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). 

This proceeding stems from a petition for declaratory order filed by CN on April 14, 2020, regarding a disagreement with CP involving interchange operations in the Chicago area between the two carriers.  See Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397, slip op. at 1 (STB served Oct. 30, 2020).  CN asked the Board to decide whether CN has the right to designate Clearing Yard, owned by the Belt Railway of Chicago (BRC), as the point at which CN will receive interchange traffic from CP, and whether each railroad must bear its own costs for the interchange of that traffic, including BRC’s fees for switching services.  Id. 

On October 30, 2020, the Board issued a declaratory order finding that CN cannot unilaterally designate BRC’s Clearing Yard as the interchange point for inbound CP traffic.  Id.  The Board concluded that, in the absence of a physical interchange, there was nothing for the Board to decide regarding how cars should be exchanged between CN and CP under 49 U.S.C. § 10742.  Id., slip op. at 9.  The Board stated that, since a receiving carrier does not have an obligation under § 10742 to provide interchange facilities in the absence of a physical intersection, “it follows that there is no corresponding right to unilaterally designate any interchange location with non-intersecting carriers.”  Id.  The Board also concluded that it did not need to decide whether each railroad must bear its own costs for interchanging traffic at Clearing Yard.  Id., slip op. at 10.

On January 7, 2021, the Board issued a decision providing notice that a court action was instituted by CN on December 23, 2020 in the United States Court of Appeals for the Seventh Circuit.  Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397 (STB served Jan. 7, 2021).  The Seventh Circuit vacated the Board’s October 30, 2020 decision and remanded the matter to the Board.  Wis. Cent. Ltd. v. STB, 20 F.4th 292 (7th Cir. 2021).

On February 2, 2022, CN filed a post-remand brief, “arguing that the sole remaining issue in the case is whether CP should be required to pay BRC’s switching fees for interchange traffic that CP will deliver to Clearing Yard.”  Wisconsin Central, Ltd.—Pet. for Declaratory Order—Interchange with Soo Line R.R. Co., FD 36397, slip op. at 3 (STB served Oct. 19, 2022).  CP moved to strike on February 14, 2022, arguing that “the Board has not directed the parties to file post-remand briefs, and it is for the Board, not CN, to decide what procedures to follow on remand.”  Id.  CP filed a reply to CN’s post-remand brief on March 21, 2022.  Id.  On April 20, 2022, CN filed a reply to CP’s reply, and CP subsequently asked the Board to reject CN’s reply.  Id.  Additionally, the Commuter Rail Division of the Regional Transportation Authority d/b/a Metra filed comments on April 25, 2022.  Id.

On October 19, 2022, the Board issued a decision denying CP’s request to strike CN’s post-remand brief and accepting all post-remand briefs and comments filed to date.  Id., slip op. at 5.  The Board noted that it “does not have specific regulations or procedures for cases following a judicial remand.”  Id., slip op. at 3.  The Board also stated that, “[g]iven the Seventh Circuit’s discussion of the Board’s reliance on agency precedent and industry practice[,] . . . a post-remand decision resolving the dispute between CN and CP has the potential to significantly alter such precedent and practices regarding the interchange of rail traffic.”  Id., slip op. at 4.  Thus, the Board stated that since its resulting interpretation of § 10702 “could have wide-reaching consequences for the rail industry, the Board is soliciting input from stakeholders and other interested persons.”  Id.  Specifically, the Board has invited interested persons to comment on the broader legal issues presented by this proceeding and to address eight issues, including the following:

  • How a carrier’s obligations under 49 U.S.C. § 10742 to “provide reasonable, proper, and equal facilities that are within its power to provide” should be understood in light of the decision by the United States Court of Appeals for the Seventh Circuit, as well as the impact of that decision on existing ICC and Board precedent and current carrier practices.
  • How the statutory term “reasonable” should be interpreted.
  • How a carrier’s “power to provide” facilities relates to the other carrier’s ability or rights to reach those facilities.

See id., slip op. at 4-5.  Comments must be filed by December 19, 2022.  Id., slip op. at 5.  Reply comments are due by January 17, 2023.  Id.  The Board noted that, as always, it “encourages the parties to settle their dispute privately without further Board action if possible.”  Id.

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