Posts Tagged ‘Susquehanna Union Railroad’

Appeals Court Reverses Course in SEDA-COG Dispute

July 3, 2018

The fight over a Pennsylvania short-line railroad took another turn last week when a Pennsylvania state appeals court reversed its earlier order and instructed a lower court in Clinton County to reconsider a short line service contract approved by the SEDA-COG Joint Rail Authority Board of Directors.

The legal action stemmed from the Susquehanna Union Railroad, also known as the North Shore Railroad, being turned down by SEDA-COG for a seven-year operating contract. Instead, the contract went to Carload Express of Oakmont, Pennsylvania.

Susquehanna Union has operated the lines in question since they were purchased by the state from Conrail in 1984.

In awarding the operating contract to Carload Express, SEDA-COG said it used a scoring system that showed Carload Express scored one point higher than Susquehanna Union.

The line is made up of five branches and 200 miles of track in central Pennsylvania.

The 2015 decision has displeased both railroads with each filing lawsuits.

One issue is that state law requires nine of the board’s 16 members to approve the contract, but six members abstained during the voting.

In sending the case back the appeals court said the lower court “failed to resolve all issues” and additional pertinent information has since been disclosed.

The latter includes a news report saying that in a sworn deposition, a SEDA-COG board member said he had given no points to the North Shore when submitting his tally in 2015, but had planned to give the railroad 60 out of a possible 100 points.

That would have been enough to put Susquehanna Union into a tie with Carload Express.

Judge Rules in Favor of Carload Express in SEDA-COG Contract Awarding Dispute

May 9, 2018

The SEDA-COG Joint Rail Authority has been ordered by a Pennsylvania court to award a freight railroad operating contract to Carload Express.

The contract covers operating rights over five short-line railroads in Centre, Lycoming, Northumberland, Mifflin, Montour, Columbia and Clinton counties owned by SEDA-COG and serving 70 customers over 200 miles of track.

Carload Express would replace Susquehanna Union Railroad, the parent company of North Shore Railroad, as operator of the lines.

At issue is SEDA-COG’s interpretation of how many board members are needed to award a contract.

SEDA-COG argued that at least nine of its 16 voting board members are needed to determine to award an operating contract.

In 2014, SEDA-COG sought proposals to operate the short lines and received three bids. It later chose two finalists, Carload Express and Susquehanna Union.

At a July 2015 board meeting, six board members withdrew from the contract vote because of potential conflicts of interest.

Seven of the 10 voting members favored awarding the contract to Carload Express.

But SEDA-COG said because that fell short of a majority of the board – meaning nine or more board members – the vote failed to meet its requirement to award an operating contract to Carload Express of Allegheny County.

A Clinton County Court of Common Pleas later ruled in SEDA-COG’s favor in a lawsuit filed by Carload Express.

The latest ruling overturns that decision and was made by a Commonwealth Court judge.

In response to the Commonwealth Court’s decision, Susquehanna Union said it is considering its legal options.

Susquehanna had pending a lawsuit of its own in Clinton Country that alleges that the request for proposals to operate the SEDA-COG lines was tainted by a board member who committed ethical violations.

Susquehanna contents that the outcome of its lawsuit could negate the award to Carload by the Commonwealth Court.

In the meantime, SEDA-COG has held off awarding the contract to Carload Express, instead voting unanimously to hold a special meeting to discuss the litigation.

Commonwealth Court Judge Robert Simpson found in the state court opinion that a 7-3 vote from the 16-member SEDA-COG was a valid endorsement of a contract with Carload Express.

Simpson relied on the state Municipal Authorities Act, which states that a contract can be awarded based on a vote of the majority of an authority’s members who are present.

North Shore is based in Northumberland, Pennsylvania, and has 80 employees. It interchanges freight with Norfolk Southern.