[Federal Register Volume 64, Number 53 (Friday, March 19, 1999)]
[Notices]
[Pages 13628-13629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6802]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board
[STB Docket No. MC-F-20944]


K.C. Irving, Limited and S.M.T. (Eastern), Limited--Control--
Acadian Lines, Limited, Nova Charter Service Incorporated, S.M.T. 
(Eastern), Inc., and S.M.T. (Eastern), Limited

AGENCY: Surface Transportation Board.

ACTION: Notice Tentatively Approving Finance Transaction.

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SUMMARY: K.C. Irving, Limited (Irving), a noncarrier holding company 
that controls several motor passenger carriers, and its subsidiary, 
S.M.T. (Eastern), Limited (SMT Limited), a motor passenger carrier, 
filed an application under 49 U.S.C. 14303 for control of Acadian Lines 
Limited (Acadian), Nova Charter Service Incorporated (Nova), S.M.T. 
(Eastern), Inc. (SMT Inc.), and SMT Limited, all motor carriers of 
passengers or, in the case of SMT Inc., an entity that intends to 
become a motor carrier of passengers. Persons wishing to oppose the 
application must follow the rules under 49 CFR 1182.5 and 
1182.8.1 The Board has tentatively approved the transaction, 
and, if no opposing comments are timely filed, this notice will be the 
final Board action.

    \1\ Revised procedures governing finance applications filed 
under 49 U.S.C. 14303 were adopted in Revisions to Regulations 
Governing Finance Applications Involving Motor Passenger Carriers, 
STB Ex Parte No. 559 (STB served Sept. 1, 1998).

DATES: Comments must be filed by April 5, 1999. Applicants may file a 
reply by April 20, 1999. If no comments are filed by April 5, 1999, 
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this notice is effective on that date.

ADDRESSES: Send an original and 10 copies of any comments referring to 
STB Docket No. MC-F-20944 to: Surface Transportation Board, Office of 
the Secretary, Case Control Unit, 1925 K

[[Page 13629]]

