow NSR to retain trackage rights over
approximately 17.45 miles of rail line between milepost 484.85 in the vicinity of Schenectady, N.Y., and CPF 467 in the
vicinity of Mechanicville, N.Y., including the right to use such tracks
within D&H's Mohawk Yard. The notice of exemption filed in FD 34562
(Sub-No. 1) provides for the modification of the Saratoga-East
Binghamton Trackage Rights Agreement granted by D&H to NSR. This
modification would allow NSR to retain trackage rights between milepost
37.10 of D&H's Canadian Main Line in Saratoga Springs,
N.Y., and CPF 484 at Schenectady. Both of these notices of exemption
would remove from the respective trackage rights agreements rail lines
that NSR would purchase under the Control Transaction, and would allow
NSR to retain needed trackage rights over the remaining lines. Neither
notice of exemption would provide for new trackage rights.
The Board finds that the application is complete and that the
Control Transaction is a minor transaction based upon the preliminary
determination that the Control Transaction clearly will not have any
anticompetitive effects and that, to the extent any anticompetitive
effects exist, they will clearly be outweighed by the transaction's
anticipated contribution to the public interest in meeting significant
transportation needs. 49 CFR 1180.2(b)(1), (c). The Board makes this
preliminary determination based on the evidence presented in the
application and the record to date. The Board emphasizes that this is
not a final determination, and may be rebutted by subsequent filings
and evidence submitted into the record for this proceeding. The Board
will give careful consideration to any claims that the Control
Transaction would have anticompetitive effects that are not apparent
from the application and the record to date.
DATES: The effective date of this decision is December 16, 2014. Any
person who wishes to participate in this proceeding as a party of
record (POR) must file, no later than December 29, 2014, a notice of
intent to participate. All comments, protests, requests for conditions,
and any other evidence and argument in opposition to the primary
application and related filings, including filings by the U.S.
Department of Justice (DOJ) and the U.S. Department of Transportation
(DOT), must be filed by January 15, 2015. Responses to comments,
protests, requests for conditions, other opposition, and rebuttal in
support of the primary application or related filings must be filed by
March 31, 2015. See Appendix A (Procedural Schedule). A final decision
in this matter will be served no later than May 15, 2015. Further
procedural orders, if any, will be issued by the Board as necessary.
ADDRESSES: Any filing submitted in this proceeding must be submitted
either via the Board's e-filing format or in the traditional paper
format. Any person using e-filing should attach a document and
otherwise comply with the instructions found on the Board's Web
[[Page 76447]]
site at www.stb.dot.gov at the ``E-FILING'' link. Any person submitting
a filing in the traditional paper format should send an original and 10
paper copies of the filing (and also an electronic version) to: Surface
Transportation Board, 395 E Street SW., Washington, DC 20423-0001. In
addition, one copy of each filing in this proceeding must be sent (and
may be sent by email only if service by email is acceptable to the
recipient) to each of the following: (1) Secretary of Transportation,
1200 New Jersey Avenue SE., Washington, DC 20590; (2) Attorney General
of the United States, c/o Assistant Attorney General, Antitrust
Division, Room 3109, Department of Justice, Washington, DC 20530; (3)
William A. Mullins (representing NSR), Baker & Miller PLLC, 2401
Pennsylvania Ave. NW., Suite 300, Washington, DC 20037; and (4) any
other person designated as a POR on the service list notice (as
explained below, the service list notice will be issued as soon after
December 29, 2014, as practicable).
FOR FURTHER INFORMATION CONTACT: Jonathon Binet, (202) 245-0368.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.]
SUPPLEMENTARY INFORMATION: Applicant, a Class I railroad, is a wholly
owned subsidiary of Norfolk Southern Corporation, a publicly held
noncarrier holding company. D&H, a Class II railroad, is a wholly
owned, indirect subsidiary of CP. Applicant seeks the Board's prior
review and authorization pursuant to 49 U.S.C. 11321-25 for the
acquisition of the lines collectively known as the D&H South Lines.
