STB Briefs: IANR, BGNR

In separate rulings, the Surface Transportation Board denied Canadian Pacific Kansas City’s petition seeking reconsideration of the Board’s prior decision to classify CN’s acquisition of Iowa Northern a “minor transaction”; and extended for an additional 120 days the authority of Chicago, Rock Island & Pacific Railroad, LLC, to provide emergency local rail service over a rail line owned by the State of Oklahoma and the Blackwell Industrial Authority.

IANR

“On Jan. 30, 2024, Canadian National Railway Company (CNR) and Grand Trunk Corporation (GTC), together with the Iowa Northern Railway Company (Iowa Northern or IANR) (collectively, Applicants) filed an application (Application) seeking Board approval for CNR and GTC to acquire control of Iowa Northern pursuant to 49 U.S.C. §§ 11323-25 and 49 C.F.R. part 1180,” STB ruled in Docket No. FD 36744 (download below). “Applicants argued that the Proposed Transaction should be classified as a ‘minor transaction’ under 49 C.F.R. § 1180.2(c). By decision issued on Feb. 29, 2024 (Decision No. 1), the Board found the Proposed Transaction would be a minor transaction under 49 C.F.R. § 1180.2(c), and accepted the Application for consideration because it was in substantial compliance with the applicable regulations governing minor transactions. Decision No. 1, FD 36744, slip op. at 6-7 (citing 49 U.S.C. § 11321-26; 49 C.F.R. part 1180) … On March 1, 2024, Canadian Pacific Kansas City (CPKC) filed a petition requesting that the Board reconsider its finding in Decision No. 1 and instead find that the Proposed Transaction is a ‘significant transaction.’ On March 1, 2024, Iowa Interstate Railroad, LLC (IAIS) filed a reply in support of CPKC’s petition for reconsideration. On March 5, 2024, Applicants replied in opposition to the petition for reconsideration … the Board will deny CPKC’s petition for reconsideration but will modify the procedural schedule and direct Applicants to provide additional information.”

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 any anticompetitive effects; or (2) any anticompetitive effects of the transaction will clearly be outweighed by the transaction’s anticipated contribution to the public interest in meeting significant transportation needs … The Board in Decision No. 1 classified the Proposed Transaction as minor because the Board found that any anticompetitive effects of the transaction will clearly be outweighed by the transaction’s anticipated contribution to the public interest in meeting significant transportation needs.”

“As a threshold matter, the Board clarifies that CPKC is incorrect when it contends that ‘there is no regulatory deadline restricting submission of evidence regarding the appropriate classification of a transaction to the first 20 days following the filing of a putatively “minor” application,’ STB concluded. “And, relatedly, CPKC is also incorrect in suggesting that the Board’s reconsideration standard does not apply to a request that the Board reevaluate a classification decision … The Board finds that CPKC has not satisfied either the new evidence or material error criteria of 49 C.F.R. § 1115.3 and, as such, there is no basis to grant its petition for reconsideration. On the new evidence criterion, Applicants correctly note that a petition for reconsideration may not be based on evidence that could have and should have been presented at an earlier stage of the proceeding.

“Nevertheless, to ensure that the parties and the Board are able to fully consider the important issues raised by CPKC, IAIS, and NGFA, the Board will (as discussed below) require Applicants to file additional information. Moreover, the Board stresses that its findings regarding the Proposed Transaction’s potential anticompetitive effects and/or contributions to the public interest remain preliminary and, as components of the statutory approval standard under 49 U.S.C. § 11324(d), are subject to change following the development of the record in the upcoming comment period. Regardless of whether the Proposed Transaction is classified as ‘minor’ or ‘significant,’ the standards for approval of the transaction and for the potential imposition of conditions remain the same.”

BGNR

“By decision served on March 1, 2024, the Board issued an order under 49 U.S.C. § 11123 authorizing Chicago, Rock Island & Pacific Railroad, LLC (Rock Island), to provide emergency local rail service over 37.26 miles of rail line owned by the State of Oklahoma through the Oklahoma Department of Transportation (ODOT) and the Blackwell Industrial Authority (BIA) and leased to the Blackwell Northern Gateway Railroad Company (BNGR) (the Line) for an initial period of 30 days,” STB ruled in Docket No. FD 36762 (download below). “On March 15, 2024, the State of Oklahoma, acting by and through ODOT, joined by BIA, on behalf of themselves and impacted shippers (collectively, Petitioners), filed a petition seeking an extension of the emergency service authority for an additional 120 days. Petitioners explain that BNGR ceased operations pursuant to Federal Railroad Administration (FRA) Emergency Order No. 33 Notice 1 and BNGR has not provided any indication that it plans to remedy the issues identified in that order and reinstate service over the Line. (Pet. 2, Mar. 15, 2024.) ODOT and BIA further explain that they have identified Rock Island as a potential long-term operator of the Line but have not yet entered into a long-term agreement because all parties have been working to respond to the current service emergency. (Id.) Neither BNGR nor any other party has opposed the requested extension … The joint petition to extend the emergency service order is granted; Rock Island is authorized to provide alternative rail service over the Line for an additional 120 days, until July 29, 2024.”