Chairman Oberman Dissents in Recent Board Decisions Granting Preliminary Construction Authority on the Transportation Merits

In two recent construction cases, Chairman Oberman has objected to the Board granting a petitioner preliminary construction approval based on the transportation merits but conditioning the approval upon completion of an environmental and historical review. 

The construction of a common carrier rail line requires Board approval.  An applicant can either apply to the Board under 49 U.S.C. §10901 or an applicant can petition the Board for an exemption under 49 U.S.C. §10502 from the approval requirements of section 10901.

Prior to 2007, an applicant could seek preliminary Board approval of a rail construction project, subject to completion of either an Environmental Impact Statement or an Environmental Analysis.  The Board established a new policy in 2007, that it would “not address transportation-related issues in construction proposals until the entire record, including the environmental record, is completed” because the petition could be later rejected when the Board considers the environmental impacts of the project.  Six County Ass’n of Governments – Construction & Operation Exemption – A Rail Line Between Levan and Salina, Utah, STB Finance Docket 34075, slip op.  at 2 n.4 (served Sept. 3, 2015).



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U.S. District Dismisses Sexual Assault Claims against Airline and its Holding Company that Occurred on International Flight for Lack of Personal Jurisdiction and Preemption under the Montreal Convention

The U.S. District Court for the Central District of California recently dismissed a plaintiff’s claims against an airline and its holding company arising from an alleged sexual assault she suffered on an international flight from Los Angeles to Panama City for lack of personal jurisdiction over the holding company and because the claims against the airline were preempted by the Montreal Convention.1

According to the plaintiff’s complaint, she was sexually assaulted by a passenger sitting next to her almost immediately after she took her seat.  She requested a seat change, but the crew initially denied her request.  After the alleged assailant “completely mount[ed]” the plaintiff, she escaped her seat, woke up the flight crew, and requested again that her seat be moved.  This time she was accommodated, but moved to a seat still within visibility of the alleged assailant, who allegedly continued his behavior and terrorized the plaintiff.  The offending behavior continued after the flight landed, when the plaintiff was forced to wait near the alleged assaulter.

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ATLP President’s Message 2021-22: Jameson Rice

Dear Members,

The ATLP recently concluded its 92nd annual meeting. Thank you to all of those who attended. For those of our members who could not join us virtually, we look forward to seeing you again soon, in person. Our sincere thanks goes to Wayne Rohde and the Program Committee for putting together a successful and informative program.

At the conclusion of the meeting, we elected a new slate of officers. I am grateful to be serving as President for the upcoming year and excited to be working with the board on enacting and implementing new strategic initiatives. Special thanks to Jason Tutrone - as the outgoing President - who successfully steered our organization through the challenges of a global pandemic.



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International Regulation Of Autonomous And Remotely Controlled Commercial Vessels

The International Maritime Organization (“IMO”) has directed its focus on the analysis of the potential regulatory scheme that must be implemented to address the emerging technology of autonomous and remotely controlled commercial ships.  The IMO Strategic Plan for the years 2018 through 2023 contains a Key Strategic Direction to “integrate new and advancing technologies into the regulatory framework.”1 Specifically, this Key Strategic Direction entails weighing the benefits of new technology against safety concerns, security, cybersecurity, environmental risks, costs, and the facilitation of international trade. Commensurate with that goal, IMO is conducting an analysis of all applicable treaties in assessing the regulation of Maritime Autonomous Surface Ships (“MASS”). 2   Three IMO standing Committees, including the Marine Safety Committee (“MSC”), the Legal Committee (“LGL”), and the Facilitation Committee (“FAL”) have commenced a “Scoping Exercise” to analyze MASS against the backdrop of the international treaties that govern the world’s commercial shipping industry.