More specifically, these lines consist of approximately 267.15 route
miles of the D&H Freight Main Line between Sunbury/Kase, Pa., (milepost
752) and Schenectady, N.Y. (milepost 484.85), and 15.40 miles of the
Voorheesville Running Track between Voorheesville Junction (milepost A
10.9) and Delanson, N.Y. (milepost 499/milepost A 26.320), for a total
of 282.55 miles of line currently owned by D&H. Applicant also has
filed two notices of exemption seeking to modify existing trackage
rights agreements between NSR and D&H, as discussed above and embraced
by this case.
Applicant provides three primary purposes for pursuing the Control
Transaction: (1) The Control Transaction would benefit shippers through
improved service and increased operating efficiencies; (2) the Control
Transaction would preserve and enhance competition in the Northeast
surface transportation market; and (3) the Control Transaction would
preserve and possibly increase jobs on the D&H South Lines by
integrating D&H employees with NSR operations and organically growing
traffic on the lines.
Financial Arrangements. According to the Applicant, if the Control
Transaction is approved, NSR will pay D&H $217 million in cash. The
Control Transaction would not require the issuance of any new
securities or any other financial arrangement that would require the
Board's approval. The Control Transaction would not result in any new
debt or increase NSR's annual interest expense. Applicant further
states that the Control Transaction would result in operating expense
savings of $2.7 million annually.
Passenger Service Impacts. Applicant states that the Control
Transaction would not affect passenger rail service because there is no
scheduled passenger service over the D&H South Lines. Applicant states
that passenger service does exist on the portion of the D&H lines over
which Applicant seeks to modify trackage rights in FD 34209 (Sub-No.
1), but Applicant does not anticipate any adverse effects on passenger
service as a result of the transaction.
Discontinuances/Abandonments. Applicant states that it does not
anticipate any transaction-related line abandonments. Applicant does
expect D&H will be filing for authority to discontinue trackage rights
over certain NSR lines because D&H has determined those trackage rights
are no longer economically justified.\2\
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\2\ The D&H trackage rights over NSR lines that Applicant states
will be involved in D&H's request(s) for discontinuance authority
are: (1) From Lehighton, Pa., to Allentown/Bethlehem, Pa.; (2) from
Allentown/Bethlehem, Pa., to Oak Island, N.J.; (3) from Sunbury,
Pa., to Harrisburg, Pa.; (4) from Harrisburg to Reading, Pa., to
Philadelphia, Pa.; and (5) from Harrisburg to Perryville, Pa., to
the Washington, DC area.
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Public Interest Considerations. Applicant states that the Control
Transaction would have no anticompetitive effects. According to the
Applicant, the Control Transaction would not create a monopoly and
would not result in any restraint of trade in freight surface
transportation in any region of the United States. Applicant further
states that, even if there are anticompetitive effects to the Control
Transaction, they are clearly outweighed by the substantial public
benefits of the transaction.
Applicant states that there are no anticompetitive effects to the
Control Transaction because there are no customers served directly by
both NSR and D&H on the D&H South Lines. Applicant further states that
its competitive analysis shows there are four potential 2-to-1
corridors (i.e., corridors where shippers served by two carriers before
the Control Transaction would be served by one after its consummation,
if approved) as a result of the Control Transaction, but contends that
none of these are ``true'' 2-to-1 corridors because there are
independent alternatives to NSR and D&H in these corridors. Applicant
states that the shippers and receivers utilizing these corridors would
only experience a de minimis competitive effect as a result of the
Control Transaction. In addition, Applicant points to two new
commercial agreements that NSR and D&H have agreed to enter into at
closing of the Control Transaction, if approved, as evidence that there
would be no anticompetitive effects. Applicant states that the first
agreement would ensure shippers with existing contracts and rate
authorities with D&H would be able to continue to operate under those
contracts or rate authorities with D&H or NSR, as applicable under the
agreement, until they expire or are renewed or amended. Applicant
states that the second agreement would ensure that shippers located on
short lines that currently connect with the D&H South Lines and NSR
lines would have continued commercial access to both NSR and D&H.
