```

[Federal Register Volume 79, Number 245 (Monday, December 22, 2014)]
[Notices]
[Pages 76446-76451]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-29835]

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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35873] 1

Norfolk Southern Railway Company--Acquisition and Operation--
Certain Rail Lines of the Delaware and Hudson Railway Company, Inc.

AGENCY: Surface Transportation Board, Department of Transportation.
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    \1\ This decision also embraces Norfolk S. Ry.--Trackage Rights 
Exemption--Delaware & Hudson Ry., FD 34209 (Sub-No. 1), and Norfolk 
S. Ry.--Trackage Rights Exemption--Delaware & Hudson Ry., FD 34562 
(Sub-No. 1).

ACTION: Decision No. 1 in Docket No. FD 35873; Notice of Acceptance of 
Primary Application and Related Filings; Issuance of Procedural 
Schedule.

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SUMMARY: The Surface Transportation Board (Board) is accepting for 
consideration the application filed November 17, 2014, by Norfolk 
Southern Railway Company (NSR or Applicant), and two related filings. 
The primary application seeks Board approval under 49 U.S.C. 11323-25 
of the acquisition of control of 282.55 miles of rail line owned by 
Delaware and Hudson Railway Company, Inc. (D&H), a wholly owned, 
indirect subsidiary of Canadian Pacific Railway Company (CP), by NSR, a 
Class I railroad. This proposal is referred to as the Control 
Transaction.
    The related filings are two notices of exemption filed by NSR to 
modify existing trackage rights agreements. The notice of exemption 
filed in FD 34209 (Sub-No. 1) provides for the modification of an 
existing trackage rights agreement granted by D&H to NSR. This 
modification would allow NSR to retain trackage rights over 
approximately 17.45 miles of rail line between milepost 484.85  in the vicinity of Schenectady, N.Y., and CPF 467 in the 
vicinity of Mechanicville, N.Y., including the right to use such tracks 
within D&H's Mohawk Yard. The notice of exemption filed in FD 34562 
(Sub-No. 1) provides for the modification of the Saratoga-East 
Binghamton Trackage Rights Agreement granted by D&H to NSR. This 
modification would allow NSR to retain trackage rights between milepost 
37.10  of D&H's Canadian Main Line in Saratoga Springs, 
N.Y., and CPF 484 at Schenectady. Both of these notices of exemption 
would remove from the respective trackage rights agreements rail lines 
that NSR would purchase under the Control Transaction, and would allow 
NSR to retain needed trackage rights over the remaining lines. Neither 
notice of exemption would provide for new trackage rights.
    The Board finds that the application is complete and that the 
Control Transaction is a minor transaction based upon the preliminary 
determination that the Control Transaction clearly will not have any 
anticompetitive effects and that, to the extent any anticompetitive 
effects exist, they will clearly be outweighed by the transaction's 
anticipated contribution to the public interest in meeting significant 
transportation needs. 49 CFR 1180.2(b)(1), (c). The Board makes this 
preliminary determination based on the evidence presented in the 
application and the record to date. The Board emphasizes that this is 
not a final determination, and may be rebutted by subsequent filings 
and evidence submitted into the record for this proceeding. The Board 
will give careful consideration to any claims that the Control 
Transaction would have anticompetitive effects that are not apparent 
from the application and the record to date.

DATES: The effective date of this decision is December 16, 2014. Any 
person who wishes to participate in this proceeding as a party of 
record (POR) must file, no later than December 29, 2014, a notice of 
intent to participate. All comments, protests, requests for conditions, 
and any other evidence and argument in opposition to the primary 
application and related filings, including filings by the U.S. 
Department of Justice (DOJ) and the U.S. Department of Transportation 
(DOT), must be filed by January 15, 2015. Responses to comments, 
protests, requests for conditions, other opposition, and rebuttal in 
support of the primary application or related filings must be filed by 
March 31, 2015. See Appendix A (Procedural Schedule). A final decision 
in this matter will be served no later than May 15, 2015. Further 
procedural orders, if any, will be issued by the Board as necessary.

