Letter Decision No. LET-R-171-2006

[1] This is further to the above-noted complaint and the subsequent motions for dismissal filed by both the Canadian National Railway Company (CN) and the BNSF Railway Company (BNSF).

A. Motions for dismissal

[2] In its letter dated April 7, 2006, CN requested that the Canadian Transportation Agency (Agency) dismiss Normerica Inc.'s (Normerica) complaint on the grounds of lack of jurisdiction and lack of sufficient relevant particulars of the issues raised against CN and the specific remedy sought from CN.

[3] In its letter dated April 24, 2006, BNSF filed a motion similar to CN's, whereby BNSF seeks an order that the Agency does not have jurisdiction to hear the complaint of Normerica against BNSF and an order that Normerica's complaint be dismissed against BNSF. In the alternative, BNSF is seeking an order that the complaint commenced by Normerica be dismissed, but that Normerica be granted leave to refile a complaint against BNSF only if Normerica is able to: (i) assert a claim against BNSF based on service complaints over which the Agency has jurisdiction; (ii) provide complete particulars of its complaint against BSNF, without consolidating the particulars of the complaint against BNSF and CN collectively; (iii) provide full particulars of any alleged substantial commercial harm that BNSF, as opposed to CN, caused Normerica; and (iv) provide which remedies it seeks against BNSF and the grounds for the same.

[4] Pleadings on both motions have now been completed. In essence, both CN and BNSF seek to have Normerica's complaint dismissed for lack of jurisdiction and lack of particulars against each respective railway company.

[5] With respect to the jurisdictional question, the Agency has carefully examined the question and deems it appropriate to leave it in abeyance until such time as it issues its final decision.

[6] With respect to the argument advanced by both CN and BNSF that Normerica's complaint is construed in such a way as to make it impossible for CN and BNSF to know the case each has to meet, the Agency finds that Normerica's complaint, as currently formulated, provides both CN and BNSF with more than enough information to enable CN and BNSF to understand the case they respectively have to meet before the Agency.

[7] In cases such as this one where traffic is moved over the lines of more than one railway company on a single through bill of lading it would be inappropriate to expect a shipper to know the timing, location of and responsibility for all of the railway service matters that it feels have contributed to its perceived delivery problems. The impossibility lies, in part, in the complexities of rail transportation as well as in the inability for the shipper to even obtain the information in the first place.

[8] Dealing with the former, shippers cannot be expected to have a detailed knowledge of the history of their rail car deliveries. Typically, all they know and can know is that they have a problem in their rail service and that it arises somewhere - at origin, destination or somewhere in between. It would be unfair for the Agency to expect them to know all of the details of the moves, such as exactly when and in what railway yard a particular car or group of cars was or were delayed. It would be untoward for the Agency to then expect a shipper to have enough operating expertise in railway matters for it to know whether the reason for any perceived delay in a particular yard at a particular time was due to labour rules, safety considerations, the weather, change in consist or diesel power or crew, inefficiency, bad management or some other reason.

[9] The facts pleaded by Normerica in support of its case go beyond the detail that generally accompanies these kinds of complaints. To ask Normerica to now go even further and to provide additional detail that it does not even have is unreasonable.

[10] On a broader policy level, dismissing this kind of a complaint on account of a purported lack of particulars would be unfair to shippers and would make a mockery of the level of service provisions under the statute. Basically, it would mean that a shipper can complain to the Agency but the complaint would never be accepted for a determination because it does not have enough particulars.

[11] In this case, CN and BNSF have sufficient particulars to defend their case and if they need more information, they have the right to file interrogatories. In the ordinary course, they also know that the Agency poses questions to shippers that might otherwise be needed to fill in any gaps. Most importantly, they alone have all of the information relative to the location and timing of the movements in question.

[12] This portion of the railway companies motions is therefore dismissed for all of the above reasons.

[13] As the Agency is of the opinion that Normerica's complaint contains more than enough information for CN and BNSF to know the case they have to meet, the Agency will set out procedural directions for the pleadings on the merits of Normerica's application.

B. Pleadings on the merits of the application

1. Answer and reply

[14] CN and BNSF shall provide their answers to Normerica's application by August 31, 2006. Normerica will then be allowed until September 18, 2006 to file its reply to CN and BNSF's answers. A copy of the parties' submission, in addition to being filed with the Agency, shall also be concurrently served on the other parties.

2. Interrogatories

[15] Should a party wish to direct interrogatories to another party, such interrogatories are to be served on the other party and filed with the Agency on or before July 14, 2006. Parties on whom interrogatories are served shall provide a response by August 4, 2006, with a copy to the Agency.

[16] Parties on whom interrogatories are served who intend to object to the relevance of an interrogatory shall do so on or before July 21, 2006. The time line for the pleadings on any claim made with respect to the relevancy of interrogatories will be established by the Agency upon receipt of the claim from the depositing party.

