While much of the focus on the proposed merger between Canadian Pacific and Kansas City Southern has been on keeping cross-border gateways open to competing railroads, a Canadian attorney is asking whether there will be national security consequences if a corporate police force run by a foreign entity is operating on U.S. soil.
Tavengwa Runyowa, a Regina, Saskatchewan-based lawyer, plans to address that issue before the Surface Transportation Board’s three-day hearing later this week on the proposed merger.
Runyowa represents three families of CP employees who were killed during a February 2019 incident in which a CP train bound for Vancouver derailed near Field, British Columbia. The train consisted of 112 covered hopper cars and three locomotives. Of those, 99 cars and two locomotives derailed.
CP, like other Class I railroads, operates a police force to safeguard rail shipments and infrastructure. CP’s police force is a fully authorized federal force under the direction of CP.
Runyowa wants STB to consider how or whether a foreign-run corporate police force operating in the U.S. should abide by U.S. law — especially, he says, since he wants CP to be accountable for actions in Canada related to the February 2019 incident.
“If STB allows CP Railway to use the merger process to integrate the KCS police force into the new Canada-based CP-KCS Police, that will affirm the United States’ acceptance of non-American persons with no police powers in the United States, and who answer to persons outside of American soil, exercising full police powers in the country,” said Runyowa’s filing from last Thursday. “The externalization of extraordinary powers and informational access that law enforcement authority endows on those who exercise it could have disastrous national security, privacy, and other consequences on the United States.”
Runyowa has also expressed concern that if there are issues with CP’s accountability for the 2019 incident, that kind of behavior could extend to operations in the U.S. and even Mexico post-merger.
CP unsuccessfully sought to prevent Runyowa from testifying at this week’s public hearing on the proposed merger, saying in a filing from last Tuesday that STB rules dictate that testimony from legal counsel should come from attorneys licensed in the U.S., and Runyowa is licensed in Canada.
But STB denied CP’s request and is allowing Runyowa to testify this week because “the board finds good cause to waive that regulation,” according to its decision rendered Friday.
Runyowa is expected to testify before the board this Thursday.
What’s unclear is where CP’s police force would be based and how that relates to following the laws of different nations. According to a September 2021 release, CP would keep the merged company’s headquarters in Calgary, Alberta, with its U.S. headquarters in Kansas City, Missouri, and its Mexico headquarters in Mexico City and Monterrey. CP’s current U.S. headquarters in Minneapolis-St. Paul would remain an important base of operations, CP said.
Shareholders of CP and KCS approved the $31 billion merger in December, and the deal is now before STB for review. CP has said it hopes for the agency’s approval by early 2023.
CP and KCS say the merger would create a single rail system known as Canadian Pacific Kansas City, or CPKC, with a network of approximately 21,400 miles of track in total, with approximately 6,900 miles in the U.S. The network would extend from Canada into the U.S. and Mexico, and CP and KCS say the new rail system would create an “end-to-end” merger because the existing CP and KCS systems don’t overlap.
Dispute on what caused deadly 2019 accident
The Transportation Safety Board of Canada (TSB) issued in March a final report on its investigation of the 2019 incident. It said faulty brakes were among the causes of the accident, which had occurred in extremely cold temperatures.
CP has disputed that conclusion, saying the board misinterpreted data and that the three employees were properly trained to follow safety standards.
“The TSB has erroneously concluded, based on inappropriate extrapolation of data and unsupported inferences, that the involved-train exhibited poor braking performance,” CP said in March. “As confirmed in the report, the train involved in the incident was fully functional, met all industry standards and passed all regulatory brake test inspections.”
CP said in March that it would communicate with TSB regarding the board’s findings. The railway also said the Royal Canadian Mounted Police (RCMP) is still conducting an inquiry on the accident.
But Runyowa wants the police of the Canadian freight railways to be held accountable if any cover-ups occurred. On behalf of the three families, Runyowa filed a lawsuit against CP and Transport Canada over the February 2019 incident. That lawsuit is still underway.
Indeed, questions about the integrity of the police forces privately operated by CP and even CP rival CN (NYSE: CNI) came to a head following the 2019 accident.
