Norfolk Southern Railway Company, Pan Am Railways, Inc., et al.-Joint Control and Operating/Pooling Agreements-Pan Am Southern, LLC, 36586-36592 [E8-14633]

Agencies

• Surface Transportation Board
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 73, Number 125 (Friday, June 27, 2008)]
[Notices]
[Pages 36586-36592]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-14633]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 35147 \1\]


Norfolk Southern Railway Company, Pan Am Railways, Inc., et al.--
Joint Control and Operating/Pooling Agreements--Pan Am Southern, LLC

AGENCY: Surface Transportation Board.

ACTION: Decision No. 2 in STB Finance Docket No. 35147; 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 primary application and related filings, filed on May 
30, 2008, by Norfolk Southern Railway Company (Norfolk Southern), Pan 
Am Railways, Inc. (PARI) (a noncarrier railroad holding company), and 
two of PARI's rail carrier subsidiaries, Boston and Maine Corporation 
(B&M) and Springfield Terminal Railway Company (Springfield Terminal) 
(collectively, Applicants). The primary application seeks Board 
approval under 49 U.S.C. 11322 and 11323 of (1) the acquisition by 
Norfolk Southern and B&M of joint control and ownership of Pan Am 
Southern, LLC (PAS), a new rail carrier to be formed; and (2) the 
agreements by which Springfield Terminal would operate the lines of PAS 
and establish rates for PAS. The agreements for which approval and 
authorization are being sought by the application and the related 
filings will be referred to collectively as the Transaction.
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    \1\ This decision also embraces Pan Am Southern, LLC--
Acquisition and Operation Exemption--Lines of Boston and Maine 
Corporation, STB Finance Docket No. 35147 (Sub-No. 1); Norfolk 
Southern Railway Company--Trackage Rights Exemption--Pan Am 
Southern, LLC--Between Mechanicville, NY and Ayer, MA, STB Finance 
Docket No. 35147 (Sub-No. 2); and Springfield Terminal Railway 
Company--Trackage Rights Exemption--Pan Am Southern, LLC--Between 
CPF 312 Near Willows, MA, and Harvard Station, MA, STB Finance 
Docket No. 35147 (Sub-No. 3) (collectively, the related filings).
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    If the Transaction is approved, PAS would own or operate over 
(through trackage rights) approximately 437 miles of track (PAS Lines). 
The PAS Lines consist of 238.3 miles of rail lines to be owned by PAS, 
as well as 198.4 miles of track over which PAS would have trackage 
rights. The west to east main line section of the PAS Line, called the 
Patriot Corridor, would be comprised of 139.7 miles of track to be 
owned by PAS extending from Mechanicville, NY to CPF-312, near Ayer, 
MA, as well as 15.8 miles of trackage rights over Massachusetts Bay 
Transportation Authority (MBTA) track between Fitchburg, MA and 
Willows, MA. The north-south section of the PAS Lines extending from 
White River Junction, VT to New Haven, CT would be comprised of: (1) 
72.8 miles of trackage rights over New England Central Railroad (NECR) 
between White River Junction, VT and East Northfield, MA; (2) 49.7 
miles of track to be owned by PAS on the Connecticut River Mainline 
between East Northfield, MA and Springfield, MA; and (3) 62.0 miles of

[[Page 36587]]

