UPS Has to Pay Expensive Fine for Shipping Unreported Cigarettes

ups truck

UPS wants to appeal an extremely punitive ruling for its decision to ship unreported cigarettes.

On Thursday, a federal judge ruled against UPS Inc. in a lawsuit between the delivery giant and New York City. The defendant has to cover $247 million in settlement now. This case concerned several shipments of the company of unreported cigarettes. As a consequence, the assets crossed the border without the necessary taxes.

UPS Is Ready to Appeal the Court’s Decision

U.S. District Judge Katherine Forrest applied one of the most expensive penalties in a civil case on Thursday. The Manhattan court discovered that the company was aware of the situation. Despite this, the officials decided to continue allowing their brown trucks circulate in New York City. The vehicles carried unreported cigarettes from Indian reservations.

The United Parcel Service showed disappointment in regards to the court’s decision. Spokespersons declared that they are ready to appeal the ruling because of an excessive monetary fine. Moreover, the company believes that the court outreached its constitutional rights. On top of that, the company explained in an email that the goods generated $1 million in revenue. This implies generous success for the state itself.

The Court Sought to Punish Shipments of Unreported Cigarettes and Correct a Moral Issue

The state Attorney General and city Law Department opened the case in February 2015. The allegations concerned around 78,500 shipments of unreported cigarettes coming from Indian reservoirs. By entering the market untaxed, the state lost a total of $35 million funds.

The punitive funds will go to both New York State and New York City. The New York state is going to receive $165 million while the latter will get $81 million. Certain court submissions that both parties had to file showed a lack of cooperation on behalf of UPS. This disrespectful demeanor contributed to the final verdict. The court didn’t avoid to point that out. Authorities declared that the company refused to acknowledge some serious wrongdoings.

As such, the court deliberately appointed a large sum of money in a penalty. The judge justified this decision by stating that a gentler punitive condition would not have stirred enough concern for the company itself. Therefore, the ruling served more as a moral lesson for UPS to assume the consequences of its decisions.

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