# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 2- 21 43

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Uni on Paci fic Rai lro ad Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el le e

v.

Uni te d St at es Dep art m en t of Hom el an d Secu rit y ; Ran d Bee rs , in hi s of fic ia l cap aci ty

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el la nt

s

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Uni on Paci fic Rai lro ad Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

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Uni te d S ta te s o f Am eri ca

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Uni on Paci fic Rai lro ad Co m pa ny

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee__ __ __ __ __ __
App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of Ne br as ka - Om ah a

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Su bm it te d: May 14, 2 01 3
Fil ed : Dec em

be r 12 , 20 13

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Befo re RI LEY, Chi ef J ud ge , MELLOY and SHEPHERD, Circ ui t J ud ge s.

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RILEY, Chi ef J ud ge

.

On th irt y -ei gh t oc cas io ns be twee n 20 01 an d 20 06

, Uni te d St at es Cu st om s an d

Bo rd er Pro te ct io n (CBP ), a co m po ne nt of th e U.S. Dep art m en t of Hom el an d Secu rit y (DHS), fo un d il le ga l dr ug s se cret ed on tra in s br ou gh t to th e U.S. bo rd er by Ferr oc arri l

Mex ic an o S.A. de C.V. (Fer ro m ex ) or Kan sa s Ci ty So ut he rn de Mex ic o S.A. de C.V.
(KCSM ), bo th Mex ic an rai lro ad s. Alt ho ug h th e U n i on Paci fic Rai lro ad Co m pa ny (UP) di d no t co nt ro l th e tra in s be fo re th ei r arri va l at th e U.S. bo rd er or ev en du rin g 1

th e ti m e CBP in sp ect ed th e tra in s at th e bo rd er, CBP im po se d al m os t $3 8 m il li on in

pe n a l t i e s ag ai ns t UP—n ot Ferr om ex or KCSM —u nd er th e Tari ff Act of 19 30

, as

am en de d, 19 U.S.C. § 15 84 (a)( 2)

. CBP’s sh ift in g ex pl an at io ns m ak e it di ffi cu lt to

de ci ph er pr eci se ly why CBP th in ks it ha s th e po wer to im po se th es e pe na lt ie s ag ai ns t
UP, bu t th e go ve rn m en t’s pr es en t po si ti on ap pe ars to be th at UP is li ab le be cau se UP
(1 ) own ed so m e of th e in di vi du al rai lc ars in whi ch CBP fo un d il le ga l dr ug s an d
(2 ) fo rward ed el ect ro ni c m an ife st in fo rm at io n t o CBP, whi ch do es no t acce pt

el ect ro ni c m an ife st s d ire ct ly from Mex ic an rai lro ad s.

In di vi du al tra in s arri ve d at bo rd er cro ss in gs in Cal ifo rn ia

, Ariz on a, an d Tex as

. 1

-2

-Afte r ex ha us ti ng it s ad m in is tra tiv e re m ed ie s, U P ch al le ng ed th e pe na lt ie s in th e
di st ric t co ur t be lo w, in vo ki ng th e Fi fth an d Eig ht h Am en dm en ts to th e Co ns ti tu ti on ,

an d th e Adm in is tra ti ve Pro ced ur e Act (APA), 5 U.S.C. § 70 6( 2) (A). The go ve rn m en t

se pa rat el y fil ed en fo rcem en t acti on s, whic h were co ns ol id at ed wit h UP’s su it in th e
di st ric t co ur t. U P mo v e d f or su m m ary jud gm en t, an d th e go ve rn m en t m ov ed fo r jud gm en t on th e ad m in is tra ti ve reco rd

. Fi nd in g CBP la ck ed s t a t u t o r y au th or it y to

pe na li ze UP an d th e pe na lt ie s wer e arb it rary and cap ric io us , t he di st ric t co ur t ru le d

in UP’s fav or an d en

joi ne d th e go ve rn m en t fro m pe na li zi ng UP fo r sm ug gl ed dr ug s

un ti l t he ag en cy

“ pr op erl y

pro m ul ga te d” reg ul at io ns au th or iz in g s uc h p en al ti es

.

The go ve rn m en t ap pe al s. W e reject CBP’s co ns ti tu ti on al ly su sp ect co nt en ti on

th at th e Tari ff Act au th or iz es th e he av y fin es at is su e in th is cas e. The st at ut e do es

no t au th or iz e pe na lt ie s ag ai ns t UP fo r dr ug s fo un d on rai lc ars UP ne it he r own s no r

co nt ro ls

. And th e st at ut e cert ai nl y do es no t au th or iz e C B P to req ui re UP, as a

co m m on carr ie r, to do m or e th an reas on ab ly po ss ib le to pr ev en t Mex ic an dr ug cart el s

fro m h i d i n g d r u g s on tra in s UP do es no t co nt ro l in a co un try in whi ch UP ha s no

op erat io ns

. Howev er, th e di s t r i c t co ur t’s im pr eci se in jun ct io n m

us t be co rrec te d.

Hav in g juri sd ic ti on un de r 28 U.S.C. § 12 91

, we affi rm in p a r t, va cat in g on ly th e

in jun ct io n.

I. BACKGRO UND

A. Fac ts

UP is an Om ah a, Neb ras ka

, ba se d co m m on carr ie r wit h no rai lro ad op erat io ns

in si de Mex ic o, no c o n t r ol ov er th e Mex ic an rai lro ad s th at br in g tra in s to th e U.S. 2

bo rd er, no po wer to di rect th es e Mex ic an rai lro ad s’ em pl oyees, an d no le ga l au th or it y

to se cu re or se arch tra in s in si de Mex ic o. Nor can UP se arch tra in s at th e bo rd e r
be fo re CBP co nd uc ts it s in sp ect io n: CBP refu se s to al lo w su ch s e a r c h e s by UP.

Alt ho u g h U P o w n s a m in or it y st ak e (2 6%) in Ferr om ex , th e pr iv at el y he ld 2

Mex ic an co rp or at io n wh ic h o wns th e rem ai ni ng 74 % so le ly con tro ls Ferro m ex

.

-3

-In st ead

, CBP ta ke s cu st od y of Mex ic an tra in s at th e bo rd er, in sp ect s th em , se nd s th e

Mex ic an lo co m ot iv es wit h th ei r Mex ic an crews ba ck to Mex i c o , a nd

, whe n th is

pr oc es s is co m

pl et ed

, al lo ws UP to ta ke cu st od y of th e tra in s. UP, as a c o m m on

c a r r ie r, acce pt s th es e tra in s an d de li ve rs th em to th ei r de st in at io ns in th e Uni t e d

St at es

.

D e s pi te th es e li m it at io ns , UP wor ks to pr ev en t Mex ic o’s dr ug cart el s fro m

s mu gg li ng dr ug s in to th e Uni te d St at es

. Thro ug ho ut it s rai lro ad ne two rk

, U P

em pl oys m or e th an 20 0 co m

m is si on ed po li ce of

fic ers , 30 0 co nt ract se cu rit y of fic ers ,

an d ni ne can in e dr ug de te ct io n te am s. A t t h e Te xa s, Cal ifo rn ia

, an d Ariz on a

in te rn at io na l bo rd ers al on e, UP sp en ds ap pr ox im at el y $2 .4 m il li on an nu al ly on sa la ry

an d be ne fit s fo r it s se cu rit y te am s. At it s own co st

, UP ha s bu il t nu m ero us bu il di ng s

fo r CBP’s us e, in cl ud in g cam era an d in sp e c ti on to wers an d an of fic e bu il di ng , an d

in st al l e d a d v an ced sc reen in g m ach in es at th e bo rd er. UP was th e fir st rai lro ad to

en te r CBP’s “La n d Bo rd er Carr ie r In it ia ti ve Pro gr am ” an d “ Cu st om s- Trad e

Part ne rs hi p Ag ai ns t Terr or is m ,” an d is al so a m em be r of va rio us ot he r pa rtn ers hi ps
be twee n th e fe de ral go ve rn m en t, st at e an d lo cal go ve rn m en ts

, an d pr iv at e

tra ns po rta ti on fir m s. UP ha s pe rs u a d e d F e rro m ex to in crea se it s se cu rit y m eas ur es

in Mex ic o, ev en th ou gh dr ug rel at ed sa f e t y c on cern s in Mex ic an bo rd er to wns
dr as ti cal ly lim it Ferro m ex ’s abi li ty to p ro te ct U.S.-bo un d t rai ns

. 3

See, e.g ., Ju ne S. Bei tt el

, Co ng

. Res earc h Serv

., R4 05 82

, Mex ic o’ s D ru g- 3

Rel at ed Vio le nc e 10 (2 00 9) (“ The vi ol en ce in Mex ic o ha s in cl ud ed th e as sa ss in at io n of hi gh le ve l go ve rn m en t of fic i a l s as well as gr ue so m e m ur de rs (o fte n carr ie d ou t wit h ga ris h on e-u pm an sh ip ) an d ki dn ap pi n g s

. ” ) ; Dav id Luh no w et al

., Ju st an Ord in ary Day of Deat h in Mex ic o’s W ar on Dru g Traffi ck ers , W al l St

. J., Aug us t 27

, 2 0 1 1

, at A1 (“ The pa ce of [d ru g rel at ed ] ki ll in gs is es cal at in g. Mo re th an h a l f t h e de ad

, 22 ,00 0, were ki ll ed in th e p a s t 18 m on th s, a ra te of on e ever y 35

min ut es

. . . . Pl aces li ke Ci ud ad Ju arez , o n e of th e m os t vi ol en t ci ti es in th e wor ld

, ke ep a ta ll y of th e de ad

. Bu t in ot he r p a r t s o f M ex ic o, th e m ur de rs aren ’t ev en

co un te d u p.” (em

ph as is ad de d) ).

-4

-In sp it e of th es e fact s, CBP im po se d a l mo s t $3 8 m il li on in fin es ag ai ns t UP

aft er fin di ng il le ga l d r ug s hi dd en on Mex ic an tra in s arri vi ng at th e U.S. bo rd er.

Acco rd in g to CBP, UP was li ab le fo r th e il le ga l dr ug s ev en th ou gh UP ha d no co nt ro l

o v e r t h e tra in s un ti l aft er CBP di sc ov ered th e il le ga l dr ug s. By UP pr es en ti ng t h e

Mex ic an m an ife st s in th e Uni te d St at es , CBP as se rts UP “ is res po ns ib le fo r [th e

m an ife st s’] accu racy,” an d “ it is in cu m be nt up on [UP] to en su re th at th e rai lc ars are

in sp ect ed in Mex ic o.” CBP co nc ed es UP ha d no kn owl ed ge of th e dr ug s, whi ch were

hi dd en in rai lc ar “ sp in es ” (i.e

., an area ou ts id e th e lo ck ed carg o ho ld )

, in ex po se d

ch ut es , un de r ex te rio r pl at es , or i ns id e ta nk cars . Alth ou gh UP m ay ha ve own ed as

m an y as el ev en of th e nu m ero us rai lc ars in vo lv ed

, t h es e rai lc ars were pu ll ed by 4

Mex ic an lo co m ot iv es an d th e tra in s were crewe d by th e Mex ic an rai lro a d s’

em pl oyees.

