In a decision that highlights the overlap of international trade obligations and False Claims Act jurisprudence, a federal judge dismissed an FCA suit because the whistleblower’s claims against an importer of Chinese steel pipe were already the subject of a Customs and Border Protection proceeding to recover penalties for it.
This is the first time a federal court has directly addressed the question of whether a penalty proceeding under the Tariff Act of 1930 qualifies as an “administrative civil monetary penalty proceeding” for purposes of the “government action bar” in the FCA.
The decision in Schagrin v. LDR Industries, LLC arises from an unusual strategy for collecting duties under the Tariff Act: invoking the whistleblower provisions of the FCA.
