No Interlocutory Appeal in Customs Fraud Case Since No 'Question of Law' in Dispute, US Says

The Court of International Trade should not grant importer Greenlight Organic's and Parambir Singh Aulakh's motion for a certification of an order for an interlocutory appeal in a customs fraud case since the court's decision did not emit a "controlling question of law" to be appealed, the U.S. argued in a Sept. 1 reply brief. The court's opinion denied a motion for judgment since facts were still in dispute, precluding the interlocutory appeal, the U.S. said (United States v. Parambir Singh "Sonny" Aulakh, CIT #17-00031).

The U.S. brought the case in 2017 to contest an alleged misclassification scheme on behalf of importer Greenlight. Fraud was committed when the importer claimed its Vietnam-origin knit garments were misclassified as woven garments, dutiable at a lower rate, and undervaluing the goods. Greenlight originally argued the suit was beyond the statute of limitations since Section 1592 cases can be brought only within five years after the date of the alleged violation. Fraud cases, though, must be brought within five years after the government discovers the fraud. In the 2018 decision, the court denied summary judgment, questioning when the government actually knew about the fraud.

Greenlight sought to use the court's discovery process to find out exactly that (see 2107260038). Having done so, the importer argued the case could be dismissed as being time-barred according to federal law. It floated three dates, each of which would be sufficient to see the case tossed: May 31, 2011, when Leslie Jordan, principal of a competing business gave her complaint to Immigration and Customs Enforcement; Oct. 31, 2011, when ICE opened a formal investigation; and Dec. 19, 2011, when CBP opened a formal investigation. The U.S., meanwhile, said that it discovered evidence of the fraud no earlier than Feb. 9, 2012, when the importer first handed over some of its internal business records showing the double invoicing.

The judge said that because the parties cannot agree on many facts, the fact-specific inquiry of finding the date of when a statute of limitations begins to run cannot be conducted (see 2208040056). Greenlight contested this finding in its motion for rehearing, arguing that many facts relating to the discovery of fraud aren't in dispute, and the court's finding they are "constitutes clear error." The U.S. now contests the bid for rehearing, arguing that Greenlight has not fulfilled the factors needed for an appeal of this nature.

DOJ said that two standards need to be met to certify an interlocutory appeal: a court decision must present a controlling question of law for which there is a substantial ground for a difference of opinion; and an immediate appeal from the decision may materially advance the ultimate termination of the litigation. The U.S. argued that the defendants did not clear either of these hurdles.

"First, there is no 'pure question of law' that is 'controlling,'" the brief said. "In their motion, defendants omit that the Court’s August 4 opinion did not turn upon an interpretation of law. Rather, the Court denied defendants’ summary judgment motion because facts remain in dispute, and the Court 'can only consider undisputed facts, not disputed facts, for summary judgment.'"

The brief also claimed that certification would "prolong this litigation, not expedite it." Instead of just dismissing the case, the matter would be sent back to the trade court, and the jury would have to discover the date of the discovery of fraud and whether Greenlight's concealment of the evidence tolled the statute of limitations.