CIT Declines to Dismiss Penalty Suit After Importer Says No Penalty Notice Received
A penalty action against an alleged importer of prohibited HID headlight conversion kits will proceed, after the Court of International Trade on May 15 denied Kevin Ho’s motion to dismiss the case against him. Ho claimed he never received a final penalty notice, as is required before the government seeks to collect penalties in court, but CIT found that CBP delivered the notice to two of Ho’s known addresses, and that under the “mailbox rule,” that Ho is presumed to have received it.
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Ho was owner and director of Atria, which allegedly entered HID headlight conversion kits, banned by the Department of Transportation, as “ballasts for interior track lighting fixtures.” While Ho acknowledged receipt of a pre-penalty notice from CBP, he said he never got the penalty notice, so the case should be dismissed. Ho also sought dismissal because he was never served a copy of the summons and complaint, and challenges the merits of the government’s arguments as well.
According to the “mailbox rule,” which is rooted in a 19th century Supreme Court decision, a letter is presumed to have been received if it was “properly directed” and is proved to have been “either put into the post office or delivered to the postman.” While one of three penalty notices sent by CBP was returned as undeliverable, the other two were delivered, and must be presumed to have been received by Ho, CIT said. Even if they weren’t, the case would not be dismissed because Ho had an opportunity to respond to the pre-penalty notice, CIT said.
CIT agreed that Ho was not properly served, but rather than dismiss the case on that basis, it gave the government an additional 60 days to serve him. The court declined to rule on whether the case should be dismissed for failure to make enough of a case for penalties, finding Ho first had to be served before it could take up the matter.
(U.S. v. Ho, Slip Op. 20-66, CIT #19-00038, dated 05/15/20, Judge Reif)
(Attorneys: William Kanellis for plaintiff U.S. government; Elon Pollack of Stein Shostak for defendant Chu-Chiang “Kevin” Ho)