STB Freezes UP-NS Case After Accepting Filing

by Jim Mathews/President & CEO

The Surface Transportation Board today formally accepted Union Pacific and Norfolk Southern’s revised merger application — but only in the narrowest procedural sense imaginable.

And honestly? The decision reads less like a green light than a gentle, but unmistakable, warning shot.

The Board repeatedly emphasizes that “completeness” is not the same thing as demonstrating that the merger is actually in the public interest. In fact, the STB immediately froze the proceeding after accepting the filing, ordered a new round of supplemental information from the railroads, and made clear that major parts of the application remain “unclear or underdeveloped.”

“Although Applicants have included sufficient information to satisfy the fairly narrow procedural question of completeness, there are several aspects of the Revised Application that are unclear or underdeveloped and require supplementation at this stage of the proceeding so that the Board may have the information necessary to thoroughly evaluate — and the public has an adequate opportunity to comment on — whether the Transaction is in the public interest,” the Board said in its latest decision in the case, Decision No. 21.

So as part of its decision accepting the application, STB said it would hold the rest of the proceeding in abeyance while it waits for UP and NS to respond to a very detailed list of supplementary inquiries the Board itself posed in the decision. It’s putting everything on hold until at least July 27 to give UP and NS time to respond.

The Board also specifically warned that it would not launch a procedural schedule that “places undue burden on commenting parties to ascertain and evaluate important information about the Transaction and how it corresponds to the new framework.” In plain English: I think STB is signaling that Applicants, not outside parties like Class Is, shippers, or public representatives like us, bear the burden of proving this merger satisfies the much tougher post-2001 merger standards.

The tone throughout the decision reflects exactly that “show me” skepticism, a skepticism we offered at the outset last year.

(You can read more about the “new” merger standards by clicking here to review my previous post on the new application earlier this month.)

The STB repeatedly references the failures and service disruptions that followed the last generation of mega-mergers and reminds applicants that the modern merger rules were intentionally designed to impose a “heavier burden” on Class I railroads seeking consolidation. The Board also pointedly notes that this is the first merger proceeding under those revised rules.

Most important for passenger rail, the Board appears unconvinced by broad assurances that the combined railroad can absorb large volumes of new freight traffic while simultaneously preserving passenger operations and future expansion opportunities.

The decision specifically calls out the need for more detailed information about capacity, competition, operations, and public-interest effects before parties (like us) can meaningfully comment. And notably, one of the Board’s own passenger-rail supplemental information requests asks essentially the same question Rail Passengers Association and others have already been asking publicly: how can anyone independently verify these claims about future capacity and passenger compatibility when so much of the underlying modeling remains shielded behind confidentiality restrictions?

That tension remains unresolved.

The Board says it does not want to force outside commenters to “ascertain and evaluate important information” on their own. And yet many public-interest organizations, states, passenger advocates, and local communities still don’t have access to the confidential workpapers underlying many of the merger’s key assumptions. We can’t sign the confidential undertaking that would permit us to access the confidential workpapers.

In other words: the STB accepted the filing, but it very clearly has not accepted the applicants’ conclusions. That’s appropriate, given that the only question on the table so far has been whether UP and NS filed a “complete” application, rather than whether the application would succeed on the merits.

Your Rail Passengers Association team and our coalition partners will continue reviewing the decision and the underlying filing in detail over the coming days, particularly as it relates to passenger-train reliability, Corridor ID expansion opportunities, host-railroad capacity, and the long-term public-interest implications of concentrating even more of the national rail network under a single private operator.

But be aware, this proceeding is very, very far from over.