[Federal Register Volume 60, Number 46 (Thursday, March 9, 1995)]
[Notices]
[Pages 12973-12975]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5799]



[[Page 12973]]

INTERSTATE COMMERCE COMMISSION

[Finance Docket No. 32549]


Burlington Northern Inc. and Burlington Northern Railroad 
Company--Control and Merger--Santa Fe Pacific Corporation and The 
Atchison, Topeka and Santa Fe Railway Company

AGENCY: Interstate Commerce Commission.

ACTION: Decision No. 10; notice of issuance of new procedural schedule.

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

SUMMARY: The Commission is issuing a new procedural schedule, which 
follows the Santa Fe Pacific Corporation (SFP) shareholders' and 
Burlington Northern Inc. (BNI) shareholders' vote on February 7, 1995, 
to approve the proposed BNI/SFP merger. This schedule will provide for 
issuance of a final decision no later than August 23, 1995. The 
Commission also is setting a 50-page limitation for briefs, which must 
be filed in accordance with the requirements at 49 CFR 1104.2. In 
addition, the Commission is requiring that a Preliminary Draft 
Environmental Assessment (PDEA) be submitted, where applicable, with 
each inconsistent and responsive application.

EFFECTIVE DATE: The effective date of this decision is March 9, 1995. 
All comments, protests, requests for conditions, and any other 
opposition evidence and argument are due on May 10, 1995. For further 
information, see the attached procedural schedule.

ADDRESSES: An original and 20 copies of all documents must refer to 
Finance Docket No. 32549 and be sent to the Office of the Secretary, 
Case Control Branch, Attn: Finance Docket No. 32549, Interstate 
Commerce Commission, 1201 Constitution Ave., N.W., Washington, DC 
20423. Parties are encouraged also to submit all pleadings and 
attachments on a 3.5-inch diskette in WordPerfect 5.1 format.
    In addition, one copy of all documents in this proceeding must be 
sent to Administrative Law Judge Stephen L. Grossman, Federal Energy 
Regulatory Commission, Office of Hearings, 825 North Capitol Street, 
N.E., Washington, DC 20426 and to each of applicants' representatives: 
(1) Betty Jo Christian, Esq., Steptoe & Johnson, 1330 Connecticut 
Avenue, N.W., Washington, DC 20036-1795; and (2) Erika Z. Jones, Esq., 
Mayer, Brown & Platt, 2000 Pennsylvania Avenue, N.W., Suite 6500, 
Washington, DC 20006.

FOR FURTHER INFORMATION CONTACT: Julia Farr or Dugie Standeford, (202) 
927-7513. (TDD for hearing impaired: (202) 927-5721.)

SUPPLEMENTARY INFORMATION: On October 13, 1994, an application was 
filed for approval of BNI's acquisition of, control of, and merger with 
SFP, the resulting common control of Burlington Northern Railroad 
Company (BN) and The Atchison, Topeka and Santa Fe Railway Company 
(Santa Fe) by the merged company, the consolidation of BN and Santa Fe 
railroad operations, and the merger of BN and Santa Fe. Applicants also 
seek exemption from regulation for the merged holding company and 
merged railroad to control The Wichita Union Terminal Railway Company 
[Finance Docket No. 32549 (Sub-No. 1)] and for 11 construction projects 
related to the primary application [Finance Docket No. 32549 (Sub-No. 2 
through Sub-No. 12)]. We accepted the application in our Decision No. 
5, served and published in the Federal Register (59 FR 56089) on 
November 10, 1994, and we set certain filing dates under the procedural 
schedule previously adopted in our Decision No. 4, served October 5, 
1994.<SUP>1

    \1\ SP contends that the Supplemental Materials filed by 
applicants on February 17, 1995 (BN/SF-25) contain certain deficient 
information about the additional debt that applicants will incur in 
order to consummate their tender offers for SFP common stock. SP's 
concern relates to form rather than substance. Adequate information 
about this financing and its possible effects on applicants' pro 
forma projections of merged operations is ascertainable from 
information contained in the application filed October 13, 1994, and 
in the Supplemental Materials, primarily the Supplemental Verified 
Statement of Thomas N. Hund and Don S. Snyder and the Amendments to 
SEC Form S-4, filed by BNI and BNSF Corporation.
---------------------------------------------------------------------------

    In Decision No. 7, served December 5, 1994, we granted the requests 
of several parties and postponed the procedural schedule set forth in 
Decision Nos. 4 and 5 pending the outcome of an SFP shareholder vote. 
In Decision No. 7, we stated that upon approval of the proposed BNI/SFP 
merger by the shareholders, we would immediately issue a new 
schedule.<SUP>2 On February 7, 1995, the shareholders approved the 
proposed BNI/SFP merger.

