UNITED STATES, 

Plaintiff,

v.

NYCC 1959 INC., 

Defendant.

Slip Op. 15 - 13

UNITED STATES COURT OF INTERNATIONAL TRADE 

OPINION

[granting plaintiff’s motion for default judgment] 

Dated: February 6, 2015 666

Zachary J. Sullivan, Trial Attorney, Commercial 

Litigation Branch, Civil Division, U.S. Department of Justice, 

of Washington, DC, for the Plaintiff. Also on the brief were 

Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. 

Davidson, Director, and Franklin E. White, Jr., Assistant 

Director. Of counsel was Brian J. Redar, Staff Attorney, 

U.S. Customs and Border Protection, of Long Beach, CA. 

Pogue, Senior Judge: The United States brings this 

action to recover a civil penalty as permitted by Section 592 of 

the Tariff Act of 1930, as amended, 19 U.S.C. § 1592 (2012) 

(“Section 592”).1

 The Government claims that Defendant NYCC 1959 

Inc. (“NYCC”), an importer of candles from the People’s Republic 

of China (“China”), negligently attempted to enter merchandise 

1

 Compl., ECF No. 3, at ¶ 1. Further citations to the Tariff Act 

of 1930, as amended, are to the relevant provisions of Title 19 

of the U.S. Code, 2012 edition. 

Before: Donald C. Pogue, 

Senior Judge 

Court No. 14-00045 
Court No. 14-00045 Page 2 

into the commerce of the United States by means of materially 

false information, in violation of 19 U.S.C. § 1592(a)(1)(A)(i).2

Because NYCC failed to timely appear, plead, or otherwise 

defend, default was entered against it.3

 The Government now 

moves for default judgment pursuant to USCIT Rule 55(b).4

The court has jurisdiction pursuant to 28 U.S.C. 

§ 1582(1) (2012).

As further explained below, because the Government’s 

well-pleaded complaint and supporting declaration adequately 

establish the defaulting Defendant’s liability for a grossly 

negligent violation of Section 592 as a matter of law, 

Plaintiff’s motion for a default judgment is granted. In 

addition, because the Government’s claim is for a civil penalty 

amount within the statutory limit for such violations, judgment 

shall be entered for the Plaintiff accordingly. 

DISCUSSION

Here, Defendant NYCC has defaulted by not appearing. 

Entry of Default, ECF No. 7. Because a defendant who defaults 

thereby admits all well-pleaded factual allegations contained in 

2

 Compl., ECF No. 3, at ¶¶ 3-8, 17, 21. The Government claims 

that NYCC acted with gross negligence (count I), id. at ¶ 17, 

or, in the alternative, negligence (count II), id. at ¶ 21. 

3

 Entry of Default, ECF No. 7.

4

 Pl.’s Mot. for Default J., ECF No. 8 (“Pl.’s Br.”).
Court No. 14-00045 Page 3 

the complaint,5 the court must enter judgment against NYCC if 

(1) “the plaintiff’s allegations establish the defendant’s 

liability as a matter of law,”6

 and (2) “the plaintiff’s claim is 

for a sum certain or for a sum that can be made certain by 

computation.” USCIT R. 55(b).7

I. Admitted as True, the Government’s Factual Allegations 

Establish NYCC’s Liability as a Matter of Law. 

Section 592 prohibits attempts to “enter or introduce 

any merchandise into the commerce of the United States by means 

of . . . any document or electronically transmitted data or 

information, written or oral statement, or act which is material 

and false,” if the responsible person acted with “fraud, gross 

5

 E.g., City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 

114, 137 (2d Cir. 2011) (“It is an ancient common law axiom that 

a defendant who defaults thereby admits all well-pleaded factual 

allegations contained in the complaint.”) (quotation marks and 

citation omitted). 

