Notice2022-23021
Wisconsin Central, Ltd.-Petition for Declaratory Order-Interchange With Soo Line Railroad Company
Primary source
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Published
October 24, 2022
Issuing agencies
Surface Transportation Board
Full Text
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<title>Federal Register, Volume 87 Issue 204 (Monday, October 24, 2022)</title>
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[Federal Register Volume 87, Number 204 (Monday, October 24, 2022)]
[Notices]
[Pages 64304-64306]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[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.
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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
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</html>Indexed from Federal Register on October 24, 2022.
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