Sigvaris, Inc. v. United States

Slip Op. 17-20
UNITED STATES COURT OF INTERNATIONAL TRADE
SIGVARIS, INC.,
Plaintiff,
Before: Jennifer Choe-Groves, Judge
v.
Court No. 11-00532
UNITED STATES,
Defendant.
OPINION
[Sua sponte dismissing Plaintiff’s claims concerning the classification of (1) certain models of
graduated compression hosiery for which the court lacks subject matter jurisdiction, and (2)
certain models of graduated compression arm-sleeves and gauntlets that were protested properly
but Plaintiff has waived.]
Dated:February 28, 2017
John M. Peterson, Russell Andrew Semmel, and Elyssa R. Emsellem, Neville Peterson, LLP, of
New York, N.Y., for Plaintiff Sigvaris, Inc.
Alexander J. Vanderweide, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, N.Y., for Defendant United States. With him on the brief
were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, and Amy M. Rubin,
Assistant Director. Of counsel on the brief was Beth C. Brotman, Attorney, Office of the Chief
Counsel International Trade Litigation, U.S. Customs and Border Protection, of New York, N.Y.
Choe-Groves, Judge: Sigvaris, Inc. (“Plaintiff”) filed a complaint pursuant to 28 U.S.C.
§ 1581(a) (2006)1 claiming that U.S. Customs and Border Protection (“Customs”) improperly
denied its protests, which challenged Customs’ classification of various models of graduated
compression hosiery, arm-sleeves, and gauntlets. See Summons, Dec. 22, 2011, ECF No. 1;
1
Further citations to Title 28 of the U.S. Code are to the 2006 edition.
Court No. 11-00532 Page 2
Compl., Mar. 30, 2012, ECF No. 6. Plaintiff and Defendant subsequently filed cross-motions for
summary judgment concerning the correct classification of several models of Plaintiff’s imported
compression products. See Pl.’s Mot. Summ. J., Dec. 21, 2015, ECF No. 56; Def.’s Cross-Mot.
Summ. J. 2, Mar. 10, 2016, ECF No. 61. Before addressing the merits of the Parties’ cross-
motions for summary judgment, the court issues this opinion to address jurisdictional matters.
For the reasons set forth below, the court finds that it lacks subject matter jurisdiction to hear
Plaintiff’s claim for certain models of hosiery and that Plaintiff has waived its claim regarding
certain models of arm-sleeves and gauntlets. The court accordingly dismisses these claims sua
sponte. The court will render judgment on the cross-motions for summary judgment in a
separate opinion, which will exclude those claims that the court dismisses here.
BACKGROUND
Plaintiff imported 105 entries of graduated compression merchandise into the United
States at the Port of Atlanta between September 2008 and November 2010. See Summons;
Statement of Material Facts as to Which no Genuine Issue Exists ¶ 2, Dec. 21, 2015, ECF No.
56-1 (“Pl. Facts”); Def.’s Resp. Pl.’s Statement of Material Facts as to Which No Genuine Issues
Exists ¶ 2, Mar. 10, 2016, ECF No. 61 (“Def. Facts Resp.”). The entries imported by Plaintiff
consist of graduated compression hosiery, arm-sleeves, and gauntlets. See Def.’s Statement of
Undisputed Material Facts ¶ 1, Mar. 10, 2016, ECF No. 61 (“Def. Facts”); see also Pl.’s Resp.
Def.’s Statement of Undisputed Material Facts ¶ 1, June 1, 2016, ECF No. 66-1 (“Pl. Facts
Resp.”). Each product is designed to apply a fixed range of graduated compression measured in
millimeters of mercury (“mmHg”). See Def. Facts ¶ 3; Pl. Facts Resp. ¶ 3.
Court No. 11-00532 Page 3
Plaintiff imported various models of its graduated compression products, each differing
in style, material, length, and compression level. See Def. Facts ¶¶ 1–8; Pl. Facts Resp. ¶¶ 1–8.