trackage rights over the National Railroad Passenger Corporation 
(Amtrak) between Springfield, MA and New Haven, CT. The PAS Lines would 
also include several branch lines.\2\
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    \2\ The branch lines consist of: (1) The Rotterdam Branch, which 
is approximately 30.5 miles between Rotterdam Junction, NY and 
Mechanicville, NY (including 18.3 miles of trackage over Canadian 
Pacific Railway Company (CP) between Mohawk Yard in Schenectady, NY 
and Mechanicville, NY); (2) the Adams Industrial branch, which is 
approximately 4.6 miles between N. Adams, MA and Adams, MA; (3) the 
Heywood Industrial branch, which is approximately 1.2 miles between 
Gardner, MA and Heywood, MA; (4) approximately 2.3 miles between 
Ayer, MA and Harvard Station, MA; (5) the Groton Industrial, which 
consists of trackage rights over MBTA extending approximately 5 
miles between Ayer, MA and Groton, MA; (6) approximately 2.3 miles 
of trackage rights over MBTA between Willows, just east of Ayer, MA, 
and Littleton, MA; (7) approximately 42.9 miles between Berlin, CT 
and Derby, CT (including 18.6 miles of trackage rights over Metro 
North Commuter Railroad (MNCR) between Waterbury, CT and Derby, CT); 
(8) the Southington Industrial branch, which is approximately 4.5 
miles between Plainville, CT and Southington, CT; and (9) 
approximately 3.7 miles of trackage rights over CSX Transportation, 
Inc. (CSXT) between North Haven, CT and Cedar Hill, CT.
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    In addition, the parties have filed with the application three 
related notices of exemption. Pursuant to 49 CFR 1150.35(a), the first 
is a notice of intention to file, on or after June 16, 2008, a notice 
of exemption in Pan Am Southern, LLC--Acquisition and Operation 
Exemption--Lines of Boston and Maine Corporation, STB Finance Docket 
No. 35147 (Sub-No. 1), for PAS to acquire from B&M the 437 miles of 
rail lines and trackage rights involved in the Transaction and to 
operate over the lines as a common carrier. The second is a notice of 
exemption in Norfolk Southern Railway Company--Trackage Rights 
Exemption--Pan Am Southern, LLC--Between Mechanicville, NY and Ayer, 
MA, STB Finance Docket No. 35147 (Sub-No. 2), for Norfolk Southern to 
acquire trackage rights over 151.33 miles of PAS track between 
Mechanicville, NY and Ayer, MA. Finally, Applicants have included a 
notice of exemption in Springfield Terminal Railway Company--Trackage 
Rights Exemption--Pan Am Southern, LLC--Between CPF 312 Near Willows, 
MA, and Harvard Station, MA, STB Finance Docket No. 35141 (Sub-No. 3), 
for Springfield Terminal to acquire trackage rights over 6.4 miles of 
PAS track, to allow Springfield Terminal to continue to connect its 
remaining lines and to preserve connections to CSXT and Providence and 
Worcester Railroad Company (P&W).
    In this decision, the Board finds that the Transaction is a ``minor 
transaction'' under 49 CFR 1180.2(c). The Board also adopts a 
procedural schedule for consideration of the application under which 
the Board's final decision would be issued on October 20, 2008, and 
become effective on November 4, 2008, assuming that there is no need 
for further environmental analysis. See the discussion on environmental 
matters, below.

DATES: The effective date of this decision is June 27, 2008. Comments 
on applicants' Environmental Appendix, which sets out why they believe 
no formal environmental review is warranted in this case, are due to 
the Board's Section of Environmental Analysis (SEA) by July 7, 2008. 
Any person who wishes to participate in this proceeding as a party of 
record (POR) must file, no later than July 11, 2008, 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 August 11, 2008. Responses to comments, 
protests, requests for conditions, and other opposition, and rebuttal 
in support of the primary application or related filings must be filed 
by September 5, 2008. If a public hearing or oral argument is held, it 
will be held on a date to be determined by the Board. The Board will 
issue its final decision on October 20, 2008, unless an extension is 
needed to permit the completion of formal environmental review.

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 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 e-mail only if service by e-mail 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) 
Richard A. Allen (representing Applicants), Zuckert, Scoutt & 
Rasenberger, LLP, 888 Seventeenth Street, N.W., Suite 700, Washington, 
DC 20006; 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 July 11, 2008, as practicable).

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: Norfolk Southern is a Class I railroad 
headquartered in Norfolk, VA. With more than 30,000 employees, it 
operates approximately 21,000 route miles in 22 states and the District 
of Columbia. Norfolk Southern is a wholly owned subsidiary of Norfolk 
Southern Corporation, a publicly held noncarrier holding company. 
Norfolk Southern provides intermodal rail service to upstate New York, 
New England and Canada through haulage agreements with CP (including CP 
subsidiaries) (collectively, CP) and Springfield Terminal.\3\
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    \3\ CP provides haulage of intermodal traffic to Norfolk 
Southern over a CP line from Sunbury, PA to Mechanicville, NY, and 
Springfield Terminal provides haulage of intermodal traffic to 
Norfolk Southern over its line from Mechanicville to the intermodal 
terminals in Ayer, MA and Waterville, ME.
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    Springfield Terminal is a Class II rail carrier. Its principal 
office, and that of its affiliate, B&M, is in Massachusetts. With 
approximately 700 employees, Springfield Terminal operates some 2,056 
route miles in Maine, New Hampshire, Vermont, Massachusetts, New York, 
and Connecticut.
    PARI is a noncarrier holding company formerly known as Guilford 
Transportation Industries, Inc. (GTI). PARI has four wholly owned 
subsidiaries, including B&M and Springfield Terminal. PARI (then GTI) 
acquired Maine Central Railroad, Inc. (MCR) in 1981, and in 1983, it 
purchased B&M and Springfield Terminal. Springfield Terminal's lines 
extend from Rotterdam Junction, NY in the west, to Mattawamkeag, ME in 
the east and, with trackage rights, to New Haven, CT in the south.\4\ 
Springfield Terminal interchanges traffic with 15 other railroads. In 
addition to interchanges with 11 short lines, Springfield Terminal 
interchanges with CSXT at Rotterdam Junction, NY, Hartford CT,\5\ 
Holyoke, MA, Barbers,

