|SURFACE TRANSPORTATION BOARD DECISION DOCUMENT|
|ANTHONY MACRIE-CONTINUANCE IN CONTROL EXEMPTION-NEW JERSEY SEASHORE LINES, INC.|
|DECISION CORRECTED FOOTNOTE 4 OF THE DECISION SERVED ON AUGUST 16, 2010, IN THIS PROCEEDING.|
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|Full Text of Decision|
41056 SERVICE DATE – AUGUST 31, 2010
Surface Transportation Board
Docket No. FD 35296
Anthony Macrie—Continuance in Control Exemption—New Jersey Seashore Lines, Inc.
Docket No. FD 35297
New Jersey Seashore Lines, Inc.—Operation Exemption—Clayton Companies, Inc.
Decided: August 11, 2010
This decision addresses the issues raised by the parties in these proceedings and clarifies the rights and obligations of New Jersey Seashore Lines, Inc. (NJSL) and Clayton Sand Company (Clayton)— the prospective operator and the noncarrier owner, respectively, of the track at issue.
On September 10, 2009, in Anthony Macrie—Continuance
in Control Exemption—N.J. Seashore Lines, Inc., FD 35296, Anthony Macrie
(Macrie), a noncarrier individual, filed a verified notice of exemption
pursuant to 49 C.F.R. § 1180.2(d)(2) to continue in
control of Cape May Seashore Lines, Inc., an existing Class III carrier, and
its corporate affiliate NJSL, upon NJSL’s becoming a Class III carrier. Concurrently, NJSL filed
a verified notice of exemption pursuant to 49 C.F.R. § 1150.31 in New
Jersey Seashore Lines, Inc.—Operation Exemption—Clayton Companies, Inc., FD
35297, to operate over a 13-mile abandoned rail line in
By decision served September 25, 2009, the Board accepted the notices in these dockets, but held their publication in the Federal Register and their effectiveness in abeyance pending further action by the Board. Because Clayton had not sought acquisition authority, the Board expressed concerns about a situation where the owner of a rail line held no license from the agency and therefore fell outside the scope of the Board’s authority. That meant that the Board had no direct way to assure that rail customers that used the line would receive adequate service. The operator of the line, NJSL, held a license and was subject to Board authority. NJSL, however, did not own the line, and had little or no control over it. NJSL therefore had only a limited ability to ensure continued rail service for the line’s customers. Accordingly, the Board indicated that it would not act further unless and until Clayton also sought authority from the Board or NJSL provided an explanation as to why Clayton need not seek such authority.
On October 14, 2009, NJSL and Macrie filed a joint pleading in response, arguing that there was no need for Clayton to seek Board authority as it had never held itself out to provide rail service for compensation and had no intent to do so in the future. On October 22, 2009, James Riffin (Riffin) filed (1) a notice of intent to participate as a party of record, and (2) comments in which he specified a number of findings he wanted the Board to make in connection with the notices. In response, on October 30, 2009, NJSL and Macrie jointly filed a motion to strike the Riffin filing and a reply to that filing. The Board found the explanation in the NJSL’s and Macrie’s October 14, 2009 joint response to be sufficient to permit service and publication of the notices, which the Board did on December 11, 2009. The exemption became effective on December 25, 2009.
Discussion and Conclusions
At the time the Board served and published the notices in these proceedings, we deferred resolution of a number of issues raised by the parties. We will address those issues here.
The first issue before us is whether Clayton, the track’s owner and lessor, must seek and obtain Board acquisition authority and assume a residual common carrier obligation to perform service in the event of NJSL’s absence. Based on Wisconsin Central Ltd. v. STB, 112 F.3d 881 (7th Cir. 1997), we find that Clayton need not seek such authority, as it would not acquire a residual common carrier obligation.
Central, the line at issue was first abandoned, then
sold, and the property was later leased to an operator who provided for-hire
service. However, the operation was not
profitable, and the operator sought discontinuance authority from the Board’s predecessor,
the Interstate Commerce Commission (ICC).
Although the ICC granted discontinuance authority, it stated that the
underlying owner-lessor would need to seek abandonment authority before the
line could be sold or removed from the interstate rail network. See id. at 884. On appeal, the court reversed the ICC’s
decision, stating that “the mere act of leasing the line [to the operator] was
insufficient to confer any common carrier obligation on [the underlying
That said, Clayton’s lease of its property for common carrier freight rail service does impose some obligations on Clayton with respect to the leased property. Clayton cannot: (1) exercise control over NJSL’s operations such that Clayton must become a common carrier itself, thus implicating the Board’s jurisdiction, or (2) interfere with NJSL’s ability to meet its common carrier obligation to its shippers.
In the line
of cases that began with
In this case, the Board can examine the relationship between Clayton and NJSL because the operating agreement between those entities is in the record. In similar situations in the future, operators should include with their filing copies of their lease or operating agreement with the owner to resolve expeditiously any concerns the Board may have.
In examining this agreement, we find that it does not provide Clayton with control over NJSL that would impute a common carrier obligation to Clayton or allow Clayton to interfere with NJSL’s freight operations. The agreement states that “[t]he Owner grants NJSL the exclusive and unlimited right to access and operate over the Line as a common carrier . . . .” Moreover, other provisions of the agreement reflect that general statement. For instance, Clayton does not have the right to remove NJSL from the line (except after a material breach and failure to cure such a breach); and while Clayton can grant long-term property interests to third parties (for example, outdoor advertising or installation of fiber optic cables), those property interests cannot interfere with the NJSL’s operation of the line. In sum, we conclude that, on the basis of the parties’ agreement, Clayton does not exercise control over NJSL’s operations and cannot otherwise interfere with NJSL’s ability to meet its common carrier obligation to its shippers.
In his comments, Riffin asks the Board to find that the property at issue is a line of railroad rather than private track. Riffin is also concerned about NJSL’s statement in another Board proceeding suggesting that NJSL will not cooperate with Riffin should he acquire a nearby line. Riffin asks the Board to instruct NJSL that it must deal with all shippers and carriers, including Riffin, indiscriminately.
Riffin’s first request is based on his suggestion that the
property remains a line of railroad rather than private track because the
previous owner, Conrail, never consummated the abandonment authority granted to
it in Conrail Abandonment in Burlington & Ocean Counties, N.J., AB 167
(Sub-No. 741N) (ICC served Mar. 11, 1985).
Riffin further asserts that it is “unknown”
Riffin’s request that we caution NJSL to cooperate with him
is now moot. Riffin
and his associate, Eric Strohmeyer, attempted to
purchase a portion of a line in Jersey City, N.J. adjacent to NJSL’s property. Riffin and Strohmeyer invoked the
offer of financial assistance (OFA) forced sale provisions of 49 U.S.C. § 10904
when the line’s owner, Conrail, sought authority to abandon the line in Consolidated
Rail Corp.—Abandonment Exemption—In
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
It is ordered:
1. The NJSL and Macrie motion to strike is denied.
2. Our prior decision is clarified to the extent set forth in this decision.
3. NJSL is directed to serve a copy of this decision on Clayton within 5 days of the service date of this decision and to certify to the Board that it has done
4. This decision is effective on its date of service.
By the Board, Chairman Elliott, Vice Chairman Mulvey, and Commissioner Nottingham.
* This decision corrects the decision served on August 16, 2010. In that decision, footnote 4 stated that “if NJSL materially breached the lease, Clayton would still first have to obtain adverse abandonment authority from the Board before Clayton could evict NJSL.” Instead, the footnote should have stated that Clayton would have to obtain adverse discontinuance authority. Footnote 4 herein is corrected to reflect that change. The August 16, 2010 decision remains unchanged in all other respects.
 The abandoned line extends between milepost 66.0 at
Lakehurst, Borough of Lakehurst,
 Inasmuch as we find that a number of the issues raised by Riffin warrant discussion, and in the interest of compiling a more complete record in this matter, we will deny NJSL’s and Macrie’s joint motion to strike and accept and consider Riffin’s filing. In fairness, we will also accept and consider NJSL’s and Macrie’s joint reply.
 Macrie & NJSL Reply Ex. C, ¶ 1, Oct. 14, 2009.
 Even if NJSL materially breached the lease, Clayton would still first have to obtain adverse discontinuance authority from the Board before Clayton could evict NJSL.
 We address and resolve above three other issues raised by Riffin: Clayton’s need to seek acquisition authority (none), Clayton’s common carrier obligation (none), and Clayton’s rights as a carrier (Clayton is not a carrier). We will not address any other issues raised by Riffin and not specifically mentioned here, as they represent an inappropriate attempt by Riffin to transform this case into a declaratory order proceeding to address a variety of matters that need not be resolved here, but that Riffin suggests may be relevant to other proceedings in which he is involved.
 Riffin’s Notice of Intent to Participate as a Party of R. & Comments 4.
 In 1997, the Board added a notice of consummation requirement. Pursuant to 49 C.F.R. § 1152.29(e)(2) and 49 C.F.R. § 1152.50(e), the filing of a consummation notice has been deemed conclusive evidence of consummation of an abandonment. In 1985, when the Board granted Conrail abandonment authority, no such rule was in effect. At that time, consummation was determined through an analysis of various indicia of the carrier’s objective intent. As noted above, Riffin has presented no evidence that Conrail did not consummate the abandonment of this track.