[Federal Register Volume 87, Number 204 (Monday, October 24, 2022)]
[Notices]
[Pages 64304-64306]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23021]


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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36397]


Wisconsin Central, Ltd.--Petition for Declaratory Order--
Interchange With Soo Line Railroad Company

    This proceeding derives from an April 14, 2020 petition for 
declaratory order filed by Wisconsin Central, Ltd. (CN), regarding the 
interchange of traffic from Soo Line Railroad Company (CP) to CN in the 
Chicago, Ill., area. On October 30, 2020, the Board served a decision 
denying the relief sought by the petition. CN appealed the Board's 
decision to the United States Court of Appeals for the Seventh Circuit, 
which vacated the Board's decision and remanded the matter to the 
Board.
    On February 2, 2022, CN filed a post-remand brief. CP moved to 
strike CN's post-remand brief on February 14, 2022, and later filed a 
separate reply to it. Thereafter, CN filed a reply to CP's reply, which 
CP then asked the Board to reject.
    For the reasons explained below, the Board will deny CP's motion to 
strike CN's post-remand brief and CP's request to reject CN's reply to 
reply. The Board also will solicit comments from stakeholders and other 
interested persons on the issues presented in this proceeding.

Background

    From 2010 to 2019, CP and CN mainly interchanged Chicago-area 
traffic at Spaulding,\1\ near Bartlett, Ill. Soo Line R.R.--Pet. for 
Declaratory Ord. & Prelim. Inj.--Interchange with Canadian Nat'l, FD 
36299, slip op. at 1-2 (STB served Nov. 29, 2019). However, in 2019 CN 
sought to move the Spaulding interchange traffic elsewhere. Id. at 1-2. 
CN first designated Kirk Yard in Gary, Ind., but CP objected and sought 
relief from the Board, requesting that the Board order CN to continue 
to receive CP cars at Spaulding unless a replacement location was 
agreed upon or the Board prescribed a replacement location. Id. at 2. 
Pending the Board's decision regarding Kirk Yard in Docket No. 36299, 
the parties signed an interim agreement in August 2019 in which they 
agreed to move the Spaulding interchange traffic to Clearing Yard 
(Clearing), owned by the Belt Railway of Chicago (BRC).\2\ Id. at 2-3. 
Subsequently, the Board concluded that CN could not designate Kirk Yard 
for interchange with CP because it was not a reasonable interchange 
location, while also declining to address the reasonableness of 
interchange at Clearing. Id. at 3-4, 7.
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    \1\ CN states that during that time, some traffic, especially 
toxic-by-inhalation hazardous materials, was moved by the parties to 
Clearing Yard, owned by the Belt Railway of Chicago, for 
interchange. (CN Post-Remand Brief 1, 4.)
    \2\ CN, CP, and four other Class I railroads are co-owners of 
BRC. Wis. Cent. Ltd., FD 36397, slip op. at 1 n.2.
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    On April 14, 2020, CN filed a petition for a declaratory order 
seeking a ruling under 49 U.S.C. 10742, which states:

    A rail carrier providing transportation subject to the 
jurisdiction of the Board under this part shall provide reasonable, 
proper, and equal facilities that are within its power to provide 
for the interchange of traffic between, and for the receiving, 
forwarding, and delivering of passengers and property to and from, 
its respective line and a connecting line of another rail carrier or 
of a water carrier providing transportation subject to chapter 137.

    CN asked the Board to declare that: (1) CN may designate Clearing 
to receive interchange traffic from CP; and (2) each railroad must bear 
its own costs for those interchanges, including payment by the 
delivering carrier of BRC's switching fees. (Pet. 1, 3-4.) By decision 
served on October 30, 2020, the Board held that CN could not 
unilaterally designate Clearing as the interchange point and it 
therefore was not necessary to reach the issue of whether CN and CP 
must bear their own costs. Wis. Cent. Ltd.--Pet. for Declaratory Ord.--
Interchange with Soo Line R.R., FD 36397, slip op. at 4 (STB served 
Oct. 30, 2020). The Board found that, pursuant to precedent, when two 
carriers physically intersect, the receiving carrier is required to 
designate a point on its own line where it will receive traffic and to 
provide a free route over its tracks to that point but that when the