[[Page 36588]]

MA, Clinton, MA, and Boston, MA (I and F Junction); with CP at CP's 
Mohawk Yard in Schenectady, NY, St. Johnsbury, VT, and Wells River, VT; 
with Norfolk Southern at Mohawk Yard; \6\ and with Canadian National 
Railway Company (CN) at Danville Junction, ME, and St. John, New 
Brunswick (via CN haulage rights). The largest source of Springfield 
Terminal's traffic is the paper industry, for which Springfield 
Terminal transports inbound chemicals, clay, and pulp, and outbound 
paper.
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    \4\ In 1984, GTI also acquired the Delaware & Hudson Railway 
Company (D&H). D&H filed for bankruptcy protection in 1988 and is 
now owned by CP.
    \5\ The Hartford interchange point with CSXT is currently 
inactive.
    \6\ Norfolk Southern has the right to interchange traffic with 
Springfield Terminal at Mechanicville, NY, but the interchange now 
takes place by agreement at CP's Mohawk Yard. Following the 
Transaction and the construction of the proposed intermodal and 
automotive facility, to be located on the site of two former rail 
yards at Mechanicville, NY (Mechanicville Facility), it is 
anticipated that the interchange between Norfolk Southern and PAS 
will occur at that proposed facility. CP has consented to the 
relocation of its mainline and modification of the interchange 
location, in each case to accommodate the proposed Mechanicville 
Facility.
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    Norfolk Southern, PARI, B&M and Springfield Terminal entered into a 
Transaction Agreement dated May 15, 2008, which would require the 
parties upon closing to establish PAS and to effect various other 
agreements (Ancillary Agreements), the complete versions of which are 
attached to the confidential version of the application filed with the 
Board. The Transaction Agreement is subject to, and would be 
consummated following, receipt of Board approval and effectiveness of 
applicable exemptions. The Transaction Agreement requires Norfolk 
Southern to contribute $137.5 million in cash and demand notes, and to 
assign a Purchase Option \7\ to PAS for which Norfolk Southern would 
receive a 50% membership interest in PAS. The Transaction Agreement 
requires the Pan Am parties to contribute a 73.684% undivided interest 
in the PAS Lines, certain trackage rights, and other related assets to 
PAS for which B&M would receive a 50% membership interest in PAS, and 
for PAS to use $47.5 million of its capital to exercise the Purchase 
Option contributed by Norfolk Southern and purchase the other 26.316% 
undivided interest in the PAS Lines, certain trackage rights, and other 
related assets from the Pan Am parties.
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    \7\ Norfolk Southern has purchased an option (the Purchase 
Option) from B&M to purchase a 26.316% undivided interest in the PAS 
Lines and related assets for $52 million, and PARI has agreed to 
expend $2.5 million to perform specified track work. The $5 million 
option price paid by Norfolk Southern is non-refundable but will be 
credited against the purchase price when PAS exercises the Purchase 
Option at closing of the Transaction Agreement.
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    The application states that Norfolk Southern would infuse 
substantial capital into PAS, $87.5 million dollars of which would go 
into improving infrastructure. PAS would use part of that capital to 
remove long term slow orders along the Patriot Corridor and add 
capacity and clearances along that line for better traffic flow. 
Springfield Terminal would provide the labor associated with these 
capital projects, to the same extent it would do so under its operation 
of these lines today under its collective bargaining agreements.
    According to the application, PAS would use a portion of the 
capital contributed by Norfolk Southern to create the Mechanicville 
Facility. The proposed Mechanicville Facility is expected to 
significantly improve overhead rail operations for intermodal and 
automotive traffic destined to Ayer, MA. The existing intermodal 
facility at Ayer also would be improved, and a new automotive facility 
would be constructed at San Vel near Ayer (San Vel Automotive). 
