Rockwell Automation, Inc. v. United States , 31 Ct. Int'l Trade 692 ( 2007 )

Slip Op. 07-67
UNITED STATES COURT OF INTERNATIONAL TRADE
_______________________________
:
ROCKWELL AUTOMATION, INC. :
f/k/a ROCKWELL AUTOMATION/ :
ALLEN-BRADLEY CO., LLC, :
:
Plaintiff, :
:
v. : Before: Richard K. Eaton, Judge
:
UNITED STATES, : Court No. 03-00007
:
Defendant. :
_______________________________:
OPINION AND ORDER
[Plaintiff’s motion for summary judgment granted, in part;
Defendant’s cross-motion for summary judgment denied.]
Dated: May 7, 2007
Neville Peterson LLP (John M. Peterson and Curtis W. Knauss), for
plaintiff.
Peter D. Keisler, Assistant Attorney General; Barbara S.
Williams, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, United States
Department of Justice (Bruce N. Stratvert), for defendant.
Eaton, Judge: At issue is the proper classification of
merchandise described by plaintiff Rockwell Automation, Inc.
(“plaintiff” or “Rockwell”) as short body timing relays. Before
the court are the cross-motions for summary judgment of plaintiff
and defendant the United States (“Government”). Jurisdiction is
had pursuant to 28 U.S.C. § 1581(a) (2000). For the reasons set
forth below, the court grants plaintiff’s motion for summary
Court No. 03-00007 Page 2
judgment, in part; denies the Government’s cross-motion for
summary judgment and finds that plaintiff’s merchandise, with
respect to which plaintiff supplied samples to the court, is
properly classified as relays under the Harmonized Tariff
Schedule of the United States (“HTSUS”) Heading 8536, which
covers “[e]lectrical apparatus for switching or protecting
electrical circuits, or for making connections to or in
electrical circuits (for example, switches, relays, fuses, surge
suppressors, plugs, sockets, lamp-holders, junction boxes), for a
voltage not exceeding 1,000 V,” subject to a duty of 2.7% ad
valorem.1
BACKGROUND
Plaintiff’s merchandise is solid state electrical timing
devices imported from Japan (“subject merchandise”)2 used as
components of integrated electrical systems that may include
several other electrical components. Their function is to direct
electricity to specific apparatus at a specified time after power
1
Reference is made to the 1999 version of the HTSUS and
chapter notes, which were in force at the time the subject
merchandise was entered.
2
The parties’ briefs describe the subject merchandise in
substantially similar language. See Pl.’s Revised Mem. Supp.
Mot. Summ. J. 1-5; Def.’s Mem. Supp. Mot. Summ. J. & Opp’n Pl.’s
Mot. Summ. J. (“Def.’s Mem.”) 5 n.2. Instead of referring to the
subject merchandise as “relays,” however, the Government uses the
description “solid state timers.” Def.’s Mem. 7 n.3.
Court No. 03-00007 Page 3
has been applied to the entire electrical system. The most
widely used application of these devices is in a control panel on
an assembly operation or conveyor line.
Each timing device consists of a number of electrical parts
contained in a small six-sided, plastic box with a front dial and
a rear connection port. Its interior parts are: a set of
moveable contact blocks; a set of stationary contact blocks; a
wound magnetic coil mounted on a stack of steel laminations; and
a circuit board containing various components, including
resistors that regulate the period of time between cycles. See
Pl.’s Revised Mem. Supp. Mot. Summ. J. (“Pl.’s Mem.”) 1, 3, 4;
Def.’s Mem. Supp. Mot. Summ. J. & Opp’n Pl.’s Mot. Summ. J.
(“Def.’s Mem.”) 5 n.2.
Customs has consistently classified plaintiff’s merchandise
as “[t]ime switches with clock or watch movement or with
synchronous motor: . . . Valued over $5 each,” under HTSUS
subheading 9107.00.80. Beginning in 1999, Rockwell regularly
disputed Customs’s classification, arguing that they were
properly classifiable as relays under Heading 8536. In July,
1999, Customs affirmed its classification of Rockwell’s
merchandise, describing the devices in the ruling as solid state
timing relays, under Heading 9107. See HQ 962138 (July 28,
1999), reprinted in 36 Cust. Bull. & Decs. 24 (June 12, 2002),
Attach. A (“1999 Ruling”) 27, 30-31 (“[W]e find that the Bulletin
Court No. 03-00007 Page 4
700 solid state timing relays are classifiable under subheading
9107.00.80.”). Thereafter, between December 9, 1999, and
February 22, 2000, Rockwell entered the subject merchandise under
HTSUS subheading 9107.00.80. See Summons (Jan. 9, 2003).
