Counsel to Counsel - May 2008 - (Page 20)

partnership at a glance Union Pacific Railroad Company Union Pacific Railroad Company (UP) is the largest rail company in the United States, covering 23 states and two-thirds of the country. Its 8,500 locomotives and 104,700 freight cars move cars, coal, chemicals and countless other types of freight over 32,300 miles of track. In addition to actively resolving its legacy environmental issues, the company has made significant strides in fuel efficiency and low-emissions technology. an environmental liability they didn’t find in their original due diligence, that liability can bounce back to the original owner. “We thought through the sequence and devised language that avoids that kind of circumstance,” McIntosh recalls. One of the trickier matters the firm and its client collaborated on was the acquisition of a right-of-way through a Superfund site. In the big picture, there are a limited number of places you can put a railroad. Sometimes the tracks inevitably must cross contaminated property. David P. Young is UP’s general solicitor and national environmental counsel. He supervises environmental legal issues for the company and oversees all litigation for its southern region. In addition to himself, there are four lawyers in the Environmental group, but he draws on resources throughout UP’s 60-lawyer legal department, including in-house trial lawyers working on environmental litigation. He can be reached at dpyoung@up.com. “ hegoalwastorenegotiateasleasesexpiredtobetter T spreadcostandindemnityinawaythatmoreaptly reflectsthecurrentenvironmentallaws.Thatmightresult inthelesseewalkingaway,butatleastitwasa consistentwaytoupgradethelevelofcontroltherailroad hasoveritsproperties.” Close Collaboration One of the first things Patton Boggs helped UP sort out was its relationships with lessees. Railroads have a lot of land, and their business model is based on shipping cost, so historically they offered relatively inexpensive leases to their biggest customers. But if the lessee, for example, is a petroleum company whose storage tanks leak, today the railroad could be ultimately saddled with the contamination liability. “The goal was to renegotiate as leases expired to better spread cost and indemnity in a way that more aptly reflects the current environmental laws,” McIntosh explains. “That might result in the lessee walking away, but at least it was a consistent way to upgrade the level of control the railroad has over its properties.” Next, they enlisted one of Patton Boggs’ real estate partners to develop a standardized contract for purchase and sale that would protect the company from future environmental exposure. If a purchaser experiences trouble down the line, due to “Carolyn and I worked very closely to negotiate various aspects of that transaction,” Young says. “She helped negotiate the real estate deal. She helped negotiate with the consulting firms to do a fixed-price cleanup. We then put caps on cost overruns using an insurance instrument. At the same time, we negotiated a prospective purchaser agreement with EPA that put boundaries on our liability. “What we wound up with was a real estate transaction that allowed us to take the interest in that site that we needed to The other critical factor was UP’s need for firms that could function as a team. For highly complex sites, Young frequently combines two or three firms for different capabilities they possess. Some firms, he says, feel threatened in that situation. “Patton Boggs brings a number of attributes to the table,” he says. “They have both an environmental regulatory capability and a litigation capability. A lot of environmental attorneys have never straightened up their knees and made an objection to a judge. The Patton Boggs people have—they have former U.S. attorneys. They’re very good at working between their various offices and coordinating with other firms.” 20 LexisNexis® Martindale-Hubbell®

Table of Contents Feed for the Digital Edition of Counsel to Counsel - May 2008

Counsel to Counsel - May 2008 Contents Harassment Policies NEC Corporation of America and Duane Morris LLP Lost or Stolen Data: Minimizing Fallout On-Boarding the Board Drafting Fair, Efficient and Enforceable Arbitration Agreements Responding to Counterfeit Products Crafting an English-Only Workplace Policy Distressed Debt: New Players, Global Sophistication Make Restructuring More Complex IP Confidential: Plan Ahead, Act Fast to Protect Your Trade Secrets Adverse Changes: Think Ahead in a Strained M&A Market Optimizing Web 2.0 Technology: Expanding Your Professional Network Union Pacific Railroad Company and Patton Boggs LLP Warming Warning: Develop Your Climate Change Strategy Now Risk Sharing: Expect New Obstacles and Expenses in Syndicated Loans E-Discovery in Action Diversification at the Gate Energy

Counsel to Counsel - May 2008

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