CBP Seizure - broker destroyed package illegally

[quincy]

Your attorney should be able to personally review facts and draft/send a demand letter for less than $1000.

Again, though, what action you should take is really a business decision.

 

[Zigner]

It was a Chinese manufacturer/exporter. Demand letter is an obvious first step, were just trying to deduce, if in fact that is our best approach, is it worth it to spend $1-2k for a demand letter / what are our odds of that yielding anything? We understand that is obviously the biggest risk factor. Just trying to think about it from every angle.

A simple demand letter is not going to cost $1,000-$2,000.

Clerical error? You should avoid making assumptions without information. They signed my name and address, as the consignee, allocated to a statement that says "I hereby waive all rights..." signing the package into destruction as our course of action. The 20+ year corporate counsel attorney said this was clearly a legal / fraudulent infraction.

They may have (mistakenly) believed that they had a POA to do such a thing. All I'm saying is that there is no clear cut evidence that this was done with fraudulent intent. Perhaps you can work out a deal with the "20+ year corporate counsel attorney" to write that demand letter...?

 

[NeilTheCop]

Why did the company in China fail to properly label the goods? But for that company's failure, you would not have experienced a loss.

I looked it up and it's up to the purchaser to make sure the supplier has attached the correct labels.
https://help.cbp.gov/app/answers/detail/a_id/492/~/requirements-for-country-of-origin-marking-on-goods-imported-into-the-u.s.

 

[quincy]

I looked it up and it's up to the purchaser to make sure the supplier has attached the correct labels.
https://help.cbp.gov/app/answers/detail/a_id/492/~/requirements-for-country-of-origin-marking-on-goods-imported-into-the-u.s.

Yes, the purchaser should check to make sure goods meet all of the requirements for import into the US. But the labeling was the responsibility of the manufacturer/exporter.

 

[Zigner]

Yes, the purchaser should check to make sure goods meet all of the requirements for import into the US. But the labeling was the responsibility of the manufacturer/exporter.

If they were contracted to do that.

 

[Taxing Matters]

Any insights if the legality of it makes it worth pursuing it or if we are somewhat forced to take the $6,000 hit and go out of business?

Understand that to sue a private person (like the broker you used) in federal court you need one of two situations: (1) you are suing the person for a federal claim you have against the person or (2) diversity jurisdiction applies, which means that you and the other person are citizens of different states AND your claim against the other person exceeds $75,000. As your claim is apparently at best $6,000 there is clearly no diversity jurisdiction. And from what you describe, I'm not seeing any federal cause of action. Note that just because the situation involved customs does not make it a federal claim. What I see are potential state law claims: negligence, breach of contract, and/or breach of fiduciary duty. Those would have to be tried in state court if you have no federal claim to bring. And that may mean using small claims court for the amount involved here. It also matters, of course, whether your contract requires you to arbitrate the claim rather than sue in court.

 

[quincy]

If they were contracted to do that.

I believe exporters are required to label their goods with their country of origin prior to export. But I could be wrong.

I think a demand letter makes the most sense, followed if necessary by a small claims action against the broker.

 

[FlyingRon]

Sorry Q, I don't agree. Strictly, there is no requirement for the (foreign) exporter to mark anything. The responsibility is on the importer to have things marked or pay the penalty tariff. This ends up being a couple of contractual issues:

1. Whether the contract for purchase of the items required marking.
2. Whether the handling company had the authority to make the decision that was made.

It's entirely on the importer to make sure they are playing the game right. If you are going to play importer, you need to have an understanding of the laws involved.

 

[LdiJ]

Sorry Q, I don't agree. Strictly, there is no requirement for the (foreign) exporter to mark anything. The responsibility is on the importer to have things marked or pay the penalty tariff. This ends up being a couple of contractual issues:

1. Whether the contract for purchase of the items required marking.
2. Whether the handling company had the authority to make the decision that was made.

It's entirely on the importer to make sure they are playing the game right. If you are going to play importer, you need to have an understanding of the laws involved.

I agree with this, and I will add, from direct experience over many years of working for a company that imported goods...the US customs service allows for corrective action. That means that the importer had the option of physically correcting the labels to say "made in China". Now, that means people going to the customs warehouse and physically changing the labels before the goods are released, but that IS an option.

Therefore, I would have been seriously PO'd if a broker had the nerve to tell them to destroy the goods.

 

[quincy]

Sorry Q, I don't agree. Strictly, there is no requirement for the (foreign) exporter to mark anything. The responsibility is on the importer to have things marked or pay the penalty tariff. This ends up being a couple of contractual issues:

1. Whether the contract for purchase of the items required marking.
2. Whether the handling company had the authority to make the decision that was made.

It's entirely on the importer to make sure they are playing the game right. If you are going to play importer, you need to have an understanding of the laws involved.

Thank you for the correction, FlyingRon.

So ... labeling by the Chinese manufacturer/exporter may or may not have been part of contractual agreement with Brady but it was up to Brady to ensure proper labeling.

Now it remains for Brady to show the broker was not given authority to sign for Brady.

If he wasn't, then Brady can send a demand letter (the cheapest initial action to take) or sue (more expensive but, if small claims, still not that expensive an action to take).

 

[LdiJ]

Thank you for the correction, FlyingRon.

So ... labeling by the Chinese manufacturer/exporter may or may not have been part of contractual agreement with Brady but it was up to Brady to ensure proper labeling.

Now it remains for Brady to show the broker was not given authority to sign for Brady.

If he wasn't, then Brady can send a demand letter (the cheapest initial action to take) or sue (more expensive but, if small claims, still not that expensive an action to take).

Even if the broker has the authority to sign for a client that does not mean that the broker is allowed to unilaterally take action contrary to the clients wishes.

 

[Zigner]

Even if the broker has the authority to sign for a client that does not mean that the broker is allowed to unilaterally take action contrary to the clients wishes.

Well, it might...darn those absolute statements.

 

[quincy]

Even if the broker has the authority to sign for a client that does not mean that the broker is allowed to unilaterally take action contrary to the clients wishes.

It depends on facts we do not have, LdiJ.

 

[FlyingRon]

That is true. I can tell you that the import broker contracts I have used (with FEDEX and DHL) both include POA. As to what the limits on that authority might be, depends on the paperwork details we don't have.

 

[LdiJ]

It depends on facts we do not have, LdiJ.

As I said, I worked for a company that imported goods for 15 years. I worked directly with our customs brokers. Yes, there was a POA involved. However, the just like any personal POA that POA did not allow our brokers to act against our wishes. I cannot imagine any form of POA for a customs brokerage that would allow a broker to act against the wishes of the client/importer.