Court Okays CSX, NS, Conrail Merger
April 30, 2001
A U.S. Court of Appeals has unanimously affirmed the Surface Transportation Board’s approval of the CSX, Norfolk Southern (NS), and Conrail merger.
In the transaction approved by STB, CSX and NS acquired control of Conrail and divided the assets between them. STB called it a "procompetitive restructuring of rail transportation" that resulted in new, two-railroad competition for thousands of shippers that had been previously served only by Contrail. The agency, which is part of the U.S. Department of Transportation, also noted that the merger also produced new single-line service for many shippers and generally did not diminish competition. Nevertheless, numerous conditions were imposed to mitigate potential harm to shippers. STB also established an oversight process to ensure that its conditions will be carried out.
Some shippers and shipper organizations, including the National Industrial Transportation Board, claimed the conditions didn’t afford them enough protection. At the same time, a CSX affiliate argued that the conditions went too far.
The Court of Appeals for the Second Circuit sided with STB, noting "with approval" the analysis of issues reflected in the STB ruling, the conditions established, and the post-merger review process.