Metra renews suit against STB over CP-KCS merger approval
Chicago commuter rail provider Metra has renewed its lawsuit criticizing how the Surface Transportation Board handled its review of the merger between Canadian Pacific and Kansas City Southern. Metra joins Union Pacific and a Chicago-area citizens group in suing STB.
In a Sept. 29 filing before the U.S. District Court of Appeals in Washington, D.C., Metra asked the court to find that STB’s March 15 approval of the CP-KCS merger was unlawful and should be sent back to the board so it can address the “legal deficiencies” in its decision.
Metra initially filed a suit against STB after ther merger officially took place in April. But the court ruled that Metra must wait until STB responded to Metra in a separate board proceeding about Metra’s concerns over how the merger was handled. In that proceeding, Metra had asked the board to reconsider elements of its decision, which had been rendered in March. The board subsequently rejected Metra’s request to reconsider its decision.
During merger proceedings before the board, Metra, along with the Coalition to Stop CPKC, a citizens group consisting of western Chicago-area communities, had questioned the data that STB used to determine the magnitude of additional freight rail traffic that would occur as a result of the merger. Both claim that the data prompted the board to underestimate how much freight rail traffic would increase as a result of the merger. The citizens coalition filed its lawsuit against STB in federal court this past summer.
UP (NYSE: UNP) filed its lawsuit against STB in May. UP had expressed concerns during STB hearings on the merger that the board needed to impose conditions upon CP and KCS that would ensure competition at interchanges.
If the court rules against STB, then the board may have to reconsider what conditions to place upon CPKC that would either ensure competition or address freight capacity concerns.
In response to this lawsuit, CP directed FreightWaves to the statement it had issued when Metra first sued STB this spring: “In our view, the U.S. Surface Transportation Board conducted a comprehensive, thorough and thoughtful review of the combination, and its environmental impacts, as part of a more than year-long regulatory review and environmental impact study. We believe that unprecedented examination of the facts produced the right final decision which clearly recognizes the many benefits of the CPKC combination.”
Shareholders of CP and KCS approved the $31 billion merger in December 2021 after both companies filed their merger application with the STB in October 2021. The board received nearly 2,000 comments from public hearings on the plan. The STB also received comments when it produced an environmental impact statement on the merger.
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