Government In Jurisdictional Pickle Over Reverse-False-Claims Action For Unpaid Customs Duties

The U.S Court of International Trade (CIT), in U.S. v. Universal Fruits & Vegetables Corp. (May 25, 2006), has dismissed for lack of jurisdiction the government's False Claims Act (FCA) lawsuit alleging that defendants who falsified country-of-origin information to avoid customs duties incurred treble damages and civil penalties by knowingly making false statements to decrease an obligation to pay money to the U.S.  Because the case was at the CIT only because the Ninth Circuit had previously ruled that the forum originally chosen by the government, i.e., the federal district court for the Central District of California, lacked jurisdiction over this customs-related matter, the government now appears to be left without a forum, unless it appeals the CIT's decision to the Federal Circuit, in which case a conflict of circuits could result, with the Supreme Court eventually being asked to determine the jurisdictional fate of the government's potentially lucrative "reverse-false-claims" theory.