[[Page 64305]]

carriers do not physically intersect, the receiving carrier has neither 
the right nor the obligation to designate an interchange point. Id. at 
5. Accordingly, the Board held that if CP's and CN's lines physically 
intersected, CN was required to designate an interchange point on its 
own line and provide a free route for CP to travel to that point, but 
if the lines did not physically intersect, section 10742 would not 
apply and the case would be moot. Id. at 6-7, 9. In doing so, the Board 
rejected CN's argument that the language of section 10742 permitted CN 
to designate Clearing as the interchange based on CN's status as co-
owner of BRC, which does intersect with CP at Clearing. Id. at 7. The 
Board reasoned that CN and BRC were distinct entities and, by 
designating a third party's rail line as the interchange point and 
forcing CP to pay a switching fee, CN would not be ``providing'' 
interchange facilities that are within its ``power to provide'' as 
required by section 10742. Id. at 7-8, 10.
    The United States Court of Appeals for the Seventh Circuit vacated 
the Board's October 30, 2020 decision and remanded the matter to the 
Board. Wis. Cent. Ltd. v. STB, 20 F.4th 292 (7th Cir. 2021). The court 
held that the Board erred in interpreting section 10742 by: (1) 
concluding that carriers only have the ``power to provide'' facilities 
that they own; (2) finding that section 10742 only applies if two 
carriers physically intersect, (3) conflating an assumption about who 
pays the fees of a third-party carrier with the question of ``whether a 
receiving carrier [can] ever designate a willing third party to receive 
traffic on its behalf''; and (4) relying on a ``common-law norm'' that 
a delivering railroad cannot compel a receiving railroad to exercise a 
voluntary contractual right to receive traffic on the line of a third 
party carrier. Id. at 294-95. The court also indicated that the word 
``reasonable'' in section 10742 gives the Board interpretive leeway 
that the statutory phrase ``that are within its power to provide'' does 
not. Id. at 295.
    CN filed a post-remand brief on February 2, 2022, arguing that the 
sole remaining issue in the case is whether CP should be required to 
pay BRC's switching fees for interchange traffic that CP will deliver 
to Clearing Yard. (CN Post-Remand Brief 1.) CN asserts the answer is 
yes, both under the BRC operating agreement and because requiring CP to 
pay would be fair and consistent with industry practice. (Id.) On 
February 14, 2022, CP filed a motion to strike CN's post-remand brief. 
CP argues that the Board has not directed the parties to file post-
remand briefs, and it is for the Board, not CN, to decide what 
procedures to follow on remand. (CP Mot. to Strike 1-2.) CP further 
argues that CN's post-remand brief improperly asserts that the sole 
remaining issue on remand is whether CP must pay the BRC switching fees 
for CN-bound traffic that CP delivers to Clearing. (Id. at 2.) CP 
claims that the court did not consider or address whether CN's proffer 
of Clearing Yard satisfied its statutory obligation under section 10742 
to ``provide reasonable, proper, and equal facilities that are within 
its power to provide.'' (Id. at 3.) CP also asserts that the court did 
not reach the question of whether CN may require CP to exercise its 
permissive trackage rights to deliver its traffic to CN at Clearing 
Yard. (Id.) CP requests that the Board strike CN's post-remand brief 
from the record, set a procedural schedule for initial briefs and reply 
briefs, and identify what issues should be addressed in the briefs. 
(Id. at 4.) On March 21, 2022, CP filed a reply to CN's post-remand 
brief. On April 20, 2022, CN filed a reply to CP's reply and a motion 
for leave to file a reply to a reply. On April 25, 2022, the Commuter 
Rail Division of the Regional Transportation Authority d/b/a Metra 
(Metra) filed comments and a motion for leave to file comments out of 
time. On May 10, 2022, CP filed a reply to CN's April 20, 2022 reply 
requesting that the Board reject CN's reply because the Board has not 
authorized additional post-remand briefing and because CN's submission 
was filed nearly a month after CP's reply. (CP Reply 1, May 10, 2022.)

Discussion and Conclusions

    The Board does not have specific regulations or procedures for 
cases following a judicial remand. While parties often do not file 
post-remand briefs without a directive from the Board or a petition for 
leave to file a brief, the Board will accept CN's post-remand brief and 
its April 20, 2022 reply brief because striking them would not serve a 
useful purpose. CP cites to Western Fuels Association v. BNSF Railway, 
NOR 42088 (STB served Feb. 1, 2011), for the proposition that 
unilaterally filing comments in a remand proceeding has been deemed 
inappropriate by the Board. (CP Mot. to Strike 1-2.) In that case, 
however, the Board did not state that the filing was inappropriate, and 
it accepted the comments into the record. W. Fuels Ass'n, NOR 42088, 
slip op. at 2-3. CP also argues that CN's filing improperly arrogated 
the Board's authority to decide what action and procedures should be 
followed on remand. (CP Mot. to Strike 2.) However, the Board is now 
exercising its authority to set procedures in this remand proceeding, 
and the acceptance of CN's briefs will not interfere with those 
procedures or prejudice any party. In addition, to develop a more 
complete record, the Board invites CN, CP and any other rail carriers 
and other interested parties to file comments, as outlined below.
    Given the Seventh Circuit's discussion of the Board's reliance on 
agency precedent and industry practice as summarized above, a post-
remand decision resolving the dispute between CN and CP has the 
potential to significantly alter such precedent and practices regarding 
the interchange of rail traffic. Because the resulting interpretation 
of section 10742 by the Board could have wide-reaching consequences for 
the rail industry, the Board is soliciting input from stakeholders and 
other interested persons. Input from a wider variety of industry 
participants will give the Board a better sense of the potential 
impacts of different approaches and enable it to make a more informed 
decision.
    Accordingly, the Board invites interested parties to comment on the 
broader legal issues presented by this declaratory order proceeding. 
Specifically, commenters are invited to address any or all of the 
following issues:
    1. How a carrier's obligations under 49 U.S.C. 10742 to ``provide 
reasonable, proper, and equal facilities that are within its power to 
provide'' should be understood in light of the decision by the United 
States Court of Appeals for the Seventh Circuit, as well as the impact 
of that decision on existing ICC and Board precedent and current 
carrier practices.
    2. Whether the Board can consider the costs to each railroad of 
using a particular interchange location designated by one carrier when 
determining whether interchange facilities are ``reasonable'' under 
section 10742 and, if so, whether the Board can allocate such costs 
between delivering and receiving railroads when resolving section 10742 
disputes. If commenters believe that the Board may consider costs as 
part of a reasonableness determination under section 10742, commenters 
should address how the Board should consider costs and/or the 
allocation of costs in making such a determination.
    3. Whether the Board has authority under any other statutory 
provision(s) to resolve a dispute regarding the costs associated with 
an interchange location and how the Board should apply any such 
statutory authority.

[[Page 64306]]

    4. How the statutory term ``reasonable'' should be interpreted.
    5. How the interests of delivering and receiving carriers should be 
balanced in the selection of an interchange location, particularly 
where the existing interchange location is well established or long-
standing.
    6. How a carrier's ``power to provide'' facilities relates to the 
other carrier's ability or rights to reach those facilities.
    7. Generally what procedures and factors should apply when 
railroads cannot agree on an interchange location or one carrier 
unilaterally seeks to move an existing interchange location.\3\
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    \3\ As discussed above, CN, CP, and Metra have each already 
filed briefs or comments following the remand. In the interest of 
compiling a complete record, all post-remand briefs and comments 
filed to date will be accepted. In addition, parties that have 
already filed post-remand briefs or comments may also file initial 
comments and reply comments as requested by this decision. All 
comments should be limited to the broader legal issues discussed 
above and should not address the specific facts of this case; 
following the comments and replies permitted in this decision, CP 
and CN will be afforded an opportunity to further brief the 
application of the issues discussed to the facts of this case.
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    8. Whether and how any changes a party recommends regarding the 
Board's interpretation of section 10742 should affect the Board's 
interpretation of other statutory provisions and related precedent 
(e.g., 49 U.S.C. 10705(a)(2) and related precedent).
    The Board recognizes that CN and CP have an interest in resolving 
their dispute in a timely manner. However, in light of the court's 
decision, because resolution of their dispute could potentially have a 
significant impact on the rail industry at large and because the 
industry will likely have insight regarding how any particular standard 
for designating interchange locations will impact rail operations, the 
Board believes that the delay necessary to obtain input from other 
stakeholders is warranted. Following the receipt of comments, the Board 
intends to work expeditiously to issue a decision. As always, the Board 
encourages the parties to settle their dispute privately without 
further Board action if possible.
    Comments must be filed by December 19, 2022 and reply comments must 
be filed by January 17, 2023. To provide interested parties with notice 
of the opportunity to submit comments in this proceeding, this decision 
will be published in the Federal Register.
    It is ordered:
    1. CP's motion to strike CN's post-remand brief and request to 
reject CN's April 20, 2022 reply are denied.
    2. CN's motion for leave to file a reply to a reply is granted.
    3. Metra's motion for leave to file comments out of time is 
granted.
    4. Interested parties may submit comments by December 19, 2022. 
Replies to those comments are due by January 17, 2023.
    5. This decision will be published in the Federal Register.
    6. This decision is effective on its service date.

    Decided: October 18, 2022.

    By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and 
Schultz.
Aretha Laws-Byrum,
Clearance Clerk.
[FR Doc. 2022-23021 Filed 10-21-22; 8:45 am]
BILLING CODE 4915-01-P