CIT Again Finds Bankruptcy Protection Doesn't Stop Customs Penalty Cases Against Importers

The Court of International Trade on Sept. 15 again ruled that filing for bankruptcy does not stop the government from pursuing Section 1592 penalty cases against importers in court. Mirroring a ruling issued by a different CIT judge in August (see 1708110027), CIT Judge Jennifer Choe-Groves held that Section 1592 has the legitimate public policy purpose of deterring customs fraud and encouraging accurate completion of entry documents. That means it qualifies for the public policy exemption from the automatic stay of claims on debtors during bankruptcy protection, she said. The purpose of the lawsuit is also to fix penalties, rather than collect them, seeing that the court still has a final say in the penalty amount, the court said. In the case, filed in February, the government alleges Greenlight Organic fraudulently imported athletic wearing apparel. Greenlight Organic filed for bankruptcy protection in Nevada in July.