Applicant also states that there would be substantial public
benefits to the Control Transaction. Applicant states that shippers
would benefit from the Control Transaction as it would align ownership
with use, which would ensure adequate investment in the D&H South Lines
to support NSR traffic and projected growth on the lines. Applicant
also states that this would also result in more sustainable and
reliable service for shippers on the D&H South Lines and promote
operating efficiencies. In addition, Applicant states that this
transaction would increase competition in the Northeast surface
transportation market by strengthening both NSR and D&H. Finally,
Applicant states that the Control Transaction would benefit employees
on the D&H South Lines by providing continued employment that might
otherwise be lost due to the potential for eventual reduction in
service on the lines if they remain under D&H's control. Applicant also
states that employees would benefit from NSR's expected expansion and
growth of the D&H South Lines over time.
Time Schedule for Consummation. Applicant intends to consummate
control of the D&H South Lines as soon
[[Page 76448]]
as a Board decision approving the Control Transaction becomes
effective, should the Board authorize the proposed Control Transaction.
Environmental Impacts. Applicant states that the Control
Transaction is exempt from environmental reporting requirements under
49 CFR 1105.6(c)(2) because the environmental impacts of the Control
Transaction fall below the thresholds established in 49 CFR
1105.7(e)(4) and (5).
Historic Preservation Impacts. Applicant states that, under 49 CFR
1105.8(b)(1) and (3), the Control Transaction is exempt from historic
preservation reporting requirements because rail operations would
continue after Applicant's purchase of the D&H South Lines. Applicant
states that it has no plans to dispose of or alter properties subject
to the Board's jurisdiction that are 50 years old or older.
Labor Impacts. Applicant states that it does not anticipate any NSR
employees being adversely affected by the Control Transaction, though
the transaction may adversely affect 254 active D&H employees who
operate over the D&H South Lines involved in the Control Transaction.
Applicant states that it anticipates hiring approximately 150 of the
254 D&H employees through its standard hiring process, and that it
anticipates the remaining employees would be retained by D&H or offered
positions with another CP affiliate. In addition, Applicant states that
the Control Transaction may create new jobs on the D&H South Lines, as
Applicant believes the transaction may allow NSR to grow traffic on the
lines. Applicant contends that any NSR or D&H employees adversely
impacted by the Control Transaction would be entitled to labor
protective conditions in accordance with New York Dock Railway--
Control--Brooklyn Eastern District Terminal (New York Dock), 360 I.C.C
60, aff'd New York Dock Railway v. United States, 609 F.2d 83 (2d Cir.
1979), as modified by Wilmington Terminal Railroad--Purchase & Lease--
CSX Transportation Inc. (Wilmington Terminal), 6 I.C.C. 2d 799, 814-26
(1990), aff'd sub nom. Railway Labor Executives' Ass'n v. ICC, 930 F.2d
511 (6th Cir. 1991).
Related Filings. In connection with this transaction, two notices
of exemption were filed under 49 CFR 1180.2(d)(7).
FD 34209 (Sub-No. 1). In FD 34209 (Sub-No. 1), Applicant filed a
verified notice of exemption under 49 CFR 1180.2(d)(7) to amend an
existing trackage rights agreement between NSR and D&H involving
trackage rights authorized by the Board in Norfolk Southern Railway
Company--Trackage Rights Exemption--Delaware & Hudson Railway Company,
FD 34209 (STB served July 25, 2002). The existing trackage rights
extend over approximately 284.6 miles of CP's main line, between NSR's
connection with CP at milepost 752.0 near Sunbury, Pa., and CP's
connection with Guilford Rail System at milepost 467.40 at
Mechanicville, N.Y. While the Control Transaction would allow NSR to
acquire and operate the majority of this trackage, the new trackage
rights agreement would allow NSR to retain approximately 17.45 miles of
previously authorized trackage rights between milepost 484.85 in the vicinity of Schenectady, N.Y., and CPF 467 in the
vicinity of Mechanicville. Applicant states that the retained trackage
rights are necessary for NSR's continued access to its Mechanicville
terminal and its continued interchange with Pan Am Southern LLC.
