LEADERSHIP: Marc D. Machlin

One of Pepper Hamilton LLP’s strengths is its experience in the transportation industry. Members of the firm have been involved since the early 1970s in the private sector restructuring of the rail industry in the United States. This involved legislative drafting and enactment by Congress of regulatory frameworks applicable to railroads, motor carriers and intermodal enterprises. We also handle a variety of work for other types of transportation companies.

Legal services the firm provides include the following:

Formation of Carriers. Pepper has represented entities in developing business, financial and regulatory strategies for entry into the transportation industry. We have implemented programs to obtain requisite regulatory approvals for the commencement of operations and the financing of the enterprise, and have negotiated the necessary agreements with employees, suppliers and other carriers.

Withdrawals from Rail Transportation. We have represented entities in developing business, financial and regulatory strategies for withdrawal from the railroad business, including complex restructuring.

Financing. We have represented numerous entities in obtaining debt and equity capital through private placements, governmental sources and public offerings. This has included obtaining requisite regulatory approvals.

Mergers, Acquisitions and Franchising. Pepper has represented and counseled carriers and non-carrier interests in selecting and acquiring properties for merger or acquisition, in resisting proposed mergers or acquisitions, and in negotiating the terms and seeking or resisting conditions for such mergers or acquisitions before courts and federal agencies. This includes representation of U.S. and foreign flag air carriers regarding foreign control, fitness review, route authority and bilateral treaty matters. We also have represented road building companies, investors, leasing and financing companies.

Antitrust and Trade Regulation. We have represented and advised transportation entities on questions of monopolization, pricing, tariffs, and regulation and restraint of trade, including distribution/dealer and network issues. In addition, we have provided prospective counseling on a variety of railroad and airline marketing and network issues. This includes travel agency commercial disputes with antitrust immunity and RICO claims.

Equipment Financing. The firm has represented a number of parties in complex transactions, including carriers, lenders, lessees, lessors, manufacturers, merchant bankers, investment bankers, creditors and public authorities. We have assisted in purchase, lease (both operating and capital), syndication, cross-border double and triple dip financings, and equipment trust matters, by structuring, negotiating and documenting such transactions.

Environmental. Pepper has assisted enterprises in environmental audits, compliance reviews and environmental issues raised by acquisitions, divestitures and other transactions. We have represented several railroads in negotiating consent decrees that resolve environmental violations or problems. We have represented carriers in Superfund sites, advised on the environmental implications of discontinuing service or abandoning unprofitable lines, and counseled carriers on the effects of bankruptcy or reorganization on environmental liabilities.

Labor. We have represented major rail and air carriers in collective bargaining, work rule, redundancy, health and safety, benefit program and other initiatives. We have represented air carriers in representation, duty to bargain, pension, subcontracting, health care and civil rights disputes. We have counseled a foreign flag air carrier on the employment aspects of a reorganization of its U.S. operations. We also have handled substantial ERISA class action cases involving benefit claims and asset transfer issues.

Regulatory Counseling. Pepper has represented clients in connection with all aspects of the regulatory framework established by the National Highway Traffic Safety Administration (NHTSA). Specifically, the firm has counseled clients on matters involving formal responses to inquiries arising out of Preliminary Evaluations, Engineering Analyses and Peer Group Subpoenas initiated by NHTSA. In connection with any responsive information submitted to NHTSA, we assist clients in maintaining the confidentiality of proprietary information by seeking protection under the applicable regulations.

Pepper also has counseled clients in connection with recall campaigns for motor vehicle equipment, including liaison with NHTSA staff, implementation of the procedures to accomplish the recall, negotiation with distributors and reporting of the progress pursuant to federal regulations. The firm has advised clients on their affirmative reporting obligations under the traditional NHTSA regulations relating to defects in motor vehicle equipment, as well as the new early warning and defect reporting obligations imposed by the Transportation Recall Enhancement Accountability and Documentation (TREAD) Act enacted in 2000 in response to the Ford/Firestone investigation. We counsel clients on the reporting requirements of the regulations promulgated under the authority of the TREAD Act, which were adopted in 2002, and required manufacturers of motor vehicle equipment to make their first quarterly early warning data reports in 2003. We also handle matters involving the U.S. Department of Transportation, Surface Transportation Board, Federal Aviation Administration and Federal Maritime Commission.

Bankruptcy. We have acted for airlines and airline creditors in major airline reorganizations. We drafted and successfully lobbied for amendments to the Bankruptcy Code, which fundamentally altered prior law by, among other things, changing the role of the ICC from an active participant and “architect” of a plan of reorganization to an advisory role, permitting expedited abandonments and liquidation if a plan of reorganization is not implemented within five years. Since that time, we have acted as counsel for railroads in their capacity as debtors or creditors, as well as special counsel to court-appointed trustees.

Airports. Our lawyers have represented carriers in a number of airport-related legal matters, including those involving facilities use, leasing, finance and construction, First Amendment issues and labor dispute regulation. We also have handled construction projects for transportation facilities and litigation involving construction failure.

Rail Passenger Operations. Pepper has represented public authorities in acquiring rail properties, negotiating operating rights, using joint facilities, securing public and private financing, and obtaining requisite regulatory approvals. We also have represented carriers in conveying rail properties or operating rights to commuter authorities.

Railroad Accounting. We have represented railroads in the development of revenue adequacy, cost of capital, maximum rates, exclusionary practice and Generally Accepted Accounting Principles initiatives.

Litigation. Our transportation-related litigation experience includes ERISA class action suits, equipment condition contract claims, freight overcharge claims, defense of a False Claims Act matter, and defense of ADEA and ERISA claims following a reduction in force. We also handle all types of commercial disputes, including for an automotive-related financial services company.

The focus of Pepper’s transportation practice is on achieving positive economic results for our clients over the long term and adding value to their business enterprise. We have an excellent record of success before regulatory agencies and courts regarding the adoption of rules and legal principles that not only solve the client’s immediate problems, but also help it achieve its business objective.