Friday, September 28, 2007

When to Litigate a Penalty?

I'm not sure I know the answer to that. It does not seem like defendants are having much luck proving their case in Court. The latest big penalty comes in Inn Foods, Inc. The gist of this case is that one person's preliminary pricing may well be another person's double invoicing scheme. Also, there is a textbook example of piercing the corporate veil involved in the case. There is not much in the way of interesting or novel legal analysis to be had from the case. However, the fact that the result is a $7.5 million penalty for fraud is lesson enough. I have no idea what happened behind the scenes. But, one has to wonder whether there was some point at which this could have been settled for a lesser sum. It is entirely possible that the company involved could not absorb even a settlement amount and decided to bet the farm on litigation. Again I don't know and don't doubt that the lawyers laid out all the options. Sometimes, there are no good options.

I am off to the ABA Section of International Law Fall Meeting. If you are in London, please come to my program on Thursday morning. It is called "Buying Trouble: Avoiding Purchasing and Outsourcing Traps in Customs, Trade, and Export Law." We are hoping for an excellent session. Here is a link to more info.

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