United States v. Univar U.S. Inc.

• Decision Date: 02 March 2018
• Docket Number: Court No. 15–00215,Slip Op. 18–14
• Citation: 294 F.Supp.3d 1314
• Parties: UNITED STATES, Plaintiff, v. UNIVAR USA INC., Defendant.
• Court: U.S. Court of International Trade

294 F.Supp.3d 1314

UNITED STATES, Plaintiff,

v.UNIVAR USA INC., Defendant.

Slip Op. 18–14

Court No. 15–00215

United States Court of International Trade.

March 2, 2018

MEMORANDUM AND ORDER

Mark A. Barnett, Judge

Pending before the court are three motions in limine. Two of the motions were filed by Defendant Univar USA Inc. ("Defendant" or "Univar"), both of which the United States ("Plaintiff" or "the Government") opposes. Def. Univar USA Inc.'s Mot. in Limine No. 1 (Tables Provided by Taiwan Customs) ("Def.'s First Mot. in Limine "), ECF No. 142; Def. Univar USA Inc.'s Motion in Limine No. 2 (Dr. Henry McFarland) ("Def.'s Second Mot. in Limine "), ECF No. 163; Pl.'s Resp. to Def.'s Mot. in Limine to Exclude Taiwan's Records Showing Transshipment from China through Taiwan to the United States ("Pl.'s Resp. to Def.'s First Mot. in Limine "), ECF No. 150; Pl.'s Resp. to Def.'s Mot. in Limine to Exclude Henry McFarland, Ph.D. from Testifying as an Expert Economist ("Pl.'s Resp. to Def.'s Second Mot. in Limine "), ECF No. 167. The third motion in limine was filed by the Government, to which Univar has filed a response in opposition. The United States' Mot. in Limine to Preclude a Lawyer from Testifying Regarding his Legal Interpretation of "Reasonable Care," and Applying his Interpretation of the Facts of this Case ("Pl.'s Mot. in Limine "), ECF No. 152; Univar USA Inc.'s Resp. to Gov't's Mot. in Limine Concerning Michael O'Rourke ("Def.'s Resp."), ECF No. 159. The court heard oral argument on these motions on December 19, 2017. Hr'g Tr., ECF No. 173.¹ For the reasons that follow, the court denies Defendant's first motion in limine , grants, in part, Defendant's second motion in limine , and grants the Government's motion in limine.

I. Background

The Government filed this action against Univar seeking to recover unpaid antidumping duties and a monetary penalty pursuant to 19 U.S.C. § 1592, stemming from 36 entries of saccharin, allegedly transshipped from the People's Republic of China ("China" or the "PRC") through the Republic of China (Taiwan) ("Taiwan"), and entered into the commerce of the United States between 2007 and 2012. Compl. ¶ 1, ECF No. 2. The Government alleges that Univar's actions were grossly negligent or negligent when it misrepresented the country of origin of the subject saccharin on U.S. Customs and Border Patrol ("CBP") entry documents as Taiwan when, in fact, the saccharin originated from China. Id. ¶¶ 28, 32. The Government seeks recovery of $36,088,718.03 in unpaid antidumping duties pursuant to 19 U.S.C. § 1592(d), and a civil penalty in the amount of $47,888,851.00 pursuant to 19 U.S.C. § 1592(c)(3). Id. ¶¶ 33–34. Discovery has closed and Univar has filed a motion for summary judgment. See Order (Nov. 25, 2015), ECF No. 16, as amended by Memorandum and Order (July 3, 2017), ECF No. 134, as amended by Memorandum and Order (Aug. 29, 2017), ECF No. 151; Univar's Mot. for Summ. J., ECF No. 143. The court will address the summary judgment motion after ruling on the motions in limine.

Univar, in its first motion in limine , seeks to exclude certain import and export data provided to the United States by Taiwan's Department of Investigation, Customs Administration, Ministry of Finance ("Taiwan Customs") that the Government has characterized as the "wedge pin fact" that shows the saccharin in question originated from China. Def.'s First Mot. in Limine at 1; id. Ex. 12 (Deposition of Patrick Deas) at 119:1–12, 120:13–25. The Government seeks to admit this data under exceptions to the rule against hearsay or, alternatively, through its proposed expert witness, Dr. Henry McFarland. See generally Pl.'s Resp. to Def.'s First Mot. in Limine. Univar challenges the admissibility of this data under any of the hearsay exceptions and through Dr. McFarland's testimony. Def.'s First Mot. in Limine at 18–22; Hr'g Tr. at 15–17, 19–29. Moreover, in its second motion in limine , Univar seeks to exclude Dr. McFarland from testifying altogether, on the bases that his testimony is neither helpful nor reliable. Def.'s Second Mot. in Limine at 2 (citing Fed. R. Evid. 702(a),(c) ).

