STB Permits Service Case Against UP to Proceed

The Surface Transportation Board (STB) is allowing a formal service complaint to proceed in the Sanimax USA LLC v. Union Pacific case.

On Nov. 1, STB issued a decision granting Sanimax’s request for the Board to partially revoke commodity exemptions and permitting the service case against UP to proceed. The decision (download below) also denies UP’s motion to dismiss Sanimax’s complaint and sets a procedural schedule, STB reported in its decision announcement on Nov. 2.

Sanimax operates a facility in South St. Paul, Minn., where it processes animal waste and purifies byproducts for animal feed, pet food, yellow grease, soap and industrial chemicals. On Nov. 6, 2020, the company filed with STB a complaint against UP “alleging that UP’s reduction in service days [from five days per week to three] and repeated service failures [many of which were “pandemic-related,” UP has stated] violate UP’s common carrier obligation and constitute unreasonable practices,” STB explained.

On Nov. 30, 2020, UP filed a motion to dismiss Sanimax’s complaint, “stating that the commodities at issue are exempt from Board regulation,” according to STB, which added that “[f]urther negotiations between Sanimax and UP were unsuccessful.”

In its announcement of the decision, STB explained that “it has broad authority to exempt persons, transactions and services from certain regulation when it finds the regulation unnecessary to carry out the rail transportation policy, the transaction or service is of limited scope, or the application of the provision is not needed to protect shippers from the abuse of market power. In this case, however, the Board noted [in the decision] that, given the issues raised in Sanimax’s allegations, including its alleged dependence on UP’s service, it is important that the Board partially revoke the commodity exemption so that the Board can examine Sanimax’s claims and UP’s responses in order to determine if regulatory relief is appropriate and warranted.”

The following procedural schedule has been set:
• Jan. 31, 2022: Discovery ends.
• March 2, 2022: Sanimax’s opening statement is due.
• April 1, 2022: UP’s opening statement is due.
• April 18, 2022: Sanimax’s rebuttal statement is due.