Schlumberger Technology Corp. v. United States , 845 F.3d 1158 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
SCHLUMBERGER TECHNOLOGY CORPORATION,
Plaintiff-Appellee
v.
UNITED STATES,
Defendant-Appellant
______________________
2015-2076
______________________
Appeal from the United States Court of International
Trade in No. 1:11-cv-00266-TCS, Chief Judge Timothy C.
Stanceu.
______________________
Decided: January 9, 2017
______________________
ALEXANDER SCHAEFER, Crowell & Moring, LLP, Wash-
ington, DC, argued for plaintiff-appellee. Also represent-
ed by JOHN BOWERS BREW, DAVID COOPER WOLFF;
FRANCES PIERSON HADFIELD, New York, NY.
AIMEE LEE, Appellate Section, International Trade
Litigation, United States Department of Justice, New
York, NY, argued for defendant-appellant. Also repre-
sented by AMY M. RUBIN, Commercial Litigation Branch,
Civil Division, United States Department of Justice, New
York, NY; JEANNE E. DAVIDSON, BENJAMIN C. MIZER,
Washington, DC; MICHAEL W. HEYDRICH, EDWARD N.
2 SCHLUMBERGER TECH. CORP. v. UNITED STATES
MAURER, Office of Assistant Chief Counsel, United States
Customs and Border Protection, New York, NY.
______________________
Before O’MALLEY, WALLACH, and TARANTO, Circuit Judg-
es.
WALLACH, Circuit Judge.
The instant appeal concerns the proper classification
of bauxite proppants imported by Appellee Schlumberger
Technology Corporation (“Schlumberger”) in 2010. U.S.
Customs & Border Protection (“Customs”) classified the
subject merchandise under Subheading 6909.19.50 of the
Harmonized Tariff Schedule of the United States
(“HTSUS”). 1 Schlumberger appealed Customs’s classifi-
cation to the U.S. Court of International Trade (“CIT”).
The CIT rejected Customs’s classification and, instead,
entered summary judgment that the subject merchandise
should enter under HTSUS 2606.00.00. Schlumberger
Tech. Corp. v. United States, 91 F. Supp. 3d 1304, 1324
(Ct. Int’l Trade 2015).
Appellant, the United States (“Government”), appeals.
We possess subject matter jurisdiction pursuant to 28
U.S.C. § 1295(a)(5) (2012). We affirm the CIT.
BACKGROUND
The parties do not dispute the facts material to the
resolution of the classification question before us. We
discuss in turn the facts relevant to the subject merchan-
dise, Customs’s classification, and the CIT’s decision
before turning to the merits.
1 “All citations to the HTSUS refer to the 20[10]
version, as determined by the date of importation of the
merchandise.” LeMans Corp. v. United States, 660 F.3d
1311, 1314 n.2 (Fed. Cir. 2011).
SCHLUMBERGER TECH. CORP. v. UNITED STATES 3
I. The Subject Merchandise
Schlumberger, an oil well services provider, J.A. 119,
imported the subject bauxite proppants from the People’s
Republic of China, J.A. 1729. Schlumberger used the
subject merchandise in hydraulic fracturing services that
it provided to customers in the United States. J.A. 126.
The subject merchandise, when combined with other
materials after importation, increased oil well productivi-
ty by preventing fractures in rock formations from closing.
J.A. 126, 129, 281.
The subject bauxite proppants consisted of two mod-
els: “S580-2040 Ceramic Proppant[s]” (“2040 Proppants”)
and “S580-4070 Ceramic Proppant[s]” (“4070 Proppants”).
J.A. 119–20. “S580” referred to the designation used by
Schlumberger for bauxite proppants produced by a specif-
ic third-party supplier, J.A. 125, and “2040” and “4070”
referred to the “size of sieves through which the prop-
pants can fit,” J.A. 123. Each model primarily consisted
of “non-metallurgical bauxite,” 2 but the precise chemical
composition of the merchandise is unknown because
neither party retained a sample of the merchandise.
J.A. 1729; see J.A. 498–510. Each model measured less
than a millimeter in diameter and possessed specific
physical characteristics with associated values for crush
resistance (i.e., strength), specific density, roundness, and
sphericity. J.A. 122–23.
