Canadian Pacific Railway Company, et al.-Control-Dakota, Minnesota, & Eastern Railroad Corp., et al., 63232-63236 [E7-21901]
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allowing just 10 days for comment in
order to expedite resolution of this
matter. All comments and supporting
materials received after the closing date
will also be filed and will be considered
to the extent possible. When the petition
is granted or denied, notice of the
decision will be published in the
Federal Register pursuant to the
authority indicated below.
Comment closing date: December 10,
2007.
Authority: 49 U.S.C. 30118, 30120:
delegations of authority at CFR 1.50 and
501.8.
Issued on: November 2, 2007.
Daniel C. Smith
Associate Administrator for Enforcement.
[FR Doc. E7–21903 Filed 11–7–07; 8:45 am]
BILLING CODE 4910–59–P
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials
Safety Administration
Office of Hazardous Materials Safety;
Notice of Delays in Processing of
Special Permits Applications
Pipeline and Hazardous
Materials Safety Administration
(PHMSA), DOT.
ACTION: List of Applications Delayed
more than 180 days.
AGENCY:
SUMMARY: In accordance with the
requirements of 49 U.S.C. 5117(c),
PHMSA is publishing the following list
of special permit applications that have
been in process for 180 days or more.
The reason(s) for delay and the expected
completion date for action on each
application is provided in association
with each identified application.
FOR FURTHER INFORMATION CONTACT:
Delmer F. Billings, Director, Office of
Hazardous Materials Special Permits
and Approvals, Pipeline and Hazardous
Materials Safety Administration, U.S.
Department of Transportation, East
Application No.
Building, PHH–30, 1200 New Jersey
Avenue, Southeast, Washington, DC
20590–0001, (202) 366–4535.
Key to ‘‘Reason for Delay’’
1. Awaiting additional information
from applicant.
2. Extensive public comment under
review.
3. Applicantion is technically
complex and is of significant impact or
precedent-setting and requires extensive
analysis.
4. Staff review delayed by other
priority issues or volume of special
permit applications.
Meaning of Application Number
Suffixes
N—New application.
M—Modification request.
PM—Party to application with
modification request.
Issued in Washington, DC, on October 31,
2007.
Delmer F. Billings,
Director, Office of Hazardous Materials,
Special Permits and Approvals.
Estimated
date of
completion
Reason for
delay
Applicant
Modification to Special Permits
10481–M ...........
11579–M ...........
M–1 Engineering Limited, Bradford, West Yorkshire ...............................................................
Austin Powder Company, Cleveland, OH ................................................................................
4
1
11–30–2007
12–31–2007
4
1
4
4
1
4
4
11–30–2007
12–31–2007
11–30–2007
11–30–2007
11–30–2007
11–30–2007
11–30–2007
New Special Permit Applications
14385–N
14402–N
14436–N
14500–N
14504–N
14507–N
14508–N
...........
...........
...........
...........
...........
...........
...........
Kansas City Southern Railway Company, Kansas City, MO ...................................................
Lincoln Composites, Lincoln, NE ..............................................................................................
BNSF Railway Company, Topeka, KS .....................................................................................
Northwest Respiratory Services, St. Paul, MN ........................................................................
Medis Technologies Ltd., New York, NY .................................................................................
Gulf Coast Hydrostatic Testers, LLC, Denham Springs, LA ....................................................
Gulf Coast Hydrostatic Testers, LLC, Denham Springs, LA ....................................................
[FR Doc. 07–5575 Filed 11–7–07; 8:45 am]
BILLING CODE 4910–60–M
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 35081]
Canadian Pacific Railway Company, et
al.—Control—Dakota, Minnesota, &
Eastern Railroad Corp., et al.
AGENCY:
Surface Transportation Board,
rwilkins on PROD1PC63 with NOTICES
DOT.
Decision No. 2 in STB Finance
Docket No. 35081; Notice of Receipt of
Prefiling Notification.
ACTION:
SUMMARY: The Surface Transportation
Board (Board) has reviewed the
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submission filed October 5, 2007, by
Canadian Pacific Railway Corporation
(CPRC), Soo Line Holding Company, a
Delaware Corporation and indirect
subsidiary of CPRC (Soo Holding),
Dakota, Minnesota & Eastern Railroad
Corporation (DM&E), and Iowa, Chicago
& Eastern Railroad Corporation, a
wholly owned rail subsidiary of DM&E
(IC&E). The submission is styled as an
application seeking Board approval
under 49 U.S.C. 11321–26 of the
acquisition of control of DM&E and
IC&E by Soo Holding (and, indirectly,
by CPRC). This proposal is referred to as
the ‘‘transaction,’’ and, for ease, CPRC,
Soo Holding, DM&E, and IC&E are
referred to collectively as ‘‘Applicants.’’
The Board finds that the transaction
would be a ‘‘significant transaction’’
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under 49 CFR 1180.2(b). The Board’s
rules at 49 CFR 1180.4(b) require that
applicants give notice 2 to 4 months
prior to the filing of an application in a
‘‘significant’’ transaction. Because
Applicants did not file the required
prefiling notification before their
October 5 submission seeking Board
approval of this ‘‘significant’’
transaction, and did not pay the filing
fee for a ‘‘significant’’ transaction, their
submission cannot be treated as an
application at this time. The Board will,
however, consider the October 5
submission a prefiling notification and
publish notice of it in the Federal
Register, which has the effect of
permitting Applicants to perfect their
application, and provide any
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supplemental materials or information,
on or after December 5, 2007.
When filing a prefiling notification,
merger applicants in a ‘‘significant’’
transaction must propose a procedural
schedule for Board review of their
proposed transaction. As part of their
tender of an application for a ‘‘minor’’
transaction, Applicants had proposed a
procedural schedule that tracks the
statutory deadlines for processing
‘‘minor’’ applications. Because the
Board finds the proposed transaction to
be ‘‘significant,’’ Applicants must file
with the Board no later than November
13, 2007, a revised proposed procedural
schedule that reflects the Board’s
determination that this is a ‘‘significant’’
transaction. The Board will promptly
seek public comments on a proposed
procedural schedule, with comments
due 10 days after publication of the
proposed procedural schedule in the
Federal Register. Section 1180.4(b) also
calls for merger applicants to indicate in
their prefiling notification the year to be
used for the impact analysis required in
‘‘significant’’ transactions. In their
October 5 submission, Applicants cite
the 2005 Carload Waybill Sample in
their market analysis. The Board
therefore designates 2005 as the year to
be used for impact analysis in the
application. In addition, Applicants
must submit the difference between the
filing fee for a ‘‘minor’’ transaction
(which Applicants already have paid)
and the fee for a ‘‘significant’’
transaction when they perfect their
application on or after December 5,
2007.
DATES: Applicants must, by November
13, 2007, file a proposed procedural
schedule with the Board. In addition,
Applicants must submit the difference
between the filing fee for a ‘‘minor’’
transaction and the fee for a
‘‘significant’’ transaction with or
without supplemental information, on
or after December 5, 2007.
