[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Notices]
[Pages 28847-28850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-12130]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[Docket No. FD 35498]


Adrian & Blissfield Rail Road Company--Continuance in Control--
Charlotte Southern Railroad Company, Detroit Connecting Railroad 
Company, and Lapeer Industrial Railroad Company

AGENCY: Surface Transportation Board.

ACTION: Notice of Acceptance of Application; Issuance of procedural 
schedule.

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SUMMARY: The Surface Transportation Board (Board) is accepting for 
consideration the application filed by Adrian & Blissfield Rail Road 
Company (ADBF) seeking Board authority under 49 U.S.C. 11321-26 for 
continuance in control of Charlotte Southern Railroad Company (CHS), 
Detroit Connecting Railroad Company (DCON), and Lapeer Industrial 
Railroad Company (LIRR). ADBF seeks authorization for its previously 
consummated control, through stock ownership and management, of those 3 
entities when they became Class III short line railroads.
    The Board finds that this transaction is a ``minor transaction'' 
under 49 CFR 1180.2(c) and adopts a procedural schedule for 
consideration of the application, providing for the Board's final 
decision to be issued on August 19, 2011, and to become effective on 
September 18, 2011.

DATES: The effective date of this decision is May 18, 2011. Any person 
who wishes to participate in this proceeding as a party of record (POR) 
must file a notice of intent to participate no later than June 2, 2011. 
All comments, protests, requests for conditions, and any other evidence 
and argument in opposition to the application, including filings by the 
U.S. Department of Justice (DOJ) and the U.S. Department of 
Transportation (DOT), must be filed by June 17, 2011. Any responses to 
such filings and rebuttal in support of the application must be filed 
by July 5, 2011. If a public hearing or oral argument is held, it will 
be on a date to be determined by the Board. The Board expects to issue 
a final decision on August 19, 2011. For further information respecting 
dates, see the Appendix (Procedural Schedule).

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 attach a document and 
otherwise comply with the instructions found on the Board's Web site at 
``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 electronic version) to: Surface 
Transportation Board, 395 E Street, SW., Washington, DC 20423-0001. In 
addition, one copy of each filing in this proceeding must be sent (and 
may be sent by e-mail only if service by e-mail is acceptable to the 
recipient) to each of the following: (1) Secretary of Transportation, 
1200 New Jersey Avenue, SE., Washington, DC 20590; (2) Attorney General 
of the United States, c/o Assistant Attorney General, Antitrust 
Division, Room 3109, Department of Justice, Washington, DC 20530; (3) 
John D. Heffner (representing ADBF), John D. Heffner, PLLC, 1750 K 
Street, NW., Suite 200, Washington, DC 20006; and (4) any other person 
designated as a POR on the service-list notice (to be issued as soon 
after June 2, 2011, as practicable).

FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 245-0359. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: ADBF is a Class III rail carrier operating 
approximately 20 miles of freight lines between Adrian and Blissfield, 
Mich., as well as several short branches connecting with its mainline. 
Through a series of transactions between 1998 and 1999, ADBF purchased 
a 2.27-mile rail line in Detroit, Mich., a 3.22-mile rail line in 
Charlotte, Mich., and a 1.34-mile

[[Page 28848]]

