[Federal Register Volume 71, Number 146 (Monday, July 31, 2006)]
[Notices]
[Pages 43284-43286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12182]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Finance Docket No. 33388 (Sub-No. 100)]


CSX Corporation and CSX Transportation, Inc., Norfolk Southern 
Corporation and Norfolk Southern Railway Company--Control and Operating 
Leases/Agreements--Conrail Inc. and Consolidated Rail Corporation

AGENCY: Surface Transportation Board, DOT.

ACTION: Decision No. 1 in STB Finance Docket No. 33388 (Sub-No. 100); 
Notice of Filing of Petition for Clarification or in the Alternative 
for Supplemental Order; and Issuance of Procedural Schedule.

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SUMMARY: On January 20, 2006, Bridgewater Resources, Inc. (BRI) and 
ECDC Environmental, L.L.C. (ECDC), referred to collectively as the 
petitioners, filed with the Surface Transportation Board (Board) a 
joint petition for clarification (petition) as to the limits of the 
North Jersey Shared Assets Area (NJSAA), established as part of the 
Conrail control transaction, approved by the Board in CSX Corp. et 
al.--Control--Conrail Inc. et al., 3 S.T.B. 196 (1998) (Decision No. 
89).\1\ In particular, petitioners seek a determination that BRI's 
waste transfer facility (BRI facility) is within the NJSAA and/or can 
be switched by Conrail under the agreements pertaining to the NJSAA. If 
the Board finds that the BRI facility is not located within the NJSAA, 
petitioners seek in the alternative a supplemental order that would 
enable Conrail to provide switching service, which NS currently 
provides, between the BRI facility and CSXT's Manville Yard.
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    \1\ In Decision No. 89, the Board approved the acquisition of 
control of Conrail Inc. and Consolidated Rail Corporation (Conrail), 
and the division of that carrier's assets by (1) CSX Corporation 
(CSXC) and CSX Transportation, Inc. (CSXT) (collectively CSX), and 
(2) Norfolk Southern Corporation (NSC) and Norfolk Southern Railway 
Company (NSR) (collectively, NS). Control of Conrail was effected by 
CSX and NS on August 22, 1998.
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    By separate motions filed on February 9, 2006, NS seeks dismissal 
of the petition, and a protective order to quash discovery, or in the 
alternative, to stay all discovery pending a decision by the Board on 
NS's motion to dismiss. Also on February 9, 2006, Conrail requested 
that all discovery related to this matter be quashed, or in the 
alternative, stayed pending a decision by the Board on NS's motion to 
dismiss. On March 1, 2006, petitioners filed replies to both of NS's 
procedural motions. For the reasons discussed below, NS's motion to 
dismiss BRI's petition for clarification is denied and a schedule to 
allow BRI to pursue limited discovery regarding the parties' intent 
involving the boundaries of the NJSAA is established. BRI's alternative 
request for a supplemental order is denied.

DATES: The effective date of this decision is July 31, 2006. 
Petitioners have until August 30, 2006 to complete discovery, as 
prescribed by this decision. Upon completion of discovery, petitioners 
have until September 29, 2006 to supplement the petition based on 
additional information provided by NS and Conrail in response to 
petitioners' discovery request, unless the Board provides otherwise in 
connection with any motions to compel. Any person who wishes to file 
comments respecting this petition as supplemented must do so by October 
19, 2006. Petitioners will have until October 30, 2006 to reply to 
those comments.
    Any motions to compel that may be necessary regarding discovery 
requests must be filed by August 21, 2006. Replies to motions to compel 
will be due 3 business days later.

ADDRESSES: Any filing submitted in this proceeding must be submitted 
either via the Board's e-filing format or in the traditional paper 
format. Any person using e-filing should comply with the instructions 
found on the Board's Web site at http://www.stb.dot.gov at the ``E-
FILING'' link. Any person submitting a filing in the traditional paper 
format should send an original and 10 paper copies of the filing (and 
also an IBM-compatible floppy disk with any textual submission in any 
version of either Microsoft Word or WordPerfect) to: Surface 
Transportation Board, 1925 K Street, NW., Washington, DC 20423-0001. In 
addition, one copy of each filing in this proceeding must be sent

[[Page 43285]]

(and may be sent by e-mail only if service by e-mail is acceptable to 
the recipient) to each of the following: (1) Christopher A. Mills, 
Slover & Loftus, 1224 Seventeenth Street, NW., Washington, DC 20036; 
(2) Kendra A. Ericson, Slover & Loftus, 1224 Seventeenth Street, NW., 
Washington, DC 20036; (3) John V. Edwards, Norfolk Southern 
Corporation, Three Commercial Place, Norfolk, VA 23510-2191; (4) 
Richard A. Allen, Zuckert, Scoutt & Rasenberger, LLP, 888 Seventeenth 
Street, NW., Washington, DC 20006; and (5) Shannon M. Moyer, Zuckert, 
Scoutt & Rasenberger, LLP, 888 Seventeenth Street, NW., Washington, DC 
20006. Any reply should also be served (one copy each) on each 
commenting party, and may be served by e-mail, but only if service by 
email is acceptable to the recipient.

FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 565-1655. 
[Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.]

SUPPLEMENTARY INFORMATION: In Decision No. 89, Conrail's rail operating 
properties were divided into two categories: Allocated Assets and 
Retained Assets. The latter were retained by Conrail for operation for 
the benefit of both CSX and NS and consist primarily of three Shared 
Assets Areas (SAAs), one of which is the NJSAA. Under the Shared Assets 
Agreements, Conrail has the right to perform switching service within 
the SAAs.
    BRI owns and operates a fully permitted solid waste transfer 
station near Manville/Port Reading Jct., in Bridgewater Township, 
Somerset County, NJ. Non-toxic municipal solid waste (MSW), 
construction and demolition debris, and non-hazardous soils are 
transported to the BRI facility from various locations in northern New 
Jersey and Staten Island. These waste materials are processed at the 
BRI facility and shipped to disposal sites in other states, with 
approximately 2,500 cars of MSW moved annually.
    ECDC is a subsidiary of Allied Waste Industries. ECDC arranges for 
the transportation of containerized shipments of MSW from collection 
stations at various points, including the BRI facility, to landfills in 
other states. ECDC pays the freight charges for most rail shipments 
from the BRI facility to such landfills.
    Presently, NS and CSX provide rail service for these MSW shipments, 
pursuant to a transportation contract, under which NS acts as the 
switching carrier, switching loaded and empty railcars between the BRI 
facility and CSXT's nearby Manville Yard, in Manville, NJ. The BRI 
facility is located north of NS's Lehigh Line and is served by a 
private spur, the Royce Spur, which connects to a track known as the 
Royce Running Track. BRI manages the loading of railcars and 
coordinates the movement of cars between its facility and Manville 
Yard. CSXT performs the line-haul transportation between Manville Yard 
and the landfill in South Carolina. ECDC pays a single, through fare 
for these rail transportation services.
    Petitioners assert that NS service has deteriorated over the past 6 
months, citing NS's failure to switch the facility on several occasions 
when service should have been provided. On some of these occasions, the 
petitioners state that BRI requested and received service from Conrail 
when an NS crew was unavailable. Petitioners argue that both the BRI 
facility and Manville Yard are located within the NJSAA, and that, 
therefore, Conrail should be found to be allowed to provide switch 
service between these points, pursuant to the NJSAA Operating Agreement 
approved by the Board in Decision No. 89.
    In the alternative, should the Board find that the BRI facility is 
located outside the NJSAA, petitioners request that the Board issue a 
supplemental order, allowing Conrail to perform switching service 
between the BRI facility and CSXT's Manville Yard.
    Petition For Clarification. Petitioners request that the Board 
clarify whether the BRI facility is within the NJSAA and/or can be 
switched by Conrail under the agreements pertaining to the NJSAA that 
were approved by the Board in Decision No. 89.
    Petitioners contend that the NJSAA extends southwest of ``CP-Port 
Reading Jct.,'' where CSXT's Trenton Line and NS's Lehigh Line come 
together. Petitioners assert that a ``CP,'' or control point, includes 
everything within the approach circuits for the interlocking(s) at the 
location involved, including all track, signals, turnouts and 
electronic circuitry between the approach signals for the interlocking. 
Therefore, petitioners contend that the CP at Port Reading Junction, 
and thus the boundary of the NJSAA, extends west along the Lehigh Line 
to the approach signal and related circuits of the interlocking for the 
junction where the Trenton and Lehigh Lines converge. If the boundaries 
of the NJSAA are defined in that way, petitioners state that, at least 
a portion, if not all, of the Royce Spur track that serves the BRI 
facility would also be located within the NJSAA, and that the right-of-
way for the spur would abut the Conrail property in the NJSAA.
    In its motion to dismiss, NS argues that petitioners' claim that 
the BRI facility is within the NJSAA is clearly refuted by the 
unambiguous provisions of the transaction agreement among NS, CSXT, and 
Conrail that was approved in Decision No. 89. NS relies on schedules 
and maps included in the transaction agreement that identify the 
portion of the Lehigh Line, running from CP Port Reading Jct. eastward 
to Oak Island Yard, as among the lines allocated to Conrail's NJSAA. 
According to NS, the transaction agreement further shows that the 
portion of the Lehigh Line, running from CP Port Reading Jct. westward 
to Allentown, PA, is allocated to Pennsylvania Lines, LLC (or PRR) (now 
NS). NS states that the maps show that the Royce Running Track that 
connects to the Royce Spur (which serves the BRI facility) is a NS line 
and is not in the NJSAA, and further that the Royce Running Track joins 
the NS portion of the line west of its connection to the NJSAA.
    NS states that Port Reading Jct. is the point where Conrail's 
portion of the Lehigh Line terminates, where NS's portion of the Lehigh 
Line begins, and where the Lehigh Line meets CSXT's Trenton Line. The 
designation, ``CP-Port Reading Jct.,'' signifies that the switches at 
that point and the signals controlling access to the interlocking are 
controlled by the Conrail North Jersey Train Dispatcher. However, NS 
argues, the boundaries of an interlocking do not define the ownership 
of the various tracks within the interlocking and do not determine the 
use of equipment and personnel over those various tracks by those other 
railroads.
    NS asserts that the SAAs, as governed by the Shared Assets 
Agreements, are not broad geographic areas encompassing non-railroad as 
well as railroad property but consist only of railroad property. NS 
argues that, since under the Shared Assets Agreements Conrail may only 
operate over SAA tracks, Conrail may not operate to, or provide 
switching services for, a facility if it can do so only by operating 
over non-SAA tracks of NS or CSXT, such as the tracks that serve the 
BRI facility.
    NS has presented strong evidence, based on the transaction 
agreement, to support its claim that the BRI facility is located 
outside the NJSAA. Nevertheless, it is appropriate for the Board to 
allow for limited discovery for BRI to obtain evidence to further 
develop the record as to what the parties intended in their original 
transaction agreement before resolving the issues that are presented 
here. The Board notes

