US v. Menard, Inc., 89-05-00238.
| Decision Date | 22 November 1993 |
| Docket Number | No. 89-05-00238.,89-05-00238. |
| Citation | 838 F. Supp. 615,17 CIT 1229 |
| Parties | UNITED STATES of America, Plaintiff, v. MENARD, INC., Defendant. |
| Court | U.S. Court of International Trade |
Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, and Michael S. Kane, Atty., Washington, DC, for plaintiff.
Irving A. Mandel, New York City (Thomas J. Kovarick, Brooklyn, NY, of counsel), for defendant.
This is a decision to determine the amount of penalty to be imposed on defendant under 19 U.S.C. § 1592 for having deprived the government of tariff duty by making negligent false statements on customs entries. In an earlier stage of this action, on a motion for summary judgment, the court found that defendant's negligence had deprived the government of $53,215.30 in duties. United States v. Menard, Inc., 795 F.Supp. 1182 (C.I.T.1992). The negligence consisted of Menard's failure to ascertain the correctness of its private method of declaring a lower value on entries of merchandise in order to give itself an allowance for past duties paid on defective merchandise.
The penalty statute provides for a trial de novo on all issues, leaving the amount of the penalty to the sound discretion of the court. United States v. Valley Steel Prod. Co., 14 CIT 14, 17, 729 F.Supp. 1356, 1359 (1990). It further provides for limits on the amount of penalty. When ordinary negligence caused the loss of duty, the maximum penalty is the lesser of the domestic value of the merchandise or twice the duty of which the government was deprived. In this case the government seeks the maximum penalty, which is twice the amount of duty.
Many of the basic factors which go into deciding the proper amount of penalty in these cases have been set out in the case of United States v. Modes, Inc., 826 F.Supp. 504 (CIT 1993) (1993). It bears repeating that the law requires the court to begin its reasoning on a clean slate. It does not start from any presumption that the maximum penalty is the most appropriate or that the penalty assessed or sought by the government has any special weight. See United States v. Priority Prod., Inc., 9 CIT 383, 386, 615 F.Supp. 591, 593 (1985).
The court heard testimony from three executives of the defendant. As a result, the court finds that a penalty of one times the amount of duty lost is appropriate in this case. In the opinion of the court this situation falls within what can be described as the midrange of ordinary negligence. There was a loss to the government and the carelessness or negligent improvisation which gave rise to it must be penalized. However there are some facets of the case which distinguish it from a case in which stronger punitive measures would be justified.
The need for a more severe penalty is reduced by the fact that the defendant company was not experienced in handling...
To continue reading
Request your trial
-
U.S. v. Complex Mach. Works Co.
...is the most appropriate or that the penalty assessed or sought by the government has any special weight." United States v. Menard, Inc., 17 CIT 1229, 1229, 838 F.Supp. 615, 616 (1993), aff'd in part, vacated and remanded in part on other grounds, 64 F.3d 678 (Fed.Cir.1995). The maximum pena......
-
U.S. v. Hitachi America, Ltd.
...is the most appropriate or that the penalty assessed or sought by the government has any special weight." United States v. Menard, 17 CIT 1229, 1229, 838 F.Supp. 615, 616 (1993) (finding that the appropriate penalty was equal to the amount of lost duties). Indeed, "Nothing in the statute pr......
-
U.S. v. Itt Industries, Inc., SLIP OP. 04-81.
...penalty amount." S.Rep. No. 95-778, pt. 10. at 20 (1978), reprinted in 1978 U.S.C.C.A.N. 2211, 2231; United States v. Menard, Inc., 17 CIT 1229, 1229, 838 F.Supp. 615, 616 (1993) ("The penalty statute provides for a trial de novo on all issues, leaving the amount of the penalty to the sound......
-
United States v. Univar USA Inc.
...; United States v. Complex Mach. Works Co. , 23 CIT 942, 942, 947, 83 F.Supp.2d 1307, 1308, 1312 (1999) ; United States v. Menard, Inc. , 17 CIT 1229, 1229, 838 F.Supp. 615, 616 (1993), aff'd in part, vacated in part , 64 F.3d 678 (table) (Fed. Cir. 1995) ; United States v. Modes, Inc. , 17......