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khammond on DSKJM1Z7X2PROD with NOTICES

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Federal Register / Vol. 86, No. 55 / Wednesday, March 24, 2021 / Notices
below, will grant the exemptions sua sponte.
As RFM, Baupost, and Infravest Managers are each noncarriers, their acquisitions of control of the Pioneer Railroads require prior Board approval under 49 U.S.C. 11323a4. Because the acquisitions of control do not involve the merger or control of at least two Class I railroads, approval of the transactions is governed by 49 U.S.C.
11324d. However, under 49 U.S.C.
10502a, the Board must exempt a transaction or service from regulation upon finding that: 1 Regulation is not necessary to carry out the rail transportation policy RTP of 49 U.S.C.
10101; and 2 either a the transaction or service is of limited scope, or b regulation is not needed to protect shippers from the abuse of market power.
Here, exemptions from the prior approval requirements of sections 1132325 are consistent with 10502a.
Detailed scrutiny of the acquisitions of control of the Pioneer Railroads in each docket is not necessary to carry out the RTP. An exemption from the application process would promote a fair and expeditious regulatory decisionmaking process, minimize the need for Federal regulatory control, reduce regulatory barriers to entry, and result in more expeditious handling of this proceeding. See 49 U.S.C. 101012, 7, 15. Other aspects of the RTP would not be adversely affected.
Regulation of these transactions is not needed to protect shippers from the abuse of market power. RFM states that it does not own or control any other carriers other than the Pioneer Railroads, nor did it, or its equity owners, at the time of its formation.
RFM Verified Notice 4 n.5, FD 36306
Sub-No. 1 et al. Accordingly, RFMs 2019 acquisition of control of Pioneer and the Pioneer Railroads did not create any adverse change in competition among rail carriers or between rail carriers and other modes. For their part, Baupost and Infravest Managers also state that they are not themselves rail carriers and do not currently control any rail carriers, Baupost Verified Notice 4, FD 36451, so their proposed acquisition of Pioneer and the Pioneer Railroads similarly would not adversely affect the competitive landscape so as to require regulation to protect shippers from an abuse of market power.7
7 Because this decision finds that regulation is not necessary to protect shippers from the abuse of market power, the Board need not determine
VerDate Sep<11>2014

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Under 49 U.S.C. 10502g, the Board may not use its exemption authority to relieve a rail carrier of its statutory obligation to protect the interests of its employees. Section 11326c, however, precludes the Board from imposing labor protections for transactions involving only Class III rail carriers.
Because all the Pioneer Railroads are Class III carriers, the Board may not impose labor protections here.
In light of Bauposts and Infravest Managers request regarding the effective date, the exemptions will be effective on March 26, 2021. Petitions to stay will be due by March 24, 2021.
The transactions are categorically excluded from environmental review under 49 CFR 1105.6c1 and from the historic reporting requirements under 49 CFR 1105.8b.
It is ordered:
1. The verified notices of exemption in Docket Nos. FD 36306 Sub-No. 1
and FD 36451 are rejected.
2. In Docket No. FD 36306 Sub-No.
1, under 49 U.S.C. 10502, the Board exempts from the prior approval requirements of 49 U.S.C. 1132325
RFMs 2019 acquisition of control of the Pioneer Railroads.
3. In Docket No. FD 36451, under 49
U.S.C. 10502, the Board exempts from the prior approval requirements of 49
U.S.C. 1132325 Bauposts and Infravest Managers acquisition of control of the Pioneer Railroads from RFM.
4. Notice of the exemptions will be published in the Federal Register.
5. The exemptions will be effective on March 26, 2021. Petitions to stay will be due by March 24, 2021.
Decided: March 18, 2021.
By the Board, Board Members Begeman, Fuchs, Oberman, Primus, and Schultz. Board Member Primus dissented with a separate expression.
Board Member Primus, dissenting:
This case is extremely troubling and lays bare gaps in compliance that I am not willing to excuse. The focus of my displeasure is not directed toward Baupost and Infravest Managers, but rather Related Companies and RFM.
When the history of Related Companies and RFM is taken into account, specifically their inability to provide accurate and complete information to the Board with respect to ownership, what we have before us is at best a comedy of errors and at worst a blatant disregard for the Boards role as the economic regulator of the rail industry.
whether the transaction is limited in scope. See 49
U.S.C. 10502a2.

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The Board was faced with two notices of exemption involving a chain of unauthorized transactions. Details surrounding the history of the ownership of Pioneer and the Pioneer Railroads is murky and unnecessarily complicated. Upon further review, it was revealed that Related Companies never obtained Board authorization to acquire Pioneer and the Pioneer Railroads. Similarly, RFM skirted Board authority when it acquired the railroad entities from Related Companies. Only now, when Baupost and Infravest Managers have come before the Board to acquire control of these railroad entities, has RFM decided to step into the light.
Failure to obtain the required Board authority lies squarely with RFM. Both RFM and its subsidiaries and Related Companies before it did not bother to adhere to 49 U.S.C. 11323, which clearly requires an entity seeking to purchase/acquire a railroad to obtain Board authority. Given the fact that the proposed acquisition involves unauthorized transactions, it was incumbent upon the parties to be forthcoming with accurate and complete information about the ownership and relationship of the numerous railroads involved in the proposed transaction.
This clearly did not happen.
Accordingly, I do not believe that the selling entity should be permitted to benefit or profit from such a transaction without first curing its unauthorized acquisition. While RFM has asked for after-the-fact authority, it has done so through the Boards streamlined class exemption procedures, which are reserved for transactions involving routine, uncomplicated, and noncontroversial matters, and not appropriate here. Moreover, Related Companies has not sought after-the-fact authority for its unauthorized acquisition.
My hope is that, moving forward, the Board will begin to look at ways to effectively promote greater compliance and transparency as it relates to the licensing of rail activities. For those who continue to operate outside the rules, stronger enforcement, including the administering of severe penalties when appropriate, should prevail.
For these reasons, I respectfully dissent.
Aretha Laws-Byrum, Clearance Clerk.
FR Doc. 202106066 Filed 32321; 8:45 am BILLING CODE 491501P

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