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Yesterday, CN officials issued a statement expressing disappointment with a U.S. appellate court decision that denied the Class I’s request to reverse a Surface Transportation Board (STB) order requiring the railroad to fund the majority of costs associated with two grade separation projects on Elgin, Joliet and Eastern Railway Co. (EJ&E) lines.

In its December 2008 decision approving CN's EJ&E acquisition, the STB ordered the railroad to pay 67 percent of the cost for a grade separation at Ogden Avenue in Aurora, Ill., and 78.5 percent of the cost for a separation at Lincoln Highway in Lynwood, Ill.

In a case before the U.S. Court of Appeals for the District of Columbia Circuit, CN officials argued that the board's order, as applied to a transaction like the EJ&E acquisition, was “unjustified and beyond the STB's regulatory authority,” according to a prepared statement. Although the court found CN's argument “eminently reasonable,” the judges determined that the Class I failed to carry the “heavy burden” necessary to overturn the order. The railroad won’t appeal the decision, CN officials said.

“We will continue working with Illinois officials to implement the grade separations in accordance with the STB's requirements,” said CN President and Chief Executive Officer Claude Mongeau. “The company's focus remains on completing the integration of the EJ&E into the CN network, a project now in its third year.”