Business Law Chapter 23 Homework Stanley Lebese William Nbobeni John Lucas Ngobeni

404 CASE PRINTOUTS TO ACCOMPANY BUSINESS LAW

Third, the disclaimer implied that Inn Foods was working to correct the error, and would “advise” Customs as soon as

Cir.2004) (where defendant received insurance document reflecting defendant’s falsification but “chose not to correct

the misinformation” he had provided to insurance company, reasonable jury could infer that failure to correct was

“perpetuating the fraud and demonstrating further his fraudulent intent”).FN9

FN9. Nor are we persuaded by Inn Foods’s similar contention that its belated letter to Customs, dated July

19, 1989, indicated that it did not act with fraudulent intent. The vaguely worded letter, which attempted to lay

the blame for the false invoices on the Mexican growers and came months after Inn Foods had already been

informed that it would be investigated, can hardly be said to preclude a finding of fraud.

We conclude that the trade court’s finding of fraudulent intent as to the invoices bearing the disclaimer is not clearly

the Court of International Trade. Def.–Appellant’s Br. 19 (“Customs is authorized to impose civil penalties not only on

importers of record, but on

any person

involved in the violation, including persons who aid and abet such violations.”);

see

19 U.S.C. § 1592(a)(1)(B).

Inn Foods contends, however, that the trade court erred in holding that it was similarly liable under § 1592(d) for the

entire $624,602.55 in unpaid duty on the subject entries, including the portion attributable to entries for which SeaVeg

United States v. Blum,

858 F.2d 1566, 1570 (Fed.Cir.1988) (identifying importers of record and sureties as the parties

“traditionally liable” for payment of duty). However, the language and structure of § 1592 indicates that subsection (d)

is not limited to only importers and their sureties, but is intended to apply to further the mandatory recovery of unpaid

duty from any party liable under subsection (a).

Subsection (d) states broadly that when any duty is lost “as a result of a violation of subsection (a) …, [Customs] shall

*1347 The clear purpose of the statute as well supports a broad reading. It seems inherently improbable that the

statute was intended to allow a party (such as Inn Foods) that deprives the government of revenue by aiding and

abetting another’s fraudulent entry of merchandise to be subject to penalties, yet bear no responsibility under §

1592(d) to make the United States whole by paying the duty lost as a result of that fraud.

The legislative history of § 1592(d) is in accord with the clear language of the provision. Subsection (d) was added by

FN10. Former § 592 provided, in relevant part,

If any … person or persons enters or introduces … into the commerce of the United States any imported

merchandise by means of any fraudulent or false invoice … or by means of any false statement, … or aids

or procures the making of any such false statement as to any matter material thereto without reasonable

(1977) (Memorandum to the Committee on Ways and Means of the House of Representatives, from the International

Trade Commission, stating that the “current practice is to mitigate on the basis of the degree of culpability” so that

“the penalty usually represents an increment of the loss of revenue”).

The revision to § 592 eliminated mandatory minimum penalties, setting instead different maximum penalties for

FN11. Section 1592(c) of Title 19 (1988) provides, in relevant part:

(c) Maximum penalties

(1) Fraud

A fraudulent violation of subsection (a) of this section is punishable by a civil penalty in an amount not to

exceed the domestic value of the merchandise.

(2) Gross negligence

A grossly negligent violation of subsection (a) of this section is punishable by a civil penalty in an amount

(3) Negligence

A negligent violation of subsection (a) of this section is punishable by a civil penalty in an amount not to

exceed-

(A) the lesser of-

1567–68. McAfee and St. Paul were not implicated in Blum’s wrongdoing under § 1592(a) and argued that as

“innocent parties” they could not be liable for unpaid import duties under subsection (d).

Id.

at 1569.

We rejected this argument, holding that subsection (d) is broader than subsection (a), covering not only those who

participated in the fraud but also those traditionally liable for payment of duty:

FN12. The fact that subsection (d) does not impose a “penalty,”

see Blum,

858 F.2d at 1569;

United States v.

Jac Natori Co.,

108 F.3d 295, 299 (Fed.Cir.1997), does not argue against requiring aiders and abettors to

CHAPTER 23: INTERNATIONAL LAW IN A GLOBAL ECONOMY 407

make a compensatory payment of duty.

*1349 Because we conclude that § 1592(d) imposes liability for unpaid duty upon those who knowingly aid and abet

[7][8] We disagree with Inn Foods’s characterization of the trade court’s opinion. Where the legislature delegates to a

trial court the discretion to determine the amount of a monetary award, we will overturn an exercise of that discretion

only where it is “clearly unreasonable, arbitrary, or fanciful, based upon an erroneous construction of the law, based

upon fact findings that are clearly erroneous,” or completely unsupported by the record.

