United States v. Neman

18 Ct. Int'l Trade 89
United States Court of International Trade·Decided February 7, 1994·No. Court No. 89-07-00444·Published

Opinion

MEMORANDUM OPINION AND ORDER

Background

Musgrave, Judge:

The United States commenced this action pursuant to Section 592 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592, seeking to recover penalties related to 15 entries of polyester fabric that Neman Brothers allegedly entered or sought to enter in violation of the Customs laws of the United States. In particular, in an attempt to circumvent quotas established with respect to polyester fabric manufactured in the Republic of Korea, Neman Brother and Yoel Neman allegedly arranged for the transshipment of Korean-made polyester fabric through Japan, concealment of the Korean origin of the fabric, and the creation of false papers prior to the fabric’s importation into the United States. Complaint Paras. 7-42. In this regard, this case involves a scheme similar to that reflected in several other matters currently or previously pending before this Court.1

The story of the defense mounted by the Neman brothers in this and two other related matters before this Court,2 is a sordid tale of delay, obfuscation, and recalcitrance. Defendants were regularly late with Court filings, and labored continually under the specter of a default judgment.3 Defendants also filed a series of marginally meritorious motions and fired, then re-hired their attorney, gaining a substantial delay in these proceedings. Perhaps the high point in this charade occurred in CIT No. 92-03-00183, when Neman Brothers & Associates, [90] a corporation moved to proceed in forma pauperis — even as the government had already documented in excess of 42 million dollars in value for the entries under investigation.4 Despite these affronts to the justice system, the Court granted defendants leave to file their tardy Opposition to the United States’ Motion for Sanctions due to the severity of the relief sought by the government.

Plaintiff’s Claims for Sanctions

Plaintiff asserts two justifications for striking Defendant’s Answer, entering default against defendants, and for ordering sanctions in the form of compensation to the government for its costs in pursuing discovery in this case. Primarily, plaintiff relies on United States Court of International Trade Rule 37(d), which mirrors the Federal Rules of Civil Procedure and prescribes the sanctions the Court may impose upon defendants that fail to respond to interrogatories or requests for production. Plaintiff claims that the Court is justified in entering default against defendants for their failure to secure counsel as required for corporations by USCIT R. 75(b)(1) as well. That, in turn, exacerbated the delay in the prosecution of this matter, diminished the effectiveness of the Court’s leverage on defendants in forcing them to comply with Court rules, and substantially prejudiced plaintiffs ability to fully develop and plead its case. See W.W. & W.B. Gardner, Inc. v. Park West Village Inc., 568 P.2d 734, 738 (Utah 1977) (“The sanction of default judgment is justified where there has been a frustration of the judicial process, viz., where the failure to respond to discovery impedes the trial on the merits and makes it impossible to ascertain whether the allegations of the answer have any factual merit.”)

Discussion

On February 26,1991, the United States served Plaintiffs First Set of Interrogatories and Plaintiffs First Request for the Production of Documents upon Yoel Neman and Neman Brothers in this case and upon Yoel Neman in the Yoel Neman case. Defendant’s Counsel sought to withdraw from the case when, instead of responding to the discovery by April 8,1991, defendants “specifically * * * [instructed him] * * * not to do anything further to see if these cases would just die.” Letter ofFert-man March 18,1991, Plaintiffs Motion For Sanctions (Attachment 3). In granting Mr. Fertman’s motion to withdraw, the Court ordered that “Defendants shall have sixty days from the date of this order to respond to Plaintiffs First Set of Interrogatories and Plaintiffs First Request for the Production of Documents.” Plaintiff claims that “Neman Brothers and Yoel Neman have neither retained new counsel nor responded to discovery in this case or the Yoel Neman case.” Plaintiffs Motion For Sanctions at 3. Since plaintiffs Motion for Sanctions, the Court has allowed defendants to retain Mr. Fertman again, but this last minute [91] maneuver does not cure defendant’s inexcusable delay in complying with the Court rules regarding discovery or the appointment of counsel.

Rule 37(d) prescribes:

If a party or an officer, director, or managing agent of a party * * * fails * * * (2) to serve answers or objections to interrogatories submitted under Rule 33, after proper service of the interrogatories, or (3) to serve written response to a request for inspection submitted under Rule 34, after proper service of the request, the court on motion may make such orders in regard to the failure as are just, and among others it may take any action authorized under subdivisions (b)(1), (b)(2) and (b)(3) of this rule. In lieu of any order or in addition thereto, the court shall require the party failing to act or the attorney advising that party or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.

USCIT R. 37(d). Accord Fed. R. Civ. P. 3.7(d).

Subdivision (b)(3) of Rule 37 prescribes that the Court may enter,

(3) An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.

USCIT R. 37(b)(3).

Free access — add to your briefcase to read the full text and ask questions with AI

United States v. Neman, 18 Ct. Int'l Trade 89 (cit 1994).

18 Ct. Int'l Trade 89 (United States v. Neman) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related