United States Court of International Trade

19-147

In United States v. Greenlight Organic, Inc. and Parambir Singh “Sonny” Aulakh, Court No. 17-31, Slip Op. 19-147, Plaintiff United States (“Plaintiff” or “Government”) brought a  civil enforcement action against Greenlight Organic, Inc. (“Greenlight”) and Parambir Singh “Sonny” Aulakh (“Aulakh”) (together, “Defendants”) to recover unpaid duties and fees and affix penalties for violations of 19 U.S.C. § 1592(a) and (d) (2012). The Government alleges that “Greenlight, under the direction of Aulakh,” “knowingly made material false statements” about the classification and valuation of “approximately 122 entries” of wearing apparel imported into the commerce of the United States.  Defendant filed a motion to dismiss for failure to state a claim upon which relief may be granted.

The Court stated that “the fraud allegations lack the factual precision or substantiation required under USCIT Rule 9(b). Nowhere in or attached to the complaint does the Government identify necessary and relevant information needed to substantiate a plausible fraud claim, such as identifying with specificity the “approximately 122 entries of wearing apparel” at issue here, a loss of revenue calculation, and the applicable HTSUS provision. See Am. Compl. ¶¶ 1, 5–7, 9. And nowhere does Plaintiff identify or attribute to a specific Defendant who made what statements that were false and material, or critically, the degree of each Defendant’s participation in the fraudulent scheme.”  See id. at 9.    Furthermore, plaintiff may not impute knowledge of fraud to Aulakh because of his position of control over the company Greenlight. Thus, the complaint was dismissed pending plaintiff’s filing of an amended complaint within 45 days of the decision. As a significant side note, Greenlight was required to retain counsel after its counsel withdrew its appearance on February 27, 2019. If Greenlight does not retain counsel, it may be subject to a default motion for its failure to plead or otherwise defend.