In a recent development in Island Industries, Inc. v. Sigma Corp.—a nonintervened False Claims Act (FCA) qui tam action based on an alleged failure to pay antidumping duties—the Ninth Circuit, post–oral argument, ordered supplemental briefing on the threshold question of whether FCA violations can be predicated on a violation of customs laws or whether Congress instead intended the recovery of customs duties fall within the exclusive province of the customs enforcement regime. We examine arguments made by Sigma, Island Industries, and the United States, as the Ninth Circuit grapples with this important question.

This latest briefing follows separate supplemental briefing on the related question of whether district courts have jurisdiction over qui tam actions based on customs violations.

The Ninth Circuit on May 26, 2023 ordered the parties in Island Industries v. Sigma Corp., Case No. 22-55063 (9th Cir.), to brief “whether 19 U.S.C. § 1592 provides the exclusive means for recovering antidumping duties that an importer has fraudulently evaded paying through false statements on customs forms, or whether the False Claims Act may also be used to recover such duties.” Section 1592(d) states that, “if the United States has been deprived of lawful duties, taxes, or fees . . ., the Customs Service shall require that such lawful duties, taxes, and fees be restored, whether or not a monetary penalty is assessed.” [1]

In briefing completed on July 12, 2023, Sigma—the defendant below...

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