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The Board Adopts a Final Rule Amending the Thresholds for Classifying Rail Carriers

In a decision served on April 5, 2021, the Surface Transportation Board (Board) adopted a final rule amending the thresholds for classifying rail carriers.  Mont. Rail Link, Inc.—Pet. for Rulemaking—Classification of Carriers, EP 763 (STB served April 5, 2021).  Under 49 C.F.R. Part 1201, rail carriers are grouped into one of three classes for purposes of accounting and reporting.  Id., slip op. at 1.  This classification affects the degree to which rail carriers must file annual, quarterly, and other operational reports, and it is used in various other contexts, including differentiating the legal standards and procedures that apply to certain transactions subject to Board licensing, and prescribing labor protection conditions.  Id. 

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The Board Adopts a Final Rule Regarding Demurrage Billing Requirements

In a decision served on April 6, 2021, the Surface Transportation Board (Board) adopted a final rule “requiring Class I carriers to include certain minimum information on or with their demurrage invoices and provide, in the format of their choosing, machine-readable access to the required minimum information.”  Demurrage Billing Requirements, EP 759, slip op. at 3 (STB served April 6, 2021).  According to the Board, “[d]emurrage is a charge that serves principally as an incentive to prevent undue car detention and thereby encourage the efficient use of rail cars in the rail network, while also providing compensation to rail carriers for the expense incurred when rail cars are unduly detained beyond a specified period of time (i.e., ‘free time”) for loading and unloading.”  Id., slip op. at 1-2.

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The Board Issues a Notice of Proposed Rulemaking to Establish a New Class Exemption for Emergency Temporary Trackage Rights

On May 28, 2021, the Surface Transportation Board (Board) issued a decision granting the Association of American Railroads’ (AAR) petition to initiate a rulemaking proceeding to establish a new class exemption for emergency temporary trackage rights, with certain modifications made by the Board.  Pet. for Rulemaking—Railroad Consolidation Procedures—Exemption for Emergency Temporary Trackage Rights, EP 282 (Sub-No. 21) (STB served May 28, 2021).  The Board also proposed related changes to the class exemptions for trackage rights and temporary trackage rights.  Id., slip op. at 1. 

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The Board Rejects as Incomplete the “Significant” Application Filed by CSXT & Pan Am in Control and Merger Proceeding

On May 26, 2021, the Surface Transportation Board (Board) issued a decision rejecting as incomplete an application seeking approval for: (1) CSX Corporation (CSXC), CSX Transportation, Inc. (CSXT), and 747 Merger Sub 2, Inc. (747 Merger Sub 2) to control the railroads controlled by Pan Am Systems, Inc. (Systems) and Pan Am Railways, Inc. (PAR); and (2) CSXT to merge certain PAR subsidiaries into CSXT (the Proposed Transaction).  CSX Corp.—Control and Merger—Pan Am Systems, Inc., FD 36472 (STB served May 26, 2021). The Board also permitted the applicants to file a revised application.

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KCS Terminates CP Merger Agreement and Enters Into Merger Agreement with CN

Pending before the Surface Transportation Board (Board) are two potential merger proceedings involving Kansas City Southern – Docket No. FD 36500, regarding a potential merger with Canadian Pacific, and Docket No. FD 36514, regarding a potential merger with Canadian National.  A summary of these proceedings is provided below.

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The Surface Transportation Board’s Antitrust Review of Kansas City Southern Bids

Twenty years after issuing stronger regulations for the Surface Transportation Board’s review of railroad mergers, the STB is finally reviewing a merger of two Class I carrier railroads. But it’s not the merger that the Board expected to be reviewing two months ago.

On March 21, 2021, Canadian Pacific Railway (CP) announced it had reached an agreement to acquire Kansas City Southern for $29 billion. Both firms were Class I rail carriers as defined by the STB, meaning that they each had annual revenues of $505 million. The STB has authority to review mergers between Class I carriers.1 This was the first such merger since the STB finalized its “Major Rail Consolidation Procedures” regulations in 2001.2 Those regulations heightened the scrutiny that the STB would apply to Class I carriers’ mergers, but included a waiver of that scrutiny for transactions involving Kansas City Southern, unless the Board determined that the 2001 regulations should apply. Competing railroads and shippers urged the STB not to apply the waiver to this transaction.3 The Department of Justice also filed a comment through its Antitrust Division, objecting to the proposed use of a voting trust structure because of the effects on the firms’ incentives of such a structure, and because a voting trust could undermine the STB’s ability to conduct a meaningful review of the transaction or order divestitures as remedies.4 But the STB determined that the waiver in the 2001 rules should still apply twenty years later in the transaction with CP.5 The Board noted that Kansas City Southern’s rail network overlapped less with CP’s than with any other Class I railroad, and that the combined company would still be the smallest Class I railroad. The STB subsequently approved the CP-Kansas City Southern voting trust.6