ADDRESSES: Any filing submitted in this
proceeding must be submitted either via
the Board’s e-filing format or in the
traditional paper format as provided for
in the Board’s rules. Any person using
e-filing should attach a document and
otherwise comply with the instructions
found on the Board’s Web site at
https://www.stb.dot.gov at the ‘‘EFILING’’ 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
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16:54 Nov 07, 2007
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sent by e-mail only if service by e-mail
is acceptable to the recipient) to each of
the following: (1) Terence M. Hynes
(representing CPRC), Sidley Austin LLP,
1501 K Street, NW., Washington, DC
20005; and (2) William C. Sippel
(representing DM&E), Fletcher & Sippel,
29 North Wacker Drive, Suite 920,
Chicago, IL 60606.
FOR FURTHER INFORMATION CONTACT: Julia
M. Farr, (202) 245–0359. [Assistance for
the hearing impaired is available
through the Federal Information Relay
Service (FIRS) at 1–800–877–8339.]
SUPPLEMENTARY INFORMATION: CPRC is a
Canadian corporation whose stock is
publicly held and traded on the New
York and Toronto stock exchanges.
CPRC and its U.S. rail carrier subsidies,
Soo Line Railroad Company (Soo) and
Delaware and Hudson Railway
Company, Inc. (D&H), operate a
transcontinental rail network over
13,000 miles in Canada and the United
States. (CPRC, Soo, and D&H are
referred to collectively as ‘‘CPR.’’) CPR
serves the principal business centers of
Canada and 14 U.S. states in the
Northeast and Midwest. The major
commodities transported by CPR
include bulk commodities such as grain,
coal, sulfur, and fertilizers; merchandise
freight including finished vehicles and
automotive parts, forest products,
industrial products, and consumer
products; and intermodal traffic. In
fiscal year 2006, the freight revenues of
CPR were approximately $4.4 billion.
DM&E is a privately held Class II rail
carrier headquartered in Sioux Falls,
SD. DM&E and its subsidiary, IC&E,
operate over 2,500 miles of rail lines
serving eight U.S. states, including the
major Midwestern gateways of Chicago,
IL, Minneapolis/St. Paul, MN, and
Kansas City, MO. Together, DM&E and
IC&E interchange rail traffic with all
seven U.S. Class I railroads.
DM&E was created in 1986 from lines
formerly owned by Chicago and North
Western Transportation Company
(CNW) in South Dakota, Minnesota, and
Iowa. In 1996, DM&E acquired CNW’s
Colony Line, running from Eastern
Wyoming through Western South
Dakota and into Northwestern Nebraska.
DM&E subsequently acquired the lines
now operated by IC&E from the former
Iowa and Minnesota Rail Link in 2002.
IC&E owns or operates approximately
1,322 route miles of rail lines that were
once part of the CPR system, in Illinois,
Minnesota, Missouri, and Wisconsin.
In 2006, the Board granted DM&E
authority to construct and operate 282
miles of new railroad lines to serve coal
origins in Wyoming’s Powder River
Basin (PRB). DM&E states that it is
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currently pursuing the process of
acquiring the right-of-way needed to
build the PRB line. It must execute
agreements with PRB mines on terms for
operations by DM&E over their loading
track and facilities. DM&E must also
secure sufficient contractual
commitments from prospective coal
shippers to route their traffic over the
PRB line to justify the large investment
to build it. Finally, DM&E must arrange
financing for the project and comply
with the environmental conditions
imposed by the Board. If the proposed
transaction is approved, CPR states that
it plans to work diligently with DM&E
to accomplish these necessary
prerequisites to construction of the
proposed PRB line, assuming that the
decision is made to build it.
The proposed transaction for which
Applicants seek approval involves the
acquisition of control of DM&E and
IC&E by Soo Holding (and, indirectly,
by CPRC).1 On October 4, 2007, Soo
Line Properties Company, a Delaware
corporation and wholly owned
subsidiary of Soo Holding (Soo
Properties), merged with and into
DM&E, subject to the voting trust
described below. At the time of closing,
DM&E shareholders received cash
consideration of approximately $1.48
billion, subject to certain working
capital adjustments in accordance with
the Agreement and Plan of Merger
(Merger Agreement). As part of the
$1.48 billion paid at closing, DM&E and
IC&E repaid certain obligations to third
party creditors, including $250 million
to the Federal Railroad Administration
(FRA). The Merger Agreement provides
for future contingent payments by CPR
to DM&E’s shareholders of up to
approximately $1 billion. Specifically,
an additional payment of $350 million
will become due if construction starts
on the PRB line prior to December 31,
2025. Further contingent payments of
up to approximately $707 million will
become due upon the movement of
specified volumes of PRB coal over the
PRB line prior to December 31, 2025.
Public Interest Considerations.
Applicants contend that the transaction
would not result in any lessening of
competition, creation of a monopoly, or
restraint of trade in freight surface
transportation in any region of the
United States. Rather, Applicants state
that CPR’s acquisition of DM&E and
IC&E would be strongly procompetitive. Most significantly,
1 In Decision No. 1 in this proceeding, served
September 21, 2007, the Board issued a Protective
Order to facilitate the discovery process and
establish appropriate procedures for the submission
of evidence containing confidential or proprietary
information.
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Applicants note that the transaction
would create new single-system rail
options where none currently exist.
Applicants contend that CPR’s plan to
invest $300 million in capital
improvements on DM&E’s and IC&E’s
existing lines would enhance safety and
the efficiency of their operations,
thereby strengthening the competitive
ability of DM&E and IC&E. Applicants
state that this investment would allow
DM&E and IC&E to upgrade track,
bridges, and other rail facilities and to
bring their safety performance closer to
CPR standards, thus improving the
fluidity of their train operations. The
transaction would restore CPR’s direct
access to the Kansas City gateway,
enhancing their ability to compete
effectively for rail traffic moving
between CPR’s current network and
points in the U.S. Southwest and
Mexico. Applicants assert that the
transaction would enable CPR to assist
DM&E in possibly bringing to fruition
its proposal to introduce a third rail
competitor to the PRB, which is
currently served by UP and BNSF.
Independent Voting Trust. On
October 4, 2007, Soo Properties was
merged with and into DM&E. At that
time, all the common shares of DM&E
were deposited into an independent
voting trust, pending Board approval of
the proposed transaction, in order to
avoid unlawful control of DM&E and
IC&E in violation of 49 U.S.C. 11323. On
or after the effective date of a Board
final order authorizing the transaction,
the voting trust would be terminated;
DM&E’s shares would be transferred to
Soo Holding; and DM&E would become
a wholly owned subsidiary of Soo
Holding (and an indirect subsidiary of
CPRC). In the event that the Board does
not approve the transaction, Soo
Holding would use its reasonable best
efforts to sell or direct the trustee to sell
the trust interests to one or more eligible
purchasers or otherwise dispose of the
trust interests during a period of 2 years
after such a decision becomes final.
With the exception of the Board’s
final approval of the transaction, all
conditions precedent to closing of the
merger have been satisfied.
