[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26864]


[Federal Register: October 28, 1994]


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INTERSTATE COMMERCE COMMISSION
[Finance Docket No. 32579]\1\
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    \1\ Embraces Burlington Northern Railroad Company--Acquisition--
Certain Lines of Davenport, Rock Island and North Western Railway 
Company, Finance Docket No. 32579 (Sub-No. 1); Burlington Northern 
Railroad Company--Acquisition--Certain Lines of Soo Line Railroad 
Company, Finance Docket No. 32579 (Sub No. 2); and, Soo Line 
Railroad Company--Acquisition--Certain Lines of Burlington Northern 
Railroad Company, Finance Docket No. 32579 (Sub-No. 3).
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Canadian Pacific Limited, Canadian Pacific (U.S.) Holdings, Inc., 
Soo Line Corporation and Soo Line Railroad Company--Control--Davenport, 
Rock Island and North Western Railway Company

AGENCY: Interstate Commerce Commission.

ACTION: Notice of decision accepting application for consideration.

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SUMMARY: The Commission accepts for consideration the application filed 
September 30, 1994, by Canadian Pacific Limited, Canadian Pacific 
(U.S.) Holdings Inc., Soo Line Corporation, and Soo Line Railroad 
Company (Soo) (collectively, applicants). Soo and Burlington Northern 
Railroad Company (BN) own the Davenport, Rock Island and North Western 
Railway Company (DRI) jointly. Soo seeks to acquire sole control of DRI 
as a prelude to merging DRI into Soo. DRI lines east of the Mississippi 
River will be transferred to BN, and lines west of the Mississippi 
River (and BN's ownership interest in a joint BN/Soo line) will be 
transferred to Soo. Soo's East Moline-Albany line (east of the 
Mississippi River) will also be transferred to BN. DRI will cease to 
exist. Under 49 CFR part 1180, the Commission finds this to be a minor 
transaction.

DATES: Written comments must be filed with the Interstate Commerce 
Commission no later than November 28, 1994 and concurrently served on 
applicants' representatives, the United States Secretary of 
Transportation (Secretary of Transportation), and the Attorney General 
of the United States (Attorney General). Comments from the Secretary of 
Transportation and the Attorney General must be filed by December 12, 
1994. The Commission will issue a service list shortly thereafter. 
Comments must be served on all parties of record within 10 days of the 
issuance of the service list and confirmed by certificate of service 
filed with the Commission indicating that all designated individuals 
and organizations on the service list have been properly served. 
Applicants' reply is due by December 27, 1994.

