83 FR 58807 - CSX Transportation, Inc.-Lease-Western and Atlantic Railroad

SURFACE TRANSPORTATION BOARD

Federal Register Volume 83, Issue 225 (November 21, 2018)

Page Range		58807-58809
FR Document		2018-25388

This decision accepts for consideration the application by CSX Transportation, Inc. to continue to lease approximately 137.33 miles of rail line of the Western and Atlantic Railroad from the State of Georgia. The Board determines that this is a minor transaction as defined by the Board's regulations and adopts a procedural schedule.

Federal Register, Volume 83 Issue 225 (Wednesday, November 21, 2018)

[Federal Register Volume 83, Number 225 (Wednesday, November 21, 2018)]
[Notices]
[Pages 58807-58809]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-25388]

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SURFACE TRANSPORTATION BOARD

[Docket No. FD 36220]

CSX Transportation, Inc.--Lease--Western and Atlantic Railroad

AGENCY: Surface Transportation Board.

ACTION: Decision No. 1 in FD 36220; Notice of Acceptance of
Application; Issuance of Procedural Schedule.

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SUMMARY: This decision accepts for consideration the application by CSX
Transportation, Inc. to continue to lease approximately 137.33 miles of
rail line of the Western and Atlantic Railroad from the State of
Georgia. The Board determines that this is a minor transaction as
defined by the Board's regulations and adopts a procedural schedule.

DATES: The effective date of this decision is November 21, 2018. Any
person who wishes to participate in this proceeding as a party of
record (POR) must file a notice of intent to participate no later than
December 5, 2018. 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 January 4, 2019.
Responses to comments, protests, requests for conditions, and other
opposition on the transportation merits of the Lease, and rebuttal in
support of the application must be filed by February 1, 2019.
The Board expects to issue its final decision by April 19, 2019,
and to make the decision effective by May 19, 2019. For further
information respecting dates, see the procedural schedule below.

ADDRESSES: Any filing submitted on the transportation merits 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.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 SW, Washington,
DC 20423-0001. In addition, one copy of each filing in this proceeding
must be sent (and may be sent by email only if service by email is
acceptable to the recipient) to each of the following: (1) U.S.
Secretary of Transportation, 1200 New Jersey Avenue SE, Washington, DC
20590; (2) Attorney General of the United States, c/o Assistant
Attorney General, Antitrust Division, Room 3109, Department of Justice,
Washington, DC 20530; (3) Louis E. Gitomer (representing CSXT), Law
Offices of Louis E. Gitomer, LLC, 600 Baltimore Avenue, Suite 301,
Towson, MD 21204; and (4) any other person designated as a POR on the
service list notice (as explained below, the service list notice will
be issued as soon after December 5, 2018, as practicable).

FOR FURTHER INFORMATION CONTACT: Lisa Novins, (202) 245-0389.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: The Surface Transportation Board (Board) is
accepting for consideration the application submitted on October 22,
2018, by CSX Transportation, Inc. (CSXT). CSXT seeks Board approval
under 49 U.S.C. 11323 to continue to lease from the State of Georgia
(Georgia) approximately 137.33 miles of rail line of the Western and
Atlantic Railroad (W&A), a non-operating carrier owned by Georgia,
acting by and through the State Properties Commission, between milepost
0 at Central Avenue in the City of Atlanta, Ga., and milepost 137.28 at
the centerline of Interstate 24 in the City of Chattanooga, Tenn. (the
Line). On November 2, 2018, Georgia, acting by and through the State
Properties Commission, filed a letter in support of CSXT's application.
The Board finds that the proposed transaction (the Lease) is a
``minor transaction'' under 49 CFR 1180.2(c) and that the application
is complete. The Board adopts a procedural schedule for consideration
of the application, under which the Board's final decision would be
expected to be issued by April 19, 2019, and would become effective by
May 19, 2019.
As a condition to the Lease, CSXT states that it has agreed to seek
authority to abandon two lines that are not part of the Line in order
to allow Georgia to expand its Silver Comet recreational trail: (1) A
2.32-mile long railroad line between milepost S.G. 579.29 and milepost
S.G. 581.61 in Cobb County, Ga., see CSX Transportation, Inc.--
Abandonment Exemption--in Cobb County, Ga., AB 55 (Sub-No. 784X); and
(2) a 4.3-mile line between milepost S.G. 579.29 and milepost 575.00 in
Cobb County, Ga. (Appl. 18.)
CSXT is a Class I railroad and W&A is a non-operating Class III
railroad that is owned by Georgia, acting by and through the State
Properties Commission. (Appl. 3, 5.) According to CSXT, it and its
predecessors have been the only railroads operating the Line since
1890. (Id. at 4.) CSXT states that it provides overhead and local
service over the Line, that the Norfolk Southern Railway Company (NSR)
intersects with the Line in Chattanooga, Tenn., and Dalton, Ga.,\1\ and
that CSXT interchanges traffic in Elizabeth, Ga., with the Georgia
Northeastern Railroad Company, Inc. (GNRR). (Id.) CSXT states that the
current lease expires on December 31, 2019, and that the new lease for
the Line is for an additional 50 years. (Id. at 14, 17.) CSXT further
states that it will retain responsibility for dispatching, track
maintenance, capital improvements, and serving shippers under the
Lease. (Id. at 14.)
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\1\ CSXT does not indicate whether it interchanges traffic with
NSR at these locations.
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Discontinuances/Abandonments. CSXT states that it does not
anticipate discontinuing service over or abandoning the Line or any
portion of the Line. (Appl. 18.) However, CSXT has agreed to seek
authority to abandon two of its lines that are not part of the Line to
allow Georgia to expand its Silver Comet recreational trail, which is a
material condition of the Lease. (Appl. 18, citing id. at Ex. 2, Lease,
section 11.03.) On October 15, 2018, CSXT filed a verified notice of
exemption under 49 CFR pt. 1152 subpart F--Exempt Abandonments to
abandon the 2.32-mile line between milepost S.G. 579.29 and milepost
S.G. 581.61 in Cobb County, Ga. in Docket No. AB 55 (Sub-