Environmental Impacts. Applicants
contend that the transaction would not
result in any increases in rail traffic,
train operations, or yard activity that
would exceed the Board’s thresholds for
environmental review in 49 CFR
1105.7(e)(5). Applicants therefore assert
that the transaction does not require the
preparation of environmental
documentation under 49 CFR
1105.6(b)(4). However, Applicants plan
to prepare a Safety Integration Plan (SIP)
under the Board’s rules at 49 CFR 1106
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and 49 CFR 1180.1(f)(3) setting out how
they would ensure that safe operations
are maintained throughout the
acquisition-implementation process, if
the proposed transaction is approved.
In regard to the environmental
impacts of the transportation of DM&E
PRB coal trains over the lines of IC&E
and/or CPR, Applicants propose that the
Board defer any required analysis of the
environmental impacts of the movement
of DM&E PRB coal trains over the lines
of IC&E and/or CPR because definitive
information regarding the likely volume,
destination, and routing of DM&E PRB
coal trains beyond DM&E’s existing line
remains speculative.
The City of Winona, Mayo Clinic, and
BNSF Railway Company (BNSF) have
filed comments on Applicants’
proposed environmental approach.
Applicants replied to BNSF’s
comments. The Board will consider
these comments in its review of the
transaction; there is no need for the
commenters to refile those submissions.
Significant Transaction. The statute
and our 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 significance.’’
Compare 49 U.S.C. 11325(a)(2), (c)
(addressing ‘‘significant’’ transactions)
with 49 U.S.C. 11325(a)(3), (d)
(addressing ‘‘minor’’ transactions).
Under our regulations, at 49 CFR
1180.2, a transaction is to be classified
as ‘‘significant’’ unless the application
shows on its face (1) that the transaction
clearly would not have any
anticompetitive effects, or (2) that any
anticompetitive effects would clearly be
outweighed by the anticipated
contribution to the public interest in
meeting ‘‘significant’’ transportation
needs.
A transaction classified as
‘‘significant’’ must meet different
procedural and informational
requirements than one classified as
‘‘minor.’’ For example, Applicants are
required to submit more detailed
information regarding competitive
effects, operating plans and other issues
for a ‘‘significant’’ transaction than for a
‘‘minor’’ transaction. 49 CFR
1180.4(c)(2). Responsive applications
are not permitted for a ‘‘minor’’
transaction but are allowed for a
‘‘significant’’ transaction. 49 CFR
1180.4(d). The time limit for Board
review is shorter for a ‘‘minor’’
transaction and prefiling notification is
not required. 49 U.S.C. 11325(d); 49
CFR 1180.4(b). Finally, the filing fee for
a ‘‘significant’’ transaction is higher
than the fee for a ‘‘minor’’ transaction.
49 CFR 1002.2.
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Applicants contend that this
transaction should be classified as
‘‘minor.’’ First, they argue that the
transaction is pro-competitive due to its
anticipated benefits, including (1)
creating new single-system rail options
where none currently exist, (2)
enhancing the safety and efficiency of
DM&E’s and IC&E’s operations through
CPR’s plan to invest $300 million in
capital improvements on DM&E’s and
IC&E’s existing lines, (3) restoring CPR’s
direct access to the Kansas City gateway,
enhancing its ability to compete
effectively for rail traffic moving
between CPR’s current network and
points in the U.S. Southwest and
Mexico, and (4) enabling CPR to assist
DM&E in possibly bringing to fruition
its proposal to introduce a third rail
competitor to the PRB, which is
currently served by UP and BNSF.
Second, Applicants assert that the
transaction would not result in any
lessening of effective rail competition
because the networks of Applicants are
largely complementary, not competitive.
Applicants point to the competitive
analysis prepared by their expert as
confirmation that none of the stations
commonly served by Applicants would
lose competitive rail service as a result
of the proposed transaction due to a
variety of station-specific reasons,
including the existence of another
competitive option or the fact that one
or the other of Applicants is not actively
serving the station today. Applicants
also state that vertical anticompetitive
effects would be non-existent because
virtually all of the shortlines that
interchange with DM&E have many
other interchange routing options.
Mayo Clinic, Iowa Northern Railway
Company (IANR), and the Iowa
Department of Transportation (IDOT)
have filed comments taking issue with
Applicants’ proposed designation of the
transaction as ‘‘minor.’’ The Mayo
Clinic suggests that the Board should
compel Applicants to submit ‘‘verifiable
documentation regarding DM&E’s
current revenues to ensure that DM&E
does not meet Class I status,’’ and that,
in any event, this transaction would
propel DM&E into Class I status.2 IDOT
2 Specifically, Mayo Clinic argues that
Applicants’ claim that the transaction is ‘‘minor’’
rather than ‘‘substantial’’ serves ‘‘to limit the
information they had to provide in their
application’’ and allows ‘‘Applicants to avoid
scrutiny of various competitive considerations,
including whether the proposed transaction will
foster a major market extension free and clear of
Board scrutiny.’’ Mayo Clinic’s argument is not well
taken because Applicants submitted additional
information in their application to comply with the
requirements for ‘‘significant’’ transactions,
including a market analysis and a more detailed
Operating Plan. Furthermore, the Board will not
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argues that the geographic scope of the
transaction means that the merger
‘‘clearly has regional transportation
significance,’’ and it states that applying
the timetable for a ‘‘significant’’
transaction would give it sufficient time
to analyze the effects of the deal. IANR
argues that Applicants provided
inadequate competitive analysis to show
clearly that the transaction would not
have any anticompetitive effects, or that
any anticompetitive effects would
clearly be outweighed by the public
interest benefits. They maintain that use
of larger market areas such as Business
Economic Areas (BEAs) would have
increased the number of 2-to-1 and 3-to2 cases of potential loss of competition;
that the market analysis failed to
consider current competition from
extending rail connections or from
intermodal truck-rail competition; that
the market analysis failed to identify
potential vertical foreclosure of short
line railroads; and that the market
analysis did not sufficiently assess
markets where Applicants do not
‘‘compete actively.’’
In response to IANR’s comments,
Applicants argue that their competitive
analysis is sufficient to support a
‘‘minor’’ designation. Applicants assert
that they provided a station-by-station
review of competitive effects, and also
provided information about every
shortline that could be impacted by this
transaction. Moreover, Applicants assert
that they have provided the information
that would be required if the transaction
were classified as ‘‘significant,’’ so that
their October 5 submission should be
accepted as a complete application
regardless of how the transaction is
classified.
The purpose of the test articulated in
section 1180.2 of the Board’s regulations
is to allow the Board to lessen the
regulatory burden when ‘‘a
determination can clearly be made, at
the time the application is filed, that the
transaction passes muster under’’ the
statute. See RR. Consolidation Proced.
of Significant Transactions, 9 I.C.C.2d
1198, 1200 (1993) (emphasis in
original). It permits the Board to select
the most appropriate procedures to
apply to a proposed transaction. It is not
the purpose of section 1180.2(b) to force
the Board to make an advance
determination on the extent of the likely
competitive effects or to weigh those
effects against the public benefits in
cases where more information would be
helpful. (Any broader reading of the
require Applicants to file verification documents as
to DM&E’s revenues in this proceeding given the
established procedures set forth at 49 CFR 1201
General Instructions 1–1(2) for the classification of
railroads.