2 “Bauxite” refers to “an impure mixture of earthy
hydrous aluminum oxides and hydroxides that commonly
contains similar compounds of iron and occas[ionally] of
manganese . . . and is the principal source of aluminum
used in commerce and industry.” Bauxite, Webster’s
Third New International Dictionary of the English Lan-
guage Unabridged (1986) (“Webster’s”); J.A. 467 (similar).
4 SCHLUMBERGER TECH. CORP. v. UNITED STATES
The production of the subject merchandise involved
the following steps. First, “[t]he raw materials of the
subject proppants were milled or ground to a fine pow-
der.” J.A. 126. Second, the resulting powder underwent a
granulation process in a pan granulator, which resulted in
“larger sized particles from the milled particles.”
J.A. 124. Third, “the particles [were] sorted” to determine
whether they met the required size specifications and, if
so, the particles were dried. J.A. 124–25. Fourth, the
particles that fell within the required size specifications
were kiln fired. J.A. 125. Fifth, after firing, the particles
were sorted anew to ensure that ninety percent of them
fell within the required size specifications. J.A. 125.
Finally, the particles that met the previous steps were
packed in bulk in 3,200 pound bags and exported to the
United States as the subject bauxite proppants. J.A. 125.
II. Procedural History
Customs classified the subject bauxite proppants un-
der HTSUS 6909.19.50 at a duty rate of four percent ad
valorem. J.A. 120–21. The subheading selected by Cus-
toms covers “Ceramic wares for laboratory, chemical, or
other technical uses; ceramic troughs, tubs and similar
receptacles of a kind used in agriculture; ceramic pots,
jars and similar articles of a kind used for the conveyance
or packing of goods: Other: Other.” HTSUS 6909.19.50.
Schlumberger contested the classification in separate
protests, 3 arguing that the subject merchandise should
enter duty free under HTSUS 2606.00.0060 as “Alumi-
num ores and concentrates: Bauxite, calcined: Other.”
J.A. 109–10; see J.A. 162, 194. Customs denied the pro-
3 A party may protest Customs’s classification of
merchandise under 19 U.S.C. § 1514(a)(2) (2006). The
party may appeal Customs’s denial of the protest to the
CIT. 28 U.S.C. § 1581(a).
SCHLUMBERGER TECH. CORP. v. UNITED STATES 5
tests, and Schlumberger appealed to the CIT. J.A. 107–
12.
Following cross-motions for summary judgment, the
CIT rejected Customs’s classification and entered sum-
mary judgment that the subject bauxite proppants should
enter under HTSUS 2606.00.00. See Schlumberger, 91 F.
Supp. 3d at 1323–24. In relevant part, the CIT reasoned
that the applicable interpretive rules “preclude[d]” classi-
fying the subject merchandise under HTSUS 6909.19.50
“because the proppants are not ‘ceramic wares’ within the
intended meaning of that term as used in [H]eading
6909.” Id. at 1323. The CIT also found that the Govern-
ment’s “alternate classification” under Subheading
6914.90.80 “is incorrect because [H]eading 6914 . . . is
confined to ‘ceramic articles’ rather than substances such
as the proppants at issue.” Id. at 1323−24; see HTSUS
6914.90.80 (covering “Other ceramic articles: Other:
Other”). Having found these provisions inapplicable, the
CIT concluded that the subject merchandise should enter
under HTSUS 2606.00.00 based on Heading 2606’s terms,
guidance provided in the notes accompanying HTSUS
Chapter 26 and in other sources, and the undisputed
material facts. See Schlumberger, 91 F. Supp. 3d at
1316–22.
DISCUSSION
I. Standard of Review
We review de novo the CIT’s decision to grant sum-
mary judgment and apply anew the standard used by the
CIT to assess the subject Customs classification. See
Otter Prods., LLC v. United States, 834 F.3d 1369, 1374–
75 (Fed. Cir. 2016). “Although we review the decision[] of
the CIT de novo, we give great weight to the informed
opinion of the CIT . . . and it is nearly always the starting
point of our analysis.” Nan Ya Plastics Corp. v. United
States, 810 F.3d 1333, 1341 (Fed. Cir. 2016) (internal
quotation marks, brackets, and citation omitted). The
6 SCHLUMBERGER TECH. CORP. v. UNITED STATES
CIT “shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of
law.” U.S. CIT R. 56(a) (2015).
