The current Administration has made clear that tariffs are a priority, whether through broad tariff policies or aggressive task forces targeting alleged customs and trade fraud. Earlier this year, President Trump went as far as announcing the creation of the National Fraud Enforcement Division within the Department of Justice (“DOJ”), “prioritizing the investigation and prosecution of, among others, . . . the undervaluation of imported goods designed to evade duties.” Press Release, U.S. Dep’t of Justice, Assistant Attorney General Colin M. McDonald Issues Memorandum on the National Fraud Enforcement Division’s Enforcement Priorities (Aug. 13, 2026). But when the government decides to take one of these cases to court rather than to the negotiating table, it may run into a problem that has nothing to do with the merits: it may be suing in the wrong courthouse.
Congress Gave Customs Cases to the Court of International Trade
The obstacle the government faces is jurisdictional. Congress long ago granted the United States Court of International Trade (“CIT”) nationwide jurisdiction over civil actions commenced by the United States and arising out of the customs and international trade laws of the United States. 28 U.S.C. § 1582. The Ninth Circuit has recognized that the CIT has “exclusive jurisdiction of any civil action which arises out of an import transaction and which is commenced by the United States . . . to recover customs duties.” United States v. Universal Fruits & Vegetables Corp., 370 F.3d 829, 832 (9th Cir. 2004) (“Universal Fruits”) (citing 28 U.S.C. § 1582(3)) (emphasis added). And it is not alone: the Second, Fourth, Fifth, Sixth, D.C., and Federal Circuits have all consistently held the same. J. C. Penney Co. v. U.S. Treasury Dep’t, 439 F.2d 63, 65 (2d Cir. 1971); Cottman Co. v. Dailey, 94 F.2d 85, 88 (4th Cir. 1938); Argosy Ltd. v. Hennigan, 404 F.2d 14, 20 (5th Cir. 1968); Commodities Exp. Co. v. U.S. Customs Serv., 957 F.2d 223, 224 (6th Cir. 1992); E. States Petroleum Corp. v. Rogers, 280 F.2d 611, 613 (D.C. Cir. 1960); Trayco, Inc. v. United States, 994 F.2d 832, 836 (Fed. Cir. 1993).
This exclusive grant of jurisdiction means that when the government initiates a customs duty recovery action in a federal district court rather than the CIT, it is litigating in the wrong forum—and that is a jurisdictional defect that cannot be waived or cured. If the United States wants to sue to recover unpaid customs duties, there is only one forum available to it: the CIT.
The FCA Repackaging Argument—And Why It Fails
The government has tried to repackage some actions to recover customs duties as False Claims Act (“FCA”) cases, filing them in federal district court. The theory: an FCA suit seeks “treble damages and penalties for fraud,” not recovery of customs duties, so the CIT’s exclusive jurisdiction doesn’t apply. But this end run around the CIT’s exclusive jurisdiction is doomed to fail.
As an initial matter, when Congress enacted the Tariff Act in 1980, the FCA had already been on the books for over 100 years, since its original enactment in 1863. Courts “assume Congress is aware of existing law when it passes legislation.” Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990). Thus, had Congress intended to carve out FCA suits from the CIT’s exclusive jurisdiction, it would have said so. Indeed, in establishing the jurisdiction of the federal district courts in 1948, Congress did precisely that, removing from the district courts’ original jurisdiction “matters within the jurisdiction of the Court of International Trade.” 28 U.S.C. § 1340. No equivalent carve-out exists for FCA suits.
The Ninth Circuit squarely rejected this repackaging argument in Universal Fruits. There, the government brought a “reverse false claims” case against an importer it alleged had filed false customs documents. Universal Fruits, 370 F.3d at 832. The court concluded that federal district courts lack jurisdiction to hear FCA cases of that nature, holding that allowing the government to incorporate “customs duties” into “damages” contradicts the principle that a party “may not, by creatively framing [its] complaint, circumvent a congressional grant of jurisdiction.” Id. at 835-36 (citing Heller, Ehrman, White & MacAuliffe v. Babbitt, 992 F.2d 360, 363-64 (D.C. Cir. 1993)). At oral argument, the government’s own counsel conceded that a successful FCA recovery would “offset” any subsequent customs duty claim—an admission the court read as proof that the FCA action was, at bottom, an action to recover customs duties. The Ninth Circuit recently reaffirmed this holding in Island Industries, Inc. v. Sigma Corp., 142 F.4th 1153 (9th Cir. 2025).
The Intervention End Run—And Why It Also Fails
As the FCA repackaging argument has failed when the government files suit directly, the government has resorted to a subtler version of the same theory in the relator context. Under the FCA, a private whistleblower (called a “relator”) can file a complaint in district court alleging customs fraud on the government’s behalf. The government then intervenes, files its own complaint-in-intervention (often adding new counts and allegations), and argues that the CIT’s exclusive jurisdiction has not been triggered because the relator—not the government—“commenced” the action.
This argument fails on a plain reading of Federal Rule of Civil Procedure 3, which provides that “[a] civil action is commenced by filing a complaint with the court.” When the government intervenes and files its own complaint, it commences a new action on its own behalf. The complaint-in-intervention supersedes the relator’s complaint and becomes the operative pleading for the intervened claims. E.g.,United States ex rel. Sansbury v. LB&B Assocs., Inc., 58 F. Supp. 3d 37, 47 (D.D.C. 2014) (“by automatic operation of [the FCA statute], the Government’s complaint in intervention becomes the operative complaint as to all claims in which the government has intervened”). The government does not merely amend the relator’s complaint; it displaces it. That is a commencement by the United States, and the CIT’s exclusive jurisdiction attaches.
The intervention argument also leads to an untenable result. If the government could intervene in a relator’s district court suit to recover customs duties, then any private citizen could effectively give the executive branch what Congress denied it: the authority to sue to recover customs duties in any federal district court, rather than in the CIT. Given the number of FCA cases in which the government intervenes, accepting that theory would destroy Congress’s grant of exclusive jurisdiction to the CIT. A statutory grant of exclusive jurisdiction cannot be nullified through that kind of two-step.
Conclusion
The Administration’s aggressive tariff enforcement posture has put customs duties squarely in the spotlight. But enforcement in court is still bound by jurisdictional limits. Congress vested the CIT with exclusive jurisdiction over civil actions commenced by the United States to recover customs duties, and that grant cannot be circumvented by repackaging a duty recovery action as an FCA suit or by piggybacking on a relator’s district court complaint.
The logic is straightforward: if the substance of the government’s complaint is the recovery of unpaid customs duties, then the CIT is the only court with jurisdiction, regardless of how the complaint is captioned and regardless of who filed first. Creative pleading does not rewrite jurisdictional mandates.
For importers and their counsel, the takeaway is practical. Subject-matter jurisdiction is not waivable and can be raised at any stage. Companies facing customs-related FCA exposure should evaluate early whether the government’s chosen forum can withstand a jurisdictional challenge, because the answer may fundamentally reshape the litigation before the merits are even reached.