Latest news with #9thCircuit
Reuters
3 days ago
- Business
- Reuters
: In 9th Circuit fight over import duty fraud, False Claims Act gets new life
June 26 (Reuters) - New tariffs have dominated headlines in recent months, but a key question has received far less attention: How does the U.S. government make sure importers — who collectively brought in $3.36 trillion worth of goods, opens new tab last year — actually pay the duties that they owe? While inspectors can't look at every shipment, one way to keep importers honest is the threat of liability under the False Claims Act, or FCA, for customs duty evasion. It's an increasingly active area of law, lawyers tell me, and likely to get even hotter as President Donald Trump's tariffs kick in and the amount of money at issue skyrockets. For the past 20 years, however, the ability of whistleblowers to bring cases alleging customs fraud has been under a cloud in the San Francisco-based 9th U.S. Circuit Court of Appeals, thanks to a 2004 decision that put the circuit's nine western states — and their busy ports — at odds with the rest of the country. Earlier this week, a 9th Circuit panel offered new clarity, rejecting the notion that the Court of International Trade has exclusive jurisdiction over such actions. The panel also rebuffed arguments that the FCA conflicts with a customs statute that gives the government another pathway to recover fraudulently unpaid duties — but more on that later. The decision, opens new tab 'opens the door for whistleblowers' to bring customs-related enforcement actions in federal district courts, said Mayer Brown partner Kelly Kramer, who represented pipe fitting maker Island Industries in bringing a so-called qui tam suit against competitor Sigma Corporation. 'It validates the whole concept.' In a statement, Sigma said it 'strongly maintains that it did not intentionally violate any law,' and that it 'will continue to seek appropriate relief in this lawsuit.' The case began in 2017 when Island sued Sigma (as well as five other importers who either settled or went bankrupt) in Los Angeles federal court under the FCA. Island alleged that between 2010 and 2018, Sigma imported welded outlets used in fire protection systems that were subject to antidumping duties of 182.9%. (Such duties may be imposed on products exported to the United States at less than their fair value.) According to Island, Sigma knowingly made false statements on customs forms to avoid paying the duties. As a qui tam relator, Island is entitled to pocket a share of any proceeds from the litigation. The U.S. Department of Justice, which declined comment, typically intervenes in several dozen FCA cases each year, assuming control of the litigation from the relator. That didn't happen here (though the feds weighed in on appeal as an amicus, opens new tab in favor of Island). Island and its lawyers from Mayer Brown helmed the case, taking it to trial in 2021. A jury found Sigma liable for violating the FCA and that it owed $8 million ($24 million after trebling), plus $2.5 million in legal fees. Sigma appealed the verdict to the 9th Circuit, and here's where things get a bit odd. After oral argument in 2023, the court asked for two rounds of supplemental briefing on issues that neither party had raised. The first question was whether the case belonged at the Court of International Trade, or CIT. The Manhattan-based court, which hears disputes involving international trade and customs laws, has taken on greater prominence of late after blocking most of Trump's tariffs in May, ruling that the president overstepped his authority. The decision is on hold pending appeal to the U.S. Court of Appeals for the Federal Circuit. As for FCA suits, the 9th Circuit in United States v. Universal Fruits and Vegetables, opens new tab held in 2004 that litigation 'commenced' by the United States against an importer for evading customs duties must be brought in the CIT, concluding Congress gave it exclusive jurisdiction over such matters. Or not. After the 9th Circuit transferred the case, the CIT held that it did not in fact have jurisdiction because the FCA provides for damages and civil penalties, not the recovery of customs duties. But Universal Fruits is still on the books in the 9th Circuit. 'No matter how persuasive' the CIT's reasoning in declining jurisdiction, wrote Judge Michelle Friedland for the panel, 'we have no authority here to overrule an earlier decision of our court.' She was joined by Judge Mark Bennett. The third member of the panel, Judge Paul Watford, left the court after the case was argued but before the decision was issued. Rather than transferring the case like a jurisdictional hot potato to the CIT, the judges found a way around Universal Fruit. That is, the qui tam suit was not actually 'commenced' by the government because the United States didn't file the complaint – Island did. Yes, relators 'stand in the shoes' of the United States when they pursue FCA suits, the panel said, but 'that metaphor does not mean that a statute's reference to 'the United States' can be read to include FCA relators.' The judges also asked for briefing on whether a specific customs statute, section 1592, precludes actions under the FCA based on fraud in connection with customs duties. Sigma argued, opens new tab that the FCA cannot be used to upset this 'carefully crafted and comprehensive customs legal regime' that lays out a specific process for the United States to recover customs duties. The panel was not persuaded, writing that while section 1592 'undoubtedly overlaps with the FCA,' there was 'no irreconcilable conflict' between the two enforcement mechanisms. The end result, said Jonathan Tycko, who penned an amicus brief, opens new tab for The Anti-Fraud Coalition siding with Island, will be to bring more fraud schemes 'otherwise invisible' to customs officers to light. The qui tam provision, he added via email, 'provides a necessary incentive for those whistleblowers to come forward.'
