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Railroads: The Board Accepts Post-Remand Filings in CN/CP Interchange Dispute and Seeks Public Comments on the Legal Issues in the Proceeding

On October 19, 2022, the Surface Transportation Board (Board) issued a decision accepting the post-remand briefs and comments filed in a declaratory order proceeding involving Soo Line Railroad Company (CP) and Wisconsin Central, Ltd. (CN) and soliciting public comments regarding the broad legal issues presented by the proceeding.  Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397 (STB served Oct. 19, 2022). 

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Railroads: The Board Announces Final Evidentiary Hearing Dates and Voting Conference in Gulf Coast Proceeding

On October 28, 2022, the Surface Transportation Board (Board) announced the final evidentiary hearing dates – November 17 and November 18, 2002 – for the March 16, 2021 application by the National Railroad Passenger Corporation (Amtrak) requesting an order that allowed additional Amtrak train operations over CSX Transportation, Inc. (CSXT) and Norfolk Southern Railway Company (NSR) lines along the Gulf Coast.  Application of the Nat’l Passenger R.R. Corp. Under 49 U.S.C. § 24308(E)—CSX Transp., Inc. & Norfolk S. Ry. Co., FD 36496 (STB served Oct. 28, 2022).  The Board also announced that it would hold a voting conference on December 7, 2022.  Id.

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Railroads: The Board Held Public Hearing in CP/KCS Merger Proceeding

On September 28, 2022, the Surface Transportation Board (Board) commenced a public hearing in the proposed Kansas City Southern (KCS) and Canadian Pacific (CP) merger proceeding.  See Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served September 21, 2022).

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The National Labor Relations Act and Its Impact on Human Resources Policies

Practitioners in the modes are familiar with the role administrative agencies can alter the shape of compliance obligations through administrative decisions and rulemakings. The National Labor Relations Board (NLRB) is similar in most respects. One of these is the authority of the Board to assess part decisional practice and, in a decision, issued a new rule, as a case holding, without the necessity for formal rulemaking. The most well-known example is the case of John Deklewa & Sons, Inc. https://www.nlrb.gov/case/06-RC-012417 (creating a new test for when a collective bargaining agreement is revokable).

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Ohio Supreme Court Holds That Ohio’s Antiblocking Statute is Preempted by Federal Law and Cannot Be Enforced Against CSX

On August 17, 2022, the Supreme Court of Ohio issued a decision finding that Ohio’s antiblocking statute cannot be enforced against CSX Transportation, Inc. (CSX) on preemption grounds, reversing a Third District Court of Appeals decision.  State v. CSX Transp., Inc., 2022-Ohio-2832, 2022 WL 3372044 (Ohio 2022).

In 2018, the State of Ohio charged CSX with violating a state statute, R.C. 5589.21, five times in Union County, Ohio.  Id. at *1. The statute prohibits a stopped train from blocking a railroad crossing for more than five minutes, with limited exceptions.  Id.  A violation of the statute is a first-degree misdemeanor.  Id.  The Ohio General Assembly enacted the statute “to enhance public safety by ensuring the unhindered flow of emergency responders across railroad crossings.”  Id.  

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Passenger Rail Update

Introduction

Recent developments have put labor issues front and center for passenger railroads this past summer. First, the Federal Railroad Administration’s (“FRA”) proposed rule regarding train crew size safety imposes two-person crews for passenger operations, with limited exceptions. Second, federal intervention has not stopped ongoing contract disputes between most major railroads and the labor unions representing their employees, which continue to risk impacting passenger railroads that share tracks with freight operations or that are directly involved in the union disputes.

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The Board Requires Reporting from Class I Carriers in Response to Concerns Raised at the Public Hearing on Urgent Issues in Freight Rail Service

On May 6, 2022, the Surface Transportation Board (Board) issued a decision ordering certain reporting from Class I carriers, in response to concerns raised at the public hearing held on April 26 and 27, 2022 on urgent issues in freight rail service.  Urgent Issues in Freight Rail Service, EP 770 (Sub-No. 1) (STB served May 6, 2022).

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The Board Accepts for Consideration Responsive Applications by CN and NS & Announces a Public Hearing in the CP/KCS Merger Proceeding

On July 1, 2022, the Board issued a decision accepting for consideration the responsive applications filed by Canadian National Railway Company (CNR) and its rail carrier affiliate, Illinois Central Railroad Company (ICRR) (collectively, CN), and by Norfolk Southern Railway Company (NSR), in the CP/KCS merger proceeding.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served July 1, 2022).

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The Board Issues a Notice of Public Hearing Concerning Urgent Issues in Freight Rail Service

On April 7, 2022, the Surface Transportation Board (Board) issued a decision announcing that it will hold a public hearing on April 26 and 27, 2022, concerning recent rail service issues and recovery efforts involving several Class I carriers.  Urgent Issues in Freight Rail Service, EP 770, slip op. at 1 (STB served Apr. 7, 2022).

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The Board is Seeking Public Comment on the Petition by Non-Railroad Entities to Adopt Rules Governing Use of Private Railcars by Railroads

On April 1, 2022, the Surface Transportation Board (Board) issued a decision seeking public comment on a petition for rulemaking filed on July 26, 2021 by the North America Freight Car Association, The National Grain and Feed Association, The Chlorine Institute, and The National Oilseed Processors Association (collectively, Petitioners), requesting that the Board exercise its authority under 49 U.S.C. § 11122(a)(2) to promulgate regulations governing the use of private railcars by railroads.  Petition for Rulemaking to Adopt Rules Governing Private Railcar Use by Railroads, EP 768 (STB served Apr. 1, 2022). 

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The Board Held Public Hearing Concerning the Proposed Reciprocal Switching Regulations

On March 15 and 16, 2022, the Surface Transportation Board (Board) held a public hearing concerning the reciprocal switching regulations that it proposed in this proceeding.  See Reciprocal Switching¸ EP 711 (Sub-No. 1) (STB served Mar. 1, 2022). 

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The Board Held Hearings Regarding Amtrak’s Application for an Order Allowing Additional Train Operations Over CSXT and NSR Lines Along the Gulf Coast

On February 15, 2022, the Surface Transportation Board (Board) commenced the initial phase of the public hearing regarding the March 16, 2021 application by the National Railroad Passenger Corporation (Amtrak) for an order allowing additional train operations over CSX Transportation, Inc. (CSXT) and Norfolk Southern Railway Company (NSR) lines along the Gulf Coast.  See Application of the Nat’l Passenger R.R. Corp. Under 49 U.S.C. § 24308(E)—CSX Transp., Inc. & Norfolk S. Ry. Co., FD 36496 (STB served Feb. 11, 2022).  The second phase, an evidentiary hearing, commenced on April 4, 2022.  See Application of the Nat’l Passenger R.R. Corp. Under 49 U.S.C. § 24308(E)—CSX Transp., Inc. & Norfolk S. Ry. Co., FD 36496 (STB served Mar. 23, 2022). 

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The Board Approves the CSXT/Pan Am Control and Merger Transaction

On April 14, 2022, the Surface Transportation Board (Board) issued a decision approving the revised 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 Merger Transaction).  CSX Corp.—Control and Merger—Pan Am Systems, Inc., FD 36472 (STB served Apr. 14, 2022).

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The Board Directs Applicants in the CP/KCS Merger Proceeding to Address an Apparent Inconsistency in Certain Data and Suspends the Procedural Schedule

On March 16, 2022, the Board issued a decision directing the applicants in the proposed Kansas City Southern and Canadian Pacific merger proceeding to address an apparent inconsistency in traffic density data submitted to the Board.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served Mar. 16, 2022).  The Board also provided an opportunity for other parties to reply to the applicants’ submission and suspended the procedural schedule.

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The Board Holds Public Hearing in CSXT/Pan Am Control and Merger Proceeding

On January 13-14, 2022, the Surface Transportation Board (Board) held a public hearing in the CSXT/Pan Am control and merger proceeding, in which the applicants are 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).  See CSX Corp.—Control and Merger—Pan Am Systems, Inc., FD 36472 (STB served Dec. 10, 2021).

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The Board Issues a Notice of Public Hearing Concerning the Proposed Reciprocal Switching Regulations

On December 28, 2021, the Surface Transportation Board (Board) issued a decision announcing that it would hold a public hearing on March 15 and 16, 2022, concerning the reciprocal switching regulations that it proposed in this proceeding. Reciprocal Switching¸ EP 711 (Sub-No. 1), slip op. at 1 (STB served Dec. 28, 2021).

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The Board Accepts for Consideration the Application Filed in CP/KCS Merger Proceeding

On November 23, 2021, the Board issued a decision accepting for consideration the application filed on October 29, 2021 in Docket No. FD 36500, regarding a potential merger between Kansas City Southern and Canadian Pacific.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served Nov. 23, 2021).  

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The Board Seeks Comments on Modifications to Proposed Procedure for Challenging the Reasonableness of Railroad Rates in Smaller Cases

On November 15, 2021, the Board issued a supplemental notice of proposed rulemaking (SNPRM) in Docket Nos. EP 755, Final Offer Rate Review, and EP 665 (Sub-No. 2), Expanding Access to Rate Relief.  Final Offer Rate Review, EP 755 (STB served Nov. 15, 2021).  The Board stated that, in response to comments received on the notice of proposed rulemaking (NPRM) in those dockets, and to ensure parallel consideration of the proposal in Docket No. EP 765, Joint Petition for Rulemaking to Establish an Alternative Voluntary Arbitration Program for Small Rate Disputes, the Board was inviting parties to comment on certain modifications to the rate reasonableness procedure proposed in the NPRM.  Id., slip op. at 1.

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The Board Proposes to Modify its Regulations to Establish a Voluntary Arbitration Program for Small Rate Disputes

On November 15, 2021, the Board issued a notice of proposed rulemaking (NPRM) to modify its regulations at 49 C.F.R. Part 1108, Subpart B to establish a voluntary arbitration program for small rate disputes.  Joint Petition for Rulemaking to Establish an Alternative Voluntary Arbitration Program for Small Rate Disputes, EP 765 (STB served Nov. 15, 2021).  The Board also stated that it has decided to defer final action in Docket No. EP 755, Final Offer Rate Review,to allow for “parallel consideration of the voluntary, small rate case arbitration program proposed in this docket.”  Id., slip op. at 8. 

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Passenger Rail Update

Introduction

In this Passenger Rail Update we mark Congress’s passage of the Infrastructure Investment and Jobs Act in November last year, which provides a range of passenger rail funding opportunities. We also note Amtrak’s announced support for the proposed merger between the Canadian Pacific (“CP”) and the Kansas City Southern (“KCS”) Class I railroads, which is currently pending before the Surface Transportation Board (“STB”). Finally, we review a recent Illinois federal district court case discussing whether a freight railroad’s common carrier obligation includes the obligation to provide passenger rail service (spoiler alert—the court held that it does not).

(The authors note at the outset that they represent the Commuter Rail Division of the Regional Transportation Authority, d/b/a Metra, as a party in the CP-KCS merger proceedings before the STB in FD No. 36500, and as Metra’s outside rail counsel in the Illinois district court case discussed below.)



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