|SURFACE TRANSPORTATION BOARD DECISION DOCUMENT|
|CSX TRANSPORTATION, INC. AND DELAWARE AND HUDSON RAILWAY COMPANY, INC.--JOINT USE AGREEMENT|
|DECISION ACCEPTED FOR CONSIDERATION THE APPLICATION FILED BY CSX TRANSPORTATION, INC. AND DELAWARE AND HUDSON RAILWAY COMPANY, INC., FOR BOARD AUTHORIZATION TO COMMENCE OPERATIONS PURSUANT TO THEIR NEW YORK JOINT USE AGREEMENT. THIS DECISION ALSO FOUND THE PROPOSED TRANSACTION TO BE A “MINOR TRANSACTION” AND SET A PROCEDURAL SCHEDULE.|
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|Full Text of Decision|
40797 SERVICE DATE – MAY 27, 2010
SURFACE TRANSPORTATION BOARD
Docket No. FD 35348
CSX Transportation, Inc. and
AGENCY: Surface Transportation Board.
ACTION: Decision No. 2 in FD 35348; Notice of Acceptance of Application; Issuance of Procedural Schedule.
SUMMARY: The Surface
Transportation Board (Board) is accepting for consideration the application
filed on April 27, 2010, by CSX Transportation, Inc. (CSXT), and
The Board finds that the transaction is a “minor transaction” under 49 C.F.R. § 1180.2(c), and that the application, as supplemented, is complete. The Board adopts a procedural schedule for consideration of the application, under which the Board’s final decision would be issued on October 22, 2010, and would become effective November 21, 2010, assuming that there is no need for further environmental analysis. See the discussion on environmental matters, below.
DATES: The effective date of this decision is May 27, 2010. Any person who wishes to participate in this proceeding as a party of record (POR) must file, no later than June 7, 2010, a notice of intent to participate. Discovery requests to Applicants are due by June 11, 2010. Applicants’ responses to discovery requests are due by June 25, 2010. All comments, protests, requests for conditions, and any other evidence and argument in opposition to the application, including filings by the U.S. Department of Justice (DOJ) and the U.S. Department of Transportation (DOT), must be filed by July 2, 2010. Comments on the Board’s Section of Environmental Analysis (SEA) Environmental Notice are due by July 21, 2010. Responses to comments, protests, requests for conditions, and other opposition, and rebuttal in support of the application must be filed by July 23, 2010. If a public hearing or oral argument is held, it will be held on a date to be determined by the Board. The Board will issue its final decision on October 22, 2010, and the Board will make any such approval effective on November 21, 2010, unless an extension is needed to permit the completion of formal environmental review. For further information respecting dates, see the Appendix (Procedural Schedule).
ADDRESSES: Any filing submitted in this proceeding must
be submitted either via the Board’s
e-filing format or in the
traditional paper format. Any person
using e-filing should attach a document and otherwise comply with the
instructions found on the Board’s website at “www.stb.dot.gov” at the
“E-FILING” link. Any person submitting a
filing in the traditional paper format should send an original and 10 paper
copies of the filing (and also an electronic version) to: Surface Transportation Board, 395 E Street,
original and 10 copies) on the Environmental Notice should be submitted
in writing to: Surface Transportation
Board, Section of Environmental Analysis, Attn: Phillis
Johnson-Ball, Docket No. FD 35348, 395 E Street,
FOR FURTHER INFORMATION CONTACT: Julia M. Farr, (202) 245-0359. [Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.]
SUPPLEMENTARY INFORMATION: CSXT is a wholly owned subsidiary of CSX
Corporation and is a Class I railroad that owns and operates approximately
21,000 miles of railroad lines in the
D&H, a Class
II railroad, is a wholly owned, indirect subsidiary of Canadian Pacific Railway
Company (CP), a Class I railroad. D&H
owns and/or operates 1,138 miles of rail lines in
D&H currently operates 2 trains per week in each direction between Albany, N.Y., and New York City via a route consisting of: D&H’s line between Albany and Schenectady; trackage rights over CSXT’s line between Schenectady and Poughkeepsie, N.Y.; trackage rights owned by Metro North Commuter Railroad (MNCR), between Poughkeepsie and milepost 7 near High Bridge, N.Y.; and trackage rights over CSXT and Amtrak lines between Harlem River Yard, Oak Point Yard, and Fresh Pond Junction. D&H states that trains in this corridor currently average less than 27 revenue carloads per train and asserts that such traffic volume is not sufficient to support more frequent, profitable train service.