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16:54 Nov 07, 2007
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regulation could effectively require a
preliminary determination on the
ultimate issue in the case even where
the Board regards such a determination
as premature.)
Here, although Applicants’
submission states that no currently
served shipper would become captive as
a result of the transaction (i.e., no
shipper would have its competitive
options reduced from two carriers pretransaction to one carrier posttransaction), it does not clearly establish
that there would be no other
anticompetitive effects that might result
from the transaction. For example, it
does not contain information that rules
out the possibility that there are some
shippers whose competitive options
would be reduced post-transaction. Nor
does it provide details regarding those
stations that both Applicants could
serve but at which only one Applicant
derived revenue from originating or
terminating traffic in 2005.
Applicants’ submission asserts that
there are anticipated benefits associated
with the transaction.3 Based on the
information we have about the possible
competitive impacts today, we are
unable to conclude at this stage that
such impacts would clearly be
outweighed by the potential benefits.
However, our classification of this
transaction as ‘‘significant’’ should not
be read as any indication of how we
might ultimately assess and weigh the
benefits and any impacts on
competition after development of a
more complete record.
The Board considers each proposed
transaction based on its unique factual
circumstances and our regulatory
criteria for classifying transactions. Had
Applicants’ submission satisfied the
criteria for a ‘‘minor’’ designation here,
the transaction would have been
classified as such even if it differed
substantially from other transactions
designated as ‘‘minor.’’ We also reject
arguments that the Board should
consider this to be a ‘‘major’’ transaction
based on the notion that DM&E and
IC&E combined might someday have
revenues for 3 consecutive years that
would qualify for Class I status.
The Board finds the proposed
transaction to be ‘‘significant’’ and is
unable to accept the submission as an
application now, due to Applicants’
failure to provide prefiling notification
and pay the filing fee applicable for a
‘‘significant’’ transaction. Accordingly,
3 We do not consider the potential for
introduction of another competitor into the PRB as
one of those benefits. Applicants state that they
have not yet determined whether they would
proceed with the construction of that line if this
merger is approved.
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63235
the Board will treat Applicants’’ October
5 submission as a prefiling notification.
Furthermore, the Board designates 2005
as the year to be used for impact
analysis because Applicants use the
2005 Carload Waybill Sample in the
market analysis in their submission.
Applicants may perfect their
application by submitting the remainder
of the fee on or after December 5, 2007.
Pursuant to section 1180.4(b)(2)(v),
Applicants may perfect their application
with or without supplemental
information because they have already
submitted sufficient information to
substantially comply with the
informational requirements for a
‘‘significant’’ transaction. Others who
have already participated in this
proceeding need not resubmit their
previous comments, as the Board will
consider what has already been
submitted to the extent it remains
relevant once an application is
perfected.
Procedural Schedule. The Board’s
determination that this transaction is
‘‘significant’’ necessitates a different
procedural schedule than that proposed
by Applicants. Metra, Mayo Clinic, and
IANR submitted separate filings
commenting on Applicants’ proposed
procedural schedule.4 Some of the
concerns expressed by these parties are
moot, given the Board’s determination
that the transaction is ‘‘significant.’’
In its October 26, 2007 comments,
IANR proposes a 270-day schedule
starting on December 4, 2007, based on
the schedule for a ‘‘significant’’
transaction. In their reply, filed on
October 29, 2007, Applicants request
that, if the Board treats the transaction
as ‘‘significant,’’ the Board accept as
their application the submission
tendered on October 5, 2007, and
establish a procedural schedule that
would allow the transaction to be
approved within the statutory deadline.
Applicants must file with the Board
no later than November 13, 2007, a
revised proposed procedural schedule
that reflects the Board’s determination
that this is a ‘‘significant’’ transaction.
The Board will promptly seek public
comments on a proposed procedural
4 In its October 18, 2007 reply, Metra requests that
the Board delay the due date for the submission of
comments, protest, requests for conditions, other
opposition, and evidence an additional 2 weeks
until January 15, 2008, to allow it sufficient time
to negotiate a settlement with Applicants to resolve
questions regarding the potential impact the
transaction could have on Metra’s operations
between Elgin, IL, and Chicago over its line, which
it shares between Pingree Grove, IL, and Chicago
with CPRC and IC&E. Likewise, Mayo Clinic, in its
October 24, 2007 reply, states that it supports the
request to extend the due date to allow it sufficient
time for meaningful negotiations with CPRC.
E:\FR\FM\08NON1.SGM
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63236
Federal Register / Vol. 72, No. 216 / Thursday, November 8, 2007 / Notices
rwilkins on PROD1PC63 with NOTICES
schedule, with comments due 10 days
after publication of the proposed
procedural schedule in the Federal
Register.
Filing Requirements. Any document
filed in this proceeding must be filed
either via the Board’s e-filing format or
in the traditional paper format as
provided for in the Board’s rules. Any
person using e-filing should attach a
document and otherwise comply with
the instructions found on the Board’s
Web site at https://www.stb.dot.gov at the
‘‘E-FILING’’ link. Any person filing a
document in the traditional paper
format should send an original and 10
paper copies of the document (and also
an electronic version) to: Surface
Transportation Board, 395 E Street, SW.,
Washington, DC 20423–0001.
Service Requirements. One copy of
each document filed in this proceeding
must be sent to each of the following
(any copy may be sent by e-mail only if
service by e-mail is acceptable to the
recipient): (1) Terence M. Hynes
(representing CPRC), Sidley Austin LLP,
1501 K Street, NW., Washington, DC
20005; and (2) William C. Sippel
(representing DM&E), Fletcher & Sippel,
29 North Wacker Drive, Suite 920,
Chicago, IL 60606.
This action will not significantly
affect either the quality of the human
environment or the conservation of
energy resources.
It is ordered:
1. The submission filed by Applicants
on October 5, 2007, in STB Finance
Docket No. 35081 is treated as the
prefiling notification of the anticipated
application.
2. Applicants are directed to
supplement the prefiling notification by
submitting a revised proposed
procedural schedule with the Board no
later than November 13, 2007, that is
consistent with the Board’s
determination that this is a ‘‘significant’’
transaction.
3. This decision is effective on
November 2, 2007.
Decided: November 2, 2007.
By the Board, Chairman Nottingham, Vice
Chairman Buttrey, and Commissioner
Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7–21901 Filed 11–7–07; 8:45 am]
BILLING CODE 4915–01–P
VerDate Aug<31>2005
16:54 Nov 07, 2007
Jkt 214001
DEPARTMENT OF THE TREASURY
Office of Foreign Assets Control
Additional Designations, Foreign
Narcotics Kingpin Designation Act
Office of Foreign Assets
Control, Treasury.