ADDRESSES: Send original and 10 copies of all documents to: Office of 
the Secretary, Case Control Branch, Attn: Finance Docket No. 32579, 
Interstate Commerce Commission, 1201 Constitution Avenue NW., 
Washington, DC 20423. In addition, concurrently send one copy of all 
documents to the Secretary of Transportation, the Attorney General, and 
to applicants' representatives: (1) Docket Clerk, Office of Chief 
Counsel, Federal Railroad Administration, Room 8201, 400 Seventh Street 
SW., Washington, DC 20590; (2) Attorney General of the United States, 
United States Department of Justice, 10th St. & Constitution Avenue 
NW., Washington, DC 20530; (3) Michael E. Roper, Burlington Northern 
Railroad Company, 3800 Continental Plaza, 777 Main Street, Fort Worth, 
TX 76102; (4) Barry McGrath, Soo Line Railroad Company, 105 South Fifth 
Street, P.O. Box 530, Minneapolis, MN 55440; and (5) William C. Sippel, 
Oppenheimer Wolff & Donnelly, Two Prudential Plaza, 45th floor, 180 
North Stetson Avenue, Chicago, IL 60601.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 927-5660. 
[TDD for hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: Applicants seek Commission approval under 49 
U.S.C. 11343, et seq., for: (1) BN to transfer to DRI all of BN's 
shares of DRI stock (and the resulting full control by Soo of DRI) 
(Finance Docket No. 32579); (2) DRI to convey to BN its Davenport, IA-
East Moline, IL line between DRI mileposts 36.65 at East Wye Switch in 
Davenport and 45.55 at East Moline [Finance Docket No. 32579 (Sub-No. 
1)]; (3) Soo to convey to BN its East Moline-Albany, IL line between CP 
mileposts 52.00 and 26.60 [Finance Docket No. 32579 (Sub-No. 2)]; and 
(4) BN to convey to Soo BN's one-half ownership interest in the joint 
BN/Soo main line between CP mileposts 157.70 and 158.42 at Clinton, IA 
[Finance Docket No. 32579 (Sub-No. 3)].
    Three related notices of exemption involving the grant back of 
trackage rights between BN and Soo and the merger of DRI into Soo were 
also concurrently filed with this application.2
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    \2\(1) Burlington Northern Railroad Company--Trackage Rights 
Exemption--Soo Line Railroad Company, Finance Docket No. 32579 (Sub-
No. 4), wherein Soo is granting BN non-exclusive local trackage 
rights between CP milepost 157.70 at Clinton, IL and DRI milepost 
36.65 at Davenport, IL, a distance of 35.8 miles.
    (2) Soo Line Railroad Company--Trackage Rights Exemption--
Burlington Northern Railroad Company, Finance Docket No. 32579 (Sub-
No. 5), wherein BN is granting Soo non-exclusive local trackage 
rights: (1) between DRI milepost 36.65 at Davenport, IL and CP 
milepost 26.60 at Albany, IL, a distance of 34 miles; (2) between 
DRI milepost 45.06 at East Moline, IL and BN milepost 244.42 at 
Silvis, IL, a distance of 1.3 miles; and
    (3) Soo Line Railroad Company--Merger Exemption--Davenport, Rock 
Island and North Western Railway Company, Finance Docket No. 32579 
(Sub-No. 6), wherein Soo will merge DRI into Soo.
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    Soo, a class I railroad, operates approximately 5,230 route miles 
in 11 states. Soo is wholly owned by Soo Line Corporation (SLC), a 
noncarrier holding company. SLC is wholly owned by Canadian Pacific 
(U.S.) Holdings Inc. (Holdings), a noncarrier holding company. Holdings 
is in turn wholly owned by Canadian Pacific Limited (CP), d/b/a CP Rail 
System, which owns and operates approximately 17,650 miles of rail in 
Canada and the United States. CP and Holdings also control the Delaware 
& Hudson Railway Company d/b/a CP Rail System, which operates in the 
northeastern United States and has no involvement in the proposed 
transactions.
    BN, also a class I railroad, operates more than 25,000 route miles 
in 26 states. BN is wholly owned by Burlington Northern, Inc.
    BN and Soo jointly own DRI,3 a class III switching and 
terminal railroad which owns and operates approximately 45 route miles 
between Clinton, IA and East Moline, IL, via Davenport, IA (known as 
the Quad Cities area).
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    \3\BN and Soo each own 14,997 shares of DRI common stock. Three 
current or former BN employees and three current or former Soo 
employees each own one share of DRI stock. Thus, BN and Soo each own 
and control 15,000 shares of DRI stock. BN has agreed to arrange for 
the sale to DRI of the three shares of DRI common stock owned by 
current and former BN employees.
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    The transactions described in this application will be consummated 
with internally generated funds and do not involve the issuance of any 
new securities.
    BN and Soo expect to benefit from administrative cost savings 
associated with eliminating DRI as a separate entity. Applicants aver 
that the allocation of DRI's lines between BN and Soo reflect, in part, 
their operational patterns in the Quad Cities area. They have concluded 
that it would be more efficient for each carrier to handle its own 
traffic on the DRI lines with a contractual allocation of the cost of 
maintenance of the lines. Transfer of the DRI lines, they say, will 
