A Law360 op-ed written by partners Vanessa Waldref and Dan Fruchter of Singleton Schreiber discusses the ruling in Island Industries Inc. v. Sigma Corp., where the U.S. District Court for the Central District of California upheld an $8 million jury verdict against Sigma, a Chinese importer found liable for customs fraud. The case centered on Sigma’s deliberate mislabeling of welded outlets to evade antidumping duties, a scheme the court found to be knowing and intentional. The Ninth Circuit’s affirmation of the verdict underscores that such conduct falls squarely under the False Claims Act, empowering whistleblowers to pursue customs fraud cases in federal court—even without government backing. The ruling also clarifies that duties are owed upon importation and that companies cannot avoid liability by citing regulatory ambiguity or procedural technicalities.
It also clarifies that duties are owed upon importation, not final liquidation, and that companies cannot escape liability by citing regulatory ambiguity. With tariff evasion costing the U.S. billions annually, the ruling sends a strong message: private citizens have the legal tools to hold bad actors accountable and protect fair competition in American trade.