Los Angeles Times
4 days ago
- Politics
- Los Angeles Times
Newsom vs. Trump: What to know about California's lawsuit against the federal government
Even a casual reader of this newsletter knows the Trump administration has deployed nearly 7,000 federal troops to L.A. over the last two weeks. Most also know California officials sued to stop them. (I reported earlier that the line he shall take Care that the Laws be faithfully executed from Article II, Section 3 of the Constitution was first invoked to deploy troops against civilians to enforce the Fugitive Slave Act.) But if your life and your For You Page are anything like mine, you may not have kept up with the details since then. So as your resident legal affairs correspondent, I'm here to tell you what's happening with California's lawsuit against the federal government, and what you should watch for next. California's June 9 suit makes two big legal claims: On June 12, U.S. District Judge Charles R. Breyer — the bowtie-wearing brother of retired U.S. Supreme Court Justice Stephen Breyer — agreed with the first set of claims, saying the government hadn't shown evidence of a 'rebellion' in Los Angeles and that civilian efforts to frustrate ICE raids were not disruptive enough to trigger 10 U.S.C. § 12406. He issued an order that would have given control of most troops back to Gov. Gavin Newsom. Trump appealed the order. The 9th Circuit hit pause to review it, leaving the troops in Trump's hands. A week later, the appellate panel tossed out Breyer's order entirely. In the court's Juneteenth ruling, Judge Mark J. Bennett wrote that the Constitution and the U.S. Code gave the president broad authority to interpret the facts as he saw them. But neither court has yet opined on California's second major claim: that by assisting immigration raids, troops under Trump's command violated the Posse Comitatus Act of 1878, which forbids soldiers from enforcing civilian laws. (That law has an 'ignominious' history. I'll explain more later this week.) On Tuesday, Breyer gave state attorneys the green light to start collecting evidence about troop activities 'on the streets of communities in Southern California', and to depose key officials, including ICE Enforcement and Removal Operations Field Office Director Ernesto Santacruz Jr. and Maj. Gen. Niave F. Knell. Meanwhile, DOJ lawyers argued troops aren't enforcing civilian law; and even if they were, that would be allowed under the statute; and even if it wasn't, the Northern District of California has limited authority to say so. (Anyone who listened to Assistant Atty. Gen. Brett Shumate argue before the 9th Circuit last week will instantly recognize this as his signature style.) Trump's June 7 executive order called up troops for 60 days — or at the discretion of the secretary of Defense. Does that mean soldiers could be deployed in Los Angeles indefinitely? That's something California lawyers have sought to clarify through the courts while the PCA claim is heard. In his Tuesday order, Breyer signaled he could weigh in on it. The one thing we can say for sure is, if California wins, the Trump administration will appeal. Today's great photo is from Times photographer Juliana Yamada at the garage of animator-turned-ceramicist Rami Kim, who has been making whimsical character-driven ceramics in Los Angeles for more than a decade. Kevinisha Walker, multiplatform editorAndrew Campa, Sunday writerKarim Doumar, head of newsletters How can we make this newsletter more useful? Send comments to essentialcalifornia@ Check our top stories, topics and the latest articles on
Reuters
6 days ago
- Business
- Reuters
Court revives lawsuit against supplement maker, applies lower bar for mislabeling claims
June 23 (Reuters) - A U.S. appeals court revived a proposed class action against a dietary supplement company on Monday, ruling that a single test showing its product had a misleading nutrition label was enough for the case to move forward. The San Francisco-based 9th U.S. Circuit Court of Appeals reversed a lower court's ruling that had dismissed a lawsuit against ProSupps USA over claims that its Hydro BCAA product had far more carbohydrates and calories than the label listed. The appeals panel said, opens new tab the plaintiff, Jacob Scheibe, had enough initial evidence to accuse ProSupps of mislabeling its product under California law, rejecting the lower court's holding that Scheibe needed to use a more elaborate testing regimen set by the U.S. Food and Drug Administration. The ruling means that in the 9th Circuit, where district courts have issued varying rulings on product testing requirements for lawsuits alleging mislabeling under state law, it could become easier for consumers to bring such claims. The 9th Circuit said that in the initial phase of a lawsuit, a plaintiff doesn't have to follow the full FDA sampling process to accuse a company of using a false nutrition label. For labels on products