CBP Admits to Lab Mistake in Closed Cigar Wrap Weighing Case

DOJ said it recently discovered that it made inaccurate statements in a now-concluded case involving tobacco excise taxes for cigar wrappers, telling the U.S. Court of Appeals for the Federal Circuit in an April 21 motion that it said samples of the goods relied on in the case were from from a specific entry when they were not, and that it has only identified the source of six of the nine samples considered by the court (New Image Global v. U.S., Fed. Cir. # 19-2444).

Although DOJ said importer New Image never raised the source of the samples as an issue in that case, the company filed two related complaints at the Court of International Trade in October, where it alleged, for the first time, that the lab reports were false and unreliable (see 2210310062).

DOJ said that it asked the court for leave to withdraw the two statements that inaccurately described the entries of tobacco cigar wraps made by New Image "out of a deep commitment to transparency and candor." DOJ said that the statements were made in good faith during the proceedings but were recently discovered to be inaccurate while it was reviewing evidence in the CIT cases.

According to DOJ, the error occurred because, "when submitting the 350 tobacco wraps to the laboratory, the CBP import specialist submitted all of the samples referencing one entry number, BIM1120692-2, and although some of the 350 samples submitted to the laboratory were taken from that entry," the samples of New Image's "XXL" wraps were not.

The government also filed a similar motion at CIT in the underlying case (see 1907240009). On April 24, CIT Judge Jane Restani ruled that motion was "of no moment" to the case because New Image never challenged the government's motion for summary judgment and the court waived any future arguments based on the sample selection.

New Image said that it opposes the government’s CAFC motion because it views the government’s duty as the disclosure of "all the potential ramifications" of the false statements. Those statements, New Image said, "were material to the court’s finding that Customs lab reports were reliable, and the reported weights were accurate." The company said that it reserves the right to file a response.

In April 2012, CBP weighed samples of New Image's XXL tobacco cigar wraps to calculate the excise tax. CBP used an “indirect method” to weigh the wraps and arrived at a weight of 0.915 grams per wrap instead of New Image's stated 0.75 grams. New Image argued that CBP’s test was scientifically unreliable, but the court was unconvinced and sustained the tax assessment. New Image appealed, challenging CIT's interpretation of the excise statute. CAFC ultimately dismissed the case, but in October 2022, New Image filed complaints at CIT. After reviewing the claims, CBP learned that the weighed wraps were not taken from the listed entry.