[Federal Register Volume 60, Number 204 (Monday, October 23, 1995)]
[Notices]
[Pages 54384-54387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26271]
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INTERSTATE COMMERCE COMMISSION
[Finance Docket No. 32760]
Union Pacific Corporation, Union Pacific Railroad Company, and
Missouri Pacific Railroad Company--Control and Merger--Southern Pacific
Rail Corporation, Southern Pacific Transportation Company, St. Louis
Southwestern Railway Company, SPCSL Corp., and The Denver and Rio
Grande Western Railroad Company
AGENCY: Interstate Commerce Commission.
ACTION: Decision No. 6; Notice of Issuance of Procedural Schedule.
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SUMMARY: The Commission is issuing a procedural schedule, following the
receipt of comments from the public on applicants' proposed procedural
schedule and applicants' reply to those comments. This schedule will
provide for issuance of a final decision no later than 255 days after
applicants file the primary application, which is 60 days beyond the
time proposed by applicants.
EFFECTIVE DATE: The effective date of this decision is October 24,
1995. Notices of intent to participate in this proceeding will be due
45 days after the primary application is filed. All comments, protests,
requests for conditions, inconsistent and responsive applications, and
any other opposition evidence and argument will be due 120 days after
the filing of the primary application. For further information, see the
procedural schedule set forth below.
ADDRESSES: An original and 20 copies of all documents must refer to
Finance Docket No. 32760 and be sent to the Office of the Secretary,
Case Control Branch, Attn: Finance Docket No. 32760, Interstate
Commerce Commission, 1201 Constitution Avenue NW., Washington, DC
20423. Parties are encouraged also to submit all pleadings and
attachments on a 3.5-inch diskette in WordPerfect 5.1 format.
In addition, one copy of all documents in this proceeding must be
sent to Administrative Law Judge Jerome Nelson, Federal Energy
Regulatory Commission, 825 North Capitol Street NE., Washington, DC
20426 and to each of applicants' representatives: (1) Arvid E. Roach
II, Esq., Covington & Burling, 1201 Pennsylvania Avenue NW., P.O. Box
7566, Washington, DC 20044; and (2) Paul A. Cunningham, Esq., Harkins
Cunningham, 1300 Nineteenth Street NW., Washington, DC 20036.
FOR FURTHER INFORMATION CONTACT: Julia Farr, (202) 927-5352. [TDD for
the hearing impaired: (202) 927-5721.]
SUPPLEMENTARY INFORMATION: On August 4, 1995, Union Pacific Corporation
(UPC), Union Pacific Railroad Company (UPRR), Missouri Pacific Railroad
Company (MPRR), Southern Pacific Rail Corporation (SPR), Southern
Pacific Transportation Company (SPT), St. Louis Southwestern Railway
Company (SSW), SPCSL Corp. (SPCSL), and The Denver and Rio Grande
Western Railroad Company (DRGW) (collectively, applicants) 1
notified the Commission of their intent to file an application seeking
authority under 49 U.S.C. 11343-45 for: (1) the acquisition of control
of SPR by UP Acquisition Corporation (Acquisition), an indirect wholly
owned subsidiary of UPC; (2) the merger of SPR into UPRR; and (3) the
resulting common control of UP and SP by UPC. Applicants stated that
they will file their application by December 1, 1995, and proposed a
procedural schedule for use in the resulting proceeding. Under that
schedule, a final decision would be issued 195 days after the filing of
the application.
\1\ UPC, UPRR, and MPRR are referred to collectively as Union
Pacific. UPRR and MPRR are referred to collectively as UP.
SPR, SPT, SSW, SPCSL, and DRGW are referred to collectively as
Southern Pacific. SPT, SSW, SPCSL, and DRGW are referred to
collectively as SP.
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In Decision No. 1, served and published in the Federal Register on
September 1, 1995, 60 FR 45737, the Commission gave notice of the
prefiling notification and asked for comments on applicants' proposed
procedural schedule. The Commission also asked for comments on a
variation of the applicants' proposed procedural schedule, wherein
parties filing inconsistent or responsive applications, comments,
protests, requests for conditions, or any other opposition evidence and
arguments would submit their pleadings to the Commission 60 days after
the filing of the primary application (in applicants' proposed
schedule, these parties would submit their pleadings 90 days after the
filing of the primary application). Comments were due on September 18,
1995; most were received on or before that date. Applicants replied to
the comments on September 28, 1995.2
\2\ We have received petitions for leave to file additional
comments on the procedural schedule by the United States Department
of Justice (DOJ-2) and The Kansas City Southern Railway Company
(KCS-4), and their respective additional comments (DOJ-3 and KCS-5).
