A New York importer and a defense contractor will together pay $8 million to settle allegations that the companies sold defective countermeasure flares made from illegally imported magnesium to the U.S. Army, said the Justice Department on March 28 (here). The importer, ESM Group, will pay $2 million of that total to resolve a whistleblower lawsuit brought by a competitor that alleged it misrepresented the content of its magnesium powder to avoid antidumping duties.
The Court of International Trade on March 25 ordered a dairy importer to pay over $30,000 in unpaid duties and penalties for misclassifying and undervaluing his entries and falsely declaring them eligible for duty preferences under the Caribbean Basin Economic Recovery Act. According to the court order (here), the government alleges Juan Chavez and his company incorrectly classified entries of “soft dairy express” as dairy butter substitutes under subheading 0405.20.4000 and non-cow’s milk cheese under subheading 0406.90.9900. He also undervalued some entries so they were below the $2,500 informal entry limit and did not require bonds, it said. Though Chavez initially defended himself against the charges, he has since failed to respond to inquiries from the court, said CIT. The government still seeks an additional $137,431.55 in unpaid duties and penalties from Chavez’ company.
Lumber Liquidators will pay $2.5 million to California regulators to settle alleged emissions violations related to high levels of formaldehyde in its composite wood flooring, said the California Air Resources Board (CARB) on March 22 (here). According to the state agency, testing of composite wood flooring obtained from Lumber Liquidators stores in California between 2013 and 2015 revealed that some products were labeled as compliant, but exceeded state formaldehyde limits. CARB claimed Lumber Liquidators “failed to take reasonable prudent precautions to ensure that laminate flooring sold in California” complied with state formaldehyde emissions standards, it said. Lumber Liquidators cooperated with the investigation and enforcement action, said CARB. The $2.5 million payment comes on top of over $13 million the company agreed to pay in October to settle federal Lacey Act charges (see 1510080012). As part of the California settlement, Lumber Liquidators will implement programs requiring regular audits of existing and new suppliers and random tests of composite core samples.
The following lawsuits were filed at the Court of International Trade during the week of March 14-20:
The following lawsuits were filed at the Court of International Trade during the week of March 6-13:
A California importer faces hundreds of millions of dollars in penalties for importing motorcycles and all-terrain vehicles that don’t conform to certificates on file with the Environmental Protection Agency. According to a complaint filed March 11 by the federal government in Central California U.S. District Court, the company, named Goldenvale, imported over 16,000 motorcycles and ATVs that were of a different model year, from a different manufacturer, or had a different engine displacement than listed on its EPA certificates of conformity. Some of the vehicles also included a fully adjustable air-fuel mixture screw on the carburetor or a replaceable main jet in the carburetor, that was not described in its certificate application. The government is asking the court to assess Clean Air Act penalties of $32,500 per vehicle imported pre-2009, and $37,500 for each vehicle imported 2009 or after.
Farrell Lines and Damco paid $3.7 million in civil penalties to the U.S. as a result of the companies' use of inauthentic shipment weight disclosures in violation of a contract with the government, said the U.S. Attorney's Office for the Southern District of Illinois in a news release (here). The case involved a contract between Farrell, its affiliate Damco and the U.S. Transportation Command that called for shipping services for government cargo in and out of Afghanistan, said the USAO. "The price of the contract was based almost exclusively on the weight of the shipments, and documented cargo weights, consisting of 'weight tickets' issued by a certified commercial scale for each cargo container, needed to be included with billing invoices to the Government," it said. Instead of using "authentic" weight tickets, Damco employees "recreated" 563 tickets to support the billing invoices, said the USAO.
The following lawsuits were filed at the Court of International Trade during the week of Feb. 29 - March 6:
The sale abroad of a good patented in the U.S. does not “exhaust” the patent and allow the good’s unrestricted sale in the U.S., said the Court of Appeals for the Federal Circuit in a recent decision. In the wake of a 2013 Supreme Court decision that found the “first sale” abroad removes copyright restrictions (see 13032521), the CAFC held Feb. 12 (here) that the same does not apply to patents. The Federal Circuit sided with Lexmark in finding an importer that purchased spent printer cartridges abroad before refilling them and selling them in the U.S. infringed Lexmark’s patents. “Loss of U.S. patent rights based on a foreign sale remains a matter of express or implied license,” it said. The importer, Impression Products, said it plans to appeal to the Supreme Court, according to a report by Reuters (here).
The Court of International Trade on Feb. 29 sustained a recent Commerce Department redetermination that found four models of chests imported by Ethan Allen are not subject to antidumping duties on wooden bedroom furniture from China (A-570-890). Commerce’s Feb. 12 redetermination, filed under protest, found all four models of chests are living room furniture (see 1602160030). CIT had in December told Commerce that furniture that is not part of a bedroom set may only be considered bedroom furniture under limited circumstances that did not apply to Ethan Allen’s chests (see 1512010073).