Whistle-Blower Denied Access to Settlement Info
JACKSONVILLE, Fla. (CN) - Government settlements with aluminum importers that allegedly shirked their anti-dumping duties need not come to light, a federal judge ruled.
James Valenti Jr. had tried to blow the whistle in April 2011 on several companies that he claimed had misrepresented the origin of their imported aluminum extrusion products to avoid paying anti-dumping and countervailing duties.
Valenti is the founder and CEO of WTG International, formerly World Trade Group, which helps American businesses buy aluminum from foreign countries.
After the United States last year chose to intervene against some of the defendants, a federal judge in Jacksonville unsealed Valenti's complaint and the government's notice to intervene. The court set a Feb. 18, 2014, deadline to serve the defendants with the complaint.
The government filed its complaint this past November, naming as defendants Northeastern Aluminum Corp., Southeastern Aluminum Products, Waterfall Group, C.R. Laurence Co., Northeastern owner William Ma, and Robert Wingfield, the U.S. representative of Chinese exporter Tai Shan Golden Gain Aluminum Products Ltd.
It accused the defendants of having shipped aluminum products manufactured by nonparty Tai Shan in China to Malaysia to be repackaged before shipping them to the United States, in a process known as transshipping.
The importers had allegedly tried to avoid paying mandatory additional duties collected for certain products made by foreign manufacturers, such as companies located in China, by transshipping the aluminum to Malaysia, repackaging it there and lying about the product's country of origin, the government claimed.
Valenti, whose original complaint under seal included additional defendants, asked for an extension to serve his complaint and decide whether to pursue the defendants against which the government had declined to intervene. Those entities are described as "non-intervened defendants" in a court order on the motion.
Claiming that he was also entitled to a share of any settlement or payments that the government recovered from defendants he had sued under seal, Valenti sought an order for the government to make payment or settlement information available.
Valenti said the Department of Justice told his attorney in December 2013 about payment of duties it had negotiated from some of the defendants the government had chosen not to sue.
Indeed the government announced a $1.1 million settlement on Nov. 12 with Basco Manufacturing Co., a defendant in Valenti's original suit. "Circumvention of our country's import laws causes substantive harm to U.S. businesses and our economy," acting U.S. Attorney A. Lee Bentley III of the Middle District of Florida had said in a statement announcing the settlement.
Valenti said the United States had refused to provide any information about payments from or agreements reached with non-intervened defendants like Basco, denying him his share of alleged settlements.
But the government claimed that Valenti's request was not timely and that he did not need the requested information to file a complaint against the non-intervened defendants. It also argued that the False Claims Act does not require the government to share settlement information with whistle-blowers before formal discovery.
U.S. Magistrate Judge Monte Richardson ruled on Feb. 14 that Valenti is not entitled to information about settlements with companies and individuals who are not parties to the government's lawsuit.
The alleged settlements happened before the government intervened in the lawsuit, and Valenti has not yet filed a complaint against any of the non-intervened defendants, the Feb. 14 order states.
Richardson noted Valenti is free to pursue claims against those defendants because the United States chose not to proceed with the action against them.
He also denied Valenti's request for an extension, and reminded him that the deadline to file a complaint was Feb. 18.
No new complaint was available on the docket as of Feb. 21.
Valenti, who previously worked as a litigation attorney, said his team plans to seek a rehearing on "the magistrate's rulings, especially as to controlling statutory and case law the magistrate completely overlooked and failed to address."