Opponents of Iowa rail consolidation must act fast to register concerns

Scott Syroka is a former Johnston city council member.

The U.S. Surface Transportation Board announced on February 29 it accepted Canadian National’s request to classify its proposed acquisition of Iowa Northern Railway as a “Minor” transaction. The federal regulator also established a procedural schedule going forward for interested parties to weigh in as the proposed acquisition undergoes review.

Canadian National had been facing opposition to its classification request from entities like Canadian Pacific Kansas City and the National Grain and Feed Association. Both had called for the Surface Transportation Board to classify the deal as a “Significant” transaction when being reviewed for consideration.

While on its face the classification decision may appear as a setback for those who oppose the deal due to increased consolidation of the rail industry and its potential for further abuses of monopoly power, the 9-page decision by the Surface Transportation Board makes clear that no final determination has been made.

Indeed, the decision appears carefully written to ensure interested parties know that now is the time to act if there are concerns they’d like the Surface Transportation Board to consider (emphasis added in bold):

The Board finds the Proposed Transaction to be a “minor transaction” because it appears from the face of the Application that the efficiency and other public interest benefits would clearly outweigh whatever anticompetitive effects may exist.

And further (emphasis added):

For these reasons, based on the information provided in the Application, the Board finds the Proposed Transaction to be a minor transaction under 49 CFR 1180.2(c). The Board emphasizes that this is not a final determination and may be rebutted by subsequent filings and evidence submitted into the record for this proceeding. Further, this determination should not be read to mean that the Proposed Transaction is insignificant or of little importance. Indeed, after the record is fully developed, the Board will conduct a careful review before making a final determination as to whether the Proposed Transaction would substantially lessen competition, create a monopoly, or restrain trade, and whether any anticompetitive effects would be outweighed by the public interest. See 49 U.S.C. 11324(d)(1)-(2). The Board may also consider imposing conditions on the Proposed Transaction.

The Surface Transportation Board appears to be clarifying that its February 29 decision is based on the application (and associated claims) that Canadian National itself submitted. In order for the Surface Transportation Board to consider additional arguments – such as those in opposition to the deal – interested parties will need to act fast to submit those arguments and related evidence to meet the deadlines found in the procedural schedule.

The full procedural schedule can be found in the appendix of the February 29 decision, and it is also listed below:

January 30, 2024: Application filed.

February 29, 2024: Board notice of acceptance of Application served.

March 15, 2024: Notices of intent to participate in this proceeding due.

April 1, 2024: All comments, protests, requests for conditions, and any other evidence and argument in opposition to the Application, including filings of DOJ [U.S. Department of Justice] and DOT [U.S. Department of Transportation], due.

May 1, 2024: Responses to comments, protests, requests for conditions, and other opposition due. Rebuttal in support of the Application due.

June 13, 2024: Record closes.

July 26, 2024: Date by which a final decision will be served.

August 25, 2024: Board’s decision becomes effective.

Top logo and photo originally published on the U.S. Surface Transportation Board’s website.

About the Author(s)

Scott Syroka