Between November 13, 2000, and January 5, 2001, Customs
liquidated Rockwell’s entries under HTSUS subheading 9107.00.80,
as entered. See Summons (Jan. 9, 2003).
In January 2002, Rockwell timely filed Protest Number 3901-
01-100230, contesting Customs’s classification of the subject
merchandise. See Protest Number 3901-01-100230. In its
supporting papers, Rockwell reasserted its argument that the
subject merchandise was properly classifiable under HTSUS Heading
8536. See Rockwell’s Mem. P. & A. Supp. Protest 1.
On June 12, 2002, Customs published notice of its intention
to modify the 1999 Ruling. See Proposed Modification of Ruling
Letter and Revocation of Treatment Relating to Tariff
Classification of Relays, 36 Cust. Bull. & Decs. 24 (June 12,
2002). Nonetheless, on July 23, 2002, it issued HQ 964656
reaffirming those portions of the 1999 Ruling and again
classified Rockwell’s merchandise under Heading 9107. See HQ
964656 (July 23, 2002), attached as Ex. 3 to Def.’s Mem. (“2002
Ruling”). On August 8, 2002, Customs denied Protest Number 3901-
01-100230 with respect to the subject merchandise, stating that
its decision was based on the 1999 Ruling. See Protest Number
Court No. 03-00007 Page 5
3901-01-100230.
On January 9, 2003, plaintiff filed a summons with the
Court, commencing this action to challenge Customs’s denial. By
its motion for summary judgment, Rockwell claims that the subject
merchandise is properly classifiable under HTSUS Heading 8536.
By its cross-motion for summary judgment, the Government urges
the court to sustain Customs’s classification of the subject
merchandise.
STANDARD OF REVIEW
Summary judgment “shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.”
USCIT R. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247 (1986). In the context of a classification action, “summary
judgment is appropriate when there is no genuine dispute as to
the underlying factual issue of exactly what the merchandise is.”
Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.
Cir. 1998) (citations omitted). Under such circumstances, all
that remains is the interpretation of the relevant tariff
provisions, which is a question of law. See Boen Hardwood
Flooring, Inc. v. United States, 357 F.3d 1262, 1264 (Fed. Cir.
Court No. 03-00007 Page 6
2004).
DISCUSSION
I. Identification of the Subject Merchandise
With its motion for summary judgment, plaintiff has provided
what it claims are samples of the subject merchandise to the
court.3 The Government, however, contends that Rockwell has
failed to satisfy its burden of identifying these samples as
representative of the subject merchandise. See Group Italglass
U.S.A., Inc. v. United States, 16 CIT 766, 767, 798 F. Supp. 729,
730 (1992) (“Italglass”). It argues:
Rockwell has never identified the particular
models of timers covered by the entries in
3
Plaintiff provided eight samples in individual boxes
that have been numbered sequentially from one to eight. Each
sample is stamped with a variation of the phrase “timing relay.”
The samples have the following model numbers: (1) 700-HRM12TU24
Series C (bearing the description “single function timing
relay”); (2) 700-HRM12TA17 Series C (bearing the description “on-
delay timing relay”); (3) 700-HRC12TA17 Series C (bearing the
description “single function timing relay”); (4) 700-HRC12TU24
Series B (bearing the description “on delay timing relay”); (5)
700-HR52TA17 Series B (bearing the description “multi function
timing relay”); (6) 700-HR52TU24 Series B (bearing the
description “multi function timing relay”); (7) 700-HR52TA17
Series C (bearing the description “multi function timing relay”);
and (8) 700-HR52TU24 Series C (bearing the description “multi
function timing relay”).
Although plaintiff did not import any Series C timing
relays, plaintiff insists that the “Series C models are
substantially similar to the Series B models,” and thus that “the
samples before the Court, whether Series B or Series C, correctly
reflect those short body timing relays that are contained in the
subject entries.” Letter from Curtis W. Knauss to Hon. Richard
K. Eaton of 04/05/07 at 4; see Third Pohl Aff. ¶¶ 2-3.
Court No. 03-00007 Page 7
issue. Although Rockwell submitted technical
documentation from Omron and samples
manufactured by Omron to the Court and to the
Government, none of this has been shown to
relate to the specific merchandise covered by
the specific entries at issue. That is,
while the imported merchandise and the
samples have Rockwell’s model numbers on
them, and their functions may be similar,
there is absolutely no evidence that the
electronics inside are the same or that their
functions are the same.
