[Federal Register Volume 59, Number 120 (Thursday, June 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15275]


[[Page Unknown]]

[Federal Register: June 23, 1994]


=======================================================================
-----------------------------------------------------------------------

INTERSTATE COMMERCE COMMISSION

[Supplemental Order No. 2 to Directed Service Order No. 1516]

 

Dardanelle & Russellville Railroad Company--Authorized To 
Operate--Lines of Arkansas Midland Railroad Company

AGENCY: Interstate Commerce Commission.

ACTION: Extension of Directed Service Order.

-----------------------------------------------------------------------

SUMMARY: On March 28, 1994, in response to requests from the Dardanelle 
& Russellville Railroad Company (DRRC) and the Caddo, Antoine, Little 
Missouri Railroad Company (CALM), its newly formed non-carrier 
subsidiary, and shippers located on the northern segment of the 
Arkansas Midland Railroad Company's (AMR) Norman Branch, we issued 
Service Order No. 1516 pursuant to 49 U.S.C. 11123(a), authorizing the 
DRRC/CALM to operate approximately 49 miles of the AMR line currently 
under embargo. We also allowed trackage rights over approximately 3 
miles of the remaining portion of the Norman Branch, that AMR continues 
to operate, in order for DRRC/CALM to reach a connection with the Union 
Pacific Railroad Company (UP). The parties did not reach agreement as 
to compensation for trackage rights, as DRRC/CALM did not indicate an 
intention to exercise its trackage rights authority immediately. Thus, 
our order required DRRC/CALM to enter into an agreement with AMR for 
the use of its northern line segment and to compensate AMR, as required 
by 49 U.S.C. 11123(a)(1)(C), in the form of:
    (1) indemnification of AMR for any liability that might occur as a 
result of DRRC/CALM's operation of AMR's northern line segment;
    (2) assumption of responsibility for maintenance of the northern 
line segment.

This level of compensation was agreed to by all parties for operations 
over the northern line segment.
    On April 26, 1994, we issued Supplemental Order No. 1 to Service 
Order No. 1516, which extended the service order authority for an 
additional 180 days and, at the request of AMR, required DRRC/CALM to 
further compensate AMR for DRRC/CALM's trackage rights operation over 
the remaining 3-mile segment of AMR's line which it was continuing to 
operate, ``at a mutually agreed upon and commercially reasonable rate 
beginning June 1, 1994''.
    On April 29, 1994, the attorney for DRRC/CALM filed comments 
requesting reconsideration of the service order on the basis that the 
April 15, 1994 agreement undertaken between AMR and DRRC/CALM did not 
include compensation for the trackage rights operation; that the 
operations undertaken over the northern segment of the AMR line 
provided sufficient compensation in the form of ``mitigating their 
damages for [embargoing the line and thereby] failing to comply with 
their common carrier obligation''; and finally, that revenue levels 
under current rate structures are not sufficient to allow for 
compensation to AMR. On May 2 and 3, 1994, attorneys for the affected 
shippers filed comments in support of DRRC/CALM's position.1 On 
May 17, 1994, attorneys for DRRC/CALM filed additional comments 
indicating that no compensation would be paid until the Commission had 
reconsidered the compensation issue.
---------------------------------------------------------------------------

    \1\ The shippers' attorneys cited Gibbons v. United States, 660 
F.2d 225, 232 (7th Cir. 1981) (Gibbons), Lehigh & New England Ry. 
Co. v. I.C.C., 540 F2d. 71, 81 (3rd Cir. 1976) (Lehigh), and 
Implementation of Public Law 93-236, Section 601(e), Regional Rail 
Reorganization Act of 1973--Submission of Cost Data to Justify 
Reimbursement, 348 I.C.C. 251, 275 (1975) (Cost Data), as examples 
of cases giving the Commission authority to deny such compensation.
---------------------------------------------------------------------------

    On May 25, 1994, attorneys for AMR responded to DRRC/CALM's request 
for reconsideration. AMR indicated that while it recognized that it was 
temporarily relieved of the expenses for operating and maintaining the 
northern segment of its line through DRRC/CALM's operation, it was 
nonetheless continuing to pay debt service on the entire line and was 
operating and maintaining the southern segment of the line in support 
of both its operations and those of DRRC/CALM. AMR pointed out that the 
revenue levels complained of by DRRC/CALM as being insufficient to 
allow compensation to AMR are the same revenue levels on which AMR was 
being asked by shippers to continue its operations under its full debt 
load. According to AMR, the $7 per car compensation sought for DRRC/
CALM's trackage rights operation was set to offset direct expenses 
incurred by AMR.
    On May 26, 1994, attorneys for the shippers filed additional 
comments reiterating their continuing opposition to AMR's request for 
compensation for the trackage rights operation and their position that 
the embargo was unjustified.
    We find:
    DRRC/CALM's and shippers' request for reconsideration of the 
Commission's requirement of compensation for DRRC/CALM's continued rail 
service over those portions of the AMR lines included in the Norman 
Branch which it determines to be operationally safe is denied. The 
Commission has determined that the requirement for compensation to the 
AMR for trackage rights, at a level that may properly be determined by 
the parties, is appropriate under the statute. Absent agreement by the 
parties, the Commission will set the compensation in a separate 
proceeding.
    This action will not significantly affect either the quality of the 
human environment or energy conservation.
    It is ordered: 
    1. The petition for reconsideration is denied.
    2. Based upon its agreement, consistent with the terms and 
conditions noted herein, and in Service Order No. 1516 and Supplemental 
Order No. 1 to that order, DRRC/CALM may continue its operation of AMR 
lines as authorized under 49 U.S.C. 11123, and pursuant to the terms 
and conditions of this service order and its agreements with AMR.
    3. Operations performed under authority of Service Order No. 1516 
shall conform to the directions and conditions prescribed herein, 
including compensation to AMR for use of trackage rights.
    4. All submissions filed in this proceeding should refer to Service 
Order No. 1516 and should be sent to the Commission's headquarters at 
12th Street and Constitution Avenue, N.W., Washington, D.C. 20423. Any 
filings made in this proceeding should include an original and 10 
copies.
    5. The provisions of this decision shall apply to intrastate, 
interstate, and foreign commerce.
    6. The Commission retains jurisdiction to modify, supplement, or 
reconsider this decision at any time.
    7. Notice to the general public of this decision shall be given by 
publication in the Federal Register. The decision will be served on the 
Federal Railroad Administration, the Association of American Railroads, 
American Short Line Railroad Association, DRRC/CALM, AMR, and UP.
    8. This decision and order shall become effective at 12:01 a.m., on 
June 7, 1994.
    9. Unless otherwise modified by the Commission, this order will 
expire at 11:59 p.m., on October 24, 1994.
    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
Commissioners Simmons and Morgan.
Sidney L. Strickland, Jr.,
Secretary.
[FR Doc. 94-15275 Filed 6-22-94; 8:45 am]
BILLING CODE 7035-01-P