Yesterday, Chief Judge Wood in the Southern District of Georgia unsealed whistleblower claims we filed against Z Gallerie, a large retailer with stores across the United States. The case was unsealed because the government joined our complaint against Z Gallerie and agreed to a $15 million settlement to resolve our allegations against the company.
In our complaint, we allege that Z Gallerie violated the False Claims Act by not paying required anti-dumping duties on wooden bedroom furniture imported from China. We filed this whistleblower complaint in 2013 on behalf of our client who was an online furniture retailer. She had discovered that big retail stores like Z Gallerie were able to import wooden bedroom furniture from China significantly cheaper by misclassifying the furniture as non-bedroom items. The anti-dumping duty that should have been paid for these furniture items was significant. In some cases, the duty was over 200% of the value of the furniture.
This is an unusual whistleblower case. Most whistleblower cases involve false billing in the healthcare or government procurement industries. This is one of a relatively few whistleblower cases brought against importers and retailers who attempt to get around mandatory duties that were put in place to help American manufacturers compete with government-subsidized Chinese companies.
This settlement shows that successful whistleblower claims are not always the most obvious ones. I think it also illustrates how a law firm’s diligence in investigating a whistleblower claim and preparing a thorough and detailed complaint can be very effective in convincing the government to investigate, intervene and ultimately resolve the case in a way that benefits both the government and the whistleblower.
I am very pleased that we were able to help our client successfully pursue this whistleblower case. We believe this settlement is a fair resolution to our lawsuit against Z Gallerie, and we appreciate the Department of Justice’s involvement and diligence in pursuing this defendant. As a result of this settlement, our client will receive 16% of the total amount recovered by the government.