Kahrs International, Inc. v. United States , 713 F.3d 640 ( 2013 )

United States Court of Appeals
for the Federal Circuit
______________________
KAHRS INTERNATIONAL, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
______________________
2012-1034
______________________
Appeal from the United States Court of International
Trade in case No. 07-CV-0343, Judge Gregory W. Car-
man.
______________________
Decided: April 3, 2013
______________________
CARL D. CAMMARATA, Law Offices of George R. Tuttle,
of Madison, Wisconsin, argued for the plaintiff-appellant.
With him on the brief were STEPHEN S. SPRAITZAR,
MICHAEL J. TONSING and GEORGE R. TUTTLE.
MIKKI COTTET, Senior Trial Counsel, Commercial Lit-
igation Branch, Civil Division, United States Department
of Justice, of Washington, DC, for defendant-appellee.
With her on the brief were STUART F. DELERY, Acting
Assistant Attorney General, and JEANNE E. DAVIDSON,
Director; BARBARA S. WILLIAMS, Attorney in Charge, of
2 KAHRS INTL v. US
New York, New York. Of counsel on the brief was YELENA
SLEPAK, Senior Trial Attorney, Office of the Assistant
Chief Counsel, International Trade Litigation, United
States Customs and Border Protection, of New York, New
York. Of counsel was BEVERLY A. FARRELL, Trial Attor-
ney.
______________________
Before LOURIE and REYNA, Circuit Judges, and KRIEGER,
Chief Judge. *
REYNA, Circuit Judge.
Kahrs International Inc. (“Kahrs”) appeals from a fi-
nal judgment of the United States Court of International
Trade upholding a tariff classification determination by
U.S. Customs and Border Protection (“Customs”) that
Kahrs’ imported engineered wood flooring (“EWF”) is
properly classified as “plywood” under heading 4412 of the
Harmonized Tariff Schedule of the United States
(“HTSUS”). Because Kahrs’ flooring panels are properly
classified as “plywood” under heading 4412, we affirm.
BACKGROUND
Kahrs imports engineered wood flooring panels into
the United States for distribution to flooring wholesalers.
Kahrs’ flooring panels are composed of multiple layers
(that is, “plies”) of wood that are glued together and
laminated to resemble solid hardwood flooring. The
panels have specially milled edges that allow them to be
joined together in their final installation over a structural
subfloor.
* The Honorable Marcia S. Krieger, Chief Judge of
the United States District Court for the District of Colo-
rado, sitting by designation, assumed the position of Chief
Judge on January 1, 2013.
KAHRS INTL v. US 3
At issue in this appeal are two types of flooring panels
imported by Kahrs: (1) panels that are 14 millimeters
thick and composed of seven plies, and (2) panels that are
15 millimeters thick panels and have three plies. All of
the imported flooring panels are composed of an odd
number of plies, bonded together so that grains of adja-
cent layers are at right angles. The panels are laminated
and are designed to simulate solid wood strip or plank
flooring.
Kahrs classified its engineered wood flooring imports
as “assembled parquet panels” under HTSUS subheading
4418.30.00, a duty-free provision for “Builders’ joinery
and carpentry of wood, including cellular wood panels and
assembled parquet panels; shingles and shakes: parquet
panels.” HTSUS, subheading 4418.30.00 (2006). Kahrs
identified the imported merchandise on its entry summar-
ies as “PARQUET PANELS BUILDERS’ JOINE[RY].”
CF-7501, Entry Papers, USCIT Court File (Ct. No. 07-
000343). Customs subsequently liquidated Kahrs’ mer-
chandise under HTSUS 4412, which covers “plywood,
veneered panels and similar laminated wood,” at a duty
rate of 8% ad valorem. Customs explained that the
merchandise was not parquet panels, but specifically
engineered flooring of plywood construction with a non-
coniferous face ply and no ply exceeding 6 millimeters in
thickness. 1
1 The relevant provisions of the 2006 HTSUS read as
follows:
4412 Plywood
Plywood consisting solely of sheets of wood, each ply not
exceeding 6 mm in thickness:
4412.14 Other, with at least one outer ply of nonconiferous
wood:
Not surface covered, or surface covered with a clear
or transparent material which does not obscure the
grain, texture or markings of the face ply:
4412.14.31 Other ............................................ 8% ad valorem
4 KAHRS INTL v. US
Kahrs protested Customs’ classification, and Customs
denied the protest. Kahrs subsequently filed a complaint
before the Court of International Trade challenging the
protest denial. The Court of International Trade found
that Customs correctly classified Kahrs’ merchandise as
plywood under heading 4412. Kahrs Int’l, Inc. v. United
States, 645 F. Supp. 2d 1251 (Ct. Int’l Trade 2009). In its
analysis, the court considered the plain language of the
HTSUS, a dictionary definition of “plywood,” and the
definition of plywood adopted by this court in Boen Hard-
wood Flooring, Inc. v. United States, 357 F.3d 1262 (Fed.
