And NJT runs freight on the lines it owns, and NJT runs on freight-owned lines. And NJT runs INTERSTATE passenger service (to Pennsylvania on its own behalf, and to New York under contract). Over lines shared with freight. I'd like to see the ruling because it sounds like complete nonsense; it would eliminate the entire jurisdiction of the STB over passenger service, which is clearly contrary to the intent of Congress and the text of the law.
All of that is completely irrelevant because the law clearly states that government run transit/commuter rail systems are outside the purview of STB,
No, it does not say any such thing. Citation if you still think you're right, since you're completely wrong.
irrespective of who they interline with or what freight runs on their lines. They are free to discontinue or start passenger service as they see fit, which is the matter at hand in Princeton.
Oh, THAT -- yes, the STB has no jurisdiction over *whether NJT starts or discontinues their own commuter services*. That's not at all the same thing as having no jurisdiction over NJT in general. The STB absolutely retains jurisdiction over NJT in regards to many, many other matters, including whether they are required to provide access to freight haulers or other passenger carriers, and all kinds of other things like that.
In short, this is a narrow ruling. Looking at it more closely, it's still an *incorrect* ruling, since the intent of Congress is very clear: ripping up tracks is supposed to require STB approval, whether passenger or freight. But it's a narrow ruling, and doesn't change the fact that the STB has lots of authority over NJT. The "commuter service" exemption from jurisdiction was intended as an anti-micromanagement provision, not an exemption for stuff like ripping tracks out to build housing on them.
I think you're right that the current STB members want to shirk their responsibilities with regards to passenger rail. This is contrary to the intent of Congress, of course (recall that the STB regulates passenger buses as well as passenger rail), which is why changing the composition of the STB would help.
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I dug up the citations. STB is relying on 10501©(2)(a). However, the STB retains jurisdiction over many matters relating to NJT at 10501©(3)(A) and 10501©(3)(B) (relating to switching and terminal traffic of other railroads).
Furthermore, since 10501©(2)(a) only exempts "mass transportation provided by a local government authority", the STB's authority continues to apply to any activities of NJT which don't fall in that category, including most obviously hosting of freight, but arguably including a lot of other stuff (charters, contract operations, track demolition, etc.)
The STB very carefully cabined its ruling of non-jurisdiction to the Princeton Branch and the Princeton Branch service, so as not to accidentally disclaim more jurisdiction.
The STB's claim is that the obligation of freight service and the obligation to seek STB approval for abandonment and demolition of the Princeton branch was dropped by Congress at the formation of Conrail. I consider this argument tendentious; but regardless, this is an argument which is based on specific provisions of the 3R Act which formed Conrail and so only applies to a very small list of railway lines.