Existing law makes a person guilty of organized retail theft if, among other things, the person acts in concert with one or more persons to steal merchandise from one or more merchants premises or online marketplace with the intent to sell, exchange, or return the merchandise for value. Under existing law, these crimes are punishable as either misdemeanors or felonies, as specified.

This bill would expand that crime to include merchandise stolen from a merchants cargo. By expanding the scope of a crime, this bill would create a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Date of Hearing: March 28, 2023

Counsel: Liah Burnley

ASSEMBLY COMMITTEE ON

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:

Author:() – As Ver:

SUMMARY:

Expands the crime of organized retail theft to include merchandise stolen from a merchant’s cargo.

EXISTING LAW:

1. States that a person who commits any of the following acts is guilty of organized retail theft:
   
   1. Acts in concert with one or more persons to steal merchandise from one or more merchant’s premises or online marketplace with the intent to sell, exchange, or return the merchandise for value;
      
   2. Acts in concert with two or more persons to receive, purchase, or possess merchandise as defined, knowing or believing it to have been stolen;
      
   3. Acts as an agent of another individual or group of individuals to steal merchandise from one or more merchant’s premises or online marketplaces as part of an organized plan to commit theft; or,
      
   4. Recruits, coordinates, organizes, supervises, directs, manages, or finances another to undertake any of these acts or any other statute defining theft of merchandise. (Pen. Code, § 490.4, subd. (a).)
      
2. Punishes organized retail theft, as follows:
   
   1. If violations of the provisions directed at acting in concert or as an agent are committed on two or more separate occasions within a one-year period, and if the aggregated value of the merchandise stolen, received, purchased, or possessed within that period exceeds $950, the offense is punishable as an alternate felony-misdemeanor (a “wobbler”);
      
   2. Any other violation of the provisions directed at acting in concert or as an agent is punishable as a misdemeanor by imprisonment in a county jail not exceeding one year; and,
      
   3. A violation of the recruiting, coordinating, organizing, supervising, directing, managing, or financing provision is punishable as a wobbler. (Pen. Code, § 490.4, subd. (b).)
      
3. States that every person who steals, takes, carries, leads, or drives away the personal property of another, or who fraudulently appropriates property which has been entrusted to them, or who knowingly and designedly, by any false or fraudulent representation or pretense, defrauds any other person of money, labor or real or personal property, is guilty of theft. (Pen. Code, § 484, subd. (a).)
   
4. Provides that every person who enters any house, room, apartment, tenement, shop, warehouse, store, mill, barn, stable, outhouse or other building, tent, vessel, floating home, railroad car, locked or sealed cargo container, house car, inhabited camper, locked vehicle, aircraft, or mine with attempt to commit theft or any felony is guilty of burglary. (Pen. Code, § 459.)
   
5. Defines grand theft as theft of money, labor, real or personal property of a value exceeding $950. (Pen. Code, § 487.)
   
6. Provides that the value of the money, labor, real property, or personal property taken exceeds $950 over the course of distinct but related acts, the value of the money, labor, real property, or personal property taken may properly be aggregated to charge a count of grand theft, if the acts are motivated by one intention, one general impulse, and one plan. (Pen. Code, § 487, subd. (e).)
   
7. Provides that every person who steal, takes, or carries away cargo of another, if the cargo is taken of a value exceeding $950, is guilty of grand theft. (Pen. Code, § 487h, subd. (a).)
   
8. Defines “cargo” as any goods, wares, products or manufactured merchandise that has been loaded into a trailer, railcar, or cargo container, awaiting or in transit. (Pen. Code § 487h, subd. (b).)
   
9. Defines “cargo container” as a receptacle with strong enough for repeated use, designed to facilitate the carriage of goods, fitted for handling from one mode of transport to another, designed to be easy to fill and empty, and having a cubic displacement of 1,000 cubic feet or more. (Pen. Code, § 458.)
   
10. Provides that every person who destroys any part of a railroad, including any structure or fixture attached to or connected with any railroad, is guilty of a misdemeanor punishable by imprisonment in the county jail not exceeding one year, or a felony, punishable by imprisonment in county jail for a period of 16 months, two, or three years. (Pen. Code, § 489, subd. (c)(1).)
    
11. Makes it a felony, punishable by imprisonment in a county jail for a term of two, three, or four years, to obstruct a railroad track. (Pen. Code, § 218.1.)
    
12. Makes trespass on a railroad or any transit related property a misdemeanor. (Pen. Code, § 369i.)
    
13. Provides that any railroad police officer, as specified, are peace officers whose authority extends to any place in the State for the purpose of performing their primary duty or when making an arrest. (Pen. Code, § 830.33, subd. (e).)

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author's Statement: According to the author, “Theft is on the rise, and the costs are passed onto Californians. Businesses are hit in their stores, and also up and down the supply chain – from trains to cargo containers. AB 523 modernizes the state’s response to organized retail theft to include where other acts of theft are committed. Protecting the supply chain strengthens the state’s economy and guarantees families have access to day-to-day essentials.”
   