ADDRESSES: Any filing submitted in this proceeding must be submitted 
either via the Board's e-filing format or in the traditional paper 
format. Any person using e-filing should attach a document and 
otherwise comply with the instructions found on the Board's Web

[[Page 76447]]

site at www.stb.dot.gov at the ``E-FILING'' link. Any person submitting 
a filing in the traditional paper format should send an original and 10 
paper copies of the filing (and also an electronic version) to: Surface 
Transportation Board, 395 E Street SW., Washington, DC 20423-0001. In 
addition, one copy of each filing in this proceeding must be sent (and 
may be sent by email only if service by email is acceptable to the 
recipient) to each of the following: (1) Secretary of Transportation, 
1200 New Jersey Avenue SE., Washington, DC 20590; (2) Attorney General 
of the United States, c/o Assistant Attorney General, Antitrust 
Division, Room 3109, Department of Justice, Washington, DC 20530; (3) 
William A. Mullins (representing NSR), Baker & Miller PLLC, 2401 
Pennsylvania Ave. NW., Suite 300, Washington, DC 20037; and (4) any 
other person designated as a POR on the service list notice (as 
explained below, the service list notice will be issued as soon after 
December 29, 2014, as practicable).

FOR FURTHER INFORMATION CONTACT: Jonathon Binet, (202) 245-0368. 
[Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.]

SUPPLEMENTARY INFORMATION: Applicant, a Class I railroad, is a wholly 
owned subsidiary of Norfolk Southern Corporation, a publicly held 
noncarrier holding company. D&H, a Class II railroad, is a wholly 
owned, indirect subsidiary of CP. Applicant seeks the Board's prior 
review and authorization pursuant to 49 U.S.C. 11321-25 for the 
acquisition of the lines collectively known as the D&H South Lines. 
More specifically, these lines consist of approximately 267.15 route 
miles of the D&H Freight Main Line between Sunbury/Kase, Pa., (milepost 
752) and Schenectady, N.Y. (milepost 484.85), and 15.40 miles of the 
Voorheesville Running Track between Voorheesville Junction (milepost A 
10.9) and Delanson, N.Y. (milepost 499/milepost A 26.320), for a total 
of 282.55 miles of line currently owned by D&H. Applicant also has 
filed two notices of exemption seeking to modify existing trackage 
rights agreements between NSR and D&H, as discussed above and embraced 
by this case.
    Applicant provides three primary purposes for pursuing the Control 
Transaction: (1) The Control Transaction would benefit shippers through 
improved service and increased operating efficiencies; (2) the Control 
Transaction would preserve and enhance competition in the Northeast 
surface transportation market; and (3) the Control Transaction would 
preserve and possibly increase jobs on the D&H South Lines by 
integrating D&H employees with NSR operations and organically growing 
traffic on the lines.
    Financial Arrangements. According to the Applicant, if the Control 
Transaction is approved, NSR will pay D&H $217 million in cash. The 
Control Transaction would not require the issuance of any new 
securities or any other financial arrangement that would require the 
Board's approval. The Control Transaction would not result in any new 
debt or increase NSR's annual interest expense. Applicant further 
states that the Control Transaction would result in operating expense 
savings of $2.7 million annually.
    Passenger Service Impacts. Applicant states that the Control 
Transaction would not affect passenger rail service because there is no 
scheduled passenger service over the D&H South Lines. Applicant states 
that passenger service does exist on the portion of the D&H lines over 
which Applicant seeks to modify trackage rights in FD 34209 (Sub-No. 
1), but Applicant does not anticipate any adverse effects on passenger 
service as a result of the transaction.
    Discontinuances/Abandonments. Applicant states that it does not 
anticipate any transaction-related line abandonments. Applicant does 
expect D&H will be filing for authority to discontinue trackage rights 
over certain NSR lines because D&H has determined those trackage rights 
are no longer economically justified.\2\
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    \2\ The D&H trackage rights over NSR lines that Applicant states 
will be involved in D&H's request(s) for discontinuance authority 
are: (1) From Lehighton, Pa., to Allentown/Bethlehem, Pa.; (2) from 
Allentown/Bethlehem, Pa., to Oak Island, N.J.; (3) from Sunbury, 
Pa., to Harrisburg, Pa.; (4) from Harrisburg to Reading, Pa., to 
Philadelphia, Pa.; and (5) from Harrisburg to Perryville, Pa., to 
the Washington, DC area.
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    Public Interest Considerations. Applicant states that the Control 
Transaction would have no anticompetitive effects. According to the 
Applicant, the Control Transaction would not create a monopoly and 
would not result in any restraint of trade in freight surface 
transportation in any region of the United States. Applicant further 
states that, even if there are anticompetitive effects to the Control 
Transaction, they are clearly outweighed by the substantial public 
benefits of the transaction.
