A federal appeals court has declined to revive claims that Amazon.com aided foreign fur manufacturers in dodging U.S. tariffs and inspection fees, finding no evidence that the online retailer knew of or intentionally ignored alleged fraud.
The 2nd U.S. Circuit Court of Appeals in New York issued the ruling on Wednesday, saying the record did not show Amazon was aware that some foreign suppliers were reporting artificially low values for shipments to reduce tariffs or were evading U.S. Fish and Wildlife Service inspection fees by leaving out required paperwork and routing shipments through ports not inspected by that agency.
Mike Henig, who owns Henig Furs in Montgomery, Alabama, brought the complaint under the False Claims Act, asserting that between 2007 and 2024 foreign manufacturers were able to set below-market prices by fraudulently avoiding import tariffs and fees. Henig argued that Amazon should have recognized that these practices allowed the foreign sellers to undercut domestic competitors.
But the three-judge panel, writing through Circuit Judge Jose Cabranes, said lower prices alone could reflect legitimate factors and do not prove Amazon had knowledge of fraud. The court noted there might be an "innocent explanation" for the lower prices - examples cited included economies of scale or lower labor costs overseas. "Below-market prices alone are therefore insufficient in this case to show that Amazon was aware of a substantial risk that the foreign manufacturers were submitting false claims," Judge Cabranes wrote for the unanimous panel.
The decision leaves in place a January 2025 ruling from a lower court that had dismissed the suit.
The ruling comes amid frequent litigation aimed at holding online marketplaces accountable for the conduct of third-party sellers. Amazon, based in Seattle, is routinely sued by customers and competing businesses seeking to attribute seller conduct to the platform itself. The company reported revenue in 2025 that surpassed that of Walmart.
Separate litigation targeting Amazon has continued. On Friday, consumers filed a proposed class action alleging Amazon failed to refund costs that were passed on to buyers through higher prices tied to tariffs the U.S. Supreme Court found had been imposed unlawfully by President Donald Trump. The article notes that other major companies, including Costco, FedEx and Nike, face similar lawsuits over tariff-related charges.
Lawyers for Henig did not immediately respond to requests for comment. Amazon and its counsel also did not immediately respond to similar inquiries.
Context note: The appeals court's ruling specifically addressed whether the available evidence supported an inference that Amazon knew or recklessly disregarded the risk that sellers were submitting false claims to the government. The court concluded the record fell short of that standard.