District Court Orders Forwarder to Pay Importer $5.8 Million in Unpaid AD/CV Duties

A federal court in Chicago ordered a freight forwarder to refund $5,838,992.21 in unpaid antidumping and countervailing duties to Union Pacific after finding in December that it improperly kept payments intended to be used as cash deposits (see 1712210020). Though Pactrans was not a licensed broker, a power of attorney signed by Union Pacific created a fiduciary duty on the part of the forwarder to ensure the cash deposits were transmitted to CBP by the broker, the Northern Illinois U.S. District Court had said (see 1712210020).

In a two-page final judgment issued Feb. 2, the district court ruled in favor of Union Pacific on its claims of breach of fiduciary duty, breach of contract and accounting. The court also ordered Pactrans to pay post-judgment interest at a rate of 1.84 percent, as well as Union Pacific’s costs. The court dismissed the remainder of Union Pacific’s suit, including a motion to pierce the corporate veil and hold Pactrans’ corporate officers directly responsible. Attorneys representing Pactrans and Union Pacific did not comment.

Union Pacific filed the lawsuit in August 2016, alleging it paid Pactrans, who was purportedly acting as its broker, nearly $6 million with the expectation that the AD/CV duty cash deposits would be transmitted to CBP. After the investigation ended with no duties imposed, Pactrans kept the money instead of refunding it to Union Pacific, the complaint said (see 1608170010). Pactrans disputed that it was acting as Union Pacific’s broker, and said it instead contracted out brokerage services to Nissin. Pactrans did admit in its court filings that it “has failed to pay Union Pacific” the overpayments.

Email ITTNews@warren-news.com for a copy of the final judgment.