2. Organized Retail Theft: AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018, among other things, created the crime of organized retail theft and expanded jurisdictional rules for theft offenses. AB 1065 had a sunset date of January 1, 2021. AB 331 (Jones-Sawyer), Chapter 113, Statutes of 2021, re-established the crime of organized retail theft through 2025.
   
   This bill would unnecessarily enlarge the organized retail theft statute, which was intended to cover the limited circumstances of theft of merchandise from a merchant’s premises or online marketplace with the intent to sell, exchange, or return the merchandise for value. The supply chain is not a retailer. Moreover, property in cargo is not in all cases “merchandise.”
3. Existing Law Allows for Increased Penalties for Cargo Theft: To the extent this bill is aimed at increasing penalties for thefts, there are currently a number of laws that prosecutors can use to charge cargo theft that call for increased penalties. Grand theft of property (including cargo) valued over $950 is already chargeable as a felony offense, punishable by imprisonment in county jail for a period of 16 months, two or three years. (Pen. Code, § 489, subd. (c)(1).) Also, any person who steals, takes, or carries away cargo of another, if the cargo is taken of a value exceeding $950, is guilty of grand theft. (Pen. Code, § 487h, subd. (a).) And, any person who enters any railroad car or locked or sealed cargo container with attempt to commit theft or any felony is guilty of burglary, which is a felony, punishable by imprisonment in county jail for a period of 16 months, two or three years. (Pen. Code, §§ 459; 461, subd. (b).)

In instances where the property stolen from cargo is less than $950, the crime is punishable by a fine not exceeding $1,000 or by imprisonment in the county jail not exceeding 6 months, or both. (Pen. Code, § 490.) If a person trespasses on a railroad or any transit related property during the commission of the offense, they can be charged with an additional misdemeanor. (Pen. Code, § 369i.) If a person trespasses on a railroad with intent to commit robbery, they can be subject to imprisonment of a term of not more than twenty years under federal law. (18 U.S.C. § 1991.)

Existing law also allows for increased penalties for thefts less than $950, for example by aggregation of theft offenses. Repeated acts of theft can be aggregated and prosecuted as one felony if they are conducted pursuant to one intention, one general impulse, and one plan. (People v. Bailey (1961) 55 Cal.2d 514, 518-519 (Bailey).)

Moreover, under California law, if two or more persons conspire to commit any crime, even misdemeanor petty theft, they can be charged with a felony for the conspiracy itself. Thus, any time there is more than one person involved in any act of cargo theft the offense can be charged as felony conspiracy, regardless of the value of the items stolen. (Pen. Code, § 182.)

In sum, cargo theft is already a crime and there are already many legal options for charging cargo thefts with increased penalties.

1. Railroad Cargo Theft: According to background materials provided by the author, “Representatives from the Union Pacific Railroad indicated that rail thefts experienced a 160% increase in 2021 compared to 2020. The throttling of the supply chain, compounded by increased gas prices, climbing inflation, and rising interest rates put additional pressure on the economy. Unfortunately, this also spurred increased activity in the illicit market: household goods and electronics were the most stolen commodities in 2022.”
   
   In California, railroad police officers have general peace officer authority. (Pen. Code, § 830.33, subd. (e).) Under federal law, railroad police have interstate authority; they can enforce the laws of any jurisdiction in which the rail carrier owns property to protect patrons of the rail carrier, property, equipment and facilities, personnel, equipment and material moving by rail, and property moving in interstate or foreign commerce in the possession of the rail carrier. (49 U.S.C. § 28101.)
   
   The Union Pacific Police Department is the law enforcement agency of Union Pacific’s (UP) railroad. The first UP special agents were hired during the “Hell on Wheels” era to protect cargo from train robbers in the Wild West. (Union Pacific Special Agents: The Badges Behind the Shield, UP (April 2016). https://www.up.com/aboutup/community/inside_track/badges-04-11-2016.htm [as of March 8, 2023].) According to UP, the Union Pacific Police Department has primary jurisdiction over crimes committed against the railroad. The department is responsible for all UP locations across 32,000 miles of track in 23 states. (Ibid.) UP police have full police authority and are responsible for crimes that include trespassing on railroad rights of way, theft of railroad property, threats of terrorism and derailments, well as investigate public safety incidents which occur on railroad property. They often work with local, state, and federal law enforcement agencies on issues concerning the railroad. (Ibid.) Union Pacific special agents and local law enforcement officers have overlapping jurisdictions, but UP railroad property is the Union Pacific Police Department’s responsibility. (Ibid.)
   
