TRB-87-076-BC
2-3001-1520-2
D-5505, Order No. R-4130
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE TRANSPORTATION REGULATION BOARD
Application of Chicago & North
Western Transportation Co.,
St. Paul, MN for Authority to FINDINGS QF FACT,
Retire and Remove 443 Feet of CONCLUSIONS AND
ICC Track Nos. 174, 85 and 80 RECOMMENDED ORDER
Located in Butterfield, MN
The above-entitled matter came on for hearing in St. James, Minnesota on
May 28, 1987, before Bruce D, Campbell, Administrative Law Judqe fton the
Minnesota Office of Administrative Hearings.
Appearances: David A. Donna, Attorney at Law, 4200 IDS Center,
Minneapolis, Minnesota 55402, appeared on behalf of the Petitioner, Chicago
North Western Transportation Company (Railroad or CNW); Daniel A. Birkholz,
Attorney at Law, P.O. Box 461, 101 South Seventh Street, St. James, Minnesota
56081, appeared on behalf of Tony Downs Food Company and Butterfield Foods
Company; Gerald L. Hempeck, Mayor, City of Butterfield, Butterfie!d, Minnesota
56120, appeared on behalf of the City of Butterfield; and Michael P. Kircher,
Attorney at Law, 108 Armstrong Boulevard South, St, James, Minnesota
56081-1797, appeared on behalf of Glenn Adrian, John Adrian, and Butterfield
Oil Company. Roger A. Laufenburger, Chairman, Transportation Regulation
Board, attended the hearing on behalf of the Transportation Regulation Board
(Board).
The record herein closed on May 28, 1987, at the close of the hearing,
Notice is hereby given that, pursuant to Minn, Stat. 14.61, and the
Rules of Practice of the Public Utilities Commission, as applicable to the
Transportation Regulation Board, and the Rules of the Office of Administrative
Hearings, exceptions to this Report, if any, by any party adversely affected
must be filed within 20 days of the mailing date hereof with the
Transportation Regulation Board, Minnesota Administrative Truck Center,
254 Livestock Exchange Building, 100 Stockyards Road, South St. Paul,
Minnesota 55075. Exceptions must be specific and stated and numbered
separately. Proposed Findings of Fact, Conclusions and Order should be
included, and copies thereof shall be served upon all parties If desired, a
reply to exceptions may be filed and served within ten days after the service
of the exceptions to which reply is made. Oral argument before a majority of
the Board may be permitted to all parties adverselly affected by the
Administrative Law Judge's recommendation who request such argument. Such
request must accompany the filed exceptions or reply, and an original and five
copies of each document must be filed with the Board.
The Minnesota Transportation Regulation Board will make the final
determination of the matter after the expiration of thi period for filing
exCeptions as set forth above, or after oral argument, it such is requested
and had in the matter.
Further notice is hereby given that the Board may at its own discretion,
accept or reject the Administrative Law Judge's recomendation and that said
recommendation has no legal effect unless expressly adopted by the Board as
Final order.
STATEMENT OF ISSUE
!he issue to be determined in this proceeding is whether retirement and
removal of 443 feet of ICC Track Nos. 174, 85 and 80, located in Butterfield,
Minnesota should be authorized by the Transportation Regulation Board,
pursuant to Minn. Stat. 219.681, 219.741 (1986).
Based upon all of the proceedings herein, the Adminstrative Law Judge
makes the following:
FINDINGS OF FACT
1. By Petition dated March 4, 1987, and received by the Transportation
Regulation Board on March 9, 1987, the Petitioner sought permission to retire
and remove 443 feet of ICC Track Nos. 174, 85 and 80 located in Butterfield,
Minnesota. Notice of the Petition and an Opportunity for Hearing was
published in the Transportation Regulation Board's weekly calendar dated
March 13, 1987. Timely objections to the Petition were kiled by Tony Downs
,-ad Company, Butterfield Foods Company, the City of Butterfield, Minnesota,
John Adrian, Glenn Adrian and Butterfield Oil Company. by Order for Hearing
published in the Board's weekly calendar of April 24, 1987, and thereafter,
- board ordered that a hearing be held in St. James, Minnesota on May 28,
A copy of the Order and Notice was mailed to all interested parties,
As a consequence of their Protests to the Petition, and without
,action from the Railroad, the following were made parties to this
on ceding: the City of Butterfield; Tony Downs Food Company; Butterfield
ods Company; Glenn Adrian; John Adrian; and Butterfield Oil Company.