6

 Id. (alterations, quotation marks, citation and footnote 

omitted); United States v. Freight Forwarder Int’l, Inc., 

Slip Op. 15-5, 2015 WL 250913, at *2 (CIT Jan. 21, 2015) 

(relying on Mickalis Pawn Shop, 645 F.3d at 137).

7

 USCIT Rule 55(b) provides that “[w]hen the plaintiff’s claim is 

for a sum certain or for a sum that can be made certain by 

computation, the court – on the plaintiff’s request with an 

affidavit showing the amount due – must enter judgment for that 

amount and costs against a defendant who has been defaulted for 

not appearing and who is neither a minor nor an incompetent 

person.” Plaintiff’s complaint alleges that NYCC is a 

corporation, not a minor or an incompetent person. See Compl., 

ECF No. 3, at ¶ 3 (averring that, “[u]pon information and 

belief,” Defendant NYCC is “a New York corporation . . . engaged 

in the importation of candles”). 
Court No. 14-00045 Page 4 

negligence, or negligence.” 19 U.S.C. § 1592(a)(1)(A)(i). Here, 

the Government adequately alleges that NYCC submitted entry 

documents to U.S. Customs and Border Protection (“Customs”) that 

falsely indicated that the merchandise in question was not 

subject to any antidumping duties.8

 In fact (accepting, as 

necessary in cases of default, the truth of the Plaintiff’s 

factual allegations9

), the merchandise NYCC attempted to enter – 

candles from China wholly composed of petroleum wax – was 

covered by an antidumping duty order.10 Because the false entry 

information was material to Customs’ evaluation of NYCC’s duty 

liability for the attempted entry,11 the Government’s factual 

allegations, deemed admitted by the defaulting Defendant, 

establish that NYCC attempted to enter merchandise into the 

commerce of the United States by means of information that was 

both material and false.

In the absence of any defense by the Defendant, these 

8

 Compl., ECF No. 3, at ¶¶ 4-7.

9

 See Mickalis Pawn Shop, 645 F.3d at 137. 

10 Compl., ECF No. 3, at ¶¶ 4, 7 (citing Petroleum Wax Candles 

from [China], 51 Fed. Reg. 30,686 (Dep’t Commerce Aug. 28, 1986) 

(antidumping duty order) (“Candles from China AD Order”)); 

Decl. of Robert P. Thierry (Director of the Office of Fines, 

Penalties and Forfeitures, U.S. Customs and Border Protection, 

for the Los Angeles, California area), ECF No. 8-1 (“Thierry 

Decl.”), at ¶ 5-6.

11 Compl., ECF No. 3, at ¶¶ 6, 8.
Court No. 14-00045 Page 5 

factual allegations are sufficient to establish NYCC’s liability 

under Section 592 for a monetary penalty based on negligence.12

The next inquiry, therefore, concerns the Government’s 

alternative claim to a monetary penalty based on gross 

negligence.13

“Gross negligence, for purposes of [S]ection 592, is 

behavior that is willful, wanton, or reckless, or demonstrates 

an ‘utter lack of care.’”14 Here the Government alleges that, 

prior to the entry attempt in question, NYCC had “twice 

attempted to enter Chinese candles from the same manufacturer 

without payment of antidumping duties,”15 and that in both prior 

instances Customs had tested the merchandise and determined it 

12 See 19 U.S.C. § 1592(e)(4) (“Notwithstanding any other 

provision of law, in any proceeding commenced by the United 

States in the Court of International Trade for the recovery of 

any monetary penalty claimed under [Section 592] . . . if the 

monetary penalty is based on negligence, the United States shall 

have the burden of proof to establish the act or omission 

constituting the violation, and the alleged violator shall have 

the burden of proof that the act or omission did not occur as a 

result of negligence.”).

13 See id. at § 1592(e)(3) (“[I]f the monetary penalty is based 

on gross negligence, the United States shall have the burden of 

proof to establish all the elements of the alleged 

violation[.]”).

