United States v. Universal Fruits and Vegetables Corporation David Pai, AKA Shih Wei Pai Jason Pai, AKA Chung Sheng Pai

We must decide which court — a federal district court or the Court of International Trade — -has jurisdiction over an action brought by the United States under the False Claims Act arising out of an importer’s scheme to avoid paying customs duties.

I

In July of 1994, the United States Department of Commerce (“Department”) issued a preliminary determination that fresh garlic from the People’s Republic of China (PRC) was being “dumped” into the United States. See 59 Fed.Reg. 35310-12 (July 11, 1994). Pursuant to its authority under the Tariff Act of 1930, the Department also issued a preliminary antidumping order imposing a duty of 376.67 percent of the declared value of each shipment of garlic. Id. at 35311. To get their shipments of garlic, importers were required to post a bond or to provide a cash deposit. The preliminary order became final in November of 1994. See 59 Fed.Reg. 59209-03 (Nov. 16, 1994).

Incorporated in 1987, Universal Fruits & Vegetable Corporation (“Universal”) was in the produce business, importing, among other things, garlic, ginger and shallots for resale in the United States. David Pai initially ran the business by himself, but eventually his father,…