CBP’s pr op os ed f

i n e s a ga in st UP ran ge d fro m $1 6,5 79 to m or e th an $8 .2

m il li on pe r in ci de nt

. CBP ev en fin ed U P $ 6 5 5

, 21 5 fo r an in ci de nt on Mar ch 30

, 20 04

, in whi ch UP it se lf, wor ki ng wit h U.S. Im m ig rat io n an d Cu st om s Enfo rcem en t (ICE) age nt s, fou nd il le ga l dr ug s th at CBP m is se d. Tha t m or ni ng , a Ferr om ex tra in

reac he d th e U.S. bo rd er at Cal ex ic o, Cal ifo rn ia

, an d CBP pe rs on ne l co nd uc te d th ei r

ro ut in e in sp ect io n: th ey fo un d no th in g, cl eare d th e t r a i n , an d le ft. Bu t a UP po li ce

of fic er who was wor ki ng w i t h a n I CE ag en t de ci de d, ba se d on a ti p, to in sp ect th e

tra in ’s no n- pr es su riz ed ta nk car s

. The UP of fic er, se ei ng si gn s th at so m eo ne ha d

The go ve rn m en t as se rte d in th e di st ric t cou rt th at UP own ed te n or el ev en of 4

th e rai lc ars at is su e , b u t d i d no t sp eci fy th e ex act nu m be r in it s ap pe ll at e br ie f. At

arg um en t, UP es ti m at ed it own ed se ve n of th e rai lc ars

. The reco rd ci ta ti on s pr ov id ed by th e go ve rn m en t po in t to so m e rai lc ar nu m be rs be gi nn i n g w i t h “ UP” an d ot he rs wit h di ffer en t le tt ers

. W e can no t de te rm in e fro m t h e reco rd whe th er th es e ot he r le tt ers m ean th e rai lc ars are own ed b y U P t h ro ug h su bs id ia rie s, le as ed by UP fro m
ot he r e n t i t i e s , or no t own ed by UP at al l, fo r ex am pl e, own ed by UP’s cu st om ers

. The refo re, we m

us t ag ree wit h UP th at th e go ve rn m en t ha s no t “p r o v id ed

. . . th e

reco rd ci ta ti on s an d [o th er in fo rm at io n]

. . . ne ed [ed ] to id en ti fy whi ch [rai l]cars were

own ed by U P.”

-5

-ta m

pe red wit h on e of th e ta nk cars ’ do m es , ob ta in ed a wren ch t o o p e n th e do m e.

In si de

, th e UP of

fic er an d th e ICE ag en t fo un d two la rg e ba gs of m ari juan a weig hi ng

37 .15 ki lo gr ams ( 8 1 .73 po un ds ). The ICE ag en t co nt act ed CBP, whi ch di sp at ch ed

two off ic ers to th e tr ai n. Th e UP o ffi cer a nd on e o f th e CBP off ic ers th en rem ov ed

t h e ba gs fro m th e tra in an d pl aced th em in CBP cu st od y

. Des pi te UP’s di li g e n c e , CBP im po se d a fin e ag ai ns t UP. CBP ha s ne ve r ex pl ai ne d why UP’s act iv e ro le in

un co ve rin g t he m ari

juan a was no t en ou gh to ab so lv e UP o f li ab il it y

.

B. Adm in is tra tiv e Pro ceed in gs

UP in it ia ll y so ug ht an ad m in is tra ti ve rem ed y , ch al le ng in g CBP’s au th or it y to

im po se th e pe na lt ie s an d, al te rn at iv el y , req ue st in g co m pl e t e mi ti ga ti on of al l

pe na lt ie s. In a se rie s of bo il erp la te de ci si on s, CBP reaf fir m ed it s po wer to im

po se th e

pe na lt ie s bu t, wit h li tt le ex pl an at io n, of fere d to red uc e th e pe na lt ie s by 90 -9 5% if UP

pa id wit hi n 60 da y s. See 19 C.F.R. § 1 7 1

. 22

. CBP co nc lu de d UP m us t “ en su re

rai lc ar i ns pe ct io n i n M ex ic o.”

U P ex pl ai ne d it was no t reas on ab ly po ss ib le fo r UP em pl oyees to in sp ect

Mex ic a n t r ai ns in si de Mex ic o. Safe ty ris ks in Mex ic o are so se ve re th at th e U.S.
Dep art m en t of Agr ic ul tu re, whi ch fo rm erl y in sp ect ed U.S.- b o u n d tra in s on th e

M e xi can si de of th e bo rd er, ha s wit hd rawn it s pe rs on ne l fro m Mex ic o fo r se cu rit y

reas on s an d ceas ed in sp ect io ns

. If UP di sp at ch ed it s se cu rit y pe rs on ne l in to Mex ic o,

th ey “ wou ld no t be pe rm it te d to carr y fir earm s fo r pr ot ect io n, wou ld no t be pe rm it te d

to m ak e arre st s, an d co ul d ev en r i s k a r r es t th em se lv es —i f th ey f[o un d] dr ug s— fo r

po ss es si ng th e dr ug s.” Bec au se lo cal Mex ic an po li ce are of te n at th e m ercy of vi ol en t

dr ug cart el s, it is li ke ly an y UP effo r t s o n t h e M e x i can si de of th e bo rd er wou ld be

th wart ed by loc al po li ce. 5

Cf., e.g ., Dav id Luh no w et al

., su pr a, at A1 (“ Aut ho rit ie s an d jou rn al is ts in th e 5

no rth ern bo rd er st at e of Tam au li pa s, acro ss fro m Tex as , are so co wed by dr ug ga ng s th at ne it he r pu bl ic ly repo rts dru g- rel at ed ho m ic id es .”).

-6

-CBP co un te red th at it “ do es no t ex pe ct [UP] to crea te a po li ce fo rce in Mex ic o

eq ua l t o it s forc e in th e U.S.[, an d] [i]ns te ad

. . . as k[ s] th at [UP] pr ov id e[] fo r ba si c

ra il ca r in sp e c t io ns in Mex ic o, ut il iz in g [CBP ] tra in in g on th e su bjec t.” “ If [UP]

a l o n e can no t ach ie ve th is ob jecti ve ,” CBP sa id

, “ th en [UP] sh ou ld wor k i n

co nju nc ti on wit h it s bu si ne ss pa rtn er, Ferr om ex , or hi re a th ird -p art y se cu rit y

co nt ract or .” Secu rit y co nc ern s in Mex ic o are so se ve re— an d lo cal p o l i c e s o

in effe ct iv e in th e face of he av il y arm ed dr ug cart el s— th at Ferr om ex m us t rel y on th e

Mex ic an mil it ar

y to pr ev en t dr ug sm

ug gl in g on it s tra in s. Ferr om ex tra in s bo un d fo r

th e Uni te d St at es are se arch ed two or t h r e e ti m es by th e Mex ic an m il it ary be fo re

reac hi ng th e bo rd er. Non e of CBP’s ad m in is tra ti v e d eci si on s ex pl ai n ho w UP, th e

Mex ic an rai lro ad s, or “ a th ird -p art y se cu rit y co nt ract or ” co ul d acco m pl is h what th e

Mex ic an m il it ary can no t.

Alt ho ug h so m e of CBP’s de ci si on s pu rp or te d to ti e UP’s li ab il it y to it s
el ect ro ni c tra ns m is si on of m an ife st s fro m Ferr om ex an d KCSM

, CBP al so sa id “ [t]he

pe rti ne nt qu es ti on in th is cas e is no t who was res po ns ib le fo r pr es en ti ng th e man if es t

, bu t rat he r, wh e t h e r , a s th e carr ie r, UP[] ex erci se d th e hi gh es t de gr ee of care an d

di li ge nc e in pr ev en ti ng th e dr ug sm ug gl in g in it s rai lc ar[s ]. ” (Em ph as is ad de d)

. The
ph ras e “ hi gh es t de gr ee of care an d di li ge nc e” co m es fro m 19 U.S.C. § 1 5 8 4 ( a ) ( 2 ),

whi ch ex em

pt s fr o m p e na lt y cert ai n co m m on carr ie rs who ex erci se it

. Alt ho ug h
§ 15 84 (a)( 2) do es no t de fin e th e te rm , in 19 88 Co n g r e s s ex pr es sl y di rect ed th e
rel ev an t ag en cy

to ex pl ai n wh at th e p hr as e m ean s:

By no la te r th an th e da te th at is 12 0 da y s aft er th e da te of en act m en t of
th is Act a n d a f

t e r an op po rtu ni ty fo r pu bl ic co m m en t, th e Secr et ary o f
th e Treas ur y sh al l pr es cri be reg ul at io ns whi ch set fo rth cri te ria fo r us e by th e own er, m as te r, pi lo t, op erat or , or of fic er of

, or ot he r em

pl oyee in
ch arg e of

, an y co m m on carr ie r in m eet in g th e st an da rd s un de r se ct io ns 58 4( a)(2 ) an d 59 4( c) of th e Tari ff Act o f 19 30 (1 9 U.S.C. 15 84 (a)( 2)

an d 15 94 (c)) fo r th e ex erci se of th e hi gh es t de gr ee of ca re an d di li

ge nc e

-7

-to kn ow whe th er co nt ro ll ed su bs ta nc es im po rte d in to th e Uni te d St at es

are o n b oa rd th e co m

m on carr ie r.

Ant i-Dr ug Abu se Act of 19 88

, Pu b. L. No

. 1 0 0– 69 0, § 73 69

, 10 2 St at

. 41 81

, 44 81
(em ph as is ad de d)

. Mo re th an two de cad es la te r, ne it he r th e Secr et ary of th e Treas ur y , who in 19 88 was th e cab in et of fic ia l res po ns ib le fo r CBP’s pr ed eces so r ag en cy , no r

th e S e c r e t ary of Hom el an d Secu rit y (Sec ret ary), who no w ov ers ees CBP, ha s

co m pl ie d wi th Co ng res s’s ex pr es s d ire ct iv e. 6

C. Arti cl e II I Pro ceed in gs

O n Ju ly 31

, 20 08

, ha vi ng ex ha us te d it s ad m in is tra ti ve rem ed ie s, UP f i l e d a

co m pl ai nt in th e Dis tri ct of Neb ras ka ag ai ns t DHS an d th e Secr et ary (co ll ect iv el y , th e

go ve rn m en t). UP so ug ht a jud gm en t de cl ari ng th e pe na lt ie s vo id an d en joi ni ng DHS

an d it s co m

po ne nt s fro m im

po si ng n e w p e n a l t i es ag ai ns t UP. On Mar ch 17 , 2 00 9,

th e go ve rn m en t fil ed a co m pl ai nt in th e So ut he rn Dis tri ct of Tex a s s e e k in g a jud gm en t of $4,1 28 ,00 0 in pe na lt ie s ag ai ns t UP fo r on e of th e th irt y -ei gh t in ci de nt s

at is su e in th is cas e. On Mar ch 18

, 20 09

, t h e go ve rn m en t fil ed a co m pl ai nt in th e

So ut he rn Dis tri ct of Cal ifo rn ia se ek in g a jud gm en t ag ai ns t UP fo r $3 3, 5 9 5

, 1 1 2 in

pe na lt ie s fo r th e ot he r th irt y -s ev en in ci de nt s at is su e in th is cas e. In Nov em be r 20 10

, th e go ve rn m en t’s cas es were tra ns ferr ed to th e Dis tri ct of Neb ras ka an d co ns ol id at ed

wit h UP’s ca se

.

