United States v. Trek Leather, Inc.

Trek Leather, Inc. (Trek) and its sole shareholder and president, Harish Shadadpuri (defendants) imported men’s suits into the United States. Despite knowing that he was required to declare the cost of the fabric as part of the value of the imported merchandise, Shadadpuri personally took actions to ensure that the suits would be entered without doing so, thus understating the dutiable value of the merchandise. After following the required administrative procedures, United States Customs and Border Protection (customs) (plaintiff) filed a complaint in the Court of International Trade alleging fraud, negligence, and gross negligence, seeking to recover unpaid duties and interest and to impose penalties on Trek and Shadadpuri. Shadadpuri filed a motion for summary judgment, arguing that Trek was the importer of record and that he could not be held personally liable for the violations because he did not enter the merchandise. The court held that Trek and Shadadpuri were liable due to gross negligence and dismissed the fraud and negligence charges as moot. Shadadpuri appealed. On appeal, the United States Court of Appeals for the Federal Circuit held that since the importer of record was Trek, Shadadpuri could not be liable for entering merchandise, as he was neither the importer of record nor the designated agent. Customs requested an en banc rehearing.