ATLANTA – UPS has settled a lawsuit filed by the New York Office of the Attorney General (OAG) for $1.3 million. The company said it was involved in a four-year investigation by the New York Attorney General's Office concerning the company’s fleet of vehicles in upstate New York. UPS stated that “it neither admits nor denies the allegations that formed the basis of the investigation.” The company said it made a business decision to settle in order to avoid expending additional funds and resources.

Attorney General Eric T. Schneiderman’s investigation alleged that UPS “knowingly permitted package delivery trucks in serious disrepair to be driven and operated by UPS employees throughout New York State.”

The investigation began when a UPS mechanic contacted the OAG about four package delivery trucks that he had removed from service at the Watertown, New York facility in March 2006 with concerns about cracked frames. The OAG alleged that UPS allowed those trucks to remain in service without being repaired.

Despite this allegation, UPS said that independent inspections did not find fault with the company’s safety record in the State.

An independent expert concluded that UPS' fleet was safe in all respects, a conclusion that was never challenged, the company said. Also, during the state investigation, the U.S. Department of Transportation conducted its own inspections of UPS's fleet and facilities in the Empire State District. UPS stated that the U.S. DOT's Safety Inspector “paid special attention to frames," but concluded that "[n]o frame violations were found."

UPS said it maintains one of the safest fleets in the industry, and that this has been confirmed by the federal government as well as an independent expert who, as part of the investigation, both physically inspected UPS's fleet in New York and reviewed the same records the Attorney General's Office reviewed.

UPS stated that it firmly believes the Assurance of Discontinuance reached with the attorney general in this case does not reflect on the safety of its automotive fleet in upstate New York or anywhere else in the country. The company added that there has never been an accident or injury relating to the allegations made by the New York attorney general.

As part of the agreement with the State of New York, in addition to paying $1.3 million in penalties, fees, and costs, UPS agreed to bear the expense of retaining an independent inspector for the next five years, who the State of New York said will be pre-approved by the OAG, and who will conduct New York State vehicle inspections of UPS trucks in service within New York State.

For the first three years of this agreement, the independent inspector will conduct inspections of all UPS trucks in service within New York State. During the fourth and fifth years, the independent inspector will conduct "spot checks" of UPS trucks in service within New York State.

The OAG said that UPS also agreed to graduated penalties for any future violations ranging from $500 for the first violation within a one-year period and up to $10,000 for a fourth or any subsequent violation within a one-year period.