ACTION: Notice.
AGENCY:
SUMMARY: The Treasury Department’s
Office of Foreign Assets Control
(‘‘OFAC’’) is publishing the names of
additional persons whose property and
interests in property have been blocked
pursuant to the Foreign Narcotics
Kingpin Designation Act (21 U.S.C.
1901–1908, 8 U.S.C. 1182).
DATES: The designation by the Director
of OFAC of the fifteen individuals
identified in this notice pursuant to
section 805(b) of the Kingpin Act is
effective on November 1, 2007.
FOR FURTHER INFORMATION CONTACT:
Assistant Director, Compliance
Outreach & Implementation, Office of
Foreign Assets Control, Department of
the Treasury, Washington, DC 20220,
tel.: 202/622–2490.
SUPPLEMENTARY INFORMATION:
Electronic and Facsimile Availability
This document and additional
information concerning OFAC are
available on OFAC’s Web site (https://
www.treas.gov/ofac) or via facsimile
through a 24-hour fax-on demand
service, tel.: (202) 622–0077.
Background
The Foreign Narcotics Kingpin
Designation Act (‘‘Kingpin Act’’)
became law on December 3, 1999. The
Kingpin Act establishes a program
targeting the activities of significant
foreign narcotics traffickers and their
organizations on a worldwide basis. It
provides a statutory framework for the
President to impose sanctions against
significant foreign narcotics traffickers
and their organizations on a worldwide
basis, with the objective of denying their
businesses and agents access to the U.S.
financial system and to the benefits of
trade and transactions involving U.S.
companies and individuals.
The Kingpin Act blocks all property
and interests in property, subject to U.S.
jurisdiction, owned or controlled by
significant foreign narcotics traffickers
as identified by the President. In
addition, the Kingpin Act blocks the
property and interests in property,
subject to U.S. jurisdiction, of foreign
persons designated by the Secretary of
Treasury, in consultation with the
Attorney General, the Director of Central
Intelligence, the Director of the Federal
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
Bureau of Investigation, the
Administrator of the Drug Enforcement
Administration, the Secretary of
Defense, the Secretary of State, and the
Secretary of Homeland Security who are
found to be: (1) Materially assisting in,
or providing financial or technological
support for or to, or providing goods or
services in support of, the international
narcotics trafficking activities of a
person designated pursuant to the
Kingpin Act; (2) owned, controlled, or
directed by, or acting for or on behalf of,
a person designated pursuant to the
Kingpin Act; or (3) playing a significant
role in international narcotics
trafficking.
On November 1, 2007, the Director of
OFAC designated fifteen additional
entities whose property and interests in
property are blocked pursuant to section
805(b) of the Foreign Narcotics Kingpin
Designation Act.
The list of additional designees
follows:
Entities:
1. CABANA GUILLEN, Sixto Antonio,
(a.k.a. ‘‘Domingo Bioho’’); DOB 15 Jun
1955; POB Orihueca-Cienaga,
Magdalena, Colombia; Cedula No.
19500634 (Colombia).
2. CABRERA DIAZ, Hermilo, (a.k.a.
‘‘Bertulfo’’; a.k.a. CABRERA DIAZ,
Ermilo); DOB 25 Nov 1941; POB Neiva,
Huila, Colombia; Cedula No. 9680080
(Colombia).
3. CAICEDO COLORADO, Abelardo,
(a.k.a. ‘‘Solis Almeida’’); DOB 3 Mar
1960; POB Mercaderes, Cauca,
Colombia.
4. CAMARGO, Norbei, (a.k.a. ‘‘James
Patapalo’’; a.k.a. ‘‘James Patamala’’;
a.k.a. CAMARGO, Norbey; a.k.a.
TRIANA, Hermer; a.k.a. ‘‘Muerto
Parado’’); DOB 5 Aug 1965; POB Paujil,
Caqueta, Colombia; Cedula No.
17702895 (Colombia).
5. CUEVAS CABRERA, Erminso,
(a.k.a. ‘‘Mincho’’); DOB 16 Sep 1960;
POB El Paujil, Caqueta, Colombia;
Cedula No. 96328518 (Colombia).
6. LEAL GARCIA, Ignacio, (a.k.a.
‘‘Camilo’’; a.k.a. ‘‘Tuerto’’); Cedula No.
96186610 (Colombia).
7. LOPEZ MENDEZ, Luis Eduardo,
(a.k.a. ‘‘Efren Arboleda’’; a.k.a. LOPEZ
MENDEZ, Alfonso); Cedula No.
96329889 (Colombia).
8. MOLINA GONZALEZ, Jose
Epinemio, (a.k.a. ‘‘Danilo Garcia’’; a.k.a.
MOLINA GONZALEZ, Jose Epimenio);
DOB 18 Nov 1957; POB Incononzo,
Tolima, Colombia.; Cedula No. TI.
57111–01681 (Colombia).
9. OLARTE LOMBANA, Alonso,
(a.k.a. ‘‘Luis Eduardo Marin’’; a.k.a.
‘‘Rafael Gutierrez’’; a.k.a. GUZMAN
FLOREZ, Reinel); DOB 7 Nov 1960; Alt
DOB 11 Apr 1957; POB Bogota,
E:\FR\FM\08NON1.SGM
08NON1
Agencies
[Federal Register Volume 72, Number 216 (Thursday, November 8, 2007)]
[Notices]
[Pages 63232-63236]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21901]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Finance Docket No. 35081]
Canadian Pacific Railway Company, et al.--Control--Dakota,
Minnesota, & Eastern Railroad Corp., et al.
AGENCY: Surface Transportation Board, DOT.
ACTION: Decision No. 2 in STB Finance Docket No. 35081; Notice of
Receipt of Prefiling Notification.
-----------------------------------------------------------------------
SUMMARY: The Surface Transportation Board (Board) has reviewed the
submission filed October 5, 2007, by Canadian Pacific Railway
Corporation (CPRC), Soo Line Holding Company, a Delaware Corporation
and indirect subsidiary of CPRC (Soo Holding), Dakota, Minnesota &
Eastern Railroad Corporation (DM&E), and Iowa, Chicago & Eastern
Railroad Corporation, a wholly owned rail subsidiary of DM&E (IC&E).
The submission is styled as an application seeking Board approval under
49 U.S.C. 11321-26 of the acquisition of control of DM&E and IC&E by
Soo Holding (and, indirectly, by CPRC). This proposal is referred to as
the ``transaction,'' and, for ease, CPRC, Soo Holding, DM&E, and IC&E
are referred to collectively as ``Applicants.''
The Board finds that the transaction would be a ``significant
transaction'' under 49 CFR 1180.2(b). The Board's rules at 49 CFR
1180.4(b) require that applicants give notice 2 to 4 months prior to
the filing of an application in a ``significant'' transaction. Because
Applicants did not file the required prefiling notification before
their October 5 submission seeking Board approval of this
``significant'' transaction, and did not pay the filing fee for a
``significant'' transaction, their submission cannot be treated as an
application at this time. The Board will, however, consider the October
5 submission a prefiling notification and publish notice of it in the
Federal Register, which has the effect of permitting Applicants to
perfect their application, and provide any
[[Page 63233]]
supplemental materials or information, on or after December 5, 2007.