    Applicant states that there are no anticompetitive effects to the 
Control Transaction because there are no customers served directly by 
both NSR and D&H on the D&H South Lines. Applicant further states that 
its competitive analysis shows there are four potential 2-to-1 
corridors (i.e., corridors where shippers served by two carriers before 
the Control Transaction would be served by one after its consummation, 
if approved) as a result of the Control Transaction, but contends that 
none of these are ``true'' 2-to-1 corridors because there are 
independent alternatives to NSR and D&H in these corridors. Applicant 
states that the shippers and receivers utilizing these corridors would 
only experience a de minimis competitive effect as a result of the 
Control Transaction. In addition, Applicant points to two new 
commercial agreements that NSR and D&H have agreed to enter into at 
closing of the Control Transaction, if approved, as evidence that there 
would be no anticompetitive effects. Applicant states that the first 
agreement would ensure shippers with existing contracts and rate 
authorities with D&H would be able to continue to operate under those 
contracts or rate authorities with D&H or NSR, as applicable under the 
agreement, until they expire or are renewed or amended. Applicant 
states that the second agreement would ensure that shippers located on 
short lines that currently connect with the D&H South Lines and NSR 
lines would have continued commercial access to both NSR and D&H.
    Applicant also states that there would be substantial public 
benefits to the Control Transaction. Applicant states that shippers 
would benefit from the Control Transaction as it would align ownership 
with use, which would ensure adequate investment in the D&H South Lines 
to support NSR traffic and projected growth on the lines. Applicant 
also states that this would also result in more sustainable and 
reliable service for shippers on the D&H South Lines and promote 
operating efficiencies. In addition, Applicant states that this 
transaction would increase competition in the Northeast surface 
transportation market by strengthening both NSR and D&H. Finally, 
Applicant states that the Control Transaction would benefit employees 
on the D&H South Lines by providing continued employment that might 
otherwise be lost due to the potential for eventual reduction in 
service on the lines if they remain under D&H's control. Applicant also 
states that employees would benefit from NSR's expected expansion and 
growth of the D&H South Lines over time.
    Time Schedule for Consummation. Applicant intends to consummate 
control of the D&H South Lines as soon

[[Page 76448]]

as a Board decision approving the Control Transaction becomes 
effective, should the Board authorize the proposed Control Transaction.
    Environmental Impacts. Applicant states that the Control 
Transaction is exempt from environmental reporting requirements under 
49 CFR 1105.6(c)(2) because the environmental impacts of the Control 
Transaction fall below the thresholds established in 49 CFR 
1105.7(e)(4) and (5).
    Historic Preservation Impacts. Applicant states that, under 49 CFR 
1105.8(b)(1) and (3), the Control Transaction is exempt from historic 
preservation reporting requirements because rail operations would 
continue after Applicant's purchase of the D&H South Lines. Applicant 
states that it has no plans to dispose of or alter properties subject 
to the Board's jurisdiction that are 50 years old or older.
    Labor Impacts. Applicant states that it does not anticipate any NSR 
employees being adversely affected by the Control Transaction, though 
the transaction may adversely affect 254 active D&H employees who 
operate over the D&H South Lines involved in the Control Transaction. 
Applicant states that it anticipates hiring approximately 150 of the 
254 D&H employees through its standard hiring process, and that it 
anticipates the remaining employees would be retained by D&H or offered 
positions with another CP affiliate. In addition, Applicant states that 
the Control Transaction may create new jobs on the D&H South Lines, as 
Applicant believes the transaction may allow NSR to grow traffic on the 
lines. Applicant contends that any NSR or D&H employees adversely 
impacted by the Control Transaction would be entitled to labor 
protective conditions in accordance with New York Dock Railway--
Control--Brooklyn Eastern District Terminal (New York Dock), 360 I.C.C 
60, aff'd New York Dock Railway v. United States, 609 F.2d 83 (2d Cir. 
1979), as modified by Wilmington Terminal Railroad--Purchase & Lease--
CSX Transportation Inc. (Wilmington Terminal), 6 I.C.C. 2d 799, 814-26 
(1990), aff'd sub nom. Railway Labor Executives' Ass'n v. ICC, 930 F.2d 
511 (6th Cir. 1991).
    Related Filings. In connection with this transaction, two notices 
of exemption were filed under 49 CFR 1180.2(d)(7).