The parties intend to consummate this transaction upon the approval
and consummation of the Control Transaction, should the Board approve
that transaction. Applicant states that, if the transaction in FD 35873
is approved, NSR would become the owner of the portion of line between
Sunbury, Pa., and Schenectady, N.Y., over which it currently has
trackage rights authorized in FD 34209. As a condition to use of this
exemption, Applicant states that any employees adversely affected by
the transaction would be protected by the conditions set forth in
Norfolk & Western Railway--Trackage Rights--Burlington Northern, Inc.,
354 I.C.C. 605 (1978), as modified in Mendocino Coast Railway--Lease &
Operate--California Western Railroad, 360 I.C.C. 653 (1980).
FD 34562 (Sub-No. 1). In FD 34562 (Sub-No. 1), Applicant filed a
verified notice of exemption under 49 CFR 1180.2(d)(7) to amend another
existing trackage rights agreement between NSR and D&H, this one
involving trackage rights authorized by the Board in Norfolk Southern
Railway Company--Trackage Rights Exemption--Delaware & Hudson Railway
Company, Inc., FD 34562 (STB served Oct. 21, 2004). The existing
trackage rights extend over approximately 155.24 miles of D&H lines as
follows: (1) Between milepost 37.10 of D&H's Canadian Main
Line in Saratoga Springs, N.Y., and the point of connection between
D&H's Canadian Main Line and D&H's Freight Main Line at CPF 480,
located at milepost 21.70 of D&H's Canadian Main Line, a
total distance of approximately 15.4 miles; (2) between milepost 480.36
and milepost 611.15 of D&H's Freight Main
Line in Binghamton, N.Y., a distance of approximately 130.79 miles; and
(3) between milepost 611.15 and milepost 620.20 of D&H's Freight Main Line (including tracks into and within
D&H's East Binghamton Yard) in Binghamton, a distance of approximately
9.05 miles. This amended trackage rights agreement would allow NSR to
retain the portion of the previously authorized overhead trackage
rights between milepost 37.10 of D&H's Canadian Main Line
in Saratoga Springs and CPF 484 at Schenectady, N.Y. Applicant states
that the retained trackage rights are needed for NSR's continued access
and use of the line.
The parties also intend to consummate this transaction upon the
approval and consummation of the Control Transaction, should the Board
approve that transaction. Applicant states that, if the transaction in
FD 35873 is approved, NSR would become the owner of the portion of the
line between Binghamton and Schenectady, N.Y., over which it currently
has trackage rights authorized in FD 34562. As a condition to use of
this exemption, Applicant states that any employees adversely affected
by the transaction would be protected by the conditions set forth in
Norfolk & Western Railway--Trackage Rights--Burlington Northern, Inc.,
354 I.C.C. 605 (1978), as modified in Mendocino Coast Railway--Lease &
Operate--California Western Railroad, 360 I.C.C. 653 (1980).
Primary application and related filings accepted. The Board finds
that the proposed Control Transaction would be a ``minor transaction''
under 49 CFR 1180.2(c), and the Board accepts the primary application
for consideration because it is in substantial compliance with the
applicable regulations governing minor transactions. See 49 U.S.C.
11321-26; 49 CFR 1180. The Board is also accepting for consideration
the two related filings, which are also in compliance with the
applicable regulations. The Board reserves the right to require the
filing of supplemental information as necessary to complete the record.
The statute and Board regulations treat a transaction that does not
involve two or more Class I railroads differently depending upon
whether or not the transaction would have ``regional or national
transportation significance.'' 49 U.S.C. 11325. Under our regulations,
at 49 CFR 1180.2, a transaction that does not involve two or more Class
I railroads is to be classified as ``minor''--and thus not having
regional or national transportation significance--if a determination
can be made that either: (1) The transaction clearly will not have
[[Page 76449]]
any anticompetitive effects; or (2) any anticompetitive effects will
clearly be outweighed by the anticipated contribution to the public
interest in meeting significant transportation needs. A transaction not
involving the control or merger of two or more Class I railroads is
``significant'' if neither of these determinations can clearly be made.
