What can you make with cheap crawfish, garlic, canned mushrooms and honey?
A class action lawsuit, say U.S. food producers who are suing The Hartford and other insurers for nearly $1 billion in damages.
The suit, filed Tuesday, spotlights how the dumping of cheap Chinese food items in the U.S. market hurts domestic food producers — and the role of insurers in the fray.
Plaintiffs in the case, filed in the U.S. Court of International Trade, include the Sioux Honey Association and a South Dakota honey producer, garlic and mushroom companies in California, and a Louisiana crawfish firm.
Defendants include U.S. Customs and Border Protection and the U.S. Department of Commerce, which are accused of failing to enforce four anti-dumping orders issued years ago to protect domestic producers from Chinese imports.
"The dumping of these imports forced the domestic producers to significantly lower the prices for their competing products, causing the producers to lose hundreds of millions of dollars," said Michael Coursey, a partner in Kelley Drye & Warren, a law firm representing the plaintiffs.
The 81-page complaint says that for eight years, the insurers negligently issued hundreds of customs surety bonds to thinly capitalized and inexperienced importers and refused to pay out on the bonds. The bonds guaranteed the payment of any dumping duties that the government determined were owed by U.S. importers for specified Chinese goods.
The importers have defaulted on paying the anti-dumping duties they were assessed by the government. U.S. Customs was supposed to distribute the collected duties to affected domestic producers, the suit notes.
U.S. Customs failed to collect 93 percent, or $723 million, of the anti-dumping duties it assessed under four orders during six years, and most of that is now owed by insurers, the suit says.
The Hartford Financial Services Group declined to comment on the suit.
Other insurer defendants include Great American Insurance Co.; Lincoln General Insurance Co., part of Kingsway Financial Services Inc.; XL Specialty Insurance Co.; and Washington International Insurance Co., part of Swiss Re.Copyright © 2015, Los Angeles Times