SURFACE TRANSPORTATION BOARD DECISION DOCUMENT
    Decision Information

Docket Number:  
FD_36316_0

Case Title:  
DMH TRUST FBO MARTHA M. HEAD, RED RIVER VALLEY & WESTERN RAILROAD COMPANY, TWIN CITIES & WESTERN RAILROAD COMPANY, AND HSC & WESTERN, LLC--CORPORATE FAMILY EXEMPTION

Decision Type:  
Decision

Deciding Body:  
Director Of Proceedings

    Decision Summary

Decision Notes:  
DECISION DISMISSED THE NOTICE OF EXEMPTION IN THIS PROCEEDING.

    Decision Attachments

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    Full Text of Decision

47102 SERVICE DATE – JULY 10, 2019

DO

 

SURFACE TRANSPORTATION BOARD

 

DECISION

 

Docket No. FD 36316

 

DMH TRUST FBO MARTHA M. HEAD, RED RIVER VALLEY & WESTERN RAILROAD COMPANY, TWIN CITIES & WESTERN RAILROAD COMPANY, AND HSC & WESTERN, LLC—CORPORATE FAMILY EXEMPTION

 

Decided: July 9, 2019

 

DMH Trust fbo Martha M. Head (DMH Trust), a noncarrier, Red River Valley & Western Railroad Company (RRVW), a Class III carrier, Twin Cities & Western Railroad Company (TCW), a Class III carrier, and HSC & Western, LLC (HSC), a noncarrier, filed a verified notice of exemption on June 13, 2019, under 49 C.F.R.  1180.2(d)(3), which exempts from the prior approval requirements of 49 U.S.C.  11323 “[t]ransactions within a corporate family that do not result in adverse changes in service levels, significant operational changes, or a change in the competitive balance with carriers outside the corporate family.” 49 C.F.R.  1180.2(d)(3).

 

According to the verified notice, DMH Trust owns and controls 100% of RRVW[1] and TCW.[2] (Verified Notice 4.)[3] HSC is a newly created, wholly owned noncarrier subsidiary of DMH Trust, which created HSC to serve as a non-operating railroad holding company upon exemption of the transaction described in the verified notice. (Verified Notice 4.) Upon exemption, DMH Trust will control 100% of HSC, which will in turn control 100% of RRVW and TCW. (Id.) Applicants state that the proposed transaction is “within a corporate family and will not result in adverse changes in service levels, significant operational changes, or a change in the competitive balance with carriers outside the corporate family.” (Id.)

 

When a proposed transaction will not result in a cognizable change in control, the agency has determined that “the mere insertion of a noncarrier holding company in the chain of control is a transaction outside the scope of section 11343(a) [now  11323(a)] and not subject to its prior approval.” RailAmerica, Inc.—Corp. Family Transaction Exemption—Huron & E. Ry., FD 32068, slip op. at 1 (ICC served June 18, 1992) (citing Woods Indus., Inc.—Control—United Transports, Inc., 85 M.C.C. 672, 675 (1960)) (dismissing notice of exemption); see also Hainesport Transp. Grp.—Corp. Family Transaction Exemption, FD 36184 (STB served May 24, 2018) (dismissing notice of exemption).

 

DMH Trust is merely inserting HSC, a noncarrier holding company, in the chain of control between it and the railroads it owns. As in RailAmerica and Hainesport, this transaction is outside the scope of  11323(a) and not subject to the Board’s prior approval. Therefore, the notice of exemption will be dismissed.

 

It is ordered:

 

1. The notice of exemption is dismissed.

 

2. This decision is effective on its service date.

 

By the Board, Allison C. Davis, Director, Office of Proceedings.



[1] RRVW owns a Class III carrier subsidiary, Rutland Line, Inc. (See Verified Notice 4); see also Red River Valley & W. R.R.—Corp. Family Transaction Exemption, FD 35254 (STB served July 2, 2009).

[2] TCW owns two Class III carrier subsidiaries, Minnesota Prairie Line, Inc., and Sisseton Milbank Railroad Company. (See Verified Notice 4); see also Twin Cities & W. R.R.—Continuance in Control Exemption—Sisseton Milbank R.R., FD 35642 (STB served July 18, 2012); Sisseton Milbank R.R.—Acquis. & Operation Exemption—SLA Prop. Mgmt. Ltd. P’ship, FD 35641 (STB served June 29, 2012); Minn. Prairie Line, Inc.—Modified Certificate, FD 34234 (STB served Oct. 23, 2002); Twin Cities & W. R.R.—Continuance in Control Exemption—Minn. Prairie Line, Inc., FD 34068 (STB served June 6, 2002).

[3] See also DMH Trust fbo Martha M. Head—Acquis. of Control Exemption—Twin Cities & W. R.R., FD 35662 (STB served Aug. 24, 2012); DMH Trust fbo Martha M. Head—Acquis. of Control Exemption—Red River Valley & W. R.R., FD 35649 (STB served Aug. 8, 2012).