Union Pacific Railroad Co. v. U.S. Dept. of Homeland Security, et al., No. 12-2143 (8th Cir. 2013)
Annotate this CaseCBP imposed almost $38 million in penalties against UP under the Tariff Act of 1930, 19 U.S.C. 1584(a)(2), after finding illegal drugs secreted on trains brought to the U.S. border by Ferromex or KCSM, both Mexican railroads. The district court found that CBP lacked statutory authority to penalize UP and found in UP's favor. The government appealed. The court rejected CBP's constitutionally suspect contention that the Act authorizes the heavy fines at issue in this case; the statute does not authorize penalties against UP for drugs found on railcars UP neither owned nor controlled; and the statute did not authorize CBP to require UP, as a common carrier, to do more than reasonably possible to prevent Mexican drug cartels from hiding drugs on trains UP did not control in a country in which UP had no operations. The court concluded, however, that the district court's imprecise injunction must be corrected. Accordingly, the court affirmed in part, vacating only the injunction.
Court Description: Civil case - Injunctions. In an appeal challenging the district court's decision to set aside the Customs and Border Protection agency's imposition of almost $38 million in fines against Union Pacific based on the agency's seizure of illegal drugs secreted in trains brought across the U.S.-Mexico border by two Mexican railroads, the district court did not err in setting aside the fines as the agency lacked authority under the Tariff Act - 19 U.S.C. Sec. 1584(a)(2) - to impose fines against Union Pacific for drugs found on railcars it neither owned nor controlled; however, the district court's injunctive order enjoining the agency from penalizing Union Pacific "until such time as regulations permitting such action are properly promulgated" must be set aside because the Tariff Act does not authorize the agency to penalize Union Pacific for illegal drugs found in cars it does not own or control and no regulation could be "properly promulgated" to authorize such penalties; on remand, the district court should only enjoin the agency from penalizing Union Pacific for illegal drugs found on railroad cars it neither controls nor owns.
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