CN Flip Flops in Legal Filing, Reverses CEO Testimony Before Congress

CHICAGO, April 12 /PRNewswire-USNewswire/ -- On April 7, all parties appealing the 2008 decision of the Surface Transportation Board's (STB) approval of the acquisition of the EJ&E rail line by Canadian National Railway (CN) were required to file opening briefs with the United States Court of Appeals for the District of Columbia Circuit outlining their arguments.  CN filed a petition appealing the Board's decision, as did a coalition of local governments affiliated with  TRAC, The Regional Answer to Canadian National.

CN's filing asks the Court to strike from the STB's Decision the requirement that CN partially fund grade separations in Aurora and Lynwood.  This claim flies in the face of the congressional testimony of former CN chief executive, E. Hunter Harrison, who testified to the House Transportation and Infrastructure Committee members before the acquisition was approved that "there can be conditions placed that say you can only merge if you will mitigate."  In explaining away the inconsistency between its CEO's testimony before Congress and its legal filing, CN tries to make the case that Harrison's 2008 testimony was the erroneous statement by an apparently ill-informed "non-lawyer."  

In responding to the CN legal filing, TRAC co-chair and Aurora Mayor Tom Weisner says, "CN's story is ever-evolving to suit its immediate needs – in 2008 they wanted the deal approved so they told Congress the STB could mandate mitigation.  Now, they don't want to pay part of the cost of two grade crossings, so they claim the Board lacks that authority.  This is another instance where what CN says is not what CN means."  

In its legal filing, TRAC outlined the four issues it is basing its appeal on that are all related to errors made by the STB throughout the review process:  

1. The STB committed a reversible error under the National Environmental Policy Act (NEPA) by unquestioningly adopting CN's stated goals on the purpose and need for the transaction.

2. That as a result of that foundational error, the STB impermissibly restricted its analysis of alternatives to the transaction.

3. The STB acted in an arbitrary and capricious manner by allowing CN to avoid financial responsibility for the grade separation projects in Aurora and Lynwood if construction is delayed beyond 2015 by factors that cannot be controlled by the relevant communities and state agencies.

4. The STB erred throughout the environmental review process by failing to:

• select and supervise its third-party contractor to handle the environmental review process -- instead leaving it to CN to select its preferred contractor;
• analyze the speculative environmental benefits that were supposed to accrue to some communities against the known harms to communities along the EJ&E;
• consider the direct, indirect and cumulative effects of the transaction; and,
• provide adequate mitigation measures for the harms created in the region by CN.

Barrington Village President and TRAC Co-Chair Karen Darch notes of the TRAC appeal, "We realize that we are facing an uphill battle to prevail in the Court, but we believe that we have made an excellent case that the Court will consider.  Unfortunately, TRAC has no choice but to pursue the legal challenge given the severity of the impacts on the region.  We simply must have some legal redress for a gross public harm that has been created for the sole benefit of one corporation's financial interests."

Ultimately, CN's legal filing objects only to the STB's mitigation mandate of the two grade crossings (estimated to cost CN $68 million) -- claiming that the mitigation was an unlawful disapproval of the $300 million transaction that CN had brought before the Board for approval:  "CN sought approval of a $300 million purchase transaction, not a $368 million purchase-plus-highway-funding transaction, but STB unlawfully refused to approve the former."

CN believes that the Board had no authority to do anything but approve the transaction, claiming that the same environmental law that required the Board to assess environmental impacts stemming from the transaction could only be used to guide CN in adopting "voluntary mitigation agreements." The railroad claims that anything beyond its voluntary mitigation is unlawful and should be overturned by the Court.  The CN filing then goes on to state that the grade crossing mitigation was used by the STB to "punish misstatements in congressional hearings."  

To view a copy of both legal filings and other information visit www.fightrailcongestion.com.

About TRAC:  TRAC (The Regional Answer to Canadian National) is a coalition of suburban leaders that have joined forces to ensure the quality of life of more than one million residents in numerous Chicagoland communities is not adversely impacted by the CN/EJ&E issue. TRAC includes municipal and county leaders from Lake, Cook, McHenry, Kane, DuPage and Will Counties. Barrington Communities Against CN Rail Congestion (BCACRC) represents the interests of Barrington area communities and is an active member of TRAC.

SOURCE TRAC (The Regional Answer to Canadian National)