Free Motion for Summary Judgment - District Court of Federal Claims - federal

Case 1:07-cv-00271-RHH

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Filed 05/15/2008

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37200 DO

SERVICE DATE - JULY 26, 2006

SURFACE TRANSPORTATION BOARD

DECISION AND NOTICE OF INTERIM TRAIL USE OR ABANDONMENT

STB Docket No. AB-I081X

SAN PEDRO RAILROAD OPERATING COMPANY, LLC-ABANDONMENT EXEMPTION-IN COCHISE COUNTY, AZ

Decided: July 25, 2006
By decision served February 3,2006, the Board, under 49 U.S.c. 10502, exempted from

the prior approval requirements of 49 U.S.c. 10903 the abandonment by San Pedro Railroad railroad line in Cochise approximately 76.2 miles of Operating Company, LLC (SPROC) of County, AZ, as follows: (1) the Bisbee Branch, between milepost 1085.0 at Bisbee Junction and milepost 1090.6 at Bisbee, a distance of 5.6 miles; and (2) the Douglas Branch (a) between milepost 1097.3 near Paul Spur and milepost 1106.5 near Douglas, a distance of9.2 miles, (b) between milepost 1055.8 near Charleston and milepost 1097.3 near Paul Spur, a distance of 41.5 miles, and (c) between milepost 1040.15 near Curtiss and milepost i 055.8 near Charleston, a distance of 19.9 miles. The exemption was scheduled to become effective on March 5, 2006, unless an offer of financial assistance (OFA) was fied on or before February 13,2006.
On February 13,2006, Sonora-Arizona InternationalLLC (Sonora) timely filed an OFA

under 49 U.S.C. 10904 and 49 CFR 1 152.27(c) to purchase the line. By decision served on Proceedings, found Sonora to be the Office of February 17,2006, the Board, by the Director of the exemption to permit the OFA financially responsible and postponed the effective date of process to proceed. Subsequently, on March 17,2006, Sonora fied a request that the Board set this line. Thereafter, in a decision served on April 13, sale of the terms and conditions for the 2006, the Board set the purchase price for the line at $5,632,644, on the condition that SPROC
agree to indemnify Sonora for title defects, and established terms for transfer of

the line. In that

decision, the Board also directed SPROC to notify Sonora and the Board by April 18, 2006, if it agrees to indemnify Sonora for title defects.

By letter filed on April 21,2006, SPROC agreed to provide such indemnification and documentation with the draft purchase and sale provide Sonora. On April 24, 2006, Sonora fied notice that it agreement that SPROC would accepted the Board's terms and conditions, noting that it expected closing on this transaction to take place on or before July 12,2006. The Board approved the sale and dismissed the petition for exemption, effective on the date the sale was consummated, in a decision served on May 3, 2006.
stated that it would include appropriate.

Def. Exhibit A

Case 1:07-cv-00271-RHH

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its OFA in this proceeding. On July 13, 2006, SPROC fied a letter requesting that the Board vacate the May 3 decision authorizing the sale and authorize SPROC to abandon this line without further delay. On July 20, 2006, SPROC fied a letter indicating its wilingness to enter into trail use negotiations previously requested by the Trust for Public Land (the Trust) under section 8(d) of the National Trails System Act, 16 U.S.c. 1247(d) (Trails Act).
On July 12,2006, Sonora fied a notice indicating its withdrawal of

When an entity offering to purchase a line later notifies the Board that it is withdrawing its OF A, the Board wil serve a decision vacating the decision which postponed the effective date
ofthe decision granting

the exemption. See 49 U.S.C. 10904 and 49 CFR 1152.27(g)(2).

Accordingly, the OFA process will be terminated, and the May 3 decision will be vacated to permit the prior abandonment authorization for the line subject to the OF A to become effective on. the service date of this decision. As indicated in the February 3, 2006 decision, the Trust submitted a request for issuance of a notice of interim trail use (NITU) for the subject line under the Trails Act, in order to negotiate with SPROC for acquisition of the right-of-way for interim trail use. The Trust at that willingness to assume financial responsibility for the right-oftime also submitted a statement of the right-of-way is subject to future reconstruction and way and acknowledged that use of service as required under 49 CFR 1152.29. However, because SPROC had reactivation for raiL. not indicated whether it was wiling to enter into negotiations, the Board did not issue a NITU in its February3 decision. Because SPROC has since notified the Board of its willingness to enter into trail use negotiations with the Trust, a 180-day period will now be authorized for the parties
to negotiate an interim trail use/rail banking agreement. Moreover, the Trust had simultaneously

submitted a request for a public use condition under 49 U.S.c. i 0905 for 180 days, which the the public use procedures could be delayed, or even foreclosed, by the financial assistance procedures under 49 U.S.C. 10904. Such procedures were subsequently delayed by Sonora's OFA. Because the bF A process wil now be terminated, the public use condition and NITU periods will commence this decision. with the effective date of
Board authorized in its February 3 decision. The Board noted that operation of

This decision and notice will not significantly affect either the quality of the human envirónment or the conservation of energy resources.
It is ordered:

1. This proceeding is reopened.

2. The request for permission to withdraw the OF A is granted and the financial. assistance process in this proceeding is terminated.

3. The decision served on February 17,2006, is vacated to the extent it postponed the effective date of the abandonment exemption to permit the OF A process to proceed.
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4. The abandonment exemption wil become effective on the service date oftliis decision and notice, subject to the conditions imposed in the February 3 decision, and subject to the NITU issued in this decision.

to assume, for the term of

5. If an interim trail use/rail banking agreement is reached, it must require the trail user the agreement, full responsibility for management of, for any legal liability arising out of the transfer or use of (unless the user is immune from liability, in which case it need only indemnify the railroad against any potential liabilty), and for the payment of any and all taxes that may be levied or assessed against, the right-of-way.

6. Interim trail use/rail banking is subjectto the future restoration of rail service and to the user's continuing to meet the financial obligations for the right-of-way.
interim trail use is implemented, and subsequently the user intends to terminate trail this decision and notice and request that it be vacated on a a copy of specified date.
7. If use, it must send the Board

8. Ifan agreement for interim trail use/rail banking is reached by January 22, 2007, interim trail use may be implemented. Ifno agreement is reached by that time, SPROC may fully abandon the line, provided the previously imposed conditions are met.

9. This decision and notice is effective on its service date. By the Board, David M. Konschnik, Director, Offce of Proceedings.

Vernon A. Wiliams Secretary

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