rail line in Lapeer, Mich., from the Grand Trunk Western Railroad (now, 
part of Canadian National Railway Company).\1\ According to ADBF, in 
October 2000, it spun off these 3 acquired lines to 3 new ADBF 
subsidiaries (DCON, CHS, and LIRR, respectively), in order to insulate 
it from any liabilities created by these subsidiaries.\2\ ADBF states 
that it intended to continue in control of these newly formed entities, 
and in fact assumed control over the entities through stock ownership 
and management, but due to oversight of its then-general counsel, it 
failed to seek Board authority for continuance in control at that time.
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    \1\ See Adrian & Blissfield Rail Rd.-Acquis. Exemption-Grand 
Trunk W. R.R., FD 33692 (STB served Dec. 28, 1998); Adrian & 
Blissfield Rail Rd.-Acquis. Exemption-Grand Trunk W. R.R., FD 33718 
(STB served Mar. 3, 1999); Adrian & Blissfield Rail Rd.-Acquis. 
Exemption-Grand Trunk W. R.R., FD 33747 (STB served June 3, 1999).
    \2\ See Charlotte S. R.R.--Acquis. & Operation Exemption--Adrian 
& Blissfield Rail Rd., FD 33937 (STB served Oct. 4, 2000); Detroit 
Connecting R.R.--Acquis. & Operation Exemption--Adrian & Blissfield 
Rail Rd., FD 33935 (STB served Oct. 4, 2000); Lapeer Indus. R.R.--
Acquis. & Operation Exemption--Adrian & Blissfield Rail Rd., FD 
33936 (STB served Oct. 4, 2000).
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    In a separate proceeding where ADBF belatedly sought Board 
authority to acquire and operate the Tecumseh Branch Connecting 
Railroad Company, the Board noted that ADBF did not appear to have 
authority to have common control of its subsidiaries and that it 
expected ADBF to promptly seek appropriate authorization for that 
common control.\3\ On February 15, 2011, ADBF filed a notice of 
exemption, seeking authority for continuance in control of the 3 
carriers at issue here.\4\ The notice was rejected because the notice, 
which listed several shareholders as petitioners, purported to be filed 
on behalf of a party who did not authorize and was not aware of its 
filing. The transaction also appeared to be controversial and raised 
issues that made more scrutiny and the development of a more complete 
record necessary. Because of the questions raised as to the proper 
identity of the petitioners seeking authority, as well as the 
significant delay in seeking authority since 2009, ADBF was directed to 
submit either an application or petition for exemption for continuance 
in control.\5\
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    \3\ Adrian & Blissfield Rail Rd.--Acquis. & Operation 
Exemption--Tecumseh Branch Connecting R.R., FD 35035 (STB served 
Oct. 23, 2009).
    \4\ The notice of exemption included Jackson & Lansing Railroad 
Company in the title of the proceeding, but ADBF has sought 
authorization for its control in a separate proceeding. See Adrian & 
Blissfield Rail Rd.--Continuance in Control Exemption--Jackson & 
Lansing R.R., FD 35410.
    \5\ Arthur W. Single II--Continuance in Control Exemption--
Charlotte S. R.R., FD 35253 (STB served Mar. 4, 2011).
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    ADBF states that it now seeks common control of the 3 Class III 
carriers that it has in fact controlled since 2000. According to ADBF, 
the purpose of the transaction was, and would continue to be, to 
facilitate efficient and economical operation of its short line 
railroad subsidiaries through centralized management, purchasing, 
operations, marketing, accounting, and similar functions.
    Passenger Service Impacts. ADBF states that no lines handling 
passenger service have been or will be downgraded, eliminated, or 
operated on a consolidated basis. Although it provides passenger 
excursion service on certain lines, ADBF does not provide common 
carrier passenger, Amtrak, or commuter passenger service.
    Discontinuances/Abandonments. ADBF states that there have been no 
discontinuances or abandonments of rail lines in the past and does not 
anticipate discontinuing service or abandoning any portion in the 
future.
    Financial Arrangements. According to ADBF, no new securities were 
originally issued or need to be issued now, and no other financing was 
or will be required.
    Time Schedule for Consummation. As stated above, ADBF assumed 
control of the 3 carriers in 2000 after spinning off the relevant lines 
to its 3 subsidiaries (which became carriers). ADBF states that it 
failed to realize at that time that Board authorization was required 
and now seeks belated approval.
    Public Interest Considerations. According to ADBF, the transaction 
has not resulted and will not result in the lessening of competition, 
creation of a monopoly, or restraint of trade. The transaction's 
impact, ADBF states, is neutral, as it involves no changes in railroad 
operations. ADBF further stresses that the transaction involves a 
limited number of shippers, carloads, and revenues, as well as small 
carriers that do not compete with one another. Nor will the 
transaction, according to ADBF, result in a reduction in service or 
rail competitive options. Rather, since 2003, ADBF notes that it has 
experienced substantial growth with increased revenues, as well as an 
increase in the number of shippers served and carloads handled. ADBF 
also notes that it has made significant investments in track 
maintenance and signal upgrades.
    Environmental Impacts. ADBF states that no environmental 
documentation is required because there will be no operational changes 
that would exceed the thresholds established in 49 CFR 1105.7(e)(4) or 
(5) for requiring environmental review, and there will be no action 
that would normally require environmental documentation. ADBF further 
indicates that an historic report is not required because the 
transaction does not involve any changes in operations or plans to 
discontinue or abandon any service. It states that there are no plans 
to dispose of or alter properties subject to Board jurisdiction that 
are 50 or more years old.
    Labor Impacts. ADBF states that, because the transaction involves 
only Class III carriers, no labor protection would apply under 49 
U.S.C. 11326(c). ADBF further notes that the transaction has not 
impacted and will not impact any of its employees, as the transaction 
does not involve any change in operations.
    Application Accepted. The Board finds that the transaction would be 
a ``minor transaction'' under 49 CFR 1180.2(c), and the Board accepts 
the application for consideration because it is in substantial 
compliance with the applicable regulations governing minor 
transactions. See 49 CFR part 1180; 49 U.S.C. 11321-26. The Board 
reserves the right to require the filing of further information as 
necessary to complete the record.
    The statute and Board regulations treat a transaction that does not 
involve 2 or more Class I railroads differently depending upon whether 
the transaction would have ``regional or national transportation 
significance.'' 49 U.S.C. 11325. Under our regulations, at 49 CFR 
1180.2, a transaction that does not involve two or more Class I 
railroads is to be classified as ``minor''--and thus not having 
regional or national transportation significance--if a determination 
can be made based on the application either: (1) That the transaction 
clearly will not have any anticompetitive effects; or (2) that any 
anticompetitive effects will clearly be outweighed by the transaction's 
anticipated contribution to the public interest in meeting significant 
transportation needs. A transaction not involving the control or merger 
of two or more Class I railroads is ``significant'' if neither of these 
determinations can clearly be made.
    The Board finds the transaction to be a ``minor transaction'' 
because it appears on the face of the application that there would not 
be any anticompetitive effects from the transaction. The Board's 
findings regarding the anticompetitive impact are preliminary. The 
Board will give careful consideration to any claims

