Lanza & Smith Claims Victory In Lawsuit Filed By Exporter of Chinese Garlic


In an era of trade wars between China and America, the Americans claimed a victory. On September 16, 2020, Harmoni Spice Intl., arguably China’s largest exporter of garlic to the U.S. in recent years, dismissed its long-running federal lawsuit filed against many defendants, including a coalition of American garlic growers from New Mexico, represented by Lanza & Smith. Before Wednesday, the lawsuit had been pending for over four years in federal court in Los Angeles, with a detour through the Ninth Circuit Court of Appeals. The case is captioned Harmoni v. Bai, Hume, Crawford, et. al., USDC Case No. 2:16-cv-00614, District Court, Central District of California.

The case has become the subject of a popular documentary episode on Netflix exploring corruption in the food industry, called Rotten, Season 1, Ep. 6, “Garlic Breath,” and a book later published by one of the defendants, Stanley Crawford: The Garlic Papers: A Small Garlic Farm in the Age of Global Vampires

According to court filings by the American garlic growers, foreign exporters of garlic into the United States are subject to “anti-dumping” duties collected by U.S. Customs and Border Patrol. The duties are supposed to ensure that products from foreign countries are not “dumped” into America at below-market prices, disadvantaging domestic producers. The duties were intended by Congress to “level the playing field” for Americans, say the growers.

The American growers argue that a Chinese company, Harmoni, had applied to the US Department of Commerce in about 2004 for an exemption to anti-dumping duties based on its then low export volumes. At the time, Harmoni’s imports were negligible and the Commerce Department granted the exemption, say the growers.The America growers contend Harmoni then partnered with an association of California-based agriculture corporations. According to filings in the lawsuit, this partnership then began importing massive amounts of garlic—at quantities and prices for which the Commerce Department would typically charge antidumping duties. The American growers allege Harmoni employed its California partners—and their partners’ team of lawyers—to exercise influence in the Commerce Department and ensure that Harmoni’s duty exemption wasn’t revoked, so as to permit “dumping” in US markets. 

In a strange twist, when the American growers applied to the Commerce Department for re-evaluation of Harmoni’s duties, the Chinese company sued the Americans (and others) in U.S. District Court alleging racketeering – under Civil RICO (the Federal Racketeering and Corrupt Organizations Act). Harmoni claimed that the Americans’ petition to the Commerce Department was a gangster-like fraud.  The case wound through the court system for over four years as various motions and appeals were heard. Finally, on September 16, Harmoni dismissed the case — while two motions to dismiss the case were pending before Judge Andre Birotte in Los Angeles.

The lawyers for the defendants are Anthony Lanza and Brodie Smith, with Lanza & Smith, a professional law corporation, in Irvine, California. Lanza & Smith had previously obtained a dismissal of the case in 2017, but that decision was later reversed, in part, by the Ninth Circuit Court of Appeals. One of the issues central to the appeal was RICO proximate cause.

For now, at least, the American growers can celebrate a small victory in the U.S. -China trade wars. Harmoni, however, continues to enjoy a duty exemption, despite being the largest Chinese exporter of garlic to the U.S.  The Commerce Department continues in its refusal to re-assess Harmoni’s import volumes or duty exemptions. The 2004 exemption remains preserved almost as if in a time capsule, raising the question: If the Americans won this most recent battle, who is winning the war?

©2020 Lanza & Smith PLC. All rights reserved.

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