United States v. Greenlight Organic, Inc.
2017 CIT 168
| Ct. Intl. Trade | 2017Background
- The United States sued Greenlight Organic, Inc. under 19 U.S.C. § 1592 alleging fraudulent misclassification and undervaluation of imported apparel and seeking penalties, unpaid duties, and fees.
- The Government moved to compel discovery responses (RFA 1–4 and Interrogatories 3, 5, 6, 8–11, 15), asserting Greenlight withheld or incompletely produced documents.
- Greenlight opposed, arguing requests were overbroad, irrelevant, and that some responsive materials (e.g., emails on a defunct
greenlightorganic.comaccount) were inaccessible; it also moved for a protective order to limit discovery into officers’ personal finances. - The Government sought officer-related discovery as relevant to who made classification/valuation decisions and to explore potential individual liability or piercing the corporate veil.
- The court held a telephone conference, found the disputed discovery relevant and within Rule 26's liberal scope, and ordered Greenlight to produce specified responses and documents and to report efforts to recover emails from the third‑party provider.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RFAs 1–4 seeking admissions that officers participated in valuation/classification are permissible | Requests probe who made tariff decisions and are relevant to impute officer conduct to the corporation | RFAs exceed case scope and are irrelevant | Granted; Greenlight must answer RFAs 1–4 (responses due Jan 12, 2018) |
| Whether Interrogatory 3 (identify manufacturers and related communications, Jan 1, 2007–Feb 9, 2012) is overbroad and time‑bounded | Relevant; post‑period data may show patterns before/after alleged fraud | Overbroad and partly outside complaint’s time window; some emails inaccessible | Compelled supplementation for full Jan 1, 2007–Feb 9, 2012 period; ordered counsel to seek third‑party emails and report efforts |
| Whether Interrogatories 5, 6, and 15 (documents re: other companies, classification bases, recycled polyester labeling) require further production | Government has third‑party evidence suggesting incomplete production; seeks full production | Greenlight says it already produced responsive materials and relied on vendors/brokers | Compelled another search and production of any remaining responsive documents; counsel to report search efforts |
| Whether interrogatories into officers’ sources of income and business associations (Interrogatories 8–11) and personal finances are discoverable; motion for protective order | Such financial information is relevant to proving a fraud scheme and to piercing the corporate veil; may support adding individual liability claims | Discovery into personal finances is improper because complaint does not yet allege individual liability | Denied protective order; compelled responses to Interrogatories 8–11 (discovery permitted to evaluate potential individual liability and veil‑piercing) |
Key Cases Cited
- Jones v. N.Y. Guar. & Indem. Co., 101 U.S. 622 (agency principle that corporation acts through agents)
- Kellogg Brown & Root Serv., Inc. v. United States, 728 F.3d 1348 (imputing employee knowledge to principal when within scope)
- Meyer v. Holley, 537 U.S. 280 (agency principles applied to imputation of knowledge)
- Long Island Sav. Bank, FSB v. United States, 503 F.3d 1234 (imputing agent knowledge to principal)
- Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544 (officers’ knowledge and acts can bind corporation)
- Oppenheimer Fund, Inc. v. Sanders, 437 F.3d 340 (discovery construed broadly to reach matters that may lead to admissible evidence)
- Hickman v. Taylor, 329 U.S. 495 (discovery’s broad scope and purpose)
- United States v. Trek Leather, Inc., 767 F.3d 1288 (officers may be personally liable under §1592)