    \2\ In Decision No. 7, we stated that the new schedule would 
require comments to be filed 30 days later and adjust other schedule 
dates accordingly. As explained later in this decision, comments 
will not be due until 62 days from the date of publication of this 
decision.
---------------------------------------------------------------------------

    By petition filed January 27, 1995, BNI, BN, SFP, and Santa Fe 
requested that we adopt a modified, expedited procedural schedule which 
tracks the schedule proposed by the Commission for public comment in Ex 
Parte No. 282 (Sub-No. 19).<SUP>3 In Decision No. 9 in this proceeding, 
served February 3, 1995, we requested public comments on the 
applicants' proposal to revise the procedural schedule to provide for 
the service of a final decision no later than 165 days from the date 
the Commission publishes its decision restarting the schedule for 
processing the proceeding. Additionally, we requested public comments 
on proposed page limitations on certain filings, on whether a 
preliminary scoping order should be issued, and on the feasibility of 
meeting all environmental review requirements within the proposed 
compressed schedule. Public comments on these issues were due on 
February 21, 1995.

    \3\ In New Procedures in Rail Acquisitions, Mergers and 
Consolidations, Ex Parte No. 282 (Sub-No. 19) (ICC served Jan. 26, 
1995 and published at 60 FR 5890, January 31, 1995), we requested 
comments, due March 2, 1995, on our proposed establishment of more 
timely procedures for processing applications for major and 
significant rail combinations. We also served a copy of the notice 
on all parties on the service list in this merger proceeding and 
asked for comments on whether this case should be governed by the 
schedule originally adopted or the schedule proposed in Ex Parte No. 
282 (Sub-No. 19).
---------------------------------------------------------------------------

    Over 170 public comments were received in response to Decision No. 
9. The vast majority of these comments were from shippers; however, 
comments were also filed by several Members of Congress, government 
parties, railroads, electric utilities, other shipper interests, and 
rail labor unions. In addition, the applicants responded to Decision 
No. 9.
    Approximately 55 commenters specifically supported the applicants' 
proposed 165-day procedural schedule. There were a number of statements 
in support of a 180-day schedule as proposed by the Commission in New 
Procedures in Rail Acquisitions, Mergers and Consolidations, Ex Parte 
No. 282 (Sub-No. 19) (ICC served Jan. 26, 1995), and several parties 
suggested alternative 180-day schedules. Over 25 shippers approved an 
expedited merger process, but suggested no time limits.
    By contrast, approximately 65 commenters stated their opposition to 
the proposed 165-day schedule, although not all of these entities 
specifically objected to the total time of 165 days; rather, some were 
more concerned with having only 30 days to comment on the application. 
Many of the opposing commenters asked the Commission to lengthen the 
review process to at least 9 months.
    We have determined after review of all the comments that a 165-day 
procedural schedule will allow us time to consider fully all of the 
issues in this proceeding and to ensure that all parties are accorded 
due process.\4\ We will agree, however, to giving additional time to 
interested parties, including the [[Page 12974]] Department of Justice 
(DOJ) and the Department of Transportation (DOT), in which to file 
written comments and protests on the primary application (including any 
comments in opposition to the primary application), as well as 
requested conditions. These filings will be due 62 days after 
publication of this notice, which is the same date that inconsistent 
and responsive applications are due. All descriptions of anticipated 
inconsistent or responsive applications, as well as petitions for 
waiver or clarification, will be due 32 days after publication of this 
notice.

    \4\Technically, Appendix A to this decision envisions a 167-day 
procedural schedule. We found it necessary to add two additional 
days to the schedule so that no date on the schedule would fall on a 
Saturday, a Sunday, or a legal holiday.
---------------------------------------------------------------------------