[[Page 58808]]

No. 784X), CSX Transportation, Inc.--Abandonment Exemption--in Cobb
County, Ga. Notice of the exemption was served and published in the
Federal Register on November 2, 2018 (83 FR 55,232). The exemption is
scheduled to become effective on December 2, 2018. CSXT states that, if
the abandonment is granted, CSXT intends to enter into a trail use
agreement with Georgia under the National Trails System Act, 16 U.S.C.
1247(d). (Appl. 18.) With respect to the second line,\2\ CSXT states
that, in the Lease, CSXT has granted Georgia or its Department of
Transportation a first right of refusal to acquire the 4.3-mile line
between milepost S.G. 579.29 and milepost 575.00 in Cobb County, Ga.
According to CSXT, that line must be acquired within three years of
CSXT obtaining abandonment authority. (Id.)
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\2\ As of the decided date of this decision, CSXT has not filed
for abandonment authority for this line.
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Financial Arrangements. According to CSXT, no new securities will
be issued in connection with the Lease. (Appl. 8.) CSXT states that,
under the Lease, CSXT would pay Georgia a monthly rental of
$1,008,333.33, which would increase annually by 2.5% compounded.
Additionally, CSXT states that, by July 31 of each year, it would pay
Georgia additional rent consisting of 50% of the revenue generated from
all agreements, subleases, easements, or licenses attributable to the
Line for the previous year. CSXT states that it will not incur any
fixed charges as a result of the Lease. (Id. at 10.)
Public Interest Considerations. CSXT states that it expects the
transaction to be competitively neutral and that it will not result in
any lessening of competition, creation of a monopoly, or restraint of
trade in freight surface transportation in any region of the United
States. (Appl. 9.) In support, CSXT states that competition with NSR
between Atlanta and Chattanooga will be maintained at the current level
and that the Lease will not impact motor carriers operating between
Atlanta and Chattanooga on Interstate 75 or intermodal competition at
intermediate points. (Id.) CSXT further states that the number of rail
carriers serving each shipper on the Line will remain the same and that
no shipper now being served by two railroads would have its service
limited to one railroad. (Id.)
According to CSXT, the Lease will maintain the status quo of the
transportation services to rail customers now served by CSXT, as CSXT
will continue to serve shippers as it does today. (Appl. 10.) CSXT
states that it will continue to provide essential transportation
services as it and its predecessors have done since 1890, and that
essential services provided by other carriers will not be affected by
the Lease. (Id. at 8, 10.)
CSXT states that, under the Lease, Georgia has reserved rights that
may require the relocation of track, but CSXT is confident that its
ability to provide adequate transportation service is protected by the
terms of the Lease, which states that any track relocation will not
``unreasonably interfere with the use by [CSXT] of the Leased Property,
or unreasonably reduce [CSXT's] operating capacity.'' (Appl. 10, citing
id. at Ex. 2, Lease, section 1.04(c).) Additionally, CSXT states that
Georgia has reserved the right to institute passenger rail service over
the Line ``subject to the mutual agreement of [Georgia] and [CSXT] with
respect to the impact any such passenger rail may have upon the safety
and capacity of, compensation for, and liability in connection with the
[Line].'' (Id. at 11, citing id. at Ex. 2, Lease, section 11.01.)
Time Schedule for Consummation. CSXT states that, pursuant to the
Lease, the transaction is scheduled to be consummated January 1, 2020.
(Appl. 8.)
Environmental Impacts. CSXT states that the Lease does not require
environmental documentation and review under 49 CFR 1105.6(c) because
the Lease will not result in CSXT's operations over the Line exceeding
the thresholds in 49 CFR 1105.7(e)(4) and (5). (Appl. 15-16.)
Historic Preservation Impacts. CSXT states that the Lease does not
require an historic report under 49 CFR 1105.8(b) because the Lease
``is for the purpose of continued rail operations where further [Board]
approval is required to abandon any service and there are no plans to
dispose of or alter properties subject to [Board] jurisdiction that are