In 19 89 , CBP’s p red eces so r, th e U.S. Cu st om s Se rv ic e (USCS ), no ti fie d t he 6

pu bl ic of pr op os ed reg ul at io ns

. See 54 Fed

. Reg

. 48 35

, 48 36 (J an

. 31

, 19 89 ). Afte r di ge st in g th e pu bl ic ’s co m m en t s , U S CS in vi te d co m m en t on an up da te d pr op os al

. See 56 Fed

. Reg

. 56 65

, 56 68 -6 9 (Feb

. 12

, 19 91 ). W it ho ut ex pl an at io n, th e pr op os ed

r e g ul at io ns (id en ti fie d by th e nu m be r 15 15 -AA67 ), di sa pp eare d fro m th e ag en cy ’s

ru le m ak in g ag en da in 19 95

. Co m pa re 60 Fed

. Reg

. 23 78 1 (Ma y 8, 19 95 ) (li st in g th e
reg ul at io ns ), wit h 6 0 F ed . Reg . 60 45 2 (No v. 28 , 19 95 ) (n ot li st in g t he reg ul at io ns ),

an d 6 1 F ed . Reg . 23 46 8 (M ay 13 , 19 96 ) (s am e).

-8

-UP m ov ed fo r su m m ary jud gm en t, an d th e go ve rn m en t m ov ed fo r jud gm en t on

th e ad m in is tra ti ve reco rd

. On Mar ch 14

, 20 12

, th e di st ric t co ur t gr an te d UP’s m ot io n

a n d de ni ed th e go ve rn m en t’s m ot io n, co nc lu di ng th at “ CBP’s act io ns were o u t s i d e

th e au th or it y gr an te d to th e ag en cy by Co ng res s an d m us t be se t as id e.” The di st ric t

co ur t pr im ari ly rel ie d on it s co nc lu si o n t h a t th e ag en cy ’s fai lu re to co m pl y wit h it s

st at ut or y ob li ga ti on to de fin e th e ph ras e “ hi gh es t de gr ee of care a n d d i l i g en ce,” as

us ed in 19 U.S.C. § 15 84 (a)( 2)

, m ean t th e ag en cy rece iv ed no de fere nc e fo r i ts

c o n t en ti on th at m eet in g th is st an da rd req ui red UP to “ ‘leav e no st on e un tu rn e d

. ’”

In st ead

, th e di st ric t co ur t lo ok ed to th e co m m on la w de fin it io n an d co nc lu de d “ a

co m m on carr ie r m

us t on ly us e th e de gr ee of sk il l a re as on ab le co mmon ca rr ie r wou ld

us e un de r si m il ar ci rcu m st an ces .” (Em ph as is ad de d) . Th e di st ric t co ur t no te d “ th e

ag en cy ack no wled ge [d ] th at UP ha s un de rta k e n nu m ero us m eas ur es to di sc ov er,

co m ba t, an d pr ev en t dr ug sm

ug gl in g.” Bec au se “ CBP ha [d ] no t pr es en te d ev id en ce,

or ev en arg um en t, wit h res pe ct to in du st ry st an da r d s o r co m m erci al pr act ic es wit h

res pe ct to dr

u g i nt erd ic ti on by co m

m on carr ie rs ,” th e di st ric t co ur t “ f[o un d] th at

CBP’s a ct io ns were ul tr a v ir es .”

In th e al te rn at iv e , t h e di st ric t co ur t fo un d “ th at CBP’s in te rp ret at io n an d

ap pl ic at io n of th e Tari ff Act [were ] arb it rary an d un reas on ab le ” fo r th r e e reas on s.

Fi rs t, CBP who ll y fai le d to “ ad dr es s[ ] UP’s arg um en t th at it ha d no co nt ro l ov er th e

rai lc ars in Mex ic o, ha d no co nt ro ll in g in te res t in th e Mex ic an rai lro ad

, an d co ul d no t

ex erci se an y de gr ee of care a n d d i l i g e n c e un ti l th e po in t at whi ch th e rai lc ars were

un de r it s co nt ro l.” Seco nd

, “ CBP’s su gg es ti on s th at UP ei th er fo rce Ferr om ex to ta ke

act io n or hi re a pr iv at e se cu rit y fo rce

. . . [were ] no t on ly arb it rary, bu t cap ric io us , in

th at th ey [were ] es se nt ia ll y im po ss ib le fo r UP to acco m

pl is h.” Thi rd

, “ CBP fai le d to

art ic ul at e why it ex erci se d di sc ret io n th e way it di d or to off er a rat io na l co nn ect io n
be twee n t he fact s p res en te d a nd th e ch oi ce t o i m po se pe na lt ie s.”

Hav in g reac he d th es e disposi tiv e co nc lu si on s, th e di st ric t co ur t ex pl ai ne d it di d

no t ne ed to de ci de an y co ns ti t u t i o n a l i ss ue

. The di st ric t co ur t di d fin d “ gr av e

-9

-co ns ti tu ti on al co nc ern s wou ld ari se if th e co ur t were to en fo rce CBP’s in te rp ret at io n

of th e st at ut es .” The di st ric t co ur t th en (1 ) de cl ar e d t h e fin es “ nu ll an d vo id an d

un en fo rcea bl e,” (2 ) gr an te d jud gm en t in UP’s fav or , (3 ) rev ers ed CBP’s de ci si on s in

th e th irt y -ei gh t a d mi n i s t rat iv e ad jud ic at io ns at is su e, an d (4 ) va cat ed th e pe na lt ie s.
The di st ric t co ur t al so en jo i n ed DHS an d th e Secr et ary, al on g wit h th ei r of fic ers ,
ag en ts

, an d em

pl oyees, fro m im

po si ng an y pe na lt ie s ag ai ns t U P un de r “ 19 U.S.C.
§ 15 84

, fo r fai lu re to m an ife st il le ga l dr ug s fo un d in rai lc ars ov er whi ch [UP] ha s no

co nt ro l en t e r i n g t h e Uni te d St at es fro m Mex ic o, un ti l su ch ti m e as reg ul at io ns

pe rm it ti ng su ch act io n a re p ro pe rly pro m ul ga te d.” The g ov ern m en t ap pe al s.

II

. DISCUSS IO N

W e rev ie w de no vo th e di st ric t co ur t ’s v a r i ou s le ga l co nc lu si on s. See, e.g ., Uni te d St at es v. Fern an de z, 71 0 F.3 d 84 7, 84 9 (8 th C i r

. 2 0 1 3) (rev ie win g

“ co ns ti tu ti on al ch al le ng es de no vo ”); Uni te d St at es v. Ju ng ers , 70 2 F.3 d 10 66

, 10 69
(8 th Ci r. 2 0 1 3 ) ( r e vi ewin g de no vo a qu es ti on of st at ut or y in te rp ret at io n) ; Cl ark v. USDA, 53 7 F.3 d 93 4, 93 9 (8 th Ci r. 20 08 ) (rev ie win g de no vo an award of su m m ary jud gm en t in a cas e ch al le ng in g ad m in is tra ti ve act io n) ; Ent erg y Ark

., In c. v. Neb ras ka

, 35 8 F.3 d 52 8, 55 3- 54 (8 th Ci r. 20 04 ) (rev ie win g de no vo whe th er a pa rti cu la r rem ed y

was av ai la bl e). CBP’s ad m in is tra ti ve de ci si on s rece iv e de fere nt ia l rev ie w un de r th e

APA. “ W e wil l no t di st ur b th e [ag en cy ]’ s act io n un le ss it was ‘arbi tra ry , cap ric io us ,

an ab us e of di sc ret io n, or ot he rw i s e n o t in acco rd an ce wit h la w’ or ‘in ex ces s of

st at ut o r y juri sd ic ti on , au th or it y , or li m it at io ns , or sh or t of st at ut or y rig ht .’ ” Cl ark

, 53 7 F .3d at 9 39 (qu ot in g 5 U.S.C. § 7 06 (2 )).

A. Con st itu tio na l Av oi da nce

Bo th pa rti es of

fer co m pe ti ng in te rp ret at io ns of th e rel ev an t st at ut e, an d UP al so

rai se s si gn ifi can t co ns ti tu ti on a l c h a l l en ge s ag ai ns t CBP’s in te rp ret at io n. It is a
be dr oc k pr in ci pl e of st at ut or y in te rp ret at io n th at “ whe re a st at ut e is su sc ep ti bl e of two

co ns tru ct io ns , by on e of whi ch gr av e an d do ub tfu l co ns ti tu ti on al qu es ti on s ari se an d
by th e ot he r of whi ch su ch qu es ti on s are av oi de d, ou r du ty is to ad op t th e la tt er.”

-1 0-U.S. ex rel Att or ne y Gen

. v. Del. & Hud so n Co

., 21 3 U.S. 36 6, 40 8 (1 90 9) ; se e al so ,

e.g ., C l a r k v

. Mar ti ne z, 54 3 U.S. 37 1, 38 1 (2 00 5)

. W e ad he re to th is pr in ci pl e of

co ns ti tu ti on al av oi da nc e “ ou t of res pe ct fo r Co ng res s, whi ch we as su m e le gi sl at es in

th e li gh t o f co ns ti tu ti on al li m it at io ns .” Ru st v. Su ll iv an , 50 0 U.S. 1 73 , 19 1 (1 99 1) ;

se e al so Ash wan de r v. TVA, 29 7 U.S. 28 8, 34 5- 48 (1 93 6) (Bra nd ei s, J., co nc ur rin g)

.

Co nst itu tio na l av oid an ce tr um ps ev en Ch ev ro n de fere nc e, an d ea sil y out w ei ghs

an y le ss er fo rm of de fere nc e w e m ig ht or di na ril y affo rd an ad m in is tra ti ve ag en cy

su ch as C BP. See , e.g., So li d W as te Age nc y of N. Coo k C nt y . v. U.S. Arm y Co rp s

of Eng ’rs, 53 1 U

. S. 15 9, 17 2 (2 00 1) (“ W he re an ad m in is tra ti ve in te rp ret at io n of a

st at ut e in vo ke s th e ou te r li m it s of Co ng res s’ po wer, we ex pe ct a cl ear in di cat io n th at

C on gr es s in te nd ed th at res ul t.”) ; cf. Ch ev ro n U.S.A. In c. v. Natu ral Re s

. D e f

. Co un ci l, 4 67 U.S. 8 37 (1 98 4) ; Sk id m or e v. Swif t & Co ., 32 3 U.S. 1 34 (19 44 ). W e

“ as su m [e] th at Co ng res s d o e s no t cas ua ll y au th or iz e ad m in is tra ti ve ag en ci es to

in te rp ret a st at ut e to pu sh th e li m it of co ng res si on al au th or it y .” So li d W as te

, 53 1 U.S.

at 17 2- 73

. W he n an ag en cy ’s in te rp ret at io n of a st at ut e pu sh es th es e li m it s, we

“ he ed [] th e es se n c e of Mr. Ch ie f Ju st ic e Mar sh al l’s ad m on it io n in Mu rray v. The

Ch arm in g Bet sy

, 6 U.S. (2 Cran ch ) 64

, 11 8 (1 80 4)

, by ho ld in g th at [th e st at ut e] ou gh t

no t be co ns tru ed to vi ol at e th e Co ns ti tu ti on if an y ot he r po ss ib le co ns tru ct io n rem ai ns

av ai la bl e.” NLRB v. Cat ho li c Bi sh op of Ch i., 44 0 U.S. 49 0, 50 0 (1 97 9)

. W it ho ut th e

“ cl eare st i n d i c at io n” th at Co ng res s in te nd ed to en act a co ns ti tu ti on al ly su sp ect

st at ut e, NLRB v. Driv ers Loc al 63 9, 3 6 2 U

. S

. 27 4, 28 4 (1 96 0)

, we fo ll ow “ th e

tra di ti on al ru le ” an d “ in de pe nd en tl y in qu ire whe th er the re is ano th er int erp ret at io n,

n o t rai si ng

. . . se rio us co ns ti tu ti on al co nc ern s, th at m ay fai rly be as cri be d to [ t h e

st at ut e],” Edwar d J. DeBar to lo C o r p

. v. Fl a. Gul f Co as t Bl dg

. & Co ns tr. Trad es

Co un ci l, 4 85 U.S. 56 8, 5 77 (19 88 ).