   In December 20, 2021, UP sent a letter to Los Angeles County District Attorney George Gascón, regarding train thefts and security concerns. The letter states, in part:

“Since December 2020, UP has experienced an over 160% increase in criminal rail theft in Los Angeles County. In several months during that period, the increase from the previous year surpassed 200%. In October 2021 alone, the increase was 356% over compared to October 2020. Not only do these dramatic increases represent retail product thefts – they include increased assaults and armed robberies of UP employees performing their duties moving trains. …

“This increased criminal activity over the past twelve months accounts for approximately $5 million in claims, losses and damages to UP. And that value does not include respective losses to our impacted customers. Nor does it capture the larger operating or commercial impacts to the UP network or supply chain system in Los Angeles County.

“In response to this increased, organized, and opportunistic criminal activity, UP by its own effort and cost enlisted additional and existing Special Agents across the UP system to join our local efforts with LAPD, LASD and CHP to help prevent the ongoing thefts. We have also utilized and are further exploring the use of additional technologies to help us combat these criminals through drones, specialized fencing, trespass detection systems, and other measures.”

(Letter from Union Pacific Railroad (Dec. 20, 2021) <https://www.up.com/cs/groups/public/@uprr/@newsinfo/documents/up_pdf_nativedocs/pdf_up_la_district_atty_211221.pdf>.)

Notably, UP’s train thefts started right around the time it laid off thousands of workers. According to UP’s annual reports to the federal Surface Transportation Board, the company ended 2019 with 23,096 employees. In 2020, that number fell to 20,334. And that number fell again to 18,408 in the third quarter of 2021. (Quarterly Wage A&B Data, Surface Transportation Board. <https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/>.) According to the Los Angeles Times, former UP employees and police say budgetary issues have slashed the ranks of the company’s force, leaving as few as half a dozen in the region. (‘Like A Third World Country’: Gov. Newsom Decries Rail Thefts amid Push to Beef up Enforcement, Los Angeles Times (Jan. 20, 2022) <https://www.latimes.com/california/story/2022-01-20/los-angeles-rail-theft-supply-chain-crunch-limited-security>.) “Union Pacific from Yuma, Ariz., to L.A. has six people patrolling…” and “thefts started about seven months ago as the police presence ebbed.” (Ibid.) UP’s employment numbers remain low, despite record profits for the rail operator. UP reported a net income of $6.5 billion for 2021. (Union Pacific Reports Fourth Quarter and Full Year 2021 Results, UP (Jan. 2022) <https://www.up.com/media/releases/4q21-earnings-nr210120.htm>.)

In response to UP’s letter, Los Angeles District Attorney George Gascón stated:

“In response to your letter, we conducted a thorough review of cases submitted for filing consideration over the last three years in which UP is listed as a victim. In order to appropriately respond to your concerns, we wanted to know the actual data behind your claims, so we can address the issues. Here are the numbers: In 2019, 78 cases were presented for filing. In 2020, 56 cases were presented for filing. And in a sharp decline, in 2021, 47 such cases were presented for filing consideration, and over 55% were filed by my Office. The charges filed included both felony and misdemeanor offenses alleging burglary, theft, and receiving stolen property. Of the 20 cases that were declined for filing, 10 were not filed due to the insufficiency of the evidence presented to prove the case beyond a reasonable doubt, which is our ethical standard to file a criminal case. The other 10 declined matters involved offenses such as allegations of unhoused individuals within 20 feet of the railroad tracks and simple possession of drugs for personal use—not allegations of burglary, theft, or tampering. Although homelessness is a serious issue, it is not one that we can fix through expending resources of the criminal legal system.

“To be clear, felony and misdemeanor cases are filed where our Office is presented with enough evidence to prove that a crime was committed. We understand how vital the rail system is to Los Angeles County and the entire nation and want to work with you in a productive manner to ensure that those who tamper with or steal from UP are held accountable. As more Americans engage in e-commerce and rely on our transportation infrastructure to receive goods, it is important that our work to ensure the safety of this system is collaborative. Part of this collaboration involves taking preventative steps to ensure that cargo containers are secure or locked. Furthermore, UP has its own law enforcement officers who are responsible for patrolling and keeping areas safe. However, according to LAPD Deputy Chief Al Labrada, UP does little to secure or lock trains and has significantly decreased law enforcement staffing. It is very telling that other major railroad operations in the area are not facing the same level of theft at their facilities as UP. We can ensure that appropriate cases are filed and prosecuted; however, my Office is not tasked with keeping your sites secure and the District Attorney alone cannot solve the major issues facing your organization.”

(Letter from George Gascón, Los Angeles County District Attorney, (Jan. 21, 2022) <https://da.lacounty.gov/sites/default/files/pdf/Letter-to-Union-Pacific-012122.pdf>.)

Further, railroad police such as UP work with both local, state and federal law enforcement agencies. (Policing America’s Railroads, Mission Critical Communications (Sept. 2014)<https://www.npstc.org/download.jsp?tableId=37&column=217&id=3198&file=RR_Police_IO_Mission_Critical_Comm_Sept_2014.pdf> .) Thus, UP police can seek federal assistance and prosecution under federal law.

