John J. McCarthy--Acquisition of Control--Trombly Motor Coach Service, Inc.

Topics:  Trombly Motor Coach Service

Jeffrey Herzig
Surface Transportation Board
11 August 2021

[Federal Register Volume 86, Number 152 (Wednesday, August 11, 2021)]
[Notices]
[Pages 44128-44129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17130]


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SURFACE TRANSPORTATION BOARD

[Docket No. MCF 21094]


John J. McCarthy--Acquisition of Control--Trombly Motor Coach 
Service, Inc.

AGENCY: Surface Transportation Board.

ACTION: Notice tentatively approving and authorizing finance 
transaction.

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SUMMARY: John J. McCarthy (Applicant), a noncarrier, has filed an 
application for authority after-the-fact to acquire control of Trombly 
Motor Coach Service Inc. (Trombly) from Michael J. Trombly (Seller). 
The Board is tentatively approving and granting after-the-fact 
authorization of the transaction, and, if no opposing comments are 
timely filed, this notice will be the final Board action.

DATES: Comments may be filed by September 27, 2021. If any comments are 
filed, Applicant may file a reply by October 11, 2021. If no opposing 
comments are filed by September 27, 2021, this notice shall be 
effective on September 28, 2021.

ADDRESSES: Comments may be filed with the Board via e-filing on the 
Board's website. In addition, one copy of any comments must be sent to 
Applicant's representative: Andrew K. Light, Scopelitis, Garvin, Light, 
Hanson & Feary, P.C., 10 W Market Street, Suite 1400, Indianapolis, IN 
46204.

FOR FURTHER INFORMATION CONTACT: Amy Ziehm at (202) 245-0391. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: According to the application,\1\ Applicant 
is an individual who directly owned and controlled another passenger 
motor carrier, NRT Bus, Inc. (NRT), prior to the closing of the 
transaction. (Appl. 2.) NRT held and continues to hold interstate 
passenger motor carrier authority in the United States through the 
Federal Motor Carrier Safety Administration (FMCSA). (Id.) Under the 
transaction, which was completed on April 13, 2013, Seller transferred 
to Applicant all issued and outstanding equity shares of Trombly.\2\ 
(Appl. 1, 3.)
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    \1\ The application initially was filed on May 4, 2021. On June 
3, 2021, the Board issued a decision requiring Applicant to submit 
additional information in support of the application. Applicant 
filed an unverified supplement to its application on June 30, 2021, 
and a verification of that supplement pursuant to 49 CFR 1182.2(c) 
on July 12, 2021. Therefore, for purposes of calculating the 
procedural schedule and statutory deadlines, the filing date of the 
application is July 12, 2021. See 49 CFR 1182.4(a).
    \2\ Applicant states he did not seek approval of the transaction 
before it was completed because neither he nor Seller were aware 
that the transaction was subject to the Board's jurisdiction. (Appl. 
1.) Applicant now requests that the Board approve the transaction 
after-the-fact. (Suppl. Appl. 1.) The Board has permitted parties to 
obtain after-the-fact licensing authority for a transaction when the 
failure to seek approval was without malice and by mistake. See 
Winthrop Sargent--Aquis. of Control--Plymouth & Brockton St. Ry., 
MCF 21089, slip op. at 2 (STB served Jan. 3, 2020) (citing Allied 
Indus. Dev. Corp.--Pet. for Declaratory Order, FD 35477, slip. op. 
at 6 (STB served Sept. 17, 2015), and Gen. Ry.--Exemption for 
Acquis. of R.R. Line--in Osceola & Dickinson Cntys., Iowa, FD 34867, 
slip op. at 5 (STB served June 15, 2007)).
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    Applicant provides the following description of the two carriers:
     Trombly primarily provides non-regulated student school 
bus transportation services in the Commonwealth of Massachusetts--in 
the counties of Essex and Middlesex--and occasionally provides charter 
services when its buses are not in use for school activities. At the 
time of the transaction, it utilized a fleet of approximately 150 
passenger vehicles, consisting of school buses and mini-buses, and it 
used approximately 160 drivers. Currently, Trombly utilizes a fleet of 
approximately 266 passenger vehicles, consisting of school buses, mini-
buses, and passenger vans. It currently uses approximately 142 drivers. 
(Suppl. Appl. 3.)
     NRT primarily provides non-regulated student school bus 
transportation services in the Commonwealth of Massachusetts--in the 
counties of Essex, Middlesex, Norfolk, Suffolk, and Worcester--and 
occasionally provides charter services when its buses are not in use 
for school activities. At the time of the transaction, it utilized a 
fleet of approximately 1,350 passenger vehicles, consisting of school 
buses, mini-buses, and passenger vans, and it used approximately 1,400 
drivers. Currently, NRT utilizes a fleet of approximately 1,490 
passenger vehicles, consisting of school buses, mini-buses, and vans; 
and it uses approximately 1,221 drivers. (Id. at 2.) \3\
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    \3\ Additional information about these motor carriers, including 
U.S. Department of Transportation (USDOT) numbers, motor carrier 
numbers, and USDOT safety fitness ratings, can be found in the 
application. (See Appl. 2-3; id. at Ex. A.)
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    As a result of the transaction, Applicant owned and controlled two 
regulated interstate passenger motor carriers that operate in the same 
territory. (Id. at 2-3, 5-6.)
    Applicant claims that the transaction has not had, and will not 
have, a material, adverse impact on the adequacy of transportation 
services available to the public. (Id. at 7.) Applicant states that the 
services provided by Trombly prior to the transaction have been 
provided by Trombly under the same name since the transaction, just 
under different ownership, and will continue to be provided by Trombly 
going forward. (Appl. 4.)
    Under 49 U.S.C. 14303(b), the Board must approve and authorize a 
transaction that it finds consistent with the public interest, taking 
into consideration at least: (1) The effect of the proposed transaction 
on the adequacy of transportation to the public, (2) total fixed 
charges that result, and (3) the interest of affected carrier 
employees. Applicant has submitted the information required by 49 CFR 
1182.2, including information to demonstrate that the transaction is 
consistent with the public interest under 49 U.S.C. 14303(b), see 49 
CFR 1182.2(a)(7), and a jurisdictional statement under 49 U.S.C. 
14303(g) that the aggregate gross operating revenues of the involved 
carriers exceeded $2 million during the 12-month period immediately 
preceding the filing of the application, see 49 CFR 1182.2(a)(5).
    Applicant asserts that the transportation services available to the 
public will be maintained and improved as operating efficiencies are 
realized as a result of the transaction. (Appl. 4.) Since the 
transaction, Trombly has continued to provide transportation services 
to the public under the same name. (Id.) Applicant represents that 
Trombly has continued to operate under the control of Applicant, who is 
``an individual thoroughly experienced in school bus transportation 
operations.'' (Id.) Applicant also represents that there has been no 
reduction in the charter

[[Page 44129]]

services provided by Trombly or NRT. (Suppl. Appl. 7.) He also states 
that the transaction resulted in improved operating efficiencies and 
cost savings derived from economies of scale for both Trombly and NRT. 
(Id.) Specifically, the transaction has allowed both NRT and Trombly to 
take advantage of increased purchasing power when acquiring new 
equipment, parts, fuel, and insurance. (Id.) These operating 
efficiencies and cost savings have helped the financial strength of 
both NRT and Trombly, allowing them to effectively compete in their 
respective geographic markets. (Id.)
    Applicant states that fixed charges are not contemplated to have a 
material impact on the transaction. (Appl. 5.)
    Moreover, Applicant asserts that the transaction did not have a 
substantial impact on employees or labor conditions because the 
operations of both Trombly and NRT have continued ``substantially 
unchanged.'' (Suppl. Appl. 7.) The transaction did result in a limited 
number of duplicative back-office positions, and those positions were 
phased out. (Appl. 5.) According to Applicant, any reduction in the 
number of drivers used by either company since the transaction is not 
the result of layoffs or reduction in the workforce at NRT or Trombly 
but rather the result of their inability ``to find, hire and retain 
additional qualified drivers,'' in part due to the COVID-19 pandemic. 
(Suppl. Appl. 8.)
    The Board finds that the acquisition as described in the 
application, as supplemented, is consistent with the public interest 
and should be tentatively approved and authorized after-the-fact. If 
any opposing comments are timely filed, these findings will be deemed 
vacated, and, if a final decision cannot be made on the record as 
developed, a procedural schedule will be adopted to reconsider the 
application. See 49 CFR 1182.6. If no opposing comments are filed by 
the expiration of the comment period, this notice will take effect 
automatically and will be the final Board action.
    This action is categorically excluded from environmental review 
under 49 CFR 1105.6(c).
    Board decisions and notices are available at www.stb.gov.
    It is ordered:
    1. The transaction is approved and authorized after-the-fact, 
subject to the filing of opposing comments.
    2. If opposing comments are timely filed, the findings made in this 
notice will be deemed vacated.
    3. This notice will be effective September 28, 2021, unless 
opposing comments are filed by September 27, 2021. If any comments are 
filed, Applicant may file a reply by October 11, 2021.
    4. A copy of this notice will be served on: (1) The U.S. Department 
of Transportation, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE, Washington, DC 20590; (2) the U.S. Department of 
Justice, Antitrust Division, 10th Street & Pennsylvania Avenue NW, 
Washington, DC 20530; and (3) the U.S. Department of Transportation, 
Office of General Counsel, 1200 New Jersey Avenue SE, Washington, DC 
20590.

    Decided: August 5, 2021.

    By the Board, Board Members Begeman, Fuchs, Oberman, Primus, and 
Schultz.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2021-17130 Filed 8-10-21; 8:45 am]
BILLING CODE 4915-01-P