Co ns is te nt wit h th es e c a r d i n al pr in ci pl es , be fo re an al y zi ng th e pa rti es ’

in te rp ret at io n s of th e st at ut e “ it is in cu m be nt on us to de te rm in e whe th er th e

-1 1-[ag en cy ]’ s [in te rp ret at io n] wou ld gi ve ris e to se rio us co ns ti tu ti on al qu es ti on s.”

Cat ho li c Bi sh op , 44 0 U.S. at 50 1. We con cl ud e it wou ld

.

1. Due Pro ces s
Und er CBP’s in te rp ret at io n, § 15 84 (a)( 2) al lo ws th e go ve rn m en t to pu ni sh an

in no cen t own er or reci pi en t of pr op ert y fo r m is us e of th e pr op ert y whi le th e pr op ert y
is en ti rel y un de r a th ird pa rty’ s co nt ro l e v en if th e m is us e oc cu rs wit ho ut th e th ird

pa rty’ s kn owl ed ge an d de sp it e th e th ird pa rty’ s be st effo rts to pr ev en t it

. If CBP is

co rrec t, § 15 84 (a)( 2) pu sh es th e li m it s of th e Fi fth Am en dm en t, whi ch gu aran te es UP

s h a l l no t “ be de pr iv ed of

. . . pr op ert y [] wit ho ut du e pr oc es s of la w.” Neit h e r o u r

co ur t no r th e Su pr em e Co ur t ha s ev er sa nc ti on ed a sc he m e to pu ni sh in no cen t own ers

fo r “ th e m is co nd uc t of m ere st ran ge rs , ov er who m su ch own ers or [th e own ers ’]

co ns ig ne es co ul d ha ve no co nt ro l,” Pei sc h v. W are, 8 U

. S

. (4 Cran ch ) 34 7, 36 5
(1 80 8)

.

To th e co nt rary, we ha ve ex p r e s s ly pr es um ed th at “ th e im po si ti on of se ve re

pe na lt ie s

. . . fo r th e co m m is si on of a m or al ly in no cen t act m ay vi ol at e th e du e

pr oc es s cl au se of th e fif

th am en dm en t.” Uni te d St at es v. Eno ch s, 85 7 F.2 d 49 1, 49 4

n.2 (8 th Ci r. 19 88 ). And in a lo ng li ne of cas es st ret ch in g ba ck to Ch ie f Ju st ic e

Mar sh al l’s de ci si on in Pei sc h, th e S u p r e me C ou rt ha s “ im pl ie d th at it wou ld be

di ffi cu lt to reject th e co ns ti tu ti on al cl ai m

. . . . of an own er who pr ov ed no t on ly th at

he was un in vo lv ed in an d un aware of th e wro ng fu l act iv it y , bu t al so th at he ha d do ne

al l th at reas on ab ly co ul d be ex pe ct ed to pr ev en t th e pr os cri be d us e of hi s pr op ert y .”

Cal ero -Tol ed o v . Pears on Yach t Lea si ng Co ., 41 6 U.S. 6 63 , 68 9 (1 97 4)

.

2. Comm on La w Forf ei ture

W he th er CBP m ay ex pa nd th e frau gh t co m m on la w fo rfei tu re tra di ti on pa st it s

hi st or ic al li m it s is a “ gr av e an d do ub tfu l co ns ti tu ti on al qu es ti on [],” Del. & Hud so n,

21 3 U.S. at 40 8. The Su pr em e Co ur t has he ld th e co m m on la w tra di ti on pe rm it ti ng

“ fo rfei tu res of pr op ert y in tru st ed by [a n ] i n n o c en t own er or li en or to an ot he r who

-1 2-[m is ]use s it ,” Van Ost er v. Kan sa s, 27 2 U.S. 46 5, 46 8 (1 92 6)

, “ is to o fir m ly fix ed in

th e p u n it iv e an d rem ed ia l juri sp ru de nc e of th e co un try to be no w di sp la ced .” J.W.

Gol ds m it h, Jr .-Gran t Co

. v. Uni t e d St at es , 25 4 U.S. 50 5, 51 1 (1 92 1)

. Eve n as th e

Su pr em e Co ur t ha s na rro wly pr es erv ed th is tra di t i o n , th e Su pr em e Co ur t ha s

co ns is te nt ly tre at ed it as a li m it ed ex cep ti on to

, rat he r th an ru le of

, Fi fth Am en dm en t

du e pr oc e s s

. See, e.g ., Ben ni s v. Mi ch ig an , 51 6 U.S. 44 2, 45 3 (1 99 6) (“ Th[e ]

arg um en t” th a t a st ric t li ab il it y “ fo rfei tu re st at ut e is un fai r be cau se it rel ie ve s

p r o se cu to rs fro m th e bu rd en of se pa rat in g co -o wne rs who are co m pl ic it in th e

wro ng fu l us e of pr op ert y fro m in no cen t co -o wne rs

. . . , in t h e a b s tra ct

, ha s

co ns id erab le ap pe al .”); id

. at 45 6 (Tho m as , J., co nc ur rin g) (“ It

. . . se em s ap pr op ria te

, whe re a co ns ti tu ti on al ch al le ng e by an in no cen t own er is co nc ern ed

, to ap pl y th [e]”

“ li m it s on wh at pr op ert y can be fo rfe i te d” “ rat he r st ric tl y , ad he rin g to hi st or ic al

st an da rd s.”) ; id

. at 45 8 (Gin sb ur g, J., co nc ur rin g) (n ot in g th e Su pr em e Co ur t do es no t

“ co nd on e” “ an ex pe riment to pu ni sh in no cen t th ird pa rti es ”); id

. at 46 3 (St ev en s, J.,

di ss en ti ng ) (cal cu la ti ng “a m ajor it y of th e Mem be rs of th [e] [Su pr em e] Co ur t ha s

ag reed th at th e co nc ep t of an in st ru m en ta li ty su bjec t to fo rfei tu re

. . . m us t ha ve an

ou te r li m it ”). Ju st ic e Tho m as ev en vi ews th is tra di ti on ’s lo ng ev it y as “ a rem in de r th at

th e Fed eral Co ns ti tu ti on do es no t pro hi bi t ever y th in g th at is in te ns el y un de si rab le .”

Id . at 4 54 (Tho m as , J., co nc ur rin g) (em ph as is ad de d)

.

In th r e e w a ys , CBP’s ap pl ic at io n of § 15 84 go es far be y on d th is tra di ti on ’s

na rro w li m it s. Fi rs t an d m os t o bv io us , th e p un is hm en ts at i ss ue in th is cas e are no t

fo rfei tu res

. Cf., e.g ., id

. (“ [F] or fe it ur e of pr op er ty wit ho ut pr oo f of th e own er’s 7

Bo th th e go ve rn m en t an d UP ap pa ren tl y th in k th at th e du e pr oc es s an al y si s is 7

th e sa m e fo r fo rfei tu res , whi ch are in re m pe na lt ie s, an d fin es , whi ch are in pe rs on am
pe na lt ie s. W e are no t c o n vi nc ed

. The on ly au th or it y th e pa rti es ci te fo r th is

pr op os it io n is th e Sev en th Ci rcu it ’s un su pp or te d st at em en t in Tower s v. Ci ty of Ch i.,
17 3 F.3 d 61 9, 62 6 (1 99 9)

, “ th at an y di st in ct io n be twee n [th es e two pe na lt ie s] is on e of fo rm , bu t no t su bs ta nc e.” The pr op os it io n th at an in no cen t own er m ay lo se m or e th an th e va lu e of hi s m is us ed pr op ert y wit ho ut rece iv in g fu ll du e pr oc es s pr ot ect io n

-1 3-wro ng do in g, m erel y be cau se it was ‘use d’ in or was an ‘ins tru m en ta li ty’ of cri m e ha s

be en pe rm it te d in Eng la nd an d in th is co un try, bo th be fo re an d aft er th e ad op ti on of

th e Fi fth an d F ou rte en th Am en dm en ts .” (em ph as is ad de d) ).

Seco nd

, un li ke th e pr op ert y at is s ue in al l of th e Su pr em e Co ur t cas es

up ho ld in g f

or fei tu re, th e pr op ert y in th is cas e was no t m is us ed by it s own er,

co ns ig no r, or co ns ig ne e. Cf., e.g ., Gol ds m it h, 2 54 U.S. at 51 2 (e xp res sl y res erv in g

th e qu es ti on whe th er th e Fi f t h A men d m en t co ul d al lo w fo rfei tu re of pr op ert y us ed

“ wit ho ut [th e own er’s] pr i v i t y or co ns en t ” (em

ph as is ad de d) ). Rat he r, un kn own

p ers on s (p res um ab ly op erat iv es of Mex ic o’s da ng ero us dr ug cart el s) hi d dr ug s,
wit ho ut UP’s or th e Mex ic an rai lro ad s’ kn owl ed ge , in si de rai lc ars th at were no t un de r

UP’s co nt ro l. Cf. Pei sc h, 8 U.S. (4 C r a nc h) at 36 4 (rejec ti ng fo rfei tu re whe re th e

m is us e oc cu rred wit ho ut th e own er’s “ co ns en t or co nn iv an ce, or

. . . th at of so m e

ot he r pe rs on em

pl oyed o r tr us te d b y

hi m ”).

Thi rd

, UP (wh et he r as own er, co ns ig no r, or co ns ig ne e) ha s no t be en a ne gl ig en t bysta nd er to th e m is us e of th e p ro pe rty. Cf., e.g., Aus ti n v. Uni te d Stat es , 50 9 U.S.

60 2, 61 5 (1 99 3) (ex pl ai ni ng th at “ [b ]oth th eo rie s [u nd erl y in g co m m on la w fo rfei tu re]

res t, at bo tt om , on th e no ti on th at th e own er ha s be en ne gl ig en t in al lo win g hi s

pr op ert y to be m is us ed an d th at he is pr op erl y pu ni sh ed fo r th at ne gl ig en ce”)

. Qui te

th e op po si te : UP’s co nt en t i o n t h a t i t ha s do ne al l it reas on ab ly can to pr ev en t dr ug

sm ug gl in g— wit ho ut p l a c i n g it s em pl oyees in gr av e da ng er by se nd in g th em to

Mex ic o— is bu tt res se d by th e fact th at

, in at le as t on e cas e, UP fo un d sm ug gl ed dr ug s

fin ds no su pp or t in Su pr em e Co ur t or co m m on la w pr eced en t. See

, e

. g

. , Dob bi ns ’
Dis ti ll ery v. Uni te d St at es , 96 U.S. 39 5, 39 9- 40 0 (1 87 7) (ex pl ai ni ng th at co m m on la w

“ se iz ur es an d fo rfei tu res crea te d by st at ut e in re m , co gn iz ab le on th e rev en ue si de of
th e ex ch eq ue r co ur t,” were an ex cep ti on to th e ge ne ral co m m on la w ru le —t ha t “ th e

cro wn

. . . ha d no rig ht to th e go od s an d ch at te ls of th e fel on , wit ho ut pr o d uc in g

reco rd of hi s co nv ic ti on ”—b ecau se “ th e th in g in s u c h

. . . cas e[s ] [wa]s pr im ari ly

co ns id ered as th e of

fen de r” (em

ph as is ad de d) ); se e al so Gol ds m it h, 25 4 U.S. at 51 3.