3. ICC Tracks No. 85, 80 and 174 are siding track running east and west,
parallel to the Railroad's main track in Butterfield, Minnesota, a segment of
the Applicant's main track running in an east-west direction between Mankato
and Worthington, Minnesota. The tracks sought to be removed as a consequence
) this proceeding are depicted in yellow marking on Railroad Exhibit 1. As
;aspects the Protestants to the Application, Butterfield Foods Company is
adjacent to the 174 track, Butterfield Oil Company is located in proximity to
ack 85 and track 80 connects tracks 174 and 85.
4. The siding tracks were initially constructed prior to 1913. They are
instructed of 50-pound rail. The current internal standards of the Railroad
now require at least 80-pound rail for general use.
5. There is no evidence in the record of the last time tracks 174, 80
1 85 were inspected or repaired, They have not, however, been maintained
noc at least the last five years. The tracks show extreme deterioration, with
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broken rails and overgrown weeds and brush. The current condition of the
tracks, individually, is as depicted in Railroad Exhibit No, 2,
Photographs 1-7.
6. The federal requirements for Class I track, the lowest classification
of acceptable track, require appropriate ballast and at least five
non-defective cross-ties per 39 feet of track, with a maximum distance of
100 inches between non-defective ties, center to center. Railroad Ex 3,
213.109. Tracks 80, 85 and 174 do not currently conform to federal minimum
safety standards for Class I track. The federal standards have been adopted
in Minnesota to define the necessary condition of track used to a railroad's
operations Minn. Stat. 219.01 (1986)
7. The federal standards for inspection and maintenance, Subpart F of
the Track Safety Standards of the United States Department on Transportation,
Railroad Ex. 3, require periodic inspection, even of Class I track, and
immediate remedial action to repair any deviations from thp fal
standards. Railroad Ex. 3, 213.233(c). Compliance with !mum federal
standards may be required, at any time, by either federal or state safpty
officials.
8. To bring track 80 into a safety condition consonant with a FRA
Class I Track Safety Standard would require an expenditure by the Railroad of
$6,203, calculated as follows: labor, $1,669; materials, $1,431; other
expenses, $402; and additives, $2,700. Railroad Ex. 4.
9. To rehabilitate track 85 to a safety condition consonant with a FRA
Class I Track Safety Standard would require an expenditure of
calculated as follows: labor, $1,172; materials, $709; other expennes, $244;
and additives, $1,546, Railroad Ex. 5.
10. Co rehabi Ii tate track 1 74 to meet FRA C Iass Tr ack Saf ety Standards
would require an expenditure by the Railroad of $3,978, calculated an
follows: labor, $1,278; materials, $804; other expenses, $278; and additives,
$1,617.
11. Annual maintenance expense by the Railroad or tracks Po, 85 and 174,
after rehabilitation, would be about 15% of the initial rehabilitation cost of
each track, See Findings 8-10, supra.
12. Although removal of the tracks would eliminate one track street
crossing in Butterfield, there is no evidence in the record that any
particular safety problems are associated with that track street crossing, or
that any injury or property damage has occurred at any of the street track
crossings in Butterfield.
13. The shipping records of the Railroad, which have been maintained from
1983 to the present date, show no inbound or outbound Railroad traffic for
Butterfield Oil Company, Butterfield Foods Company, or Buehler Construction
Company since 1983. There is no evidence in the record of the last time that
any protesting party received or shipped goods on the subject track, No
shipper has informed the Railroad of a definite intention to use tracks 80, 85
or 174 in the operation of its business.
