In the cross-appeals of a $246,975,614 judgment won by New York State and New York City, amici curiae have filed briefs in support of the United Parcel Service, Inc., (“UPS”). The case is New York v. UPS, Nos. 17-1993, -2107, -2111 (2d Cir.).

The amici curiae have focused on the judgment amount and several aspects of the underlying liability determinations. As might have been expected, the most salient issue raised involves the constitutional implications of the lower court’s overwhelming award of penalties – which accounted for just under 95% of the State’s award and more than 99% of the City’s.

Filing in support of the carrier as amici curiae were the Cigar Association of America, Inc.; the U.S. Chamber of Commerce; the American Trucking Associations, Inc.; the State of Louisiana; the State of Arkansas; the Commonwealth of Kentucky; and the Washington Legal Foundation. Each has offered a unique perspective on the issues:

  • the Cigar Association of America has stated that the “grossly excessive and unnecessary award in excess of $247 million threatens to have a dramatic impact on this legal and commercially important activity,” noting that “a similar lawsuit in a case brought against a UPS competitor – unrelated to cigar delivery – led the company to discontinue that part of its business;”
  • the American Trucking Associations has argued that the theory behind the district court’s liability determination will upset Congress’ broad policy that carriers abide by nationally-uniform practices and has also contended that the lower court effectively read-out the necessary element of “knowledge” by “penaliz[ing] UPS for carrying tens of thousands of packages that, to this day, no one actually knows contained cigarettes, because the plaintiffs offered no evidence of their contents;”
  • the U.S. Chamber of Congress has addressed the substantive due process limitations that should have been applied to the lower court’s penalty determinations and has also argued a procedural due process violation insofar as the lower court “increased the punishment because UPS did not accept responsibility and instead exercised its right to contest the claims at trial;”
  • the State of Louisiana, the State of Arkansas, and the Commonwealth of Kentucky have assailed the penalties as unlawful takings without due process and unlawfully-excessive fines, and they also raise potential equal-protection implications insofar as the precedent might lead carriers to act more circumspectly with regard to Native American shippers; and
  • the Washington Legal Foundation has addressed the excessiveness of the lower court’s penalties under the federal common law, the Due Process Clause, and the Excessive Fines Clause, while also noting that UPS’s corporate wealth cannot serve as an excuse for these constitutional violations.

The briefs of New York State and New York City are to be filed by February 21, 2017. Meanwhile, a similar case, New York v. FedEx Ground & Package System, Inc., No. 13-cv-9173 (S.D.N.Y), remains pending before a different Judge of the U.S. District Court for the Southern District of New York.

Stay tuned for further developments.