According to Applicants, for traffic moving into the Boston area from 
the west, the Transaction would strengthen the existing Norfolk 
Southern/Springfield Terminal competitive option to CSXT's single line 
service because it makes PAS a more efficient competitor.
    Applicants state that short line and regional railroads in the 
area--P&W, NECR, and Vermont Railroad, Inc. (VTR)--would not only 
interchange traffic with PAS, but would also obtain new direct routing 
opportunities for interchange with Norfolk Southern. According to 
Applicants, these railroads and their customers would benefit further 
from the proposed infrastructure improvements.
    Passenger Service Impacts. According to Applicants, there are no 
passenger trains currently operating or expected to operate over the 
line segments proposed to be owned by PAS.
    Discontinuances/Abandonments. Applicants state that the Transaction 
would not entail any abandonments or elimination of any facilities.
    Financial Arrangements. According to Applicants, no new securities 
would be issued in connection with the Transaction, and Norfolk 
Southern's contribution to PAS would be funded from available cash and 
credit facilities. Norfolk Southern does not expect any increase in 
fixed charges as a result of the Transaction.
    Time Schedule for Consummation. Applicants expect to consummate the 
Transaction promptly after the effective date of any Board approval of 
the Transaction.
    Public Interest Considerations. Applicants contend that the 
Transaction would have no adverse competitive effects and that it would 
in fact enhance their ability to compete with trucks and with other 
railroads, most notably, CSXT, which is the only Class I railroad now 
providing rail service over its own lines to locations in this New 
England region. In a verified statement attached to the application, 
the Applicants' outside consultant maintains that: (1) The Transaction 
is an end-to-end transaction that would eliminate no competing routes, 
stations, or services; (2) no rail customer would be left with reduced 
competitive rail options as a result of the proposed transaction; and 
(3) the Transaction would not have any material adverse effects on 
connecting short lines, but would in fact benefit these carriers.
    Applicants maintain that the improvement in their ability to 
compete would be most significant with respect to intermodal and 
automotive traffic between Massachusetts, eastern New York, and points 
west. Today, according to Applicants, CSXT has large intermodal and 
automotive terminals in eastern New York and Massachusetts and carries 
a large share of the intermodal and automotive traffic in those 
areas.\8\ Applicants maintain that, with the improvements to the PAS 
Lines and the new or improved terminals at Ayer, San Vel and 
Mechanicville, Applicants' ability to expand their intermodal and 
automotive services into markets now largely dominated by CSXT would be 
significantly enhanced.
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    \8\ According to Applicants, CSXT also leases a large terminal 
facility from Pan Am in Ayer, MA that is capable of handling 
automotive traffic, but CSXT has elected not to use it and not to 
relinquish the lease. B&M would contribute that facility to PAS, but 
it would not be available for PAS's use until 2017 due to the CSXT 
lease.
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    Applicants state that, in addition to furthering competition, the 
Transaction would further the public interest in meeting significant 
transportation needs. According to Applicants, the principal purpose of 
the Transaction is to enhance the existing infrastructure of the lines 
to be acquired by PAS, substantially improving service to rail 
customers. Infrastructure would be enhanced by: (1) Upgrading the lines 
to permit heavier (286,000 pound) rail cars, which are more efficient 
and economical for the coal-burning electric utilities served by the 
lines; (2) the proposed intermodal facility at Mechanicville, which 
would enable Norfolk Southern to better utilize its existing authority 
to move more efficient double-stack cars to eastern New York from 
points west and to move

[[Page 36589]]

