U.S. Army, Military Surface Deployment and Distribution Command, Filed Reply Comments Opposing CP’s Petition for Expedited Declaratory Order re: its Voting Trust Pursuit.
Ms. Cynthia T. Brown
Chief, Section of Administration
Office of Proceedings
Surface Transportation Board
395 E Street N.W
Washington, DC 20423
7 April 2016
Re: DoD Reply Regarding Canadian Pacific Railway Limited – Petition for Expedited Declaratory Order (Docket No. FD 36004)
Dear Ms. Brown:
The Surface Transportation Board sought replies addressing Canadian Pacific’s petition for an expedited declaratory order. Enclosed, please find the reply from the Military Surface Deployment and Distribution Command (SDDC).
Should any questions arise regarding SDDC’s reply, please do not hesitate to contact me at (618) 220-5796 or via e-mail at david.j.dicenso.civ@mail.mil. Thank you for your consideration of the enclosed.
DAVID J. DICENSO
Attorney-Advisor
SURFACE TRANSPORTATION BOARD
CANADIAN PACIFIC RAILWAY LIMITEDPETITION
FOR EXPEDITED DECLARATORY ORDER
[DOCKET NO. FD 36004]
COMMENTS FROM
RAILROADS FOR NATIONAL DEFENSE PROGRAM
MILITARY SURFACE DEPLOYMENT AND DISTRIBUTION COMMAND
TRANSPORTATION ENGINEERING AGENCY
This statement is in regard to the Surface Transportation Board Federal Register Docket Number FD 36004 which was published in,the Federal Register on March 16, 2016. This is a request for replies to Canadian Pacific Railway Limited’s (CPRL) petition requesting that the board issue a declaratory order on two issues pertaining to a potential merger between CPRL and Norfolk Southern Railway Company (NSR).
On behalf of the Department of Defense, the Military Surface Deployment and Distribution Command (SDDC) has an ongoing interest concerning proposed changes to the North American railroad network.
By way of background, the Transportation Engineering Agency of SDDC (SDDCTEA), through the Railroads for National Defense (RND) Program, works with each military Service to identify its requirements for civil sector rail service. The Services’ needs and requirements are then integrated into civil sector plans. The October 2013 report, "Strategic Rail Corridor Network (STRACNET) and Defense Connector Lines", is the formal document that designates civil rail lines most important to national defense. This designation comprises over 36,000 miles of integrated and interconnected lines for the movement of defense cargo throughout the United States in peace and war. There are approximately 120 military installations and other locations involved in the movement of defense forces and material to ports of embarkation for deployment. These sites require rail service to accomplish their assigned mission and are served by lines designated as part of the STRACNET and connectors between STRACNET lines and military installations and critical ports. CPRL and NSR own and operate hundreds of miles of STRACNET and both railroads directly serve major military installations which require rail service to perform their missions.
It is too early to determine whether either a CPRL+NSR merger itself, or a downstream merger involving other major railroads, would degrade national defense. However, the potential certainly exists for either the CPRL+NSR merger or a downstream merger to adversely affect national defense. Therefore, it is critical that no common control of CPRL and NSR occur prior to the Board ruling that such common control, and the merger that cements it, is permissible. Such a ruling should certainly consider the effects of both the CPRL+NSR merger, and any resultant downstream mergers, on national defense.
While, at this point, the Board need not rule on common control in evaluating a declaratory order on the two issues raised by CPRL, the Board must carefully consider whether the declaratory order creates an irreversible move forward toward de facto common control.
We are troubled by the possibility that Mr. Harrison could become a senior executive at Norfolk Southern in advance of the Board ruling in favor of common control/merger between Canadian Pacific and Norfolk Southern. If Mr. Harrison is a senior executive at NSR he may be placed in a position where he must make business decisions with potentially competing interests. He may make a certain decision that would benefit NSR if it remains an independent railroad, or a decision that would benefit NSR only if it becomes part of CPRL. This seems to be an untenable position for Mr. Harrison (or any other executive that would be swapped between NSR and CPRL). Certainly, one would exp~ct Mr. Harrison, working as the executive agent ofNSR to make decisions that would benefit NSR while presuming it would remain an independent company. But placing him in this position could prove to be untenable due to the appearance of common control in advance of the Board’s decision on the matter.
We would like to emphasize that our interest is in national defense effects, either in a possible merger between Canadian Pacific and Norfolk Southern or any responsive downstream merger. We ask the Board to rule on the CPRL petition in a way that does not permit de facto common control to occur before legal common control is thoroughly analyzed and approved.
DAVID P. DORFMAN, P.E.
Senior Civil Engineer
Railroads for National
Defense Program
CERTIFICATION OF SERVICE
I hereby certify that on this date I caused copies of the foregoing Reply to Canadian Pacific
Railway Limited – Petition for Expedited Declaratory Order -Concerning Theoretical Voting Trust
upon the following by First Class Mail:
Ms. Sandra L.Brown,
Thompson Hine LLP
1919 M Street, Suite 700
Washington, DC 20036
Ms. Linda Bauer Darr
American Short Line and Regional Railroad Association
50 F Street, NW, Suite 7020
Washington, DC 20001
Ms. Mary M. Dillon
Ellis & Winters LLP
4131 Parklake Avenue, Suite 400
Raleigh, NC 27612
Mr. Richard S. Edelman
Mooney, Green, Saindon, Murphy and Welch PC
1920 L Street, NW, Suite 400
Washington, DC 20036
Mr. John E. Fenton
Patriot Rail
1 0060 Skinner Lake Dr.
Jacksonville, FL 32246
Mr. Robert A. Scardelletti
Transportation Communications International Union
3 Research Place
Rockville, MD 20850
Mr. Peter J. Shudtz
CSX Transportation Inc.
1331 Pennsylvania Avenue, NW, Suite 560
Washington, DC 20004
Mr. Michael F. McBride,
Van Ness Feldman, LLP
1050 Thomas Jefferson St, N.W., 7Th Floor
Washington, DC 20007
Mr. John Previsich
Transportation Division of the
Sheet Metal, Air, Rail, and Transportation Workers Union
24950 County Club Blvd., Suite 340
Olmstead, OH 44070-5333
Ms. Ann Warner
300 New Jersey Avenue, NW, Suite 900
Washington, DC 20001
Mr. Michael S. Wolly
Zwerdling, Paul, Leibig, Kahn, & Wolly
1025 Connecticut Ave NW Suite 712
Washington, DC 20036
I hereby certify that on this date I caused copies of the foregoing Reply to Canadian Pacific Railway Limited – Petition for Expedited Declaratory Order – Concerning Theoretical Voting Trust upon the following by electronic mail:
Ms. Erika A. Diehl-Gibbons, Smart Transportation Division
Sheet Metal, Air, Rail and Transportation
Ediehl@Smart-Union.org
Mr. Dennis Lane, Stinson Leonard Street
dennis.lane@stinson.com
Mr. David F. Rifkind, Stinson Leonard Street
david.rifkind@stinson.com
Mr. Larry I. Willis, Transportation Trades Department, AFL-CIO
Larryw@Ttd.org
April 7, 2016
DAVID J. DICENSO
Attorney-Advisor