14 United States v. Lafidale, Inc., __ CIT __, 942 F. Supp. 2d 

1362, 1365 (2013) (quoting United States v. Ford Motor Co., 

29 CIT 827, 845, 395 F. Supp. 2d 1190, 1206 (2005), aff’d in 

part, rev’d in part on other grounds, 463 F.3d 1267 (Fed. Cir. 

2006)).

15 Compl., ECF No. 3, at ¶ 9. 
Court No. 14-00045 Page 6 

to be subject to the antidumping duty order covering petroleum 

wax candles from China.16 In both prior instances, Customs 

“issued a rate advance that NYCC paid.”17 These undenied 

allegations sufficiently establish a complete lack of care by 

NYCC, demonstrating that when NYCC falsely indicated to Customs 

that the merchandise covered by this attempted entry was not 

subject to antidumping duties, it did so “with actual knowledge 

of or wanton disregard for the relevant facts and with 

indifference to or disregard for its obligation to file the 

entry as subject to antidumping duties.”18

Thus the Government has met its burden to establish 

NYCC’s liability for a grossly negligent violation of 

Section 592. The remaining question before the court is the 

claimed penalty amount. 

II. The Penalty Amount

Section 592 also provides for the civil penalty amount 

to be assessed for gross negligence.19 Where (as here) the 

material misrepresentation that forms the basis of the grossly 

16 Thierry Decl., ECF No. 8-1, at ¶ 8.

17 Id. (also stating that NYCC protested the rate advance in the 

second (but not the first) instance, that Customs denied that 

protest, and that NYCC did not further litigate the matter). 

18 Compl., ECF No. 3, at ¶ 17.

19 19 U.S.C. § 1592(c)(2). 
Court No. 14-00045 Page 7 

negligent violation concerned the assessment of duties, the 

amount of the penalty may not exceed the lesser of “the domestic 

value of the merchandise” or “four times the lawful duties, 

taxes, and fees of which the United States is or may be 

deprived.”20 The Government alleges that the attempted entry in 

20 See id. at § 1592(c)(2)(A). The Government’s explanation that 

the penalty amount assessed for NYCC’s grossly negligent 

violation of Section 592 “represented 40 percent of the dutiable 

value of the merchandise,” Compl., ECF No. 3, at ¶ 12, suggests 

that Customs was applying 19 U.S.C. § 1592(c)(2)(B) (“[I]f the 

[grossly negligent] violation [of Section 592] did not affect 

the assessment of duties, [the civil penalty amount may not 

exceed] 40 percent of the dutiable value of the merchandise.”) 

(emphasis added). But because the false information provided by 

NYCC – i.e., that the merchandise in question was not covered by 

an antidumping duty order – was material precisely because it 

had the potential to affect the importer’s duty liability, the 

applicable statutory cap on the civil penalty is in fact found 

in 19 U.S.C. § 1592(c)(2)(A) (“A grossly negligent violation of 

[Section 592] is punishable by a civil penalty in an amount not 

to exceed . . . the lesser of – (i) the domestic value of the 

merchandise, or (ii) four times the lawful duties, taxes, and 

fees of which the United States is or may be deprived[.]”). 

See Pl.’s Br., ECF No. 8, at 7 (relying on 19 U.S.C. 

§ 1592(c)(2)(A)); id. at 8 n.2 (“Although Customs utilized the

maximum for a gross negligence penalty when the violation does 

not affect the assessment of duties, 19 U.S.C. § 1592(c)(2)(B), 

we note that the violation here did in fact affect the 

assessment of duties, and thus a higher penalty was 

available.”); id. at 7-8 n.2 (explaining that Customs “exercised 

its discretion” to assess “a penalty for gross negligence in an 

amount that was significantly less than an amount that Customs 

could have assessed” in part because “the entry was ultimately 

canceled and the goods were abandoned”). Subsection 

1592(c)(2)(A) generally sets the statutory limit for penalties 

based on grossly negligent violations of Section 592, except “if 

the violation did not affect the assessment of duties,” in which 

case the alternative limit provided by subsection 1592(c)(2)(B) 