14. Tony Downs Food Company and Butterfield Foods Company are jointly
owned. Tony Downs Food Company is primarily located in St, James, Minnesota.
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es rail traffic in St. James and will continue to do so. Butterfield
4. Company is a processor of frozen prepared food, located in Butterfie!d,
Recently, Butterfield Foods began expanding its operation to convert the
bv-products resulting from the manufacture of prepared frozen dinners into
animal protein. Its current customers and sources of supply make the use of
transport the most efficient method of transportation. Butterfield
has not used rail transport for at least the past five years and there
no evidence in the record as to when it last used rail transport
qrfield Foods has 13 semi-trailer trucks for its use and employ; both
dopendent contractors and employee truck drivers to transport the materials
Products involved in its operation. Within the past six months, it has
wased an additional truck tractor-trailer unit. At least an far as its
sent operation is concerned, transportation by truck is more timely and
appeopriate than rail transport. Although it has been conducting feasibility
.es on its transportation needs, the Company hasn't studied the cost of
snipping by rail or the potential use of rail transport in its business.
field Foods has not communicated to the Railroad any definite intention
the tracks included in the Petition. It desires that the track be
and, perhaps, upgraded, as an indefinite contingent measure shown
transportation needs change to make rail transport more attractive an 3ome
tucure date,
!S. Glenn Adrian and John Adrian are the owners of Butterfield Oil
company, a local fuel oil distributor, Adrian Elevator, the local grain
elevator, and a recently purchased fertilizer plant which was previously
closed. As regards the Petition herein, only Butterfield Oil Company is
located on the subject tracks, more specifically, tracks 80 and 85. There is
evidence in the record that the elevator has ever used rail transport, or
do so in the future or requires the maintenance of tracks 80 and 85,
,!though the fertilizer plant has been partially refurbished and the owners
are currently considering resuming operation, it is not located on any of the
vs in question. It could continue to use rail transport even if the three
icks were closed. The oil company was purchased by the Adrian brothers in
1986 and, since that time, they have been considering the transportation needs
"he oil company. Butterfield Oil Company has not adopted any plans fot the
of rail transport. It has not conducted any comparative cost or
sibility studies, of any kind, to determine the potential use, if any, of
ai in its transportation needs. If Butterfield Oil Company were to use rail
traffic, it would never ship more than 50 carloads of fuel oil and LP gas in
any given year. Such minimal traffic would provide little revenue to the
railroad. The primary concern of Butterfield Oil Company is to retain the
nylon of rail transport for use at some future date if conditions chango
markedly.
16. The city government of Butterfield considers the removal of any
Railroad track located in the town to be a potential threat to local industry.
17. Although federal safety requirements dictate that all unretired track
be maintained in at least a Class I condition, it is the practice of the
railroad, in the absence of service demands, to allow spur trackage to
deteriorate. If service demands develop, the track is repaired. If no usage
occurs, at some point, it seeks to retire the track. Since tracks 80, 85 and
174 have not been retired, the Railroad could, at any time, be required by
federal and state safety officials to return the track to at least a Class I
safety standard, irrespective of a lack of shipper use.
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Based upon the foregoing Findings of Fact, the Administrative Law Judge
makes the following:
CONCLUSIONS
1. The subject matter of the Petition is within thp jurisdiction of the
Minnesota Transportation Regulation Board and the matter is properly before
the Administrative Law Judge pursuant to adequate notice All requirements of
law or rule hive been fulfilled.
2. Restoration of ICC Tracks No. 80, 85 and 174 to, Minimum Class I FRA
safety standard and their annual maintenance would require i significant
expenditure by the Railroad.
3. There is no recent past or reasonably projected future shipper neec
for the use of the track.
4. Removal of the track will not substantiatly injure the public or Li
detrimental to their interests.