Def.’s Mem. 10. The crux of the Government’s claim is that
plaintiff has not offered evidence that the internal electronics
and functioning of the supplied samples, which were manufactured
by Omron Corporation, are the same as the electronics and
functioning of the entered merchandise, which was manufactured by
Fuji Electric Co. Ltd. See Def.’s Resp. Pl.’s Statement of
Material Facts Not in Dispute ¶¶ 6, 7 & 8; Def.’s Reply Br. Supp.
Mot. Summ. J. & Opp’n Pl.’s Resp. 3-4.
The Government correctly points out that plaintiff “has the
burden of demonstrating exactly what merchandise the Court is
being called upon to classify.” Def.’s Mem. 9; Italglass, 16 CIT
at 767, 798 F. Supp. at 730. An examination of the case law
reveals how this burden is to be met.
In Italglass, a case challenging the denial of a protest,
the plaintiff moved for summary judgment but supplied “no
affidavit or other evidence to identify the disputed items
actually imported under the entries” in the case. Italglass, 16
CIT at 767, 798 F. Supp. at 730. The court stated that “[u]nless
Court No. 03-00007 Page 8
stipulated between the parties, plaintiff has the burden of
submitting evidence on its motion identifying the specific items
of merchandise in the particular entries in the case that are
claimed to have been incorrectly classified by Customs.” Id.,
798 F. Supp. at 730. The plaintiff having failed to do so, the
court denied its motion for summary judgment.4
When an employee affidavit has been presented, however, this
Court has upheld its use to identify imported merchandise. In
E.T.I.C., Inc. v. United States, 26 CIT 1293 (2002) (not reported
in the Federal Supplement), the plaintiff challenged the
classification of a tomato product that had previously been the
subject of a different action. The plaintiff supported its
motion for summary judgment with the affidavit of one of its
employees, who testified that the tomato product at issue was
“identical in all respects to that at issue in” the previous
case. Id. at 1293. The defendant submitted an opposing
affidavit by a Customs import specialist, who had not examined
the product, but relied solely on the invoice descriptions. Id.4
The Italglass Court permitted the parties to engage in
further discovery and to submit supplemental briefing and
evidence with respect to plaintiff’s motion for summary judgment.
In a later stage of the case, the Court noted that the
identification issue had been obviated by the plaintiff’s
supplemental filings and observed that “identification of the
subject merchandise under the entries and commercial invoices can
be determined with reference to the verbal descriptions, style
numbers, and photographs in plaintiff’s catalog.” Group Italglass
U.S.A., Inc. v. United States, 17 CIT 226, 227 (1993) (not
reported in the Federal Supplement).
Court No. 03-00007 Page 9
at 1293-94. Finding the E.T.I.C. employee’s affidavit
persuasive, the Court granted summary judgment for plaintiff.
Id. at 1294 (“The court concludes that the ‘heavy juice’ referred
to in the Malpica entries is equivalent to the ‘puree’ mentioned
in [Orlando Food Corp. v. United States, 140 F.3d 1437, 1439
(Fed. Cir. 1998)], because an E.T.I.C. employee with knowledge
has sworn that the products are the same.”).
Here, unlike the plaintiff in Italglass, Rockwell has
submitted the Pohl affidavits5 “to identify the disputed items
actually imported under the entries in this case . . . .”
Italglass, 16 CIT at 767, 798 F. Supp. at 730. Mr. Pohl is a
Senior Project Engineer at Rockwell, whose experience includes
“providing technical support and guidance to customers,
suppliers, professional organizations, and other technical
personnel” with respect to “relays and timing relays produced and
sold for [Rockwell].” First Pohl Aff. ¶ 1. Thus, like the
employee of the plaintiff in E.T.I.C., Mr. Pohl is familiar with
the product at issue and his sworn affidavit, which states that
the Fuji-produced short body timing relays “are identical in all
5
Plaintiff has submitted the “Affirmation of Randy Pohl”
as Exhibit C to its revised motion for summary judgment; the
“Second Affirmation of Randy Pohl” as an attachment to
Plaintiff’s Response to Defendant’s Motion for Summary Judgment
and Reply in Support of Plaintiff’s Motion for Summary Judgment;
and the “Third Affirmation of Randy Pohl” as an attachment to its
letter to the court of April 5, 2007. Mr. Pohl’s sworn
statements shall be referred to as “First Pohl Affidavit,”
“Second Pohl Affidavit” and “Third Pohl Affidavit,” respectively.