50 years or older.'' (Appl. 17.) CSXT states that it will continue to
operate the Line that it has operated for over 120 years. (Appl. 17.)
Labor Impacts. CSXT states that there will be no impact on its
employees or on the employees of W&A, because CSXT does not plan to
change operations on the Line. Further, CSXT states that there are no
W&A employees on the Line. CSXT requests that the Board impose the
labor protective conditions set forth in Mendocino Coast Railway,
Inc.--Lease and Operate--California Western Railroad, 360 I.C.C. 653
(1980), as clarified in Wilmington Terminal Railroad, Inc.--Purchase
and Lease--CSX Transportation, Inc., 6 I.C.C.2d 799, 814-826 (1990).
(Appl. 11.)
Application Accepted. A transaction that does not involve the
control or merger of two or more Class I railroads is not of regional
or national transportation significance, and therefore is classified as
``minor'' if: (1) The transaction 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. A transaction not
involving the control or merger of two or more Class I railroads is
``significant'' if neither of these determinations can be clearly made.
See 49 CFR 1180.2(b), (c).
Based on a review of the application, the Board finds that the
proposed Lease would be a ``minor transaction'' under 49 CFR 1180.2(c).
Nothing in the record thus far suggests that the Lease would have
anticompetitive effects, because the Lease proposes to generally
maintain the status quo by allowing CSXT to continue operating over the
Line as it and its predecessors have done since 1890. The application
indicates that, not only would CSXT continue to operate over the Line,
but NSR and GNRR would ``retain their existing rights.'' (Appl. 6.) It
does not appear, under the terms of the proposed Lease, 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 any
potential anticompetitive effects of the Lease would not be outweighed
by its potential benefits.
The Board accepts the application for consideration because it is
in substantial compliance with the applicable regulations governing
``minor transactions.'' See 49 CFR 1180; 49 U.S.C. 11321-26. The Board
reserves the right to require the filing of supplemental information as
necessary to complete the record.
Procedural Schedule. Any person who wishes to participate in this
proceeding as a POR must file a notice of intent to participate no
later than December 5, 2018; requests for discovery from CSXT are due
by December 5, 2018; CSXT's discovery responses are due by December 19,
2018; all comments, protests, requests for conditions, and any other
evidence and argument in opposition to the application, including
filings by DOJ and DOT, must be filed by January 4, 2019; and responses
to comments, protests, requests for conditions, and

[[Page 58809]]

other opposition on the transportation merits of the Lease, as well as
CSXT's rebuttal in support of the application, must be filed by
February 1, 2019. The Board reserves the right to adjust the schedule
as circumstances may warrant. For further information regarding dates,
see the procedural schedule below.
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 December 5, 2018, a notice of intent to participate,
accompanied by a certificate of service indicating that the notice has
been properly served on the U.S. Secretary of Transportation, the
Attorney General of the United States, and Mr. Gitomer (representing
CSXT), as described above.
If a request is made in the notice of intent to participate to have
more than one 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 one 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 CFR
1180.4, and any other requirements set forth in this decision.
Service List Notice. The Board will serve, as soon after December
5, 2018, 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
notices, 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 will also 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, Order, and Notices. The Board will serve
copies of its decisions, orders, and notices 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.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 to interested persons on request, unless subject to a
protective order. 49 CFR 1180.4(a)(3). The application and other
filings in this proceeding are available on the Board's website at
www.stb.gov under ``E-LIBRARY/Filings.'' In addition, the application
may be obtained from Mr. Gitomer at the address indicated above.

