[Federal Register Volume 59, Number 208 (Friday, October 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-26864]
[Federal Register: October 28, 1994]
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INTERSTATE COMMERCE COMMISSION
[Finance Docket No. 32579]\1\
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\1\ Embraces Burlington Northern Railroad Company--Acquisition--
Certain Lines of Davenport, Rock Island and North Western Railway
Company, Finance Docket No. 32579 (Sub-No. 1); Burlington Northern
Railroad Company--Acquisition--Certain Lines of Soo Line Railroad
Company, Finance Docket No. 32579 (Sub No. 2); and, Soo Line
Railroad Company--Acquisition--Certain Lines of Burlington Northern
Railroad Company, Finance Docket No. 32579 (Sub-No. 3).
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Canadian Pacific Limited, Canadian Pacific (U.S.) Holdings, Inc.,
Soo Line Corporation and Soo Line Railroad Company--Control--Davenport,
Rock Island and North Western Railway Company
AGENCY: Interstate Commerce Commission.
ACTION: Notice of decision accepting application for consideration.
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SUMMARY: The Commission accepts for consideration the application filed
September 30, 1994, by Canadian Pacific Limited, Canadian Pacific
(U.S.) Holdings Inc., Soo Line Corporation, and Soo Line Railroad
Company (Soo) (collectively, applicants). Soo and Burlington Northern
Railroad Company (BN) own the Davenport, Rock Island and North Western
Railway Company (DRI) jointly. Soo seeks to acquire sole control of DRI
as a prelude to merging DRI into Soo. DRI lines east of the Mississippi
River will be transferred to BN, and lines west of the Mississippi
River (and BN's ownership interest in a joint BN/Soo line) will be
transferred to Soo. Soo's East Moline-Albany line (east of the
Mississippi River) will also be transferred to BN. DRI will cease to
exist. Under 49 CFR part 1180, the Commission finds this to be a minor
transaction.
DATES: Written comments must be filed with the Interstate Commerce
Commission no later than November 28, 1994 and concurrently served on
applicants' representatives, the United States Secretary of
Transportation (Secretary of Transportation), and the Attorney General
of the United States (Attorney General). Comments from the Secretary of
Transportation and the Attorney General must be filed by December 12,
1994. The Commission will issue a service list shortly thereafter.
Comments must be served on all parties of record within 10 days of the
issuance of the service list and confirmed by certificate of service
filed with the Commission indicating that all designated individuals
and organizations on the service list have been properly served.
Applicants' reply is due by December 27, 1994.
ADDRESSES: Send original and 10 copies of all documents to: Office of
the Secretary, Case Control Branch, Attn: Finance Docket No. 32579,
Interstate Commerce Commission, 1201 Constitution Avenue NW.,
Washington, DC 20423. In addition, concurrently send one copy of all
documents to the Secretary of Transportation, the Attorney General, and
to applicants' representatives: (1) Docket Clerk, Office of Chief
Counsel, Federal Railroad Administration, Room 8201, 400 Seventh Street
SW., Washington, DC 20590; (2) Attorney General of the United States,
United States Department of Justice, 10th St. & Constitution Avenue
NW., Washington, DC 20530; (3) Michael E. Roper, Burlington Northern
Railroad Company, 3800 Continental Plaza, 777 Main Street, Fort Worth,
TX 76102; (4) Barry McGrath, Soo Line Railroad Company, 105 South Fifth
Street, P.O. Box 530, Minneapolis, MN 55440; and (5) William C. Sippel,
Oppenheimer Wolff & Donnelly, Two Prudential Plaza, 45th floor, 180
North Stetson Avenue, Chicago, IL 60601.
FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 927-5660.
[TDD for hearing impaired: (202) 927-5721.]
SUPPLEMENTARY INFORMATION: Applicants seek Commission approval under 49
U.S.C. 11343, et seq., for: (1) BN to transfer to DRI all of BN's
shares of DRI stock (and the resulting full control by Soo of DRI)
(Finance Docket No. 32579); (2) DRI to convey to BN its Davenport, IA-
East Moline, IL line between DRI mileposts 36.65 at East Wye Switch in
Davenport and 45.55 at East Moline [Finance Docket No. 32579 (Sub-No.
