U.P. asks court to overturn $61 million in drug fines
(The following story by Joe Ruff appeared on the Omaha World-Herald website on April 17, 2010.)
OMAHA, Neb. Fighting nearly a decade of fines exceeding $61 million and the seizure of 24 railroad cars, Union Pacific Corp. asked a judge Thursday to stop the government from levying penalties for illegal drugs found on trains coming from Mexico.
Is Union Pacific an owner and operator or person in charge of a Mexican train as it approaches the (U.S.) border? asked William Lamson, an attorney for the railroad. We are not, and Customs and Border Protection should not be fining us, seizing railroad cars.
Union Pacifics arguing that the judge should rule on the case without a trial is the latest development in a lawsuit the railroad filed against the Department of Homeland Security in Omahas U.S. District Court in July 2008. The company said it filed the suit after trying to reach a settlement with the government over nearly $38 million in fines levied between 2001 and 2006.
The fines have continued to pile up since the filing of that lawsuit, with the government assessing an additional $23 million in penalties, the latest in April 2009.
No other railroad has been assessed fines at that level, which U.P. attributes to its being the largest shipper of goods by rail across the Mexican-U.S. border.
Eight months after Union Pacific filed its lawsuit in Omaha, government attorneys asked the court to dismiss the case, or to transfer the arguments to cases in three other states. Among their arguments was that U.P. was shopping for a favorable forum in which to have the case heard.
The court hasnt ruled on that request, and Union Pacific objects to dismissal of its case, arguing that it is more efficient to have one court handle the arguments.
The governments lawsuits against the railroad were filed in Texas, Arizona and California federal courts. Each case is different and more appropriately handled in the states involved, the government states.
At the core of the dispute is whether Union Pacific aggressively combats the use of railroad cars for drug trafficking.
U.P. says it cooperates with authorities, spends $3.6 million a year on its own 29-officer police force and canine patrol at the border, and has spent $72.5 million over the last decade on inspection towers, fencing, lighting and new technology.
The company will introduce a pilot program in June in Eagle Pass, Texas, that will use imaging equipment to notify rail and border patrol officials when a rail car door is open, when unauthorized personnel could be on the train, or when something could be attached to a rail car.
We are being fined for things we do to the tune of $3.6 million a year, said Dennis Jenson, who heads the railroads 224-officer police force. Union Pacific is being asked to solve problems the government has not been able to solve.
The government, however, argues that Union Pacific should inspect rail cars in Mexico or hire an outside security company and work more closely with its business partner, the Mexican railroad Ferrocarril Mexicano (Ferromex).
Twenty-six percent of Ferromex is owned by U.P., which says it has encouraged the Mexican company to improve its drug interdiction programs.
But Union Pacific has no operational authority over the Mexican railroad, officials said, and U.P. doesnt take control of a train until Ferromex delivers it to customs officials, who inspect it and then release it to Union Pacific.
Union Pacific officials said a security operation in Mexico, whether conducted by U.P. employees or a third-party contractor, would expose those people to the risk of violence at the hands of Mexican drug cartels.
One member of U.P.s police force working in Nogales, Ariz., said violence is increasing on the Mexican side of the border.
Its something that has changed drastically in the last two years, said the officer, who declined to give his name for security reasons. Especially here in Nogales. You didnt see what we are seeing 10 feet away from us the killings, kidnappings and beatings because of the drug trade.
