Glock Says DOJ 'Professing Ignorance' of Discovery, CBP Procedures

The early stages of this case already have been unusually contentious. First, Glock claimed in a June 20 motion to compel discovery (see 2406240062) that the U.S. had been “stonewalling” by responding to requests with “boilerplate, baseless and improper objections” and refusing to produce documents or accept admissions.

In reply, the government July 1 first sought to have the court rule in Glock’s favor (see 2406280025), citing the low refund -- $50 -- at issue. But Glock opposed two days later (see 2407080044), saying that this wouldn’t solve the broader problem of CBP incorrectly including the gunmaker’s royalty payments in its imports’ value calculations. As a result, the U.S. filed an Aug. 6 answer to Glock’s initial motion (see 2408070046), claiming the importer’s document requests sought irrelevant and disproportionate information and its admissions requests asked the U.S. to admit to legal conclusions, not facts.

Glock filed its most recent response Aug. 12 answering the U.S.’s objections to its discovery requests.

It opened by saying the U.S.’s brief had provided the trade court “a lengthy historical summary of the parties’ multi-year dispute” that was “irrelevant to the Court’s assessment of GLOCK’s Motion to Compel.”

“Nevertheless, the Government’s historical narration makes one thing abundantly clear: [I]t is no stranger to the specific topics, positions, arguments, legal principles, and terminology at issue in this case -- all of which are fully within its purview and involve principles routinely applied by [CBP] under its statutory mandate -- despite professing ignorance of these matters,” it said.

The gunmaker then pushed back against the U.S.'s objections to 10 out of of its 11 “carefully crafted” requests for admission. It dismissed the government’s claim that the requests sought admissions to legal conclusions, saying requests can seek to admit “the truth of any matters” relating to facts, the application of law to facts, or opinions about either.

The government argued Glock’s first three requests sought “an admission as to the content of a regulation”; but “that is not true,” it said. Rather, they asked “for admissions as to how the Government defines ‘generally accepted accounting principles’ specifically in the context of the valuation statute at issue in this case,” it said.

Another request didn’t seek “an admission on the interpretation of a statute” -- it only asked what CBP was supposed to do under said statute in the facts of the case, i.e. asking for application of the law to the facts, the pistol manufacturer said. And the same was true of yet another request, though the government falsely claimed that request “must be” an unlawful hypothetical because it included the word “if,” Glock alleged.

Five other requests sought relevant factual admissions needed to “streamline” the case, it said, and thus do “incorporate references to facts of this case,” despite the U.S.’s contention otherwise. One, for example, asked for an admission that the obligation to pay a royalty based on net sales does not arise until after a sale occurs, it said.

And it denied that the terms “net sales,” “period cost,” “selling expense” and “production costs” are accounting terms of art, saying that the U.S. hadn’t cited to any authority that would let it refuse to answer an admissions request because it contained a “so-called” term of art.

“But even if it genuinely had no idea what those terms mean, the Government should have amended its answers after GLOCK supplied definitions in response to its objections,” the importer said.

It then moved on to the U.S.’s objections to Glock’s requests for document production.

The U.S. argued that Glock carried the burden to prove that the appraised value of its pistol kits was wrong, not the government, but “this is not a basis for objecting to discovery,” the gunmaker said. All of the cases the U.S. cited while arguing otherwise have nothing to do with discovery, it said.

“GLOCK cannot possibly be expected to prove the appropriateness” of the value it proffered for its entry “if the Government is allowed to refuse to produce pertinent information,” it said.

The government also claimed Glock’s requests sought irrelevant and disproportionate information, lacking “temporal limitations” and asking for information about “every type of imported good” and from “every branch, unit, and component of U.S. Customs and Border Protection.” Most had nothing to do with Glock’s “valuation claim involving a single entry of pistol kits,” it said.

But “despite arguing about the breadth of the requests, the Government responded without making any efforts to search for responsive documents,” Glock said.

It said it understood that “‘all’ documents” refers to those found after a reasonable search, not “necessarily every single document under the sun.” And Glock said it asked the government to coordinate on setting a temporal limit, even proposing one itself; plus, “the operative time period can be reasonably ascertained,” it said.

All of its requests for information go “to the very heart of this dispute: how customs valuation-related determinations are made,” it said.