Cir. 2004). Kahrs, 645 F. Supp. 2d at 1276–78. The Court
of International Trade entered summary judgment affirm-
ing Customs’ classification.
Kahrs appeals. We have jurisdiction under 28 U.S.C.
§ 1295(a)(5).
STANDARD OF REVIEW
We review de novo a grant of summary judgment by
the Court of International Trade. Drygel, Inc. v. United
States, 541 F.3d 1129, 1133 (Fed. Cir. 2003).
Proper classification of goods under the HTSUS is a
two-step process. First, we ascertain the meaning of the
Other, with at least one outer ply of nonconiferous wood:
4412.29 Other:
Plywood: Not surface covered, or surface covered
with a clear or transparent material which does not
obscure the grain, texture or markings of the face
ply:
4412.29.36 Other ............................................ 8% ad valorem
4412.29.56 Other ............................................................ duty-free
4418 Builders’ joinery and carpentry of wood, including
cellular wood panels and assembled parquet panels;
shingles and shakes:
4418.30.00 Parquet Panels ............................................... duty-free
4418.90 Other:
4418.90.20 Edge-glued lumber .............................. duty-free
4418.90.45 Other ......................................... 3.2% ad valorem
KAHRS INTL v. US 5
specific terms in the tariff provision. Orlando Food Corp.
v. United States, 140 F.3d 1437, 1439 (Fed. Cir. 1998).
This step is a question of law which we review without
deference. Id. Second, we determine whether the goods
come within the description of those terms. Id. This step
is a factual inquiry which we review for clear error. Id.
While we accord deference to a classification ruling by
Customs relative to its “power to persuade,” United States
v. Mead Corp., 533 U.S. 218, 235 (2001), we have “an
independent responsibility to decide the legal issue of the
proper meaning and scope of HTSUS terms,” Warner-
Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed.
Cir. 2005).
DISCUSSION
On appeal, Kahrs argues that its engineered wood
flooring panels are not classifiable as plywood under
heading 4412. In support of its position, Kahrs makes
two alternative arguments: First, Kahrs argues that
Customs’ classification of the EWF panels is inconsistent
with the commercial meaning of “plywood.” Instead,
Kahrs asserts that its flooring panels should be classified
under heading 4418 as “builders’ joinery” or “assembled
parquet panels.” Second, Kahrs argues that, even if its
flooring panels are prima facie classifiable under heading
4412, they are also properly classified under heading
4418. Kahrs argues that, because heading 4418 is more
specific than heading 4412, its merchandise should be
classified under heading 4418.
HTSUS CLASSIFICATION
An HTSUS classification determination involves two
steps. Orlando Food, 140 F.3d at 1439. First, we address
the proper meaning of the relevant tariff provisions. Id.
Second, we determine whether the merchandise at issue
falls within a particular tariff provision as construed. Id.
When there is no factual dispute regarding the nature,
6 KAHRS INTL v. US
structure, and use of imported merchandise, the proper
classification turns on the first step. Faus Group, Inc. v.
United States, 581 F.3d 1369, 1372 (Fed. Cir. 2009).
To determine a product’s proper tariff classification,
we apply the General Rules of Interpretation (GRI), which
are part of the HTSUS, in numerical order. BASF Corp.
v. United States, 482 F.3d 1324, 1325–26 (Fed. Cir. 2007).
According to GRI 1, the HTSUS headings and relative
section or chapter notes govern the classification of a
product. Orlando Food, 140 F.3d at 1440. Absent contra-
ry legislative intent, we construe HTSUS terms according
to their common and commercial meanings, which we
presume to be the same. Carl Zeiss, Inc. v. United States,
195 F.3d 1375, 1379 (Fed. Cir. 1999). To discern the
common meaning of a tariff term, we may consult diction-
aries, scientific authorities, and other reliable information
sources. Mead Corp. v. United States, 283 F.3d 1342,
1346 (Fed. Cir. 2002). After consulting the headings and
relevant section or chapter notes, we may also consult the
Explanatory Notes of the relevant chapters. 2 Fuji Am.