When filing a prefiling notification, merger applicants in a
``significant'' transaction must propose a procedural schedule for
Board review of their proposed transaction. As part of their tender of
an application for a ``minor'' transaction, Applicants had proposed a
procedural schedule that tracks the statutory deadlines for processing
``minor'' applications. Because the Board finds the proposed
transaction to be ``significant,'' Applicants must file with the Board
no later than November 13, 2007, a revised proposed procedural schedule
that reflects the Board's determination that this is a ``significant''
transaction. The Board will promptly seek public comments on a proposed
procedural schedule, with comments due 10 days after publication of the
proposed procedural schedule in the Federal Register. Section 1180.4(b)
also calls for merger applicants to indicate in their prefiling
notification the year to be used for the impact analysis required in
``significant'' transactions. In their October 5 submission, Applicants
cite the 2005 Carload Waybill Sample in their market analysis. The
Board therefore designates 2005 as the year to be used for impact
analysis in the application. In addition, Applicants must submit the
difference between the filing fee for a ``minor'' transaction (which
Applicants already have paid) and the fee for a ``significant''
transaction when they perfect their application on or after December 5,
2007.
DATES: Applicants must, by November 13, 2007, file a proposed
procedural schedule with the Board. In addition, Applicants must submit
the difference between the filing fee for a ``minor'' transaction and
the fee for a ``significant'' transaction with or without supplemental
information, on or after December 5, 2007.
ADDRESSES: Any filing submitted in this proceeding must be submitted
either via the Board's e-filing format or in the traditional paper
format as provided for in the Board's rules. Any person using e-filing
should attach a document and otherwise comply with the instructions
found on the Board's Web site at https://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 e-mail only
if service by e-mail is acceptable to the recipient) to each of the
following: (1) Terence M. Hynes (representing CPRC), Sidley Austin LLP,
1501 K Street, NW., Washington, DC 20005; and (2) William C. Sippel
(representing DM&E), Fletcher & Sippel, 29 North Wacker Drive, Suite
920, Chicago, IL 60606.
FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 245-0359.
[Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.]
SUPPLEMENTARY INFORMATION: CPRC is a Canadian corporation whose stock
is publicly held and traded on the New York and Toronto stock
exchanges. CPRC and its U.S. rail carrier subsidies, Soo Line Railroad
Company (Soo) and Delaware and Hudson Railway Company, Inc. (D&H),
operate a transcontinental rail network over 13,000 miles in Canada and
the United States. (CPRC, Soo, and D&H are referred to collectively as
``CPR.'') CPR serves the principal business centers of Canada and 14
U.S. states in the Northeast and Midwest. The major commodities
transported by CPR include bulk commodities such as grain, coal,
sulfur, and fertilizers; merchandise freight including finished
vehicles and automotive parts, forest products, industrial products,
and consumer products; and intermodal traffic. In fiscal year 2006, the
freight revenues of CPR were approximately $4.4 billion.
DM&E is a privately held Class II rail carrier headquartered in
Sioux Falls, SD. DM&E and its subsidiary, IC&E, operate over 2,500
miles of rail lines serving eight U.S. states, including the major
Midwestern gateways of Chicago, IL, Minneapolis/St. Paul, MN, and
Kansas City, MO. Together, DM&E and IC&E interchange rail traffic with
all seven U.S. Class I railroads.
DM&E was created in 1986 from lines formerly owned by Chicago and
North Western Transportation Company (CNW) in South Dakota, Minnesota,
and Iowa. In 1996, DM&E acquired CNW's Colony Line, running from
Eastern Wyoming through Western South Dakota and into Northwestern
Nebraska. DM&E subsequently acquired the lines now operated by IC&E
from the former Iowa and Minnesota Rail Link in 2002. IC&E owns or
operates approximately 1,322 route miles of rail lines that were once
part of the CPR system, in Illinois, Minnesota, Missouri, and
Wisconsin.
In 2006, the Board granted DM&E authority to construct and operate
282 miles of new railroad lines to serve coal origins in Wyoming's
Powder River Basin (PRB). DM&E states that it is currently pursuing the
process of acquiring the right-of-way needed to build the PRB line. It
must execute agreements with PRB mines on terms for operations by DM&E
over their loading track and facilities. DM&E must also secure
sufficient contractual commitments from prospective coal shippers to
route their traffic over the PRB line to justify the large investment
to build it. Finally, DM&E must arrange financing for the project and
comply with the environmental conditions imposed by the Board. If the
proposed transaction is approved, CPR states that it plans to work
diligently with DM&E to accomplish these necessary prerequisites to
construction of the proposed PRB line, assuming that the decision is
made to build it.
The proposed transaction for which Applicants seek approval
involves the acquisition of control of DM&E and IC&E by Soo Holding
(and, indirectly, by CPRC).\1\ On October 4, 2007, Soo Line Properties
Company, a Delaware corporation and wholly owned subsidiary of Soo
Holding (Soo Properties), merged with and into DM&E, subject to the
voting trust described below. At the time of closing, DM&E shareholders
received cash consideration of approximately $1.48 billion, subject to
certain working capital adjustments in accordance with the Agreement
and Plan of Merger (Merger Agreement). As part of the $1.48 billion
paid at closing, DM&E and IC&E repaid certain obligations to third
party creditors, including $250 million to the Federal Railroad
Administration (FRA). The Merger Agreement provides for future
contingent payments by CPR to DM&E's shareholders of up to
approximately $1 billion. Specifically, an additional payment of $350
million will become due if construction starts on the PRB line prior to
December 31, 2025. Further contingent payments of up to approximately
$707 million will become due upon the movement of specified volumes of
PRB coal over the PRB line prior to December 31, 2025.
---------------------------------------------------------------------------
\1\ In Decision No. 1 in this proceeding, served September 21,
2007, the Board issued a Protective Order to facilitate the
discovery process and establish appropriate procedures for the
submission of evidence containing confidential or proprietary
information.
---------------------------------------------------------------------------
Public Interest Considerations. Applicants contend that the
transaction would not result in any lessening of competition, creation
of a monopoly, or restraint of trade in freight surface transportation
in any region of the United States. Rather, Applicants state that CPR's
acquisition of DM&E and IC&E would be strongly pro-competitive. Most
significantly,
[[Page 63234]]
Applicants note that the transaction would create new single-system
rail options where none currently exist. Applicants contend that CPR's
plan to invest $300 million in capital improvements on DM&E's and
IC&E's existing lines would enhance safety and the efficiency of their
operations, thereby strengthening the competitive ability of DM&E and
IC&E. Applicants state that this investment would allow DM&E and IC&E
to upgrade track, bridges, and other rail facilities and to bring their
safety performance closer to CPR standards, thus improving the fluidity
of their train operations. The transaction would restore CPR's direct
access to the Kansas City gateway, enhancing their ability to compete
effectively for rail traffic moving between CPR's current network and
points in the U.S. Southwest and Mexico. Applicants assert that the
transaction would enable CPR to assist DM&E in possibly bringing to
fruition its proposal to introduce a third rail competitor to the PRB,
which is currently served by UP and BNSF.
