Southern Pacific Railroad History Center


Law Department

The Southern Pacific law department was a vital player in the Southern Pacific family of companies.  In 1980, the department head was Herb Waterman with Thor Miller as the second in command.  Later, after Herb’s retirement, Thor became head of the department.  The Law Department had approximately 12 to 15 lawyers and paralegals in the 1980s.

The law department’s headquarters were in San Francisco but it also had offices in Los Angeles, Sacramento, Houston, Dallas, and Washington, D.C.  The law department handled all aspects of legal work for Southern Pacific and its subsidiaries, spanning the areas of commerce, taxation, securities, labor, finance, communications, personal injury, freight loss and damage, real estate, contracts, antitrust and regulatory work.

The law department included both the general claims department and the tax department.  The general claims department, which oversaw the investigation and the settlement or litigation of all personal injury matters, had personnel located in various offices throughout the system and was under the immediate direction of the general claims manager.  Both in-house counsel and outside firms handled the personal injury litigation arising from accidents throughout the system.

The tax department was headed by a general tax commissioner and, similar to the other units, had its headquarters in San Francisco; it also had  offices in Portland, Los Angeles, Reno, Nevada, Phoenix, El Paso, and Houston.  The Tax Department’s job was to see that the ad valorem and sales taxes were properly assessed and paid.  The general tax commissioner had an added responsibility for community relations and civil affairs.

Lawyers were key players in managing Southern Pacific’s vast portfolio of real estate, including Mission Bay.  Eventually, the real estate function was spun off into Southern Pacific Land Company, and the real estate lawyers became part of that unit.  A number of the Southern Pacific lawyers and paralegals processed and, where necessary, litigated, a vast array of cargo loss and damage claims. When there were regulatory matters before state Public Utilities Commissions or the federal Surface Transportation Board (until 1996 the Interstate Commerce Commission), Southern Pacific lawyers played a huge role in defending and protecting Southern Pacific’s interests. Once deregulation went into effect, Southern Pacific lawyers developed and wrote the new service contracts for customers, contracts which became the backbone of business in the new deregulated, competitive environment.

Southern Pacific lawyers worked on the legal aspects of the construction of the ICTF (Intermodal Container Transfer Facility), a very large and successful project to speed up the interchange of containers from ship to train in the San Pedro harbor area.   Southern Pacific lawyers worked on the legal aspects of the creation of Sprint which used the railroad’s rights of ways to lay down fiber optic cable for speedier telephone service.  Southern Pacific lawyers also worked on Sprint’s spinoff from the Company.

During the last decades of Southern Pacific’s separate existence, it was involved in some major litigation.  One case, brought by the Department of Justice, concerned the Class I railroads’ alleged discriminatory treatment of short line railroads. As a note, this was in the days when there were 41 Class I railroads.  In that instance, Southern Pacific was represented by both outside counsel and in-house counsel, given the seriousness of the case.  Another case concerned the allegations of monopoly against AT&T; the litigation was one of the lawsuits which forced the breakup of “Ma Bell” into a number of “Baby Bells.”  There were also cases that challenged the new regulatory regime by shippers who did not like the fact that railroad companies could, starting in 1980, charge different shippers different rates.

The Law Department also presented compliance programs.  One program, which included use of videos, was a program to educate employees about the impact of the antitrust laws on the industry.

Of course, the Law Department was deeply involved in the attempted merger with the Santa Fe and the successful merger with Union Pacific.  Hundreds of hours were spent researching and writing briefs and preparing for arguments in front of the Interstate Commerce Commission.  Industry data was analyzed and dissected, and  several lawyers moved to Chicago in anticipation of the Santa Fe merger, which, as we all know, did not actually materialize.

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