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Friday, Jul. 17, 1998
Union Pacific near settling in pair of major lawsuits
Deals would join list of hundreds involving track overcrowding
Staff Writer staff contributed to this report.
DALLAS - Union Pacific Corp. says it is very close to settling two major lawsuits over congestion that overwhelmed the tracks of the nation's largest railroad last year and disrupted shipping for its customers.
The company would not disclose the plaintiffs, but a source familiar with matter said they were Dow Chemical Co. of Midland, Mich., and Union Carbide Corp. of Danbury, Conn.
If the deals go through, they will join an agreement between the company and DuPont, the nation's largest chemical company, as well as literally hundreds of smaller claims that have been settled.
Union Pacific attorney Jim Dolan said Thursday that some minor details needed to be finalized in the new agreements.
Many companies that did business with Dallas-based Union Pacific filed claims against the railroad in the wake of major congestion and delivery delays last year after Union Pacific merged with Southern Pacific. The railroad's customers said they lost money because of the rail service delays.
Dow Chemical claims service disruptions cost it more than $25 million in more expensive shipping modes and lost production and sales.
Union Carbide claims that ``service has not only failed to improve, but also has increasingly deteriorated.'' The company also alleges breach of contract because of unreliable service.
Many of the smaller claimants have reached agreement with the railroad, which is working to make settlements rather than go to court.
(Congestion and shipping delays have been alleviated in the Coastal Bend, though not to the point where service is normal, shippers in the Corpus Christi area have said. Local industries that reported shipping problems in recent months were the Reynolds Metals Alumina plant near Gregory, Elementis Chromium in Corpus Christi, and Interstate Grain, a private grain terminal on the Corpus Christi Ship Channel.)
``When you count the little ones, there are easily over 200 claims out there,'' Dolan said. ``We've probably settled more than are left. We're knocking off one or two a week.''
The railroad also settled one of its major lawsuits when it reached agreement earlier this month with Wilmington, Del.-based DuPont. Details of the settlement were not released.
One shareholder lawsuit has also been dismissed. The lawsuit had claimed directors of Union Pacific knew that the railroad's merger with Southern Pacific was off track.
Other major lawsuits still remaining for the company include:
A second shareholder lawsuit, representing Union Pacific shareholders who bought stock between March 4 and Oct. 1. It accuses the railroad of misrepresenting its safety record and failing to disclose problems involving last year's merger.
A suit by Entergy Corp. of New Orleans, which seeks damages in excess of $1 million and an opportunity to rework its contract with the railroad.
Entergy is one of the toughest lawsuits pending, Dolan concedes.
``What Entergy wants is relief from their contract. It's not over money with Entergy. Entergy entered into a contract that it thinks is at the high end of the price spectrum,'' Dolan said.
Cyril Guerrera, a spokesman for Entergy, said matters have not improved for the company even though the days of gridlock on Union Pacific's tracks are over.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web