fortified with protein and other nutrients like those sold by ProSupps, the FDA requires testing on 12 samples, each taken from different lots of product, a nearly impossible thing for an everyday customer to replicate, said Charles Weller, the attorney for the plaintiff. Until now, some courts in the 9th Circuit were requiring it before a mislabeling lawsuit could be filed, he said. Representatives for ProSupps did not immediately respond to requests for comment. Customer Jacob Scheibe filed the proposed class action against the company in 2022, claiming that the label on the Hydro BCAA powdered supplement said they contained zero carbohydrates and zero calories, but a test using an FDA-prescribed process showed the product had more than five grams of carbohydrates and more than 50 calories per serving. He brought claims under California's consumer deception laws on behalf of a class of California ProSupps customers. The trial court dismissed the lawsuit, agreeing with ProSupps that Scheibe needed to use the 12-sample method to avoid having his claims preempted by federal labeling law. In its ruling reversing the lower court, the appellate court said Scheibe's one test of the product and the results that showed a significant difference from what the label read were enough to allow an inference that more testing would also show the label was wrong. The case is Scheibe v. ProSupps USA LLC, U.S. Court of Appeals for the 9th Circuit, No. 23-3300 For the plaintiffs: Charles Weller For ProSupps: Jessica Walker of Theodora Oringher; and Jaikaran Singh of Foley & Lardner
Yahoo
6 days ago
- Politics
- Yahoo
The 9th Circuit Says California's One-Per-Month Limit on Gun Purchases Is Unconstitutional
A California law that limits gun purchases to one per month is unconstitutional on its face, the U.S. Court of Appeals for the 9th Circuit ruled last Friday. The three-judge panel's unanimous conclusion illustrates the continuing impact of the Supreme Court's 2022 decision in New York State Rifle & Pistol Association v. Bruen, which clarified the constitutional test for gun control laws. "California's law is facially unconstitutional because possession of multiple firearms and the ability to acquire firearms through purchase without meaningful constraints are protected by the Second Amendment," Judge Danielle J. Forrest, a Donald Trump appointee, wrote in Nguyen v. Bonta, "and California's law is not supported by our nation's tradition of firearms regulation." The opinion was joined by Judge Bridget S. Bade, who also was appointed by Trump, and by Judge John B. Owens, who was appointed by Barack Obama. The law at issue in Nguyen, originally enacted in 1999, was aimed at preventing "straw purchases"—transactions in which people buy multiple firearms and transfer them to individuals who are not legally allowed to possess them. The restriction, which originally applied only to handguns but was eventually extended to all firearms, applies to all buyers with a few exceptions, including law enforcement agencies, private security companies, and movie studios. The plaintiffs in this case, including individual gun owners, two firearm retailers, and three gun rights groups, argued that California's restriction violated the Second Amendment right to keep and bear arms. Last year, U.S. District Judge William Q. Hayes, a George W. Bush appointee, agreed that the law failed the Bruen test, and the 9th Circuit upheld that decision. "When the Second Amendment's plain text covers an individual's conduct, the Constitution presumptively protects that conduct," the Supreme Court said in Bruen. "To justify its regulation, the government may not simply posit that the regulation promotes an important interest. Rather, the government must demonstrate that the regulation is consistent with this Nation's historical tradition of firearm regulation. Only if a firearm regulation is consistent with this Nation's historical tradition may a court conclude that the individual's conduct falls outside the Second Amendment's 'unqualified command.'" California "suggests that the Second Amendment only guarantees a right to possess a single firearm, and that Plaintiffs' rights have not been infringed because they already possess at least one firearm," Forrest noted. "California is wrong. The Second Amendment protects the right of the people to 'keep and bear Arms,' plural. This 'guarantee[s] the individual right to possess and carry weapons.' And not only is 'Arms' stated in the plural, but this term refers to more than just guns. It includes other weapons and instruments used for defense. California's interpretation would mean that the Second Amendment only protects possession of a single weapon of any kind. There is no basis for interpreting the constitutional text in that way." California also argued that its law does not ban possession of multiple firearms, provided 30 days elapse between purchases. "We have held that the Second Amendment