[Federal Register Volume 85, Number 247 (Wednesday, December 23, 2020)]
[Notices]
[Pages 84093-84094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28395]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36452]


Wisconsin & Southern Railroad, L.L.C.--Acquisition and Operation 
Exemption--Soo Line Railroad Company

    On November 17, 2020, Wisconsin & Southern Railroad, L.L.C. (WSOR), 
a Class II rail carrier, filed a petition under 49 U.S.C. 10502 for an 
exemption from the prior approval requirements of 49 U.S.C. 10902 to 
acquire and operate over approximately 4.79 miles of rail line owned by 
Soo Line Railroad Company (Soo Line). The rail line extends from 
milepost 93.20 (at Hampton Avenue) to milepost 88.41 (south of State 
Street) in the City of Milwaukee, Milwaukee County, Wis. (the Line). 
WSOR concurrently filed a petition for waiver of the 60-day advance 
notice requirement of 49 CFR 1121.4(h). For the reasons discussed 
below, the Board will grant the petition for exemption and the petition 
for waiver.

Background

    In 2007, WSOR received Board authority to lease and operate over 
the Line. Wis. & S. R.R.--Lease & Operation Exemption--Soo Line R.R. 
(Lease Decision), FD 35012, slip op. at 1, 3 (STB served July 17, 
2007).\1\ According to WSOR, it has continued to lease, maintain, 
dispatch, and operate over the Line since 2007, but now seeks to 
purchase the Line from Soo Line.\2\ (Pet. for Exemption 1-2.) WSOR 
states that, through ownership of the Line, it ``will be able to 
exercise more complete control over investment decisions, and will be 
better positioned to offer responsive and efficient rail service into 
the future.'' (Id. at 3.) WSOR states that the parties hope to close on 
their transaction before the end of the year and asks the Board, at Soo 
Line's request, for expedited consideration of its petition for 
exemption. (Id. at 2.)
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    \1\ The petition for exemption notes that the Lease Decision 
listed the Line's southern limit as milepost 88.4, whereas the Asset 
Purchase Agreement governing the sale of the Line here lists it as 
milepost 88.41. WSOR states that this ``minimal difference in 
mileposts--less than 53 feet--is believed to be a rounding error, 
and was not intended to signify a different point on the Line.'' 
(Pet. for Exemption 1 n.1.)
    \2\ WSOR states that its proposed transaction with Soo Line also 
includes the transfer of a portion of Soo Line's Glendale Yard known 
as the ``B'' yard. (Pet. for Exemption 1.) The 2007 transaction also 
included the ``B'' yard. Lease Decision, FD 35012, slip op. at 1.
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    WSOR also petitions the Board for a waiver of the 60-day notice 
requirement under 49 CFR 1121.4(h). Unless waived, section 1121.4(h) 
would require WSOR, at least 60 days before the exemption becomes 
effective, to post a notice of its intent to undertake the proposed 
transaction setting forth certain information at the workplace of the 
employees on the affected lines, serve a copy of the notice on the 
national offices of the labor unions with employees on the affected 
lines, and certify to the Board that it has done so. WSOR argues that 
the notice requirement would serve no useful purpose under the 
circumstances, pointing out that no Soo Line employees have worked on 
the Line for more than 13 years and that, because WSOR has operated the 
Line during that time, there is no new carrier. (Pet. for Waiver 3.) 
WSOR states that it ``has no plans to modify its operation of the Line 
once its leasehold interest is converted to ownership,'' and, 
therefore, no employees would be adversely affected by the proposed 
acquisition. (Id. at 2.)
    No opposition to either the petition for exemption or the petition 
for waiver has been filed.