[17] Parties on whom interrogatories are served who intend to make a claim of confidentiality in respect of an answer or a document to be filed in support of an answer are hereby directed to file with the Agency, by August 4, 2006: (i) a claim of confidentiality in respect of the answer or document; (ii) the answer or document that contains the confidential information marked "confidential information", and; (iii) an abridged public version of the answer or document. Any claim of confidentiality shall specify why any particular information is claimed as confidential and shall identify any specific direct harm that would likely result from public disclosure or disclosure to the other party. Further, claimants are also directed to indicate whether, or to what extent, any specific direct harm so shown is or is not sufficient to outweigh the public interest in having the answer or document disclosed to the other party or disclosed publicly. The abridged public version shall, at a minimum, disclose all non-confidential information and identify the general nature of the information that is claimed as being confidential. The claim of confidentiality, as well as, the abridged public version of the answer or document claimed as being confidential shall, in addition to being filed with the Agency, also be served on the party directing the interrogatory.

[18] Any request for disclosure of the information claimed as being confidential shall be filed by August 10, 2006 and shall specify the reasons for the request, including the relevance of the document or information to the proceeding and the public interest in its disclosure in the context of the Agency's regulatory responsibilities. Any material in support of the reasons for disclosure must also be filed. The party asserting a claim of confidentiality shall then have until August 14, 2006 to file a final reply following which the Agency shall rule on the request.

3. Filing of documents

[19] Pursuant to section 23 of the Canadian Transportation Agency General Rules (General Rules), any document filed with the Agency in a proceeding is public unless the person filing the document makes a claim for confidentiality. Should a party assert a claim of confidentiality in respect of any document to be filed with the Agency as part of this proceeding, they are directed to follow the same procedure explained above with respect to any claim of confidentiality being asserted with respect to a response or a document filed in support of an answer to a party's interrogatory. The time line for the pleadings on any claim of confidentiality will be established by the Agency upon receipt of the claim from the depositing party.

4. Agency's interrogatories

[20] Pursuant to section 18 of the General Rules, the Agency hereby directs the following interrogatories to the parties:

Normerica

[21] Provide the following:

1. An electronic copy, in MSExcel if possible, of the data found in its application under Schedule F, Transit Days for Cars, sorted by type A, B, C, or D, as submitted; or an electronic file, in MSExcel if possible, of the same data sorted chronologically by constructive placement date.

2. For the period covered by the application, records of the orders for railcars placed by Bentonite Performance Minerals (BPM) and Federal Industrial Products (FIP) with BNSF relative to Normerica's weekly purchase order for clay.

3. For the period covered by the application, records of Normerica's daily requests for active placement of railcars from CN's Brantford yard and the actual number of railcars received each day.

4. Information as to how car weight and condition is determined at origin and destination to calculate a claim for lost product, and provide any evidence available. Include records of any railcars bad ordered by Normerica, or BPM or FIP relative to railcars ordered on behalf of Normerica's Brantford facility.

5. For the period covered by the application; the following information regarding switches performed by CN:

   • Reference is made in the application (para. 69) that "CN failed to provide switches to Normerica on some days." Provide evidence of these occurrences including the dates and the number of railcars ordered.
   • Reference is made in the application (para. 71.) that "CN would perform its switches earlier than scheduled...." , describing situations that allegedly led to additional switching charges. Provide evidence of these occurrences, including dates, the number of railcars involved and any subsequent additional switching charges and/or penalties incurred.
   • Reference is made in the application (para. 72) that "...a missed switch, which leads to a plant shutdown of 24 hours means....". Provide evidence of any such occurrences including dates and durations.
   • Reference is made in the application (para. 73) that "A late switch that results in plant downtime costs Normerica approximately $2700 per hour". Provide evidence of any such occurrences including dates and durations.
   • Reference is made in the application (para. 81) that "the cost to Normerica for each additional switch conducted by CN for each car that cannot be received by Normerica (because it still has railcars left to unload from the previous day)...". Provide evidence of any such occurrences including dates, circumstances, number of switches involved and any subsequent additional switching charges and/or penalties incurred.

6. For the period of the application; evidence linking any incidence of the following with the alleged service failures for the period covered by the application, including the dates, duration, and estimated cost to Normerica, as applicable:

   • plant interruptions or shut-downs
   • additional staff necessitated
   • increased leasing and other business costs
   • penalties levied by Normerica customers against Normerica.

7. Information regarding the contractual arrangement governing shipments between October 1, 2002 and December 31, 2002.

8. Details about Normerica's manufacturing process at the Brantford plant, from receipt of raw material to placement of finished product with customer, including time lines, processing capacity, storage capacity for both raw material and finished product, and delivery information.