    FD 34209 (Sub-No. 1). In FD 34209 (Sub-No. 1), Applicant filed a 
verified notice of exemption under 49 CFR 1180.2(d)(7) to amend an 
existing trackage rights agreement between NSR and D&H involving 
trackage rights authorized by the Board in Norfolk Southern Railway 
Company--Trackage Rights Exemption--Delaware & Hudson Railway Company, 
FD 34209 (STB served July 25, 2002). The existing trackage rights 
extend over approximately 284.6 miles of CP's main line, between NSR's 
connection with CP at milepost 752.0 near Sunbury, Pa., and CP's 
connection with Guilford Rail System at milepost 467.40 at 
Mechanicville, N.Y. While the Control Transaction would allow NSR to 
acquire and operate the majority of this trackage, the new trackage 
rights agreement would allow NSR to retain approximately 17.45 miles of 
previously authorized trackage rights between milepost 484.85  in the vicinity of Schenectady, N.Y., and CPF 467 in the 
vicinity of Mechanicville. Applicant states that the retained trackage 
rights are necessary for NSR's continued access to its Mechanicville 
terminal and its continued interchange with Pan Am Southern LLC.
    The parties intend to consummate this transaction upon the approval 
and consummation of the Control Transaction, should the Board approve 
that transaction. Applicant states that, if the transaction in FD 35873 
is approved, NSR would become the owner of the portion of line between 
Sunbury, Pa., and Schenectady, N.Y., over which it currently has 
trackage rights authorized in FD 34209. As a condition to use of this 
exemption, Applicant states that any employees adversely affected by 
the transaction would be protected by the conditions set forth in 
Norfolk & Western Railway--Trackage Rights--Burlington Northern, Inc., 
354 I.C.C. 605 (1978), as modified in Mendocino Coast Railway--Lease & 
Operate--California Western Railroad, 360 I.C.C. 653 (1980).
    FD 34562 (Sub-No. 1). In FD 34562 (Sub-No. 1), Applicant filed a 
verified notice of exemption under 49 CFR 1180.2(d)(7) to amend another 
existing trackage rights agreement between NSR and D&H, this one 
involving trackage rights authorized by the Board in Norfolk Southern 
Railway Company--Trackage Rights Exemption--Delaware & Hudson Railway 
Company, Inc., FD 34562 (STB served Oct. 21, 2004). The existing 
trackage rights extend over approximately 155.24 miles of D&H lines as 
follows: (1) Between milepost 37.10  of D&H's Canadian Main 
Line in Saratoga Springs, N.Y., and the point of connection between 
D&H's Canadian Main Line and D&H's Freight Main Line at CPF 480, 
located at milepost 21.70  of D&H's Canadian Main Line, a 
total distance of approximately 15.4 miles; (2) between milepost 480.36 
 and milepost 611.15  of D&H's Freight Main 
Line in Binghamton, N.Y., a distance of approximately 130.79 miles; and 
(3) between milepost 611.15  and milepost 620.20  of D&H's Freight Main Line (including tracks into and within 
D&H's East Binghamton Yard) in Binghamton, a distance of approximately 
9.05 miles. This amended trackage rights agreement would allow NSR to 
retain the portion of the previously authorized overhead trackage 
rights between milepost 37.10  of D&H's Canadian Main Line 
in Saratoga Springs and CPF 484 at Schenectady, N.Y. Applicant states 
that the retained trackage rights are needed for NSR's continued access 
and use of the line.
    The parties also intend to consummate this transaction upon the 
approval and consummation of the Control Transaction, should the Board 
approve that transaction. Applicant states that, if the transaction in 
FD 35873 is approved, NSR would become the owner of the portion of the 
line between Binghamton and Schenectady, N.Y., over which it currently 
has trackage rights authorized in FD 34562. As a condition to use of 
this exemption, Applicant states that any employees adversely affected 
by the transaction would be protected by the conditions set forth in 
Norfolk & Western Railway--Trackage Rights--Burlington Northern, Inc., 
354 I.C.C. 605 (1978), as modified in Mendocino Coast Railway--Lease & 
Operate--California Western Railroad, 360 I.C.C. 653 (1980).
    Primary application and related filings accepted. The Board finds 
that the proposed Control Transaction would be a ``minor transaction'' 
under 49 CFR 1180.2(c), and the Board accepts the primary application 
for consideration because it is in substantial compliance with the 
applicable regulations governing minor transactions. See 49 U.S.C. 