applies. 19 U.S.C. § 1592(c). Although the phrase “affect the 

assessment of duties” is not entirely devoid of ambiguity, the 

(footnote continued) 
Court No. 14-00045 Page 8 

question consisted of 1160 cartons of candles, with an “entered 

value” of $33,396.00,21 a “dutiable value” determined by Customs 

to be $38,275.20,22 and a “domestic value” calculated by Customs 

to be $346,290.29.23 This attempted false entry is alleged to 

have “resulted in a potential loss of antidumping duties of 

$41,452.04,”24 based on a 108.3 percent ad valorem antidumping 

duty rate applicable to petroleum wax candles imported from 

China.25 Customs assessed a penalty of $15,310.08, which is 

focus of the distinction between the two statutory limits on 

penalties for grossly negligent violations appears to concern 

the nature of the violation – i.e., was the misinformation 

constituting the violation directly material to duty assessment, 

or did the misinformation concern some other aspect of the entry 

process? Cf. United States v. Inner Beauty Int’l (USA) Ltd., 

Slip Op. 11-148, 2011 WL 6009239 (CIT Dec. 2, 2011) (applying 

subsection 1592(c)(2)(B) as the appropriate cap for a penalty 

based on a “non-revenue-loss” violation of Section 592, where 

the misinformation in question was material to the 

classification of the merchandise for purposes of an import 

quota). Here, the violation was directly material to Customs’ 

duty assessment, because the misinformation provided by NYCC 

concerned the applicable antidumping duties. Accordingly, the 

general cap set by 19 U.S.C. § 1592(c)(2)(A) applies. 

21 Compl., ECF No. 3, at ¶ 4; Thierry Decl., ECF No. 8-1, 

at ¶¶ 2-3.

22 Compl., ECF No. 3, at ¶ 12; Thierry Decl., ECF No. 8-1, 

at ¶ 4.

23 Thierry Decl., ECF No. 8-1, at ¶ 13. The large disparity 

between the amount provided for the “domestic value” and the two 

relatively similar “entered” and “dutiable” values suggests that 

the former may perhaps contain a typographical error.

24 Id. at ¶ 10. 

25 See Compl., ECF No. 3, at ¶ 7; Thierry Decl., ECF No. 8-1, 

(footnote continued) 
Court No. 14-00045 Page 9 

alleged to represent 40 percent of the alleged dutiable value of 

the merchandise, for NYCC’s grossly negligent violation of 

Section 592.26 NYCC has not paid any part of this penalty.27

Although the Government’s presentation of its case is 

not a model of clarity,28 the facts alleged are sufficient to 

establish that the amount of the claimed penalty – $15,310.08 – 

falls within the statutory cap set by the lesser of the 

merchandise’s domestic value and four times the potential duty 

at ¶ 6. Using the “entered” value – the lowest alleged amount - 

the applicable duties, based on the 108.3 percent ad valorem

antidumping duty rate, would have been $36,167.87. 

26 Compl., ECF No. 3, at ¶¶ 12-13, 18; Thierry Decl., 

ECF No. 8-1, at ¶ 17.

27 Compl., ECF No. 3, at ¶¶ 15, 19; Thierry Decl., ECF No. 8-1, 

at ¶¶ 19, 24. The Government states that “[a]ll administrative 

notices, petitions for relief and demands for payment were 

processed in accordance with applicable laws and procedures.” 

Compl., ECF No. 3, at ¶ 14; see also id. at ¶¶ 12-13 (describing 

the penalty notices issued to NYCC in connection with this 

violation); 19 U.S.C. § 1592(b) (providing the procedures that 

Customs must follow when assessing penalties for violations of 

Section 592). In the absence of any challenge from the defense, 

no procedural defect is apparent in this regard.