Applicants replied. We will accept all of these pleadings into the
record.
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Approximately 35 public comments were received in response to
Decision
[[Page 54385]]
No. 1. Comments were filed by shippers, government parties, railroads,
electric utility interests, and rail labor unions. Most of the
commenters opposed the Commission's suggested variation on applicants'
proposed procedural schedule. Several commenters supported the
applicants' proposed 195-day schedule or stated that the proposed
schedule offered them the minimum amount of time in which they could
prepare their submissions. Several commenters opposed the proposed 195-
day schedule as being too short, and suggested alternative procedural
schedules extending from 9 months to the full 2\1/2\ years allotted
under the statute. After reviewing all of the comments we received on
the proposed procedural schedule, we have determined that a 255-day
procedural schedule (which is 60 days more than applicants have
proposed) will ensure that all parties are accorded due process and
allow us time to consider fully all of the issues in this proceeding.
We believe that applicants have demonstrated reasons for, and that
circumstances justify, a departure from standard procedures and
deadlines in merger proceedings. We have established that it is
possible to review major merger proceedings in less time than that
allowed by the Interstate Commerce Act and by our regulations, while
still considering all parties' concerns. If we set a procedural
schedule that is longer than is necessary for all parties to present
concerns and for us to carefully consider those concerns and the
effects of the proposed transaction on the public interest, it would be
a step backward in our effort to process applications fairly but
efficiently.
Within this expedited schedule, we will consider all issues
affecting the public interest, and will also address cumulative impacts
and crossover effects of prior mergers as appropriate. Further, we will
consider the transaction in light of any settlement agreements the
applicants have reached or may reach with any parties, regardless of
the complexity of the agreements.
We issued an expedited schedule in Burlington Northern Inc. and
Burlington Northern Railroad Company--Control and Merger--Santa Fe
Pacific Corporation and The Atchison, Topeka and Santa Fe Railway
Company, Finance Docket No. 32549, Decision No. 10 (ICC served Mar. 7,
1995). We do not believe that the fact that the BN/Santa Fe application
had been filed several months before we adopted the expedited
procedural schedule justifies an additional 5 months to prepare
opposition evidence in this proceeding, as some parties suggest. In
that case, we responded to parties' requests (arguing that they did not
want to expend resources to analyze an application when they were not
sure who would be the applicants) by suspending the procedural schedule
pending Santa Fe Pacific Corp.'s shareholders' vote. Subsequently, the
feedback we received at the time we sought comments on expediting the
schedule in BN/Santa Fe indicated that many parties had not begun to
prepare their submissions in earnest until issuance of the procedural
schedule. Those parties had ample time to prepare their submissions,
and their submissions were given serious and substantial consideration.
The same will be true in this proceeding.
We also do not believe that the uncertainty of the Commission's
future justifies a longer procedural schedule; the Commission continues
to be responsible for performing its functions efficiently and
effectively. The issue of the agency's future and any effect that it
might have on the UP/SP proceeding can be addressed if necessary as
circumstances evolve.
We are not unmindful of the concerns parties raise regarding the
amount of time necessary to prepare their cases, and have crafted the
attached procedural schedule with fairness to all parties in mind. We
have adjusted applicants' proposed procedural schedule to give more
time for the filing of comments, protests, requested conditions, and
inconsistent and responsive applications; for the filing of rebuttals
in support of inconsistent and responsive applications; for the filing
of briefs; and for the preparation for oral argument.
All interested parties, including the United States Department of
Justice (DOJ) and the United States Department of Transportation
(USDOT), may file written comments, protests, requests for conditions,
and inconsistent and responsive applications 120 days (rather than 90
days) after the filing of the primary application. All descriptions of
inconsistent and responsive applications, as well as petitions for
waiver or clarification, will be due 60 days after the filing of the
primary application.
We will not allow parties filing comments, protests, and requests
for conditions to file rebuttal in support of those pleadings. As we
have mentioned previously, we believe that parties filing inconsistent
and/or responsive applications have a right to file rebuttal evidence,
while parties simply commenting, protesting, or requesting conditions
do not. In the BN/Santa Fe proceeding we stated:
The relief responsive applicants seek is different from the
relief that parties simply requesting conditions seek.