[[Page 43286]]

that Conrail's past switching service of the BRI facility is not 
controlling in determining whether the BRI facility is within the 
NJSAA.
    Therefore, NS's motion to dismiss the petition for clarification 
will be denied, and the Board will allow for limited discovery, a 
supplement to the petition, and the filing of comments by all 
interested persons, as described below.
    Petition For Supplemental Order. In the alternative, should the 
Board find that the BRI facility is located outside the NJSAA, 
petitioners request a supplemental order that would allow Conrail to 
perform switching service between the BRI facility and CSXT's Manville 
Yard.
    Under 49 U.S.C. 11327, the Board has continuing authority to enter 
supplemental orders to modify decisions entered in merger and control 
proceedings under 49 U.S.C. 11323. Citing what they consider to be NS's 
failure to provide adequate service, petitioners argue that the public 
interest favors a change in the carriers authorized to serve the BRI 
facility by including Conrail in that authorization.
    In seeking a supplemental order that would authorize Conrail to 
provide its switching service outside the NJSAA, petitioners 
essentially request what the Board explicitly denied in Decision No. 
89: ``The ICC and the Board have consistently declined to attempt to 
equalize the rail transportation options of shippers who receive merger 
benefits with all those who do not. * * * [T]his is not the kind of 
harm that the agency rectifies under its conditioning power.'' 3 S.T.B. 
at 269-270. As the Board has dismissed similar claims seeking 
additional relief in previous Conrail decisions, it will decline to 
issue a supplemental order here. See, e.g., CSX Corp. et al.--Control--
Conrail Inc. et al., 4 S.T.B. 107 (1999). Therefore, petitioners' 
request for a supplemental order is denied.
    Discovery. The Board will allow for limited discovery pertaining to 
the parties' intent in defining the NJSAA boundaries in the original 
transaction agreement. The Board is particularly interested in what the 
parties meant by the use of the term ``CP,'' or control point, in 
defining the SAAs. Therefore, the NS and Conrail motions for protective 
order are denied to the extent needed to permit the limited discovery.
    Procedural Schedule. The Board has arranged to publish this 
decision in the Federal Register on July 31, 2006, to provide notice of 
this proceeding to all interested persons, and to provide an 
opportunity for public participation.
    Petition Available to Interested Persons. Interested persons may 
view the petition (and/or other related filings) on the Board's Web 
site at http://www.stb.dot.gov, at the ``Filings'' button.
    Any person wishing to obtain a paper copy of the petition may 
request a copy in writing or by phone from petitioners' representatives 
(1) Christopher A. Mills, Slover & Loftus, 1224 Seventeenth Street, 
NW., Washington, DC 20036; and (2) Kendra A. Ericson, Slover & Loftus, 
1224 Seventeenth Street, NW., Washington, DC 20036.
    Comments and Replies. Any person who wishes to file comments 
regarding the petition as supplemented must file such comments by 
October 19, 2006. Petitioners will have until October 30, 2006, to 
reply to any comments filed by interested persons.
    Decision by the Board. The Board will act as promptly as possible 
to issue its decision on the merits of the petition as supplemented.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. NS's motion to dismiss the petition for clarification is denied. 
Petitioners are permitted to pursue limited discovery pertaining to the 
parties' intent in defining the NJSAA's boundaries in the original 
transaction agreement.
    2. Petitioners' request in the alternative for a supplemental order 
is denied.
    3. Limited discovery, as described in this decision, must be 
completed by August 30, 2006.
    4. Petitioners' supplement to the petition is due by September 29, 
2006.
    5. Comments of interested persons on the petition as supplemented 
are due by October 19, 2006.
    6. Petitioners' reply is due by October 30, 2006.
    7. This decision is effective on its service date.

    Decided: July 24, 2006.

By the Board, Chairman Buttrey and Vice Chairman Mulvey.
Vernon A. Williams,
 Secretary.
[FR Doc. E6-12182 Filed 7-28-06; 8:45 am]
BILLING CODE 4915-01-P