11321-26; 49 CFR 1180. The Board is also accepting for consideration 
the two related filings, which are also in compliance with the 
applicable regulations. The Board reserves the right to require the 
filing of supplemental information as necessary to complete the record.
    The statute and Board regulations treat a transaction that does not 
involve two or more Class I railroads differently depending upon 
whether or not the transaction would have ``regional or national 
transportation significance.'' 49 U.S.C. 11325. Under our regulations, 
at 49 CFR 1180.2, a transaction that does not involve two or more Class 
I 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

[[Page 76449]]

any anticompetitive effects; or (2) any anticompetitive effects will 
clearly be outweighed by the anticipated contribution to the public 
interest in meeting significant transportation needs. A transaction not 
involving the control or merger of two or more Class I railroads is 
``significant'' if neither of these determinations can clearly be made.
    Nothing in the record thus far suggests that the Control 
Transaction would have anticompetitive effects, and any such effects 
that might result from the Control Transaction would appear, from the 
face of the application and the record to date, to be clearly 
outweighed by the Control Transaction's contribution to the public 
interest in meeting significant transportation needs. The Control 
Transaction involves 282.55 miles of rail line in a relatively small 
geographic area of Pennsylvania and New York.\3\ Moreover, NSR states 
that approximately 80% of the traffic over the lines subject to the 
application is currently transported by NSR under its trackage rights 
agreements with D&H. Thus, as the application states, the Control 
Transaction would align ownership with usage. This would appear to 
provide public benefits, including promoting operating efficiencies and 
securing NSR's routes in the region, which would provide NSR with 
incentives to maintain and invest in the lines. In addition, because 
NSR and D&H have agreed to enter into two commercial agreements to 
ensure continued commercial access to both NSR and D&H, it does not 
appear that any shipper (on the D&H South Lines or on the short lines 
connecting with the D&H South Lines or NSR) would have fewer 
competitive rail alternatives as a result of the Control Transaction. 
Therefore, the Board finds the proposed Control Transaction to be a 
``minor transaction.''
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    \3\ As Applicant notes, the Board has classified numerous 
transactions having a larger scope than the Control Transaction as 
``minor,'' including at least two in the same part of the country. 
See, e.g., Canadian Nat'l Ry. --Control--Wis. Cent. Transp. Corp., 
FD 34000 (STB served May 9, 2001) (acquisition of over 2,464 route 
miles); Kan. City S.--Control--Kan. City S. Ry., FD 34342 (STB 
served Nov. 29, 2004) (acquisition of 536 route miles); Norfolk S. 
Ry.--Joint Control & Operating/Pooling Agreements--Pan Am S. LLC, FD 
35147 (STB served June 26, 2008) (involving 438 route miles of track 
and trackage rights in five states); CSX Transp. Inc. & Delaware & 
Hudson Ry.--Joint Use Agreement, FD 35348 (STB served May 27, 2010) 
(involving approximately 345 miles).
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    The Board has received several statements in support of the Control 
Transaction, as well as two objections to the ``minor transaction'' 
designation and several other elements of NSR's application. The 
statements in support generally express the commenters' belief that the 
Control Transaction would increase regional competition and 
efficiencies, and request the Board's expedited review and approval of 
the application. In addition, on December 8, 2014, NSR filed a List of 
Supporting Parties and Submission of Statements in Support of the 
Transaction, which included statements supporting the transaction from 
78 shippers, short line railroads, and public agencies, some of whom 
also filed separately with the Board.
    On December 9, 2014, Samuel J. Nasca, on behalf of SMART/
Transportation Division, New York State Legislative Board (SMART/TD-
NY), filed a reply to the Application and the two related trackage 
rights exemption filings. On December 10, 2014, CNJ Rail Corporation 
(CNJ) filed a reply in opposition to the petition to establish a 
procedural schedule and motion to reject the application as 
incomplete.\4\ NSR filed responses to these replies on December 11, 
2014, and December 10, 2014, respectively.
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    \4\ On December 12, 2014, Alma Realty Corporation and Pace 
Glass, Inc. joined CNJ's motion to reject the Application on the 
ground that the Application is not complete. On December 12, 2014, 
NSR submitted a letter in opposition to Alma Realty and Pace Glass' 
letter joining CNJ's motion.
