Last Stand for Active Frontier

The saga of the Active Frontier penalty case has been going on since 2011. The CIT has just issued a default judgment against the company, ending this phase of the litigation.

For background, start with this post.

The important take-away from this case is how the Court set the penalty amount. The alleged material false statement in this case is the country of origin. Under the circumstances, this is a non-revenue violation and the maximum penalty is 20% of the value of the goods. 19 USC 1592(c)(3). The United States sought the maximum allowable penalty, which was about $80,000.

Despite the defendant not showing up to refute the claims or assert any mitigating factors, the Court did not say it was bound to assess the maximum penalty. On the contrary, it noted that the penalty is to be set de novo by the Court on the basis of the available information. Here, the Court noted that the true bills of lading clearly showed the true origin of the merchandise. Defendant, exercising even minimal effort could have determined and reported the correct country of origin. On that fact, the Court found it appropriate to assess the maximum penalty for a negligent violation.

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