July 16, 2014 - Law360
Pennsylvania Powerhouse: Stradley Ronon
By Matt Fair
Law360, Philadelphia -- At around 3 one morning last May, a new $150 million rail depot along the Delaware River outside Philadelphia received its first shipment of crude from North Dakota’s Bakken oil fields, bringing to fruition one of the latest major deals in the region guided by Stradley Ronon Stevens & Young LLP, a longtime go-to firm for businesses in the state.
Development of the Eddystone Rail Co. facility for the joint venture between Enbridge Inc. and Canopy Prospecting Inc. involved a number of complex legal arrangements — just the type of large, sophisticated deal that helped land the firm, which has 174 attorneys in three Pennsylvania offices between Philadelphia and Harrisburg, on Law360's list of Pennsylvania Powerhouses.
“There are a lot of complicated and sophisticated aspects of the deal, but they got their first crude oil delivery,” said firm financial partner and management committee member Kevin Boyle.
With the highest concentration of light, sweet refining capacity outside of Houston, Boyle said, the deal had helped to revitalize the Philadelphia region’s reputation as a major player on the national energy landscape.
“This has been a major turnaround from where the refinery picture was, say, three or four years ago,” he said.
With deep roots in both corporate counseling and litigation, Stradley Ronon is uniquely positioned to represent clients looking to capitalize on Pennsylvania’s growing energy boom.
“When I was coming out of law school, there were firms that were known as litigation firms and firms that were known as business firms,” firm chair William Sasso said. “We had a tremendous balance because our founders came both from the business world and the litigation world. From the very beginning, we had that balance.”
Stradley Ronon traces its history in Philadelphia to 1926, and Sasso said that its broad base as both a litigation and business firm was a tribute to its late founding partner Andrew Young. While many firms excel in both corporate counseling and litigation, Sasso said, Young has helped Stradley Ronon develop a thriving investment management practice as well.
“He was a true Renaissance man,” Sasso said. “Even though he often described himself as a tax lawyer, he had a tremendous expertise in business law generally and developed a nationally recognized expertise in the mutual fund area.”
In addition to helping found Stradley Ronon, Young worked with a friend from his days at Princeton University to found the Wellington Group, which started one of the nation’s first mutual funds. Wellington has since become a part of Vanguard Group Inc.
The firm has maintained a major presence in the world of investment management since its founding.
“We are probably the dominant Pennsylvania-based firm in the investment management space,” said Bruce Leto, chair of the firm’s investment management and mutual fund practice. “The investment management legal industry was really born in Philadelphia and Boston, and we were right there. We have maintained a very vibrant investment management practice since 1927.”
Stradley Ronon’s strength in the investment management field is evident in its representation of the Philadelphia-based Delaware Investments, which controls more than $180 billion worth of assets. The firm began representing the company since its founding in 1935 and has continued to serve as counsel through three buyouts, including the company’s 2009 acquisition by the Australia-based Macquarie Group for $428 million.
“Macquarie had a small presence in the United States with a couple of investment management interests,” Leto said. “When they acquired Delaware Investments, it became their largest U.S. holding.”
Officials said that the firm’s expertise in counseling investment management entities gave Stradley Ronon a uniquely broad base in the Philadelphia legal market and made it better able to weather the vicissitudes of the economy.
“Unlike most firms that are relying on a strong litigation department, which we have, or a strong business department, which we also have, we also have the investment management group,” Boyle said. “We’re basically supported by three strong legs as opposed to two, which really helps us.”
With a solid foundation, Stradley Ronon has been able to provide thorough representation for many of Pennsylvania’s biggest companies in their most high-profile transactions.
The firm has been intimately involved in representing the manufacturer of one of the region’s most iconic snack brands: Tastykake.