Independent Voting Trust. On October 4, 2007, Soo Properties was
merged with and into DM&E. At that time, all the common shares of DM&E
were deposited into an independent voting trust, pending Board approval
of the proposed transaction, in order to avoid unlawful control of DM&E
and IC&E in violation of 49 U.S.C. 11323. On or after the effective
date of a Board final order authorizing the transaction, the voting
trust would be terminated; DM&E's shares would be transferred to Soo
Holding; and DM&E would become a wholly owned subsidiary of Soo Holding
(and an indirect subsidiary of CPRC). In the event that the Board does
not approve the transaction, Soo Holding would use its reasonable best
efforts to sell or direct the trustee to sell the trust interests to
one or more eligible purchasers or otherwise dispose of the trust
interests during a period of 2 years after such a decision becomes
final.
With the exception of the Board's final approval of the
transaction, all conditions precedent to closing of the merger have
been satisfied.
Environmental Impacts. Applicants contend that the transaction
would not result in any increases in rail traffic, train operations, or
yard activity that would exceed the Board's thresholds for
environmental review in 49 CFR 1105.7(e)(5). Applicants therefore
assert that the transaction does not require the preparation of
environmental documentation under 49 CFR 1105.6(b)(4). However,
Applicants plan to prepare a Safety Integration Plan (SIP) under the
Board's rules at 49 CFR 1106 and 49 CFR 1180.1(f)(3) setting out how
they would ensure that safe operations are maintained throughout the
acquisition-implementation process, if the proposed transaction is
approved.
In regard to the environmental impacts of the transportation of
DM&E PRB coal trains over the lines of IC&E and/or CPR, Applicants
propose that the Board defer any required analysis of the environmental
impacts of the movement of DM&E PRB coal trains over the lines of IC&E
and/or CPR because definitive information regarding the likely volume,
destination, and routing of DM&E PRB coal trains beyond DM&E's existing
line remains speculative.
The City of Winona, Mayo Clinic, and BNSF Railway Company (BNSF)
have filed comments on Applicants' proposed environmental approach.
Applicants replied to BNSF's comments. The Board will consider these
comments in its review of the transaction; there is no need for the
commenters to refile those submissions.
Significant Transaction. The statute and our 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 significance.'' Compare 49 U.S.C. 11325(a)(2),
(c) (addressing ``significant'' transactions) with 49 U.S.C.
11325(a)(3), (d) (addressing ``minor'' transactions). Under our
regulations, at 49 CFR 1180.2, a transaction is to be classified as
``significant'' unless the application shows on its face (1) that the
transaction clearly would not have any anticompetitive effects, or (2)
that any anticompetitive effects would clearly be outweighed by the
anticipated contribution to the public interest in meeting
``significant'' transportation needs.
A transaction classified as ``significant'' must meet different
procedural and informational requirements than one classified as
``minor.'' For example, Applicants are required to submit more detailed
information regarding competitive effects, operating plans and other
issues for a ``significant'' transaction than for a ``minor''
transaction. 49 CFR 1180.4(c)(2). Responsive applications are not
permitted for a ``minor'' transaction but are allowed for a
``significant'' transaction. 49 CFR 1180.4(d). The time limit for Board
review is shorter for a ``minor'' transaction and prefiling
notification is not required. 49 U.S.C. 11325(d); 49 CFR 1180.4(b).
Finally, the filing fee for a ``significant'' transaction is higher
than the fee for a ``minor'' transaction. 49 CFR 1002.2.
Applicants contend that this transaction should be classified as
``minor.'' First, they argue that the transaction is pro-competitive
due to its anticipated benefits, including (1) creating new single-
system rail options where none currently exist, (2) enhancing the
safety and efficiency of DM&E's and IC&E's operations through CPR's
plan to invest $300 million in capital improvements on DM&E's and
IC&E's existing lines, (3) restoring CPR's direct access to the Kansas
City gateway, enhancing its ability to compete effectively for rail
traffic moving between CPR's current network and points in the U.S.
Southwest and Mexico, and (4) enabling CPR to assist DM&E in possibly
bringing to fruition its proposal to introduce a third rail competitor
to the PRB, which is currently served by UP and BNSF.
Second, Applicants assert that the transaction would not result in
any lessening of effective rail competition because the networks of
Applicants are largely complementary, not competitive. Applicants point
to the competitive analysis prepared by their expert as confirmation
that none of the stations commonly served by Applicants would lose
competitive rail service as a result of the proposed transaction due to
a variety of station-specific reasons, including the existence of
another competitive option or the fact that one or the other of
Applicants is not actively serving the station today. Applicants also
state that vertical anticompetitive effects would be non-existent
because virtually all of the shortlines that interchange with DM&E have
many other interchange routing options.
Mayo Clinic, Iowa Northern Railway Company (IANR), and the Iowa
Department of Transportation (IDOT) have filed comments taking issue
with Applicants' proposed designation of the transaction as ``minor.''
The Mayo Clinic suggests that the Board should compel Applicants to
submit ``verifiable documentation regarding DM&E's current revenues to
ensure that DM&E does not meet Class I status,'' and that, in any
event, this transaction would propel DM&E into Class I status.\2\ IDOT
[[Page 63235]]
argues that the geographic scope of the transaction means that the
merger ``clearly has regional transportation significance,'' and it
states that applying the timetable for a ``significant'' transaction
would give it sufficient time to analyze the effects of the deal. IANR
argues that Applicants provided inadequate competitive analysis to show
clearly that the transaction would not have any anticompetitive
effects, or that any anticompetitive effects would clearly be
outweighed by the public interest benefits. They maintain that use of
larger market areas such as Business Economic Areas (BEAs) would have
increased the number of 2-to-1 and 3-to-2 cases of potential loss of
competition; that the market analysis failed to consider current
competition from extending rail connections or from intermodal truck-
rail competition; that the market analysis failed to identify potential
vertical foreclosure of short line railroads; and that the market
analysis did not sufficiently assess markets where Applicants do not
``compete actively.''
---------------------------------------------------------------------------
\2\ Specifically, Mayo Clinic argues that Applicants' claim that
the transaction is ``minor'' rather than ``substantial'' serves ``to
limit the information they had to provide in their application'' and
allows ``Applicants to avoid scrutiny of various competitive
considerations, including whether the proposed transaction will
foster a major market extension free and clear of Board scrutiny.''
Mayo Clinic's argument is not well taken because Applicants
submitted additional information in their application to comply with
the requirements for ``significant'' transactions, including a
market analysis and a more detailed Operating Plan. Furthermore, the
Board will not require Applicants to file verification documents as
to DM&E's revenues in this proceeding given the established
procedures set forth at 49 CFR 1201 General Instructions 1-1(2) for
the classification of railroads.