Procedural Schedule
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October 22, 2018.................................... Application filed.
December 5, 2018.................................... Notices of intent to participate in this proceeding due.
Discovery requests due to CSXT.
December 19, 2018................................... CSXT's responses to discovery requests due.
January 4, 2019..................................... Comments due from all parties, including the U.S.
Secretary of Transportation and the Attorney General, on
the transportation merits of the Lease.
February 1, 2019.................................... Responses to comments on the transportation merits of the
Lease due.
CSXT's rebuttal in support of the application due.
March 6, 2019....................................... Close of record on the transportation merits.
April 19, 2019...................................... Date by which a final decision will be served.
May 19, 2019........................................ Date by which a final decision will become effective.
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It is ordered:
1. The application in FD 36220 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
procedural schedule above and must comply with the procedural
requirements described in this decision.
3. This decision is effective on its service date.

Decided: November 16, 2018.

By the Board, Board Members Begeman and Miller.
Aretha Laws-Byrum,
Clearance Clerk.
[FR Doc. 2018-25388 Filed 11-20-18; 8:45 am]
BILLING CODE 4915-01-P

58808 Federal Register / Vol. 83, No. 225 / Wednesday, November 21, 2018 / Notices

No. 784X), CSX Transportation, Inc.— will continue to provide essential I.C.C.2d 799, 814–826 (1990). (Appl.
Abandonment Exemption—in Cobb transportation services as it and its 11.)
County, Ga. Notice of the exemption predecessors have done since 1890, and Application Accepted. A transaction
was served and published in the that essential services provided by other that does not involve the control or
Federal Register on November 2, 2018 carriers will not be affected by the merger of two or more Class I railroads
(83 FR 55,232). The exemption is Lease. (Id. at 8, 10.) is not of regional or national
scheduled to become effective on CSXT states that, under the Lease, transportation significance, and
December 2, 2018. CSXT states that, if Georgia has reserved rights that may therefore is classified as ‘‘minor’’ if: (1)
the abandonment is granted, CSXT require the relocation of track, but CSXT The transaction would clearly not have
intends to enter into a trail use is confident that its ability to provide anticompetitive effects, or (2) any
agreement with Georgia under the adequate transportation service is anticompetitive effects would clearly be
National Trails System Act, 16 U.S.C. protected by the terms of the Lease, outweighed by the transaction’s
1247(d). (Appl. 18.) With respect to the which states that any track relocation contribution to the public interest in
second line,2 CSXT states that, in the will not ‘‘unreasonably interfere with meeting significant transportation
Lease, CSXT has granted Georgia or its the use by [CSXT] of the Leased needs. A transaction not involving the
Department of Transportation a first Property, or unreasonably reduce control or merger of two or more Class
right of refusal to acquire the 4.3-mile [CSXT’s] operating capacity.’’ (Appl. 10, I railroads is ‘‘significant’’ if neither of
line between milepost S.G. 579.29 and citing id. at Ex. 2, Lease, section 1.04(c).) these determinations can be clearly
milepost 575.00 in Cobb County, Ga. Additionally, CSXT states that Georgia made. See 49 CFR 1180.2(b), (c).
According to CSXT, that line must be has reserved the right to institute Based on a review of the application,
acquired within three years of CSXT passenger rail service over the Line the Board finds that the proposed Lease
obtaining abandonment authority. (Id.) ‘‘subject to the mutual agreement of would be a ‘‘minor transaction’’ under
Financial Arrangements. According to [Georgia] and [CSXT] with respect to the 49 CFR 1180.2(c). Nothing in the record
CSXT, no new securities will be issued impact any such passenger rail may thus far suggests that the Lease would
in connection with the Lease. (Appl. 8.) have upon the safety and capacity of, have anticompetitive effects, because
CSXT states that, under the Lease, CSXT compensation for, and liability in the Lease proposes to generally
would pay Georgia a monthly rental of connection with the [Line].’’ (Id. at 11, maintain the status quo by allowing
$1,008,333.33, which would increase CSXT to continue operating over the
citing id. at Ex. 2, Lease, section 11.01.)
annually by 2.5% compounded. Line as it and its predecessors have
Time Schedule for Consummation.
Additionally, CSXT states that, by July done since 1890. The application
CSXT states that, pursuant to the Lease,
31 of each year, it would pay Georgia indicates that, not only would CSXT
