US Moves to Scrap Remaining Claims in Customs Penalty Suit on Cooler Parts

The U.S. moved to dismiss a customs penalty suit it brought against importers Cruzin Cooler and Bad Lama and their owner Kevin Beal after it already obtained default judgment from the Court of International Trade against the companies for knowingly misclassifying their entries to lower their duty liability (United States v. Cruzin Cooler, CIT # 15-00333).

The trade court issued default judgment against Cruzin Cooler and Bad Lama in 2020, but not against Beal, after the companies' counsel withdrew (see 2007100039). The result was a nearly $1 million penalty for customs fraud. The U.S. alleged the companies ignored compliance letters from CBP regarding the classification of its parts for the Cruzin Cooler.

The government now seeks to drop the remaining claims against Beal. Beal has twice before sought to amend his pleadings to make counterclaims, but both attempts were rejected by the court, which said the motions were untimely and that the court lacked subject matter jurisdiction to consider a counterclaim based on "entries not at issue in the litigation."

The U.S. said Beal "can offer no persuasive rationale as to why the claims should not be dismissed." The trade court "has already twice denied Mr. Beal’s untimely attempts to amend the pleadings in order to assert a counterclaim," the brief said. Setting the timing considerations aside, "this Court lacks subject matter jurisdiction to entertain a claim for the recovery of duties that have not been protested through the administrative process," the U.S. argued.