United States v. Ford Motor Co.

Ford Motor Company (Ford) (defendant) imported automotive tooling dies into the United States. Upon entry, Ford disclosed merchandise values that did not account for certain engineering changes that had made the merchandise more valuable. The United States Customs Service (customs) (plaintiff) began looking into Ford’s entries. In October 1990, a customs agent reached out to Ford’s legal counsel in connection with an investigation of a different company. In March 1991, the agent wrote in the Ford investigative record that he believed Ford had violated customs laws. In June 1991, customs issued a summons to Ford requesting documents related to the violations. Then, in August 1991, Ford wrote a letter to customs revealing the nature of the violation, identifying the merchandise entered, and disclosing the correct information that should have been submitted at entry. After investigating Ford’s entries, customs determined that Ford had made false statements regarding the true value of the imported goods, resulting in an underpayment of duties. Ford filed an action before the United States Court of International Trade seeking payment of unpaid duties in addition to civil penalties. Ford sought to have penalties reduced due to prior disclosure of the violations. The court held that Ford should have known of the investigation at the latest by June 1991 and thus its August 1991 disclosure was too late to qualify for prior-disclosure penalty reductions. Ford appealed, arguing that customs did not issue a formal report of investigation until late August 1991, after Ford made its disclosure, and thus the court had incorrectly held that Ford’s disclosure proceeded the date on which Ford should have known about the investigation.