Court No. 03-00007 Page 10
material respects to the Omron short body timing relays that have
been submitted to the Court as samples,” supports Rockwell’s
motion. Second Pohl Aff. ¶ 16.
The Government insists, however, that plaintiff has failed
to sufficiently identify the product contained in the entries.
See Def.’s Mem. 10-11 (citing Saab v. United States, 434 F.3d
1359, 1369 (Fed. Cir. 2006), for the proposition that “a non-
movant is required to provide opposing evidence under Rule 56(e)
only if the moving party has provided evidence sufficient, if
unopposed, to prevail as a matter of law”).
It is, of course, true that on a motion for summary
judgment, the movant has the burden of coming forth with evidence
to support the factual allegations in its claims. See Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986) (“[A] party seeking
summary judgment always bears the initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of
a genuine issue of material fact.”) (internal quotation marks
omitted). The court finds that plaintiff has done so with
respect to the issue of identification of some, but not all of
the subject entries.
A review of the First Pohl Affidavit reveals that Mr. Pohl
Court No. 03-00007 Page 11
identified some of Rockwell’s merchandise by model number: “The
short body timing relays imported in the subject entries are
listed by Rockwell under the following model numbers: 700-
HR52TA17 Series C; 700-HR52TU24 Series C; 700HRM12TU24 Series C;
700-HR52TA17 Series B; 700-HR52TU24 Series B; 700-HRC12TA17
Series C; 700-HRC12TU24 Series B; and 700-HRM12TA17 Series [C].”
First Pohl Aff. ¶ 3; see also Third Pohl Aff. ¶ 4 (correcting a
typographical error). These model numbers match the model
numbers of the samples provided to the court; the samples’ model
numbers, in turn, correspond to certain of the model numbers that
appear in the entry documentation.6 Compare Invoice No. L68842
(Jan. 13, 2000), attached to Entry No. 110-0417823-1 and Invoice
No. F78713 (Feb. 17, 2000), attached to Entry No. 110-0418751-3
with First Pohl Aff. ¶ 3.
Based on the forgoing, the court finds that Rockwell has
sufficiently identified the merchandise covered by the entries
with respect to which it has provided samples and model numbers
6
A comparison of the sample model numbers and the model
numbers of the merchandise listed in the entry documents
indicates that plaintiff did not provide samples of all models
covered by the entries. For example, plaintiff did not provide a
sample of 700-HX86SA17 or 700-HX86SU24, which were imported under
entry numbers 110 0417823-1 and 110 0418751-3. Moreover, Mr.
Pohl’s affidavit identifies the eight samples provided to the
court as identical in all material respects to the imported
merchandise, but makes no such statement with respect to imported
merchandise for which no sample was provided. As such, the
court’s decision applies only to the merchandise for which a
sample was provided to the court.
Court No. 03-00007 Page 12
corresponding to the entered merchandise. It has thus satisfied
its burden of coming forth with evidence to support its factual
allegations with respect to identification of that merchandise.
Since plaintiff, as the movant, has met its burden with
respect to the merchandise for which it produced samples, Rule
56(e) of the rules of this Court provides that the Government, as
the adverse party, “may not rest upon the mere allegations or
denials of the adverse party’s pleading,” but rather
the adverse party’s pleading, by affidavits
or as otherwise provided in this rule, must
set forth specific facts showing that there
is a genuine issue for trial. If the adverse
party does not so respond, summary judgment,
if appropriate, shall be entered against the
adverse party.
USCIT R. 56(e); see also United States v. Rockwell Automation,
Inc., 30 CIT __, __, 462 F. Supp. 2d 1243, 1252 (2006) (where
movant has supported its motion as Rule 56 requires, Rule 56(e)
requires non-movant to come forward with opposing evidence). The
Government having failed to submit any opposing evidence
demonstrating a genuine issue for trial with respect to
identification of that portion of the subject merchandise for
which the model numbers of the provided samples match the model
numbers of the entered merchandise, the court grants partial
summary judgment for plaintiff on this issue.
Court No. 03-00007 Page 13
II. Classification of the Subject Merchandise
The court now turns to the classification of the subject
merchandise itself. Here, the primary question is whether the
subject merchandise has a “display or a system to which a
mechanical display can be incorporated.” As previously noted,
Customs denied plaintiff’s protest and classified the subject
merchandise under Heading 9107 of the HTSUS. This heading reads:
Time switches with clock or watch movement or
with synchronous motor . . . .