The classification of merchandise involves a two-step
inquiry. See LeMans, 660 F.3d at 1315. We first ascer-
tain the meaning of the terms within the relevant tariff
provision and then determine whether the subject mer-
chandise fits within those terms. See Sigma-Tau
HealthSci., Inc. v. United States, 838 F.3d 1272, 1276
(Fed. Cir. 2016). The first step presents a question of law
that we review de novo, whereas the second involves an
issue of fact that we review for clear error. Id. When, as
here, no genuine dispute exists as to the nature of the
subject merchandise, the two-step inquiry “collapses into
a question of law [that] we review de novo.” LeMans, 660
F.3d at 1315 (citation omitted).
II. The CIT Properly Classified the Subject Merchandise
The Government contests the CIT’s decision to classi-
fy the subject bauxite proppants under HTSUS
2606.00.00, arguing that the merchandise instead falls
within the terms of HTSUS 6909.19.50 or, alternatively,
HTSUS 6914.90.80. See Appellant’s Br. 17–35. The
Government also contends that the subject merchandise
does not meet the terms of HTSUS 2606.00.00. Id. at 35–
43. After discussing the applicable legal framework, we
address these arguments in turn.
A. Legal Framework
The HTSUS governs the classification of merchandise
imported into the United States. See Wilton Indus., Inc.
v. United States, 741 F.3d 1263, 1266 (Fed. Cir. 2013).
The HTSUS “shall be considered to be statutory provi-
sions of law for all purposes.” 19 U.S.C.
§ 3004(c)(1).
SCHLUMBERGER TECH. CORP. v. UNITED STATES 7
“The HTSUS scheme is organized by headings, each of
which has one or more subheadings; the headings set
forth general categories of merchandise, and the subhead-
ings provide a more particularized segregation of the
goods within each category.” 4 Wilton Indus., 741 F.3d at
1266. “[T]he headings and subheadings . . . are enumer-
ated in chapters 1 through 99 of the HTSUS (each of
which has its own section and chapter notes) . . . .” R.T.
Foods, Inc. v. United States, 757 F.3d 1349, 1353 (Fed.
Cir. 2014) (footnote and citation omitted). The HTSUS
“also contains the ‘General Notes,’ the ‘General Rules of
Interpretation’ (‘GRI’), the ‘Additional [U.S.] Rules of
Interpretation’ (‘ARI’),[5] and various appendices for
particular categories of goods.” Id. (footnote and citation
omitted).
The GRI and the ARI govern the classification of
goods within the HTSUS. See Otter Prods., 834 F.3d at
1375. The GRI apply in numerical order, meaning that
subsequent rules are inapplicable if a preceding rule
provides proper classification. See Mita Copystar Am. v.
United States, 160 F.3d 710, 712 (Fed. Cir. 1998). GRI 1
provides, in relevant part, that “classification shall be
determined according to the terms of the [HTSUS] head-
ings and any relative section or chapter notes . . . .” GRI 1
(emphasis added). Under GRI 1, “a court first construes
the language of the heading, and any section or chapter
notes in question, to determine whether the product at
issue is classifiable under the heading.” Orlando Food
4 The first four digits of an HTSUS provision consti-
tute the heading, whereas the remaining digits reflect
subheadings.
5 The ARI contain specific rules for use and textile
provisions in the HTSUS. See ARI 1(a)–(d). Because the
appeal involves eo nomine provisions, we find the ARI
inapplicable. See infra Section II.B.
8 SCHLUMBERGER TECH. CORP. v. UNITED STATES
Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir.
1998). “[T]he possible headings are to be evaluated
without reference to their subheadings, which cannot be
used to expand the scope of their respective headings.”
R.T. Foods, 757 F.3d at 1353 (citations omitted). “Absent
contrary legislative intent, HTSUS terms are to be con-
strued according to their common and commercial mean-
ings, which are presumed to be the same.” Carl Zeiss,
Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999)
(citation omitted). “To discern the common meaning of a
tariff term, we may consult dictionaries, scientific author-
ities, and other reliable information sources.” Kahrs Int’l,
Inc. v. United States, 713 F.3d 640, 644 (Fed. Cir. 2013)
(citation omitted).
