Union Pacific 2005 Annual Report Download - page 17

The District Attorney alleged that diesel fuel from this spill entered waters of the State of California. The
complaint also asserted claims under the above referenced statutes for any other diesel spill that may have
occurred in the State of California between 2000 and 2003, in which diesel may have passed into waters of the
State of California. It sought injunctive relief and civil penalties of $25,000 for the alleged February 16, 2000, diesel
spill and total penalties of not less than $250,000 for all diesel spills that may have occurred since 2000. The
District Attorney filed an amended complaint on April 10, 2003, which narrowed the claims to the incident of
February 16, 2000. The amended complaint seeks both injunctive relief and daily penalties for each day that fuel
was in the affected waterway, which could exceed $100,000.
As we reported in our Annual Report on Form 10-K for 2003, the District Attorneys of Merced, Madera, and
Stanislaus Counties in California filed a criminal case against the Railroad relating to a series of alleged releases of
calcium oxide (lime). The criminal case was dismissed in the last quarter of 2003 and was subsequently refiled as a
civil action by several counties in the San Joaquin County Superior Court. The refiled suit sought civil penalties
against the Railroad in connection with the release of lime from an unidentified rail car between Chowchilla and
Sacramento, California, on December 27, 2001, and another incident in which lime leaked from a rail car between
Chowchilla and Stockton, California, on February 21, 2002. The suit contended that regulatory violations
occurred by virtue of the Railroad’s alleged failure to timely report the release of a “hazardous material,” its
alleged disposal of hazardous waste, and the alleged release of material into the waters of the State of California.
On September 20, 2004, the Court dismissed the suit with prejudice. The State appealed this decision and the
appeal remains pending.
As we reported in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, the Illinois
Attorney General’s office filed an Agreed Order and Complaint and a Complaint for Injunctive and Other Relief
on October 7, 2004, in the Circuit Court for the Twentieth Judicial Circuit (St. Clair County) against The Alton &
Southern Railway Company, a wholly owned subsidiary of the Railroad, as a result of a collision and derailment
on September 21, 2004. The state seeks to enjoin The Alton & Southern from further violations, as well as a
monetary penalty. The amount of the proposed penalty is uncertain but could exceed $100,000.
In 2001 we received information indicating EPA considered the Railroad a potentially responsible party for
the Omaha Lead Site. The Omaha Lead Site consists of approximately 12,800 acres of residential property in the
eastern part of Omaha, Nebraska, allegedly impacted by air emissions from two former lead smelters/refineries.
One refinery was operated by ASARCO. EPA identified the Railroad as a potentially responsible party, because
more than 60 years ago, we owned land that was leased to ASARCO. The Railroad disputes both the legal and
technical base for EPA’s allegations. It has nonetheless engaged in extensive negotiations with EPA. These
negotiations have reached an apparent impasse. EPA issued a Unilateral Administrative Order with an effective
date of December 16, 2005, directing the Railroad to implement an interim remedy at the site at an estimated cost
of $50 million. Failure to comply with the order without just cause could subject the Railroad to penalties of up to
$32,500 per day and triple EPA’s costs in performing the work. The Railroad believes it has just cause not to
comply with the order, but it offered to perform some of the work specified in the order as a compromise. If EPA
rejects the offer, the Railroad will vigorously contest liability and the imposition of any penalties.
On December 12, 2005, the Illinois Attorney General’s office filed a complaint in the Circuit Court for the
Twenty-First Judicial Circuit (St. Clair County) seeking injunctive relief and civil penalties against the Railroad
relating to a collision between UPRR and Norfolk Southern (NS) trains near Momence, Illinois, on November 24,
2005. The collision derailed approximately five locomotives and 30 railcars. Two of the UPRR locomotives and
two of the NS locomotives caught fire and four of the locomotives released approximately 16,000 gallons of diesel
fuel. Other cars carrying food products derailed and released an unknown amount of product. The Railroad
promptly responded and remediation is ongoing. The State seeks a permanent injunction against the Railroad
ordering UPRR to continue remediation. The State seeks to enjoin UPRR from further violations and a monetary
penalty. The amount of the proposed penalty is uncertain.
The Illinois Attorney General’s office filed a complaint in the Circuit Court for the Twentieth Judicial Circuit
(St. Clair County) for injunctive and other relief on November 28, 2005, against the Railroad, alleging a diesel fuel
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