HTSUS 9107. The terms “clock movements” and “watch movements”
are defined in the Additional U.S. Notes and the Notes to Chapter
91, respectively. “Clock movements” and “watch movements” are
defined as
devices [with a] system capable of
determining intervals of time, with a display
or a system to which a mechanical display can
be incorporated.
HTSUS, Ch. 91, Additional U.S. Note 1(d); HTSUS, Ch. 91, Note 3
(emphasis added). It is undisputed that the merchandise has a
system capable of determining intervals of time.7 It is also
7
As described by Mr. Pohl, “the short body timing relays
measure a certain time interval and then activate or de-activate
a subcircuit.” First Pohl Aff. ¶ 5. The user sets the length of
the delay period, which is
accomplished by the resistor, capacitator,
and oscillation timing circuitry. The
oscillation circuit produces calibrated
pulses which are counted by the resistor and
capacitator circuit. After the short body
(continued...)
Court No. 03-00007 Page 14
undisputed that the merchandise does not have a mechanical
display. See Second Pohl Aff. ¶ 9; First Costello Decl. ¶ 27.
Thus, in order for Customs’s classification to be sustained the
subject merchandise must have “a system to which a mechanical
display can be incorporated.”
The Government insists that Customs’s classification under
Heading 9107 is correct, and that Customs’s 1999 and 2002 rulings
are entitled to deference in accordance with the principles set
forth in Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)
(setting forth factors which give a Customs ruling “power to
persuade”). See Def.’s Mem. 12 (“HQ 962138 and HQ 964656 are
entitled to deference.”) (citing United States v. Mead Corp., 533
U.S. 218 (2001)). It argues that it is entitled to prevail in
this action as a matter of law because, among other things, the
subject merchandise has a clock or watch movement, which although
having no mechanical display, has a system capable of
incorporating a display.
For its part, Rockwell argues that Customs’s classification
7
(...continued)
time delay relay receives a trigger signal
the timing circuitry begins counting pulses
until the total count value from external
settings is achieved.
First Pohl Aff. ¶ 10. See also First Costello Decl. ¶ 23 (“A
Rockwell Timer electronically measures [an] interval of time by
using an oscillator to generate specific very small intervals of
time . . . .”).
Court No. 03-00007 Page 15
under Heading 9107 is incorrect and that the subject merchandise
is correctly classified under Heading 8536. Rockwell contends
that it is entitled to summary judgment because the subject
merchandise does not have a system to which a mechanical display
can be incorporated. See Pl.’s Mem. 15. In addition, plaintiff
argues that the 2002 Ruling is not entitled to Skidmore
deference. Pl.’s Mem. 19 (“[T]he [2002 Ruling] summarily
concluded that the short body [timing relays] at issue ‘ha[d] a
system to which a mechanical display can be incorporated,’ which
is an essential element in classification under Heading 9107,
HTSUS.”).
A. Skidmore Deference
The court first addresses whether Customs’s 1999 and 2002
rulings are entitled to Skidmore deference. When determining the
degree of deference to be accorded to a Customs ruling, the
factors to be considered are “the thoroughness evident in the
classification ruling; the validity of the reasoning that led to
the classification; consistency of the classification with
earlier and later pronouncements; the formality with which the
particular ruling was established; and other factors that supply
a ‘power to persuade.’” Warner-Lambert Co. v. United States, 407
F.3d 1207, 1209 (Fed. Cir. 2005) (quoting Skidmore, 323 U.S. at
140).
The court concludes that those portions of Customs’s 1999
Court No. 03-00007 Page 16
and 2002 rulings finding that plaintiff’s merchandise has clock
or watch movements are not entitled to Skidmore deference because
they are unpersuasive on the question of whether the merchandise
has “a system to which a mechanical display can be incorporated.”
HTSUS, Ch. 91, Additional U.S. Note 1(d); HTSUS, Ch. 91, Note 3.
The 1999 Ruling, on which Customs based its denial of
plaintiff’s protest, is not persuasive on this issue. The ruling
sets forth the pertinent provisions of the HTSUS and the
explanatory notes, but it does not contain any discussion or
finding with respect to whether the merchandise has a “display or
a system to which a mechanical display can be incorporated.”