The graduated compression hosiery at issue includes models from the following product lines:
120 Support Therapy Sheer Fashion Series for women (“Series 120”),2 145 Support Therapy
Classic Dress Series for women (“Series 145”), 180 Support Therapy Classic Ribbed Series for
men (“Series 180”), 185 Support Therapy Classic Dress Series for men (“Series 185”), 400
Sports Performance Series (“Series 400”), 500 Medical Therapy Natural Rubber Series (“Series
500”), and 900 Medical Therapy Traditional Series (“Series 900”). Plaintiff’s product catalogue
indicates that Series 120, 145, 180, and 185 models exert 15–20 mmHg of compression, see Pl.
Exs. Rule 56.3 Statement of Facts and Mem. Ex. A at 000029–30, 000035–36, Dec. 21, 2015,
ECF No. 56-4 (“Ex. A”). Plaintiff alleges that Series 400, 500, and 900 models apply
compression of 20 mmHg or greater. See Letter in Resp. to Information Requested 3–4, Nov. 8,
2016, ECF No. 75 (“Pl. Letter”). The graduated compression arm-sleeves and gauntlets involved
in this matter include models from the 500 Medical Therapy Natural Rubber Series (“Series 500
arm-sleeves and gauntlets”)3 and 900 Medical Therapy Traditional Series (“Series 900 arm-
sleeves and gauntlets”).4 Series 500 arm-sleeves and gauntlets exert 30–40 mmHg of
2
Series 120 is available in the following varieties: 120P (pantyhose), 120M (maternity
pantyhose), 120N (thigh-high hosiery), 120C (calf-length hosiery), and 120CO (calf-length
hosiery with open toe). See Def. Facts ¶ 5.
3
Series 500 arm-Sleeves and gauntlets are available in the following varieties: 503A (arm-sleeve
without gauntlet), 503B (arm-sleeve with gauntlet), 503Gs2 (separate gauntlet), and 503GM2
(separate gauntlet). See Def. Facts ¶ 8.
4
Series 900 arm-sleeves and gauntlets are available in the following varieties: 901B11 (arm-
sleeve with gauntlet at 20–30 mmHg), 902B11 (arm-sleeve with gauntlet at 30–40 mmHg),
(footnote continued)
Court No. 11-00532 Page 4
compression and Series 900 arm-sleeves and gauntlets are available in models with either 20–30
mmHg or 30–40 mmHg of compression. See Ex. A at 000025–26.
Customs classified and liquidated the graduated compression merchandise under various
provisions of the Harmonized Tariff Schedule of the United States (2010) (“HTSUS”) as
follows: (1) the graduated compression hosiery at a duty rate of 14.6% ad valorem under HTSUS
subheading 6115.10.40 or duty free under HTSUS subheading 6115.10.05; (2) the graduated
compression arm-sleeves under HTSUS subheading 6307.90.98 dutiable at 7% ad valorem; and
(3) the graduated compression gauntlets under HTSUS subheading 6116.93.88 dutiable at 18.6%
ad valorem. See Pl. Facts ¶ 3; Def. Facts Resp. ¶ 3; see also Summons. Plaintiff filed nine
protests that challenged Customs’ classification of several models of graduated compression
merchandise. See Protest Nos. 1704-10-100013, -10-100018, -10-100068, -10-100240, -10-
100258, -11-100057, -11-100189, -11-100352, -11-100414. Plaintiff’s protests sought, inter
alia, to have Customs classify all of the merchandise duty free under HTSUS subheading
9817.00.96 as “[a]rticles specially designed or adapted for the use or benefit of the blind or other
physically or mentally handicapped persons,” or alternatively to classify the compression hosiery
as duty free under HTSUS subheading 6115.10.05 as “[s]urgical panty home [sic] and surgical
stockings with graduated compression for orthopedic treatment.” See, e.g., Protest No. 1704-10-
100018. Plaintiff’s protests were deemed denied on December 12, 2011.5
901A11 (arm-sleeve without gauntlet at 20–30 mmHg), 902A11 (arm-sleeve without gauntlet at
30–40 mmHg), and 902A11+size/S (arm-sleeve with grip-top at 30–40 mmHg). See Ex. A at
000026.