-1 4-CBP’s in sp ect io n ov erl oo ke d. F ur th erm or e, th e Mex ic an rai lro ad s, un de r pr es su re

fro m UP, ha ve un de rta ke n si gn ifi can t pr ev en ti ve effo rts

, no ta bl y su bjec ti ng tra in s to

rep eat ed se arch es by th e Mex ic an m il it ary. Cf., e.g ., i d

. at 61 6 (“ In no ne of th e[]
[fo rfei tu re] cas es di d th e Co ur t ap pl y th e g ui lt y -p ro pe rty fic ti on to jus ti fy fo rfei tu re
whe re th e own er ha d do ne al l th at re as on ab ly co ul d be exp ect ed to pr ev en t th e

un la wfu l u se of h is pro pe rty.” (em ph as is ad de d) ).

Fo r th es e reas on s, “ [a]s th e Gov ern m en t wou ld ha ve us co ns tru e it

, th e st at ut e

wou ld be op en to co ns ti tu ti on al do ub t in li gh t of a [lo ng ] se rie s of cas es .” Jo ne s v. 8

Uni te d St at es , 52 6 U.S. 22 7, 24 0 (1 99 9)

. “An y do ub t on th e is su e of st at ut or y

co ns tru ct io n is he nc e to be res ol ve d i n fa vo r of av oi di ng ” th e se rio us co ns ti tu ti on al

qu es ti on s p os ed by CBP’s in te rp ret at io n o f § 1 58 4( a)(2 ). Id. at 25 1.

B. Con gr es si on al Int ent

To de te rm in e whe th er CBP’s in te rp ret at io n of § 1 5 8 4( a)(2 ) is th e on ly

reas on ab le on e, “ we m

us t fir st id en ti fy th e affi rm at iv e in te nt io n of t h e Co ng res s
cl earl y ex pr es se d. ” Cat ho li c Bi sh op , 44 0 U.S. at 50 1 (in te rn al qu ot at io n m ark s

om it te d)

. Unl es s C o n g r e ss affi rm at iv el y in te nd ed to le gi sl at e at or be y on d

co ns ti tu ti on al li m it s by co m pe ll in g CBP’s in te rp ret at io n of th e st at ut e, co ns ti tu ti on al

av oi da nc e req ui res us to reject CBP’s in te rp ret at i o n

. S e e , e .g., id

. at 50 4. The

go ve rn m en t po in ts to no su ch “ affi rm at iv e in te nt io n ,” an d tra di ti on al to ol s of

st at ut or y in te rp ret at io n re ve al no ne . W e th eref or e reject CBP’s i nt erp ret at io n.

Be caus e CBP’s in te rp ret at io n rai se s se rio us co ns ti tu ti on al qu es ti on s un de r th e 8

Fi fth Am en dm en t, we se e no reas on to co ns id er whe th er UP ’s al te rn at iv e Eig ht h

Am en dm en t arg um en t wou ld in de pe nd en tl y tri gg er th e ru le of co ns ti tu t i o na l

av oi da nc e in th is cas e.

-1 5-1. Sta tute

As al way s, ou r “ st art in g po in t in di sc ern in g co ng res si on al in te nt is th e ex is ti ng

st at ut or y te xt .” Lam ie v. U.S. Tr., 54 0 U.S. 5 26 , 5 34 (2 0 0 4 )

. Th e rel ev an t po rti on

of th e st at ut e at is su e p ro vi de s:

If an y of su ch m erch an di se so fo un d co ns is ts of

. . . co cai ne , . . . th e

. . . pe rs on in ch ar

g e o f s u c h v e h ic le or th e ow ne r of su ch

. . . ve hi cl e

. . . sh al l be li ab le to a pe na lt y of $1 ,00 0 fo r each ou nc e th ereo f so fo un d. If any of su ch m erch an di se so fou nd co ns is ts of . . . m ari hu an a, th e

. . . p e rs on in ch ar

ge of su ch ve hi cl e or th e ow ne r of su ch

. . . v e h i c l e

. . . sh al l be li ab le to a pe na lt y of $5 00 fo r each ou nc e th ereo f so fo un d.

. . .
ex cep t th at th e

. . . ow ne r of a v e ss el us ed by an y pe rs on as a co m m on

carr ie r in th e tra ns act io n of bu si ne ss as su ch co m m on carr ie r sh al l no t be li ab le to su ch pe na lt ie s

. . . , i f i t a pp ears to th e sa ti sf act io n of th e

co ur t th at ne it he r th e m as te r no r an y of th e of fic ers (in cl ud in g li cen se d

an d un li cen se d of

fic ers an d pe tt y of

fic ers ) no r th e own er of th e ve ss el
kn ew, an d c ou ld no t, b y

th e ex erci se of t he hi

gh es t d eg re e o

f ca re an d
di li ge nc e , hav e k no wn, t ha t s uc h n arco ti c d ru gs were o n b oa rd

.

19 U.S.C. § 1 58 4( a)(2 ) (em ph as is ad de d)

.

The te rm “ su ch m erch an di se ” m ean s “ an y m erch an di se , in cl ud in g s ea sto res ,

. . . f o u n d on bo ard of or aft er ha vi ng be en un la de n fro m ” “ an y ve ss el [o r] ve hi c l e
bo un d to th e Uni te d St at es ” “ whi ch is no t in cl ud ed or de sc rib ed in [th e] m an ife st or
do es no t ag ree th erewi th .” Id

. § 15 84 (a)( 1) (em ph as is ad de d)

. The m an ife st m us t be

“ pr od uc e[d ]” by th e “ pe rs on in ch arg e of [th e] ve hi cl e

. . . to th e of fic er (whet he r of

th e Cu st om s Serv ic e or th e Co as t Gua rd ) de m an di ng th e sa m e.” Id

. In th is cas e, th e pi vo ta l st at ut or y ph ras es are “ pe rs on in ch arg e,” “ own er,” an d “ hi gh es t de gr ee of care

an d d il ig en ce.”

2. Pers on in Cha rg e

W hy, acco rd in g to th e go ve rn m en t, was UP “ in c h a r ge ” of tra in s UP di d no t

co nt ro l? Bec au se UP fo rward ed el ect ro ni c mani fes t in fo rm at io n to CBP. W hy,

-1 6-acco rd in g to th e go ve rn m en t, di d UP fo rward th is in fo rm at io n to CBP? Bec au se UP

was th e “ pe rs on in ch arg e.” Thi s ci rcu la r arg um en t d oe s n ot pe rs ua de us

.

Alt ho ug h § 15 84 do es no t de fin e “ pe rs on in ch arg e,” th e res t of th e Tari ff Act
gi ve s co nc lu si ve clu es as t o th e ph ras e’s m ean in g. Not ab ly, § 15 94 ex pl ai ns “ [t]he

te rm ‘m as te r’ an d si m il ar te rm s rel at in g to th e pe rs on in ch ar ge of a co nv ey an ce

in cl ud es th e pu rs er or ot he r pe rs on on th e co nv eya nc e wh o is res po ns ib le fo r

m ai nt ai ni ng reco rd s rel at in g to th e carg o tra ns po rte d in th e co nv ey an ce.” 19 U.S.C.
§ 15 94 (d )(2 ) (em

ph as is ad de d)

. Twice

, § 15 94 refe rs to “ th e m as te r, pi lo t, co nd uc to r,
dr iv er, or ot he r pe rs on in c ha rg e.” Id

. § 15 94 (a)( 2)

, (b )(1 ) (em ph as is ad de d)

. By

refe rri ng to th e pe rs on in ch arg e as so m eo ne “ on th e co nv ey a nc e” an d as so ci at in g “p e r s o n i n ch arg e” wit h “ th e m as te r, pi lo t, co nd uc to r, [an d] dr iv er,” th e Tari ff Ac t

m ak es cl ear th at th e pe rs on in ch arg e m us t be so m eo ne cap ab le of ex erci si ng co nt ro l

. See, e.g ., Uni te d St at es v. W il li am s, 55 3 U.S. 28 5, 29 4 (2 00 8) (“ [T]he co m m on se ns e

can on of no sc it ur a so ci is

. . . co un se ls th at a wor d is gi ve n m or e pr eci se co nt en t by

th e ne ig hb or in g wor ds wit h whi ch it is as so ci at ed .”). It is un di sp ut ed UP di d no t

co nt ro l t he tra in s u nt il aft er CB P co m pl et ed it s i ns pe ct io n.

The Tari ff Act’s us e of “ pe rs on in ch arg e” is co ns is te nt wit h th e te r m’ s

or di na ry m ean in g. To be “ in ch arg e” m ean s to “ ha v[ e] co nt r o l o r c u s t od y of

so m et hi ng

. ” W eb st er’s Thi rd New In te rn at io na l Dict io na ry 37 7 (1 99 3)

. Unt il th e

tra in s reac he d th e bo rd er, th e Mex ic an ra i l r o a d s co nt ro ll ed th em ; on ce th e tra in s

reac he d th e bo rd er, CBP it se lf to ok co nt ro l an d cu st od y of th em

. UP wou ld rece iv e

ne it he r co nt ro l n or cu st od y of t he tra in s u nt il aft er CB P co m pl et ed it s i ns pe ct io n. 9

The go ve rn m en t’s arg ume n t th at UP be cam e th e “ pe rs on in ch arg e” by 9

fo rward in g el ect ro ni c da ta fro m th e Mex ic an rai lro ad s to CBP ru ns ou t of st eam

. At

m os t, U P w as act in g as an ag en t fo r th e Mex ic an rai lro ad s be cau se CBP refu se d to

acce pt el ect ro ni c da ta di rect ly fro m th e Mex ic an rai lro ad s. W it ho ut an y cap aci ty to

ve rif y th e in fo rm at io n, UP au to m at ic al l y f o r w a rd ed th e in fo rm at io n to CBP, as

au th or iz ed by st at ut e. See 19 U.S.C. § 14 31 (b ). Mer el y fo rward in g th is in fo rm at io n

-1 7-Our pl ai n read in g of “ pe rs on in ch arg e” is al so co ns i s te nt wit h th e te rm ’s

co m m on la w us ag e. At co m

m on la w, a “ pe rs on in ch arg e” m ean t so m eo ne in act iv e

co nt ro l or co m

m an d of a co nv ey an ce. See, e.g ., Co nt ’l Im pr ov em en t Co

. v. St ead

, 95

U.S. 16 1, 16 3 (1 87 7) (ref

erri ng to th os e res po ns ib le fo r “ sl ack en [in g] th ei r sp eed an d

so un d[ in g] th e whi st le an d rin g[ in g] th e be ll ” as th e “ pe rs on s in ch arg e of th e tra in ”);

The Su ffo lk Cn ty., 76 U.S. 65 1, 65 3 (1 86 9) (ref erri ng to th o s e i n co m

m an d of a

ferr y bo at as “ th e pe rs on s in ch arg e”); The Co rs ic a, 76 U.S. 63 0, 63 3 (1 86 9) (ref erri ng

to th os e who “ or de red [th e sh ip ’s] he lm ha rd a-s ta rb oa rd ” as “ th e pe rs on s in ch arg e”).

Bas ed up on th e un di sp ut ed fact s pr es en te d, UP was no t th e “ pe rs on in ch arg e”

of an y of t he th irt y -ei gh t t rai ns at i ss ue in th is cas e.

3. Ow ner

Bec au se UP was no t “ in ch arg e” of th e tra in s, CBP on ly is on tra ck if UP was

th e “ own er” of each pa rti cu la r “ ve hi cl e” con ta in in g un m an ife st ed dr ug s. 19 U.S.C.
§ 15 84 (a)( 2)

. Ass um in g “ ve hi cl e” in cl ud es an in di vi du al rai lc ar— a po in t th e pa rti es
vi go ro us ly co nt es t bu t whi ch we ne ed no t de ci de —t he bu lk of th es e pe na lt ie s are st il l

un la wfu l b ecau se UP di d n ot own th e m ajor it y of t he rai lc ars at i ss ue

.

