Sometime, 6,694 pages just isn’t enough.

Last month, Union Pacific and Norfolk Southern filed a PDF document of that length with the Surface Transportation Board as part of their application for permission to merge (along with a 4.6 MB Excel spreadsheet of supporting data).

On January 16, the STB formally rejected the application on the grounds that it was insufficient – though the dismissal was “without prejudice,” meaning that the railroads are free to try again, and UP told the press they will. The STB has given them until February 17 to formally inform the Board that they will be re-filing, and until June 22, 2026 to re-file.

The decision was a unanimous 3-0 vote of the current members of the panel.

The Board’s decision hinges on their regulations for review of major railroad mergers (which this most certainly is), in 49 CFR §1180. Subsection §1180.7(b) requires applicants submit “‘full system’ impact analyses (incorporating any operations in Canada or Mexico) from which they must demonstrate the impacts of the transaction—both adverse and beneficial—on competition within regions of the United States and this nation as a whole (including inter- and intramodal competition, product competition, and geographic competition) and the provision of essential services (including freight, passenger, and commuter) by applicants and other network links (including Class II and Class III rail carriers and ports).”

Opponents of the merger (Canadian National and Burlington Northern Santa Fe) challenged the adequacy of UP/NS’s market impact analyses, submitted by Dr. Elizabeth Bailey. The opponents told the Board that Bailey simply extended 2023 actual flow levels into the future and used those levels for the future market analysis, when elsewhere in the application, UP/NS said that the merger would net the combined railroad over 400,000 additional carloads diverted from other railroads and give the merged carrier between 15 and 26 percent higher market share.

The Board agreed, saying “…the Application is incomplete because the full-system impact analyses do not contain Applicants’ ‘projected market shares’ as required by 49 C.F.R. § 1180.7(b). The Application is replete with claims that the merger will grow Applicants’ traffic, in one estimate by between 15 and 26% of current rail traffic levels…Applicants also project that the Transaction will result in their traffic growing by 1.86 million carloads and intermodal units annually from rail and truck diversions, (id. at 2-315, V.S. Hunt/Schabas 7), and in their Operating Plan they assume that 40% of the expected growth would be realized in year one post-Transaction, 70% in year two, and 100% in year three, (id. at 2-508, V.S. Gehringer/Orr 9). Yet, when providing Applicants’ projected market shares of revenue and traffic volumes for their competitive-impact analyses, Applicants, via Bailey’s verified statement, stop, at best, at the moment of consummation and make no attempt to account for any merger-related growth, diversions, or, indeed, any other future changes to market conditions at all. …Bailey’s approach of simply adding historical market shares together is therefore not the requisite ‘project[ion]’ of the Transaction’s competitive impact under § 1180.7(b)(2), (3), and (4), given Applicants’ claims elsewhere in the Application that the merger will result in significant traffic and revenue growth.”

The Board also dinged UP/NS for failing to meet the requirement that the applicants must provide copies of “any contract or other written instrument entered into, or proposed to be entered into, pertaining to the proposed transactions.” The Board says that no contracts or other written instruments were included. UP/NS responded that the Board had decided other merger cases in the past without being given that level of detail.

The Board’s response: “It is immaterial that the Board has on occasion accepted a merger application that did not include all schedules referenced in the merger agreement. No party raised the missing schedules as an issue in those proceedings and the Board otherwise had no need to opine on them. Moreover, the greater scrutiny required by the current major merger rules, the Transaction’s unprecedented size and potential significance for the national rail network, and the fact that certain of the schedules may relate to the competitive issues that the Board would consider, all support a requirement that Applicants comply with the straightforward regulation to submit ‘any contract or other written instrument entered into, or proposed to be entered into’ that pertains to the Transaction as part of the Application.”

In a bit of saving grace for UP/NS, the Board said that they won’t make them pay the $2.5 million filing fee a second time.