The Board Denies Louisville Riverport Authority’s Petition for Declaratory Order Regarding the Port of Louisville

On October 22, 2021, the Surface Transportation Board (Board) issued a decision, denying a petition for declaratory order filed by the Louisville and Jefferson County Riverport Authority, d/b/a Louisville Riverport Authority (LRA), seeking a finding that its lessee, New Albany Main Street Properties, LLC, d/b/a the Port of Louisville (Port of Louisville), is operating as a common carrier on certain track without authority from the Board.  The Louisville and Jefferson County Riverport Authority—Petition for Declaratory Order, FD 36463 (STB served Oct. 22, 2021).  

            The Port of Louisville leases a 300-acre facility (Port Facility) from LRA.  Id., slip op. at 1.  The Port of Louisville operates the Port Facility, which includes a barge-served bulk commodity transfer terminal and general cargo dock along the Ohio River, railroad tracks that include approximately four miles of double loop track and a short piece of connecting track, a coal storage area, and loading and unloading facilities.  Id., slip op. at 1-2.  LRA claims that “it entered into a lease agreement with the Port of Louisville in 2009 for the Port of Louisville to manage and conduct the business of the Port Facility.”  Id., slip op. at 2.  Under the lease agreement, the Port of Louisville provides “railroad switching services to move goods through the Port Facility and its rail infrastructure,” in addition to rail maintenance and other services.  Id.

On November 18, 2020, LRA filed a petition for declaratory order, in which LRA argued that the Port of Louisville has an obligation to conduct rail operations in and around the Port Facility and, despite operating on the tracks for approximately 11 years, the Port of Louisville has never sought operating or trackage rights authority from the Board.  Id.  Additionally, LRA argued that the Port of Louisville has utilized LRA’s tracks to service certain customers with facilities on the mainline, and argued that a certain section on the Port of Louisville’s website “demonstrates that the Port of Louisville holds itself out to the public as providing common carrier service.”  Id., slip op. at 2-3.  LRA requested that the Board determine that: (1) the Port of Louisville has been improperly operating certain rail lines without required authorization from the Board; (2) the Port of Louisville should cease rail operations on those lines immediately; and (3) LRA may seek authorization from the Board to have another “railroad” operate on the rail lines.  Id., slip op.at 1. 

The Port of Louisville filed a reply on January 6, 2021, stating that, “contrary to LRA’s allegations, it has not improperly conducted rail operations on any rail lines without required Board authorization.”  Id., slip op. at 3.  The Port of Louisville claimed that its rail operations are that of a contract switcher that has always confined its switching operations to the loop tracks within the Port Facility.  Id.  The Port of Louisville also argued that it is a contract switcher that only operates on tracks within the Port Facility, and it is not a rail carrier subject to the Board’s jurisdiction.  Id.

In its decision served on October 22, 2021, the Board denied LRA’s request for a declaratory order because “the Port of Louisville is not operating as a common carrier on the track in and around the Port Facility.”  Id., slip op. at 4.  The Board noted that, under 49 U.S.C. § 10501(a), it has jurisdiction over “transportation by rail carrier.”  Id.  In order to come within Board jurisdiction, “an activity must be both ‘transportation’ and ‘by rail carrier.’”  Id.  The term “transportation” is defined expansively in 49 U.S.C. § 10102(9) “to encompass any property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, by rail, and services related to that movement, including receipt, delivery, transfer in transit, storage, handling, and interchange of passengers and property.”  Id., slip op. at 4-5.  The term “rail carrier” is defined in 49 U.S.C. § 10102(5) as a “person providing common carrier railroad transportation for compensation.”  Id., slip op. at 5 (citations omitted).  The Board stated that whether a certain activity is considered part of transportation by rail carrier under 49 U.S.C. § 10501 is a case-by-case, fact-specific determination.  Id.

Here, the Board found that the Port of Louisville’s transloading activities fall within the statutory definition of transportation because “the Port of Louisville provides, among other things, railroad switching services to move goods through the Port Facility and its rail infrastructure.”  Id.  However, in order for such transloading activities to come under the Board’s jurisdiction, the activities must be offered by a rail carrier, directly or through its agent, or a rail carrier must exert control over a third-party’s operations.  Id.  The Board found that, based on the record, “the Port of Louisville has not been shown to be a rail carrier.”  Id.  Specifically, LRA failed to demonstrate that the Port of Louisville holds itself out to provide common carrier services by rail for compensation.  Id.  Rather, the record indicates that “the Port of Louisville provides contractual switching and transloading services pursuant to its 2009 lease agreement with LRA and its agreements with its customers.”  Id., slip op. at 6.  Thus, the Board denied LRA’s petition. 

The Board noted that, given its determination that the Port of Louisville is not operating as a common carrier, the Board did not need to address LRA’s request that the Board require the Port of Louisville to cease rail operations immediately.  Id., slip op. at 8.  Additionally, the Board declined LRA’s request to replace the Port of Louisville with another operator “because the Board does not intervene in private contractual relationships, such as the lease between LRA and the Port of Louisville, leaving enforcement of private contracts to the courts.”  Id.

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