At m os t, UP own ed el ev en rai lc ars , le av in g at le as t twen ty-sev en in st an ces in

whi ch CBP fin ed UP fo r dr ug s fo un d on rai lc ars UP di d no t own

. CBP’s p e n a l t ie s

ag ai ns t UP fo r dr ug s fo un d on th es e no n- own ed rai lc ars are un am bi gu ou sl y be y on d

CBP’s aut ho rit y un de r § 15 84 (a)( 2)

. The go ve rn m en t all bu t con ced es th is po in t in

it s rep ly br ie f: “ [O]wn[in g]

. . . a rai lc ar in whi ch il le ga l dr ug s are fo un d br in gs [UP]

sq ua rel y wit hi n th e t e r m s of th e st at ut e, at le as t as to th os e ra il ca rs .” As to “ th os e

rai lc ars ” no t

own ed by U P, CBP vi ol at ed § 15 84 (a)( 2) , wh ic h o nl y au th or iz es CBP

di d no t m ak e UP th e “ pe rs on in ch arg e” of th e tra in s. The st at ut e pl ai nl y au th or iz es CBP to pe na li ze on ly th e “ pe rs on in ch arg e,” no t ag en ts or bu si ne ss as so ci at es of th e

“ pe rs on in ch arg e.”

-1 8-to pe na li ze (1 ) th e “ pe rs on in ch arg e,” (2 ) “ th e own er,” “ or ” (3 ) “ an y pe rs on di rect ly

or in di rect ly res po ns ib le ” fo r th e pr es en ce of un m an ife st ed dr ug s. “ It is well 1 0

es ta bl is he d th at ‘w he n th e st at ut e’s la ng ua ge is pl a i n , t h e so le fu nc ti on of th e

co ur ts —at le as t whe re th e di sp os it io n req ui red by th e te xt is no t ab su rd —i s to en fo rce

i t acco rd in g to it s te rm s.’” Lam ie

, 54 0 U.S. at 53 4 (2 00 4) (q uo ti ng H a r t f o r d

Und erwri te rs In s. Co

. v. Uni on P l a n t e r s Ban k, N.A., 53 0 U.S. 1, 6 (2 00 0) ). The

la ng ua ge he re is pl ai n: tra ns gr es si ng un am bi gu ou s st at ut or y li m it s o n i t s a u th or it y , CBP p en al iz ed UP for dru gs fou nd on rai lc ars no t o wne d b y UP.

4. Hi gh es t Deg ree o f Car e a nd Dil ig ence Reg ard le ss of UP’s own ers hi p of in di vi d u a l r a i l cars , th e he art of CBP’s

po te nt ia l co ns ti tu ti on al pr ob le m is th e ag en cy ’s de fin it io n of “ hi gh es t de gr ee of care

an d di li ge nc e.” “ Des pi te th is co ns ti tu ti on al pr ob le m , if Co ng res s ha s m ad e it s in te nt

in th e st at ut e cl ear, we m

us t gi ve effe ct to th at in te nt .” Zad vydas v. Dav is

, 53 3 U.S.

67 8, 69 6 (2 00 1) (in te rn al qu ot at io n m ark s om it te d) (q uo ti ng M i l l e r v

. Fren ch

, 53 0

U.S. 32 7

, 33 6 (2 00 0) ). “ [H]ere, ho wev er,” we se e no “ cl ear in di cat io n of

co ng res si on al in te nt ,” id

. at 69 7, for “ hi gh es t deg ree of care and di li ge nc e” to be an

im po ss ib ly hi gh st a n d a r d

— on e whi ch wou ld fo rce UP to pl ace it s em pl oyees or

co nt ract or s in th e cro ss ha irs of Mex ic o’s vi ol en t dr ug cart el s an d re q u i r e UP to

ach ie ve what th e Me xi can po li ce an d m il it ary can no t.

a. CBP’s Unrea so na bl e In terp reta tio n

Co ng res s ex pr es sl y di rect ed th e rel ev an t ag e n cy to pr om ul ga te reg ul at io ns ,
pu rs ua nt to fo rm al no ti ce an d co m m en t pr oc ed ur es , de fin in g “ hi gh es t de gr ee of care

an d di li ge nc e.” See § 73 69

, 10 2 St at

. at 44 8. Not hi ng in th at ex pr es s d i r e c t i ve
be tra y s an y in te nt io n, m

uc h le ss on e cl earl y ex pr es se d, to au th or iz e CBP “ to in te rp ret [th e] s ta tu te to pu sh th e li m it of co ng res si on al au th or it y ,” So l i d Wa s t e , 53 1 U.S. a t

CBP do es no t ad va nc e th e un te na bl e ar g u ment th at UP was “ di rect ly or 1 0

in di rect ly resp on si bl e” fo r th e Me xi can cart el s’ dru g s m ug gl in g.

-1 9-17 2- 73

. Neit he r can th e go ve rn m en t pl au si bl y arg ue C o n g r es s un am bi gu ou sl y

au th or iz ed CBP to st ret c h c on st it ut io na l li m it s, fo r Co ng res s co ns id ered th e te rm

am bi gu ou s en ou gh to req ui re furt he r in te rp ret at io n. The re i s “ no th in g a pp ro ach in g

a cl ear st at em en t fro m Co ng res s th at it in te nd e d” CBP’s im pl au si bl e ad ho c

in te rp ret at io n. Id . at 1 74

.

CBP’s co nt e nt io n th at ex erci si ng th e “ hi gh es t de gr ee of care an d di li ge nc e”

wou ld req ui re UP to ach ie ve so m et hi ng th e Mex ic an po li ce an d arm ed fo rces can no t

is so un te na bl e th at it can no t be “ ba se d on a pe rm is si bl e co ns tru ct io n of th e st at ut e,”

Ch ev ro n, 4 67 U.S. at 8 43 . CBP fail s to sh ow i ts un reas on ab le ex pe ct at io n i s b as ed

on an y “ sp eci al iz ed ex pe rie nc e” or “ br oa d[ ] in ve st ig at io n s a n d in fo rm at io n,”

Sk id m or e, 32 3 U.S. at 13 9- 40

. In st ead

, CBP rel ie s on a se ve nt y -s ix y ear ol d

, t wopa ge di st ric t co ur t or de r whi ch sa id —wi th li tt le an al y si s an d no ci ta ti on to

au th or it y —t ha t ex erci si ng “ th e hi gh es t de gr ee of care a n d di li ge nc e” m ean s

“ le [av in g] no st on e un tu rn ed .” Lan cas hi re Sh ip pi ng Co

. v. Uni te d St at es , 17 F. Su pp

. 57 3, 57 4 (S.D.N.Y. 19 36 ). CBP al so ci te s an ot he r di st ric t co ur t cas e, ARCA Airl in es , Ltd a. v. USCS, 72 6 F. Su pp

. 82 7 (S.D. Fl a. 19 89 ), bu t th e jud ge in th at cas e rel ie d, 1 1

wit ho ut reas on in g, so le ly on Lan cas h i r e ’s cu rs or y de fin it io n of “ hi gh es t de gr ee of

care an d d il ig en ce,” s ee i d. at 83 1.

Eve n if th es e cas es were pe rs ua si ve —an d cu rs or y se n t e n c es un su pp or te d by

le ga l au th or it y are un li ke ly to pe rs ua de us —n ei th er cas e su pp or ts CBP’s im po ss ib ly

hi gh st an da rd

. Lan cas hi re in vo lv ed op iu m fo un d ab oa rd a sh ip th at ha d sa il ed fro m

In do ne si a to fiv e ot he r Asi an po rts an d th e n t o N e w Yor k. See Lan cas hi re, 17 F.

The go ve rn m en t in fo rm s us th e Ele ve nt h C irc ui t af fir m ed th is di st ric t co ur t 1 1

or de r. W ha t th e go ve rn m en t fai ls to rev eal is th at th is affi rm an ce was an

un pu bl is he d, o n e

- w o r d op in io n, no t ev en bi nd in g on th e co ur t th at is su ed it

. See
ARC A Airl in es v. USCS, 94 5 F.2 d 41 3 (1 1t h Ci r. 19 91 ) (u np ub

. ta bl e di sp .) (“ Affi rm ed .”); se e al so 11 th Ci r. R. 36 -2 (“ Unp ub li sh ed op in io ns are no t co ns id ered
bi nd in g p rece de nt .”).

-2 0-Su pp

. at 57 3- 74

. Dur in g th is le ng th y vo y ag e, th e sh ip was un de r t h e c o n t r o l o f it s

own er, who se of

fic ers “ m ig ht ha ve m ad e as care fu l a se arch ” as th e “ cu st om s of fic ers [wh o] tu rn ed up th e op iu m .” Id

. at 57 4. ARCA Airl in es is no di ffer en t: in th at cas e,

t h e o w n e r of ai rcra ft flyin g fro m Co lo m bi a to th e Uni te d St at es “ fai le d to ta ke a n y

m eas ur es to de te ct c o n t r a b a n d,” ev en th ou gh th e ai rcra ft were un de r th e own er’s

co nt ro l be fo re reac hi ng th e U.S. bo rd er. ARCA Airl in es , 72 6 F. Su pp

. at 83 1
(em ph as is ad de d)

.

Not hi ng in Lan cas hi re or ARCA Airl in es su pp or ts th e no ti on th at an in no cen t

own er is li ab le fo r cri m in al it y pe rp et rat ed by a st ran ge r ag ai ns t th e own er’s pr op ert y 1 2

in ci rcu m st an ces whe re th e pr op ert y own er can do no th in g to pr ev en t th e cri m e
be cau se th e own er la ck s co nt ro l ov er th e pr op ert y

. The se cas es cert ai n l y d o n o t

su pp or t th e pr op os it io n UP is li ab le fo r fai li ng to “ m a[k ]e as care fu l a se arch ” as th e

“ cu st om s of

fic ers [wh o] tu rn ed up th e [il le ga l dr ug s],” Lan cas hi re, 17 F. Su pp

. at 57 4,

whe n UP ha d no ab il it y to do so —i n no sm al l pa rt be cau se CBP wil l no t al lo w UP to

se arch tra in s at th e bo rd er un ti l CBP in sp ect s th e tra in s. Cf. Aus ti n, 50 9 U.S. at 61 5-

16

.

b. Rea so na bl e In terp reta tio n

Unt il CBP en ds it s on go in g vi ol at io n of § 73 69

, 10 2 St at

. at 44 8, by ad op ti ng , th ro ug h fo rm al ru le m ak in g, a co ns ti tu ti on al ly so un d in te rp ret at io n of “ hi gh es t de gr ee

of care an d di li ge nc e,” th ere is on ly on e reas on ab le in te rp ret at io n op en to us : th e ph ras e’s well -es ta bl is he d co m m on la w meani ng

. Co nt rary to CBP’s rep eat ed

p r o n o u n c em en ts

, th e co m m on la w de fin it io n ha s no th in g to do wit h ov ert ur ni ng

st on es

. Cf. Lan cas hi re, 17 F. Su p p

. a t 57 4. The co m m on la w m ean in g co m es no t

fro m an un pe rs ua si ve , co lo rfu l di st ric t co ur t or de r bu t fro m au th or it at iv e Su pr em e

Co ur t op in io ns ex pl ai ni ng th at “ th e hi gh es t de gr ee of care an d di li ge nc e” is no th in g

W e ne ed no t de lv e in to th e nu an ces of Mex ic an la w to rec o g n i z e th at 1 2

va nd al iz in g a rai lc ar i n o rd er t o h id e il le ga l d ru gs in si de is cri m in al co nd uc t.