1. Argument in Support: According to California Trucking Association, “Due to the pandemic and transition to at home working life, the demand for ordering online goods mailed directly to a residence has risen to unexpected levels. This has resulted in record levels of packages being delivered to Californian’s doorsteps every day. The surge in consumer demand also brings an alarming rate of organized package theft hurting both carriers delivering the goods and consumers receiving their packages on time.
   
   “Package thefts at a Union Pacific Railyard in Los Angeles highlighted the need to hold offenders responsible for their actions. Many of our members utilize the railyards to transport their customer’s packages into, out of, or within California. The goods movement sector is already experiencing delivery delays due to supply chain woes, and replacing stolen packages will contribute to congestion.”
   
2. Argument in Opposition: According to California Public Defenders Association (CPDA) “AB 528 would add ‘cargo; to the definition of ‘organized retail theft’ in Penal Code section 490.4, subdivision (a)(1). This would be an unwarranted departure from the existing definition of that crime, which has remained unchanged ever since Section 490.4’s inception by AB 1065 (Stats. 2019, Ch. 803), effective January 1, 2019. ‘Organized retail theft’ has always been defined as theft (or related offenses, and under specified circumstances), from ‘one or more merchant’s premises or online marketplace.’ (Italics added).
   

“When the original Penal Code section 490.4 was about to sunset, it was re-enacted without relevant change, by AB 331 (Stats. 2021, Ch. 113), as urgency legislation effective July 21, 2021. The definition of ‘organized retail theft’ was unchanged.

“The change proposed by AB 523, the addition of ‘cargo’ to that definition, is unwarranted for two reasons. The first reason is that the legislature had already separately outlawed the theft of cargo whose value exceeds $950, in Penal Code section 487h. Adding ‘cargo’ to the definition of ‘organized retail theft’ would result in considerable overlap of the two sections, thus making the Penal Code even more confusing and hard to apply than it already is.

“The second reason is more important: adding ‘cargo’ to the definition of ‘organized retail theft’ would substantially change the evil at which Penal Code section 490.4 is carefully tailored to reach and would sweep in offenses that were not originally intended.

“Currently, Penal Code section 490.4 is aimed at premises and online marketplaces. It provides increased penalties for gangs or groups who swarm into a place of business to steal en mass; or who, even if only one person enters, plan as a group to commit theft in a place of business; or who commit similar computer offenses.

“But ‘cargo’ is defined as ‘any goods, wares, products, or manufactured merchandise that has been loaded into a trailer, railcar, or cargo container, awaiting or in transit.’ (Penal Code section 487h, subdivision (b).) This does not require a premises where retail business is conducted, nor an online marketplace; it thus departs substantially from the place of business that Penal Code section 490.4 is tailored to protect.”

1. Related Legislation: AB 329 (Ta), would expand the territorial jurisdiction in which the Attorney General can prosecute specified theft offenses and associated offenses connected together in their commission to include cargo theft. AB 329 failed passage in this Committee.
   
2. Prior Legislation:
   
   1. AB 2543 (Fong), of the 2021-2022 Legislative Session, would have made burglary with regard to a railroad car or a cargo container punishable by imprisonment in a county jail for two, four, or six years. AB 2543 was not heard in this committee at the request of the author.

• 1. AB 2769 (O’Donnell), of the 2021-2022 Legislative Session, would have made burglary of a cargo container, railroad car, or cargo, where the property stolen or damaged is valued over $950, a felony offense. AB 2769 was not heard in this committee at the request of the author.
     
  2. AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018, created the crime of organized retail theft, established a property crimes task force, and expanded jurisdictional provisions for theft offenses.
     
  3. AB 2805 (Olsen), of the 2015-2016 Legislative Session, would have created a cargo theft prevention working group coordinated by the California Highway Patrol. AB 2805 was vetoed.
     
  4. SB 24 (Oropeza), Chapter 607, Statutes of 2009, eliminated the sunset date on cargo theft, and clarified that the elements of cargo theft are the same as other forms of grand theft.
     
  5. AB 1814 (Oropeza), Chapter 515, Statutes of 2004, created a specific statute providing that the theft of cargo of a value in excess of $400 is grand theft and contained a sunset date of January 1, 2010.
     

REGISTERED SUPPORT / OPPOSITION:

Support

Calchamber
California Association of Highway Patrolmen
California Retailers Association
California State Sheriffs' Association
California Trucking Association
El Dorado County Chamber of Commerce
Elk Grove Chamber of Commerce
Folsom Chamber of Commerce
Lincoln Area Chamber of Commerce
National Insurance Crime Bureau
Peace Officers Research Association of California (PORAC)
Rancho Cordova Chamber of Commerce
Rocklin Area Chamber of Commerce
Roseville Chamber of Commerce
United Chamber Advocacy Network
Yuba Sutter Chamber of Commerce

Opposition

California Public Defenders Association (CPDA)

Californians for Safety and Justice

Initiate Justice

San Francisco Public Defender

Analysis Prepared by:

Date of Hearing: March 21, 2023

Counsel: Liah Burnley

ASSEMBLY COMMITTEE ON

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:

Author:() – As Ver:

SUMMARY:

Expands the crime of organized retail theft to include merchandise stolen from a merchant’s cargo.

