DC Circuit Says Entities Must Knowingly Aid, Abet Illegal Imports to Be Fined

The U.S. Court of Appeals for the D.C. Circuit last week said that an entity can only violate the Plant Protection Act and Animal Health Protection Act for aiding, abetting, causing or inducing the illicit import of plant and animal products by knowingly taking part in the import process (Amazon Services v. U.S. Department of Agriculture, D.C. Cir. # 22-1052).

After interpreting the applicable laws, three judges on the court revoked a $1 million penalty against Amazon from USDA after finding that the evidence doesn't support a finding that Amazon knowingly aided, abetted, caused or induced illegal imports from overseas sellers.

At the crux of the issue is Amazon's fulfillment centers, at which overseas suppliers store goods until they are sold. After a product is bought, Amazon picks it from its fulfillment center inventory, then packages and ships it directly to the customer. USDA opened enforcement proceedings against Amazon in 2019 after CBP seized various packages with illegal plant and animal products addressed to Amazon fulfillment services. USDA ultimately fined Amazon $1 million for violating the laws.

The two laws say USDA can penalize entities that "aid, abet, cause, or induce" the illegal import of plant and animal products. A legal spat ensued on whether this language only covers entities that knowingly engage in this conduct. Drawing heavily from the Supreme Court's 2023 decision in Twitter v. Taamneh, the appellate court said "civil aiding-and-abetting liability generally attaches only to conscious and culpable participation in unlawful conduct."

Both laws "incorporate that settled understanding." While the overseas sellers might use the fulfillment service to conduct the illegal imports, "Amazon’s mere provision of a neutral service does not amount to conscious and culpable participation in the sellers’ wrongdoing," the decision said.

USDA argued that the use of the terms "cause" and "induce" in the phrase don't impose a rigid requirement that an entity had to knowingly violate the laws. The court disagreed, ruling that when the phrase "aids and abets" is used to impose civil liability, it "refers to a conscious, voluntary, and culpable participation in another's wrongdoing." The use of the two additional words doesn't expand the scope of secondary liability.

The court noted that in isolation, the words could encompass action beyond conscious action, providing the example of a "a cab driver who unknowingly gives a thief a ride to the store he aims to rob." But here, the words are read "in context" as requiring conscious action.

With the legal interpretation in tow, the court turned to the evidence to see if Amazon knowingly contributed to the illicit imports. Finding that the company didn't have the requisite knowledge, the appellate court said Amazon's fulfillment service is "a routine business service offered to all third-party sellers." There's "no indication that Amazon was aware of the violations."

Merely operating a "neutral fulfillment service that makes it easier for third-party sellers to import products into the United States -- and even to do so unlawfully -- is not conscious and culpable involvement in the wrongdoing," the decision said.