In 2008, the Surface Transportation Board (“STB”) approved Canadian Pacific Railway Company’s (“CP”) acquisition of the Dakota, Minnesota & Eastern Railroad Corporation (“DME”) and the Iowa, Chicago & Eastern Railroad Corporation (“ICE”). The STB’s approval of CP’s acquisition was conditioned, in part, on representations CP made to the STB regarding CP’s future investment in DME’s and ICE’s rail lines.
In August 2013, Slover & Loftus LLP client, the State of South Dakota, filed a petition at the STB requesting that the agency enforce three specific investment representations that CP had previously made in its request for agency approval of its acquisition of DME and ICE. These three representations include: (1) CP’s representation that it would invest $300 million in the first three post-acquisition years; (2) CP’s representation that it would invest $300 million in addition to investment dollars previously budgeted by DME in the first few years following acquisition; and (3) the Federal Railroad Administration’s (“FRA”) statement that CP had represented to FRA that CP would expend $300 million in the first four post-acquisition years to upgrade all of DME’s track to FRA Class 3 standards.
In its August 2013 filing, the State requested that the STB require CP to provide investment data and other information necessary to determine whether CP has adhered to the foregoing representations. CP opposed the State’s request, asserting that it had fully complied with any investment representations it made in the acquisition proceeding and that, accordingly, there was no basis for an enforcement order against CP.
In a decision issued on December 20, 2013, the STB authorized the State to engage in discovery from CP to “test the foundation of the assertions made by CP and obtain additional documentation to fully present its case.” The STB further specified that CP should “certainly” make available to the State the underlying documentation supporting its asserted capital investments.
Questions on the STB’s decision or rail transportation issues generally may be directed to John H. LeSeur or any other attorney at Slover & Loftus LLP.