Customs’s 2002 Ruling is no more persuasive. It quotes a
report prepared by the Customs laboratory that analyzed
plaintiff’s merchandise. The report stated that each of the
relays
has electronic circuitry that performs the
timing functions. Each of these circuits
contains a component that is “. . . capable
of determining intervals of time . . .” The
time delay for [one of the relays under
consideration] is factory set, while it can
be user-changed in [other relays under
consideration]. In our opinion, [all of the
above-mentioned relays] contain a watch or
clock movement as described in Note 3 or
Additional U.S. Note 1(d) to HTSUS Chapter
91. We believe that they are “time switches”
of HTSUS Heading 9107.
HQ 964656 at 4. Thus, the report addressed only one of the
requirements of a clock or watch movement, i.e., whether the
Court No. 03-00007 Page 17
subject merchandise has a system capable of determining intervals
of time. It did not address the requirement that the merchandise
must have a display or a system to which a mechanical display can
be incorporated.
In the 2002 Ruling itself, Customs devotes a single sentence
to the latter requirement: “Our discussions with the Customs
Laboratory indicated that [certain of the components under
consideration] have a system to which a mechanical display can be
incorporated.” HQ 965646 at 4 (citing definitions of clock
movements and watch movements). This conclusion is not
convincing since Customs does not provide any reasoning to
support it. Rather, Customs’s conclusion is based on
“discussions” with the laboratory, which were not reduced to
writing.
Even though Customs has consistently classified plaintiff’s
merchandise under Heading 9107, it has failed to address the
requirement of a “display or system to which a mechanical display
can be incorporated” in its rulings. Thus, the court concludes
that Customs’s 1999 and 2002 rulings do not contain valid
reasoning with respect to, or a thorough consideration of, that
issue. They are therefore not entitled to Skidmore deference.
Court No. 03-00007 Page 18
B. Classification Under HTSUS Heading 9107
The court next turns to the issue of whether the subject
merchandise has a system to which a mechanical display can be
incorporated, such that it can be said to have a “clock or watch
movement,” under Heading 9107.
Review of Customs classification decisions involves a dual
inquiry. The first question is the meaning of the HTSUS tariff
terms at issue, which is a question of law. The second question
is of a factual nature and requires the court to determine under
which HTSUS provision the subject merchandise falls. See Bausch
& Lomb, Inc., 148 F.3d at 1365 (citation omitted). A statutory
presumption of correctness applies to the factual component of
Customs’s classification decisions, not the legal issue of the
meaning of tariff terms. See 28 U.S.C. § 2639(a)(1);8 Universal
Elecs., Inc. v. United States, 112 F.3d 488, 492 (Fed. Cir.
8
Subsection 2639(a)(1) provides:
Except as provided in paragraph (2) of this
subsection [providing for civil actions
commenced under 28 U.S.C. ¶ 1582], in any
civil action commenced in the Court of
International Trade under section 515, 516,
or 516A of the Tariff Act of 1930, the
decision of the Secretary of the Treasury,
the administering authority, or the
International Trade Commission is presumed to
be correct. The burden of proving otherwise
shall rest upon the party challenging such
decision.
28 U.S.C. § 2639(a)(1).
Court No. 03-00007 Page 19
1997). The burden lies with plaintiff to demonstrate that
Customs’s classification is incorrect. Universal Elecs., 112
F.3d at 492 (“Specifically, the importer must produce evidence
(the burden of production portion of the burden of proof) that
demonstrates by a preponderance (the burden of persuasion portion
of the burden of proof) that Customs’ classification decision is
incorrect.”).
In determining the proper classification of merchandise, the
General Rules of Interpretation (“GRI”) govern. See Carl Zeiss,
Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999)
(citation omitted) (“The HTSUS General Rules of
Interpretation . . . and the Additional U.S. Rules of
Interpretation . . . govern the proper classification of all
merchandise and are applied in numerical order.”). The court
begins with the language of the HTSUS headings, section and
chapter notes, as the GRI require. See GRI 1. If a tariff term
is not defined by the statute or the legislative history, its
correct meaning is its common, or commercial, meaning. See
Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356
(Fed. Cir. 2001). “To ascertain the common meaning of a term, a
court may consult ‘dictionaries, scientific authorities, and
other reliable information sources’ and ‘lexicographic and other
materials.’” Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v.
United States, 673 F.2d 1268, 1271 (C.C.P.A. 1982); Simod Am.
Court No. 03-00007 Page 20
Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)).
Finally, the explanatory notes, while not binding law, offer
guidance as to how tariff terms are to be interpreted. See Len-
Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed. Cir.
2003) (noting explanatory notes are “intended to clarify the
scope of HTSUS subheadings and to offer guidance in their
interpretation”).