---------------------------------------------------------------------------
In response to IANR's comments, Applicants argue that their
competitive analysis is sufficient to support a ``minor'' designation.
Applicants assert that they provided a station-by-station review of
competitive effects, and also provided information about every
shortline that could be impacted by this transaction. Moreover,
Applicants assert that they have provided the information that would be
required if the transaction were classified as ``significant,'' so that
their October 5 submission should be accepted as a complete application
regardless of how the transaction is classified.
The purpose of the test articulated in section 1180.2 of the
Board's regulations is to allow the Board to lessen the regulatory
burden when ``a determination can clearly be made, at the time the
application is filed, that the transaction passes muster under'' the
statute. See RR. Consolidation Proced. of Significant Transactions, 9
I.C.C.2d 1198, 1200 (1993) (emphasis in original). It permits the Board
to select the most appropriate procedures to apply to a proposed
transaction. It is not the purpose of section 1180.2(b) to force the
Board to make an advance determination on the extent of the likely
competitive effects or to weigh those effects against the public
benefits in cases where more information would be helpful. (Any broader
reading of the regulation could effectively require a preliminary
determination on the ultimate issue in the case even where the Board
regards such a determination as premature.)
Here, although Applicants' submission states that no currently
served shipper would become captive as a result of the transaction
(i.e., no shipper would have its competitive options reduced from two
carriers pre-transaction to one carrier post-transaction), it does not
clearly establish that there would be no other anticompetitive effects
that might result from the transaction. For example, it does not
contain information that rules out the possibility that there are some
shippers whose competitive options would be reduced post-transaction.
Nor does it provide details regarding those stations that both
Applicants could serve but at which only one Applicant derived revenue
from originating or terminating traffic in 2005.
Applicants' submission asserts that there are anticipated benefits
associated with the transaction.\3\ Based on the information we have
about the possible competitive impacts today, we are unable to conclude
at this stage that such impacts would clearly be outweighed by the
potential benefits. However, our classification of this transaction as
``significant'' should not be read as any indication of how we might
ultimately assess and weigh the benefits and any impacts on competition
after development of a more complete record.
---------------------------------------------------------------------------
\3\ We do not consider the potential for introduction of another
competitor into the PRB as one of those benefits. Applicants state
that they have not yet determined whether they would proceed with
the construction of that line if this merger is approved.
---------------------------------------------------------------------------
The Board considers each proposed transaction based on its unique
factual circumstances and our regulatory criteria for classifying
transactions. Had Applicants' submission satisfied the criteria for a
``minor'' designation here, the transaction would have been classified
as such even if it differed substantially from other transactions
designated as ``minor.'' We also reject arguments that the Board should
consider this to be a ``major'' transaction based on the notion that
DM&E and IC&E combined might someday have revenues for 3 consecutive
years that would qualify for Class I status.
The Board finds the proposed transaction to be ``significant'' and
is unable to accept the submission as an application now, due to
Applicants' failure to provide prefiling notification and pay the
filing fee applicable for a ``significant'' transaction. Accordingly,
the Board will treat Applicants'' October 5 submission as a prefiling
notification. Furthermore, the Board designates 2005 as the year to be
used for impact analysis because Applicants use the 2005 Carload
Waybill Sample in the market analysis in their submission.
Applicants may perfect their application by submitting the
remainder of the fee on or after December 5, 2007. Pursuant to section
1180.4(b)(2)(v), Applicants may perfect their application with or
without supplemental information because they have already submitted
sufficient information to substantially comply with the informational
requirements for a ``significant'' transaction. Others who have already
participated in this proceeding need not resubmit their previous
comments, as the Board will consider what has already been submitted to
the extent it remains relevant once an application is perfected.
Procedural Schedule. The Board's determination that this
transaction is ``significant'' necessitates a different procedural
schedule than that proposed by Applicants. Metra, Mayo Clinic, and IANR
submitted separate filings commenting on Applicants' proposed
procedural schedule.\4\ Some of the concerns expressed by these parties
are moot, given the Board's determination that the transaction is
``significant.''
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\4\ In its October 18, 2007 reply, Metra requests that the Board
delay the due date for the submission of comments, protest, requests
for conditions, other opposition, and evidence an additional 2 weeks
until January 15, 2008, to allow it sufficient time to negotiate a
settlement with Applicants to resolve questions regarding the
potential impact the transaction could have on Metra's operations
between Elgin, IL, and Chicago over its line, which it shares
between Pingree Grove, IL, and Chicago with CPRC and IC&E. Likewise,
Mayo Clinic, in its October 24, 2007 reply, states that it supports
the request to extend the due date to allow it sufficient time for
meaningful negotiations with CPRC.
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In its October 26, 2007 comments, IANR proposes a 270-day schedule
starting on December 4, 2007, based on the schedule for a
``significant'' transaction. In their reply, filed on October 29, 2007,
Applicants request that, if the Board treats the transaction as
``significant,'' the Board accept as their application the submission
tendered on October 5, 2007, and establish a procedural schedule that
would allow the transaction to be approved within the statutory
deadline.
Applicants must file with the Board no later than November 13,
2007, a revised proposed procedural schedule that reflects the Board's
determination that this is a ``significant'' transaction. The Board
will promptly seek public comments on a proposed procedural
[[Page 63236]]
schedule, with comments due 10 days after publication of the proposed
procedural schedule in the Federal Register.
Filing Requirements. Any document filed in this proceeding must be
filed either via the Board's e-filing format or in the traditional
paper format as provided for in the Board's rules. Any person using e-
filing should attach a document and otherwise comply with the
instructions found on the Board's Web site at https://www.stb.dot.gov at
the ``E-FILING'' link. Any person filing a document in the traditional
paper format should send an original and 10 paper copies of the
document (and also an electronic version) to: Surface Transportation
Board, 395 E Street, SW., Washington, DC 20423-0001.
Service Requirements. One copy of each document filed in this
proceeding must be sent to each of the following (any copy may be sent
by e-mail only if service by e-mail is acceptable to the recipient):
(1) Terence M. Hynes (representing CPRC), Sidley Austin LLP, 1501 K
Street, NW., Washington, DC 20005; and (2) William C. Sippel
(representing DM&E), Fletcher & Sippel, 29 North Wacker Drive, Suite
920, Chicago, IL 60606.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
It is ordered:
1. The submission filed by Applicants on October 5, 2007, in STB
Finance Docket No. 35081 is treated as the prefiling notification of
the anticipated application.
2. Applicants are directed to supplement the prefiling notification
by submitting a revised proposed procedural schedule with the Board no
later than November 13, 2007, that is consistent with the Board's
determination that this is a ``significant'' transaction.
3. This decision is effective on November 2, 2007.
Decided: November 2, 2007.
By the Board, Chairman Nottingham, Vice Chairman Buttrey, and
Commissioner Mulvey.
Vernon A. Williams,
Secretary.
[FR Doc. E7-21901 Filed 11-7-07; 8:45 am]
BILLING CODE 4915-01-P