“After consulting the headings and relevant section or
chapter notes” consistent with GRI 1, we may consider the
Explanatory Notes (“EN”) attendant to the relevant
HTSUS headings. 6 Fuji Am. Corp. v. United States, 519
F.3d 1355, 1357 (Fed. Cir. 2008) (citation omitted). The
EN provide persuasive guidance and “are generally indic-
ative of the proper interpretation,” though they do not
constitute binding authority. Kahrs, 713 F.3d at 645
(citations omitted).
B. The Subject Merchandise Does Not Fall Within the
Terms of Heading 6909 or 6914
According to the Government, the subject merchan-
dise constitutes “ceramic wares” under Heading 6909 or,
6 The World Customs Organization publishes the
EN as its “official interpretation of the Harmonized
Commodity Description and Coding System,” the “global
system of trade nomenclature on which the HTSUS is
based.” Kahrs, 713 F.3d at 644 n.2; Michael Simon De-
sign, Inc. v. United States, 33 Ct. Int’l Trade 1003, 1004–
05 (2009) (discussing the HTSUS’s historical backdrop).
SCHLUMBERGER TECH. CORP. v. UNITED STATES 9
alternatively, “other ceramic articles” under Heading
6914. See Appellant’s Br. 21–35. The CIT disagreed. See
Schlumberger, 91 F. Supp. 3d at 1310–16. We agree with
the CIT.
We first must assess whether the subject Headings
constitute eo nomine or use provisions because different
rules and analysis will apply depending upon the heading
type. Compare Kahrs, 713 F.3d at 645–46 (eo nomine
analysis), with Aromont USA, Inc. v. United States, 671
F.3d 1310, 1312−16 (Fed. Cir. 2012) (principal use analy-
sis). An eo nomine provision “describes an article by a
specific name,” whereas a use provision describes articles
according to their principal or actual use. Aromont, 671
F.3d at 1312 (citation omitted); see id. at 1313. Heading
6909 covers “Ceramic wares for laboratory, chemical, or
other technical uses; ceramic troughs, tubs and similar
receptacles of a kind used in agriculture; ceramic pots,
jars and similar articles of a kind used for the conveyance
or packing of goods.” Although Heading 6909 recites the
use of ceramic products for certain purposes, the operative
question here asks whether the subject merchandise
constitutes a “ceramic ware” under the Heading’s terms.
As a result, we treat the Heading as eo nomine. See
Sigma-Tau, 838 F.3d at 1278 (treating an HTSUS provi-
sion as eo nomine, despite the provision disclosing certain
uses, when the interpretation centered on the terms
describing an article by a specific name). Heading 6914,
which recites “Other ceramic articles,” is unquestionably
eo nomine because it describes the articles it covers by
name. See Aromont, 671 F.3d at 1312. Because the
subject Headings are eo nomine, our analysis starts with
their terms. See R.T. Foods, 757 F.3d at 1354.
Neither the HTSUS nor the applicable legislative his-
tory defines “ceramic wares” under Heading 6909 or
“other ceramic articles” under Heading 6914. However,
the notes accompanying HTSUS Chapter 69 inform our
construction of the subject Headings. Note 1 to HTSUS
10 SCHLUMBERGER TECH. CORP. v. UNITED STATES
Chapter 69 explains that the Chapter’s provisions, includ-
ing Heading 6909 and Heading 6914, “appl[y] only to
ceramic products which have been fired after shaping.”
HTSUS 69, Note 1. The Note does not define “shaping,”
so we look to the dictionary to understand its common
meaning. See Sigma-Tau, 838 F.3d at 1279. The infini-
tive form of the verb “shape” means “to give a particular
or proper form to by or as if by molding or modeling from
an undifferentiated mass” or “to give definite or finished
shape to . . . .” Shape, Webster’s (emphases added). 7
The Government contends that the granulation pro-
cess provides the requisite shape to the subject merchan-
dise. Appellant’s Br. 23−25. The undisputed facts show
that it does not. As the CIT observed,
[w]hen the granules emerge from th[e] granula-
tion process, they range so substantially in size
that sieving is necessary to eliminate granules
that do not fall within the desired size range.
Even after the proppants are sieved so that 90% of
the proppants fall within the desired size range,
each of the two ranges characterizing the subject
merchandise still permits 100% variation in size.
