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applied.34 Nevertheless, petitioner made no attempt to analyze
the issue or obtain legal advice before deciding to restructure
the EVC part of its business. This leads us to believe that
petitioner's interjection of NUF and OPL into its excess value
activities in 1984 was not done in order to avoid running afoul
of State insurance laws and regulations.35
34Petitioner has not attempted to draw a distinction between
concerns about interstate versus intrastate matters. According
to the testimony of petitioner's former chairman and C.E.O., in
excess of 75 percent of petitioner's volume in 1984 consisted of
interstate shipments and 98 percent of petitioner's volume in
1984 consisted of ground transportation. As previously
indicated, petitioner obtained authorization for its pre-1984 EVC
activities from the required State transportation authorities,
and no State had asserted that petitioner was not in compliance
with State insurance law.
35As stated by Dr. Shapiro in his expert report:
Assuming the risk of state regulation was real,
abandoning a profitable business because of this risk
is equivalent to burning down the barn to get rid of
the rats. Even if you solved the problem, the price
was too high.
* * * * * * *
Based on my business experience, it is my
strongly-held opinion that a company would not walk
away from such a valuable business on a mere suspicion
that it might be subject to an added risk of
regulation. Rather, in such a situation, the company
would first meet with legal counsel to get an opinion
as to the likelihood and business consequences of such
regulation. Next, it would analyze the financial
impact of such regulation and explore how it might be
able to legally avoid, minimize, or delay the impact of
any potential regulation. * * * [Fn. ref. omitted.]
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