Tuesday, July 19, 2005

The CIT Reaches for False Claims Act Cases

Here is an interesting tidbit: Suddenly, the U.S. Court of International Trade has jurisdiction to hear cases brought under the False Claims Act by the United States. These actions involve civil claims against a party that (in the case of something before the CIT) made a false statement to the United States that resulted in a reduction in customs liability. Technically, this is a "reverse false claim." Until now, most people would have expected these cases to be handled in the district courts.

Often, False Claims Act cases arise via a whistleblower who files on behalf of the United States. That is a qui tam action. The case at the CIT, however, was not a qui tam action but was brought directly by the U.S. As a result, the CIT held that the case falls within its grant of exclusive jurisdiction. Essentially, the Court treated the action like a regular old boring customs penalty case.

The case, U.S. v. Universal Fruits & Vegetables, is a quick read. The result seems right. It will be interesting to see whether this develops into a new area of practice for the court and the bar.

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