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).

The responsive applications relate to the primary application filed on October 29, 2021, in Docket No. FD 36500, by Canadian Pacific Railway Limited, Canadian Pacific Railway Company, and their U.S. rail carrier subsidiaries (collectively, CP) and Kansas City Southern and its U.S. rail carrier subsidiaries (collectively, KCS).  In a decision served on November 23, 2021, the Board accepted for consideration the primary application.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served Nov. 23, 2021). 

CN’s responsive application, filed on February 28, 2022 and amended on June 9, 2022, in Docket Nos. FD 36500 (Sub-No. 1), FD 36500 (Sub-No. 2), FD 36500 (Sub-No. 3), and FD 36500 (Sub-No. 4), seeks, as a condition to any Board approval of the merger transaction, approval of ICRR’s acquisition of KCS’s line between Kansas City, Mo. and Springfield and East St. Louis, Ill.  See Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500, slip op. at 3 (STB served July 1, 2022).  CN asserted that its responsive application should be classified as a minor transaction.  See id., slip op. at 4.

NSR’s responsive application, filed on February 28, 2022 and amended on June 9, 2022, in Docket No. FD 36500 (Sub-No. 5), seeks, as a condition to any Board approval of the proposed merger transaction, certain contingent trackage rights for overhead movement on KCS’s line, between the connection of KCS with the Meridian Speedway, at Shreveport, La., at or near milepost V-169.85, and the Wylie Intermodal Terminal, in Wylie, Tex., at or near milepost T-197.8.  See id.  NSR requested that its responsive application be treated as a minor transaction.  See id., slip op. at 5.

In its decision served on July 1, 2022, the Board stated that it “finds the responsive applications filed by CN and NSR to be in substantial compliance with the regulations under which they were filed and finds no basis for rejecting them.”  Id.  The Board noted that it reserves the right to require supplemental information, if necessary.  Id.  Additionally, the Board found that it is not necessary to designate the proposed transactions as minor or significant because, “[a]lthough the agency has typically made such a determination for responsive applications, neither the statute nor the Board’s regulations require that such a determination be made for responsive applications that are not inconsistent with the primary application.”  Id., slip op. at 6.

Pursuant to the procedural schedule in the proceeding, responses to comments, protests, requests for conditions, and other opposition; rebuttal in support of the application; and responses to responsive, including inconsistent, applications were due on July 12, 2022.  See Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served May 27, 2022). 

On July 22, 2022, the Board issued a decision announcing that it will hold a public hearing on September 28, 29 and 30, 2022.  Canadian Pac. Ry. Ltd.—Control—Kansas City S., FD 36500 (STB served July 22, 2022).  The Board stated that, “[b]ased on the comments that have been submitted, [it] finds that a public hearing, which will provide the Board an opportunity to directly question the Applicants and other interested persons about the issues that have been raised, is in the public interest.”  Id., slip op. at 3.  The purpose of the hearing is “to summarize and emphasize the key points of a party’s case or a speaker’s position, and to provide an opportunity for the speaker to respond to questions the Board may have regarding the matters at issue.”  Id., slip op. at 4.  All interested persons are invited to appear in person or via online video conferencing.  Id., slip op. at 1.  Notices of intent to participate are due by September 14, 2022.  Id., slip op. at 4.

In its July 22 decision, the Board also revised the procedural schedule, noting that it would be beneficial to receive final briefs after the public hearing.  Id., slip op. at 3.  Under the revised schedule, final briefs will be due by October 14, 2022, which will be considered the close of the record.  Id.

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