Canadian Pacific’s DM&E Acquisition upheld by court

Written by jrood

Canadian Pacific's acquisition of the Dakota, Minnesota & Eastern Railroad Corp. in 2008 was upheld by an appeals court, which rejected challenges by the Sierra Club and Metra, the Chicago area commuter rail agency, local media report.

The U.S. Court of Appeals
for the District of Columbia said the Sierra Club had no stake in the matter
that would allow it to sue, and rebuffed claims by Metra that the Surface
Transportation Board abused its discretion in approving the purchase. Both
plaintiffs claimed the board’s approval was premature.

Canada’s second-largest
railroad won U.S. regulatory approval for the deal in September 2008. The
company paid $1.48 billion for DM&E to expand its access to ethanol and
coal markets in the U.S. Midwest.

Metra, which provides
commuter rail service in the Chicago area, said the board should have attached
conditions to the approval to protect its track rights between Chicago and
Wisconsin. The Sierra Club challenged the board’s decision to approve the
takeover while it deferred an environmental impact study.

"The Sierra Club has not
shown, as it must, a casual connection between the government action that
supposedly required the disregarded procedure" and "some reasonably increased
risk of injury to its particularized interest," the court wrote.

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