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Thursday, November 7, 2019

Feds slash UPS' fine for untaxed cigarettes to $97.6M - New York Post

Delivery giant United Parcel Service Inc. only has to cough up $97.6 million in fines for illegally transporting untaxed cigarettes — less than half of what it was previously on the hook for, an appellate court ruled Thursday.

The decision came after a Manhattan federal court judge ordered UPS in 2017 to pay $247 million in damages to the city and state, and the shipping company appealed.

Yet the U.S. Court of Appeals for the Second Circuit slashed that decision, writing in a majority opinion Thursday that the high dollar amount was “far too large a pill to swallow for the conduct at issue here.”

The panel also increased amounts awarded to NYC and New York state, finding that UPS must pay the full amount in unpaid taxes that could have applied to the cigarettes — $17.4 million for the state and $1.4 million for the city.

New York state and New York City sued the Atlanta-based company in 2015, accusing UPS of promoting a corporate culture that favored sales over a responsibility to follow regulations.

“This ruling is a big win for New Yorkers and our public health laws,” NYC Corporate Counsel James Johnson said in a statement. “In upholding millions of dollars in civil fines and doubling the damages award, the court has sent a powerful message to companies:  Do not illegally transport untaxed cigarettes; it will cost you.”

UPS did not immediately return a request for comment.

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Feds slash UPS' fine for untaxed cigarettes to $97.6M - New York Post
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