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    SMART/TD-NY contends that the Application was not complete until 
November 25, 2014, when NSR amended its November 17, 2014 application 
with errata. SMART/TD-NY therefore argues that the 30-day period for 
the Board to consider whether or not to accept NSR's application does 
not expire until December 26, 2014. Based on the contents of NSR's 
original filing and its November 25, 2014 supplement, the Board has had 
sufficient time to consider whether to accept NSR's application, to 
determine that this is a minor transaction as defined by the Board's 
regulations, and to set an appropriate procedural schedule. 
Accordingly, the Board will serve this decision within 30 days after 
Applicant filed its original application.\5\
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    \5\ SMART/TD-NY makes two additional procedural arguments. 
SMART/TD-NY argues that the Board should deny NSR's Motion for a 
Protective Order. NSR's Motion for a Protective Order will be 
addressed in a separate decision issued by the Director, Office of 
Proceedings. SMART/TD-NY also argues that the Board should 
consolidate the Control Transaction with the two notices of 
exemption filed by NSR in FD 34209 (Sub-No. 1) and FD 34562 (Sub-No. 
1). As discussed elsewhere in this decision, this decision embraces 
those notices of exemption.
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    SMART/TD-NY further asserts that the Board should apply labor 
protective conditions in accordance with New York Dock, rather than 
Wilmington Terminal. NSR responds that, in line sale transactions 
involving at least one Class I carrier (including ``minor line sale 
transactions involving joint ownership of lines and swaps of trackage 
rights''), the applicable labor protection standards are the New York 
Dock conditions as modified in Wilmington Terminal. The Board will 
address this issue in its final decision.
    With respect to the substance of the Application, SMART/TD-NY 
argues that the Control Transaction is not minor because it is of 
regional or national transportation significance due to the fact that 
D&H is an indirect subsidiary of CP, which is a Class I railroad that 
is competitive with NSR. SMART/TD-NY argues that, accordingly, the 
Board cannot find that the Control Transaction would not clearly have 
any anti-competitive effects or that any such effects would be clearly 
outweighed by the public interest. SMART/TD-NY also states that the 
rail transportation involved in the Control Transaction is broader than 
is presented in the application, in that it ``extends westward beyond 
the Buffalo gateway, as well as eastward into New England.''
    Despite SMART/TD-NY's assertions, the Control Transaction, as noted 
above, only involves rail lines in a relatively small geographic area 
of Pennsylvania and New York. D&H is an independent subsidiary of CP, 
and, consistent with Board precedent, D&H is the relevant party to this 
transaction.\6\ NSR has met its burden of proof in preliminarily 
showing that the Control Transaction is a minor transaction. SMART/TD-
NY has failed to provide the Board with sufficient evidence to rebut 
that preliminary finding.
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    \6\ See CSX Transp., Inc. & Del. & Hudson Ry.--Joint Use 
Agreement, FD 35348 (STB served May 27, 2010) (finding that a 
transaction involving CSX Transportation, Inc., a Class I railroad, 
and D&H, a Class II railroad and independent subsidiary of CP, was a 
minor transaction because it did not involve two or more Class I 
railroads).
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    CNJ similarly argues that the Control Transaction is not minor 
because, ``in essence,'' it involves two Class I railroads, as D&H is a 
subsidiary of CP. As discussed above, and consistent with past Board 
decisions, D&H, and not CP, is the proper entity for the Board to 
consider when analyzing this transaction.\7\
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    \7\ See CSX Transp., Inc. & Del. & Hudson Ry.--Joint Use 
Agreement, FD 35348 (STB served May 27, 2010). CNJ admits that the 
Control Transaction ``is not technically `a merger or control of two 
Class I railroads[.]' ''
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    CNJ further argues that the transaction is not minor because it 
would have anticompetitive effects and alludes to two routes on the 
Delaware-Lackawanna Railroad Company, Inc. (DL) for which competition 
for ``potential'' traffic may

[[Page 76450]]

be reduced from two carriers to one. CNJ asserts that the only way to 
restore competition for these potential 2-to-1 markets is through the 
filing of a responsive trackage rights application. NSR responds that 
the commodities that CNJ argues could be routed over the lines 
(municipal solid waste and recycled glass) are not currently moved over 
the lines, nor are there any indications that such shipments are even 
feasible in the future. NSR also states that CSX Transportation, Inc. 
(CSX) appears to serve the location where the alleged routes originate.