1)]; (3) Soo to convey to BN its East Moline-Albany, IL line between CP
mileposts 52.00 and 26.60 [Finance Docket No. 32579 (Sub-No. 2)]; and
(4) BN to convey to Soo BN's one-half ownership interest in the joint
BN/Soo main line between CP mileposts 157.70 and 158.42 at Clinton, IA
[Finance Docket No. 32579 (Sub-No. 3)].
Three related notices of exemption involving the grant back of
trackage rights between BN and Soo and the merger of DRI into Soo were
also concurrently filed with this application.2
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\2\(1) Burlington Northern Railroad Company--Trackage Rights
Exemption--Soo Line Railroad Company, Finance Docket No. 32579 (Sub-
No. 4), wherein Soo is granting BN non-exclusive local trackage
rights between CP milepost 157.70 at Clinton, IL and DRI milepost
36.65 at Davenport, IL, a distance of 35.8 miles.
(2) Soo Line Railroad Company--Trackage Rights Exemption--
Burlington Northern Railroad Company, Finance Docket No. 32579 (Sub-
No. 5), wherein BN is granting Soo non-exclusive local trackage
rights: (1) between DRI milepost 36.65 at Davenport, IL and CP
milepost 26.60 at Albany, IL, a distance of 34 miles; (2) between
DRI milepost 45.06 at East Moline, IL and BN milepost 244.42 at
Silvis, IL, a distance of 1.3 miles; and
(3) Soo Line Railroad Company--Merger Exemption--Davenport, Rock
Island and North Western Railway Company, Finance Docket No. 32579
(Sub-No. 6), wherein Soo will merge DRI into Soo.
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Soo, a class I railroad, operates approximately 5,230 route miles
in 11 states. Soo is wholly owned by Soo Line Corporation (SLC), a
noncarrier holding company. SLC is wholly owned by Canadian Pacific
(U.S.) Holdings Inc. (Holdings), a noncarrier holding company. Holdings
is in turn wholly owned by Canadian Pacific Limited (CP), d/b/a CP Rail
System, which owns and operates approximately 17,650 miles of rail in
Canada and the United States. CP and Holdings also control the Delaware
& Hudson Railway Company d/b/a CP Rail System, which operates in the
northeastern United States and has no involvement in the proposed
transactions.
BN, also a class I railroad, operates more than 25,000 route miles
in 26 states. BN is wholly owned by Burlington Northern, Inc.
BN and Soo jointly own DRI,3 a class III switching and
terminal railroad which owns and operates approximately 45 route miles
between Clinton, IA and East Moline, IL, via Davenport, IA (known as
the Quad Cities area).
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\3\BN and Soo each own 14,997 shares of DRI common stock. Three
current or former BN employees and three current or former Soo
employees each own one share of DRI stock. Thus, BN and Soo each own
and control 15,000 shares of DRI stock. BN has agreed to arrange for
the sale to DRI of the three shares of DRI common stock owned by
current and former BN employees.
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The transactions described in this application will be consummated
with internally generated funds and do not involve the issuance of any
new securities.
BN and Soo expect to benefit from administrative cost savings
associated with eliminating DRI as a separate entity. Applicants aver
that the allocation of DRI's lines between BN and Soo reflect, in part,
their operational patterns in the Quad Cities area. They have concluded
that it would be more efficient for each carrier to handle its own
traffic on the DRI lines with a contractual allocation of the cost of
maintenance of the lines. Transfer of the DRI lines, they say, will
permit the efficient consolidation of former DRI switching operations
with the existing operations of BN and Soo in the area.
With the elimination of DRI, Soo and BN plan to establish a direct
interchange in the Quad Cities area. Industries currently switched by
DRI for BN or Soo will now be served directly by those carriers.
Applicants note that no shipper or industry will lose rail service or
experience any reduction in rail transportation options as a result of
these transactions, and shippers on the East Moline-Albany line
currently served by one railroad will be served by two railroads.
