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Failure to Mark Country of Origin Can Give Rise To Reverse False Claim


In United States ex rel. Customs Fraud Investigations LLC v. Victaulic Co., (Oct. 5, 2016), the Third Circuit held that a failure to mark country of origin can be actionable under the False Claims Act under the “reverse false claim” theory of liability if a company knowingly imports unmarked products in an effort to evade custom duties that are due the government. In a matter of first impression, the panel voted 2-1 to reverse the lower court’s dismissal and remanded for further proceedings in this qui tam case brought by former industry insiders against a distributor of pipe fittings.

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Gail D. Zirkelbach
Partner – Los Angeles
Phone: +1 213.443.5549