    CNJ provides no support for its assertion that the Control 
Transaction would have anticompetitive effects. CNJ asserts only a 
``realistic potential'' that these 2-to-1 routings may exist, while NSR 
states that no such routings currently exist. Nor have any potential or 
existing shippers on those routes opposed the classification of this 
transaction as minor. Moreover, the filing of responsive trackage 
rights applications is not the sole method by which potential 
anticompetitive effects, if any, could be cured. The Board, after the 
record in this proceeding is fully developed, has the ability to deny 
NSR's application or to approve the Control Transaction subject to 
conditions that would mitigate or eliminate any deleterious effects on 
regional or national transportation. Thus, CNJ has not provided the 
Board with sufficient evidence to rebut a preliminary finding that this 
transaction should be classified as minor.
    In addition, CNJ argues that NSR's application should be rejected 
as incomplete because it has not included all relevant filings. CNJ 
states that NSR's application includes reference to discontinuance 
applications that it expects D&H will file with regard to certain 
trackage rights,\8\ and that in order for NSR's application here to be 
complete, NSR would need to include either those applications or 
adverse discontinuance applications for those trackage rights. CNJ 
argues that NSR is asking the Board to evaluate these discontinuances, 
even though those applications have not been filed with the Board. NSR 
argues that the Board may assess the Control Transaction, because it is 
sufficiently independent from any potential Board decision on the 
discontinuances.
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    \8\ See NSR Pet. n.3.
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    CNJ has failed to demonstrate that the trackage rights applications 
it is concerned about should have been included in NSR's application. 
CNJ appears to be referencing the same trackage rights that NSR states 
in its application are ``not economically justified'' independent of 
this application.\9\ The D&H trackage rights run over NSR lines that 
are not part of the D&H Short Lines at issue in this Control 
Transaction. Therefore, the Board need not address these trackage 
rights in this proceeding. As a result, CNJ has not demonstrated that 
NSR's application is incomplete.
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    \9\ See NSR Pet. 27-28 & n.24.
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    In sum, based on the information provided in the Application and 
the record to date, the Board finds the proposed Control Transaction to 
be a minor transaction under 49 CFR 1180.2(c).\10\ Such a 
categorization does not mean that the proposed Control Transaction is 
insignificant or not of importance. Indeed, the Board will carefully 
review the proposed Control Transaction to make certain that it does 
not substantially lessen competition, create a monopoly, or restrain 
trade and that any anticompetitive effects are outweighed by the public 
interest. See 49 U.S.C. 11324(d)(1)-(2). The Board also may condition 
the Control Transaction to mitigate or eliminate any deleterious 
effects on regional or national transportation.
    Procedural Schedule. The Board has considered Applicant's request 
(filed November 17, 2014) for an expedited procedural schedule under 
which the Board would be required to issue its final decision before 
the statutory deadline of 180 days after the filing of the application. 
Applicant's proposed procedural schedule would have the Board set the 
due date for responses to comments, protests, requests for conditions, 
and other opposition and rebuttal in support of the application on 
March 17, 2015, 15 days before the Board is required to conclude 
evidentiary proceedings under 49 U.S.C. 11325(d)(2). As this would be 
the conclusion of evidentiary proceedings, this would then require the 
Board to issue a final decision by May 1, 2015, because the Board is 
required to issue a final decision ``by the 45th day after the date on 
which it concludes the evidentiary proceedings.'' \11\ This may be in 
error, as Applicant's petition states that the proposed procedural 
schedule ``provides the full statutory time for the Board to issue its 
final decision,'' and the proposed schedule in Appendix A to the 
petition lists Friday, May 15, 2015, as the proposed deadline for a 
final decision.\12\ In the interest of allowing time for the record to 
develop fully, the Board will set the procedural schedule to allow the 
full 180 days for review.
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    \11\ 49 U.S.C. 11325(d)(2).
    \12\ Applicant's petition also states that ``the proposed 
procedural schedule provides for issuance of a final Board decision 
by May 7, 2015.'' Based on the full text of the petition and the 
schedule proposed in Appendix A to the petition, this appears to 
also be in error.
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    The Board has also considered, and rejected, SMART/TD-NY's and 
CNJ's arguments regarding the procedural schedule for this 
proceeding.\13\
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    \13\ While SMART/TD-NY argues that the Board should revise NSR's 
proposed procedural schedule to reflect the significance of the 
Control Transaction, the Board has preliminarily concluded that the 
Control Transaction is a ``minor'' transaction, not a 
``significant'' transaction. Moreover, despite CNJ's assertion that 
NSR's proposed procedural schedule is misleading because it does not 
include a deadline by which the public must object to the ``minor'' 
classification, the Board does not require an applicant to indicate 
such a deadline when proposing a procedural schedule.
