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8/2/2001



Rail News: Rail Industry Trends

U.S. appellate court upholds STB's Conrail-split conditions


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U.S. Court of Appeals for the District of Columbia Circuit Aug. 1 upheld Surface Transportation Board's Conrail-merger conditions, some of which were challenged by Indianapolis Power & Light Company (IP&L).
The board initially determined that the June 1999 Conrail-split between Norfolk Southern Corp. and CSX Transportation produced a new single-line service for many shippers and generally didn't diminish competition. However, STB at the time imposed numerous conditions on NS and CSXT to help mitigate potential harm to particular shippers and further enhance competition, and established an oversight process to ensure that conditions were met.
But various parties, including IP&L, challenged the board's actions in court. In an April 25 decision, U.S. Court of Appeals for the Second Circuit affirmed STB's decision, rejecting IP&L's argument that the board didn't do enough to preserve competition at IP&L's Indianapolis power plant, instead ruling that STB's competition-preserving conditions and oversight process were adequate.
However, IP&L also challenged in U.S. appellate court STB's decision to deny IP&L's renewed request for additional competition-preserving conditions beyond those the board originally imposed.
After the Second Circuit court's ruling, CSXT, NS and STB asked the D.C. Circuit court to summarily affirm (decide the case without briefing or oral argument) the board's decision on the grounds that IP&L still has yet to test — and establish any inadequacy in — conditions STB provided for its benefit.
IP&L opposed the request, arguing that the proceeding raised important issues of first impression. The court agreed with CSXT, NS and STB, finding no basis for undoing the board's action.
STB officials believe all pending Conrail-split court litigation now is resolved.


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