Schlumberger, 91 F. Supp. 3d at 1313 (citing J.A. 123–25)
(internal citations omitted). The Government does not
contest the CIT’s observations. See generally Appellant’s
Br. Indeed, an industry authority submitted by the
Government corroborates the CIT’s observations.
J.A. 480 (listing “Granulation” as a step that occurs prior
7 The EN to Chapter 69 provide substantively simi-
lar guidance, explaining in relevant part that “[t]he
manufacturing process of the ceramic products” classifia-
ble under Chapter 69 include a “[s]haping” step whereby
the material “is . . . shaped as nearly as possible to the
desired form.” EN 69, General (emphasis added).
SCHLUMBERGER TECH. CORP. v. UNITED STATES 11
to “Forming”). Thus, because the subject merchandise’s
size varied to such a significant degree after the granula-
tion process, the undisputed facts counsel against finding
that the merchandise possessed the requisite definite
shape following the granulation process. Possessing some
shape does not equate to the definite shape required to
enter under HTSUS Chapter 69, and a “desired form”
cannot be any form at all since it would be impossible to
shape something “as nearly as possible” to an indefinite
standard.
The principle of noscitur a sociis confirms our conclu-
sion that the subject bauxite proppants do not fall within
the terms of either Heading 6909 or Heading 6914. That
principle teaches “a word is known by the company it
keeps,” which “avoid[s] ascribing to one word a meaning
so broad that it is inconsistent with its accompanying
words.” Yates v. United States, 135 S. Ct. 1074, 1085
(2015) (internal quotation marks and citation omitted);
Bilski v. Kappos, 561 U.S. 593, 604 (2010) (“[A]n ambigu-
ous term may be given more precise content by the neigh-
boring words with which it is associated.” (internal
quotation marks and citation omitted)); see also Jewelpak
Corp. v. United States, 297 F.3d 1326, 1331, 1337 (Fed.
Cir. 2002) (affirming the use of noscitur a sociis to inter-
pret an HTSUS provision). 8 Heading 6909 covers “Ce-
ramic wares for laboratory, chemical, or other technical
8 A canon related to noscitur a sociis, ejusdem gene-
ris, instructs that “where general words follow an enu-
meration of specific items, the general words are read as
applying only to other items akin to those specifically
enumerated.” Harrison v. PPG Indus., Inc., 446 U.S. 578,
588 (1980). We also have relied upon the principle of
ejusdem generis when interpreting HTSUS provisions.
See, e.g., Victoria’s Secret Direct, LLC v. United States,
769 F.3d 1102, 1107 (Fed. Cir. 2014).
12 SCHLUMBERGER TECH. CORP. v. UNITED STATES
uses; ceramic troughs, tubs and similar receptacles of a
kind used in agriculture; ceramic pots, jars and similar
articles of a kind used for the conveyance or packing of
goods.” The EN provide that Heading 6909 “covers a
range of very varied articles,” such as “crucibles and
crucible lids,” “mortars and pestles,” “beakers,” “contain-
ers with single or double walls,” “[c]ontainers of the kinds
used for the commercial transport or packing of goods,”
and “[t]roughs, tubs and similar containers of the type
used in agriculture.” EN 69.09. The listed “wares” and
“articles” concern individual products with definite forms.
See id.; see also EN 69, General (requiring products
imported under HTSUS Chapter 69 to be “shaped as
nearly as possible to the desired form”). As explained
above, the subject merchandise does not possess a definite
form. J.A. 125–26. Because the subject merchandise does
not have a definite form, it cannot fall within that Head-
ing’s terms. See Yates, 135 S. Ct. at 1085.
The inclusion of “grinding apparatus and balls, etc.,
for grinding mills” in the EN accompanying Heading 6909
does not require a different conclusion. But see Appel-
lant’s Br. 30–31. The Government has not provided any
evidence demonstrating that the subject bauxite prop-
pants and “grinding apparatus and balls” vary in shape to
a similar degree, such that the subject proppants similar-
ly should fall within Heading 6909. The Government’s
speculation cannot prevent the entry of summary judg-
ment against it. See First Nat’l Bank of Ariz. v. Cities
Serv. Co., 391 U.S. 253, 290 (1968) (finding entry of
summary judgment appropriate because of “the absence of
any significant probative evidence” in support of a claim).