5
By statute, “a protest which has not been allowed or denied in whole or in part within thirty
(footnote continued)
Court No. 11-00532 Page 5
On December 22, 2011, Plaintiff commenced its action to contest the denial of its
protests, invoking the court’s jurisdiction under 28 U.S.C. § 1581(a). See Summons. Plaintiff’s
complaint alleged that Customs misclassified several models of graduated compression
merchandise and improperly denied the protests. See Compl. ¶¶ 32–66. Plaintiff moved for
summary judgment contending that certain models of graduated compression hosiery, arm-
sleeves, and gauntlets were entitled to duty free treatment under HTSUS subheading 9817.00.96.
See Mem. Sigvaris, Inc., Supp. Pl.’s Mot. Summ. J. 3–21, Dec. 21, 2015, ECF No. 56-2 (“Pl.
Br.”). The motion contended alternatively that models of compression hosiery applying
compression of 20 mmHg or greater were classified under HTSUS subheading 6115.10.05 and
not subject to duties. See id. at 21–24. Defendant filed a cross-motion for summary judgment
arguing that the models of compression hosiery, arm-sleeves, and gauntlets were properly
classified under HTSUS subheadings 6115.10.40, 6307.90.98, and 6116.93.88, respectively. See
Def.’s Mem. Supp. Cross-Mot. Summ. J. 5–21, Mar. 10, 2016, ECF No. 61 (“Def. Br.”).
In a letter dated November 2, 2016, the court informed the Parties of potential
jurisdictional issues that might prevent the court from ruling on the classification of certain
models of graduated compression merchandise, namely Series 180 hosiery, models of hosiery
that apply pressure of 20 mmHg or greater, and Series 900 arm-sleeves and gauntlets. See
Letter, Nov. 3, 2016, ECF No. 74. The court questioned jurisdiction because the record before
the court did not establish that Plaintiff protested Customs’ classification of these specific
days following . . . a request for accelerated disposition shall be deemed denied on the thirtieth
day following mailing of such request.” 19 U.S.C. § 1515(b) (2006); see also 19 C.F.R. § 174.22
(2011).
Court No. 11-00532 Page 6
models, which is a prerequisite to filing a classification lawsuit. See id. at 1–2. The court
requested clarification of whether the entries included these models of graduated compression
merchandise and whether Customs’ classification of such models was properly protested. See id.
In response to the court’s request, Plaintiff averred that the subject entries included the
models in question and that the denied protests challenged Customs’ classification of these
products. See Pl. Letter 1–4. Plaintiff also stated that graduated compression hosiery with
compression of 20 mmHg or greater refers to Series 400, 500, and 900 models of compression
hosiery. See id. at 3–4. Defendant responded that 28 U.S.C. § 1581(a) does not provide the
court with jurisdiction over these classification claims because, “[w]hile . . . the entries identified
on the exhibits to Sigvaris’s response to the Court’s Letter contain series 180 compression
hosiery, 900 series arm-sleeves, and hosiery products of greater than 20 mmHg of compression,
Sigvaris never protested the classification of such product models.” See Def.’s Resp. Court’s
Nov. 2, 2016 Letter 1–6, Nov. 10, 2016, ECF No. 78 (“Def. Resp.”). Defendant noted that
Plaintiff’s complaint, responses to written discovery requests, and motion for summary judgment
failed to articulate that the classification of these specific models were at dispute in the cross-
motions for summary judgment. See id. at 6–13. Plaintiff rejected Defendant’s assertions as
“unfounded and erroneous” because Plaintiff purportedly filed valid protests that challenged
Customs’ classification of the merchandise and timely filed a summons to contest the denials of
these protests. See Pl.’s Reply Def.’s Resp. Pursuant Court’s Nov. 10, 2016 Letter 2–10, Nov.
