CIT Denies Bids for Reconsideration, Certification of Customs Fraud Opinion Sending Case to Trial

The Court of International Trade on Feb. 16 denied an importer and its owner's motion for reconsideration in a penalty case where they stand accused of customs fraud, as well as their bid to appeal a single issue in the case related to the date the alleged fraud was discovered (United States v. Greenlight Organic, CIT # 17-00031).

Greenlight Organic and Parambir Singh Aulakh had asked the court to reconsider its August decision that the defendants couldn't prove that the fraud had been discovered over five years before the government filed its penalty suit, causing the statute of limitations had run out. They also asked the court to certify the issue of the date the fraud was discovered for interlocutory appeal to the U.S. Court of Appeals for the Federal Circuit.

The defendants cited CIT Rule 59 as the basics for their motion for reconsideration, which says the court can grant a rehearing after a nonjury trial. Judge Jennifer Choe-Groves ruled that since a nonjury trial has not taken place, the rule does not apply.

As for their motion for interlocutory appeal, the judge said that Greenlight's and Aulakh's claims over the undisputed facts in the case "reveal that Defendants’ disagreement is not with the Court’s statement of the law but with the Court’s conclusion that there are insufficient undisputed facts on which to determine the date of discovery of fraud and that these disputed issues of material fact must be presented to a factfinder." Since this means an appellate court would have to review the case's facts, certification for interlocutory appeal is not warranted, the judge held.

The U.S. brought the case in 2017 to root out a misclassification scheme carried out by Greenlight. Fraud was allegedly committed when the importer claimed its Vietnam-origin knit garments were misclassified as woven garments, dutiable at a lower rate, undervaluing the goods. Greenlight originally argued that the suit was beyond the statute of limitations since Section 1592 cases can only be brought within five years after the date of the alleged violation. Fraud cases must be brought within five years after the government discovers the fraud. In a 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 determine when the fraud was found, eventually floating three dates, each of which would see the case dismissed. The U.S. argued for a different date than those used by the defendants. In August 2022, Choe-Groves held that since the parties "agree upon very few facts," the fact-specific inquiry of finding the date of when a statute of limitations begins to run cannot be conducted. The judge ordered a trial to sort out the facts.

Choe-Groves said the trade court can certify a question for interlocutory appeal when the order to be appealed involves a controlling question of law, have substantial ground for difference of opinion and be of a nature where its immediate appeal may materially advance the ultimate conclusion of the litigation. On this first point, the judge said that the factual disputes still stand are not merely legal questions.

"Because the proposed question for certification is not purely a question of law and would require the appellate court to review the facts of the case (the findings of fact which are yet to be determined at trial), the first element of interlocutory appeal is not satisfied," the judge said. Choe-Groves added that she does not see a "substantial ground for difference of opinion as to the controlling law" or that an interlocutory appeal "would ultimately result in a more efficient resolution of this matter."

As for the reconsideration motion, the judge held that reconsideration "would amount to re-litigation without good reason ... ."