The proposed transaction involves the joint use of certain
rail lines owned by CSXT or D&H, located between Rouses Point Junction, N.Y.,
and Fresh Pond Junction, consisting of 3 segments: the Saratoga Springs-Rouses Point Segment,
the Albany-Saratoga Springs Segment,
and the Albany-Fresh Pond Segment
(collectively, Joint Use Lines). The
joint use rights granted to D&H and CSXT in the Joint Use Agreement are for
overhead traffic only. Pursuant to the
Joint Use Agreement, D&H has granted CSXT the non-exclusive right to use,
jointly with D&H, the Saratoga Springs-Rouses Point Segment and the Albany-Saratoga
Springs Segment. CSXT has reciprocally
granted to D&H the non-exclusive right to use, jointly with CSXT, the Albany-Fresh
Pond Segment. Applicants state that the
fundamental purpose of the proposed transaction is to address certain
inefficiencies in the current north-south operations of CSXT and D&H in
Under the Joint Use Agreement, Applicants state that CSXT would
perform operations over the Albany-Fresh Pond Segment with its own trains and
crews. D&H currently has the right
to operate between Albany and Fresh Pond Junction and to access shippers in the
New York City metropolitan area under the trackage rights and switching
arrangements obtained in the Conrail proceeding. Under the proposed transaction, D&H’s traffic volumes would be added to CSXT’s larger trains, which, Applicants state, would
eliminate D&H’s operation of inefficient short
trains in the
Likewise, D&H would perform all train operations over
the Saratoga Springs-Rouses Point Segment, with D&H crews handling CSXT
cars. D&H would also handle traffic
beyond Rouses Point, to and from the
Each carrier would perform its own train operations over
the Albany-Saratoga Springs Segment, which links both carriers’
Financial Arrangements. No new securities would be issued, nor would CSXT or D&H enter into any new financial arrangements in connection with the proposed transaction.
Passenger Service Impacts. Applicants state that the proposed transaction would not adversely impact commuter or other passenger service. The elimination of separate D&H train operations on the Albany-Fresh Pond Segment would reduce the overall number of freight train movements on lines that are shared by Applicants with Amtrak and MNCR. According to Applicants, D&H’s use of those portions of the Albany-Fresh Pond Segment that are owned by Amtrak and MNCR, respectively, would continue to be governed by the terms and conditions set forth in D&H’s agreements with those parties.
Nor would the proposed
transaction, according to the supplementary information provided by Applicants,
adversely impact Amtrak services north of
Discontinuances/Abandonments. The proposed transaction does not involve the abandonment of, or discontinuance of service over, any rail lines. Nor do Applicants have any plans at this time to abandon any lines involved in the proposed transaction.
Applicants assert that the proposed transaction would not have any anticompetitive
effects. Because the Joint Use Agreement
addresses the movement of only overhead traffic in
According to Applicants, the
transaction would generate significant public benefits. Applicants state that the Joint Use Agreement
would eliminate the need for D&H to operate inefficient, low-density trains
The Joint Use Agreement, according
to Applicants, would also give CSXT a dramatically shorter route for traffic
moving between Eastern Canada and the
Applicants assert that
the transaction would also enhance competition, not only between CSXT and
D&H (and among Applicants and other railroads), but also with other modes
of transportation (e.g., truck service) in the corridors served by the Joint
Use Lines. The more efficient, lower
cost services that D&H and CSXT would be able to provide pursuant to the
Joint Use Agreement would, according to Applicants, spur the competitiveness of
rail transportation for freight moving through
Applicants further note
that the proposed transaction would simplify rail operations. The proposed transaction would eliminate
separate D&H trains and reduce the overall number of freight train
movements along the
The proposed transaction,
according to Applicants, would also enable more efficient use of customs and
border security resources at the United States-Canada border, particularly at
Rouses Point Junction, which currently serves as a primary freight rail
checkpoint for traffic moving to or from
Time Schedule for Consummation. Applicants expect to consummate this transaction promptly after the effective date of a Board decision approving the transaction.