single-stack intermodal trains faster and more efficiently to eastern 
Massachusetts; and (3) the proposed automotive facilities at 
Mechanicville and San Vel, which are intended to improve service to 
shippers of automobiles to eastern New York and New England.
    According to Applicants, the investment that Norfolk Southern would 
make in PAS would benefit not only coal, automotive, and intermodal 
customers but all Springfield Terminal and Norfolk Southern industrial 
customers. Applicants state that elimination of the interchange of 
intermodal traffic at the less efficient Mohawk Yard should improve the 
movement of all traffic through this area. Applicants also assert that 
customers that can utilize 286,000 pound rail cars would benefit from 
the rail and track improvements. Finally, according to Applicants, the 
capacity that would be added and the increase in the speed of the main 
line between Albany and Ayer would improve the fluidity, speed, and 
consistency of shipments for all customers using the services of PAS. 
The Transaction does not contemplate the elimination of any existing 
facilities.
    According to Applicants, the short line and regional railroads that 
would connect with PAS and their customers, including particularly, 
VTR, P&W, and NECR, would likewise benefit from the improved service 
over the PAS Lines resulting from those investments, as well as from 
the new direct connections with Norfolk Southern.
    Environmental Impacts. Applicants state that their representatives 
met with representatives of the Board's Section of Environmental 
Analysis (SEA) on April 22, 2008, to explain why, in Applicants' view, 
the Transaction would not have significant environmental impacts and 
require formal environmental review. At SEA's request and to assist the 
Board in determining whether a formal environmental review should be 
conducted, Applicants, on June 6, 2008, filed an Environmental Appendix 
in support of their position and asked for public comments on it. In 
their Environmental Appendix, Applicants maintain that the Transaction 
would not have significant environmental impacts because it would not 
cause significant changes in railroad operations and that further 
environmental review is not warranted.
    Labor Impacts. Applicants expect that the Transaction would result 
in no adverse effect on any of the Applicants' employees. Employees of 
Springfield Terminal are currently providing all of the rail services 
over the PAS Lines. The Transaction Agreement and the Railroad 
Operating Agreement (attached to the application) state that, after 
consummation of the Transaction, Springfield Terminal would become the 
contract operator of the PAS Lines, and Springfield Terminal would be 
required to ``act in accordance with its then-current collective 
bargaining agreements as if the Assets were an integral part of the 
Springfield Terminal railroad network.'' \9\ Applicants state that the 
Capital Facilities and Management Agreement (attached to the 
application) provides that Springfield Terminal would perform work on 
any capital contract that its labor agreements would require 
Springfield Terminal employees to perform under pre-Transaction 
circumstances unless Springfield Terminal obtains a waiver of any such 
requirement. Thus, according to Applicants, the same employees would be 
performing the same work under the same agreements for the foreseeable 
future.
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    \9\ Exhibit E, Section 9(f)(ii)(A).
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    In any event, Applicants expect that, as required by 49 U.S.C. 
11326(a), the Board would impose the labor protective conditions set 
forth in New York Dock Ry.--Control--Brooklyn Eastern Dist., 360 I.C.C. 
60, 84-90 (1979) (New York Dock), aff'd sub nom. New York Dock Ry. v. 
United States, 609 F.2d 83 (2d Cir. 1979), on the elements of the 
Transaction that are subject to 49 U.S.C. 11323.
    Related Filings. In connection with the Transaction, three notices 
of exemption were filed:
    (Sub-No. 1). Pursuant to 49 CFR 1150.35(a), PAS filed a notice of 
intent to file, on or after June 16, 2008, a notice of exemption 
docketed as (Sub-No. 1), whereby PAS would acquire and operate certain 
lines of B&M and acquire incidental trackage rights from Springfield 
Terminal to operate over the lines of third parties. Pursuant to the 
primary application to which this notice in (Sub-No. 1) is related, PAS 
would be formed and Norfolk Southern would contribute cash, demand 
notes and the Purchase Option agreement to PAS, which together are 
valued at $140 million. Under the Transaction that is the subject of 
the notice in (Sub-No. 1), B&M would contribute certain railroad lines 
in Massachusetts, New York, Vermont, New Hampshire and Connecticut, 
totaling approximately 238 route miles. Springfield Terminal would 
assign to PAS trackage rights Springfield Terminal currently holds over 
certain lines of MBTA, NECR, CP, Amtrak, CSXT, and MNCR, totaling 
approximately 198 route miles.
    (Sub-No. 2). Pursuant to 49 CFR 1180.2(d)(7) and 1180.4(g), Norfolk 
Southern filed a notice of exemption to permit it to acquire overhead 
trackage rights over approximately 151.33 miles of track that would be 
owned or operated by PAS between Mechanicville, NY and Ayer, MA. 
According to Norfolk Southern, the trackage rights that are the subject 
of this notice would enable Norfolk Southern to provide direct rail 
transportation of intermodal traffic to and from the existing 
intermodal terminal at Ayer, MA, and the new automotive terminal that 
the Applicants propose to construct at nearby San Vel, MA, in the event 
that PAS fails to provide haulage services at a service level required 
under the Transaction Agreement. Norfolk Southern would not exercise 
any of the trackage rights until the later of (1) the effective date of 
the notice of exemption (including compliance with any conditions 
imposed on the exemption by the Board) or (2) the closing of the 
agreements for which the Board's approval is being sought in the 
primary application. As a condition to this exemption, Applicants state 
that any employees affected by the acquisition of these trackage rights 
would be protected under the conditions imposed in Norfolk and Western 
Ry. Co.--Trackage Rights--BN, 354 I.C.C. 605 (1978), as modified in 
Mendocino Coast Ry., Inc.--Lease and Operate, 360 I.C.C. 653 (1980) 
(N&W).
    (Sub No. 3). Pursuant to 49 CFR 1180.2(d)(7) and 1180.4(g), 
Springfield Terminal filed a notice of exemption to permit it to 
acquire overhead trackage rights over approximately 6.4 miles of track 
that would be owned by PAS between Willows, MA, and Harvard Station, 
MA. The trackage rights that are the subject of this notice would 
enable Springfield Terminal to provide direct transportation of traffic 
for its own account between its current lines east of CPF 312 and its 
current line south of Harvard Station, MA. These trackage rights also 
would enable Springfield Terminal to continue to interchange traffic in 
its own account directly with CSXT and the P&W at points south of 
Harvard Station. Springfield Terminal would not exercise any of the 
trackage rights until the later of (1) the effective date of the notice 
of exemption (including compliance with any conditions imposed on the 
exemption by the Board) or (2) the closing of the agreements for which 
the Board's approval is being sought in the primary application. As a 
condition to this exemption, Applicants state than any