Street, N.W., Washington, DC 20423. In addition, send one copy of 
comments to applicants' representatives: William C. Evans and John R. 
Mietus, Jr., Verner, Liipfert, Bernhard, McPherson and Hand, Chartered, 
901 15th Street, N.W., Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1600. 
[TDD for the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Irving and SMT Limited currently control 
several motor passenger carriers. In the application, Irving and SMT 
Limited,2 in which Irving historically has held an interest 
and currently holds a controlling interest, state that SMT Limited 
assumed control of Acadian 3 and Nova 4 through a 
stock transaction that was consummated in December 1995. Applicants 
indicate that their failure to obtain approval for this common control 
was unintentional, and having discovered this unresolved control issue, 
Irving and SMT Limited now seek Board authority to control these 
carriers.
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    \2\ SMT Limited is a New Brunswick corporation. It holds 
federally issued operating authority in Docket No. MC-107078, 
allowing it to conduct passenger transportation over a regular route 
between Calais and Bangor, ME, and to conduct charter and special 
operations between certain U.S./Canada border crossings and certain 
points in the United States. SMT Limited operates a fleet of 31 
coaches and employs 133.
    \3\ Acadian is a Nova Scotia corporation. It holds federally 
issued operating authority in Docket No. MC-204938, allowing it to 
conduct charter and special operations between points in the U.S. 
(except HI). Acadian operates a fleet of 15 coaches with 
approximately 70 employees.
    \4\ Nova is a Nova Scotia corporation. It holds federally issued 
operating authority in Docket No. MC-126280, allowing it to conduct 
charter and special operations between certain U.S./Canada border 
crossings and points in the U.S. (except AK and HI) and between 
points in the U.S. Nova operates a fleet of 23 coaches with about 30 
employees.
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    Irving and SMT Limited also seek Board authority to control SMT 
Inc.,5 which intends to obtain the operating authority 
currently held by Royal Blue Tours, Inc. (Royal Blue) 6 
through a transfer of authority to be requested from the Federal 
Highway Administration. The parties intend to place the stock of SMT 
Inc. in a voting trust to permit consummation of the transaction 
pending Board approval of the application.
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    \5\ SMT Inc., a Delaware corporation, plans to obtain from Royal 
Blue interstate operating authority issued in Docket No. MC-220952. 
That authority allows Royal Blue to conduct charter and special 
operations between points in the U.S. (except HI). Royal Blue 
operates a fleet of 6 coaches.
    \6\ Royal Blue is a Florida corporation providing charter 
service primarily in Florida.
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    Applicants state that granting the application will not result in 
any significant changes to carrier operations that are now being 
conducted and will not reduce competitive options available to the 
traveling public. They assert that each carrier occupies a distinct 
market niche, particularly with respect to their limited U.S. 
operations, and faces substantial competition from other bus companies, 
private vehicles and other modes of transportation.
    Applicants also submit that granting the application will produce, 
or continue to produce, substantial benefits. In particular, applicants 
state that closer coordination of motorcoach fleets will permit the 
companies to deploy buses to meet consumer demands more effectively. 
Applicants add that the proposed transaction will not impact the 
employees of any of the carriers adversely.
    Applicants certify that: (1) None of the carriers holds an 
unsatisfactory safety rating from the U.S. Department of 
Transportation; 7 (2) each carrier has sufficient liability 
insurance; (3) none of the carriers is domiciled in Mexico or owned or 
controlled by persons of that country; and (4) approval of the 
transaction will not significantly affect either the quality of the 
human environment or the conservation of energy resources. Additional 
information may be obtained from applicants' representatives.
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    \7\ Acadian, Nova, and SMT Limited hold satisfactory ratings and 
Royal Blue is unrated.
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    Under 49 U.S.C. 14303(b), we must approve and authorize a 
transaction we find consistent with the public interest, taking into 
consideration at least: (1) The effect of the transaction on the 
adequacy of transportation to the public; (2) the total fixed charges 
that result; and (3) the interest of affected carrier 
employees.8 The prior consummation of the transaction 
involving Acadian and Nova does not bar approval of the application 
under section 14303 if the evidence establishes that the transaction 
would be consistent with the public interest in other respects, and for 
the future. Approval is granted in such circumstances when the record 
contains strong affirmative evidence of public benefits to be derived 
from the resulting control, warranting the view that the public should 
not be penalized by being deprived of those benefits. Moreover, in this 
case, the record shows an absence of intent to flout the law or of a 
deliberate or planned violation.9 See Kenosha Auto Transport 
Corp.--Control, 85 M.C.C. 731, 736 (1960).
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    \8\ The parties expect no change in the fixed charges associated 
with each of the carriers.
    \9\ Applicants recognize that they should have sought our 
approval sooner. Under these circumstances, the Board does not 
intend to pursue enforcement actions against applicants for the 
previous unauthorized common control.
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    On the basis of the application, we find that the proposed 
acquisition of control is consistent with the public interest and 
should be authorized. If any opposing comments are timely filed, this 
finding will be deemed vacated and, unless a final decision can be made 
on the record as developed, a procedural schedule will be adopted to 
reconsider the application.10 If no opposing comments are 
filed by the expiration of the comment period, this decision will take 
effect automatically and will be the final Board action.
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    \10\ Under revised 49 CFR 1182.6(c), a procedural schedule will 
not be issued if we are able to dispose of opposition to the 
application on the basis of comments and the reply.
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    Board decisions and notices are available on our website at 
``WWW.STB.DOT.GOV.''
    This decision will not significantly affect either the quality of 
the human environment or the conservation of energy resources.
    It is ordered:
    1. The proposed acquisition of control is approved and authorized, 
subject to the filing of opposing comments.
    2. If timely opposing comments are filed, the findings made in this 
decision will be deemed as having been vacated.
    3. This decision will be effective on April 5, 1999, unless timely 
opposing comments are filed.
    4. A copy of this notice will be served on: (1) The U.S. Department 
of Transportation, Office of Motor Carriers-HIA 30, 400 Virginia 
Avenue, S.W., Suite 600, Washington, DC 20024; and (2) the U.S. 
Department of Justice, Antitrust Division, 10th Street & Pennsylvania 
Avenue, N.W., Washington, DC 20530.

    Decided: March 16, 1999.

    By the Board, Chairman Morgan, Vice Chairman Clyburn, and 
Commissioner Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 99-6802 Filed 3-18-99; 8:45 am]
BILLING CODE 4915-00-P