Environmental Impacts. Applicants contend that no environmental documentation, under the National Environmental Policy Act of 1969, 42 U.S.C. §§ 4321-4347 (NEPA), is required because there would be no operational changes that would exceed the thresholds established in 49 C.F.R. § 1105.7(e)(4) or (5), and there would be no action that would normally require environmental documentation.
Historic Preservation Impacts. Applicants contend that there is no need for historic review under section 106 of the National Historic Preservation Act, 16 U.S.C. § 470 (NHPA), because neither CSXT nor D&H proposes to abandon any rail line or other rail facility or structure. Applicants further state that there are no plans to dispose of or alter properties subject to Board jurisdiction that are 50 years old or older.
Labor Impacts. Applicants state that the impact on CSXT employees as a result of the proposed transaction would be relatively small. As train starts on the Massena Line are reduced, and train starts along the Joint Use Lines are increased, CSXT estimates that 10 CSXT engineer and 10 CSXT conductor jobs would be abolished, while 5 new CSXT engineer jobs and 5 new CSXT conductor jobs would be created.
For D&H employees, 1 locomotive
engineer assignment and 1 conductor assignment, which currently operate D&H’s trackage rights trains over CSXT’s
“East-of-the-Hudson” line, would be discontinued. Under the proposed transaction, 3 new
engineer assignments and 3 new conductor assignments would be created to
operate D&H trains over the Saratoga Springs-Rouses Point Segment. Because all of these assignments operate from
the same home terminal (
Applicants state that they would not integrate their employees maintaining, dispatching, or operating the Joint Use Lines. Accordingly, the Albany-Fresh Pond Segment would be maintained and dispatched in the same manner as it is today. The Albany-Saratoga Springs and Saratoga Springs-Rouses Point Segments would continue to be maintained by D&H and dispatched by D&H’s affiliate, Soo Line Railroad Company. CSXT and D&H employees working on the Joint Use Lines would be managed only by their existing employer.
Applicants request that the Board impose the employee protective conditions set forth in Norfolk and Western Railway Co.—Trackage Rights—Burlington Northern, Inc., 354 I.C.C. 605 (1978), as modified in Mendocino Coast Railway, Inc.—Lease and Operate—California Western Railroad, 360 I.C.C. 653 (1980). Applicants have not entered into any employee protection agreements affecting their employees in connection with the proposed transaction.
APPLICATION ACCEPTED. Based on the information provided in the application and supplement, the Board finds the proposed transaction to be a “minor transaction” under 49 C.F.R. § 1180.2(c). A transaction that does not involve the control or merger of 2 or more Class I railroads, nor is of regional or national transportation significance, is minor if (1) it would clearly not have anticompetitive effects, or (2) any anticompetitive effects would clearly be outweighed by the transaction's contribution to the public interest in meeting significant transportation needs. This transaction does not involve the control or merger of 2 or more Class I carriers. Nor, based on the application, does this transaction appear to be of regional or national transportation significance. On the face of the proposed application, there does not appear to be a likelihood of any anticompetitive effects resulting from the transaction, if approved. Nor does it appear, under the terms of proposed transaction, that any shipper would have fewer competitive rail alternatives as a result of the transaction.
The Board’s finding regarding competitive impact is preliminary. The Board will give careful consideration to any claims that the transaction, if approved, would have anticompetitive effects that are not apparent from the application itself.
The Board accepts the application for consideration because it is in substantial compliance with the applicable regulations governing minor transactions. See 49 U.S.C. §§ 11321-26; 49 C.F.R. part 1180. The Board reserves the right to require the filing of supplemental information as necessary to complete the record.
ENVIRONMENTAL MATTERS. Under both the regulations of the Council on Environmental Quality (CEQ) implementing NEPA, and the Board’s own environmental rules, actions for which environmental effects are ordinarily insignificant may be excluded categorically from NEPA review, without a case-by-case review. Such activities are said to be covered by a “categorical exclusion,” which CEQ defines at 40 C.F.R. § 1508.4 as:
[A] category of actions which do not individually or cumulatively have a significant effect on the human environment and which have been found to have no such effect in procedures adopted by a Federal agency in implementation of these regulations . . . and for which, therefore, neither an environmental assessment nor an environmental impact statement is required.
