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Law360 (March 31, 2021, 6:24 PM EDT) -- A U.S. Court of International Trade judge handed a California clothing company a partial win Tuesday, preventing the federal government from taking in-person depositions during discovery as part of its tariff-evasion lawsuit against the firm.
District Judge Jennifer Choe-Groves said that Greenlight Organic Inc. and its owner, Parambir Singh Aulakh, would be subjected to an undue burden if in-person questioning were allowed to proceed, due to the ongoing COVID-19 pandemic. She noted that the government had also suggested that the physical presence of attorneys would not be required.
"The court takes judicial notice that travel and remaining indoors for extended periods of time with other people during the COVID-19 pandemic poses personal health risks," she said. "It would be highly burdensome to require the witnesses to appear in person due to their concerns over the potential health risks involved, while it would be much less burdensome and far safer for the witnesses to testify remotely via videoconference."
The government had argued that in-person testimony would facilitate the review of evidentiary material by witnesses. However, Judge Choe-Groves said that videoconferencing technology allows for screen-sharing and other options for reviewing evidence.
The government's 2017 lawsuit, later amended in 2019, alleges that Greenlight Organic imported a Vietnamese manufacturer's athleticwear from 2007 to 2011, certifying to customs agents that the clothing was made of woven, not knitted, material.
Knitted fabrics are subject to a higher tariff classification, and the government accused Aulakh of working with the manufacturer to classify the material as recycled polyester, not first-run polyester, to avoid higher tariffs.
The government says that Greenlight Organic avoided paying $238,517 in duties and fees from the alleged scheme. However, the government is seeking $3.2 million in penalties.
On Tuesday, Judge Choe-Groves further denied several requests related to documentary evidence that Greenlight Organic had sought from the government. She said that the government couldn't be required to hand over lost revenue data on an import-by-import basis, primarily because it used an alternative method to calculate loss of revenue.
She further said that government manuals concerning fraud investigations could not be turned over because there was no proof that such manuals existed.
Greenlight Organic objected to the government's provision of approximately 3,100 pages of material related to customs brokers, arguing that the government should have to identify a narrower subset of relevant information.
But Judge Choe-Groves said that it was less burdensome for Greenlight Organic to pore over the mass of documentation rather than order the government to winnow out the most relevant material.
"The universe of approximately 3,100 pages of responsive documents is not too burdensome for Defendants' law firm to review without further assistance from the Government," she said. "Indeed, that is the nature of litigation."
While less than what the clothing company has asked for, Judge Choe-Groves still granted a two-and-a-half-month extension of the pretrial discovery schedule. According to her amended order, discovery will be finished by June, and motions to resolve the case, or begin a trial, are to be filed by August.
Attorneys for the government and Greenlight Organic did not return requests for comment.
The government is represented by William Kanellis and Kelly Krystyniak of the U.S. Department of Justice's Civil Division.
Greenlight Organic is represented by Robert Silverman and Joseph Spraragen of Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP.
Aulakh is represented by Robert Silverman, Joseph Spraragen and Robert Seely of Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP.
The case is U.S. v. Greenlight Organic Inc., case number 1:17-cv-00031, at the U.S. Court of International Trade.
--Editing by Andrew Cohen.
For a reprint of this article, please contact reprints@law360.com.