Traditionally, applicants, whether they are primary or responsive
applicants, have the right to close the evidentiary record on their
case. Therefore, responsive applicants can answer arguments made in
opposition to their application in rebuttal filings. Parties seeking
conditions, on the other hand, come to the Commission as part of and
in opposition to the primary application, and the primary applicants
respond to those parties in their rebuttal in support of the primary
application. Allowing * * * rebuttal evidence would deprive the
primary applicants of their right to close the evidentiary record on
their case. We see no necessity for such filings, and believe the
current procedural schedule will allow the Commission to fully
comprehend and evaluate all issues that the parties seeking
conditions will raise in this proceeding.
BN/Santa Fe, Decision No. 16 at 11. Rebuttals in support of
inconsistent and responsive applications are due 15 days (rather than
10 days) after the filing of responses to those applications are due.
In pursuing discovery and in preparing pleadings, we encourage the
parties (and will instruct the Administrative Law Judge) to focus
strictly on relevant issues, as identified by the applicable statutory
standards and our control regulations, including our merger policy
statement (49 CFR 1180.1). For example, arguments that the transaction
will cause competitive harm should be accompanied by a clear statement
of how rates will be raised, service degraded, or both, in some
identifiable market. Responses countering such competitive arguments
should explain clearly why those adverse impacts will not occur.
Briefs are due 20 days (rather than 10 days) after the close of the
evidentiary record. In spite of arguments that we should not limit
briefs to 50 pages, we believe that past experience demonstrates that
it is appropriate to do so. We will impose no page limitations on
evidentiary submissions. Briefs must be filed in accordance with the
requirements at 49 CFR 1104.2 (8\1/2\ by 11; double-spaced). Because
reply briefs appear to be unnecessary to complete our review of a
merger, we do not anticipate granting any requests to file reply
briefs. Further, we do not see a necessity at this time to schedule an
oral hearing to resolve issues of disputed fact. We can schedule such a
hearing if and when it becomes necessary to do so.
Oral argument will be scheduled no earlier than 30 days (rather
than 15 days) after briefs are due. The scheduling of an oral argument
and a
[[Page 54386]]
voting conference is at the Commission's discretion. Although we have
found from our experience in BN/Santa Fe that we had adequate time to
fully digest and consider the parties' arguments and responses to
questions at oral argument, and to weigh these arguments in our
decisionmaking process at a voting conference held the following day,
we are planning to allow an extra day between an oral argument and a
voting conference in this proceeding.
A few other matters require our attention. USDOT raises an issue
regarding the service list in this proceeding. USDOT contends that
accelerated review of the merger only can take place if the Commission
issues a definitive service list early in the case to ensure timely
receipt of the evolving record. Because in BN/Santa Fe the Commission
issued its service list after all opposition evidence was filed, USDOT
argues that it lost time trying to secure copies of evidentiary filings
from participants, and in turn had trouble meeting subsequent
deadlines.
We agree that issuing an accurate service list at an earlier stage
in this proceeding would help to facilitate parties' participation
under an accelerated procedural schedule. Therefore, rather than
adhering to the practice of compiling and issuing a service list after
parties file comments, we will issue the definitive service list before
the filing of comments, requests for conditions, inconsistent and
responsive applications, and other opposition evidence are due in this
proceeding. To compile and issue timely an accurate service list, we
are requiring persons to notify the Commission in writing, within 45
days after the primary application is filed, of their intent to
participate in this proceeding.
Another party, Gulf Rice Arkansas (GRA), seeks clarification of
whether the investigation of abandonment protests will be accomplished
through an oral hearing. Under 49 U.S.C 10904, which outlines the
procedures for applications to abandon lines or discontinue service on
lines, there is no specific provision for an oral hearing to
investigate protests. The statute states that, if the Commission
determines that an investigation is necessary, it must be completed
within 135 days after the date the abandonment application is filed. At
this time it is not possible to determine whether an oral hearing will
be necessary, although unlikely, in order to investigate a particular
proposed abandonment.
In order for us to fulfill our responsibilities under the National
Environmental Policy Act and other environmental laws, inconsistent
applications and responsive applications must contain certain
environmental information. Anyone desiring to file an inconsistent or a
responsive application involving significant operational changes or an
action such as a rail line abandonment or construction under 49 CFR
1105.6(b)(4) of our environmental rules must include, with its
application, a preliminary draft environmental assessment (PDEA).
Generally, these types of actions require an environmental report under
49 CFR 1105.6(b)(4) which would form the basis of a subsequent
environmental assessment (or environmental impact statement, if
warranted). Here, because of the accelerated time frames, a PDEA is
necessary at the outset.