the transaction is scheduled to be
additional rent consisting of 50% of the continue to operate over the Line, but
consummated January 1, 2020. (Appl.
revenue generated from all agreements, NSR and GNRR would ‘‘retain their
8.) existing rights.’’ (Appl. 6.) It does not
subleases, easements, or licenses Environmental Impacts. CSXT states
attributable to the Line for the previous appear, under the terms of the proposed
that the Lease does not require Lease, that any shipper would have
year. CSXT states that it will not incur environmental documentation and
any fixed charges as a result of the fewer competitive rail alternatives as a
review under 49 CFR 1105.6(c) because result of the transaction.
Lease. (Id. at 10.) the Lease will not result in CSXT’s
Public Interest Considerations. CSXT The Board’s finding regarding
operations over the Line exceeding the competitive impact is preliminary. The
states that it expects the transaction to thresholds in 49 CFR 1105.7(e)(4) and
be competitively neutral and that it will Board will give careful consideration to
(5). (Appl. 15–16.) any claims that any potential
not result in any lessening of Historic Preservation Impacts. CSXT
competition, creation of a monopoly, or anticompetitive effects of the Lease
states that the Lease does not require an would not be outweighed by its
restraint of trade in freight surface historic report under 49 CFR 1105.8(b)
transportation in any region of the potential benefits.
because the Lease ‘‘is for the purpose of The Board accepts the application for
United States. (Appl. 9.) In support, continued rail operations where further consideration because it is in substantial
CSXT states that competition with NSR [Board] approval is required to abandon compliance with the applicable
between Atlanta and Chattanooga will any service and there are no plans to regulations governing ‘‘minor
be maintained at the current level and dispose of or alter properties subject to transactions.’’ See 49 CFR 1180; 49
that the Lease will not impact motor [Board] jurisdiction that are 50 years or U.S.C. 11321–26. The Board reserves the
carriers operating between Atlanta and older.’’ (Appl. 17.) CSXT states that it right to require the filing of
Chattanooga on Interstate 75 or will continue to operate the Line that it supplemental information as necessary
intermodal competition at intermediate has operated for over 120 years. (Appl. to complete the record.
points. (Id.) CSXT further states that the 17.) Procedural Schedule. Any person
number of rail carriers serving each
Labor Impacts. CSXT states that there who wishes to participate in this
shipper on the Line will remain the
will be no impact on its employees or proceeding as a POR must file a notice
same and that no shipper now being
on the employees of W&A, because of intent to participate no later than
served by two railroads would have its
CSXT does not plan to change December 5, 2018; requests for
service limited to one railroad. (Id.)
operations on the Line. Further, CSXT discovery from CSXT are due by
According to CSXT, the Lease will
states that there are no W&A employees December 5, 2018; CSXT’s discovery
maintain the status quo of the
on the Line. CSXT requests that the responses are due by December 19,
khammond on DSK30JT082PROD with NOTICES

transportation services to rail customers
Board impose the labor protective 2018; all comments, protests, requests
now served by CSXT, as CSXT will
conditions set forth in Mendocino Coast for conditions, and any other evidence
continue to serve shippers as it does
Railway, Inc.—Lease and Operate— and argument in opposition to the
today. (Appl. 10.) CSXT states that it
California Western Railroad, 360 I.C.C. application, including filings by DOJ
2 As of the decided date of this decision, CSXT 653 (1980), as clarified in Wilmington and DOT, must be filed by January 4,
has not filed for abandonment authority for this Terminal Railroad, Inc.—Purchase and 2019; and responses to comments,
line. Lease—CSX Transportation, Inc., 6 protests, requests for conditions, and

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Document Created: 2018-11-21 03:11:45
Document Modified: 2018-11-21 03:11:45

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Decision No. 1 in FD 36220; Notice of Acceptance of Application; Issuance of Procedural Schedule.
Dates		The effective date of this decision is November 21, 2018. Any person who wishes to participate in this proceeding as a party of record (POR) must file a notice of intent to participate no later than December 5, 2018. 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 January 4, 2019. Responses to comments, protests, requests for conditions, and other opposition on the transportation merits of the Lease, and rebuttal in support of the application must be filed by February 1, 2019.
Contact		Lisa Novins, (202) 245-0389. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.
FR Citation		83 FR 58807