Nothing in the record thus far suggests that the Control
Transaction would have anticompetitive effects, and any such effects
that might result from the Control Transaction would appear, from the
face of the application and the record to date, to be clearly
outweighed by the Control Transaction's contribution to the public
interest in meeting significant transportation needs. The Control
Transaction involves 282.55 miles of rail line in a relatively small
geographic area of Pennsylvania and New York.\3\ Moreover, NSR states
that approximately 80% of the traffic over the lines subject to the
application is currently transported by NSR under its trackage rights
agreements with D&H. Thus, as the application states, the Control
Transaction would align ownership with usage. This would appear to
provide public benefits, including promoting operating efficiencies and
securing NSR's routes in the region, which would provide NSR with
incentives to maintain and invest in the lines. In addition, because
NSR and D&H have agreed to enter into two commercial agreements to
ensure continued commercial access to both NSR and D&H, it does not
appear that any shipper (on the D&H South Lines or on the short lines
connecting with the D&H South Lines or NSR) would have fewer
competitive rail alternatives as a result of the Control Transaction.
Therefore, the Board finds the proposed Control Transaction to be a
``minor transaction.''
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\3\ As Applicant notes, the Board has classified numerous
transactions having a larger scope than the Control Transaction as
``minor,'' including at least two in the same part of the country.
See, e.g., Canadian Nat'l Ry. --Control--Wis. Cent. Transp. Corp.,
FD 34000 (STB served May 9, 2001) (acquisition of over 2,464 route
miles); Kan. City S.--Control--Kan. City S. Ry., FD 34342 (STB
served Nov. 29, 2004) (acquisition of 536 route miles); Norfolk S.
Ry.--Joint Control & Operating/Pooling Agreements--Pan Am S. LLC, FD
35147 (STB served June 26, 2008) (involving 438 route miles of track
and trackage rights in five states); CSX Transp. Inc. & Delaware &
Hudson Ry.--Joint Use Agreement, FD 35348 (STB served May 27, 2010)
(involving approximately 345 miles).
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The Board has received several statements in support of the Control
Transaction, as well as two objections to the ``minor transaction''
designation and several other elements of NSR's application. The
statements in support generally express the commenters' belief that the
Control Transaction would increase regional competition and
efficiencies, and request the Board's expedited review and approval of
the application. In addition, on December 8, 2014, NSR filed a List of
Supporting Parties and Submission of Statements in Support of the
Transaction, which included statements supporting the transaction from
78 shippers, short line railroads, and public agencies, some of whom
also filed separately with the Board.
On December 9, 2014, Samuel J. Nasca, on behalf of SMART/
Transportation Division, New York State Legislative Board (SMART/TD-
NY), filed a reply to the Application and the two related trackage
rights exemption filings. On December 10, 2014, CNJ Rail Corporation
(CNJ) filed a reply in opposition to the petition to establish a
procedural schedule and motion to reject the application as
incomplete.\4\ NSR filed responses to these replies on December 11,
2014, and December 10, 2014, respectively.
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\4\ On December 12, 2014, Alma Realty Corporation and Pace
Glass, Inc. joined CNJ's motion to reject the Application on the
ground that the Application is not complete. On December 12, 2014,
NSR submitted a letter in opposition to Alma Realty and Pace Glass'
letter joining CNJ's motion.
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SMART/TD-NY contends that the Application was not complete until
November 25, 2014, when NSR amended its November 17, 2014 application
with errata. SMART/TD-NY therefore argues that the 30-day period for
the Board to consider whether or not to accept NSR's application does
not expire until December 26, 2014. Based on the contents of NSR's
original filing and its November 25, 2014 supplement, the Board has had
sufficient time to consider whether to accept NSR's application, to
determine that this is a minor transaction as defined by the Board's
regulations, and to set an appropriate procedural schedule.
Accordingly, the Board will serve this decision within 30 days after
Applicant filed its original application.\5\
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\5\ SMART/TD-NY makes two additional procedural arguments.
