989 F.Supp. 259 (CIT. 1997), 97-04-00557, United States ex rel. Felton v. Allflex USA, Inc.
|Docket Nº:||Court No. 97-04-00557.|
|Citation:||989 F.Supp. 259|
|Party Name:||UNITED STATES of America ex rel. Alan FELTON and ex rel. Phillips, USA, Inc., Plaintiffs, v. ALLFLEX USA, INC., Defendant. Slip Op. 97-167.|
|Case Date:||December 03, 1997|
|Court:||Court of International Trade|
Frank W. Hunger, Assistant Attorney General, Michael F. Hertz, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Joan E. Hartman and Allie Pang) for plaintiff.
Carr, Korein, Tillery, Kunin, Montroy, Cates & Glass (Robert L. King ) for relators.
(C. Dickinson Hill and Blakely, Sokoloff, Taylor & Zafman and Dennis G. Martin ) for defendant.
This matter was originally transferred to this court from the United States District
Court for the Western District of Missouri pursuant to 28 U.S.C. § 1631 (1994), following that court's finding that it lacked jurisdiction over the case. Plaintiffs Alan Felton and Phillips USA, Inc. (collectively "Relators") seek retransfer for lack of subject matter jurisdiction. The United States supports retransfer. Defendant Allflex USA, Inc. ("Allflex") challenges the motion to retransfer.
In 1995, Relators filed this action against Allflex under the False Claims Act, 31 U.S.C.A. §§ 3729-3733 (West Supp.1997), in district court. In their complaint, Relators alleged that Allflex avoided paying customs duties by falsely classifying veterinary syringes, which are subject to duty, as agricultural implements, which are not subject to duty. Relators were authorized under 31 U.S.C.A. § 3730(b)(1) (West Supp.1997) to bring this qui tam action "in the name of the Government." The Government, however, has the right to intervene in the action. 31 U.S.C.A. § 3730(b)(2). Although the Government declined to intervene, Relators pursued the case on their own initiative, as permitted under 31 U.S.C.A. § 3730(b)(4)(B).
On November 26, 1996, the district court ruled that it did not have subject matter jurisdiction over this case because the underlying dispute involved customs fraud under 19 U.S.C. § 1592 (1994) and was therefore within the exclusive jurisdiction of this court. United States ex rel. Alan Felton and ex rel. Phillips USA, Inc. v. Allflex USA, Inc., No. 95-0653-CV-W-9, at 13 (W.D.Mo. Nov. 26, 1996), Allflex Ex. B, at 13. Although Allflex had sought a dismissal for lack of subject matter jurisdiction, the district court accepted Relators' request to transfer the case to this court, pursuant to 28 U.S.C.§ 1631. Id. at 14-16. The district court also denied Allflex's alternative motion to transfer the case to another district court. Id. at 16.
This case requires the court to examine the relationship between the False Claims Act and the jurisdiction of the Court of International Trade under 28 U.S.C. § 1582 (1994). Relators claim that this court should retransfer this case to the district court because False Claims Act cases are within the exclusive jurisdiction of the district courts. In any event, Relators and the Government argue, this case does not fall within the Court of International Trade's subject matter jurisdiction because this action is not "commenced by the United States," as mandated by 28 U.S.C. § 1582. Allflex argues that, even if this action does not fall within the court's jurisdiction as expressed in § 1592, this action was effectively "commenced by the United States," and this court should retain jurisdiction because resolution of the underlying conflict requires an analysis of customs classification, one of the tasks for which this court was established. The issues before the court, therefore, are the following: whether False Claims Act cases fall within the exclusive jurisdiction of the district courts, and if not, whether this court has subject matter jurisdiction over the case under 28 U.S.C. § 1582.
In addressing these claims, the court begins with an examination of the applicability of "law of the case" principles to this case, finding that the deference owed to a coordinate court's decision to transfer a case is contingent on this court having subject matter jurisdiction. The court finds it is unnecessary to resolve whether the False Claims Act provides for exclusive jurisdiction in district courts. Rather, the court analyzes this case under the jurisdictional requirements of 28 U.S.C. § 1582 and determines that even if the district court did not have exclusive jurisdiction under the False Claims Act, this court would not have subject matter jurisdiction over this case because it was not "commenced by the United States." In light of the lack of subject matter jurisdiction, the court finds the case must be retransferred to the District Court for the Western District of Missouri.
I. Law of the Case
Relying on the Supreme Court's decision in Christianson v. Colt Industries, 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988), Allflex notes that the court must observe the significant deference owed a coordinate
court's decision to transfer a case for lack of jurisdiction, identifying the ruling of the district court, and in particular, its finding that this action was "commenced by the United States," as the "law of the case." If this court "can find the transfer decision plausible, its jurisdictional inquiry is at an end." Christianson, 486 U.S. at 819, 108 S.Ct. at 2179. The United States responds that when a court receives a case transferred from another court, but...
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