Corp. v. United States, 519 F.3d 1355, 1357 (Fed. Cir.
2008). Although the Explanatory Notes are not legally
binding or dispositive, we may consult them for guidance
and they are generally indicative of the proper interpreta-
tion of the various HTSUS provisions. JVC Co. of Am. v.
United States, 234 F.3d 1348, 1352 (Fed. Cir. 2000). See
also BenQ Am. Corp. v. United States, 646 F.3d 1371,
1376 (Fed. Cir. 2011); N. Am. Processing Co. v. United
2 The Explanatory Notes are a publication of the
World Customs Organization (WCO). The Explanatory
Notes give WCO’s official interpretation of the Harmo-
nized Commodity Description and Coding System (the
“Harmonized System”). The Harmonized System is the
global system of trade nomenclature on which the HTSUS
is based.
KAHRS INTL v. US 7
States, 236 F.3d 695, 698 (Fed. Cir. 2001); Carl Zeiss, 195
F.3d at 1378 n.1.
Here, there is no factual dispute regarding the struc-
ture and use of Kahrs’ engineered wood flooring panels.
We therefore decide the proper classification of Kahrs’
merchandise by determining the proper meaning and
scope of the relevant provisions of the HTSUS. See Carl
Zeiss, 195 F.3d at 1375.
HEADING 4412—PLYWOOD
Kahrs argues that its engineered wood flooring panels
are not prima facie classifiable under heading 4412,
which covers “Plywood, veneered panels, and similar
laminated wood.” HTSUS, heading 4412. Specifically,
Kahrs argues that its flooring panels are not “plywood”
according to the commercial meaning of the term.
We have previously considered the meaning of “ply-
wood” in the context of the HTSUS. In Russell Stadelman
& Co. v. United States, 242 F.3d 1044 (Fed. Cir. 2001), we
said, “Plywood consists of a panel composed of layers of
wood glued together, usually with the grains of adjoining
layers at right angles to each other.” 242 F.3d at 1046 n.2
(citing The American Heritage Dictionary 1352 (4th ed.
2000)). We confirmed this basic definition in Timber
Products Co. v. United States, 515 F.3d 1213 (Fed. Cir.
2008), where we explained, “Plywood consists of three or
more wooden sheets pressed together, with each sheet
referred to as a ‘ply.’” 515 F.3d at 1217. Both of these
definitions are consistent with the dictionary definition on
which the Court of International Trade relied in this case.
See Kahrs, 645 F. Supp. 2d at 1277. That definition is
found in Webster’s International Dictionary, which de-
fines plywood as “a structural material consisting of
sheets of wood glued or cemented together with the grains
of adjacent layers arranged at right angles or at a wide
angle and being made up (1) wholly of uniformly thin
veneer sheets [all-veneer plywood] or (2) of usually equal
8 KAHRS INTL v. US
numbers of veneer sheets on either side of a thicker
central layer [lumber-core plywood].” Id. (citing Webster’s
Third New Int’l Dictionary 1746 (1986)).
Perhaps our most thorough review of the term “ply-
wood,” however, is our opinion in Boen Hardwood Floor-
ing, Inc. v. United States, 357 F.3d 1262 (Fed. Cir. 2004).
In Boen, we considered the proper definition of plywood in
classifying laminated wood flooring that was substantially
the same as Kahrs’ EWF imports. 357 F.3d at 1263–64.
Reviewing various trade and dictionary definitions of the
term “plywood,” we concluded that “[t]here are three
common characteristics of ‘plywood’ found in the defini-
tions provided above: (1) there must be at least three
layers; (2) each layer must be arranged at a right angle to
its adjacent layer; and (3) the layers must be bonded
together.” Id. at 1265. These characteristics are common
to Kahrs’ EWF. While Boen is not dispositive in this case,
we are persuaded that our definition in Boen was correct.
Kahrs’ argument that the commercial meaning of
“plywood” does not include engineered wood flooring is
unavailing. Heading 4412 is an eo nomine classification
provision, not a use provision, as it describes the subject
merchandise by name, not by use. See Clarendon Mktg.,
Inc. v. United States, 144 F.3d 1464, 1467 (Fed. Cir.
1998). Generally, we should not read a use limitation into
an eo nomine provision unless the name itself inherently
suggests a type of use. Carl Zeiss, 195 F.3d at 1379 (Fed.
Cir. 1999). Further, an eo nomine provision includes all
forms of the named article, including improved forms.
CamelBak Prods., LLC v. United States, 649 F.3d 1361,
1364–65 (Fed. Cir. 2011).