Ford Motor Co.,

463 F.3d at

1285 (quotation marks omitted). The court’s reasoning concerning its determination of the appropriate monetary

(11), it found that the amount of duty lost was a substantial sum,

id.

at 1361.

FN13. The trade court identified numerous factors: the defendant’s (1) good faith effort to comply with the

statute, (2) degree of culpability, and (3) history of previous violations; the nature of (4) the public interest in

ensuring compliance with the regulations involved and (5) the violation at issue; (6) the gravity of the violation;

(7) the defendant’s ability to pay; (8) the appropriateness of the size of the penalty to the defendant’s

business and ability to continue doing business; (9) that the penalty not otherwise be shocking to the

conscience of the Court; (10) the economic benefit gained by the defendant; (11) the degree of harm to the

public; (12) the value of vindicating agency authority; (13) whether the party sought to be protected by the

statute had been adequately compensated for the harm; and (14) other matters as justice may require.

Inn

argument is without merit. As we have previously noted, Inn Foods repeatedly agreed to waive the statute of

limitations for successive two-year periods, and it did so after the 1993 amendment.

Inn Foods,

383 F.3d at 1320. The

final waiver before this action was commenced provided:

Inn Foods, Inc. hereby waives the period of limitations contained in Title

19, United States Code, Section 1621, and

any other applicable statute(s) of limitations

with respect to Customs entries of frozen fruits and vegetables, filed

Case 23.3

504 F.3d 254

Khulumani v. Barclay Nat. Bank Ltd.

C.A.2 (N.Y.),2007.

United States Court of Appeals,Second Circuit.

Mandla Madondo, Benjamin Maifadi, Tshemi Makedama, as personal representative of Lugile

Makedama, Mabel Makupe, as personal representative of Andrew Makupe, Mabel Malobola, as

CHAPTER 23: INTERNATIONAL LAW IN A GLOBAL ECONOMY 409

personal representative of Malobola Mbuso, Evelyn Matiso, as personal representative of Pitsi

Matiso, Betty Mgidi, as personal representative of Jeffrey Mgidi, Elizabeth Mkhonwana, as

Elliot Sithembiso Marenene, Alfred Masemola, Maureen Thandi Mazibuko, Michael Mbele,

Laetitia Nombambo Mfecane, as personal representative of Rubin Mfecane, Dennis Mlandeli,

Tefo Mofokeng, Motlaletsatsi Molatedi, Azariel Molebeleli, Simon Molotsi, Lina Moreane, as

personal representative of Albert Xaba, Thabiso Samuel Motsie, Sonto Ndlovu, Mangindiva

Robert Rhenene, Thobile Sikani, Bubele Stefane, Noluthando Biletile, Leslie Mncedisi Botya,

Chevrontexaco Global Energy, Inc., Citigroup, Inc., Commerzbank, Credit Suisse Group,

Daimlerchrysler AG, Deutsche Bank AG, Dresdner Bank AG, Exxonmobil Corporation, Ford Motor

Company, Fujitsu, Ltd., General Motors Corporations, International Business Machines Corp.,

J.P. Morgan Chase, Shell Oil Company, and UBS AG, Defendants-Appellees,

AEG Daimler-Benz Industrie, Fluor Corporation, Rheinmetall Group AG, Rio Tinto Group, Total–

Monnapula, Plaintiffs-Appellants,

Docket Nos. 05-2141-cv, 05-2326-cv.

Argued: Jan. 24, 2006.

Decided: Oct. 12, 2007.

Before: KATZMANN and HALL, Circuit Judges, and KORMAN, District Judge.FN**

Plaintiffs, filed a complaint against twenty-three domestic and foreign corporations, charging them with various

violations of international law.FN1 The other two groups, the Ntsebeza and Digwamaje Plaintiffs, brought class action

claims on behalf of the “victims of the apartheid related atrocities, human rights’ violations, crimes against humanity

and unfair [and] discriminatory forced labor practices.” The Digwamaje Plaintiffs also brought claims under the Torture

Victim Protection Act of 1991, Pub.L. 102-256, 106 Stat. 73 (1992), codified at 28 U.S.C. § 1350 note (“TVPA”), and

the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961

et seq.

(“RICO”).