does protect against meaningful constraints on the acquisition of firearms through purchase," Forrest wrote. "And if the Second Amendment's plain text protects the ability to possess multiple arms, which we conclude that it does, then it also protects the ability to acquire multiple arms….By categorically prohibiting citizens from purchasing more than one firearm of any kind in a 30-day period, California is infringing on citizens' exercise of their Second Amendment rights." Forrest noted that such a burden would be plainly unacceptable if it were applied to other rights guaranteed by the Constitution. "We are not aware of any circumstance where government may temporally meter the exercise of constitutional rights in this manner," she wrote. "And we doubt anyone would think government could limit citizens' free-speech right to one protest a month, their free-exercise right to one worship service per month, or their right to be free from unreasonable searches and seizures to apply only to one search or arrest per month." If "the frequency with which constitutional rights can be exercised could be regulated in this manner without infringement," Forrest wondered, "what would limit government from deciding that a right need only be available every six months or once a year or at any other interval it chooses? California had no answer to this concern at oral argument." Having concluded that California's 30-day rule impinges on conduct covered by the Second Amendment's "plain text," Forest turned to the question of whether California had shown that the restriction is "consistent with this Nation's historical tradition of firearm regulation." California proposed several historical analogs, most of which bore little resemblance to the law it was defending. The closest example it could find was a colonial Virginia law that prohibited "carrying of more than one gun and ten charges of powder when traveling near any Native town or more than three miles away from an English plantation." That law, Forrest noted, "did not burden a citizen's ability to acquire multiple firearms within a specific period. It burdened only how many firearms a person could carry in a defined location. This limitation has different implications for the right protected by the Second Amendment—preservation of citizens' ability to defend themselves—than California's one-gun-a-month law. Thus, we conclude it is not similar enough to support California's law." Even if the Virginia law were "relevantly similar," Forrest added, "one tree does not make a forest." She noted that "the Virginia colony enacted this law 100 years before the founding, and the restriction seemingly only lasted a few years." By the time the Second Amendment was ratified in 1791, she noted, "it was common for Americans" to carry multiple firearms. California argued that the appeals court should cut it some slack because "governments during the founding and Reconstruction simply did not have to confront the social problems created by the immediate commercial availability of firearms for large purchases." Since "large-scale firearms trafficking and straw purchasing" facilitated by modern production and distribution systems are relatively recent developments, it said, you would not expect to find early examples of laws similar to California's. Although "it cannot reasonably be disputed that firearm manufacturing and availability are different today than they were in our early history," Forrest said, "arms trafficking is not a new problem." From the 17th century "into the Civil War era," she noted, legislators were keen to prevent the sale of guns to people they deemed dangerous. While "the modern problems that California identifies as justification for its one-gun-a-month law are perhaps different in degree from past problems," she said, "they are not different in kind." The Second Amendment "expressly protects the right to possess multiple arms," Forrest wrote. "It also protects against meaningful constraints on the right to acquire arms because otherwise the right to 'keep and bear' would be hollow. And while Bruen does not require a 'historical twin' for a modern firearm regulation to pass muster, here the historical record does not even establish a historical cousin for California's one-gun-a-month law." Owens, who joined Forrest's opinion in full, wrote a brief concurrence to emphasize that the decision applies only to this particular law. "It does not address other means of restricting bulk and straw purchasing of firearms, which our nation's tradition of firearm regulation may support," he wrote. The Firearms Policy Coalition (FPC), one of the plaintiffs in the case, welcomed the decision as a blow against overreaching gun control. "As this decision shows, the right to keep and bear arms cannot be limited by an arbitrary cap on the number of guns that can be acquired at one time," said FPC President Brandon Combs. "We have a right to buy more than one gun at a time just as we have a right to buy more than one bible at a time. FPC is proud to have secured the rights of peaceable people and will continue to fight forward until we eliminate immoral laws like this everywhere." The post The 9th Circuit Says California's One-Per-Month Limit on Gun Purchases Is Unconstitutional appeared first on