permit the efficient consolidation of former DRI switching operations 
with the existing operations of BN and Soo in the area.
    With the elimination of DRI, Soo and BN plan to establish a direct 
interchange in the Quad Cities area. Industries currently switched by 
DRI for BN or Soo will now be served directly by those carriers. 
Applicants note that no shipper or industry will lose rail service or 
experience any reduction in rail transportation options as a result of 
these transactions, and shippers on the East Moline-Albany line 
currently served by one railroad will be served by two railroads. 
Applicants anticipate no discontinuances or abandonments in connection 
with or as a result of the proposed transactions.
    Applicants contend that the transactions will not adversely impact 
BN or Soo employees; however, DRI's current 25-man workforce will be 
abolished before or upon consummation of the proposed transactions. On 
July 20, 1994, DRI offered a voluntary severance package to employees 
with 10 or more years of service. Management employees received a 
separate severance package. Applicants recognize that, for each 
transaction for which approval is sought, the appropriate level of 
labor protection is that set forth in New York Dock Ry.--Control--
Brooklyn Eastern Dist., 360 I.C.C. 60 (1979), as clarified in 
Wilmington Term. RR, Inc.--Pur. & Lease--CSX Transp., Inc., 6 I.C.C.2d 
799 (1990), modified, 7 I.C.C.2d 60 (1990), aff'd sub nom. Railway 
Labor Executives' Ass'n v. ICC, 930 F.2d 511 (6th Cir. 1991).
    Under 49 CFR 1180.4(b)(2)(iv), we must determine whether a proposed 
transaction is major, significant, minor or exempt. The proposal here 
does not involve the control or merger of two or more class I railroads 
and has no regional or national significance.
    A review of the expected result of the transactions subject to this 
application, and the related exemptions, confirms the minor nature of 
these transactions. Upon consummation BN will own and operate DRI's 
rail line between Davenport, IA and East Moline, IL, over which BN and 
Soo already operate and over which Soo will continue to operate 
pursuant to BN's grant back of trackage rights. BN will own and operate 
Soo's rail line between East Moline and Albany, IL, over which Soo will 
also continue to operate pursuant to BN's grant back of trackage 
rights. Soo will own and operate the joint BN/Soo line at Clinton, IA 
and the DRI line between Davenport and Clinton. Soo and BN already 
operate over both lines, and BN will continue to operate over both 
lines pursuant to Soo's grant back of trackage rights.
    It does not appear that the transactions contemplated by applicants 
will have any anticompetitive effects or will result in a major market 
extension for any applicant.
    Accordingly, we find the proposal a minor transaction as defined in 
49 CFR 1180.2(c). See RR. Consolidation Proced. of Significant 
Transactions, 9 I.C.C.2d 1198 (1993). Because the application complies 
with our regulations concerning minor transactions, we are accepting it 
for consideration.
    The application and exhibits are available for inspection in the 
Public Docket Room at the Offices of the Interstate Commerce Commission 
in Washington, DC. In addition, copies may be obtained upon request 
from applicants' representatives named above.
    Any interested person or government entity may participate in this 
proceeding by submitting written comments. Any person or entity filing 
timely written comments shall be considered a party of record if the 
person's comments so request. In this event, no petition for leave to 
intervene need be filed.
    Consistent with 49 CFR 1180.4(d)(1)(iii), written comments must 
contain:
    (a) the docket number and title of the proceeding;
    (b) the name, address, and telephone number of the commenting party 
and its representative upon whom service shall be made;
    (c) the commenting party's position, i.e., whether it supports or 
opposes the proposed transaction;
    (d) a statement of whether the commenting party intends to 
participate formally in the proceeding or merely comment on the 
proposal;
    (e) if desired, a request for an oral hearing with reasons 
supporting this request--the request must indicate the disputed 
material facts that can only be resolved at a hearing; and
    (f) a list of all information sought to be discovered from 
applicant carriers.
    Because we have determined that this proposal constitutes a minor 
transaction, no responsive applications will be permitted. The time 
limits for processing minor transactions are set forth at 49 U.S.C. 
11345(d).
    Discovery may begin immediately. We admonish the parties to resolve 
all discovery matters expeditiously and amicably.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. This application is accepted for consideration as a minor 
transaction under 49 CFR 1180.2(c).
    2. The parties shall comply with all provisions stated above.

    Decided: October 21, 1994.

    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
and Commissioners Simmons, Morgan and Owen. Vice Chairman Phillips 
recused herself in this proceeding.
Vernon A. Williams,
Acting Secretary.
[FR Doc. 94-26864 Filed 10-27-94; 8:45 am]
BILLING CODE 7035-01-P