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    For further information respecting dates, see the Appendix A 
(Procedural Schedule).
    Notice of Intent To Participate. Any person who wishes to 
participate in this proceeding as a POR must file with the Board, no 
later than December 29, 2014, a notice of intent to participate, 
accompanied by a certificate of service indicating that the notice has 
been properly served on the Secretary of Transportation, the Attorney 
General of the United States, and Mr. Mullins.
    If a request is made in the notice of intent to participate to have 
more than one name added to the service list as a POR representing a 
particular entity, the extra name will be added to the service list as 
a ``Non-Party.'' The list will reflect the Board's policy of allowing 
only one official representative per party to be placed on the service 
list, as specified in Press Release No. 97-68 dated August 18, 1997, 
announcing the implementation of the Board's ``One Party-One 
Representative'' policy for service lists. Any person designated as a 
Non-Party will receive copies of Board decisions, orders, and notices 
but not copies of official filings. Persons seeking to change their 
status must accompany that request with a written certification that he 
or she has complied with the service requirements set forth at 49 CFR 
1180.4, and any other requirements set forth in this decision.
    Service List Notice. The Board will serve, as soon after December 
29, 2014 as practicable, a notice containing the official service list 
(the service-list notice). Each POR will be required to serve upon all 
other PORs, within 10 days of the service date of the service-list 
notice, copies of all filings previously submitted by that party (to 
the extent such filings have not previously been served upon such other

[[Page 76451]]

parties). Each POR will also be required to file with the Board, within 
10 days of the service date of the service-list notice, a certificate 
of service indicating that the service required by the preceding 
sentence has been accomplished. Every filing made by a POR after the 
service date of the service-list notice must have its own certificate 
of service indicating that all PORs on the service list have been 
served with a copy of the filing. Members of the United States Congress 
(MOCs) and Governors (GOVs) are not parties of record and need not be 
served with copies of filings, unless any Member or Governor has 
requested to be, and is designated as, a POR.
    Service of Decisions, Orders, and Notices. The Board will serve 
copies of its decisions, orders, and notices only on those persons who 
are designated on the official service list as either POR, MOC, GOV, or 
Non-Party. All other interested persons are encouraged to secure copies 
of decisions, orders, and notices via the Board's Web site at 
``www.stb.dot.gov'' under ``E-LIBRARY/Decisions & Notices.''
    Access to Filings. Under the Board's rules, any document filed with 
the Board (including applications, pleadings, etc.) shall be promptly 
furnished to interested persons on request, unless subject to a 
protective order. 49 CFR 1180.4(a)(3). The application and other 
filings in this proceeding are available for inspection in the library 
(Room 131) at the offices of the Surface Transportation Board, 395 E 
Street SW., in Washington, DC, and will also be available on the 
Board's Web site at ``www.stb.dot.gov'' under ``E-LIBRARY/Filings.'' In 
addition, the application may be obtained from Mr. Mullins at the 
address indicated above.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. The primary application in FD 35873 and the related filings in 
FD 34209 (Sub-No. 1) and FD 34562 (Sub-No. 1) are accepted for 
consideration.
    2. The parties to this proceeding must comply with the procedural 
schedule adopted by the Board in this proceeding as shown in Appendix 
A.
    3. The parties to this proceeding must comply with the procedural 
requirements described in this decision.
    4. This decision is effective on December 16, 2014.

    Decided: December 16, 2014.
    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Brendetta Jones,
Clearance Clerk.

Appendix A: Procedural Schedule

November 17, 2014--Motion for Protective Order filed. Application 
and Motion to Establish Procedural Schedule filed.
December 16, 2014--Board notice of acceptance of application served 
(to be published in the Federal Register on December 22, 2014).
December 29, 2014--Notices of intent to participate in this 
proceeding due.
January 15, 2015--All comments, protests, requests for conditions, 
and any other evidence and argument in opposition to the 
application, including filings of DOJ and DOT, due.
March 31, 2015--Responses to comments, protests, requests for 
conditions, and other opposition due. Rebuttal in support of the 
application due.
May 15, 2015--Date by which a final decision will be served.
June 15, 2015 \14\--Date by which a final decision will become 
effective.
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    \14\ The final decision will become effective 30 days after it 
is served.
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[FR Doc. 2014-29835 Filed 12-19-14; 8:45 am]
BILLING CODE 4915-01-P
```