New York v. United Parcel Serv., Inc.
Decision Date | 24 March 2017 |
Docket Number | 15-cv-1136 (KBF) |
Parties | THE STATE OF NEW YORK and THE CITY OF NEW YORK, Plaintiffs, v. UNITED PARCEL SERVICE, INC., Defendant. |
Court | U.S. District Court — Southern District of New York |
OPINION & ORDER
I. INTRODUCTION .................................................................................................. 1
II. PROCEDURAL HISTORY .................................................................................... 3 A. Pre-Trial Proceedings ....................................................................................... 3
B. The Trial ........................................................................................................... 8
III. FINDINGS OF FACT ............................................................................................ 9 A. Public Health Issues Associated with Cigarettes ............................................ 9
B. Plaintiffs' Investigations of UPS .................................................................... 10
C. UPS's Business ............................................................................................... 13
D. UPS's Business and Specific Conduct ............................................................ 19
E. UPS's Asserted Reliance on Governmental Action/Inaction ........................ 32
F. UPS's Audits ................................................................................................... 37
IV. CURRENT STATUS OF UPS'S COMPLIANCE EFFORTS ............................. 40
V. BACKGROUND CONCERNING THE TAXATION OF CIGARETTES AND LITTLE CIGARS ................................................................................................. 43
VI. THE PACT ACT ................................................................................................... 45
VII. CONSUMPTION OF TOBACCO PRODUCTS .................................................. 46 A. Cigarettes ........................................................................................................ 46
B. Little Cigars .................................................................................................... 48
VIII. CERTAIN COMMON EVIDENCE ..................................................................... 51 A. The Fink Accounts .......................................................................................... 51
B. The Non-Compliant Lists ............................................................................... 53
C. The "Tobacco Watchdog Group" Letter .......................................................... 56
D. Inquiries Regarding Lost or Damaged Packages .......................................... 58
E. The Cigarettes Shipped Were Unstamped .................................................... 62
IX. SHIPPERS AT ISSUE ......................................................................................... 63 A. Overview of the Shippers and the Court's Findings ..................................... 63
B. Liability Shippers ........................................................................................... 67
C. Shippers as to Which There Is Only AOD Liability .................................... 109
D. Shipper as to Which There Is No Liability .................................................. 115
X. CONCLUSIONS OF LAW ................................................................................. 118
A. The AOD ........................................................................................................ 119
B. Interpretation of the AOD ............................................................................ 128
C. Violations of the AOD ................................................................................... 129
D. Violations of the Audit Obligation Under the AOD .................................... 134
E. Whether the AOD Was "Honored" ............................................................... 140
XI. KNOWLEDGE ................................................................................................... 144 A. Knowledge ..................................................................................................... 145
B. Imputation of Knowledge ............................................................................. 150
C. Presumptions of Knowledge for Common Carriers ..................................... 154
D. Knowledge as to Each Shipper ..................................................................... 155
XII. LIMITATIONS PERIOD ................................................................................... 155
XIII. THE PACT ACT ................................................................................................. 158
XIV. PHL 1399-LL ..................................................................................................... 162
XV. THE CCTA ......................................................................................................... 165
XVI. PREEMPTION ................................................................................................... 171
XVII. UPS'S REMAINING DEFENSES ................................................................... 175 A. Unclean Hands/In Pari Delicto .................................................................... 175
B. Waiver ........................................................................................................... 177
C. Public Authority and Estoppel ..................................................................... 178
XVIII. DAMAGES ...................................................................................................... 182 A. UPS's Pre-Trial Damage Disclosure ............................................................ 183
B. Legal Principles Regarding Damages .......................................................... 189
Table of Contents
1. Sweet Seneca Smokes ............................................................................... 115
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