Host Jonathan Porter welcomes Husch Blackwell partner Bob Romashko to the show to discuss an emerging area of False Claims Act liability—tariffs. True to his campaign promises to impose additional tariffs on major U.S. trading partners, President Trump has been active early in his second term wielding the threat of tariffs against friend and foe alike.
As the tariff regime potentially expands, so do the risks posed by whistleblowers who could benefit from alleging violations of trade law. Jonathan and See more +
Host Jonathan Porter welcomes Husch Blackwell partner Bob Romashko to the show to discuss an emerging area of False Claims Act liability—tariffs. True to his campaign promises to impose additional tariffs on major U.S. trading partners, President Trump has been active early in his second term wielding the threat of tariffs against friend and foe alike.
As the tariff regime potentially expands, so do the risks posed by whistleblowers who could benefit from alleging violations of trade law. Jonathan and Bob summarize at a high level the tariff system and how its regulatory framework creates the potential for FCA liability. They explore how allegations of FCA violations often take the form of reverse false claims, which concern efforts to fraudulently withhold monies owed to the government, such as failing to disclose or falsely representing an obligation. In the trade context, these disclosures can be complex, especially as the tariff regime covers general tariffs, product-specific tariffs, and country-of-origin tariffs, each with very different classifications and definitions.
Jonathan and Bob explore in depth some issues associated with tariff-related FCA litigation that are unusual and worth considering. More so than the typical healthcare or defense industry FCA litigation, tariff-related FCA cases are often filed by relators who are also business competitors, rather than “insiders” such as employees. This has important implications, especially given that the FCA is not a strict liability statute.
Jonathan and Bob discuss recent “textbook” cases to demonstrate how honest mistakes can put a company at risk, as the costs associated with protracted litigation can compel companies to settle, even in the absence of a knowing violation. Jonathan and Bob also explore the federal district court judiciary’s unfamiliarity with some forms of trade-related litigation, as customs penalty cases are typically handled by the U.S. Court of International Trade.
Jonathan and Bob conclude the episode with a discussion of what companies that work with importers need to know about FCA enforcement. Drawing from a recent FCA lawsuit, they explore the elements required to defend against relator claims and how those impact third-party participants, including warehousers, shippers, and others involved in the supply chain. See less -