SMART/TD-NY argues that the Board should deny NSR's Motion for a
Protective Order. NSR's Motion for a Protective Order will be
addressed in a separate decision issued by the Director, Office of
Proceedings. SMART/TD-NY also argues that the Board should
consolidate the Control Transaction with the two notices of
exemption filed by NSR in FD 34209 (Sub-No. 1) and FD 34562 (Sub-No.
1). As discussed elsewhere in this decision, this decision embraces
those notices of exemption.
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SMART/TD-NY further asserts that the Board should apply labor
protective conditions in accordance with New York Dock, rather than
Wilmington Terminal. NSR responds that, in line sale transactions
involving at least one Class I carrier (including ``minor line sale
transactions involving joint ownership of lines and swaps of trackage
rights''), the applicable labor protection standards are the New York
Dock conditions as modified in Wilmington Terminal. The Board will
address this issue in its final decision.
With respect to the substance of the Application, SMART/TD-NY
argues that the Control Transaction is not minor because it is of
regional or national transportation significance due to the fact that
D&H is an indirect subsidiary of CP, which is a Class I railroad that
is competitive with NSR. SMART/TD-NY argues that, accordingly, the
Board cannot find that the Control Transaction would not clearly have
any anti-competitive effects or that any such effects would be clearly
outweighed by the public interest. SMART/TD-NY also states that the
rail transportation involved in the Control Transaction is broader than
is presented in the application, in that it ``extends westward beyond
the Buffalo gateway, as well as eastward into New England.''
Despite SMART/TD-NY's assertions, the Control Transaction, as noted
above, only involves rail lines in a relatively small geographic area
of Pennsylvania and New York. D&H is an independent subsidiary of CP,
and, consistent with Board precedent, D&H is the relevant party to this
transaction.\6\ NSR has met its burden of proof in preliminarily
showing that the Control Transaction is a minor transaction. SMART/TD-
NY has failed to provide the Board with sufficient evidence to rebut
that preliminary finding.
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\6\ See CSX Transp., Inc. & Del. & Hudson Ry.--Joint Use
Agreement, FD 35348 (STB served May 27, 2010) (finding that a
transaction involving CSX Transportation, Inc., a Class I railroad,
and D&H, a Class II railroad and independent subsidiary of CP, was a
minor transaction because it did not involve two or more Class I
railroads).
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CNJ similarly argues that the Control Transaction is not minor
because, ``in essence,'' it involves two Class I railroads, as D&H is a
subsidiary of CP. As discussed above, and consistent with past Board
decisions, D&H, and not CP, is the proper entity for the Board to
consider when analyzing this transaction.\7\
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\7\ See CSX Transp., Inc. & Del. & Hudson Ry.--Joint Use
Agreement, FD 35348 (STB served May 27, 2010). CNJ admits that the
Control Transaction ``is not technically `a merger or control of two
Class I railroads[.]' ''
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CNJ further argues that the transaction is not minor because it
would have anticompetitive effects and alludes to two routes on the
Delaware-Lackawanna Railroad Company, Inc. (DL) for which competition
for ``potential'' traffic may
[[Page 76450]]
be reduced from two carriers to one. CNJ asserts that the only way to
restore competition for these potential 2-to-1 markets is through the
filing of a responsive trackage rights application. NSR responds that
the commodities that CNJ argues could be routed over the lines
(municipal solid waste and recycled glass) are not currently moved over
the lines, nor are there any indications that such shipments are even
feasible in the future. NSR also states that CSX Transportation, Inc.
(CSX) appears to serve the location where the alleged routes originate.
CNJ provides no support for its assertion that the Control
Transaction would have anticompetitive effects. CNJ asserts only a
``realistic potential'' that these 2-to-1 routings may exist, while NSR
states that no such routings currently exist. Nor have any potential or
existing shippers on those routes opposed the classification of this
transaction as minor. Moreover, the filing of responsive trackage
rights applications is not the sole method by which potential
anticompetitive effects, if any, could be cured. The Board, after the
record in this proceeding is fully developed, has the ability to deny
NSR's application or to approve the Control Transaction subject to
conditions that would mitigate or eliminate any deleterious effects on
regional or national transportation. Thus, CNJ has not provided the
Board with sufficient evidence to rebut a preliminary finding that this
transaction should be classified as minor.