EXISTING LAW:

1. States that a person who commits any of the following acts is guilty of organized retail theft:
   
   1. Acts in concert with one or more persons to steal merchandise from one or more merchant’s premises or online marketplace with the intent to sell, exchange, or return the merchandise for value;
      
   2. Acts in concert with two or more persons to receive, purchase, or possess merchandise as defined, knowing or believing it to have been stolen;
      
   3. Acts as an agent of another individual or group of individuals to steal merchandise from one or more merchant’s premises or online marketplaces as part of an organized plan to commit theft; or,
      
   4. Recruits, coordinates, organizes, supervises, directs, manages, or finances another to undertake any of these acts or any other statute defining theft of merchandise. (Pen. Code, § 490.4, subd. (a).)
      
2. Punishes organized retail theft, as follows:
   
   1. If violations of the provisions directed at acting in concert or as an agent are committed on two or more separate occasions within a one-year period, and if the aggregated value of the merchandise stolen, received, purchased, or possessed within that period exceeds $950, the offense is punishable as an alternate felony-misdemeanor (a “wobbler”);
      
   2. Any other violation of the provisions directed at acting in concert or as an agent is punishable as a misdemeanor by imprisonment in a county jail not exceeding one year; and,
      
   3. A violation of the recruiting, coordinating, organizing, supervising, directing, managing, or financing provision is punishable as a wobbler. (Pen. Code, § 490.4, subd. (b).)
      
3. States that every person who steals, takes, carries, leads, or drives away the personal property of another, or who fraudulently appropriates property which has been entrusted to them, or who knowingly and designedly, by any false or fraudulent representation or pretense, defrauds any other person of money, labor or real or personal property, is guilty of theft. (Pen. Code, § 484, subd. (a).)
   
4. Provides that every person who enters any house, room, apartment, tenement, shop, warehouse, store, mill, barn, stable, outhouse or other building, tent, vessel, floating home, railroad car, locked or sealed cargo container, house car, inhabited camper, locked vehicle, aircraft, or mine with attempt to commit theft or any felony is guilty of burglary. (Pen. Code, § 459.)
   
5. Defines grand theft as theft of money, labor, real or personal property of a value exceeding $950. (Pen. Code, § 487.)
   
6. Provides that the value of the money, labor, real property, or personal property taken exceeds $950 over the course of distinct but related acts, the value of the money, labor, real property, or personal property taken may properly be aggregated to charge a count of grand theft, if the acts are motivated by one intention, one general impulse, and one plan. (Pen. Code, § 487, subd. (e).)
   
7. Provides that every person who steal, takes, or carries away cargo of another, if the cargo is taken of a value exceeding $950, is guilty of grand theft. (Pen. Code, § 487h, subd. (a).)
   
8. Defines “cargo” as any goods, wares, products or manufactured merchandise that has been loaded into a trailer, railcar, or cargo container, awaiting or in transit. (Pen. Code § 487h, subd. (b).)
   
9. Defines “cargo container” as a receptacle with strong enough for repeated use, designed to facilitate the carriage of goods, fitted for handling from one mode of transport to another, designed to be easy to fill and empty, and having a cubic displacement of 1,000 cubic feet or more. (Pen. Code, § 458.)
   
10. Provides that every person who destroys any part of a railroad, including any structure or fixture attached to or connected with any railroad, is guilty of a misdemeanor punishable by imprisonment in the county jail not exceeding one year, or a felony, punishable by imprisonment in county jail for a period of 16 months, two, or three years. (Pen. Code, § 489, subd. (c)(1).)
    
11. Makes it a felony, punishable by imprisonment in a county jail for a term of two, three, or four years, to obstruct a railroad track. (Pen. Code, § 218.1.)
    
12. Makes trespass on a railroad or any transit related property a misdemeanor. (Pen. Code, § 369i.)
    
13. Provides that any railroad police officer, as specified, are peace officers whose authority extends to any place in the State for the purpose of performing their primary duty or when making an arrest. (Pen. Code, § 830.33, subd. (e).)

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author's Statement: According to the author, “Theft is on the rise, and the costs are passed onto Californians. Businesses are hit in their stores, and also up and down the supply chain – from trains to cargo containers. AB 523 modernizes the state’s response to organized retail theft to include where other acts of theft are committed. Protecting the supply chain strengthens the state’s economy and guarantees families have access to day-to-day essentials.”
   