-2 1-m or e th an th e no rm al

, el ev at ed st an da rd of care ex pe ct ed of an y co m m on carr ie r. See, e.g., N.Y. Cen t. R.R. Co . v. Loc kwo od , 84 U.S. (17 W al l.) 35 7, 37 7- 78 (1 87 3)
(“ In reg ul at in g th e pu bl ic est ab li sh m en t o f co m m on carr ie rs , t he gr eat ob ject of th e

la w was to se cu re th e ut m os t care an d di li ge nc e in th e pe rfo rm an ce of th ei r im po rta nt

du ti es —an ob

ject ess en ti al to th e welf

are of ev ery ci vi li zed co m m un it y .”); Ph il a. &

Rea di ng R.R. Co . v. Derb y , 55 U.S. (2 Ho w.) 46 8, 4 86 (18 52 ). 1 3

Of pa rti cu la r rel ev an ce to th is cas e, th e Su pr em e Co ur t ex pl ai ne d in Hor st th at

th e p hr as e “ hi gh es t d eg ree o f car e an d d il ig en ce”

do [es ] no t m ean al l th e care an d di li ge nc e th e hu m an m in d can co nc ei ve of

, no r s u c h as wil l ren de r th e tra ns po rta ti on free fro m an y po ss ib le

pe ril

, no r su ch as wou ld dr iv e th e carr ie r fro m hi s bu si ne ss

. It do es no t, fo r in st an ce, req ui re, wit h res p e c t t o ei th er pa ss en ge r or frei gh t tra in s,
st eel rai ls an d iro n or gr an it e cro ss -ti es , be cau se su ch ti es are le ss li ab le

to de cay, an d he nc e sa fer th an th os e of woo d; no r up on frei gh t-t rai ns ai rbr ak es , be ll -p ul ls

, an d a br ak es m an up on ev ery c a r ; bu t it do es

em ph at ic al ly req ui re ev ery th in g ne ces sa ry to th e se cu r i t y o f th e
pa ss en ge r up on ei th er, an d re as on ab ly co ns is te nt wi th th e bu si ne ss of
th e ca rr ie r, a nd

th e mea ns of

co nv eya nc e emp lo

yed

.

Hor st

, 93 U.S. at 29 6- 97 (em ph as is ad de d)

. By de m an di ng th at UP ach ie ve wha t th e

Mex ic an m il it ary ha s be en un ab le to acco m pl is h— pr ev en t m

ur de ro us dr

ug cart el s

The go ve rn m en t pu rs ue s a di si ng en uo us cl ai m th at “ ‘the hi gh es t de gr ee o f 1 3

care ’ se ts th e ba r hi gh er th an ‘the de gr ee of care a reas on ab le co mmon ca rr ie r wou ld

ex erci se un de r th e ci rcu m st an ces ,’ ” an d th en ci te s on ly cas es di st in gu is hi ng be twee n

“ th e hi gh es t de gr ee of care ” an d “ th e de gr ee of care th at an or di na ry , reas on ab le

pe rs on w oul d ex erci se in si m il ar ci rcu m st an ces .” (Sec on d an d th ird em ph as es ad de d) (ci ti ng Mar ti ne z v. Uni on Pac. R.R. Co

., 82 F.3 d 22 3, 22 8 (8 th Ci r. 19 96 ); Peyton v. St

. Lou is S.W

. Ry

. Co

., 96 2 F.2 d 83 2, 83 4 (8 th Ci r. 19 92 )). Of co ur se , th e co m m on la w hi gh es t de gr ee of care , whi ch is si m pl y th e care ex pe ct ed of a reas on ab le co mmon

ca rr ie r , is hi gh er th an th e de gr ee of care ex pe ct ed of a reas on ab le pe rs on

. See, e.g ., In di an ap ol is & St . Lou is R.R. Co . v. Ho rs t, 9 3 U.S. 2 91 , 29 6- 97 (18 76 ).

-2 2-fro m hi di ng il le ga l dr ug s in Mex ic an tra in s— CBP is ho ld in g UP to an un ach ie va bl e

st an da rd ex pr es sl y reject ed by th e Su pr em e Co ur t: “ al l th e care an d di li ge nc e” CBP

“ can co nc ei ve of

,” rat he r th an th e care an d di li ge nc e w h i c h a r e reas on ab le

. Id

. (em ph as is ad de d)

. The go ve rn m en t ha s a si ng le refr ai n: UP m us t do “ m or e.” Bu t th e

co m m on la w st an da rd req ui res no mor e th an th e reas on ab le ne ss of a co m m on carr ie r. See, e.g ., Aus ti n, 5 09 U.S. at 6 16 ; Ho rs t, 9 3 U.S. at 29 7.

UP ha s do ne ev erythi ng “ reas on ab ly co ns is te nt wit h [it s] bu si ne ss

. . . an d th e

m ean s of th e co nv ey an ce em pl oyed” t o p rev en t d ru g s m ug gl in g o n t he U.S. si de of

th e bo rd er. Hor st

, 93 U.S. a t 2 9 7. UP ha s hi red it s own po li ce fo rce, co ns tru ct ed

bu il di ng s fo r CBP’s us e, an d ev en fo un d dr ug s CBP m is se d. The de ci si ve po in t fo r

th is cas e is th at th e co m

m on la w req ui rem en t of care an d di li ge nc e ap pl ie s to th e

co m m on carr ie r in co nt ro l

. UP di d no t co nt ro l th e Mex ic an rai ls

, whe th er bu il t up on

“ woo d” or “ gr an it e cro ss -ti es ,” on whi ch th e tr a i n s r o l l e d to th e U.S. bo rd er. Id

. Neit he r co ul d UP pu t “ a br ak es m an ”—o r a gu ard wit h a m ach in e gu n— “ up on ev ery

car” un ti l aft er th e tra in s reac he d th e Uni te d St at es an d CBP co m pl et ed it s in sp ect io n.
Id

. Und er th e co m

m on la w st an da rd

, UP act ua ll y di d m or e th an en ou gh on th e tra in s

it di d no t co nt ro l in si de a co u n t ry in whi ch it ha s no op erat io ns : UP pr es su red

Ferr om ex to en s ur e each U.S.-bo un d rai lc ar, UP own ed or no t, is se arch ed at le as t

twi ce by th e Mex ic an m ili tary

. CBP can no t reas on ab ly ex pe ct pr iv at e pe rs on ne l hi red
by UP to ou tp erfo rm th e Mex ic an m il it ary in wha t am ou nt s to a warzo ne , ev en if th e 1 4

st at ut e au th or iz ed CBP to fo rce UP to se cu re in di vi du al rai lc ar s p ul le d by fo rei gn
lo co m ot iv es

.

See, e.g ., Ju ne S. B e i t t e l

, Co ng

. Res earc h Serv

., R4 15 76

, Mex ic o’s Dru g 1 4

Tr a f f i c ki ng Org an iz at io ns : So ur ce an d Sco pe of th e Vio le nc e 1 (2 01 3) (“ Mex ic o’s
br ut al dr ug tra ffi ck in g- rel at ed vi ol en ce ha s be en dr am at ic al ly pu nc t u a t ed by m or e th an 1,3 00 be he ad in gs , pu bl ic ha ng in g of co rp se s, ki ll in g of in no cen t bysta nd ers , car bom bs, tor tur e, an d as sa ss in at io n of nu m ero us jou rn al is ts an d gove rn m en t of fi ci al s. ”)

.

-2 3-Fi nd in g no st a t u t o r y or lo gi cal reas on to acce pt CBP’s in te rp ret at io n of

§ 15 84 (a)( 2)

, we “ de cl in e to co ns tru e th e [s ta tu te ] in a m an ne r th at co ul d in tu rn cal l

up on [u s] to res ol ve di ffi cu lt an d se ns it iv e qu es ti on s ari si ng ou t of th e gu aran te es of

th e” Fi fth Am en dm en t Du e P r o c es s Cl au se

. Cat ho li c Bi sh op , 44 0 U.S. at 50 7.

Co ns is te nt wit h t he ha ll owe d ru le s of co ns ti tu ti on al av oi da nc e, we ch oo se to av oi d

th es e “ di ffi cu lt an d se ns it iv e qu es ti on s” by in te rp ret in g th e ph ras e “ hi gh es t de gr ee of

care an d di li ge nc e” in acco rd an ce wit h it s we l l

- e s t ab li sh ed co m m on la w m ean in g.

W e th eref

or e co nc lu de al l of th e CBP pe na lt ie s as se ss ed ag ai ns t UP are “ no t in

acco rd an ce w i t h l aw” an d “ in ex ces s of st at ut or y

. . . a ut ho rit y [an d] l im it at io ns , o r
sh or t o f st at ut or y

rig ht .” 5 U.S.C. § 70 6( 2)

.

C. Rem edi es

Bec au se th e pe na lt ie s are “ un la wfu l,” th ey m us t be “ se t as id e.” Id

. The di st ric t

co ur t di d no t st op wit h se tt in g as id e th e pe na lt ie s, ch oo si ng al so to en joi n CBP fro m

pe na li zi ng UP “ un ti l su ch ti m e as reg ul at io ns pe rm it ti ng su c h a c t i o n are pr op erl y

pr om ul ga te d.” The go ve rn m en t ch al le ng es th e di st ric t co ur t’s ch oi ce o f rem ed ie s,

m ai nt ai ni ng th at th e di st ric t co ur t erre d by (1 ) no t “ rem an d[ in g ] to th e ag en cy fo r

fu rth er co ns id erat io n,” an d (2 ) tying CBP’s “ au th or it y un de r th e Tari ff Act it se lf to

im po se ci vi l pe na lt ie s” to CBP’s pr om ul ga ti o n o f “ reg ul at io ns in te rp ret in g ‘the

hi gh es t de gr ee’ st an da rd .” Alt ho ug h rem an d to th e ag en cy is no t warra nt ed in th is

cas e, we m

us t v acat e th e d is tri ct co ur t’s i nju nc ti on

.

1. Rem an d to the Ag ency

Fo cu si ng on th e di st ric t co ur t’s al te rn at e fin di ng th at CBP’s act i o n s were
arb it rary an d cap ric io us , th e go ve rn m en t co nt en ds “ in so fa r as th e di st ric t co ur t

co nc lu de d th at [CBP ] fai le d to co ns id er cert ai n is su es an d to art ic ul at e it s reas on in g
ad eq ua te ly, th os e are pr eci se ly th e so rt of erro rs th at th e ag en cy co ul d co rrec t— an d

is en ti tl ed to co rrec t— on rem an d.” (In te rn al ci ta t i o n o m it te d)

. W e do no t res t ou r
de ci si on on th e di st ric t co ur t ’s a l t e r n at e fin di ng , s o th e ag en cy is no t en ti tl ed to try

ag ai n.

-2 4-To be su re, CBP’s reas on in g is in co ns is te nt

, in co m pl et e, an d at ti m es ev en

in co m pr eh en si bl e. In on e m em or an du m , CBP wro te “ th at by pr es en ti ng th e

1 5

m an ife st , [ UP] is res po ns ib le fo r it s accu racy.” (Em ph as is ad de d)

. Howev er, CBP

la te r wro te “ [t]he pe rti ne nt qu es ti on

. . . is no t who was res po ns ib le fo r pr es en ti ng th e

m an ife st .” (Em

ph as is ad de d)

. The n, at arg um en t, th e go ve rn m en t as se rte d “ th e key,

ul ti mat e is su e he re i s wh o pr es en ts th e m an ife st .” (Em ph as is ad de d)

.