28 See supra notes 21-23 and accompanying text (noting the 

numerous disparate values referenced by the Government in 

connection with this penalty claim); Cf. Lafidale, __ CIT at __, 

942 F. Supp. 2d at 1366-67 (denying without prejudice the 

Government’s motion for default judgment for a grossly negligent 

violation of Section 592 because “the court [was] unable to 

determine the actual and potential loss of revenue suffered by 

plaintiff,” due to the Government’s confusing references to both 

“domestic value” and “dutiable value”); United States v. 

Lafidale, Inc., __ CIT __, 953 F. Supp. 2d 1352 (2014) (granting 

the Government’s renewed motion for default judgment upon 

clarification of these ambiguities).
Court No. 14-00045 Page 10 

loss.29 NYCC itself entered the value of the merchandise as 

$33,396.00,30 and at an ad valorem antidumping duty rate of 

108.3 percent the duties owed on such merchandise would noncontroversially exceed the claimed penalty amount.31

Accordingly, the Government’s assessed penalty amount in this 

case is within the scope of authority provided by 19 U.S.C. 

§ 1592(c)(2)(A).

CONCLUSION

For all of the foregoing reasons, the Government’s 

motion for default judgment against NYCC for a grossly negligent 

violation of 19 U.S.C. § 1592(a) is granted. As the claimed 

penalty amount falls well within the statutory limit, and as the 

29 See 19 U.S.C. § 1592(c)(2)(A).

30 Compl., ECF No. 3, at ¶ 4. 

31 See supra note 25 (computing potential duty loss using the 

“entered value”). Compare Compl., ECF No. 3, at ¶ 4 (“NYCC, as 

importer of record, caused to be filed . . . [an] entry for 

1160 cartons of candles from [China] with an entered value of 

$33,396.00.”); id. at ¶ 12 (“The amount of the penalty 

represented 40 percent of the dutiable value of the merchandise, 

which [Customs] determined was $38,275.20.”), with United States 

v. Callanish Ltd., Slip Op. 10-124, 2010 WL 4340463, at *4 & n.3

(CIT Nov. 2, 2010) (denying without prejudice the Government’s 

motion for default judgment because “it appear[ed] that the 

amount of the ‘domestic value’ [of the merchandise] was derived 

by doubling the amounts for entered value as set forth on entry 

summaries for the importations that are the subject of this 

action”) (citation omitted). Here, rather than doubling the 

entered value of the merchandise to assess the penalty amount, 

Customs assessed an amount comprising a fraction of that value.
Court No. 14-00045 Page 11 

record presents no reason to alter it, judgment shall be entered 

in the amount of the outstanding penalty assessed against NYCC 

for this violation, $15,310.08, plus post-judgment interest, 

computed in accordance with 28 U.S.C. §§ 1961(a)-(b).32

___/s/ Donald C. Pogue_______ 

Donald C. Pogue, Senior Judge 

Dated: February 6, 2015

 New York, NY 

32 The Government additionally requested pre-judgment interest, 

Compl., ECF No. 3, at ¶ 19, but pre-judgment interest is 

unavailable for penalties assessed pursuant to 19 U.S.C. 

§ 1592(c). United States v. Nat’l Semiconductor Corp., 547 F.3d

1364, 1369-70 (Fed. Cir. 2008) (“Our precedent is clear that 

prejudgment interest may not be awarded on punitive damages, 

and, in our view, . . . the damages authorized by [19 U.S.C.] 

§ 1592(c) are punitive.”) (alteration, quotation marks, and

citations omitted); United States v. Country Flavor Corp., 

__ CIT __, 825 F. Supp. 2d 1296, 1301 n.6 (2012) (“Prejudgment 

interest is not awarded on civil penalties imposed pursuant to 

19 U.S.C. § 1592([c]).”) (citing Nat’l Semiconductor Corp., 

547 F.3d at 1369-71); Inner Beauty, 2011 WL 6009239 at *6 n.5 

(same).