In addition, CNJ argues that NSR's application should be rejected
as incomplete because it has not included all relevant filings. CNJ
states that NSR's application includes reference to discontinuance
applications that it expects D&H will file with regard to certain
trackage rights,\8\ and that in order for NSR's application here to be
complete, NSR would need to include either those applications or
adverse discontinuance applications for those trackage rights. CNJ
argues that NSR is asking the Board to evaluate these discontinuances,
even though those applications have not been filed with the Board. NSR
argues that the Board may assess the Control Transaction, because it is
sufficiently independent from any potential Board decision on the
discontinuances.
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\8\ See NSR Pet. n.3.
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CNJ has failed to demonstrate that the trackage rights applications
it is concerned about should have been included in NSR's application.
CNJ appears to be referencing the same trackage rights that NSR states
in its application are ``not economically justified'' independent of
this application.\9\ The D&H trackage rights run over NSR lines that
are not part of the D&H Short Lines at issue in this Control
Transaction. Therefore, the Board need not address these trackage
rights in this proceeding. As a result, CNJ has not demonstrated that
NSR's application is incomplete.
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\9\ See NSR Pet. 27-28 & n.24.
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In sum, based on the information provided in the Application and
the record to date, the Board finds the proposed Control Transaction to
be a minor transaction under 49 CFR 1180.2(c).\10\ Such a
categorization does not mean that the proposed Control Transaction is
insignificant or not of importance. Indeed, the Board will carefully
review the proposed Control Transaction to make certain that it does
not substantially lessen competition, create a monopoly, or restrain
trade and that any anticompetitive effects are outweighed by the public
interest. See 49 U.S.C. 11324(d)(1)-(2). The Board also may condition
the Control Transaction to mitigate or eliminate any deleterious
effects on regional or national transportation.
Procedural Schedule. The Board has considered Applicant's request
(filed November 17, 2014) for an expedited procedural schedule under
which the Board would be required to issue its final decision before
the statutory deadline of 180 days after the filing of the application.
Applicant's proposed procedural schedule would have the Board set the
due date for responses to comments, protests, requests for conditions,
and other opposition and rebuttal in support of the application on
March 17, 2015, 15 days before the Board is required to conclude
evidentiary proceedings under 49 U.S.C. 11325(d)(2). As this would be
the conclusion of evidentiary proceedings, this would then require the
Board to issue a final decision by May 1, 2015, because the Board is
required to issue a final decision ``by the 45th day after the date on
which it concludes the evidentiary proceedings.'' \11\ This may be in
error, as Applicant's petition states that the proposed procedural
schedule ``provides the full statutory time for the Board to issue its
final decision,'' and the proposed schedule in Appendix A to the
petition lists Friday, May 15, 2015, as the proposed deadline for a
final decision.\12\ In the interest of allowing time for the record to
develop fully, the Board will set the procedural schedule to allow the
full 180 days for review.
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\11\ 49 U.S.C. 11325(d)(2).
\12\ Applicant's petition also states that ``the proposed
procedural schedule provides for issuance of a final Board decision
by May 7, 2015.'' Based on the full text of the petition and the
schedule proposed in Appendix A to the petition, this appears to
also be in error.
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The Board has also considered, and rejected, SMART/TD-NY's and
CNJ's arguments regarding the procedural schedule for this
proceeding.\13\
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\13\ While SMART/TD-NY argues that the Board should revise NSR's
proposed procedural schedule to reflect the significance of the
Control Transaction, the Board has preliminarily concluded that the
Control Transaction is a ``minor'' transaction, not a
``significant'' transaction. Moreover, despite CNJ's assertion that
NSR's proposed procedural schedule is misleading because it does not
include a deadline by which the public must object to the ``minor''
classification, the Board does not require an applicant to indicate
such a deadline when proposing a procedural schedule.
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For further information respecting dates, see the Appendix A
(Procedural Schedule).