The preparation of a PDEA should not be burdensome. Although the
information would be presented in a somewhat different format, the PDEA
should address essentially the same environmental issues that would
have been covered by an environmental report. The PDEA, like the
environmental report, should be based on consultations with the Section
of Environmental Analysis (SEA) and the various agencies set forth in
49 CFR 1105.7(b). SEA will be available to provide assistance as
needed. SEA will use the PDEA to expedite the environmental review
process. If a PDEA is not submitted or is insufficient, we will not
process the inconsistent or responsive application.
If an inconsistent or responsive application does not involve
significant operational changes or an action such as an abandonment or
construction, it generally is exempt from environmental review. The
applicant must certify, however, that the proposal meets the exemption
criteria under 49 CFR 1105.6(c)(2). Anyone desiring to file an
inconsistent application or responsive application should consult with
SEA as early as possible regarding the appropriate environmental
documentation.
If the parties wish to engage in any discovery or establish any
discovery guidelines (see, e.g., the proposed discovery guidelines in
UP/SP-4), they are directed to consult with Administrative Law Judge
Jerome Nelson. Judge Nelson is authorized to convene a discovery
conference, if necessary and as appropriate, in Washington, DC, and to
establish such discovery guidelines, if any, as he deems appropriate.
However, Judge Nelson is not authorized to make adjustments to, or to
modify, the dates in the procedural schedule. We believe the schedule
as adopted allows sufficient time for meaningful discovery. Any
interlocutory appeal to a decision issued by Judge Nelson will be
governed by the stringent standard of 49 CFR 1115.1(c): ``Such appeals
are not favored; they will be granted only in exceptional circumstances
to correct a clear error of judgment or to prevent manifest
injustice.'' See Union Pacific Corporation, Union Pacific Railroad
Company and Missouri Pacific Railroad Company--Control--Chicago and
North Western Transportation Company and Chicago and North Western
Railway Company, Finance Docket No. 32133, Decision No. 17, at 9 (ICC
served July 11, 1994) (applying the ``stringent standard'' of 49 CFR
1115.1(c) to an appeal of an interlocutory decision issued by former
Chief Administrative Law Judge Paul S. Cross).\3\
\3\ For the purposes of the present proceeding, we think it
appropriate to tighten the deadlines provided by 49 CFR 1115.1(c).
Accordingly, the provisions of the second sentence of 49 CFR
1115.1(c) to the contrary notwithstanding, an appeal to a decision
issued by Judge Nelson must be filed within 3 working days of the
date of his decision, and any response to any such appeal must be
filed within 3 working days thereafter. Likewise, any reply to any
procedural motion filed with the Commission itself in the first
instance must also be filed within 3 working days.
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This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
Decided: October 17, 1995.
By the Commission, Chairman Morgan, Vice Chairman Owen, and
Commissioner Simmons.
Vernon A. Williams,
Secretary.
Final Procedural Schedule
F--Primary application and related applications filed.
F+30--Commission notice of acceptance of primary application and
related applications published in the Federal Register.
F+45--Notification of intent to participate in proceeding due.
F+60--Description of anticipated inconsistent and responsive
applications due; petitions for waiver or clarification due.
F+120--Inconsistent and responsive applications due. All comments,
protests, requests for conditions, and any other opposition evidence
and argument due. DOJ and USDOT comments due.
F+135--Notice of acceptance (if required) of inconsistent and
responsive applications published in the Federal Register.
[[Page 54387]]
F+150--Response to inconsistent and responsive applications due.
Response to comments, protests, requested conditions, and other
opposition due. Rebuttal in support of primary application and related
applications due.
F+165--Rebuttal in support of inconsistent and responsive applications
due.
F+185--Briefs due, all parties (not to exceed 50 pages).
F+215--Oral argument (at Commission's discretion).
F+217--Voting Conference (at Commission's discretion).
F+255--Date of service of final decision.
Notes: Immediately upon each evidentiary filing, the filing
party will place all documents relevant to the filing (other than
documents that are privileged or otherwise protected from discovery)
in a depository open to all parties, and will make its witnesses
available for discovery depositions. Access to documents subject to
protective order will be appropriately restricted. Parties seeking
discovery depositions may proceed by agreement. Relevant excerpts of
transcripts will be received in lieu of cross-examination, unless
cross-examination is needed to resolve material issues of disputed
fact. Discovery on responsive and inconsistent applications will
begin immediately upon their filing. The Administrative Law Judge
assigned to this proceeding will have the authority initially to
resolve any discovery disputes.
[FR Doc. 95-26271 Filed 10-20-95; 8:45 am]
BILLING CODE 7035-01-P