FN1. The Khulumani Plaintiffs include the Khulumani Support Group, a South African non-governmental

organization that “works to assist victims of apartheid-era violence and has 32,700 members who are

survivors of such violence,” as well as ninety–one individual plaintiffs who are “the personal representatives of

FN2. Apparently, not all of the named defendants in the three actions have been served with complaints, and

some defendants have indicated that they plan to contest personal jurisdiction. The district court’s order

granting the motion to dismiss stated that it was “limited to those defendants as to whom the Court’s personal

jurisdiction is not contested.”

In re S. African Apartheid Litig.,

346 F.Supp.2d at 543 n. 3. In addition, eleven of

FN3. The Ntsebeza and Digwamaje Plaintiffs moved to strike Maduna’s declaration and submissions,

asserting that the declaration contained “legal argument by a non–party” and “conclusory allegations not

FN4. Specifically, the district court inquired whether “adjudication of these cases would have an adverse

impact on the interests of the United States and, if so, the nature and significance of any such impact.”

Ruling on the defendants’ motions to dismiss, the district court held that the plaintiffs failed to establish subject matter

FN5. The plaintiffs sought to provide particularized allegations directed at particular defendants, to “meet the

new

Sosa

standard,” and to clarify for the district court that their ATCA claims were not based upon the

corporations “merely doing business” in South Africa.

FN6. The Digwamaje Plaintiffs have not challenged the dismissal of their RICO claim.

II

[1][2] All members of the panel join to affirm the district court’s dismissal of the Digwamaje Plaintiffs’ TVPA claims.

(2) subjects an individual to extrajudicial killing shall, in a civil action, be liable for damages to the individual’s legal

representative, or to any person who may be a claimant in an action for wrongful death.

28 U.S.C. § 1350 note § 2(a). For purposes of the TVPA, an individual “acts under color of law … when he acts

together with state officials or with significant state aid.”

Kadic v. Karadzic,

70 F.3d 232, 245 (2d Cir.1995). The

Digwamaje Plaintiffs, although twice having amended their complaint, failed to link any defendants to state aid or the

III

FN7. Although the district court rested its decision to deny the plaintiffs’ motion to replead on several grounds,

it is not clear from the district court’s order that it would have reached the same result in the absence of its

erroneous belief that any amendment would be futile. It seems most respectful of the district court’s

considerable discretion in this area to allow it to determine in the first instance whether to allow the plaintiffs to

replead. In that same vein, we also leave to the district court on remand the first opportunity to consider any

2739.FN9

FN8. In his dissent, Judge Korman adamantly asserts that our opinion fails to show deference to the position

of the Republic of South Africa, a position that also commands the support of the United States Department of

State. Opinion of Judge Korman at 306-11. He presents an analysis of prudential considerations, the strength

FN9. We reject the proposition endorsed by Judge Korman that the Supreme Court, in a footnote written

while deciding a different case, would instruct us on how to decide this case, which was not before it. Opinion

of Judge Korman at 295-96. Instead, we take the Supreme Court’s language in footnote 21 of

Sosa

at face

value, as simply observing that there is a strong argument that the views of the Executive Branch

on the issue

FN10. The parties agree that

Sosa

‘s reference to “case–specific deference” implicates either the political

question or international comity doctrine.

In dismissing the plaintiffs’ complaints below, the district court explicitly refrained from addressing the defendants’

arguments that the ATCA claim presented a non-justiciable political question.FN11

In re S. African Apartheid Litig.,

346

F.Supp.2d at 543 n. 4 (“Defendants also argue that ... the matter is a non-justiciable political question. Given the

FN11. Judge Korman suggests that the content of the Defendant’s Joint Motion to Dismiss (“Joint Motion”),

cited by the district court, supports the view that the issue of deference to other political branches was

FN12. It was error for the district court to consider these collateral consequences in the context of deciding

preliminarily whether it had jurisdiction to hear this case under the ATCA. However, even if we construed the

district court’s discussion of the “collateral consequences” as a decision not to recognize a cause of action for

plaintiffs’ claims, in which context consideration of these consequences would have been appropriate,

FN13. While we cannot know how these developments will affect the positions of the United States and South

Africa with respect to this litigation, the district court may wish to solicit anew the views of these governments,

and thus that fact, too, counsels against us reaching these issues at this time.

On remand, the district court will have an opportunity to consider the guidance provided by our prior cases regarding

FN14. We do not believe the Supreme Court’s statement in

Sosa

is to the contrary.

Sosa,

542 U.S. at 733 n.

21, 124 S.Ct. 2739 (noting only that “there is a strong argument that federal courts should give serious weight

CHAPTER 23: INTERNATIONAL LAW IN A GLOBAL ECONOMY 415

to the Executive Branch’s view of the case’s impact on foreign policy”). Indeed, to give dispositive weight to