14, 2016, ECF No. 80 (“Pl. Reply”).
Court No. 11-00532 Page 7
DISCUSSION
A. Jurisdictional Framework
The U.S. Court of International Trade, like all federal courts, is one of limited jurisdiction
and is “presumed to be ‘without jurisdiction’ unless ‘the contrary appears affirmatively from the
record.’” DaimlerChrysler Corp. v. United States, 442 F.3d 1313, 1318 (Fed. Cir. 2006)
(quoting King Iron Bridge & Mfg. Co. v. Otoe Cty., 120 U.S. 225, 226 (1887)). The party
invoking jurisdiction must “allege sufficient facts to establish the court’s jurisdiction”
independently for each claim asserted, id. at 1318–19 (citing McNutt v. Gen. Motors Acceptance
Corp. of Ind., 298 U.S. 178, 189 (1936)), and therefore “bears the burden of establishing it.”
Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1355 (Fed. Cir. 2006). A court may and
should raise the question of its jurisdiction sua sponte any time it appears in doubt. Arctic
Corner, Inc. v. United States, 845 F.2d 999, 1000 (Fed. Cir. 1988) (citation omitted); see also
USCIT R. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction,
the court must dismiss the action.”).
The U.S. Court of International Trade has “exclusive jurisdiction of any civil action
commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff
Act of 1930.” 28 U.S.C. § 1581(a). Jurisdiction under 28 U.S.C. § 1581(a) is conditioned upon
the denial of a protest challenging a decision made by Customs that is filed in accordance with
Court No. 11-00532 Page 8
Section 1514 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1514 (2006).6 The following
Customs decisions are protestable:
[A]ny clerical error, mistake of fact, or other inadvertence, whether or not
resulting from or contained in an electronic transmission, adverse to the importer,
in any entry, liquidation, or reliquidation, and, decisions of the Customs Service,
including the legality of all orders and findings entering into the same, as to--
(1) the appraised value of merchandise;
(2) the classification and rate and amount of duties chargeable;
(3) all charges or exactions of whatever character within the
jurisdiction of the Secretary of the Treasury;
(4) the exclusion of merchandise from entry or delivery or a
demand for redelivery to customs custody under any provision of
the customs laws, except a determination appealable under section
1337 of this title;
(5) the liquidation or reliquidation of an entry, or reconciliation as
to the issues contained therein, or any modification thereof,
including the liquidation of an entry, pursuant to either section
1500 of this title or section 1504 of this title;
(6) the refusal to pay a claim for drawback; or
(7) the refusal to reliquidate an entry under subsection (d) of
section 1520 of this title.
19 U.S.C. § 1514(a). A protest must satisfy statutory and regulatory requirements regarding
form and content.7 See 19 U.S.C. § 1514(c); 19 C.F.R. § 174.13(a). Once a valid protest is filed,
6
Further citations to the Tariff Act of 1930, as amended, are to the relevant provision under Title
19 of the U.S. Code, 2006 edition.
7
According to 19 U.S.C. § 1514(c)(1),
[a] protest must set forth distinctly and specifically--
(A) each decision described in subsection (a) of this section as to which protest is
made;
(B) each category of merchandise affected by each decision set forth under
paragraph (1);
(C) the nature of each objection and the reasons therefore; and
(D) any other matter required by the Secretary by regulation.
(footnote continued)
Court No. 11-00532 Page 9
Customs must timely review the protest and determine whether to grant or deny the protest in
whole or in part. 19 U.S.C. § 1515(a). If an importer does not avail itself of the protest process,
the decision made by Customs “shall be final and conclusive upon all persons,” 19 U.S.C.
§ 1514(a), and judicial review is statutorily precluded. See 28 U.S.C. § 1581(a); see also
Hartford Fire Ins. Co. v. United States, 544 F.3d 1289, 1292 (Fed. Cir. 2008).
B. Plaintiff’s Protests Before Customs
Plaintiff contends that the court has jurisdiction pursuant to 28 U.S.C. § 1581(a) to rule
on the classification of the imported models of compression products. See Compl. ¶ 2. The
court has jurisdiction pursuant to § 1581(a) only over claims previously subject to protest.
Each of Plaintiff’s protests included a completed protest form and an attached supporting
memorandum of points and authorities.8 See, e.g., Protest No. 1704-10-100018. Plaintiff
provided the reasons for its protests as follows:
Decision Protested: Classification of graduated compression hosiery under HTS
subheading 6115.10. Classification of compression arm sleeves under HTS
subheading 6307.90.9889. Classification of compression gauntlets under HTS
subheading 6116.93.99. Assessment of duty on products pursuant to these
subheadings.
Protest Claim: The merchandise is properly classifiable under HTS subheading
9817.00.96 as articles specially designed for the use of the blind or physically
19 U.S.C. § 1514(c)(1). The implementing regulation further clarifies that a protest must
include, among other requirements, “[a] specific description of the merchandise affected by the
decision as to which protest is made” and “[t]he nature of, and justification for the objection set
forth distinctly and specifically with respect to each category, payment, claim, decision, or
refusal.” 19 C.F.R. § 174.13(a)(5)–(6).
8
Per regulation, “[a] written protest against a decision of CBP must be filed in quadruplicate on
CBP Form 19 or a form of the same size clearly labeled ‘Protest’ and setting forth the same
content in its entirety, in the same order, addressed to CBP. All schedules or other attachments
to a protest (other than samples or similar exhibits) must also be filed in quadruplicate.” 19
C.F.R. § 174.12(b).
Court No. 11-00532 Page 10
handicapped, entitled to duty free entry, or, alternatively under HTS subheading
6115.10.05, duty free.
Reasons in Support of Protest: A Memorandum of Points and Authorities is
attached.
See, e.g., id.9 The protests indicated that the categories of merchandise subject to protest were
graduated compression hosiery, arm-sleeves, and gauntlets.
Plaintiff attached a memorandum to supplement each of its protests. See, e.g., id. at
Attach. Mem. P. & A. in Supp. Protest (“Suppl. Memo”).10 Each memorandum specified which
models of graduated compression hosiery, arm-sleeves, and gauntlets were subject to protest.
For hosiery, the memorandum specified that the goods at issue consisted of the following styles
of graduated compression hosiery:
SIGVARIS Support Therapy, Sheer Fashion graduated support
pantyhose (Model 120P) n sizes A, B, C, D, E and F and in colors
00, 10, 12, 29, 33, 36, 41, 73 and 99;
SIGVARIS Support Therapy, Sheer Fashion graduated support
Maternity Panty hose (Model 120M in sizes A, B, C, D, E and in
colors 33, 36, and 99;
SIGVARIS Support Therapy, Sheer Fashion graduated support
Thigh-High hosiery (Model 120N) in sizes A, B, C and in colors
00, 10, 12, 29, 33, 36, 41, 73, and 99;
SIGVARIS Support Therapy, Sheer Fashion graduated support
Calf-length hosiery (Model 120C) in sizes A, B, C and in colors
00, 10, 12, 29, 33, 36, 41, 73, and 99
SIGVARIS Support Therapy, Sheer Fashion graduated support
Calf length open toe hosiery (Model 120CO) in sizes A, B, C and
in colors 29, 33 and 36.
9
A number of Plaintiff’s protests forms additionally protested Customs’ classification of “cloth
accessories for compression hosiery under HTS subheading 6117.90.9090” and “compression
braces, garters under 6212.90.0030,” see Protest Nos. 1704-11-100189, -11-100352, -11-100414,
however, these products are not involved in this action.
10
The memoranda attached to each of Plaintiff’s protest are virtually identical. For ease of
reference, the court will cite to the memorandum attached to Protest Number 1704-10-100018.
Court No. 11-00532 Page 11
SIGVARIS Support Therapy, Classic Dress graduated support
sock for women (145C) in sizes A, B, C and in colors 00, 10, 12,
30 and 99;
SIGVARIS Support Therapy, Classic Dress graduated support
sock for men (185C) in sizes A, B, and C and colors 00, 10, 11, 12,
30, and 99.
See id. at 2–3 (emphases added). The memorandum clarified that the protest involved models of
graduated compression hosiery that exert between 15 and 20 mmHg of compression. See id. at
1, 3, 5–6. For arm-sleeves and gauntlets, the memorandum specified that the goods at issue
consisted of the following eight styles of graduated compression arm-sleeves and gauntlets:
SIGVARIS Medical Therapy, Natural Rubber Armsleeve with
gauntlet (503B) in sizes S1, S2, M1, M2, L1 and L2 in color beige;
SIGVARIS Medical Therapy, Natural Rubber Armsleeve without
gauntlet (503A) in sizes S1, S2, M1, M2, L1 and L2 in color beige
SIGVARIS Medical Therapy, Separate gauntlet (503Gs2 and
503GM2) in color beige
...
SIGVARIS Medical Therapy, Traditional Series Armsleeve (20-30
mmHg) with gauntlet (901B11) in sizes 1S, 2S, 1M, 2M, 1L, 2L in
color beige
SIGVARIS Medical Therapy, Traditional Series Armsleeve (30-40
mmHg) with gauntlet (902B11) in sizes 1S, 2S, 1M, 2M, 1L, 2L in
color beige
SIGVARIS Medical Therapy, Traditional Series Armsleeve (20-30
mmHg) without gauntlet (901A11) in sizes 1S, 2S, 1M, 2M, 1L,
2L in color beige
SIGVARIS Medical Therapy, Traditional Series Armsleeve (30-40
mmHg) without gauntlet (902A11) in sizes 1S, 2S, 1M, 2M, 1L,
2L in color beige
SIGVARIS Medical Therapy, Traditional Series Armsleeve (30-40
mmHg) with grip-top (902A11–size/S) in sizes 1S, 2S, 1M, 2M,
1L, 2L in color beige
Court No. 11-00532 Page 12
See id. at 3–4 (emphases added). The remainder of the memorandum set forth the reasons in
support of classifying these models of compression products under HTSUS subheading
9817.00.96.
C. Jurisdiction Over Plaintiff’s Classification Claims
Plaintiff’s complaint states that it seeks “judicial review of CBP’s denial of Plaintiff’s
protests concerning the classification . . . of certain graduated compression accessories.” Compl.
¶ 1. The complaint alleges that the merchandise in this action “consists of two principal classes
of graduated compression accessories: (a) hosiery; and (b) sleeves, worn on the arms, and
gauntlets, worn on the hands.” Compl. ¶ 5. Plaintiff’s primary claim is that the subject
graduated compression hosiery, arm-sleeves, and gauntlets are properly classified under HTSUS
subheading 9817.00.96. See Compl. ¶¶ 39–66. The complaint does not define, however, the
entire universe of product models captured by the references to “subject graduated compression
hosiery” and “subject graduated compression sleeves and gauntlets.” Id. Plaintiff’s subsequent
filings with the court clarify that “subject graduated compression hosiery” refers to Series 120,
145, 180, 185, 400, 500, and 900 models of hosiery and that “subject graduated compression
sleeves and gauntlets” refer to Series 500 and 900 arm-sleeves and gauntlets. See Compl. ¶¶ 7,
22; Pl. Facts ¶ 5; Pl. Facts Resp. ¶ 8; Pl. Letter 1–4.
As explained below, the court finds that § 1581(a) does not provide the court with subject
matter jurisdiction to hear Plaintiff’s classification claim insofar as it includes Series 180, 400,
500, and 900 graduated compression hosiery, and that Plaintiff waived its classification claim
with respect to Series 900 arm-sleeves and gauntlets during the course of this action.
Court No. 11-00532 Page 13
a. Graduated Compression Hosiery
The court does not have jurisdiction pursuant to 28 U.S.C. § 1581(a) to rule on the
classification of Series 180, 400, 500, and 900 graduated compression hosiery. Plaintiff submits
that it protested Customs’ classification of Series 120, 145, 180, 185, 400, 500, and 900 models
of graduated compression hosiery. See Pl. Reply 1–8. Upon reviewing the protests and
supporting memoranda submitted by Plaintiff, it is clear that Plaintiff only protested certain
models of graduated compression hosiery, which did not include Series 180, 400, 500, and 900
hosiery. See Suppl. Memo 2–3 (itemizing the hosiery products subject to protest). Plaintiff also
made it clear that the protests only concerned compression hosiery that applies 15–20 mmHg of
compression, but Plaintiff represents that Series 400, 500, and 900 hosiery apply greater than 20
mmHg of compression. See id. at 1 (“protests the decision of the Port Director of Customs to
classify imported compression hosiery, having a compression of between 15 and 20 millimeters
of mercury (mmHg)”), 5 (“this protest focuses on hosiery having a compression range of
between 15–20 mmHg”), 6 (“[a]t issue is the classification of the subject merchandise in the 15–
20 mmHg range”). Plaintiff’s complaint acknowledges that “[h]osiery having higher
compression (20 mmHg or more) . . . are not involved.” Compl. ¶ 19. Plaintiff’s motion for
summary judgment nevertheless attempts to claim that Customs misclassified hosiery that
applies compression of 20 mmHg or greater. See Pl. Br. 21–24.
A review of the protest documentation confirms that Plaintiff sufficiently challenged
Customs’ classification of Series 120, 145, and 185 graduated compression hosiery, but failed to
challenge the classification of Series 180, 400, 500, and 900 hosiery models. Because of this
jurisdictional failure, Customs’ classification of Series 180, 400, 500, and 900 hosiery became
Court No. 11-00532 Page 14
final and conclusive. See 19 U.S.C. § 1514(a). The court does not have jurisdiction, therefore,
over Plaintiff’s claim concerning the classification of the models of graduated compression
hosiery in Series 180, 400, 500, and 900.
Plaintiff argues that denying jurisdiction “‘is a severe action which should be taken only
sparingly.’” Pl. Reply 5 (quoting XL Specialty Ins. Co. v. United States, 21 CIT 858, 867
(2004)). Congress has expressly limited the court’s jurisdiction to the issues preserved for
appeal in a protest that is subsequently denied, and the court’s jurisdiction is confined to the
objections made in such a protest. Plaintiff itemized each model of merchandise it wished to
protest, yet failed to challenge the classification of Series 180, 400, 500, and 900 graduated
compression hosiery. Plaintiff was required to make such a challenge at the time of its initial
protests to preserve its right to appeal. See Computime, Inc. v. United States, 8 CIT 259, 261,
601 F. Supp. 1029, 1030 (1984) (“If plaintiff could have made such protests at that time, it was
required to make them.”), aff’d 772 F.2d 874 (Fed. Cir. 1985). Plaintiff does not provide any
reason for why it could not have challenged Customs’ classification of these models of graduated
compression hosiery at the time of its original protests. The court recognizes that dismissal for
lack of jurisdiction is a severe consequence. “[H]owever, the [jurisdictional] requirements are
straightforward and not difficult to satisfy.” Koike Aronson, Inc. v. United States, 165 F.3d 906,
909 (Fed. Cir. 1999).