2. Organized Retail Theft: AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018, among other things, created the crime of organized retail theft and expanded jurisdictional rules for theft offenses. AB 1065 had a sunset date of January 1, 2021. AB 331 (Jones-Sawyer), Chapter 113, Statutes of 2021, re-established the crime of organized retail theft through 2025.
   
   This bill would unnecessarily enlarge the organized retail theft statute, which was intended to cover the limited circumstances of theft of merchandise from a merchant’s premises or online marketplace with the intent to sell, exchange, or return the merchandise for value. The supply chain is not a retailer. Moreover, property in cargo is not in all cases “merchandise.”
3. Existing Law Allows for Increased Penalties for Cargo Theft: To the extent this bill is aimed at increasing penalties for thefts, there are currently a number of laws that prosecutors can use to charge cargo theft that call for increased penalties. Grand theft of property (including cargo) valued over $950 is already chargeable as a felony offense, punishable by imprisonment in county jail for a period of 16 months, two or three years. (Pen. Code, § 489, subd. (c)(1).) Also, any person who steals, takes, or carries away cargo of another, if the cargo is taken of a value exceeding $950, is guilty of grand theft. (Pen. Code, § 487h, subd. (a).) And, any person who enters any railroad car or locked or sealed cargo container with attempt to commit theft or any felony is guilty of burglary, which is a felony, punishable by imprisonment in county jail for a period of 16 months, two or three years. (Pen. Code, §§ 459; 461, subd. (b).)

In instances where the property stolen from cargo is less than $950, the crime is punishable by a fine not exceeding $1,000 or by imprisonment in the county jail not exceeding 6 months, or both. (Pen. Code, § 490.) If a person trespasses on a railroad or any transit related property during the commission of the offense, they can be charged with an additional misdemeanor. (Pen. Code, § 369i.) If a person trespasses on a railroad with intent to commit robbery, they can be subject to imprisonment of a term of not more than twenty years under federal law. (18 U.S.C. § 1991.)

Existing law also allows for increased penalties for thefts less than $950, for example by aggregation of theft offenses. Repeated acts of theft can be aggregated and prosecuted as one felony if they are conducted pursuant to one intention, one general impulse, and one plan. (People v. Bailey (1961) 55 Cal.2d 514, 518-519 (Bailey).)

Moreover, under California law, if two or more persons conspire to commit any crime, even misdemeanor petty theft, they can be charged with a felony for the conspiracy itself. Thus, any time there is more than one person involved in any act of cargo theft the offense can be charged as felony conspiracy, regardless of the value of the items stolen. (Pen. Code, § 182.)

In sum, cargo theft is already a crime and there are already many legal options for charging cargo thefts with increased penalties.

1. Railroad Cargo Theft: According to background materials provided by the author, “Representatives from the Union Pacific Railroad indicated that rail thefts experienced a 160% increase in 2021 compared to 2020. The throttling of the supply chain, compounded by increased gas prices, climbing inflation, and rising interest rates put additional pressure on the economy. Unfortunately, this also spurred increased activity in the illicit market: household goods and electronics were the most stolen commodities in 2022.”
   
   In California, railroad police officers have general peace officer authority. (Pen. Code, § 830.33, subd. (e).) Under federal law, railroad police have interstate authority; they can enforce the laws of any jurisdiction in which the rail carrier owns property to protect patrons of the rail carrier, property, equipment and facilities, personnel, equipment and material moving by rail, and property moving in interstate or foreign commerce in the possession of the rail carrier. (49 U.S.C. § 28101.)
   
   The Union Pacific Police Department is the law enforcement agency of Union Pacific’s (UP) railroad. The first UP special agents were hired during the “Hell on Wheels” era to protect cargo from train robbers in the Wild West. (Union Pacific Special Agents: The Badges Behind the Shield, UP (April 2016). https://www.up.com/aboutup/community/inside_track/badges-04-11-2016.htm [as of March 8, 2023].) According to UP, the Union Pacific Police Department has primary jurisdiction over crimes committed against the railroad. The department is responsible for all UP locations across 32,000 miles of track in 23 states. (Ibid.) UP police have full police authority and are responsible for crimes that include trespassing on railroad rights of way, theft of railroad property, threats of terrorism and derailments, well as investigate public safety incidents which occur on railroad property. They often work with local, state, and federal law enforcement agencies on issues concerning the railroad. (Ibid.) Union Pacific special agents and local law enforcement officers have overlapping jurisdictions, but UP railroad property is the Union Pacific Police Department’s responsibility. (Ibid.)
   
   In December 20, 2021, UP sent a letter to Los Angeles County District Attorney George Gascón, regarding train thefts and security concerns. The letter states, in part:

“Since December 2020, UP has experienced an over 160% increase in criminal rail theft in Los Angeles County. In several months during that period, the increase from the previous year surpassed 200%. In October 2021 alone, the increase was 356% over compared to October 2020. Not only do these dramatic increases represent retail product thefts – they include increased assaults and armed robberies of UP employees performing their duties moving trains. …

“This increased criminal activity over the past twelve months accounts for approximately $5 million in claims, losses and damages to UP. And that value does not include respective losses to our impacted customers. Nor does it capture the larger operating or commercial impacts to the UP network or supply chain system in Los Angeles County.