Notice of Intent To Participate. Any person who wishes to
participate in this proceeding as a POR must file with the Board, no
later than December 29, 2014, a notice of intent to participate,
accompanied by a certificate of service indicating that the notice has
been properly served on the Secretary of Transportation, the Attorney
General of the United States, and Mr. Mullins.
If a request is made in the notice of intent to participate to have
more than one name added to the service list as a POR representing a
particular entity, the extra name will be added to the service list as
a ``Non-Party.'' The list will reflect the Board's policy of allowing
only one official representative per party to be placed on the service
list, as specified in Press Release No. 97-68 dated August 18, 1997,
announcing the implementation of the Board's ``One Party-One
Representative'' policy for service lists. Any person designated as a
Non-Party will receive copies of Board decisions, orders, and notices
but not copies of official filings. Persons seeking to change their
status must accompany that request with a written certification that he
or she has complied with the service requirements set forth at 49 CFR
1180.4, and any other requirements set forth in this decision.
Service List Notice. The Board will serve, as soon after December
29, 2014 as practicable, a notice containing the official service list
(the service-list notice). Each POR will be required to serve upon all
other PORs, within 10 days of the service date of the service-list
notice, copies of all filings previously submitted by that party (to
the extent such filings have not previously been served upon such other
[[Page 76451]]
parties). Each POR will also be required to file with the Board, within
10 days of the service date of the service-list notice, a certificate
of service indicating that the service required by the preceding
sentence has been accomplished. Every filing made by a POR after the
service date of the service-list notice must have its own certificate
of service indicating that all PORs on the service list have been
served with a copy of the filing. Members of the United States Congress
(MOCs) and Governors (GOVs) are not parties of record and need not be
served with copies of filings, unless any Member or Governor has
requested to be, and is designated as, a POR.
Service of Decisions, Orders, and Notices. The Board will serve
copies of its decisions, orders, and notices only on those persons who
are designated on the official service list as either POR, MOC, GOV, or
Non-Party. All other interested persons are encouraged to secure copies
of decisions, orders, and notices via the Board's Web site at
``www.stb.dot.gov'' under ``E-LIBRARY/Decisions & Notices.''
Access to Filings. Under the Board's rules, any document filed with
the Board (including applications, pleadings, etc.) shall be promptly
furnished to interested persons on request, unless subject to a
protective order. 49 CFR 1180.4(a)(3). The application and other
filings in this proceeding are available for inspection in the library
(Room 131) at the offices of the Surface Transportation Board, 395 E
Street SW., in Washington, DC, and will also be available on the
Board's Web site at ``www.stb.dot.gov'' under ``E-LIBRARY/Filings.'' In
addition, the application may be obtained from Mr. Mullins at the
address indicated above.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
It is ordered:
1. The primary application in FD 35873 and the related filings in
FD 34209 (Sub-No. 1) and FD 34562 (Sub-No. 1) are accepted for
consideration.
2. The parties to this proceeding must comply with the procedural
schedule adopted by the Board in this proceeding as shown in Appendix
A.
3. The parties to this proceeding must comply with the procedural
requirements described in this decision.
4. This decision is effective on December 16, 2014.
Decided: December 16, 2014.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Brendetta Jones,
Clearance Clerk.
Appendix A: Procedural Schedule
November 17, 2014--Motion for Protective Order filed. Application
and Motion to Establish Procedural Schedule filed.
December 16, 2014--Board notice of acceptance of application served
(to be published in the Federal Register on December 22, 2014).
December 29, 2014--Notices of intent to participate in this
proceeding due.
January 15, 2015--All comments, protests, requests for conditions,
and any other evidence and argument in opposition to the
application, including filings of DOJ and DOT, due.
March 31, 2015--Responses to comments, protests, requests for
conditions, and other opposition due. Rebuttal in support of the
application due.
May 15, 2015--Date by which a final decision will be served.
June 15, 2015 \14\--Date by which a final decision will become
effective.
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\14\ The final decision will become effective 30 days after it
is served.
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[FR Doc. 2014-29835 Filed 12-19-14; 8:45 am]
BILLING CODE 4915-01-P