Union Pacific: Court fight over $61M in fines for drugs on trains continues after talks fail

Talks break down over fines for drugs on trains

OMAHA, Neb. — The long-running dispute between Union Pacific Corp. and the federal government about restricting drug smuggling on trains crossing from Mexico returned to court Thursday after the railroad said settlement talks over the $61.2 million in fines fell apart.

The railroad asked a federal judge in Omaha to set aside the fines and declare that Union Pacific isn’t responsible for its train cars until after they cross the border.

The fines are linked to at least 40 incidents since 2002 when U.S. Customs and Border Protection agents found drugs stashed in railcars crossing the border between the U.S. and Mexico. The U.S. government also has seized 24 railcars.

“The law requires UP to act on only what we can control. We expect the court will agree that it is impossible for UP to prevent drugs from being smuggled onto Mexican trains,” said Bob Grimaila, Union Pacific’s vice president of security.

Justice Department spokesman Charles Miller said the department does not comment on pending litigation.

But Justice Department officials previously have said the railroad should do more than it has to ensure the safety of its cargo and that Union Pacific is responsible for verifying the nature of what it is bringing into the U.S.

Union Pacific’s lawsuit in Omaha is one of three related to the dispute that have been on hold for a year while settlement talks progressed; the Justice Department has filed federal lawsuits in Houston and San Diego seeking to the collect fines and penalties.

In court documents, the Justice Department has defended the fines levied against Union Pacific as reasonable.

Customs and Border Protection agents found at least 4,514 pounds of marijuana hidden on Union Pacific trains, and on at least one occasion about 257 pounds of cocaine was also found.

The drugs are often found in false compartments on the railcars. Thirty-seven of the seizures took place at the Calexico, Calif., crossing. Four happened at Nogales, Ariz., and one seizure happened at Brownsville, Texas.

Union Pacific says customs inspections themselves often leave the trains vulnerable. While agents check the Mexican railroad crew’s paperwork, railcars 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 said it is not practical for the railroad to patrol trains in Mexico because its security officers have no authority there and cannot carry guns. Plus, drug trafficking is a dangerous business.

Railroad officials say that despite the legal dispute with the federal government, Union Pacific continues to work well with Border Protection agents. The Omaha-based railroad even built and donated a building for the agency to use for rail inspections near Eagle Pass, Texas.

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.

On the Net:

Union Pacific Corp.: www.up.com

Ferromex railroad: www.ferromex.com.mx

U.S. Customs and Border Protection: www.customs.gov