“In response to this increased, organized, and opportunistic criminal activity, UP by its own effort and cost enlisted additional and existing Special Agents across the UP system to join our local efforts with LAPD, LASD and CHP to help prevent the ongoing thefts. We have also utilized and are further exploring the use of additional technologies to help us combat these criminals through drones, specialized fencing, trespass detection systems, and other measures.”

(Letter from Union Pacific Railroad (Dec. 20, 2021) <https://www.up.com/cs/groups/public/@uprr/@newsinfo/documents/up_pdf_nativedocs/pdf_up_la_district_atty_211221.pdf>.)

Notably, UP’s train thefts started right around the time it laid off thousands of workers. According to UP’s annual reports to the federal Surface Transportation Board, the company ended 2019 with 23,096 employees. In 2020, that number fell to 20,334. And that number fell again to 18,408 in the third quarter of 2021. (Quarterly Wage A&B Data, Surface Transportation Board. <https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/>.) According to the Los Angeles Times, former UP employees and police say budgetary issues have slashed the ranks of the company’s force, leaving as few as half a dozen in the region. (‘Like A Third World Country’: Gov. Newsom Decries Rail Thefts amid Push to Beef up Enforcement, Los Angeles Times (Jan. 20, 2022) <https://www.latimes.com/california/story/2022-01-20/los-angeles-rail-theft-supply-chain-crunch-limited-security>.) “Union Pacific from Yuma, Ariz., to L.A. has six people patrolling…” and “thefts started about seven months ago as the police presence ebbed.” (Ibid.) UP’s employment numbers remain low, despite record profits for the rail operator. UP reported a net income of $6.5 billion for 2021. (Union Pacific Reports Fourth Quarter and Full Year 2021 Results, UP (Jan. 2022) <https://www.up.com/media/releases/4q21-earnings-nr210120.htm>.)

In response to UP’s letter, Los Angeles District Attorney George Gascón stated:

“In response to your letter, we conducted a thorough review of cases submitted for filing consideration over the last three years in which UP is listed as a victim. In order to appropriately respond to your concerns, we wanted to know the actual data behind your claims, so we can address the issues. Here are the numbers: In 2019, 78 cases were presented for filing. In 2020, 56 cases were presented for filing. And in a sharp decline, in 2021, 47 such cases were presented for filing consideration, and over 55% were filed by my Office. The charges filed included both felony and misdemeanor offenses alleging burglary, theft, and receiving stolen property. Of the 20 cases that were declined for filing, 10 were not filed due to the insufficiency of the evidence presented to prove the case beyond a reasonable doubt, which is our ethical standard to file a criminal case. The other 10 declined matters involved offenses such as allegations of unhoused individuals within 20 feet of the railroad tracks and simple possession of drugs for personal use—not allegations of burglary, theft, or tampering. Although homelessness is a serious issue, it is not one that we can fix through expending resources of the criminal legal system.

“To be clear, felony and misdemeanor cases are filed where our Office is presented with enough evidence to prove that a crime was committed. We understand how vital the rail system is to Los Angeles County and the entire nation and want to work with you in a productive manner to ensure that those who tamper with or steal from UP are held accountable. As more Americans engage in e-commerce and rely on our transportation infrastructure to receive goods, it is important that our work to ensure the safety of this system is collaborative. Part of this collaboration involves taking preventative steps to ensure that cargo containers are secure or locked. Furthermore, UP has its own law enforcement officers who are responsible for patrolling and keeping areas safe. However, according to LAPD Deputy Chief Al Labrada, UP does little to secure or lock trains and has significantly decreased law enforcement staffing. It is very telling that other major railroad operations in the area are not facing the same level of theft at their facilities as UP. We can ensure that appropriate cases are filed and prosecuted; however, my Office is not tasked with keeping your sites secure and the District Attorney alone cannot solve the major issues facing your organization.”

(Letter from George Gascón, Los Angeles County District Attorney, (Jan. 21, 2022) <https://da.lacounty.gov/sites/default/files/pdf/Letter-to-Union-Pacific-012122.pdf>.)

Further, railroad police such as UP work with both local, state and federal law enforcement agencies. (Policing America’s Railroads, Mission Critical Communications (Sept. 2014)<https://www.npstc.org/download.jsp?tableId=37&column=217&id=3198&file=RR_Police_IO_Mission_Critical_Comm_Sept_2014.pdf> .) Thus, UP police can seek federal assistance and prosecution under federal law.

