|SURFACE TRANSPORTATION BOARD DECISION DOCUMENT|
|WESTERN COAL TRAFFIC LEAGUE--PETITION FOR DECLARATORY ORDER|
|Director Of Proceedings|
|DECISION PROVIDED NOTICE THAT THE BOARD SEEKS COMMENTS FROM THE PUBLIC ADDRESSING THE RECENT DISCOVERY THAT BERKSHIRE HATHAWAY INC. OWNED OR CONTROLLED CBEC RAILWAY AND WHITE CITY TERMINAL UNION RAILWAY WHEN IT ACQUIRED BNSF RAILWAY COMPANY IN FEBRUARY 2010.|
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|Full Text of Decision|
42717 SERVICE DATE – OCTOBER 9, 2012
SURFACE TRANSPORTATION BOARD
Docket No. FD 35506
WESTERN COAL TRAFFIC LEAGUE—PETITION FOR DECLARATORY ORDER
Decided: October 9, 2012
AGENCY: Surface Transportation Board.
ACTION: Notice of Request for Comments.
SUMMARY: The Surface Transportation Board seeks comments from the public addressing the recent discovery that Berkshire Hathaway Inc. (Berkshire), owned or controlled CBEC Railway (CBEC) and White City Terminal Union Railway (WCTU) when it acquired BNSF Railway Company (BNSF) in February 2010, thus subjecting Berkshire’s acquisition of BNSF to the Board’s jurisdiction pursuant to 49 U.S.C. § 11323. Specifically, the Board seeks comments addressing the effect, if any, of this discovery on the post-February 2010 valuation of BNSF’s asset base.
DATES: Comments are due by November 8, 2012. Replies are due by November 28, 2012.
and replies may be submitted either via the Board’s e-filing format or in
traditional paper format. Any person
using e-filing should attach a document and otherwise comply with the
instructions at the E-FILING link on the Board’s website at http://www.stb.dot.gov. Any person submitting a filing in the
traditional paper format should send an original and 10 copies referring to
Docket No. FD 35506 to: Surface
Transportation Board, 395 E Street, S.W.,
FOR FURTHER INFORMATION, CONTACT: Valerie Quinn, (202) 245-0382. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at (800) 877-8339.
By a letter dated September 13, 2012, in response to an inquiry from the
Board, Berkshire stated that it owned or controlled CBEC and WCTU at the time
of Berkshire’s acquisition of BNSF in February 2010, thus
subjecting this transaction to the Board’s jurisdiction pursuant to
49 U.S.C. § 11323.
The Board responded to Berkshire in a letter dated September 18, 2012, stating that Berkshire is not permitted to own or control multiple carriers without Board authorization, and that according to the facts it disclosed, Berkshire failed to comply with the requirements of § 11323 when it acquired BNSF, and when it first obtained control over both the CBEC and WCTU. The Board directed Berkshire to submit within 10 days a letter specifying the method and timing by which it proposed to remedy its failure to comply with § 11323, and further stated that the Board would, at that time, consider whether further action is warranted.
dated September 25, 2012,
Berkshire responded to the Board, stating that it fully intends to complete the
divestiture of both WCTU and CBEC to persons that are neither rail carriers, as
defined by 49 U.S.C. § 10102(5), nor owners of other rail carriers, so that
neither divestiture would be subject to Board jurisdiction, pursuant to
§ 11323, no later than December 31, 2012.
September 28, 2011, the Board opened this proceeding to address the May 2, 2011
petition of the Western Coal Traffic League (WCTL), where WCTL asked the Board
to issue an order declaring that the Board will adjust the Uniform Railroad
Costing System (URCS) costs of BNSF for calendar year 2010 and subsequent
years. In particular, WCTL asked the
Board to declare that it will exclude the write-up in BNSF’s net investment
base attributable to the difference between the BNSF’s book value and the price
now seeks comments from the public on the effect, if any, of Berkshire’s
non-compliance with § 11323 upon this proceeding. Berkshire’s 2010 acquisition of BNSF was and
remains subject to the Board’s jurisdiction pursuant to § 11323, but
This action will not significantly affect either the quality of the human environment or the conservation of energy resources.
It is ordered:
1. Comments are due by November 8, 2012.
2. Replies are due by November 28, 2012.
3. This decision is effective on its service date.
By the Board, Rachel D. Campbell, Director, Office of Proceedings.
 On February
12, 2010, Berkshire purchased the common stock of BNSF’s parent company that
Berkshire did not already own in a transaction valued at $34.5 million in cash
 An entity that is not a rail carrier must obtain prior Board approval to acquire a railroad line through an asset purchase. See 49 U.S.C. § 10901(a)(4). But the acquisition by a non-railroad of a controlling stock interest in a company that owns a railroad line does not trigger § 10901(a)(4). Prior Board approval of the acquisition of a controlling interest in the stock of a rail carrier is only required where the purchaser already controls a rail carrier. See 49 U.S.C. § 11323.