S. As a consequence of Conclusions I - 4, supra, removal and retirement
of ICC Tracks No. 80, 85 and 174, as depicted on Railroad Ex, 1, is
appropriate,
6. Any Finding of Fact more properly termed a Conclusion or any
Conclusion more properly termed a Finding of Fact is expressly adopted as such,
THIS REPORT IS NOT AN ORDER AND NO AUTHORITY IS GRANTED HEREIN, THE
TRANSPORTATION REGULATION BOARD WILL ISSUE THE ORDER Of AUTHORITY WHICH MAY
ADOPT OR DIFFER FROM THE FOLLOWING RECOMMENDATIONS.
It is the recommendation of the Administrative Law Judge to the Board that
it issue the following:
ORDER
IT IS HEREBY ORDERED that the Petition of the Chicago 6 North Western
Transportation Company for authority to remove and retire those portions of
ICC Track Nos. 80, 85 and 174 depicted in yellow marking on Railroad Ex. I is
approved.
IT IS FURTHER ORDERED that Petitioner shall, no later than 180 days from
the date of this Order, comply with the following:
1. Remove the subject track.
2. Remove crossbucks or signals from the crossing, if applicable.
3. Restore the crossing surface to a condition satisfactory to the
appropriate road authority, if applicable.
Dated this 26th day of June, 1987.
BRUCE D. CAMPBELL
Administrative Law Judge
NOTICE
Pursuant to Minn. Stat. 14.62, subd. 1, the agency is required to serve
is final decision upon each party and the Administrative Law Judge by first
first class mail.
reported: Tape Recorded.
MEMORANDUM
Minnesota Statutes 219.681 (1986), requires that a track that has been
directly by the shipping public not be abandoned, closed for traffic or
.moved without the prior approval of the Board, The statute contains no
ndard for the Board's decision, Minnesota Statutes 219.741 (1986),
fishes a procedure when a railroad desires to abandon any track,
iding a provision for hearing. That statute does not, however, provide
sandard for the Board's decision,
Prior to 1945, the Railroad and Warehouse Commission was empowered to
Prorize the abandonment of a side track or spur only if the proposed
a, momnment "will not result in substantial injury to the public". Minn.
Stat. 219.74 (1943). In 1945, the standard was removed from the statute and
it has remained without a standard to the present. Laws of Minnesota, 1945,
Under the Adminintrative Procedure Act, the Board may not act arbitrarily
must have a basis for determining whether or not a track should be
-moved. Although the governing statute does not provide an operative
Aard statutes in pari materia outline the considerations that would be
;ant to the Board's judgment in a track removal case. For example,
Minnesota Statutes 219.71 (1986), governing the abandonment or removal of a
or terminal, allows removal if the abandonment or removal will result in
.iency in railroad operation and will not substantially injure the public
hp detrimental to the public welfare. Minnesota Statutes 219.85 (1986),
,shorzes an abandonment or reduction in agency service, after hearing, if
the Board determines that such service is not required by the "public
convenience and necessity". In Chicago & North Western Transportation Co.,
Order No. R-4041, D-5395, October 16, 1985, the Board adopted the Report of an
Adninistrative Law Judge which balanced the cost to the Railroad of track
repair and maintenance against the amount of present and reasonably projected
futuce shipper use of the track.
[he Administrative Law Judge finds that the appropriate standard to guide
the Board's determination includes a balancing of the following factors to
examine the requirements of the public interest: the cost to the Railroad
and maintenance of the track; the past, present and reasonably
dulicipated future use by shippers of the track; the revenues to be derived by
the Railroad from the track if it is used by shippers; the overall financial
condition of the Railroad; and the impact of track removal on transportation
service available to the community and affected shippers.
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In considering the appropriate factors, it is also relevant to note that a
railroad may not be required to re-establish a track once its removal has been
authorized. Chicago Railway Co. v. Railroad Commission, 181 Wis. 91, 193 N.W.
981 (1923); Missouri Pacific Railway Co. v. United States, 625 F.2d 178, reh.
den., 625 F.2d 184 (8th Cir. 1980).