After losing money for several consecutive years and seeing its stock price shrink dramatically, the Philadelphia-based Tasty Baking Co. engineered a deal to sell itself to Georgia-based Flowers Foods for $165 million in 2011. Stradley Ronon, which had represented the company for years in the litigation and corporate counseling realms, helped to make sure the deal got done.
“We handled the entire sale and everything leading up to it,” Sasso said. “Even though it was a small, publicly owned company, this was one of the most sophisticated management teams that I’ve ever seen in action.”
Even after the deal with Flowers, Sasso said, the firm continued to handle legal work for the company.
“We continue to do work involving their distribution network and some employee relations matters as well,” he said.
In addition to representing the company in its sale to Flowers, Stradley Ronon has helped the company to construct its new corporate headquarters in the former Philadelphia Navy Yard.
“We did all that work from real estate, to assisting with state grants and city grants, working out the financing, and reviewing the construction contracts,” he said.
The firm’s work for Tasty Baking shows the breadth of services Stradley Ronon strives to offer for clients both in Pennsylvania and abroad.
“We always try to stay on the cutting edge of what our clients need,” he said. “I can’t think of any area where we haven’t developed a practice area to serve that need for our client.”
In addition to representing businesses in major transactions, the company has also handled major litigation on behalf of branches of the state government.
In October the firm helped win a victory at the Pennsylvania Supreme Court on behalf of the state’s General Assembly, in a case challenging the constitutionality of a law giving counties the latitude to abolish their elected jury commissioner posts.
The justices rejected arguments raised by the Pennsylvania State Association of Jury Commissioners claiming that the 2013 law illegally allowed the executive and legislative branches to usurp the power of the judicial branch.
The ruling put an end to a lengthy run of litigation and legislation over the position of jury commissioners, who historically handled the administration of jury selection in Pennsylvania's courts, before judicial reforms in the late 1970s gave the state's president judges power to reassign these duties to court staff.
The firm has also been tapped to represent the Pennsylvania Insurance Department in a dispute with Warrantech Consumer Product Services Inc. as part of the liquidating of the defunct Reliance Insurance Co. The firm helped the department prevail on claims before the Pennsylvania Commonwealth Court that state statute barred the insurer from covering claims on consumer product warranties that were made after Reliance entered liquidation in 2001.
The firm said that the decision reduced Warrantech’s $12 million claim against the insurer to only $700,000.
Sasso said that the firm strived to be bipartisan in a state where many firms pledge allegiance either to Democrats or Republicans.
The firm’s lack of a clear political leaning is evident in the names of several prominent attorneys who have held positions with Stradley Ronon over the years. While the firm boasts Mark Schweiker, the state’s former Republican governor, as a senior adviser, it also employs former Democratic state Rep. Josh Shapiro. Shapiro, who currently serves as chair of the Montgomery County Board of Commissioners, has been named a rising star among Pennsylvania Democrats by MSNBC political pundit Chuck Todd.
In addition to litigating on behalf of state entities, Sasso said, the firm has been involved in trying to foster the natural gas industry in Pennsylvania. Stradley Ronon was involved in helping an advisory committee commissioned by Gov. Tom Corbett following his 2010 election to determine ways to best deal with the natural gas boom.
“We were involved in it from the very beginning because of our government affairs relationships,” Sasso said. “From the very beginning of the whole expansion of the natural gas industry, we developed along with it.”
“I can tell you that our activity has increased dramatically from companies coming from overseas looking for manufacturing locations in an area where energy is expected to be much cheaper,” he said. “We’re able to tout Pennsylvania as very probably the next major energy state. We sell that to these companies who are looking to relocate.”
He added that he believed the energy industry would continue to fuel massive expansion of the state’s economy at large and of the legal industry in Pennsylvania.
“Energy is going to continue to be a very hot area. It’s really just beginning in Pennsylvania,” he said. “When we get the right kind of infrastructure in place, especially a pipeline that will bring the natural gas from the central and western part of the state to Philadelphia for export, you’re going to see a tremendous boom with manufacturing concerns.”