1. Argument in Support: According to California Trucking Association, “Due to the pandemic and transition to at home working life, the demand for ordering online goods mailed directly to a residence has risen to unexpected levels. This has resulted in record levels of packages being delivered to Californian’s doorsteps every day. The surge in consumer demand also brings an alarming rate of organized package theft hurting both carriers delivering the goods and consumers receiving their packages on time.
   
   “Package thefts at a Union Pacific Railyard in Los Angeles highlighted the need to hold offenders responsible for their actions. Many of our members utilize the railyards to transport their customer’s packages into, out of, or within California. The goods movement sector is already experiencing delivery delays due to supply chain woes, and replacing stolen packages will contribute to congestion.”
   
2. Argument in Opposition: According to California Public Defenders Association (CPDA) “AB 528 would add ‘cargo; to the definition of ‘organized retail theft’ in Penal Code section 490.4, subdivision (a)(1). This would be an unwarranted departure from the existing definition of that crime, which has remained unchanged ever since Section 490.4’s inception by AB 1065 (Stats. 2019, Ch. 803), effective January 1, 2019. ‘Organized retail theft’ has always been defined as theft (or related offenses, and under specified circumstances), from ‘one or more merchant’s premises or online marketplace.’ (Italics added).
   

“When the original Penal Code section 490.4 was about to sunset, it was re-enacted without relevant change, by AB 331 (Stats. 2021, Ch. 113), as urgency legislation effective July 21, 2021. The definition of ‘organized retail theft’ was unchanged.

“The change proposed by AB 523, the addition of ‘cargo’ to that definition, is unwarranted for two reasons. The first reason is that the legislature had already separately outlawed the theft of cargo whose value exceeds $950, in Penal Code section 487h. Adding ‘cargo’ to the definition of ‘organized retail theft’ would result in considerable overlap of the two sections, thus making the Penal Code even more confusing and hard to apply than it already is.

“The second reason is more important: adding ‘cargo’ to the definition of ‘organized retail theft’ would substantially change the evil at which Penal Code section 490.4 is carefully tailored to reach and would sweep in offenses that were not originally intended.

“Currently, Penal Code section 490.4 is aimed at premises and online marketplaces. It provides increased penalties for gangs or groups who swarm into a place of business to steal en mass; or who, even if only one person enters, plan as a group to commit theft in a place of business; or who commit similar computer offenses.

“But ‘cargo’ is defined as ‘any goods, wares, products, or manufactured merchandise that has been loaded into a trailer, railcar, or cargo container, awaiting or in transit.’ (Penal Code section 487h, subdivision (b).) This does not require a premises where retail business is conducted, nor an online marketplace; it thus departs substantially from the place of business that Penal Code section 490.4 is tailored to protect.”

1. Related Legislation: AB 329 (Ta), would expand the territorial jurisdiction in which the Attorney General can prosecute specified theft offenses and associated offenses connected together in their commission to include cargo theft. AB 329 will be head by this Committee today.
   
2. Prior Legislation:
   
   1. AB 2543 (Fong), of the 2021-2022 Legislative Session, would have made burglary with regard to a railroad car or a cargo container punishable by imprisonment in a county jail for two, four, or six years. AB 2543 was not heard in this committee at the request of the author.

• 1. AB 2769 (O’Donnell), of the 2021-2022 Legislative Session, would have made burglary of a cargo container, railroad car, or cargo, where the property stolen or damaged is valued over $950, a felony offense. AB 2769 was not heard in this committee at the request of the author.
     
  2. AB 1065 (Jones-Sawyer), Chapter 803, Statutes of 2018, created the crime of organized retail theft, established a property crimes task force, and expanded jurisdictional provisions for theft offenses.
     
  3. AB 2805 (Olsen), of the 2015-2016 Legislative Session, would have created a cargo theft prevention working group coordinated by the California Highway Patrol. AB 2805 was vetoed.
     
  4. SB 24 (Oropeza), Chapter 607, Statutes of 2009, eliminated the sunset date on cargo theft, and clarified that the elements of cargo theft are the same as other forms of grand theft.
     
  5. AB 1814 (Oropeza), Chapter 515, Statutes of 2004, created a specific statute providing that the theft of cargo of a value in excess of $400 is grand theft and contained a sunset date of January 1, 2010.
     

REGISTERED SUPPORT / OPPOSITION:

Support

Calchamber

California Association of Highway Patrolmen

California Retailers Association

California State Sheriffs' Association

California Trucking Association

El Dorado County Chamber of Commerce

Elk Grove Chamber of Commerce

Folsom Chamber of Commerce

Lincoln Area Chamber of Commerce

National Insurance Crime Bureau

Peace Officers Research Association of California (PORAC)

Rancho Cordova Chamber of Commerce

Rocklin Area Chamber of Commerce

Roseville Chamber of Commerce

United Chamber Advocacy Network

Yuba Sutter Chamber of Commerce

Opposition

California Public Defenders Association (CPDA)

Initiate Justice

Analysis Prepared by: