[Federal Register Volume 85, Number 95 (Friday, May 15, 2020)]
[Notices]
[Pages 29502-29503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10428]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36402]


Fortress Investment Group LLC--Exemption for Intra-Corporate 
Family Transaction--Ohio River Partners Shareholder LLC & Katahdin 
Railcar Services LLC

    Fortress Investment Group LLC (Fortress), for the benefit of 
Fortress Transportation and Infrastructure Investors LLC (FTAI), Ohio 
River Partners Shareholder LLC (ORPS), a Class III carrier, and 
Katahdin Railcar Services LLC (KRS), a noncarrier (collectively, the 
Parties),\1\ filed a verified notice of exemption for an intra-
corporate family transaction under 49 CFR 1180.2(d)(3), which exempts 
from the prior approval requirements of 49 U.S.C. 11323 
``[t]ransactions within a corporate family that do not result in 
adverse changes in service levels, significant operational changes, or 
a change in the competitive balance with carriers outside the corporate 
family.'' 49 CFR 1180.2(d)(3).
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    \1\ The verified notice states that FTAI, which is managed by an 
affiliate of Fortress, indirectly owns a majority equity interest in 
ORPS and also indirectly owns KRS. FTAI, ORPS, and KRS all are 
Delaware limited liability companies.
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    Under the proposed transaction, KRS will lease from ORPS a 12.2-
mile rail line between milepost 60.5 at or near Powhatan Point, Ohio, 
and milepost 72.7 at or near Hannibal, Ohio (the Omal Line), thereby 
becoming a Class III rail carrier.\2\
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    \2\ In 2016, Ohio River Partners LLC (ORP) obtained an exemption 
to acquire and operate the Omal Line. See Ohio River Partners LLC--
Acquis. & Operation Exemption--Hannibal Dev., LLC, FD 35984 (STB 
served Apr. 1, 2016). In 2017, ORP was authorized to be merged into 
its corporate parent, ORPS. See Ohio River Partners Shareholders 
LLC--Exemption for Intra-Corporate Family Transaction--Ohio River 
Partners, LLC, FD 36152 (STB served Dec. 22, 2017).
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    The notice states that ORPS satisfies its common carrier obligation 
by engaging Central Maine & Quebec Railway US, Inc. (CMQR), to operate 
the Omal Line on a contract basis. The Parties state that ORPS 
affiliate KRS will operate the Omal Line upon the June 30, 2020 
termination of the contract between OPRS and CMQR.\3\ According to the 
Parties, the transaction will facilitate an orderly transition of rail 
operations and provide for uninterrupted rail service to customers 
located on and along the Omal Line. The notice states that KRS intends 
to offer employment to the same CMQR crews that currently operate 
trains over the Omal Line. Upon consummation of the transaction, KRS 
will acquire the right and common carrier obligation to operate the 
Omal Line pursuant to the lease between ORPS and KRS.
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    \3\ The notice states that FTAI sold CMQR to Soo Line 
Corporation, an indirect wholly owned subsidiary of Canadian Pacific 
Railway Company (CP), and that CMQR is no longer an affiliate of 
ORPS. CP's control of CMQR was authorized in Soo Line Corp.--
Control--Central Maine & Quebec Railway US, FD 36368 (STB served May 
4, 2020).
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    Unless stayed, the exemption will be effective on May 30, 2020 (30 
days after the verified notice was filed). The Parties state that they 
intend to consummate the proposed transaction as soon as practicable 
after that date.
    The Parties state that the transaction will not result in adverse 
changes in service levels, significant operational changes, or a change 
in the competitive balance with carriers outside the corporate family. 
Therefore, the transaction is exempt from the prior approval 
requirements of 49 U.S.C. 11323. See 49 CFR 1180.2(d)(3).
    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. However, 49 U.S.C. 11326(c) 
does not provide for labor protection for transactions under 49 U.S.C. 
11324 and 11325 that involve only Class III rail carriers. Accordingly, 
the Board may not impose labor protective conditions here because all 
of the carriers involved are Class III rail carriers.
    If the verified 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 May 22, 2020 
(at least seven days before the exemption becomes effective).
    All pleadings, referring to Docket No. FD 36402, must be filed with 
the Surface Transportation Board either via e-filing or in writing 
addressed to 395 E Street, SW, Washington, DC 20423-0001. In addition, 
one copy of each pleading must be served on the Parties' 
representative, Terence M. Hynes, Sidley Austin LLP, 1501 K St NW, 
Washington, DC 20005.
    According to the Parties, this action is categorically excluded 
from environmental review under 49 CFR 1105.6(c) and historic reporting 
under 49 CFR 1105.8(b).
    Board decisions and notices are available at www.stb.gov.

    Decided: May 11, 2020.


[[Page 29503]]


    By the Board, Allison C. Davis, Director, Office of Proceedings.
Aretha Laws-Byrum,
Clearance Clerk.
[FR Doc. 2020-10428 Filed 5-14-20; 8:45 am]
BILLING CODE 4915-01-P