Finally, an examination of the EN accompanying
Heading 6914 yields the conclusion that the subject
bauxite proppants do not fall within that Heading’s terms.
Heading 6914 covers “Other ceramic articles.” The EN
explain that Heading 6914 covers, inter alia, “[s]toves and
other heating apparatus,” “non-decorative flower pots,”
SCHLUMBERGER TECH. CORP. v. UNITED STATES 13
“fittings for doors, windows, etc.,” “[l]etters, numbers,
sign-plates and similar motifs for shop signs and shop
windows,” ceramic “[s]pring lever stoppers,” “jars and
containers for laboratories,” and “other articles such as
knife handles, school inkwells, humidifiers for radiators[,]
and bird cage accessories.” EN 69.14. The listed exam-
ples concern individual products shaped into definite
forms. See id.; see also EN 69, General (requiring prod-
ucts imported under HTSUS Chapter 69 to be “shaped as
nearly as possible to the desired form”). Unlike the
examples provided in the EN, the subject proppants are
bulk substances that lack a definite form. J.A. 125–26.
Because the subject proppants do not possess the requi-
site definite form like the products listed in Heading
6914, they cannot fall within that Heading’s terms. See
Yates, 135 S. Ct. at 1085.
C. The Subject Merchandise Falls Within the Terms of
Heading 2606
Having found the subject bauxite proppants outside
the terms of Heading 6909 and Heading 6914, we next
examine Heading 2606. The Government argues that the
CIT erred by finding the subject merchandise classifiable
under that Heading. Appellant’s Br. 35–43. We disagree.
Heading 2606 covers “Aluminum ores and concen-
trates.” The provision is eo nomine because it describes
the merchandise it covers by name. See Aromont, 671
F.3d at 1312. Neither the HTSUS nor the applicable
legislative history defines “aluminum ore” under Heading
2606. The notes accompanying HTSUS Chapter 26
inform our construction of the subject Heading, providing
two criteria. First, Note 2 to HTSUS Chapter 26 explains
that “the term ‘ores’ means minerals of mineralogical
species actually used in the metallurgical industry for the
extraction of” certain metals, “even if they are intended
for nonmetallurgical purposes.” HTSUS 26, Note 2.
Second, the Note states that HTSUS 2606 does not “in-
14 SCHLUMBERGER TECH. CORP. v. UNITED STATES
clude minerals which have been submitted to processes
not normal to the metallurgical industry.” Id.
The subject bauxite proppants meet each criterion.
With respect to the first, the subject merchandise contains
a mineral of a mineralogical species used in the metallur-
gical industry for the extraction of a particular metal. EN
26.06 provides that Heading 2606 “covers bauxite (hy-
drated aluminum oxide containing variable proportions of
iron oxide, silica, etc.).” The parties agree that “[t]he
subject proppants are produced from non-metallurgical
grade bauxite,” meaning that the subject proppants
contain the requisite mineral of a mineralogical species.
J.A. 1729. Moreover, the undisputed facts demonstrate
that the industry uses bauxite in the extraction of alumi-
num. J.A. 121 (“Metallurgical grade bauxite is used in
the metallurgical industry for the extraction of alumi-
num.”), 1729 (discussing the “commercial extraction of
aluminum metal from bauxite”).
The Government counters that the subject merchan-
dise cannot meet the first criterion because Schlumberger
used the subject merchandise “only for hydraulic fractur-
ing” and not the extraction of a particular metal. Appel-
lant’s Br. 37. However, the Government overlooks a
relevant passage of Note 2 to HTSUS Chapter 26, which
explains that the Chapter covers ores “even if they are
intended for non-metallurgical purposes,” so long as the
industry uses the ores for the extraction of metal. HTSUS
26, Note 2. As stated above, it is undisputed that the
industry uses bauxite to extract aluminum. J.A. 121,
1729.