[[Page 36590]]

employees affected by the acquisition of these trackage rights would be 
protected under the conditions imposed in N&W.
    Primary Application and Related Filings Accepted. Based on the 
information provided in the application, the Board finds the proposed 
Transaction to be a ``minor transaction'' under 49 CFR 1180.2(c). A 
transaction that does not involve two or more Class I railroads is 
minor if (1) it would clearly not have anticompetitive effects, or (2) 
any anticompetitive effects would clearly be outweighed by the 
transaction's contribution to the public interest in meeting 
significant transportation needs. On the face of the application, there 
does not appear to be a likelihood of any anticompetitive effects 
resulting from the Transaction. The Norfolk Southern and Pan Am systems 
are entirely end-to-end, and it appears that no shipper would have 
fewer competitive rail alternatives as a result of the Transaction.
    The Transaction also would not appear to have an adverse 
competitive effect on connecting short line and regional carriers. The 
Transaction would not impose any interchange restrictions on PAS, and 
PAS would honor all of the existing interchange contracts with 
connecting carriers. Eight short lines connect with the Pan Am lines 
that would become part of the PAS Lines, and none would lose a 
connecting alternative as a result of the Transaction. Many short lines 
would simply be served by PAS instead of Pan Am, and some would gain 
more direct access to Norfolk Southern via PAS.
    The Board's finding regarding competitive impact is preliminary. 
The Board will give careful consideration to any claims that the 
Transaction would have anticompetitive effects that are not apparent 
from the application itself.
    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 part 1180. 
The Board is also accepting for consideration the three 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.
    Public Inspection. The primary application and related filings are 
available for inspection in the library (Room 131) at the offices of 
the Surface Transportation Board, 395 E Street, SW., Washington, DC. In 
addition, the primary application and related filings may be obtained 
from Mr. Allen (representing Applicants) at the address indicated 
above.
    Procedural Schedule. The Board has considered Applicants' request 
for an expedited procedural schedule filed on May 30, 2008, under which 
the Board would issue its final decision before the statutory deadline 
of 180 days after the filing of the primary application. The Board is 
adopting a procedural schedule that is similar to Applicants' proposed 
schedule, but providing more time for interested parties to file 
comments.
    Under the procedural schedule adopted by the Board, comments on the 
Environmental Appendix are due to be filed by July 7, 2008. Any person 
who wishes to participate in this proceeding as a POR must file a 
notice of intent to participate no later than July 11, 2008; all 
comments, protests, requests for conditions, and any other evidence and 
argument in opposition to the primary application or related filings, 
including filings by DOJ and DOT, must be filed by August 11, 2008; and 
responses to comments, protests, requests for conditions, and other 
opposition and rebuttal in support of the primary application or 
related filings must be filed by September 5, 2008. As in past 
proceedings, DOJ and DOT will be allowed to file, on the response due 
date (here, September 5, 2008), their comments in response to the 
comments of other parties, and Applicants will be allowed to file (as 
quickly as possible thereafter) a response to any such comments filed 
by DOJ and/or DOT. Under this schedule, a public hearing or oral 
argument may be held on a date to be determined by the Board. The Board 
will issue its final decision by October 20, 2008, with an effective 
date of 15 days after its issuance, assuming that formal environmental 
review under NEPA is not required. For further information respecting 
dates, see the attached Appendix.
    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 July 11, 2008, 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. Allen (representing Applicants).
    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 July 11, 
2008, 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 
parties). Each POR also will 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.
    Comments, Protests, Requests for Conditions, and Other Opposition 
Evidence and Argument, Including Filings By DOJ and DOT. All comments, 
protests, requests for conditions, and any other evidence and argument 
in opposition to the primary application or related filings, including 
filings by DOJ and DOT, must be filed by August 11, 2008.
    Because the Transaction proposed in the application is a minor 
transaction, no responsive applications will be permitted. See 49 CFR 
1180.4(d)(1).
    Protesting parties are advised that, if they seek either the denial 
of the application or the imposition of conditions upon any approval 
thereof, on the theory that approval (or approval without conditions) 
would harm competition and/or their ability to provide essential 
services, they must present substantial evidence in support of their 
positions. See Lamoille Valley R.R. Co. v. ICC, 711 F.2d 295 (DC Cir. 
1983).