    There were a few comments on the proposed page limitations. Most 
commenters were generally opposed, but were willing to accept some page 
limitations on briefs. To facilitate meeting the expedited deadline set 
out in this notice, the Commission will limit briefs to 50 pages, but 
will impose no page limitations on evidentiary submissions. Briefs must 
be filed in accordance with the requirements at 49 CFR 1104.2. Because 
reply briefs appear to be unnecessary to complete our review of a 
merger, we do not anticipate granting any requests to file reply 
briefs. Based on the lack of response to our proposed preliminary 
scoping order, we do not anticipate issuing such an order at this time. 
However, in pursuing discovery and in preparing pleadings, we encourage 
the parties (and will instruct the Administrative Law Judge) to focus 
strictly on relevant issues, as identified by the applicable statutory 
standards and our control regulations, including our merger policy 
statement (49 CFR 1180.1). For example, arguments that the transaction 
will cause competitive harm should be accompanied by a clear statement 
of how rates will be raised, service degraded, or both, in some 
identifiable market. Responses countering such competitive arguments 
should explain clearly why those adverse impacts will not occur.
    In order for us to fulfill our responsibilities under the National 
Environmental Policy Act and other environmental laws, inconsistent 
applications and responsive applications must contain certain 
environmental information. Anyone desiring to file an inconsistent or a 
responsive application involving significant operational changes or an 
action such as a rail line abandonment or construction under 49 CFR 
1105.6(b)(4) of our environmental rules must include, with its 
application, a preliminary draft environmental assessment (PDEA). 
Generally, these types of actions require an environmental report under 
49 CFR 1105.6(b)(4) which would form the basis of a subsequent 
environmental assessment (or environmental impact statement, if 
warranted). Here, because of the accelerated time frames, a PDEA is 
necessary at the outset.
    The preparation of a PDEA should not be burdensome. Although the 
information would be presented in a somewhat different format, the PDEA 
should address essentially the same environmental issues that would 
have been covered by an environmental report. The PDEA, like the 
environmental report, should be based on consultations with the Section 
of Environmental Analysis (SEA) and the various agencies set forth in 
49 CFR 1105.7(b). SEA will be available to provide assistance as 
needed.
    SEA will use the PDEA to expedite the environmental review process. 
If a PDEA is not submitted or is insufficient, we will not process the 
inconsistent or responsive application.
    If an inconsistent or responsive application does not involve 
significant operational changes or an action such as an abandonment or 
construction, it generally is exempt from environmental review. The 
applicant must certify, however, that the proposal meets the exemption 
criteria under 49 CFR 1105.6(c)(2).
    Anyone desiring to file an inconsistent application or responsive 
application should consult with SEA as early as possible regarding the 
appropriate environmental documentation.
    If the parties wish to engage in any discovery or establish any 
discovery guidelines (see, e.g., the proposed discovery guidelines in 
BN/SF-24; see also the proposed discovery guidelines in KCS-3, Ex. D, 
pp. 4-7), they are directed to consult with Stephen L. Grossman, 
Administrative Law Judge. Judge Grossman is authorized to convene a 
discovery conference, if necessary and as appropriate, in Washington, 
DC, and to establish such discovery guidelines, if any, as he deems 
appropriate. However, Judge Grossman is not authorized to make 
adjustments to, or to modify, the dates in the procedural schedule. We 
believe the schedule as adopted allows sufficient time for meaningful 
discovery. Any interlocutory appeal to a decision issued by Judge 
Grossman will be governed by the stringent standard of 49 CFR 
1115.1(c): ``Such appeals are not favored; they will be granted only in 
exceptional circumstances to correct a clear error of judgment or to 
prevent manifest injustice.'' See Union Pacific Corporation, Union 
Pacific Railroad Company And Missouri Pacific Railroad Company--
Control--Chicago And North Western Transportation Company And Chicago 
And North Western Railway Company, Finance Docket No. 32133, Decision 
No. 17, at 9 (ICC served July 11, 1994) (applying the ``stringent 
standard'' of 49 CFR 1115.1(c) to an appeal of an interlocutory 
decision issued by former Chief Administrative Law Judge Paul S. 
Cross).<SUP>5

    \5\For the purposes of the present proceeding, we think it 
appropriate to tighten the deadlines provided by 49 CFR 1115.1(c). 
Accordingly, the provisions of the second sentence of 49 CFR 
1115.1(c) to the contrary notwithstanding, any appeal to a decision 
issued by Judge Grossman must be filed within 3 working days of the 
service date of his decision, and any response to any such appeal 
must be filed within 3 working days thereafter. Likewise, any reply 
to any procedural motion filed with the Commission itself in the 
first instance must also be filed within 3 working days.
---------------------------------------------------------------------------

    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

    Decided: March 3, 1995.

    By the Commission, Chairman McDonald, Vice Chairman Morgan, and 
Commissioners Simmons and Owen.
Vernon A. Williams,
Secretary.

Appendix A--Final Procedural Schedule

April 10, 1995--Description of anticipated inconsistent and responsive 
applications due; petitions for waiver or clarification due.
May 10, 1995--Inconsistent and responsive applications due. All 
comments, protests, requests for conditions, and any other opposition 
evidence and argument due. DOJ and DOT comments due.
May 25, 1995--Notice of acceptance (if required) of inconsistent and 
responsive applications published in the Federal Register.
June 9, 1995--Response to inconsistent and responsive applications due. 
Response to comments, protests, requested conditions, and other 
opposition due. Rebuttal in support of primary application due.
June 19, 1995--Rebuttal in support of inconsistent and responsive 
applications due.
June 29, 1995--Briefs due, all parties (not to exceed 50 pages).
July 14, 1995--Oral argument (at Commission's discretion).
July 24, 1995--Voting Conference (at Commission's discretion).
August 23, 1995--Date for service of final decision.

    Notes: Immediately upon each evidentiary filing, the filing 
party will place all documents relevant to the filing (other than 
documents that are privileged or otherwise [[Page 12975]] protected 
from discovery) in a depository open to all parties, and will make 
its witnesses available for discovery depositions. Access to 
documents subject to protective order will be appropriately 
restricted. Parties seeking discovery depositions may proceed by 
agreement. Relevant excerpts of transcripts will be received in lieu 
of cross-examination, unless cross-examination is needed to resolve 
material issues of disputed fact. Discovery on responsive and 
inconsistent applications will begin immediately upon their filing. 
The Administrative Law Judge assigned to this proceeding will have 
the authority initially to resolve any discovery disputes.
[FR Doc. 95-5799 Filed 3-8-95; 8:45 am]
BILLING CODE 7035-01-P