The monetary penalty in this matter is based on the alternatively alleged culpability of negligence; therefore, the Government bears the initial burden of proving the act or omission constituting the violation; the burden then shifts to Univar to "affirmatively demonstrate that it exercised reasonable care under the circumstances." United States v. Ford Motor Co. , 463 F.3d 1267, 1279 (Fed. Cir. 2006) (citing 19 U.S.C. § 1592(e)(4) ). In that vein, Univar has offered an expert witness, attorney Michael O'Rourke, Esq., to provide his opinion on the standard of "reasonable care" within the confines of 19 U.S.C. § 1592 and whether Univar "acted reasonably in its efforts to determine the country of origin of the saccharin it imported."See Pl.'s Mot. in Limine , Ex. 1 (Expert Report of Michael S. O' Rourke) ("O'Rourke Report"), ECF No. 152–1. The Government seeks to exclude Mr. O'Rourke from testifying on the grounds that his testimony impermissibly draws legal conclusions and usurps the functions of both the judge and jury, both contentions with which Univar disagrees. See generally Pl.'s Mot. in Limine ; Def.'s Resp. to Pl.'s Mot. in Limine.

II. Discussion

A decision on these evidentiary matters lies within the sound discretion of the court. N. Am. Processing Co. v. United States , 22 CIT 701, 703, 15 F.Supp.2d 934, 936 (1998). "Generally speaking, in limine rulings are preliminary in character because they determine the admissibility of evidence before the context of trial has actually been developed." Walter Kidde Portable Equip., Inc. v. Universal Sec. Instruments, Inc., 479 F.3d 1330, 1338 (Fed. Cir. 2007). All relevant evidence is admissible unless the U.S. Constitution, a federal statute, the rules of evidence, or other rules prescribed by the Supreme Court provide otherwise. Fed. R. Evid. 402 ; see also 28 U.S.C. § 2641 (stating that the Federal Rules of Evidence apply to all civil actions in the U.S. Court of International Trade ("CIT"), with certain exceptions not relevant here). Relevant evidence is that which "has any tendency to make a fact more or less probable than it would be without the evidence; and ... the fact is of consequence in determining the action." Fed. R. Evid. 401. Against that general backdrop, the court turns to the specific issues raised in each motion in limine.

a. Defendant's First Motion in Limine is Denied

Univar seeks to exclude certain import and export data that Taiwan Customs provided to the United States. Def.'s First Mot. in Limine at 1. The data is in the form of three distinct spreadsheets. Def.'s First Mot. in Limine , Ex. 1 (spreadsheets provided by Taiwan customs on January 13, 2017), ECF No. 142–1; see also Pl.'s Resp. to Def.'s First Mot. in Limine , Ex. 1 (spreadsheets provided by Taiwan Customs on August 1, 2017) ("Taiwan Customs Tables"), ECF No. 150–1.² One table purports to show 20 shipments of saccharin imported into Taiwan from China by Long Hwang Chemical Co. ("LH Chemical") from 2009 to 2011. See Taiwan Customs Tables. A second table purports to show 16 shipments of saccharin exported from Taiwan to the United States by Lung Huang Trading Co., Ltd. ("LH Trading") from 2009 to 2012.³ Taiwan Customs Tables. A third table purports to show Taiwan's annual statistics relating to the country of origin of its saccharin imports from 2007 to 2012. Taiwan Customs Tables. The Government proffers that it intends to introduce the Taiwan Customs Tables to "show that the amount of saccharin imported into Taiwan from China by Univar's supplier was nearly identical to, and contemporaneous with, the amount of saccharin exported to Univar." Pl.'s Resp. to Def.'s First Mot. in Limine at 1.

Univar argues that the court should exclude the tables because they are inadmissible hearsay pursuant to Rule 801(c) of the Federal Rules of Evidence. Def.'s First Mot. in Limine at 2. Alternatively, Univar argues that the tables are not original data, thereby violating rule Rule 1002, and are inadmissible summaries that must be excluded because the Government has not complied with Rule 1006. Id. Lastly, Univar asserts that even if all the evidentiary requirements have been met, the court should exclude the tables because they are unfairly prejudicial and will mislead the jury. Id. at 2.⁴

The Government does not dispute that the tables are hearsay. See, e.g. , Pl.'s Resp. to Def.'s First Mot. in Limine at 5 ("Taiwan's records are admissible hearsay.") (capitalization omitted). Instead, the Government counters that the Taiwan Customs Tables are admissible pursuant to Rules 803(8) and 803(6) of the Federal Rules of Evidence. Id. at 7–12. Additionally, the Government argues that it may introduce the tables through its expert witness, Dr. Henry McFarland, pursuant to Rule 703. Id. at 12–14. Lastly, the Government challenges Defendant's assertions that the tables do not satisfy the best evidence rule, are inadmissible summaries, and would lead to unfair prejudice and mislead the jury. Id. at 14–19.

Hearsay is an out of court statement offered "to prove the truth of the matter asserted in the statement." Fed. R. Evid. 801(c). Hearsay is inadmissible at trial unless a federal statute, Federal Rule of Evidence, or other rule prescribed by the Supreme Court provides otherwise. Fed. R. Evid. 802. Rule 803 of the Federal Rules of Evidence establishes certain exceptions to the hearsay rule, regardless of whether a declarant is available to testify. Fed. R. Evid. 803. Pursuant to 803(8), "[a] record^{[5 ]} or statement of a public office" that "sets out ... a matter observed while under a legal duty to report" is not excluded as hearsay, provided "the opponent does not show that the source of information or other circumstances indicate a lack of trustworthiness." Fed. R. Evid. 803(8)(A)(ii), (B). This exception applies to records or statements...