As noted, in order for Customs’s classification to be
sustained, the subject merchandise must have a system to which a
mechanical display can be incorporated. The Government contends
that it has such a system and cites Dr. Richard Costello’s
declaration in support of its position. In his declaration, Dr.
Costello refers to a diagram of the subject merchandise submitted
as an exhibit to plaintiff’s memorandum in support of its motion.
Dr. Costello asserts that “the essential blocks or components of
a digital clock movement or a digital timer are: (1) an
oscillator, and (2) a counter.” First Costello Decl. ¶ 25. He
then states that the oscillator and counter blocks shown in the
diagram
can be interfaced by a suitable driver
circuitry to an electrically operated
mechanical display, such as a watch or clock
hand . . . . Such a display would be
interfaced to the counter contained within
the Rockwell timer under discussion, to
provide a mechanical display, if desired . .
. . In a practical sense, constructing such
a mechanical time display would be rather
involved and somewhat complicated, but
Court No. 03-00007 Page 21
conceptually, or theoretically, it is
possible. It could be built.
First Costello Decl. ¶¶ 26-27 (emphasis added). The Government
maintains that the statute requires that the incorporation of a
mechanical display be possible, i.e., that it can be done - not
that it is commercially practical to do so. Def.’s Supplemental
Br. 1-2 (“Note 3 [defining “watch movements”] does not state that
incorporating a display has to be practical or commercially
feasible; it has to be able to be done.”).
Plaintiff, on the other hand, argues that the subject
merchandise does not have a system to which a mechanical display
can be incorporated and that the HTSUS contemplates that the
ability to incorporate a mechanical display must be more than a
mere theoretical possibility. Plaintiff argues that Congress’s
use of the word “incorporated”
implies that an article has been designed and
manufactured to accept . . . a display system
with a specific connection interface, not
some Rube Goldberg, ad hoc contraption
developed after production. . . . Clearly,
the theoretical possibility posited by the
government does not relate to the condition
of the [short body timing relay] as imported,
but merely constitutes speculation as to some
post-importation, post-production
reconfiguration of the product.
Pl.’s Supplemental Br. 2.
The court concludes that the subject merchandise does not
have “a system to which a mechanical display can be
incorporated.” In reaching this conclusion, the court agrees
Court No. 03-00007 Page 22
with plaintiff that the word “incorporated” when combined with
the word “system” compels the rejection of Customs’s
classification. The word “system” means “a complex unity formed
of many often diverse parts . . . serving a common purpose.”
Webster’s Third New International Dictionary 2322 (2002).
Applied to the words of the HTSUS, the purpose of the “system” at
issue here is to facilitate the incorporation of a display into
the subject merchandise. That is, to be classified under Heading
9107 plaintiff’s merchandise must have a system whose purpose is
to allow the incorporation of a display.9
Moreover, the merchandise must have such a system at the
time of importation. See United States v. Citroen, 223 U.S. 407,
414-15 (1911) (“The rule is well established that in order to
produce uniformity in the imposition of duties, the dutiable
classification of articles imported must be ascertained by an
examination of the imported article itself, in the condition in
which it is imported.”) (internal quotation marks omitted); Mita
Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir.
1994). As each expert makes clear, the subject merchandise does
9
Reference to other language in the notes defining
“clock movements” (Additional U.S. Note 1(d)) and “watch
movements” (Note 3) supports this conclusion. For example,
Additional U.S. Note 1(d) states that clock movements are
“devices regulated by . . . any other system capable of
determining intervals of time.” HTSUS, Ch. 91, Additional U.S.
Note 1(d) (emphasis added). In other words, this system must
have as its purpose the capacity to measure time.
Court No. 03-00007 Page 23
not satisfy this requirement. See First Costello Decl. ¶ 27 (“In
a practical sense, constructing such a mechanical time display
would be rather involved and somewhat complicated, but
conceptually, or theoretically, it is possible.”); Second Pohl
Aff. ¶¶ 9 (likening the “scenario of incorporating a display into
the subject timing relays [described by Dr. Costello in his
declaration] to taking a radio, [and] modifying the circuitry by
adding a display to make a television”); 10 (“[T]here is no
system to which a mechanical display can be
incorporated . . . .”). It is therefore apparent that, at the
time of importation, the subject merchandise had no system whose
purpose was to facilitate the addition of a display. Therefore,
the subject merchandise does not have a “clock or watch movement”
and is not properly classifiable under Heading 9107.
