[Federal Register Volume 83, Number 197 (Thursday, October 11, 2018)]
[Notices]
[Pages 51541-51542]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22227]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36225]


Fortress Investment Group LLC--Continuance in Control Exemption--
Central Maine & Quebec Railway US Inc., Ohio River Partners Shareholder 
LLC, and DesertXpress Enterprises, LLC

    Fortress Investment Group LLC (Fortress) has filed a verified 
notice of exemption pursuant to 49 CFR 1180.2(d)(2) for the benefit of 
Brightline Holdings LLC (Brightline) and Fortress Transportation and 
Infrastructure Investors LLC, which are managed by affiliates of 
Fortress, to continue in control of DesertXpress Enterprises, LLC (DXE) 
\1\ following the acquisition of DXE by Brightline.
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    \1\ In DesertXpress Enterprises--Construction & Operation 
Exemption--in Victorville, Cal. & Las Vegas, Nev. (DesertXpress), FD 
35544 (STB served Oct. 25, 2011), the Board authorized DXE to 
construct and operate a high-speed passenger rail line between 
Victorville, Cal., and Las Vegas, Nev. (DXE Line). Fortress states 
that DXE has been engaged in development and planning for the DXE 
Line, including obtaining certain federal and state permits, 
acquiring rights-of-way, and pursuing financing for the project.
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    According to Fortress, on September 17, 2018, Brightline, DXE, and 
Benny's HoldCo, LLC, entered into a Membership Interest Purchase 
Agreement (Purchase Agreement) \2\ pursuant to which Brightline will 
acquire 100% of the member interests of DXE. Upon consummation of the 
transaction contemplated by the Purchase Agreement, Brightline, a 
noncarrier, will control DXE. Brightline currently controls Brightline 
Trains LLC (Brightline Trains) which operates express passenger rail 
service between Miami, Fla., and West Palm Beach, Fla.\3\ Fortress 
asserts that Brightline can assist DXE in bringing its planned high-
speed passenger rail system between Las Vegas and Victorville to 
fruition.
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    \2\ Fortress submitted a redacted copy of the Purchase Agreement 
with its verified notice of exemption. It also submitted an 
unredacted copy under seal along with a motion for protective order 
pursuant to 49 CFR 1104.14(b). That motion will be addressed in a 
separate decision.
    \3\ Brightline Trains formerly was known as All Aboard Florida-
Operations LLC. Citing All Aboard Florida-Operations LLC--
Construction & Operation Exemption--in Miami, Fla., & Orlando, Fla., 
FD 35680 (STB served Dec. 21, 2012), Fortress states that Brightline 
Trains is not a rail carrier subject to the Board's jurisdiction.
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    The parties intend to consummate the proposed control transaction 
as soon as practicable after the exemption becomes effective (30 days 
after the verified notice was filed) and the satisfaction of all other 
conditions precedent to closing set forth in the Purchase Agreement.
    Fortress states that two other rail carriers subject to the Board's 
jurisdiction, Central Maine & Quebec Railway US Inc. (CMQR) and Ohio 
River Partners Shareholder LLC (ORPS), are currently managed by 
affiliates of Fortress. CMQR, a Class III carrier, operates 
approximately 244 miles of rail lines in the States of Maine and 
Vermont. ORPS, a Class III carrier, operates a 12.2-mile rail line 
between milepost 60.5 at or near Powhatan Point, Ohio, and milepost 
72.2 at or near Hannibal, Ohio.
    Fortress represents that: (1) None of the rail lines of CMQR, ORPS, 
or DXE connect with the lines of any other United States railroad that 
is owned or controlled by Fortress; (2) the transaction is not part of 
a series of anticipated transactions that would connect the DXE Line 
with the lines of any other rail carrier owned or controlled by 
Fortress, any affiliate of Fortress, or any investment fund or entity 
managed by an affiliate of Fortress; and (3) CMQR, ORPS, and DXE are 
not Class I carriers.\4\ Therefore, the transaction is exempt from the 
prior approval requirements of 49 U.S.C. 11323. See 49 CFR 
1180.2(d)(2).
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    \4\ Fortress states that CMQR and ORPS are Class III carriers. 
In DesertXpress, slip op. at 2, the Board noted that DXE anticipated 
that its operating revenues would qualify it as a Class I carrier; 
presently, however, according to Fortress, DXE has not commenced 
operations and does not have any operating employees or revenues. 
See Notice 6.
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    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 rail carriers. Accordingly, the 
Board may not impose labor protective conditions here because all the 
carriers involved are Class III carriers.\5\
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    \5\ See n. 4, above.
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    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 will not automatically stay the effectiveness of the exemption. 
Petitions for stay must be filed no later than October 18, 2018 (at 
least seven days before the exemption becomes effective).
    An original and 10 copies of all pleadings, referring to Docket No. 
FD 36225, must be filed with the Surface Transportation Board, 395 E 
Street SW, Washington, DC 20423-0001. In addition, one copy of each 
pleading must be served on Terence M. Hynes, Sidley Austin LLP, 1501 K 
Street NW, Washington, DC 20005.
    According to Fortress, this action is categorically excluded from 
environmental review under 49 CFR 1105.6(c) and from historic reporting 
under 49 CFR 1105.8(b).
    Board decisions and notices are available on our website at 
www.stb.gov.

    Decided: October 5, 2018.


[[Page 51542]]


    By the Board, Scott M. Zimmerman, Acting Director, Office of 
Proceedings.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2018-22227 Filed 10-10-18; 8:45 am]
BILLING CODE 4915-01-P