Discussion and Conclusions

    Exemption from 49 U.S.C. 10902. Under 49 U.S.C. 10902, the 
acquisition of a rail line by a Class II rail carrier requires the 
prior approval of the Board. Under 49 U.S.C. 10502(a), however, the 
Board must exempt a transaction or service from regulation when it 
finds that: (1) Regulation is not necessary to carry out the rail 
transportation policy (RTP) of 49 U.S.C. 10101; and (2) either (a) the 
transaction or service is of limited scope, or (b) regulation is not 
needed to protect shippers from the abuse of market power.
    In this case, an exemption from the prior approval requirements of 
section 10902 is consistent with section 10502(a). Detailed scrutiny of 
the proposed transaction under section 10902 is not necessary to carry 
out the RTP. An exemption from the application process would minimize 
the need for federal regulatory control, reduce regulatory barriers to 
entry, and result in the expeditious handling of this proceeding. See 
49 U.S.C. 10101(2), (7), (15). Other aspects of the RTP would not be 
adversely affected by use of the exemption process.
    Moreover, regulation of the proposed transaction under section 
10902 is not needed to protect shippers from the abuse of market 
power.\3\ There would be no loss of rail competition and no adverse 
change in the competitive balance in the transportation market, as WSOR 
has been the carrier providing service over the Line since 2007. Nor 
would there be a change in the level of service to any shippers because 
``WSOR does not intend as a result of the proposed transaction to 
change materially its existing operations over the Line.'' (Pet. for 
Exemption 3.)
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    \3\ Because the Board concludes that regulation is not needed to 
protect shippers from the abuse of market power, it is unnecessary 
to determine whether the proposed transaction is limited in scope. 
See 49 U.S.C. 10502(a).
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    Waiver of 49 CFR 1121.4(h). As noted, WSOR has petitioned for 
waiver of the 60-day notification requirement under 49 CFR 1121.4(h). 
The purpose of that requirement is to ensure that rail labor unions and 
employees who would be affected by the transfer of a line are given 
sufficient notice of the transaction before consummation. The Board 
takes seriously the requirements of the regulation, but it does not 
appear that the purpose behind the notice requirement would be thwarted 
if the requested waiver is granted in this case.
    The record indicates that no railroad employees would be adversely 
affected by waiver of the requirement here. As WSOR explains, ``[n]o 
Soo [Line] employees have worked on any portion of the Line in more 
than 13 years, and they (and the unions representing them) were advised 
of the transition to WSOR operation of the Line in connection with the 
Lease Decision transaction as of May 24, 2007.'' (Pet. for Waiver 3.) 
WSOR

[[Page 84094]]

also states that ``[n]o Soo [Line] employees will be displaced[,]'' and 
that WSOR ``will continue in [its] capacity'' as the operator of the 
Line following the proposed transaction. (Id.) Because no employees 
would be adversely affected by the requested waiver of the 60-day 
notice period, the Board will grant the waiver. See, e.g., Wis. & S. 
R.R.--Acquis. & Operation Exemption--City of Fitchburg, Wis., FD 35838, 
slip op. at 4 (STB served Nov. 18, 2014).
    Employee Protection. Under 49 U.S.C. 10502(g), the Board may not 
use its exemption authority to relieve a carrier of its statutory 
obligation to protect the interests of its employees. Section 10902(d) 
provides for labor protection in line acquisitions by Class II rail 
carriers. As a condition to this exemption, any employees affected by 
the acquisition will be protected as required by 49 U.S.C. 10902(d), 
subject to the standards and procedures established in Wisconsin 
Central Ltd.--Acquisition Exemption--Lines of Union Pacific Railroad, 2 
S.T.B. 218 (1997), aff'd in relevant part sub nom. Association of 
American Railroads v. STB, 162 F.3d 101 (DC Cir. 1998).
    Environmental and Historic Review. Under 49 CFR 1105.6(c)(1), this 
action, which will not result in significant changes in carrier 
operations, is categorically excluded from environmental review. 
Similarly, under 49 CFR 1105.8(b)(1), no historic report is required 
because the subject transaction is for continued rail service, WSOR has 
indicated no plans to alter railroad properties 50 years old or older, 
and any abandonment would be subject to Board jurisdiction.
    Effective Date. WSOR requests authority to acquire and operate the 
Line by December 28, 2020, so that the parties may close the 
transaction before the end of the year. The exemption will take effect 
on December 28, 2020, unless it is stayed.
    It is ordered:
    1. Under 49 U.S.C. 10502, the Board exempts from the prior approval 
requirements of 49 U.S.C. 10902 WSOR's acquisition of and operation 
over the Line, subject to the employee protective conditions 
implementing 49 U.S.C. 10902(d) as provided in this decision.
    2. Notice of the exemption will be published in the Federal 
Register.
    3. WSOR's request for a waiver of the advance notice requirement 
under 49 CFR 1121.4(h) is granted.
    4. This exemption will become effective on December 28, 2020.
    5. Petitions to stay must be filed by December 22, 2020. Petitions 
to reopen must be filed by January 4, 2021.

    Decided: December 14, 2020.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2020-28395 Filed 12-22-20; 8:45 am]
BILLING CODE 4915-01-P