[Federal Register Volume 69, Number 249 (Wednesday, December 29, 2004)]
[Notices]
[Pages 78096-78097]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28335]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34630 (Sub-No. 1)]


Dakota Southern Railway Company--Trackage Rights Exemption--State 
of South Dakota and MRC Regional Railroad Authority

    The State of South Dakota (the State) and MRC Regional Railroad 
Authority (MRC) have agreed to grant overhead trackage rights to Dakota 
Southern Railway Company (DSRC) over a State-owned line of railroad 
extending between milepost 654 near Mitchell, SD, and milepost 511.90 
in Sioux City, IA, including such yard tracks, sidetracks, and 
connecting tracks (existing or to be constructed) as are reasonable: 
(a) To interchange railcars with The Burlington Northern and Santa Fe 
Railway Company (BNSF) and Dakota, Minnesota & Eastern Railroad 
Corporation at Mitchell; (b) to access the State-owned line extending 
westerly from Napa Junction, SD, to Platte, SD; and (c) to interchange 
railcars with BNSF, Union Pacific Railroad Company, and Canadian 
National Railway Company at Sioux City. The State and MRC have also 
agreed to grant to DSRC limited local trackage rights on the Mitchell-
Sioux City Line: (i) to move loaded cars of corn, soybeans, and wheat 
originating at points on the DSRC-operated line between Mitchell and 
Kadoka, SD, and terminating at the Mitchell Elevator in Mitchell and 
the Beardsley Elevator in Beardsley, SD; and (ii) to move empty cars 
via the reverse route. The total distance of the trackage rights to be 
granted to DSRC is approximately 142.1 miles. The DSRC-MRC transaction 
contemplated by the parties was scheduled to be consummated on or after 
December 17, 2004.
    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a rail carrier of its statutory obligation to 
protect the interests of its employees. Section 11326(c), however, does 
not provide for labor protection for transactions under sections 11324 
and 11325 that involve only Class III carriers. Accordingly, the Board 
may not impose labor protective conditions here, because all of the 
carriers involved are Class III carriers.
    The notice of exemption filed in this docket was filed under 49 CFR 
1180.2(d)(7). If the notice contains false or misleading information, 
the exemption is void ab initio. Petitions to revoke the exemption 
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a 
petition to revoke does not automatically stay the transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 34630 (Sub-No. 1), must be filed with the Surface 
Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In 
addition, a copy of each pleading must be served on DSRC's President: 
George Alexander Huff, IV, Dakota Southern Railway Company, 408 East 
Prospect Street, Chamberlain, SD 57325.
    The notice of exemption filed with respect to the DSRC-MRC 
transaction in this docket is related to a notice of exemption 
concurrently filed in a related docket: STB Finance Docket No. 34630, 
MRC Regional Railroad Authority--Trackage Rights Exemption--Lines of 
the State of South Dakota. The notice of exemption filed in the related 
docket contemplates MRC's acquisition from the State of the trackage 
rights that MRC intends to grant to DSRC.
    MRC and DSRC have advised that the Mitchell-Sioux City Line, which 
is

[[Page 78097]]

owned by the State, is now operated on behalf of the State by BNSF, 
pursuant to a 1986 Operating Agreement. MRC and DSRC have also advised: 
that, under the Operating Agreement, the State has the right to grant 
trackage rights on the Mitchell-Sioux City Line subject to certain BNSF 
consent; that, although the State has the right to grant trackage 
rights to MRC for operations by MRC's third-party operator (DSRC), BNSF 
has not consented to the grant of those rights; and that the failure to 
provide this consent is now the subject of litigation between the State 
and BNSF in The Burlington Northern and Santa Fe Railway Company v. 
State of South Dakota, Case No. 04-470 (S.D. 6th Circuit). MRC and DSRC 
have further advised that they recognize that BNSF consent may have to 
be obtained, either voluntarily or through litigation, before DSRC can 
commence trackage rights operations on the Mitchell-Sioux City Line. 
MRC and DSRC have suggested, however, that, inasmuch as the Board's 
authority respecting the notices filed in this docket and in the 
related docket is ``permissive'' in nature, the filing of the notices 
in the two dockets is appropriate as a ``prelude'' to obtaining any 
necessary consent.
    By letter filed December 17, 2004, BNSF has advised that it has not 
given its consent, and does not intend to give its consent, to the 
third-party trackage rights operation contemplated by MRC and DSRC. 
BNSF has further advised that, in its view, the filings by MRC and DSRC 
in this docket and in the related docket are intended to improperly 
influence the pending state court litigation. BNSF has asked that the 
Board stress that issuance by the Board of the notices filed in this 
docket and in the related docket: does not constitute any finding by 
the Board concerning either the Board's jurisdiction over these 
transactions or DSRC's right to operate over the line without BNSF's 
consent; and does not provide any basis for MRC or DSRC to claim that 
the Board has permitted DSRC to operate over the line in the absence of 
a final decision by the courts that DSRC has a legal right to conduct 
such operations.
    In view of the ongoing litigation concerning the right of the State 
to grant the trackage rights contemplated in this docket and in the 
related docket, it seems best to note that the Board has made no 
determination, one way or the other, concerning either the right of the 
State to grant these trackage rights without BNSF's consent or the 
right of DSRC to operate over the line without BNSF's consent. The 
contractual dispute respecting the scope of the rights retained by or 
granted to the State and/or BNSF under the 1986 Operating Agreement 
must be resolved in a court of competent jurisdiction.
    Board decisions and notices are available on its Web site at 
``http://www.stb.dot.gov.''

    Decided: December 21, 2004.
    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 04-28335 Filed 12-28-04; 8:45 am]
BILLING CODE 4915-01-P