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Surface
Transportation Board (Board) Chairman Linda J. Morgan announced today
that, at the request of the City of Detroit (the City), the Board has
issued a decision striking down an attempt by the Jefferson Terminal
Railroad Company (Jefferson) to use the agency's expedited class
exemption process to acquire and operate certain property as a railroad
in Detroit, Michigan. Jefferson claims that the property is a rail
line subject to Board jurisdiction, while the City is seeking to condemn
the property for use as a sewage treatment plant. Jefferson has
attempted to use the Board's class exemption process in acquiring the
property to block the condemnation, asserting that the City's
condemnation action is preempted by the Board's jurisdiction over the
property.
The City responded to Jefferson's invocation of Board jurisdiction by
asking the agency to declare Jefferson's action to be void. The
City said that Jefferson has failed in its duty to inform the Board of
the
condemnation action, and claimed that the Board lacks jurisdiction over
the property because it is not rail property and has not been used for
rail service for the past 13 years.
In its decision, the Board explained that its class exemption process
invoked by Jefferson was adopted to facilitate continued rail service on
lines that a selling railroad could no longer operate profitably.
The Board emphasized that this process was not intended to apply to
cases in which a non-rail carrier seeks to convert what could be
non-rail property into a rail line to avoid local legal processes.
The Board held that
the class exemption invoked by Jefferson should not be applied here,
given the particular circumstances of this case, where substantial
factual and legal issues needed to be resolved. The Board also
noted that it was troubled by Jefferson's failure to disclose that the
property was about to be condemned. The Board stated, "[t]his
failure lends credence to the City's allegation that the proposal that
Jefferson submitted to this Board was merely a device to acquire or
retain property for non-rail purposes using federal preemption as a
shield. . . [w]e will not permit our processes to be misused in
that manner."
The Board indicated that Jefferson may pursue its proposal by filing a
petition for an exemption from Board regulation, or a formal application
for a specific Board ruling on the property. The Board noted that
these procedures are designed to elicit a more complete public record.
The Board issued its decision in the case entitled Jefferson Terminal
Railroad Company--Acquisition and Operation exemption--Crown
Enterprises, Inc., STB Finance Docket No. 33950. A printed copy of
today's decision is available for a fee by contacting D~-To-D~ Office
Solutions, Room 405, 1925 K Street, N.W., Washington, DC 20006,
telephone (202) 466-5530.
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