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Guest Column: Spotting Inventive Trends for Autonomous Vehicles – Mitigating Environmental Conditions

The prevalence of autonomous vehicles has increased in recent years. It is projected that approximately 58 million units will be sold by 2030.1 To improve vehicle autonomy, safety, and operation, vehicle manufacturers are inventing and developing more features. These features, whether in their entireties or components thereof, are protected by one or more intellectual property assets—patents, trademarks, trade secrets, and copyright.2

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Why Labor Law Matters: Due Diligence Updates from the Perspective of a Transportation Industry Labor Lawyer

Introduction

This is my first submission since joining Practus – In doing so, I and this article will highlight the pervasiveness of changes in employment and labor law and provide some guidance in how to plan and adapt to them, not just in everyday decisions, but in the broader context of business change, whether in acquisitions or sales, mergers, or more fundamental decisions about how to manage and classify employees to minimize risk.

In our industries, such changes, whether they emerge from the courts or legislatures define our work for our client, especially so in the modes ATLP encompasses.



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92nd Annual Meeting Webinar Series

 

ATLP's 92nd Annual Meeting 2021 is a six-session online CLE program offering*. Beginning May 25 -through June 29, 2021, Tuesdays at 2 PM EDT. ATLP will present 2-3 hour sessions with topical discussions on a wide range of issues impacting the transportation law industry.

Join us for the next session of ATLP's 92nd Annual Meeting.



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ATLP Association Highlights: HazMat Blog

On May 7, 2021, the Colonial Pipeline Company learned it was the victim of a cybersecurity ransomware attack allegedly carried out by the criminal group known as “DarkSide.” DarkSide is a “ransomware-as-a-service” business believed to be headquartered in Russia, which loans out its malware to criminal affiliates who conduct cyberattacks on its behalf. DarkSide’s ransomware uses an encryption program to hold files and IT systems hostage in exchange for payment. The attack required Colonial Pipeline to take certain IT systems offline and temporarily halt all pipeline operations to ensure that the threat was contained.  The Colonial Pipeline is the largest pipeline system for refined oil products in the United States, spanning between Houston, Texas and Linden, New Jersey, and carries up to 100 million gallons per day of diesel, gasoline, home heating oil, and jet fuel.

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U.S. District Court Holds that Choice of Law Provision in Carrier’s Contract of Carriage Applied to All Aspects of Plaintiff’s Personal Injury Claim Arising From a Rough Landing

The U.S. District Court for the Eastern District of Louisiana recently denied Delta Airlines’ motion to dismiss an action under Federal Rule of Civil Procedure 12(c), wherein it held Delta to the choice of law clause its own contract of carriage even though Delta argued that the law of the forum where the alleged injury to the plaintiff occurred applied.

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Meet Your (Presumptive) FMCSA Administrator

President Biden has tapped Meera Joshi to lead the Federal Motor Carrier Safety Administration (FMCSA).  Joshi, who was already confirmed as Deputy Administrator and has been serving as the agency’s acting administrator since January, brings a wealth of transportation administration experience to the agency tasked primarily with ensuring the safety of the nation’s motor carriers, and those who share the road with them. Joshi previously served as CEO and commissioner of the New York City Taxi and Limousine Commission (TLC), where she had regulatory oversight of the city’s 130,000-strong private passenger fleet. 