Equ al ly ba ffl in g, wit hi n a sin gle m em or an dum CBP ack no wled ge d UP “ di d no t

ha ve th e op po rtu ni ty to in sp ect th e su bjec t rai lc ars pr io r to [CBP ’s] in sp ect io n,” y et

de cl ared th at UP “ ha s ch os e n t o e n g a ge in a hi gh -ri sk m ark et of carr ia ge

. . . fr om

Mexi co to th e Uni te d St at es .” (Em ph as is ad de d)

. How co ul d UP, wit ho ut an y

op erat io ns in Mex ic o, t ran sp or t t rai ns “ fr om Mex ic o” ? CBP o ffer s n o e xp la na ti on

. Th e tru th is UP do es no t pa rti ci pa te in th e “ hi gh -ri sk m ark et of carr ia ge

. . . fro m

Mex ic o,” bu t rat he r pa rti ci pa te s so le ly in th e m ark et of carr ia ge fro m CBP in sp ect io n
faci li ti es on th e U.S. si de of t he bo rd er to ot he r po in ts in th e Uni te d Stat es

. Hav in g

no op erat io ns in Mex ic o, UP o pe rat es en ti rel y wit hi n t he Uni te d S ta te s.

Bu t we n eed no t deci de whe th er CBP’s act io ns were arbi tra ry an d c ap ric io us

un de r th e APA be cau s e C B P ’s act io ns ex ceed ed it s st at ut or y au th or it y un de r th e

Tari ff Act. An a d mi n i st rat iv e rem an d m ay be ap pr op ria te whe n an ag en cy

pr oc ed ur al ly err s b y

fai li ng to art ic ul at e a rea so ne d b as is for it s d eci si on

. W he n an

ag en cy le ga ll y errs by act in g ou ts id e it s st at ut or y au th or it y , a rem an d wou ld be fu ti le

an d im pr op er. W e si m

pl y wil l no t rem an d “ ‘[w] he re ap pl ic at io n of th e co rrec t le ga l

st an da rd co ul d le ad to on ly o ne co nc lu si on .’ ” Zab al a v. Ast ru e, 59 5 F.3 d 40 2

, 40 9

W e are rem in de d of Cal vi n, Am eri ca’s co m ic si x- y ear- ol d, who to ld hi s 1 5

st uf fed ti ge r “ th e pu rp os e of writ in g is to in fla te weak id eas , ob sc ur e po or reas on in g,

an d in hi bi t cl ari ty. W it h a li tt le pr act ic e, writ in g can be a n i nt im id at in g an d
im pe ne tra bl e fo g.” Bi ll W at te rs on , Homi c i d a l Ps y ch o Ju ng le Cat : A Cal vi n an d
Hob be s C ol le ct io n 6 2 (1 99 4)

.

-2 5-(2 d Ci r. 20 10 ) (al te rat io n in or ig in al ) (q uo ti ng Sch al l v. Apf el

, 13 4 F.3 d 49 6, 50 4 (2 d

Ci r. 19 98 )).

As the go ve rn m en t ess en ti al ly co nc ed es , a ho ld in g th at CBP lac ke d st at ut or y

au th or it y to pe na li ze UP “ le ad [s ] to on ly one co nc lu si on ”:

[I]f th is Co ur t were to up ho ld th e di st ric t co ur t’s pr in ci pa l ho ld in g, th at [CBP ]’ s act i on s were ul tr a vi re s in th e ab se nc e of reg ul at io ns

es ta bl is hi ng cri te ria in te rp ret in g “ th e hi gh es t de gr ee” st an da rd in [§ ] 15 84 (a)( 2) , a re man d w ou ld ser ve n o p ur

po se

.

(Em ph as is ad de d)

. Alt ho ug h we do no t th in k CBP’s act io ns were u nl awfu l fo r

pr eci se ly th is reas on , we do ag ree wit h th e d i s tri ct co ur t’s co nc lu si on th at CBP’s

act io ns were ul tr a v ir es . On rem an d, “ on ly o ne co nc lu si on wou ld be su pp or ta bl e.”

Don ov an v. Staff

or d Con st r. Co

., 73 2 F.2d 95 4, 96 1 (D.C. Cir. 1 98 4) . Giv in g CBP

a ch an ce to po li sh it s writ in g an d pa tc h it s reas on in g wou ld no t m ak e CBP’s act io ns

an y les s co ns ti tu ti on al ly sus pe ct or a ny m or e au th or iz ed by stat ut e.

2. In junc tio n By co nt ras t, th e go ve rn m en t’s ch al le ng e to th e di st ric t co ur t’s im pr ov id en t

in jun ct io n m ak es t h e g r a de

. W it ho ut ci ta ti on to an y au th or it y , th e di st ric t co ur t

op in ed th at CBP’s fai lu re to co m pl y wit h th e co ng res si on al di rect iv e to de fin e

“ hi gh es t de gr ee of care an d di li ge nc e” t hr ou gh for m al rul em ak in g, se e § 73 69 , 1 02

St at

. at 44 8, m ean t CBP was “ no t free to un il at eral ly crea te it s own in te rp ret at io n of

th e Tari ff Act ou ts id e th e no ti ce-a nd -co m m en t pr oc ed ur e [o r]

. . . to en fo rce an

un au th or iz ed st an da rd ag ai ns t [UP].” On th at ba si s, th e di st ric t co ur t is su ed an

in jun ct io n d e s i gn ed to fo rce CBP to en act fo rm al ru le s. The di st ric t co ur t erre d in

two way s.

Fi rs t, un le ss Co ng r e s s “spe ci f[i es ] a co ns eq ue nc e fo r no nc om pl ia nc e wit h

st at ut or y ti m in g pr ov is io ns , th e fed eral co ur ts wil l no t in th e or di na ry co ur se im po se

-2 6-th ei r own co erci ve sa nc ti on .” Uni te d St at es v. Ja m es Dan ie l Goo d Rea l Pro p., 51 0

U.S. 43

, 63 (1 99 3)

. Co ng res s co m m an de d th e ag en cy to pr om ul ga te fo rm al ru le s, se e § 73 69

, 10 2 St at

. at 44 8, bu t Co ng res s di d no t “s p e c i fy a co ns eq ue nc e fo r

no nc om pl ia nc e,” J am es Dani el Goo d, 51 0 U.S. a t 63

. In acco rd an ce wit h a “ ‘great

pr in ci pl e of pu bl ic po li cy ,’ ” we do no t al lo w “ ‘pub li c in te res ts [to ] be pr ejud ic ed by

th e ne gl ig en ce of the of

fic ers or ag en ts to who se care th ey are co nf id ed .’ ” Bro ck v.

Pi erce Cn ty., 47 6 U.S. 25 3, 26 0 (1 98 6) (q uo ti ng Uni te d St at es v. Nas hv il le

, C. & St

. L. Ry

. Co

., 11 8 U.S. 12 0, 1 2 5 (1 88 6) ). W he th er th e ag en cy ’s bl at an t an d on go in g

n o n co m pl ia nc e, se e § 73 69

, 10 2 St at

. at 44 8, is du e to ne gl ig en ce, bu re a u c r a t i c

in co m pe te nc e, st rat eg ic av oi da nc e, or so m et hi ng m or e ne fari ou s, we wil l no t gr aft

on to th e st at ut e a pe na l t y C o n g r e s s d id no t crea te

. And we wil l no t or de r CBP to

co m pl y wit h § 73 69 , 10 2 S ta t. at 40 8, b ecau se UP ne ve r req ue st ed th at rem ed y

.

Seco nd

, CBP’s act io ns in th is cas e are un la wfu l no t be cau se CBP fai le d to

co m pl y wit h § 73 69

, 10 2 St at

. at 44 8, bu t be cau se CBP ex c e e d e d i t s st at ut or y

au th or it y un de r 19 U.S.C. § 1 5 8 4 ( a)(2 ). No reg ul at io n CBP co ul d “ pr op erl y

pr om ul ga te ” wou ld au th or iz e CBP to pe na li ze UP fo r il le ga l dr ug s fo un d on rai lc ars

UP ne it he r own s n or co nt ro ls be cau se th e st at ut e d oe s n ot au th or iz e su ch pe na lt ie s.

As to an y UP own ed rai lc ars , CBP sh ou ld be free in th e fu tu re to co m pl y wit h
§ 73 69

, 10 2 St at

. at 44 8, by de ve lo pi ng a reas on ab le an d co ns ti tu ti on al ly so un d

de fin it io n of “ hi gh es t de gr ee of care an d di li ge nc e” or , if CBP w i s h e s t o co nt in ue ig no rin g Co ng res s’s ex pr es s di rect iv e, CBP m ay ap pl y th e es ta bl is he d co m m on la w
de fin it io n. 1 6

As ou r earl ie r di sc us si on m ak es cl ear, th e co m m on la w st an da rd

, to th e ex te nt 1 6

it ap pl ie s to rai lc ars , wil l n o t p e r mi t C BP to pe na li ze UP fo r dr ug s fo un d on UP

o w n e d rai lc ars un de r th e Mex ic an rai lro ad s’ co nt ro l un le ss UP is ne gl ig en t i n

en tru st in g it s rai lc ars to th e co nt ro l of th e Mex ic an rai l r o a d s ( a p os it io n th e
go ve rn m en t ha s no t ta ke n in th is cas e). See, e.g ., Aus ti n, 50 9 U.S. at 61 5- 16 ; Pei sc h, 8 U.S. (4 Cran ch ) at 36 4- 65

.

-2 7-In th is cas e we ha ve acce pt ed

, wit ho ut ru li ng up on , th e pa rti es ’ ta ci t ag reem en t

th at (1 ) th e “ hi gh es t de gr ee” ex cep ti on ap pl ie s no t jus t to “ ve ss el [s ]” bu t al so to

“ v e h i c l e[s ,] ” an d (2 ) CBP, rat he r th an “ th e co ur t,” de ci de s th e ex cep ti on ’s

ap pl ic ab il it y in th e fir st in st an ce. 19 U.S.C. § 15 84 (a)( 2) (ex em pt in g fro m pe na lt y

“ t h e mas te r or own er of a ves se l us ed by an y pe rs on as a co m m on carr ie r

. . . if it

ap pe ars to th e sa ti sf

act io n of th e co ur t th at ne it he r th e m as te r no r an y of th e of fic ers

. . . no r th e own er of th e ves se l kn ew, a n d c o u l d n o t

, by th e ex erci se of th e hi gh es t

de gr ee of care an d di li ge nc e, ha ve kn own , t h a t [il le ga l] dr ug s were on bo ard ”
(em ph as is ad de d) ). Nor ha v e w e d e c i d ed whe th er th e te rm “ ve hi cl e,” as us ed in
§ 15 84 (a)( 2)

, en co m

pa ss es an in di vi du al rai lc ar whi ch ha s no m ean s of se lf

pr op ul si on

. Fo r th es e reas on s, an d on th is reco rd

, to da y is no t th e ti m e to en joi n CBP

fro m pe na li zi ng UP in th e fu tu re fo r dr ug s fo un d o n UP o wne d ra il cars

.

W e va cat e th e di st ric t co ur t’s erro ne ou s in jun ct io n an d di rect th e di st ric t co ur t

to en joi n CBP on ly fro m pe na li zi ng UP fo r il le ga l dr ug s fo u n d o n r a i l c ars th at UP

ne it he r co nt ro ls no r own s.

II I. CONCLUSI ON

W e affi rm in pa rt, va cat e th e in jun ct io n, an d rem an d wit h in st ru ct io ns to is su e

a co rrec te d i nju nc ti on co ns is te nt wit h t hi s o pi ni on

.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

-2 8-