While Kahrs’ merchandise possesses some unique fea-
tures related to its intended use as flooring, we disagree
with Kahrs that these features are sufficiently significant
to transform its identity. Kahrs’ flooring meets all the
requirements for “plywood” as we have defined that term,
KAHRS INTL v. US 9
and we see no reason to read additional limitations into
the tariff schedule. As the Court of International Trade
noted, Kahrs’ flooring panels are composed of at least
three layers of wood. Kahrs, 645 F. Supp. 2d at 1269–70.
Each layer is arranged at right angles to adjacent layers,
and the layers are bonded together. Id. Not only does
Kahrs’ flooring meet all the requirements for plywood, but
it is essentially the same product that we classified in
Boen as plywood under heading 4412.
The Explanatory Notes confirm that Kahrs’ merchan-
dise is properly classified as plywood under heading 4412.
Although the Explanatory Notes are not legally disposi-
tive, they provide useful guidance and are “generally
indicative of the proper interpretation” of the HTSUS.
JVC, 234 F.3d at 1352–53. As the Court of International
Trade pointed out, the Explanatory Notes for heading
4412 provide in pertinent part,
The heading also covers plywood panels or ve-
neered panels, used as flooring panels, and some-
times referred to as “parquet flooring”. These
panels have a thin veneer of wood affixed to the
surface, so as to simulate a flooring panel made
up of parquet strips.
World Customs Organization, Harmonized Commodity
Description & Coding System Explanatory Notes, Explan-
atory Note 44.12, 814–16 (3d ed. 2002) (“Explanatory
Note(s)”) (emphasis added). Accordingly, the Explanatory
Notes confirm that Kahr’s flooring is properly classified as
plywood under heading 4412.
For the reasons above, we find that Kahrs’ engineered
wood flooring is prima facie classifiable as plywood under
heading 4412 of HTSUS.
BUILDERS’ JOINERY, HTSUS 4418
Kahrs argues that even if, as we have determined, its
merchandise is classifiable as plywood under heading
10 KAHRS INTL v. US
4412, it is also prima facie classifiable under heading
4418, which covers “Builders’ joinery and carpentry of
wood, including wood panels and assembled parquet
panels . . . .” HTSUS, heading 4418. Specifically, Kahrs
maintains that its flooring is properly classified under
heading 4418 either as “assembled parquet panels” or as
“builders’ joinery.” Kahrs argues that heading 4418 is
more specific than heading 4412, and therefore that we
should classify its flooring panels under heading 4418.
The Court of International Trade is correct that
Kahrs’ engineered wood flooring does not fall within the
meaning of “assembled parquet panels” as that term is
used in heading 4418. After reviewing several dictionary
definitions of “parquet” and “parquetry,” the Court of
International Trade concluded that “the sin[e] qua non
[without which not] of ‘parquet’ and ‘parquetry’ is that the
inlaid wood strips of the parquetry themselves form a
geometric pattern or mosaic.” Kahrs, 645 F. Supp. 2d at
1278–79. We agree with this characterization. Kahrs’
EWF is not composed of inlaid wood strips. We also agree
with the Court of International Trade that “in their
imported condition, Kahrs’ . . . flooring products do not
form a geometric or mosaic pattern.” Id. at 1278. Rather,
Kahrs’ flooring panels are meant to simulate wood plank
or strip flooring, neither of which exhibit the “geometric or
mosaic pattern” characteristic of parquetry.
Alternatively, Kahrs argues that its engineered floor-
ing is properly classified under heading 4418 as “builders’
joinery.” In support of its position, Kahrs cites our deci-
sion in Faus, where we decided that laminated fiberboard
flooring panels were properly classified under heading
4418 as builders’ joinery. Faus, 581 F.3d at 1375. In
Faus, we assumed without deciding that the laminated
fiberboard flooring at issue was prima facie classifiable
under both heading 4411 as fiberboard and heading 4418
as builder’s joinery. Id. at 1373. We concluded that, as
between those two headings, Faus’ flooring was more
KAHRS INTL v. US 11
appropriately classified under heading 4418 as builders’
joinery because that heading provided the more specific
description. Id. at 1374.
When goods are prima facie classifiable under two or
more headings or subheadings of HTSUS, “[t]he heading
which provides the most specific description shall be
preferred to headings providing a more general descrip-
tion.” HTSUS, GRI 3(a). Under this rule, “we look to the
provision with requirements that are more difficult to
satisfy and that describe the article with the greatest
degree of accuracy and certainty.” Orlando Food, 140 F.3d
at 1441.