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IMO Announces Release of The Ship-Port Interface Guide to Reduce GHG Emissions

 In March, the International Maritime Organization (“IMO”) announced the release of the Ship-Port Interface Guide (the “Guide”)1 for the purpose of reducing Greenhouse Gas Emissions (“GHG”).   The Guide was developed by the Global Industry Alliance2 to Support Low Carbon Shipping pursuant to the IMO-Norway GreenVoyage2020 project, 3   the Paris Agreement,4 and the United Nations 2030 Agenda for Sustainable Development.5 The Guide contains practical steps to be implemented for the overarching purpose of reducing GHG in the world shipping industry. A number of commercial shipping interests, including the cruise industry, have collectively endeavored to reduce GHG for the shipping industry. To that end, the Global Industry Alliance considered that the average lifetime of a commercial ship is approximately 25 years.

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CP & KCS Notify the Surface Transportation Board of Intent to File Application for Approval of Control Transaction

On March 23, 2021, Canadian Pacific Railway Limited (Canadian Pacific), Canadian Pacific Railway Company, and their U.S. rail carrier subsidiaries, Soo Line Railroad Company, Central Maine & Quebec Railway US Inc., Dakota, Minnesota & Eastern Railroad Corporation, and Delaware & Hudson Railway Company, Inc. (collectively, CP), and Kansas City Southern and its U.S. rail carrier subsidiaries, The Kansas City Southern Railway Company (KCSR), Gateway Eastern Railway Company, and The Texas Mexican Railway Company (collectively, KCS), notified the Surface Transportation Board (Board) of CP and KCS’s (collectively, Applicants) intent to file an application seeking authority under 49 U.S.C. §§ 11323-25 for the acquisition of control by Canadian Pacific, through its indirect, wholly owned subsidiary, Cygnus Merger Sub 2 Corporation (Cygnus Merger Sub 2), of Kansas City Southern.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD No. 36500 (filed Mar. 23, 2021).  Applicants are also seeking authority for the acquisition of control by Canadian Pacific, through Kansas City Southern, of KCSR and its railroad affiliates, and for the resulting common control by Canadian Pacific of both its U.S. railroad subsidiaries and KCSR and its railroad affiliates.  Id. at 1.  Applicants intend to file the application on or after June 28, 2021.  Id.

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The Surface Transportation Board Finds that CSXT & Pan Am’s Proposed Control and Merger Transaction is “Significant”

On February 25, 2021, CSX Corporation (CSXC), CSX Transportation, Inc. (CSXT), 747 Merger Sub 2, Inc. (747 Merger Sub 2), Pan Am Systems, Inc. (Systems), Pan Am Railways, Inc. (PAR), Boston and Maine Corporation (Boston & Maine), Maine Central Railroad Company, Northern Railroad, Portland Terminal Company, Springfield Terminal Railway Company (Springfield Terminal), Stony Brook Railroad Company, and Vermont & Massachusetts Railroad Company (collectively, Applicants), filed an application pursuant to 49 U.S.C. §§ 11323(a)(1), (3), (4), and (5) and 49 C.F.R. Part 1180, seeking approval from the Surface Transportation Board (Board) for: (1) CSXC, CSXT, and 747 Merger Sub 2 to control the railroads controlled by Systems and PAR; and (2) CSXT to merge certain PAR subsidiaries into CSXT.  CSX Corp.—Control and Merger—Pan Am Systems, Inc., FD 36472 (filed Feb. 25, 2021). 

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Court dismisses antitrust claims against Volkswagen for Forum Non Conveniens

On March 22, 2021, United States District Judge Bernard A. Friedman of the Eastern District of Michigan dismissed antitrust and business tort claims against Volkswagen AG and Volkswagen Group of America on forum non conveniens grounds.1 The claims were brought by plaintiffs Prevent USA Corporation and Eastern Horizon Group. The two plaintiffs alleged that they were two members of a group of related companies known collectively as the Horizon Group. They alleged that Volkswagen had acted in violation of Sections 1 and 2 of the Sherman Act, and similar Michigan state laws, to block efforts by Prevent Group to acquire auto parts suppliers that sold auto parts to Volkswagen.

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