Union Pacific sues to block $38M in fines tied to drugs discovered in border rail cars
THE ASSOCIATED PRESS
Tucson, Arizona | Published: 08.05.2008

OMAHA, Neb. — Union Pacific Corp. wants a federal judge to set aside nearly $38 million in proposed penalties that a U.S. agency has assessed against the railroad since 2002.
The fines against the railroad are related to 42 incidents when U.S. Customs and Border Protection agents found drugs stashed in rail cars crossing the border between the U.S. and Mexico.
Union Pacific said it does not control the train cars until after they are inspected by customs agents, so it should not be held liable for what happens in Mexico. Most of the Mexican trains Union Pacific handles are controlled in Mexico by its shipping partner Ferrocarril Mexicano, which runs the Ferromex railroad.
At the border, customs agents take control of trains and inspect them before giving Union Pacific control, the Omaha-based railroad said.
"UP was not and cannot be the person in charge of the trains when they were bound to the United States as required by the statute," the railroad said in the lawsuit.
A customs spokesman said the agency does not comment on pending litigation. But Union Pacific included several letters from customs officials as exhibits for its lawsuit, and those letters offer some insight into the agency's position.
Charles Ressin, who is chief of the customs agency's penalties branch, said in a March letter that Union Pacific is responsible for the accuracy of the manifest when it is presented to agents at the border. So Union Pacific should ensure the cars are inspected in Mexico to make sure no contraband is hidden aboard.
Ressin said that if Union Pacific itself can't inspect the Mexican trains it should work with its shipping partners to hire an outside security firm to conduct inspections, much like U.S. air and sea carriers do in similar high-risk areas.
Marijuana accounts for nearly all of the 4,514 pounds of drugs agents found in the incidents Union Pacific described in the lawsuit filed Thursday. Only one of the seizures involved cocaine. About 257 pounds of the drug was found in 2003.
Drugs were often found in false compartments on the rail cars. Thirty-seven of the seizures took place at the Calexico, Calif., crossing. Four happened at Nogales, and one seizure happened at Brownsville, Texas.
In response to Union Pacific's administrative protests, the customs agency has cut the fines to about 10 percent of the original amount. But the agency has refused to dismiss all the $37.8 million in proposed fines, saying Union Pacific was negligent.
Union Pacific said customs inspections themselves often leave the trains vulnerable. While agents check the Mexican railroad crew's paperwork, rail cars can stretch back into Mexico and sit unprotected. Some trains are two miles long.
Union Pacific said it owns 26 percent of Ferrocarril Mexicano but does not control the Mexican company and cannot force it to make drug interdiction efforts. Mexican mining and railroad company Grupo Mexico controls Ferrocarril Mexicano and Ferromex.
Union Pacific operates 32,400 miles of track in 23 states from the Midwest to the West and Gulf coasts. The railroad interchanges trains with Mexican railroads at six different border crossings.

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