A Canadian Broadcasting Corp. (CBC) documentary, “The Fifth Estate,” posed questions in January 2020 about whether CP had handled investigations into the accident properly. According to the documentary, a former CP employee, who had been part of the railway’s police force, said CP had thwarted his efforts to investigate certain aspects of the accident.
CP countered that the RCMP has been an active participant in the accident investigation since the beginning, and the railway called the CBC reports inaccurate.
“The way the stories are framed is both disgraceful and sensational,” CP President and CEO Keith Creel said in a January 2020 statement. “The RCMP can investigate whatever it sees fit in Canada, and they have been involved from the very beginning. As I said to CBC previously, we are open and willing to discuss anything with the RCMP, the TSB and all other agencies involved. We have been cooperating fully and will continue to do so.”
In his filing from last Thursday, Runyowa advised STB to block the merger unless CP provides the board with responses on the outstanding issues raised in his whistleblower filings and refer the issues to the U.S. Department of Justice, the U.S. Department of Transportation, the Committee for Foreign Investment in the U.S. and other relevant authorities.
Runyowa insists the main reason for his desire to appear before STB is not to gain leverage for his civil lawsuit against CP in Canada but to point out potential jurisdictional and legal issues that could arise if a non-American, corporate policing force were operating on U.S. soil.
“To the extent that the [February 2019] incident arises, it is to pinpoint potentially systemic safety concerns arising from CP Railway’s precision scheduled railroading practices, a business model it also employs in the United States,” Runyowa said. “With respect to CP Railway’s objection that the issues the complainants raised have no bearing on the merger, the complainants will leave it to the Board to verify that the entirety of their re-submission relates to the unprecedented implications in the United States of approving a merger that would endorse, entrench, and extend CP Railway’s policing/security footprint deeper into the country and across the USMCA region.”
CP, others respond to Runyowa’s statements
In response to Runyowa’s filings to STB and his statements about the 2019 incident, CP told FreightWaves on Monday that the railway “continues to mourn the loss of Dylan Paradis, Daniel Waldenberger-Bulmer and Andrew Dockrell. These railroaders will never be forgotten.
“It is unfortunate that such misleading statements and allegations continue to be made by Mr. Runyowa; however, given the ongoing civil litigation, CP has no additional comment at this time.”
In a Tuesday filing to the board, CP questioned the motives of Runyowa, who the railway said is taking part in several lawsuits in Canada involving freight railway police. CP also disagreed that there would be any conflict of interest or confusion about following the law.
“Instead of engaging appropriately in petitioning directed at the Canadian and U.S. jurisdictions that administer the legal framework for railway policing, Mr. Runyowa proposes that this Board orchestrate a broad-ranging investigation involving broad swaths of the U.S. federal government to overturn a longstanding legislative scheme governing the routine railroad policing functions that CP and every other Class 1 railroad engage in across their networks,” CP’s filing said. “The suggestion lacks any nexus to the CP/KCS transaction, is outrageous in scope, and should not distract the Board and public from their appropriate focus on the public interest benefits of the proposed transaction.”
As stakeholders await the three-day hearing, Railroad Workers United (RWU), a U.S.-based, independent, cross-craft organization representing rail union interests, urged STB this week to consider the issues raised in Runyowa’s filings.
“The RWU takes the position that the complaint raises threshold concerns that the STB has a duty to consider before approving a merger that would extend CP Railway’s policing operations deeper into the United States,” RWU General Secretary Jason Doering said in a letter filed with STB.
Issues that should be considered include the criminal investigation of deaths and reportable injuries allegedly at CP’s U.S. operations and national security concerns that arise when a non-American company located outside of the U.S. is commanding American police officers, among other issues.
“It is important for the STB to consider the complaint on its merits. The potentially irreversible prejudice that could arise to America’s national interests would still prevail and could worsen, even if the STB disregarded them,” Doering said. “Hence, it is important for the STB to facilitate stakeholder input and to engage in a full exploration of the implications of expanding CP Railway’s law enforcement powers.”
Meanwhile, within the Canadian government, there has been discussion about the responsibilities of CP’s and CN’s police forces, with some in the House of Commons suggesting amending the Railway Safety Act to remove a potential conflict of interest from private railway police taking part in investigations involving their companies.