Yahoo
21-06-2025
- Politics
- Yahoo
Judge asks if troops in Los Angeles are violating Posse Comitatus Act
SAN FRANCISCO — California's challenge of the Trump administration's military deployment in Los Angeles returned to a federal courtroom in San Francisco on Friday for a brief hearing after an appeals court handed President Donald Trump a key procedural win. U.S. District Judge Charles Breyer put off issuing any additional rulings and instead asked for briefings from both sides by noon Monday on whether the Posse Comitatus Act, which prohibits troops from conducting civilian law enforcement on U.S. soil, is being violated in Los Angeles. Newsom said in his complaint that 'violation of the Posse Comitatus Act is imminent, if not already underway' but Breyer last week postponed considering that allegation. The hearing comes a day after the 9th Circuit appellate panel allowed the president to keep control of National Guard troops he deployed in response to protests over immigration raids. The history of presidents activating US troops on American soil The appellate decision halted a temporary restraining order from Breyer, who found Trump acted illegally when he activated the soldiers over opposition from California Gov. Gavin Newsom. Breyer also asked the lawyers on Friday to address whether he or the appellate court retains primary jurisdiction to grant an injunction under the Posse Comitatus Act. California has sought a preliminary injunction returning control to Newsom of the troops in Los Angeles, where protests have calmed down in recent days. Trump, a Republican, argued that the troops have been necessary to restore order. Newsom, a Democrat, said their presence on the streets of a U.S. city inflamed tensions, usurped local authority and wasted resources. The demonstrations have appeared to be winding down, although dozens of protesters showed up Thursday at Dodger Stadium, where a group of federal agents with their faces covered, traveling in SUVs and cargo vans, had gathered at a parking lot. The Los Angeles Dodgers organization asked them to leave, and they did. On Tuesday, Los Angeles Mayor Karen Bass lifted a curfew in downtown Los Angeles that was first imposed in response to vandalism and clashes with police after crowds gathered in opposition to agents taking migrants into detention. Trump federalized members of the California National Guard under an authority known as Title 10. Title 10 allows the president to call the National Guard into federal service when the country 'is invaded,' when 'there is a rebellion or danger of a rebellion against the authority of the Government,' or when the president is otherwise unable 'to execute the laws of the United States.' Breyer found that Trump had overstepped his legal authority, which he said allows presidents to control state National Guard troops only during times of 'rebellion or danger of a rebellion.' 'The protests in Los Angeles fall far short of 'rebellion,'' wrote Breyer, a Watergate prosecutor who was appointed by President Bill Clinton and is the brother of retired Supreme Court Justice Stephen Breyer. The Trump administration argued that courts can't second-guess the president's decisions. The appellate panel ruled otherwise, saying presidents don't have unfettered power to seize control of a state's guard, but said that by citing violent acts by protesters in this case, the Trump administration had presented enough evidence to show it had a defensible rationale for federalizing the troops. For now, the California National Guard will stay in federal hands as the lawsuit proceeds. It's the first deployment by a president of a state National Guard without the governor's permission since troops were sent to protect Civil Rights Movement marchers in 1965. Trump celebrated the appellate ruling in a social media post, calling it a 'BIG WIN' and hinting at more potential deployments. 'All over the United States, if our Cities, and our people, need protection, we are the ones to give it to them should State and Local Police be unable, for whatever reason, to get the job done,' Trump wrote. Newsom, for his part, has also warned that California won't be the last state to see troops in the streets if Trump gets his way. 'The President is not a king and is not above the law. We will press forward with our challenge to President Trump's authoritarian use of U.S. military soldiers against citizens,' Newsom said. Meanwhile, Vice President JD Vance was traveling to Los Angeles on Friday to meet with U.S. Marines who also have been deployed to protect federal buildings, his office announced.