Because the subject bauxite proppants satisfy the first
criterion articulated in Note 2 to HTSUS Chapter 26, we
turn to the second to determine whether the subject
merchandise underwent processes not normal to the
metallurgical industry. Neither the HTSUS nor the
applicable section and chapter notes provide guidance as
SCHLUMBERGER TECH. CORP. v. UNITED STATES 15
to what constitutes a “normal” process in the metallurgi-
cal industry. However, the EN to Chapter 26 state that
aluminum ore classifiable under Heading 2606 may
undergo, inter alia, “crushing,” “grinding,” “screening,”
“agglomeration of powders . . . into grains, balls or bri-
quettes,” and “drying.” EN 26, General. As stated above,
the subject bauxite proppants underwent these very steps
during the production process. J.A. 124–25. Thus, the
CIT properly concluded that these processes “must be
considered normal to the metallurgical industry and not
the sort of processing that would cause exclusion from
[C]hapter 26 by operation of [N]ote 2 to [C]hapter 26,
HTSUS.” Schlumberger, 91 F. Supp. 3d at 1318.
The Government contends that the CIT improperly
found the processes normal to the metallurgical industry
despite the fact that the processes were “not for the pur-
pose of preparing the proppants for the extraction of
metal.” Appellant’s Br. 42. Note 2 to HTSUS Chapter 26
provides only that the minerals may not be submitted to
processes other than those normal to the metallurgical
industry; it does not require that any processing be un-
dertaken “for the purpose” of extracting metal. HTSUS
26, Note 2. Indeed, the Note expressly contemplates that
a product imported under the Chapter can be “intended
for non-metallurgical purposes.” Id.
The Government contends further that dopants were
added to the bauxite powder during the proppant manu-
facturing process and that the addition of dopants is not
normal to the metallurgical industry. 9 Appellant’s Br.
37–40. As a result, the Government contends that the
9 The noun “dopant” means “an impurity added
usually in minute amounts to a pure substance to alter its
properties.” J.A. 79. The identity of the dopants remains
proprietary. Schlumberger, 91 F. Supp. 3d at 1318 n.18.
16 SCHLUMBERGER TECH. CORP. v. UNITED STATES
subject merchandise cannot meet the second element in
Note 2 of HTSUS Chapter 26. See id.
The addition of dopants to the bauxite powder does
not necessitate a different conclusion. The EN to Chapter
26 explain that a process may remain normal to the
industry so long as it does “not alter the chemical compo-
sition of the basic compound which furnishes the desired
metal.” EN 26, General. The Government has not offered
any evidence demonstrating the extent to which the
dopants changed the chemical composition of the bauxite
powder; indeed, the Government was unable to state that
the dopants’ underlying chemicals at the exact levels
found in the subject merchandise would not themselves
exist naturally in bauxite ore. Oral Argument at 12:07–
14:24, http://oralarguments.cafc.uscourts.gov/default.aspx
?fl=2015-2076.mp3. Thus, the Government did not
demonstrate that the basic bauxite compound changed
from consisting primarily of aluminum oxide so as to
offend EN 26, and its speculation may not foreclose the
entry of summary judgment. See First Nat’l Bank of
Ariz., 391 U.S. at 290.
Finally, the Government avers that the subject baux-
ite proppants do not fall within Heading 2606 because
they are “finished manufactured products immediately
usable upon importation” and “not a ‘material’ or natural-
ly occurring ‘substance.’” Appellant’s Br. 35. According to
the Government, Heading 2606 is limited to “primary
materials which will be further processed after importa-
tion.” Id. at 1; see also id. at 17 (arguing that the CIT
failed to consider the subject merchandise in its “condition
as imported” (capitalization omitted)).
The terms of Heading 2606 do not support the Gov-
ernment’s argument. Under GRI 1, we must look to “the
terms of the [HTSUS] headings and any relative section
or chapter notes.” As the CIT observed, “[n]othing in the
terms of the heading, the section or chapter notes, or the
SCHLUMBERGER TECH. CORP. v. UNITED STATES 17
relevant [EN] supports a conclusion that a product ready
for the intended use in the condition as imported is out-
side the scope of the heading.” Schlumberger, 91 F. Supp.
3d at 1320. That conclusion comports with the principle
that “an eo nomine provision” like Heading 2606 “includes
all forms of the named article.” Kahrs, 713 F.3d at 646
(citation omitted). Thus, we decline the Government’s
invitation to imbue Heading 2606 with a meaning not
supported by the Heading’s text or the accompanying
section and chapter notes.
CONCLUSION
We have considered the Government’s remaining ar-
guments and find them unpersuasive. Accordingly, the
final judgment of the U.S. Court of International Trade is
AFFIRMED