CN

[22] Provide the following:

1. Copies of the following documents:

   • Confidential Transportation Agreement No. 816868 (Normerica:CN:BNSF February 01, 2001 - September 30, 2002) and Confidential Transportation Agreement No. 816868-AB (Normerica:CN:BNSF January 1, 2003 - September 31, 2005);
   • The relevant interchange agreements between CN and BNSF for the transfer of Normerica's traffic from the interchange points at Harvey, Illinois;
   • The contractual arrangement between BNSF and CN setting out the work to be performed by CN for its portion of the joint line move of Normerica's traffic;
   • The lease agreement between CN and Normerica for the rail siding located to the east of Normerica's property;
   • Any agreement between CN and BNSF established to increase network fluidity and infrastructure capacity in Chicago, Illinois.

2. A description of the following:

   • The process for delivering railcars out of the Brantford Yard when requested for active placement by CN's customers.
   • Scheduled delivery service established by CN, if any, to service its customers. If so, provide documentation describing the service offered.
   • How requests for active placements are prioritized by CN for its customers serviced out of the Brantford Yard.
   • How CN chooses Normerica's railcars in the Brantford Yard for active placement?

3. Records, in MSExcel if possible, for the period February 1, 2002 to December 31, 2005, and for each railcar referenced in Normerica's application, Schedule F, Transit Days for Cars, regarding:

   • The time frame (including dates) from the point of interchange with BNSF to the point of constructive placement in CN's Brantford Yard, during which the railcars were under CN's control, as well as, the dates, including elapsed time, that the railcars were actively placed at Normerica's Brantford facility.

4. Records, in MSExcel if possible, regarding:

   • For each railcar cited in Normerica's application, Schedule L, Pleadings Federal Court Action T-1730-04, paragraph 10; the inspection and weighing of the railcars undertaken by CN at the point of interchange with BNSF, and at CN's Brantford Yard.
   • Any railcars bad ordered by Normerica, or BPM or FIP relative to railcars ordered on behalf of Normerica's Brantford facility.

BNSF

[23] Provide the following:

1. Information, for the period covered by the application under Schedule F, as follows:

   • The number of railcars ordered and the date ordered by BPM and FIP on behalf of Normerica (Brantford facility).
   • The number of Normerica (Brantford facility) bound railcars actually spotted at BPM and FIP and the date spotted.
   • The number of Normerica (Brantford facility) bound railcars lifted by BNSF and the date lifted from the BMP and FIP facilities, including the car reference number, if available.

2. Records, in MSExcel if possible, for the period February 1, 2002 to December 31, 2005, and for each railcar referenced in Normerica's application, Schedule F, Transit Days for Cars, regarding:

   • Combined BNSF/CN Trip Plans for Normerica's traffic and any relevant amendments.
   • The time frame (including dates) from the points of origin (Baroid and Greybull, Wyoming) to the point of interchange with CN (Harvey, Illinois), during which the railcars were under BNSF's control.

3. Records, in MSExcel if possible, regarding:

   • For each railcar cited in Normerica's application, Schedule L, Pleadings Federal Court Action T-1730-04, paragraph 10; the inspection and weighing of the railcars undertaken by BNSF at the points of origin (Baroid and Greybull, Wyoming) and at the point of interchange with CN (Harvey, Illinois).
   • Any railcars bad ordered by Normerica, or BPM or FIP relative to railcars ordered on behalf of Normerica's Brantford facility.

4. A copy of the correct tariff, and any applicable rules, governing the movement of Normerica's traffic since January 1, 2006.

[24] The answers to the above questions shall be filed with the Agency and served on the other parties on or before July 21, 2006.

[25] Parties on whom interrogatories are served who intend to make a claim of confidentiality in respect of a response or a document to be filed in support of an answer are hereby directed to file with the Agency, by August 4, 2006: (i) a claim of confidentiality in respect of the answer or document; (ii) the answer or document that contains the confidential information marked "confidential information" and; (iii) an abridged public version of the answer or document. Any claim of confidentiality shall specify why any particular information is claimed as confidential and shall identify any specific direct harm that would be likely to result from public disclosure or disclosure to the other party. Further, claimants are also directed to indicate whether, or to what extent, any specific direct harm so shown is or is not sufficient to outweigh the public interest in having the answer or document disclosed to the other party or disclosed publicly. The abridged public version shall, at a minimum, disclose all non-confidential information and identify the general nature of the information that is claimed as being confidential. The claim of confidentiality as well as the abridged public version of the answer or document claimed as being confidential shall, in addition to being filed with the Agency, be served on the party directing the interrogatory.

[26] Any request for disclosure of the information claimed as being confidential shall be filed by August 10, 2006 and shall specify the reasons for the request, including the relevance of the document or information to the proceeding and the public interest in its disclosure in the context of the Agency's regulatory responsibilities. Any material in support of the reasons for disclosure must also be filed. The party asserting a claim of confidentiality shall then have until August 14, 2006 to file a final reply following which the Agency shall rule on the request.

5. Further directions

[27] Upon completion of pleadings, the Agency will assess whether further procedural directions, including directions for the holding of a hearing, are necessary.

[28] In addition, all documents filed with the Agency shall be filed in hard copy and electronically, either on a compact disk or via electronic mail, to the Secretary of the Agency, as follows: