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The Pennsylvania Supreme Court rules that the 2015 vote by the SEDA-COG Joint Rail Authority awarding a rail operating agreement to Carload Express passed

Oakmont, PA, October 6, 2020 – Carload Express, Inc. announces its satisfaction with the October 1, 2020 decision of the Pennsylvania Supreme Court, which upheld a 7-3 vote by the SEDA-COG Joint Rail Authority (JRA) to award a rail-operating agreement to Carload Express.

The dispute began in July 2015 after Carload Express was selected as the highest scoring proposer to a JRA Request for Proposals (RFP) to operate the JRA rail lines.  At the end of the RFP process, the JRA board voted to award the operating agreement to Carload Express, seven for, three against, and six recused and not voting.  Rather than move forward with Carload Express, the JRA instead sought a judicial determination that the 7-3 vote failed under the Municipality Authorities Act because six recused non-voting board members were physically present in the room at the time of the vote, and there were questions as to whether or not these recused non-voting members should count towards the number of affirmative votes needed to award the contract.

In its decision, the Supreme Court applied longstanding common-law voting rules to find that “the phrase ‘members present’ means voting members, as a non-voting member is not present for purposes of calculating a majority.” Therefore, the Court found that “the vote of the JRA Board by seven to three in Carload’s favor must stand.”

The standard articulated by the Supreme Court prevents abstaining members from influencing a vote.  Because, “[i]f the rule were otherwise, a member could attend the meeting and abstain from voting and have a different effect than if that person were absent from the meeting.” Here, “it would mean that the outcome of the vote would depend upon the mere presence of six board members who had recused themselves from any participation in the operating contract award process (including all voting and discussions) based upon their own decision that they had conflicts of interest based upon business relationships with the JRA’s current operator.”

Carload Express President & CEO Mark Rosner announced, “This decision ends once and for all any question as to whether or not the 7 to 3 vote awarding a multi-year operating contract to Carload Express is valid.  Since the start of the RFP process in 2014, Carload Express has been eager to serve the businesses and communities in Central Pennsylvania with its safe, high-quality and customer-focused service.  Our success starting the Delmarva Central Railroad in 2016 demonstrates that we have the experience and capabilities to hit the ground running and set up operations quickly.  We will bring that same level of energy and excellence to serve the JRA’s rail customers.  We look forward to partnering with the JRA for industrial and economic development throughout the JRA’s eight member counties.”

Supreme Court Opinion:

About Carload Express

Carload Express Inc. operates four shortline railroads: The Allegheny Valley Railroad (AVR) and Southwest Pennsylvania Railroad (SWP) serving western Pennsylvania; the Ohio Terminal Railway (OHIO) serving the Ohio River Valley bordering Ohio and West Virginia; and the Delmarva Central Railroad (DCR) serving Delaware, Maryland, and Virginia on the Delmarva Peninsula.   The company handled nearly 90,000 shipments last year, equating to roughly 360,000 fewer loaded trucks on local highways, lowering congestion and road maintenance costs, while significantly reducing carbon emissions and greenhouse gases.  The company and its 100+ employees operate 24 hours per day, seven days per week, serving over 100 customers on 344 route miles of track.