[[Page 28849]]

that the transaction has had or will have anticompetitive effects that 
are not apparent from the application itself.
    Environmental Matters. The National Environmental Policy Act (NEPA) 
requires that the Board take environmental considerations into account 
in its decision making.\6\ Under both the Council on Environmental 
Quality's regulations implementing NEPA and the Board's own 
environmental rules, actions are separated into three classes that 
prescribe the level of documentation required in the NEPA process. 
Actions that may significantly affect the environment generally require 
the Board to prepare an Environmental Impact Statement (EIS).\7\ 
Actions that may or may not have a significant environmental impact 
ordinarily require the Board to prepare a more limited Environmental 
Assessment (EA).\8\ Finally, actions, the environmental effects of 
which are ordinarily insignificant, may be excluded from NEPA review 
across the board, without a case-by-case review.
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    \6\ The Board has the authority under 49 U.S.C. 11324(c) to 
attach environmental conditions to its approval of Sec.  11323 
transactions, including transactions subject to approval under Sec.  
11324(d). Village of Barrington v. STB, No. 09-1002, 2011 WL 869904 
(DC Cir. March 15, 2011).
    \7\ See 49 CFR 1105.4(f), 1105.10(a).
    \8\ See 49 CFR 1105.4(d), 1105.10(b).
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    As pertinent here, an acquisition transaction normally requires the 
preparation of an EA or EIS where certain thresholds would be 
exceeded.\9\ Applicants indicate that the thresholds for environmental 
review would not be exceeded here because the transaction did not and 
will not involve any operational changes that exceed the thresholds 
under 49 CFR 1105.7(e)(4) and (5) and that there will be no action that 
would normally require environmental documentation. Based on this 
information, it appears that environmental documentation and review are 
not required in this proceeding.
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    \9\ See 49 CFR 1105.6(b)(4), 1105.7(e)(4) and (5).
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    Historic Review. In accordance with Section 106 of the National 
Historic Preservation Act (NHPA), the Board is required to determine 
the effects of its licensing actions on cultural resources.\10\ The 
Board's environmental rules establish exceptions to the need for 
historic review in certain cases, including the sale of a rail line for 
the purpose of continued rail operations, where further Board approval 
is required to abandon any service and there are no plans to dispose of 
or alter properties subject to the Board's jurisdiction that are 50 
years old or older.\11\ Applicants state that the proposed transaction 
fits within this exception. They assert that they have no plans to 
alter or dispose of properties 50 or more years old. Based on this 
information, it appears that historic review under the NHPA is not 
required in this case.
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    \10\ See 49 CFR 1105.8.
    \11\ See 49 CFR 1105.8(b)(1).
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    Procedural Schedule. The Board has considered ADBF's proposed 
procedural schedule, under which the Board would issue its final 
decision on August 2, 2011, 105 days after the application has been 
filed. ADBF did not provide any explanation for requesting such an 
expedited schedule, particularly given its delay in seeking approval. 
Accordingly, we will adopt a procedural schedule modified to conform 
more closely to the statutory provisions of 49 U.S.C. 11325(d) 
(allowing 30 days for comments on the application to be filed and 45 
days for the Board to issue a final decision after the evidentiary 
proceedings end). The Board also notes that its decision will be 
effective on September 18, 2011, 30 days after its final decision is 
served. For further information regarding dates, see the Appendix 
(Procedural Schedule).
    Notice of Intent To Participate. Any person who wishes to 
participate in this proceeding as a POR must file with the Board, no 
later than June 2, 2011, a notice of intent to participate, accompanied 
by a certificate of service indicating that the notice has been 
properly served on the Secretary of Transportation, the Attorney 
General of the United States, and Mr. Heffner (representing ADBF).
    If a request is made in the notice of intent to participate to have 
more than 1 name added to the service list as a POR representing a 
particular entity, the extra name will be added to the service list as 