[[Page 36591]]

    Responses To Comments, Protests, Requests for Conditions, and Other 
Opposition; Rebuttal In Support of the Primary Application Or Related 
Filings. Responses to comments, protests, requests for conditions, and 
other opposition submissions, and rebuttal in support of the primary 
application or related filings must be filed by September 5, 2008.
    Public Hearing/Oral Argument. The Board may hold a public hearing 
or an oral argument in this proceeding on a date to be determined by 
the Board.
    Discovery. Discovery may begin immediately. The parties are 
encouraged to resolve all discovery matters expeditiously and amicably.
    Environmental Matters. Applicants assert in their application that 
the proposed Transaction would have insignificant environmental effects 
and therefore does not require a formal environmental review under the 
National Environmental Policy Act of 1969 (NEPA). Applicants state that 
the proposed Transaction would result in no significant changes in 
railroad operations that would exceed the thresholds triggering 
environmental review established in the Board's environmental rules at 
49 CFR 1105.7(e)(4) or (5). No related rail construction or abandonment 
projects requiring Board approval have been proposed. Applicants 
further state that the Transaction is exempt under 49 CFR 
1105.6(c)(2)(i) from environmental reporting requirements and exempt 
under 49 CFR 1105.8(b)(1) and (3) from historic preservation reporting 
requirements. Applicants also state that the proposed Transaction does 
not require preparation of a Safety Integration Plan pursuant to 49 CFR 
1105.6.
    To assist SEA in determining whether the Transaction would not have 
significant environmental impacts and would not require formal 
environmental review, SEA directed Applicants to prepare an 
Environmental Appendix providing additional details and explanation, 
including maps, supporting Applicants' conclusion that the Transaction 
does not warrant the preparation of formal environmental documentation. 
Applicants have prepared an Environmental Appendix and issued it for 
public review and comment to a wide range of appropriate Federal, 
state, and local agencies, government entities and other interested 
parties in the project area. The Environmental Appendix is available on 
the Board's Web site at www.stb.dot.gov, under ``E-LIBRARY/Filings'' 
(see Filings for June 6, 2008). Applicants also placed notices in major 
newspapers in potentially affected communities to announce the 
availability of the Environmental Appendix and the opportunity to file 
public comments.
    Comments from all interested parties on the Environmental Appendix 
are to be postmarked by July 7, 2008. Based on its consideration of all 
timely comments on the Environmental Appendix and its own independent 
review of all available environmental information, SEA will recommend 
to the Board whether there is a need for formal environmental review in 
this case. The Board will then determine whether to issue a finding of 
no significant environmental impact, or, alternatively, whether an 
Environmental Assessment (EA) or Environmental Impact Statement (EIS) 
should be prepared. If an EA or EIS is required to meet the Board's 
NEPA obligations, the procedural schedule set forth here will be 
adjusted accordingly.
    Comments On Environmental Appendix. All comments on the 
Environmental Appendix must be filed by July 7, 2008. Persons wishing 
to submit written comments on the Environmental Appendix should send: 
(1) one signed original to SEA by mail postmarked by July 7, 2008, to 
Office of the Secretary, Case Control Unit, STB Finance Docket No. 
35147, Surface Transportation Board, 395 E Street, SW., Washington, DC 
20423; \10\ and (2) one copy to Applicants' attorney, Richard A. Allen. 
Comments can also be submitted electronically by following the 
instructions for ``e-filing'' at the Board's Web site at 
www.stb.dot.gov. Any questions or requests for additional information 
about the Board's environmental review process can be directed to Ken 
Blodgett of SEA, at 202-245-0305.
---------------------------------------------------------------------------

