[Federal Register Volume 70, Number 12 (Wednesday, January 19, 2005)]
[Notices]
[Pages 3101-3102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-1010]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 34646 (Sub-No. 1)]


D&I Railroad Company--Trackage Rights Exemption--State of South 
Dakota and Sioux Valley Regional Railroad Authority

    The State of South Dakota (the State) and Sioux Valley Regional 
Railroad Authority (SVRRA) have agreed to grant overhead trackage 
rights to D&I Railroad Company (D&I) over a State-owned line of 
railroad extending between milepost (MP) 533.4 near Elk Point, SD (also 
known as MP 0.0 at East Wye Jct.) and MP 511.90 in Sioux City, IA, 
including such yard tracks, sidetracks, and connecting tracks (existing 
or to be constructed) as are reasonable to interchange railcars with 
The Burlington Northern and Santa Fe Railway Company (BNSF), Union 
Pacific Railroad Company, and Canadian National Railway Company at 
Sioux City. The total distance of the trackage rights to be granted to 
D&I is approximately 21.5 miles. The D&I-SVRRA transaction contemplated 
by the parties was scheduled to be consummated on or after January 5, 
2005.
    Under 49 U.S.C. 10502(g), the Board may not use its exemption 
authority to relieve a rail carrier of its statutory obligation to 
protect the interests of its employees. Section 11326(c), however, does 
not provide for labor protection for transactions under sections 11324 
and 11325 that involve only Class III carriers. Accordingly, the Board 
may not impose labor protective conditions here, because all of the 
carriers involved are Class III carriers.
    The notice of exemption filed in this docket was filed under 49 CFR

[[Page 3102]]

1180.2(d)(7). If the notice contains false or misleading information, 
the exemption is void ab initio. Petitions to revoke the exemption 
under 49 U.S.C. 10502(d) may be filed at any time. The filing of a 
petition to revoke does not automatically stay the transaction.
    An original and 10 copies of all pleadings, referring to STB 
Finance Docket No. 34646 (Sub-No. 1), must be filed with the Surface 
Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In 
addition, a copy of each pleading must be served on D&I's President: 
Jack Parliament, D&I Railroad Company, P.O. Box 5829, Sioux Falls, SD 
57117.
    The notice of exemption filed with respect to the D&I-SVRRA 
transaction in this docket is related to a notice of exemption 
concurrently filed in a related docket: STB Finance Docket No. 34646, 
Sioux Valley Regional Railroad Authority--Trackage Rights Exemption--
Lines of the State of South Dakota. The notice of exemption filed in 
the related docket contemplates SVRRA's acquisition from the State of 
the trackage rights that SVRRA intends to grant to D&I.
    SVRRA and D&I have advised that the Elk Point-Sioux City line, 
which is owned by the State, is now operated on behalf of the State by 
BNSF, pursuant to a 1986 Operating Agreement. SVRRA and D&I have also 
advised: That, under the Operating Agreement, the State has the right 
to grant trackage rights on the Elk Point-Sioux City line subject to 
certain BNSF consent; that, although the State has the right to grant 
trackage rights to SVRRA for operations by SVRRA's third-party operator 
(D&I), BNSF has not consented to the grant of those rights; and that 
the failure to provide this consent is now the subject of litigation 
between the State and BNSF in The Burlington Northern and Santa Fe 
Railway Company v. State of South Dakota, Case No. 04-470 (S.D. 6th 
Circuit). SVRRA and D&I have further advised that they recognize that 
BNSF consent may have to be obtained, either voluntarily or through 
litigation, before D&I can commence trackage rights operations on the 
Elk Point-Sioux City line. SVRRA and D&I have suggested, however, that, 
inasmuch as the Board's authority respecting the notices filed in this 
docket and in the related docket is ``permissive'' in nature, the 
filing of the notices in the two dockets is appropriate as a 
``prelude'' to obtaining any necessary consent.
    By letter filed December 30, 2004, BNSF has advised that it has not 
given its consent to the third-party trackage rights operation 
contemplated by SVRRA and D&I, which (BNSF adds) would violate the 1986 
Operating Agreement. BNSF has further advised that, in its view, the 
filings by SVRRA and D&I in this docket and in the related docket are 
intended to improperly influence the pending state court litigation. 
BNSF has asked that the Board stress that issuance by the Board of the 
notices filed in this docket and in the related docket does not 
represent a determination, by the Board, concerning either the right of 
the State to grant the Elk Point-Sioux City trackage rights without 
BNSF's consent or the right of D&I to operate over the Elk Point-Sioux 
City line without BNSF's consent.
    In view of the ongoing litigation concerning the right of the State 
to grant the trackage rights contemplated in this docket and in the 
related docket, it seems best to note that the Board has made no 
determination, one way or the other, concerning either the right of the 
State to grant the Elk Point-Sioux City trackage rights without BNSF's 
consent or the right of D&I to operate over the Elk Point-Sioux City 
line without BNSF's consent. The contractual dispute respecting the 
scope of the rights retained by or granted to the State and/or BNSF 
under the 1986 Operating Agreement must be resolved in a court of 
competent jurisdiction.
    Board decisions and notices are available on its Web site at http://www.stb.dot.gov.

    Decided: January 12, 2005.

    By the Board, David M. Konschnik, Director, Office of 
Proceedings.
Vernon A. Williams,
Secretary.
[FR Doc. 05-1010 Filed 1-18-05; 8:45 am]
BILLING CODE 4915-01-P