Four major shipper groups have submitted a formal request to the Surface Transportation Board (STB) to make public a key section of the Union Pacific-Norfolk Southern merger agreement, citing improper shielding of material that outlines when UP could walk away from the deal. The section, known as Schedule 5.8, was omitted from the railroads' December 19 merger application and has since been ordered to be filed by the STB.
The shipper groups argue that the railroads improperly labeled this document as 'highly confidential', restricting access to outside attorneys and consultants under the board's protective order. Regulatory filings that contain sensitive commercial information are typically shielded from public view or redacted under board-approved protective orders.
However, the shipper groups claim that Schedule 5.8 does not qualify as Confidential Information under the Protective Order, as it contains no traffic data, no shipper identities, no rates, no cost data, and no trade secrets. Despite this, UP and NS slapped a Highly Confidential designation on it anyway, concealing their own assessment of the conditions that the Board may need to impose to ameliorate the merger's harms.
The groups include the Alliance for Chemical Distribution, the American Chemistry Council, the American Fuel & Petrochemical Manufacturers, and The Fertilizer Institute, whose members' supply chains are highly dependent on rail. These organizations have significant stakes in the outcome of the merger, as they rely heavily on rail transportation to move goods across the country.
The section of the merger agreement is important because it includes what regulatory conditions that UP will not accept should the STB approve the transcontinental merger. This information could have a significant impact on the future of the rail industry and its ability to adapt to changing market demands.
Under the merger agreement, Union Pacific could terminate the deal by paying a $2.5 billion fee to NS if regulators impose certain conditions identified in Schedule 5.8. The STB rejected the railroads' initial application in January, partly because Schedule 5.8 was not included.
The omission of this document from the merger application raises concerns about transparency and accountability in the rail industry. Shipper groups are pushing for greater disclosure to ensure that all parties involved in the merger have access to the same information.
By making Schedule 5.8 public, the STB could provide a more accurate picture of the regulatory conditions that will govern the merger. This would enable stakeholders to better understand the potential risks and benefits associated with the deal and make more informed decisions about its future.
Ultimately, the decision on whether to make Schedule 5.8 public rests with the STB. The agency must carefully consider the implications of this request and balance the need for transparency with the need to protect sensitive commercial information.
The omission of Schedule 5.8 from the merger application raises concerns about transparency and accountability in the rail industry.