C. Classification Under HTSUS Heading 8536
Plaintiff has overcome its burden of demonstrating that
Customs’s classification is incorrect. Thus, in accordance with
the holding in Jarvis Clark Co. v. United States, 733 F.2d 873,
878 (Fed. Cir. 1984), the court now turns to the question of
whether Heading 8536, or another provision of the HTSUS, provides
the correct classification of the subject merchandise. The court
concludes that the merchandise is properly classifiable under
HTSUS Heading 8536.
Applying GRI 1, the court must determine the correct
Court No. 03-00007 Page 24
classification “according to the terms of the headings and any
relative section or chapter notes . . . .” GRI 1. Heading 8536
covers
[e]lectrical apparatus for switching or
protecting electrical circuits, or for making
connections to or in electrical circuits (for
example, switches, relays, fuses, surge
suppressors, plugs, sockets, lamp-holders,
junction boxes), for a voltage not exceeding
1,000 V . . . .10
Although the terms of Heading 8536 are not defined in the section
or chapter notes, the explanatory notes, a recognized, albeit
non-binding, guide to interpreting tariff terms, provide:
Relays are electrical devices by means of
which the circuit is automatically controlled
by a change in the same or another circuit.
They are used, for example, in
telecommunication apparatus, road or rail
[signaling] apparatus, for the control or
protection of machine-tools, etc.
The various types can be distinguished by,
for example:
(1) The electrical means of control used:
electromagnetic relays, permanent magnet
relays, thermo-electric relays, induction
relays, electro-static relays, photoelectric
relays, electronic relays, etc.
(2) The predetermined conditions on which
they operate: maximum current relays, maximum
or minimum voltage relays, differential
relays, fast acting cut out relays, time
delay relays, etc.
4 World Customs Org., Harmonized Commodity Description and Coding
10
Because there is no dispute that the merchandise does
not exceed 1,000 volts, this aspect of Heading 8536 is satisfied.
Court No. 03-00007 Page 25
System Explanatory Notes (“Explanatory Notes”) § 85.36(I)(C), at
1504 (1998); see also Webster’s Third New International
Dictionary 1917 (2002) (defining relay as “an electromagnetic
device for remote or automatic control that is actuated by a
variation in conditions of an electric circuit and that operates
in turn other devices (as switches, circuit breakers) in the same
or a different circuit”).
The undisputed facts together with the court’s observations
lead to the conclusion that the subject merchandise meets the
definition of a relay. See Dolly, Inc. v. United States, 27 CIT
1597, 1609, 293 F. Supp. 2d 1340, 1350 (2003). That is to say,
the subject merchandise is an “electrical device[] by means of
which [a] circuit is automatically controlled by a change in the
same or another circuit.” Explanatory Notes § 85.36(I)(C), at
1504. As described by the parties and noted in the background
section, supra, the subject merchandise is used in a control
panel on an assembly operation or conveyor line. When electrical
power has been applied to the electrical system of which the
subject merchandise is a component, the subject merchandise
directs electrical power to specific apparatus at the rate
specified by the user. The internal components of the subject
merchandise include stationary and moveable parts to which
electric power is applied in order to complete a circuit.
Heading 8536 thus accurately describes the use and function of
Court No. 03-00007 Page 26
the merchandise at issue. Furthermore, it specifically
contemplates, eo nomine,11 the classification of relays
thereunder, i.e., relays that are used to make connections to
electrical circuits. The subject merchandise is thus properly
classifiable as a relay under HTSUS Heading 8536.
CONCLUSION
The court finds that the subject merchandise, with respect
to which plaintiff supplied samples to the court, i.e., those
whose model numbers match the model numbers of the imported
merchandise, is properly classifiable under HTSUS Heading 8536.
Summary judgment is granted in favor of Rockwell as to that
merchandise. The Government’s cross-motion is denied. The
parties are directed to confer and jointly submit, no later than
May 17, 2007:
(1) a proposed Judgment, specifically identifying the
merchandise covered by this opinion; and
11
Eo nomine means “[b]y or in that name.” Black’s Law
Dictionary 575 (8th ed. 2004). “[A]n eo nomine provision . . .
describes a commodity by a specific name, usually one common in
commerce. Absent limiting language or indicia of contrary
legislative intent, such a provision covers all forms of the
article.” Nidec Corp. v. United States, 68 F.3d 1333, 1336 (Fed.
Cir. 1995).
Court No. 03-00007 Page 27
(2) a proposed Scheduling Order for trial with respect to
the remaining merchandise.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: May 7, 2007
New York, New York