Applicants anticipate no discontinuances or abandonments in connection
with or as a result of the proposed transactions.
Applicants contend that the transactions will not adversely impact
BN or Soo employees; however, DRI's current 25-man workforce will be
abolished before or upon consummation of the proposed transactions. On
July 20, 1994, DRI offered a voluntary severance package to employees
with 10 or more years of service. Management employees received a
separate severance package. Applicants recognize that, for each
transaction for which approval is sought, the appropriate level of
labor protection is that set forth in New York Dock Ry.--Control--
Brooklyn Eastern Dist., 360 I.C.C. 60 (1979), as clarified in
Wilmington Term. RR, Inc.--Pur. & Lease--CSX Transp., Inc., 6 I.C.C.2d
799 (1990), modified, 7 I.C.C.2d 60 (1990), aff'd sub nom. Railway
Labor Executives' Ass'n v. ICC, 930 F.2d 511 (6th Cir. 1991).
Under 49 CFR 1180.4(b)(2)(iv), we must determine whether a proposed
transaction is major, significant, minor or exempt. The proposal here
does not involve the control or merger of two or more class I railroads
and has no regional or national significance.
A review of the expected result of the transactions subject to this
application, and the related exemptions, confirms the minor nature of
these transactions. Upon consummation BN will own and operate DRI's
rail line between Davenport, IA and East Moline, IL, over which BN and
Soo already operate and over which Soo will continue to operate
pursuant to BN's grant back of trackage rights. BN will own and operate
Soo's rail line between East Moline and Albany, IL, over which Soo will
also continue to operate pursuant to BN's grant back of trackage
rights. Soo will own and operate the joint BN/Soo line at Clinton, IA
and the DRI line between Davenport and Clinton. Soo and BN already
operate over both lines, and BN will continue to operate over both
lines pursuant to Soo's grant back of trackage rights.
It does not appear that the transactions contemplated by applicants
will have any anticompetitive effects or will result in a major market
extension for any applicant.
Accordingly, we find the proposal a minor transaction as defined in
49 CFR 1180.2(c). See RR. Consolidation Proced. of Significant
Transactions, 9 I.C.C.2d 1198 (1993). Because the application complies
with our regulations concerning minor transactions, we are accepting it
for consideration.
The application and exhibits are available for inspection in the
Public Docket Room at the Offices of the Interstate Commerce Commission
in Washington, DC. In addition, copies may be obtained upon request
from applicants' representatives named above.
Any interested person or government entity may participate in this
proceeding by submitting written comments. Any person or entity filing
timely written comments shall be considered a party of record if the
person's comments so request. In this event, no petition for leave to
intervene need be filed.
Consistent with 49 CFR 1180.4(d)(1)(iii), written comments must
contain:
(a) the docket number and title of the proceeding;
(b) the name, address, and telephone number of the commenting party
and its representative upon whom service shall be made;
(c) the commenting party's position, i.e., whether it supports or
opposes the proposed transaction;
(d) a statement of whether the commenting party intends to
participate formally in the proceeding or merely comment on the
proposal;
(e) if desired, a request for an oral hearing with reasons
supporting this request--the request must indicate the disputed
material facts that can only be resolved at a hearing; and
(f) a list of all information sought to be discovered from
applicant carriers.
Because we have determined that this proposal constitutes a minor
transaction, no responsive applications will be permitted. The time
limits for processing minor transactions are set forth at 49 U.S.C.
11345(d).
Discovery may begin immediately. We admonish the parties to resolve
all discovery matters expeditiously and amicably.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
It is ordered:
1. This application is accepted for consideration as a minor
transaction under 49 CFR 1180.2(c).
2. The parties shall comply with all provisions stated above.
Decided: October 21, 1994.
By the Commission, Chairman McDonald, Vice Chairman Phillips,
and Commissioners Simmons, Morgan and Owen. Vice Chairman Phillips
recused herself in this proceeding.
Vernon A. Williams,
Acting Secretary.
[FR Doc. 94-26864 Filed 10-27-94; 8:45 am]
BILLING CODE 7035-01-P