The operative facts in this proceeding are not open to substantial
dispute. ICC Tracks No. 80, 85 and 174 were initially built prior to 1913.
In recent memory, the tracks have not been maintained and they are in a state
of disrepair. Railroad Ex. 2. The current condition of the tracks does not
comply with the minimum safety standards required by the FRA for Class I
track. The track has not been used for at least the last five years and there
is no evidence in the record of when they were last used for transportation
purposes. Repair and maintenance of the track will require a significant
expenditure by the Railroad. Balanced against these facts in the argument of
the shippers herein that there may be some potential use for the track should
their transportation needs change. The argument advanced by the shippern is
that the Railroad need not incur any expenses in the maintenance of the track
but should allow it to remain in its present condition indefinitely. If their
transportation needs change at some future time, the track could then be
refurbished, possibly with the financial assistance of the shippers.
The Administrative Law Judge, for the reasons stated in the Findings,
rejects the arguments of the shippers. Initially, the Railroad does have an
obligation to maintain all track that has not been retired in at least at
Class I FRA safety standard, As demonstrated by Railroad Exhibit No. 3, track
must be inspected monthly and if deviations from the safety standards are
determined, repair operations must be undertaken The Administrative Law
Judge cannot deny that the Railroad has not followed the federal standard
contained in Railroad Exhibit No. 3. As a practical matter, it appears that
the Railroad allows its unused track to deteriorate and then either seeks its
removal or undertakes repair when there are shipper demands This practice
does not accord with the federal standard. At any time, federal or state
safety examiners could require the Railroad to bring track up to a Class I
condition, irrespective of whether there is shipper use. That likelihood is
heightened, in this case, by the fact that the current deteriorated condition
of the track is now a matter of public record
The only reason advanced by the shippers and the City for the maintenance
of the track is some indefinite possible future use, should shipping needs
change. Although witnesses for Butterfield Oil and Butterfield Foods talk
generally about their need for railroad service, the Administrative Law Judge
concludes that they are merely seeking to keep all options open in the event
that some future change might make railroad transport compatible with their
business. Although both companies have recently reviewed their shipping needs
and transportation services, no examination of railroad transport was made.
Moreover, neither company has communicated to the Railroad, or advanced at the
hearing, any definite plans to make use of railroad services, Moreover, the
instant Petition was made known to the shippers in early March of 1987
Between March and the date of the hearing, approximately three months, no
shipper developed any specific plans to use rail transport, either now or in
the reasonably foreseeable future. Under such circumstances, the
Administrative Law Judge finds that the possible future needs of the shippers
are not the type of reasonably projected future need for service that has been
recognized in legally related contexts, including the definition of public
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convience and necessity as applicable to motor transport, Minn. stat.,
sec. 221.071 (1986); Chicaqo & Northwest Railway Co. v. Vershingle, 197 Minn
268 N.W. 2 (1936).
The Administrative Law Judge notes that the Board has authorized the
removal of track even when there has been recent shipping activity. when thp
it of traffic is not profitable for railroad operations In the Matter of
Petition of Chicago & North Western Transportation Co., Order No. R-4041; .
No. D-5395, October 16, 1985. The Administrative Law Judge does not
however, conclude that the Railroad is entitled to remove any and all trackage
when operations on that isolated piece of track do not renult in significant
profit. It is the entire intrastate operation of the Railroad that is
determinative when demonstrated shipper needs are involved
in the absence of reasonably anticipated future transportation need for
track and the existence of the requirement that the Railroad maintain its
removal in a Class I condition, the Administrative Law Judge conclude that
claim of the track is appropriate, In making this Finding, the
administrative Law Judge is also influenced by the fact that the shippers, who
date to be reviewing transportation needs, did not project any particular
When they would be more certain of the amount of future rail transport
Usk No purpose would be served by delaying the decision herein for an
indefinite period. In essence, what the Protestors herein desire is for the
railroad to provide them, at its expense, with insurance against future
contingencies affecting their shipping needs. No consideration of law or
policy appropriately places that burden on the Railroad.
B.D.C