Honey importers dismissed from alleged conspiracy and transshipment suit

By Michelle de Leon | Dec 19, 2016

A district court judge has ordered the final dismissal of a class action lawsuit, which included a Texas-based honey processor, as one of the defendants in an alleged global conspiracy to transship Chinese honey.

Correction: This article was first posted on Dec. 19 and contained an assertion by Honey Solutions that it was a certified member of True Source Honey, LLC, but have since been informed that Honey Solutions has never been certified by or a member of True Source Honey.

A district court judge has ordered the final dismissal of a class action lawsuit, which included a Texas-based honey processor, as one of the defendants in an alleged global conspiracy to transship Chinese honey.

Honorable Judge Joan B. Gottschall of the U.S. District Court in Chicago has dismissed the remaining portions of the putative class action lawsuit filed against several major importers of honey in the U.S. 

In the lawsuit, it was alleged that the defendants were involved in a massive conspiracy which had its reach across the globe. The petitioners claimed that the honey processor companies had been transshipping Chinese honey in an effort to dodge their responsibility to pay millions of dollars for anti-dumping obligations.


In the fairness hearing conducted by the district court, Judge Gottschall declared the final dismissal of the lawsuits as well as approved the settlement with the remaining defendants of the claim. The agreement reached a total of $796,312. The amount, according to some, was actually almost equivalent to the “cost of defense” in a nuisance lawsuit. After a lengthy and tenuous trial, which had the defendants strongly opposing the allegations against them, the latest ruling has them released from the case as part of the settlement agreements approved.

The defendants in the case included Honey Solutions, Ernie Groeb, Troy Groeb, Sunland Trading, Horizon Partners, LTD, Marquette Capital Partners, and China Industrial Manufacturing Group.

The case stemmed from the allegations that the defendants’ practices were in clear violation of the Lanham Act for false advertising and unfair competition. Aside from this claim, they were also purported to have breached the Racketeering Influenced and Corrupt Organizations Act (RICO). In 2013, Moore’s Honey Farm, Honey Holding I, Ltd, Groeb Farms, Inc and Adee Honey Farms all agreed to hire Grant & Eisenhofer, P.A. and Hausfeld LLP as interim co-lead class counsel.

The petitioners alleged that the defendants knowingly engaged and conspired to execute an international scheme to avoid paying the required fees. According to the plaintiffs, the honey companies worked to buy, package, ship and market honey that they illegally imported and fraudulently labeled as products from China.

The class action lawsuit later on solidified to become the “Honeygate” investigation. This enquiry on the honey importers, which lasted for approximately five years, was headed by the United States Immigration and Customs Enforcement. The operation included a number of seizures of honey imported illegally. Criminal charges and substantial fines were imposed on the companies as well. Throughout the investigation, two of the biggest industrial honey packers, the Groeb Farms, Inc. and Honey Solutions, were heavily penalized by the authorities.

For their part, Honey Solutions pointed out that their products have undergone and passed the verification process conducted by the U.S. Customs and Border Protection's C-TPAT program (Customs-Trade Partnership Against Terrorism). The company shared that they have actually been granted a C-TPAT Level 2 certification earlier this year.

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