a ``Non-Party.'' The list will reflect the Board's policy of allowing 
only 1 official representative per party to be placed on the service 
list, as specified in Press Release No. 97-68 dated August 18, 1997, 
announcing the implementation of the Board's ``One Party-One 
Representative'' policy for service lists. Any person designated as a 
Non-Party will receive copies of Board decisions, orders, and notices, 
but not copies of official filings. Persons seeking to change their 
status must accompany that request with a written certification that he 
or she has complied with the service requirements set forth at 49 CFR 
1180.4 and any other requirements set forth in this decision.
    Service List Notice. The Board will serve, as soon after June 2, 
2011 as practicable, a notice containing the official service list (the 
service list notice). Each POR will be required to serve upon all other 
PORs, within 10 days of the service date of the service list notice, 
copies of all filings previously submitted by that party (to the extent 
such filings have not previously been served upon such other parties). 
Each POR also will be required to file with the Board, within 10 days 
of the service date of the service list notice, a certificate of 
service indicating that the service required by the preceding sentence 
has been accomplished. Every filing made by a POR must have its own 
certificate of service indicating that all PORs on the service list 
have been served with a copy of the filing. Members of the United 
States Congress (MOCs) and Governors (GOVs) are not parties of record 
and need not be served with copies of filings, unless any MOC or GOV 
has requested to be, and is designated as, a POR.
    Service of Decisions, Orders, and Notices. The Board will serve 
copies of its decisions, orders, and notices only on those persons who 
are designated on the official service list as either POR, MOC, GOV, or 
Non-Party. All other interested persons are encouraged to secure copies 
of decisions, orders, and notices via the Board's Web site at ``http://www.stb.dot.gov'' under ``E-LIBRARY/Decisions & Notices.''
    Access to Filings. Under the Board's rules, any document filed with 
the Board (including applications, pleadings, etc.) shall be promptly 
furnished by the filer to interested persons on request, unless subject 
to a protective order. 49 CFR 1180.4(a)(3). Such documents are 
available for inspection in the Docket File Reading Room (Room 131) at 
the offices of the Surface Transportation Board, 395 E Street, SW., in 
Washington, DC. The application and other filings in this proceeding 
will also be available on the Board's Web site at ``http://www.stb.dot.gov'' under ``E-LIBRARY/Filings.''
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. The application in FD 35498 is accepted for consideration.
    2. The parties to this proceeding must comply with the procedural 
schedule adopted by the Board in this proceeding as shown in the 
Appendix.
    3. The parties to this proceeding must comply with the procedural 
requirements described in this decision.

[[Page 28850]]

    4. This decision is effective on May 18, 2011.

    Decided: May 12, 2011.

    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey.
Jeffrey Herzig,
Clearance Clerk.

Appendix: Procedural Schedule

 
 
 
April 18, 2011....................  Application and Proposed Procedural
                                     Schedule filed.
May 18, 2011......................  Board notice of acceptance of
                                     application published in the
                                     Federal Register.
June 2, 2011......................  Notices of intent to participate in
                                     this proceeding due.
June 17, 2011.....................  All comments, protests, requests for
                                     conditions, and any other evidence
                                     and argument in opposition to the
                                     application, including filings of
                                     DOJ and DOT, due.
July 5, 2011......................  Responses to comments, protests,
                                     requests for conditions, and other
                                     opposition due. ADBF's rebuttal in
                                     support of the application due.
TBD...............................  A public hearing or oral argument
                                     may be held.
August 19, 2011...................  Final decision to be served.
September 18, 2011................  Final decision to become effective.
 

[FR Doc. 2011-12130 Filed 5-17-11; 8:45 am]
BILLING CODE 4915-01-P