Four major US shipper groups are asking federal regulators to make public an important section of the merger agreement between Union Pacific and Norfolk Southern, arguing that the railroads have improperly hidden information that could influence how stakeholders respond to the deal.
The disputed section, known as Schedule 5.8, was omitted from the railroads’ merger application filed on 19 December. The Surface Transportation Board later ordered it to be submitted, but when the document was filed, Union Pacific and Norfolk Southern designated it as “highly confidential”, limiting access to outside lawyers and consultants under the board’s protective order.
The filing is understood to set out the regulatory conditions under which Union Pacific could walk away from the merger.
The groups behind the challenge are the Alliance for Chemical Distribution, the American Chemistry Council, the American Fuel & Petrochemical Manufacturers and The Fertilizer Institute — organisations whose members are heavily reliant on rail transport.
In their filing, the groups argued that Schedule 5.8 does not meet the standard for confidential treatment because it contains no traffic data, no shipper identities, no rates, no cost data and no trade secrets. Instead, they said, it appears to contain the applicants’ own assessment of which regulatory conditions the board might impose to address potential merger harm — and which of those conditions UP would refuse to accept.
That matters because under the merger agreement, Union Pacific could terminate the transaction by paying Norfolk Southern a $2.5bn fee if regulators impose certain conditions identified in Schedule 5.8.
The shipper groups argue that keeping this information hidden shuts out the very parties who need to decide whether and how to participate in the proceeding. Rail customers, associations, elected officials and the public cannot see the document, they said, and even parties with outside counsel are unable to discuss it fully because of the restrictions.
The Surface Transportation Board had already rejected the railroads’ initial application in January, in part because Schedule 5.8 was missing. The latest filing battle now adds another layer of scrutiny to what is already one of the most closely watched rail consolidation proposals in the United States.