An agency’s procedures for categorical exclusions “shall
provide for extraordinary circumstances in which a normally excluded action may
have a significant environmental effect,” thus requiring preparation of either
an Environmental Assessment (EA) or an Environmental Impact Statement
In its environmental rules, the Board has promulgated various categorical exclusions. As pertinent here, a joint use agreement is a classification of action that normally requires no environmental review if certain thresholds would not be exceeded. The Board’s regulations also provide that historic review normally is not required for joint use agreements where there will be no significant change in operations, and properties 50 years old and older will not be affected. 49 C.F.R. § 1105.8. And, even when the Board’s presumptive thresholds for environmental analysis are met, the Board may reclassify a particular transaction or modify the requirement that an EIS or EA be prepared, if the railroad applicant demonstrates that the proposed transaction has no potential for significant environmental effects. 49 C.F.R. § 1105.6(d).
The Proposed Joint Use Agreement. Applicants assert in their application that the proposed Joint Use Agreement, if implemented, would result in 2 restrictions on the movement of traffic between Albany and Rouses Point Junction: (1) no more than 8 pairs of trains (1 north bound train plus 1 south bound train equals a pair) per week carrying CSXT Joint Use traffic and (2) no more than 3 trains per day carrying CSXT Joint Use traffic. Also, as part of the Joint Use Agreement, D&H would deliver Joint Use traffic to CSXT at Kenwood Yard, Oak Point Yard, or Fresh Pond for movement in CSXT trains. Applicants state that no notable increases in rail yard activity would likely result from these movements.
Applicants state that D&H
currently operates 2 trains 2 days per week on Albany-Fresh Pond Segment, and
under the Joint Use Agreement, this traffic would continue to move only over
this segment. As noted by Applicants,
this movement would not add traffic in the nonattainment area between
After reviewing the application, SEA requested
clarification from Applicants regarding the number of new trains that would
move through the Albany-Saratoga Springs nonattainment area under the Joint Use
Agreement and further explanation to support Applicants’ contention that the
transaction does not warrant environmental and historic documentation. In a letter dated May 11, 2010,
Applicants responded to SEA’s request for additional
information. Applicants state that the
Joint Use Agreement, as set forth in the application, limits the number of
trains that CSXT may operate between Albany and Rouses Point Junction, which
includes the Albany-Saratoga Springs nonattainment area, to no more than
8 pairs of trains per week (16 trains), and no more than 3 trains
per day. Applicants explained that, on a
daily basis, the operating plan (Exhibit 15 of the application) and the Joint
Use Agreement contemplate that Applicants would actually operate only 2 trains
(1 in each direction) per day carrying CSXT traffic between Albany and Rouses
Point Junction, even though the Joint Use Agreement allows the movement of up
to 3 trains per day and 16 trains per week.
Applicants support their 2 trains per day traffic projection with
the explanation that CSXT currently operates 2 trains per day over its
Massena Line, and that, under the Joint Use Agreement, the traffic currently on
the Massena Line consisting of 2 trains per day would, under the proposed
transaction, operate between
In sum, Applicants state that, based on the information provided in their application and supplemental information, the traffic movements described above would not result in operational changes that exceed the Board’s environmental thresholds established at 49 C.F.R. § 1105.7(e)(4) or (5), nor would there be any action that would normally require environmental documentation or historic review, if the transaction is implemented. Applicants therefore assert that the transaction does not require environmental documentation under 49 C.F.R. § 1105.6(b)(4), and that historic review is not required because neither CSXT nor D&H proposes to abandon any rail line or other rail facility or structure. Furthermore, there are no plans to dispose of or alter properties subject to Board jurisdiction that are 50 years old or older.
To allow the public the opportunity to comment on Applicants’ conclusion that approval of the transaction would not result in significant environmental impacts and does not require further environmental review under NEPA or historic review under NHPA, SEA will prepare an Environmental Notice discussing the proposed transaction, the Board’s regulatory review process, NEPA’s relevance to this transaction, and any anticipated impacts associated with the transaction, if it is implemented. SEA will distribute the Environmental Notice to certain agencies and communities, as well as all of the parties on the Board’s service list. SEA’s purpose in providing this information to the public is to encourage public involvement and consultation on any potentially significant environmental impacts related to the proposed transactions so that SEA, and ultimately the Board, can consider public concerns and issues in determining whether further environmental analysis is needed. Based on SEA’s consideration of all timely comments and its own independent review of all available information, SEA will recommend to the Board whether there is a need for the preparation of environmental or historic documentation in this case. The Board will then determine whether to issue a finding of no significant impact or whether further environmental or historic documentation should be prepared. The Environmental Notice will be served by July 1, 2010. SEA is providing a 20-day comment period, and interested parties may submit comments on the Environmental Notice directly to SEA by July 21, 2010.
PROCEDURAL SCHEDULE. The Board has considered Applicants’ request for a procedural schedule (filed April 27, 2010), under which the Board would issue its final decision on October 22, 2010, 180 days after the application has been filed. The Board will adopt a procedural schedule based on the schedule proposed by Applicants but modified to give parties more time, following the Federal holiday, to file notices of intent to participate (with subsequent deadlines changed accordingly). The procedural schedule adopted by the Board also allows for comments to be filed on the Environmental Notice. The Board also notes that its decision will be effective on November 21, 2010, 30 days after its final decision is served (not November 22, 2010, as provided by Applicants). For further information regarding dates, see the Appendix (Procedural Schedule).
NOTICE OF INTENT TO PARTICIPATE. Any person who wishes to participate in this proceeding as a POR must file with the Board, no later than June 7, 2010, a notice of intent to participate, accompanied by a certificate of service indicating that the notice has been properly served on the Secretary of Transportation, the Attorney General of the United States, Mr. Hynes (representing D&H) and Mr. Gitomer (representing CSXT).
If a request is made in the notice of intent to participate to have more than 1 name added to the service list as a POR representing a particular entity, the extra name will be added to the service list as a “Non-Party.” The list will reflect the Board’s policy of allowing only 1 official representative per party to be placed on the service list, as specified in Press Release No. 97-68 dated August 18, 1997, announcing the implementation of the Board’s “One Party-One Representative” policy for service lists. Any person designated as a Non-Party will receive copies of Board decisions, orders, and notices but not copies of official filings. Persons seeking to change their status must accompany that request with a written certification that he or she has complied with the service requirements set forth at 49 C.F.R. § 1180.4, and any other requirements set forth in this decision.
SERVICE LIST NOTICE. The Board will serve, as soon after June 7, 2010, as practicable, a notice containing the official service list (the service list notice). Each POR will be required to serve upon all other PORs, within 10 days of the service date of the service list notice, copies of all filings previously submitted by that party (to the extent such filings have not previously been served upon such other parties). Each POR also will be required to file with the Board, within 10 days of the service date of the service list notice, a certificate of service indicating that the service required by the preceding sentence has been accomplished. Every filing made by a POR must have its own certificate of service indicating that all PORs on the service list have been served with a copy of the filing. Members of the United States Congress (MOCs) and Governors (GOVs) are not parties of record and need not be served with copies of filings, unless any MOC or GOV has requested to be, and is designated as, a POR.
SERVICE OF DECISIONS, ORDERS, AND NOTICES. The Board will serve copies of its decisions, orders, and notices only on those persons who are designated on the official service list as either POR, MOC, GOV, or Non-Party. All other interested persons are encouraged to secure copies of decisions, orders, and notices via the Board’s website at “www.stb.dot.gov” under “E-LIBRARY/Decisions & Notices.”
ACCESS TO FILINGS. Under the Board’s rules, any document filed
with the Board (including applications, pleadings, etc.) shall be promptly
furnished by the filer to interested persons on request, unless subject to a
protective order. 49 C.F.R. §
documents are available for inspection in the Docket File Reading Room (Room
131) at the offices of the Surface Transportation Board, 395 E Street, S.W., 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 application in FD 35348 is accepted for consideration.
2. The parties to this proceeding must comply with the procedural schedule adopted by the Board in this proceeding as shown in the Appendix.
