U.S. Producers Of Plastic Grocery And Shopping Bags Applaud $7.3 Million False Claims Act Settlement Over Evasion Of Antidumping Duties

WASHINGTON, July 22, 2026 /PRNewswire/ -- This release is issued by King & Spalding: The U.S. Department of Justice has announced that New York Packaging II LLC, doing business as Redi-Bag USA, and its CEO, Jeffrey Rabiea, agreed to pay $7.3 million to resolve False Claims Act ("FCA") allegations that they misrepresented the country of origin of imported polyethylene retail carrier bags ("PRCBs") and thereby evaded antidumping duties owed to the United States. According to the lawsuit, defendants knew that certain PRCBs they imported had been manufactured in China but nevertheless identified Hong Kong as the country of origin on customs entry forms to avoid paying the applicable 77.57 percent antidumping duty. 

Currently, there are antidumping orders on PRCBs from China, Indonesia, Malaysia, Taiwan, Thailand, and Vietnam. The purpose of the antidumping law is to offset the unfair competitive advantage that foreign exporters enjoy as a result of selling merchandise in the United States at less than fair value. There is also a countervailing duty order on such plastic bags from Vietnam, which offsets unfair government subsidies received by Vietnamese bag producers. The antidumping and countervailing duty laws are intended to provide relief to U.S. manufacturers and U.S. workers by requiring duties to be collected on the unfairly traded imports. The failure by importers to declare entries as being subject to an antidumping or countervailing order undermines that relief and may result in severe civil or criminal penalties.

The settlement with Redi-Bag USA and Mr. Rabiea resolves a civil lawsuit filed by a former contracted sales representative for Redi-Bag USA under the whistleblower provision of the FCA, which permits private parties to file suit on behalf of the United States for false claims and to share in a portion of the government's recovery. As part of the settlement, the whistleblower will receive approximately $1.3 million of the settlement proceeds.

Michael Taylor, a partner at the law firm of King & Spalding and counsel to the Polyethylene Retail Carrier Committee, an ad hoc coalition of U.S. plastic bag manufacturers, applauded the enforcement of the trade laws and the government's enforcement efforts. "The domestic producers of retail carrier bags genuinely appreciate the government's efforts to enforce the trade laws and to make sure that importers do not shirk their border obligations," said Mr. Taylor. "Antidumping duties are intended to preserve the relief afforded to domestic producers and workers when imports are sold at unfairly traded prices, and enforcement actions help ensure that companies cannot gain an unlawful competitive advantage by disguising where covered merchandise is made."

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SOURCE King & Spalding