    \10\ In their letter of transmittal, Applicants used the wrong 
zip code (20024, the zip code for the STB's building location), 
rather than 20423 (the Board's assigned zip code that follows the 
agency wherever it is located).
---------------------------------------------------------------------------

    Filing/Service Requirements. Persons participating in this 
proceeding may file with the Board and serve on other parties: a notice 
of intent to participate (due by July 11, 2008); a certificate of 
service indicating service of prior pleadings on persons designated as 
PORs on the service-list notice (due by the 10th day after the service 
date of the service-list notice); any comments, protests, requests for 
conditions, and any other evidence and argument in opposition to the 
primary application or related filings (due by August 11, 2008); and 
any responses to comments, etc., and any rebuttal in support of the 
primary application or related filings (due by September 5, 2008).
    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 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) 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) Richard A. Allen (representing 
Applicants), Zuckert, Scoutt & Rasenberger, LLP, 888 Seventeenth 
Street, NW., Suite 700, Washington, DC 20006; and (4) any other person 
designated as a POR on the service-list notice.
    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. An interested person does not need to be on the 
service list to obtain a copy of the primary application or any other 
filing made in this proceeding. 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 primary application and 
other filings in this proceeding will also be available on the Board's 
Web site at www.stb.dot.gov under ``E-LIBRARY/Filings.''
    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 STB Finance Docket No. 35147 and the 
related filings in STB Finance Docket

[[Page 36592]]

No. 35147 (Sub-Nos. 1 through 3) 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 the 
Appendix.
    3. The parties to this proceeding must comply with the procedural 
requirements described in this decision.
    4. This decision is effective on June 27, 2008.

    Decided: June 23, 2008.

    By the Board, Chairman Nottingham, Vice Chairman Mulvey, and 
Commissioner Buttrey. Vice Chairman Mulvey commented with a separate 
expression.
Anne K. Quinlan,
Acting Secretary.

    Vice Chairman Mulvey, commenting:
    While I vote today to accept for consideration this transaction as 
``minor'' in accordance with the statutory definition of that type of 
transaction, I believe the time may have come to redefine what is 
``minor'' and what is ``significant.'' This transaction involves 
several hundred miles of rail line in the New England region and 
affects a number of carriers. It is by no means ``minor'' as that term 
is commonly used.

                    Appendix--Procedural Schedule 11
------------------------------------------------------------------------
 
------------------------------------------------------------------------
May 30, 2008.................  Application, related notices of
                                exemption, and motion to establish
                                procedural schedule filed.
June 27, 2008................  Notice of acceptance of application and
                                notices of exemption to be published in
                                Federal Register.
July 7, 2008.................  Comments on the Environmental Appendix
                                due.
July 11, 2008................  Notices of intent to participate in the
                                proceeding due.
August 11, 2008..............  Comments, protests, requests for
                                conditions, and supporting evidence,
                                including filings for government
                                agencies, due.
September 5, 2008............  Responses to comments, protests, and
                                requests for conditions, and rebuttal in
                                support of Application due.
TBD..........................  Public hearing or oral argument may be
                                held.
October 20, 2008.............  Service of final decision.
November 4, 2008.............  Final decision effective.
------------------------------------------------------------------------
\11\ This schedule will be amended, if necessary, to accommodate formal
  environmental review, if needed.

    This schedule would meet the procedural deadlines in 49 U.S.C. 
11325(a) and (d).
 [FR Doc. E8-14633 Filed 6-26-08; 8:45 AM]
BILLING CODE 4915-01-P