A product “described by both a use provision and an eo
nomine provision is generally more specifically provided
for under the use provision.” Sports Graphics, Inc. v.
United States, 24 F.3d 1390, 1394 (Fed. Cir. 1994). This
rule, however, is not obligatory. Carl Zeiss, 195 F.3d at
1380. Rather, it is a “convenient rule of thumb for resolv-
ing issues where the competing provisions are in balance.”
Id. at 1380. If the competing provisions are not in bal-
ance, the rule does not apply. Id. at 1380–81.
Here, we need not decide whether Kahrs’ engineered
wood flooring is prima facie classifiable as “builders’
joinery” under heading 4418 because, even if it is, we find
that heading 4412 provides the more specific classifica-
tion. Several factors persuade us that this result is
correct.
First, our holding in Faus does not control here. Faus
dealt with laminated fiberboard having a photographic
overlay, not engineered wood flooring. Faus, 581 F.3d at
1370. Additionally, the photographic overlay added to
Faus’ fiberboard panels was not a conventional compo-
nent of fiberboard. Rather, the photographic overlay was
a notable addition to the fiberboard, added to simulate
real wood. Id. Here, in contrast, Kahrs’ engineered wood
flooring is made entirely of plywood. See Kahrs, 645 F.
12 KAHRS INTL v. US
Supp. 2d at 1270. Even the finished top layer of Kahrs’
flooring is a ply of wood, not an overlay of a different,
additional material. Id. Nothing has been added to
Kahrs’ wood panels to change their fundamental nature.
Second, “builders’ joinery” encompasses a much wider
range of products than does “plywood.” Although build-
ers’ joinery is defined by its intended use, it is a sweeping
classification that includes products of many types. In
Faus, for example, we noted that builders’ joinery broadly
includes “products used as non-structural elements in the
construction of buildings.” Faus, 581 F.3d at 1374. While
this definition speaks to use, we can hardly see how this
use is particularly described and meaningfully limited.
“Plywood,” on the other hand, implies very specific struc-
ture: at least three plies of wood, with each ply arranged
at right angles to adjacent plies, and with the plies bond-
ed together. See Boen, 357 F.3d at 1365. While the uses
of plywood may vary, its structure may not. We find the
requirements for plywood more difficult to satisfy than
those for builders’ joinery.
Third, the Explanatory Note for heading 4412 speci-
fies that heading 4412 includes “plywood panels or ve-
neered panels, used as flooring panels, and sometimes
referred to as ‘parquet flooring.’” Explanatory Note 44.12,
at 814–16. Moreover, the Explanatory Note for heading
4418 states explicitly that heading 4418 excludes “ply-
wood panels or veneered panels, used as flooring panels,
which have thin veneer of wood affixed to the surface.”
Explanatory Note 44.12, at 821. The Note further pro-
vides that such merchandise is properly classified under
heading 4412. Id. Here, in contrast to Faus, we have a
persuasive secondary authority that clearly indicates an
appropriate classification.
Finally, Customs has ruled on this issue. Customs
took the following position in a 2001 ruling explaining the
proper classification of engineered wood flooring:
KAHRS INTL v. US 13
[W]e conclude that flooring panels consisting of
one or more strips of veneer on the surface are
classifiable in heading 4412, HTSUS. These ve-
neered flooring panels are distinct from parquet
panels of heading 4418, HTSUS, which consist of
individual parquet strips (lumber strips) joined
together at the edges or ends to form the panel.
Customs Ruling HQ 964565, 2001 WL 718602 (May 14,
2001). Customs’ ruling, which was published as required
by statute, see 19 U.S.C § 1625(c), is entitled to Skidmore
deference. Warner-Lambert Co. v. United States, 425 F.3d
1381, 1384 (Fed. Cir. 2005); see also Skidmore v. Swift &
Co., 323 U.S. 134, 140 (1944). We are persuaded that
Customs’ ruling is correct.
For the reasons above, we find that heading 4412 pro-
vides a more specific description of Kahrs’ imported
merchandise than does heading 4418. Accordingly, we
find that Kahrs’ merchandise is not properly classified
under heading 4418.
CONCLUSION
Because Kahrs’ engineered wood flooring is prima fa-
cie classifiable as plywood under heading 4412, and
because heading 4412 provides a more specific description
of Kahrs’ merchandise than does heading 4418, we hold
that the Court of International Trade correctly classified
Kahrs’ merchandise as plywood under heading 4412 of the
HTSUS. The decision of the Court of International Trade
is
AFFIRMED