3. The parties to this proceeding must comply with the procedural requirements described in this decision.
4. This decision is effective on May 27, 2010.
Decided: May 24, 2010.
By the Board, Chairman Elliott, Vice Chairman Mulvey, and Commissioner Nottingham.
APPENDIX: PROCEDURAL SCHEDULE
April 27, 2010 Application, Motion for Protective Order, and Motion to Establish Procedural Schedule filed.
May 21, 2010 Protective order issued.
May 27, 2010 Board notice of acceptance of application published in the Federal Register.
June 7, 2010 Notices of intent to participate in this proceeding due.
June 11, 2010 Discovery requests to Applicants due.
June 25, 2010 Applicants’ responses to discovery requests due.
July 2, 2010 All comments, protests, requests for conditions, and any other evidence and argument in opposition to the application, including filings of DOJ and DOT, due.
July 21, 2010 Comments to the Environmental Notice due.
July 23, 2010 Responses to comments, protests, requests for conditions, and other opposition due. Rebuttal in support of the application due.
TBD A public hearing or oral argument may be held.
October 22, 2010 Date of service of final decision.
November 21, 2010 Effective date of final decision.
 By a letter dated May 11, 2010, Applicants supplemented their application with additional information regarding the environmental and passenger service impacts of the proposed transaction.
 D&H obtained those rights in connection with Norfolk Southern Railway Company (NS) and CSXT’s acquisition of control of Conrail. See CSX Corp.—Control and Operating Leases/Agreements—Conrail Inc., 3 S.T.B. 196, 282-83 (1998) (Conrail).
 The Saratoga
Springs-Rouses Point Segment extends between D&H’s
Saratoga Springs Yard, located at D&H milepost 36.10 ± near
Albany-Saratoga Springs Segment extends between a point of connection with CSXT’s rail lines near D&H’s
Kenwood Yard located at D&H milepost 0.0 ± in the vicinity of
 The Albany-Fresh Pond Segment extends between a point of connection between CSXT’s and D&H’s rail lines near D&H’s Kenwood Yard at CSXT milepost QCP 7.1 in the vicinity of Albany, and CSXT’s Oak Point Yard and milepost QVK 8 in the vicinity of Fresh Pond Junction, a total distance of approximately 146.31 miles.
 Applicants note that, while D&H would retain its existing trackage rights over CSXT’s lines, it would not exercise those rights but would have all traffic along the Albany-Fresh Pond Segment handled by CSXT pursuant to the Joint Use Agreement. Upon termination of the Joint Use Agreement, D&H would have the right to reinstitute immediately operations under its trackage rights and switching agreements with CSXT.
 It appears that portions of the proposed transaction essentially resemble haulage arrangements, which, standing alone, generally would not need Board authority. However, the overall transaction, which includes trackage rights over the Albany-Saratoga Springs Segment, has been submitted to the Board as a joint use agreement, over which the Board has jurisdiction under 49 U.S.C. § 11323(a)(6).
 The thresholds differ depending on whether a rail line segment is in an area designated as “attainment” or “nonattainment” with the National Ambient Air Quality Standards established under the Clean Air Act, 42 U.S.C. §§ 7401-7671 (CAA). For rail lines located in attainment areas, environmental documentation normally will be prepared if the proposed action would result in: (1) an increase of at least 8 trains per day; (2) an increase in rail traffic of at least 100 percent (measured in annual gross ton miles); or (3) an increase in carload activity at rail yards of at least 100 percent. 49 C.F.R. § 1105.7(e)(5)(i). For rail lines in nonattainment areas, environmental documentation typically is required when the proposed action would result in: (1) an increase of at least 3 trains per day; (2) an increase in rail traffic of at least 50 percent (measured in annual gross ton miles); or (3) an increase in carload activity at rail yards of at least 20 percent. 49 C.F.R. § 1105.7(e)(5)(ii). An attainment area is an area considered to have air quality as good as, or better than, the national ambient air quality standards as defined in the CAA. A nonattainment area is any area that does not meet, or that contributes to ambient air quality in a nearby area that does not meet, the ambient air quality standards for the pollutant under the CAA.
 This schedule will be amended, if necessary, to accommodate further environmental review, if needed.