Defendant asserts that the court cannot exercise jurisdiction over an additional aspect of
Plaintiff’s classification claim in this action. Plaintiff claims that the imported models of
graduated compression hosiery are properly classified under HTSUS subheading 9817.00.96,
which encompasses hosiery that was classified by Customs under HTSUS subheading
Court No. 11-00532 Page 15
6115.10.05 and 6115.10.40. Defendant questions the court’s jurisdiction over this claim to the
extent that it includes hosiery classified under HTSUS subheading 6115.10.05. Defendant
argues that this aspect of Plaintiff’s claim does not present a justiciable controversy given that
HTSUS subheading 6115.10.05 and 9817.00.96 are both duty free provisions. See Def. Br. 2
n.3; Def. Resp. 5–6. Under Article III of the Constitution, the Court is only empowered to
decide claims that present live cases or controversies. See U.S. Parole Comm’n v. Geraghty, 445
U.S. 388, 395 (1988); Flast v. Cohen, 392 U.S. 83, 94 (1968). Generally, a classification dispute
concerning two tariff provisions with the same duty rate is a moot issue and does not constitute a
justiciable controversy because there is no monetary harm or injury resulting from Customs’
classification. See 3V, Inc. v. United States, 23 CIT 1047, 1048–1052, 83 F. Supp. 2d 1351,
1352–55 (1999) (dismissing an action for failing to meet the Article III case or controversy
requirement because the two putative classification provisions carried the same duty rate). The
fact that the competing tariff provisions in this case are duty free does not render Plaintiff’s claim
moot here. Plaintiff’s claim presents a justiciable controversy because, unlike HTSUS
subheading 6115.10.05, merchandise classified under HTSUS subheading 9817.00.96 is exempt
from certain merchandise processing fees. See 19 C.F.R. § 24.23(c)(1)(i). Merchandise
classified under HTSUS subheading 6115.10.05 is not afforded such treatment.11 The
government would be required to refund the assessed merchandise processing fees if Plaintiff
were to prevail on this claim. Because Plaintiff’s claim alleges monetary harm resulting from
Customs’ classification, the Article III case or controversy requirement is satisfied.
11
The entry papers indicate that merchandise classified under HTSUS subheading 6115.10.05
was subject to a 0.21% ad valorem merchandise processing fee. See Entries.
Court No. 11-00532 Page 16
The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) over Plaintiff’s classification
claim regarding Series 120, 145, and 185 models of graduated compression hosiery that were
classified under HTSUS subheadings 6115.10.05 and 6115.10.40.
b. Graduated Compression Arm-Sleeves and Gauntlets
Plaintiff established the basis for the court’s jurisdiction pursuant to 28 U.S.C. § 1581(a)
by protesting Customs’ classification of Series 500 and 900 arm-sleeves and gauntlets. The
depositions conducted during discovery, Plaintiff’s responses to Defendant’s interrogatories, and
Plaintiff’s motion for summary judgment demonstrate, however, that Plaintiff has waived its
classification claim with respect to Series 900 arm-sleeves and gauntlets.
While initial pleadings are designed to “give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests,” Bell Atlantic v. Twombly, 550 U.S. 544, 545
(2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)), it is the information obtained during
discovery that reveals the true nature of the claims and fills in the details of the dispute. See
Hickman v. Taylor, 329 U.S. 495, 500–01 (1947) (discussing the interplay between pleadings
and the pre-trial discovery tools under Rules 26 to 37); see also United States v. Procter &
Gamble Co., 356 U.S. 677, 682–83 (1958). The third count in Plaintiff’s complaint can be
construed to include a claim regarding the classification of both Series 500 and 900 arm-sleeves
and gauntlets.12 There is no reference to Series 900 arm-sleeves and gauntlets in the three
depositions conducted during discovery. See Def.’s Cross-Mot. Summ. J. Ex. C–E, Mar. 10,
12
The third count in Plaintiff’s complaint alleges that it is entitled to relief because “[t]he subject
graduated compression sleeves and gauntlets” are properly classified under HTSUS subheading
9817.00.96. Compl. ¶¶ 53–66.
Court No. 11-00532 Page 17
2016, ECF Nos. 61-3–5. Plaintiff was asked to clarify through written discovery which models
of arm-sleeves and gauntlets were subject to this action:
(a) Please correlate, precisely and specifically, each and every invoice description
of the goods in issue with the catalog description of each such article, as that
article was sold in the United States during the time of the entries in issue in
this case.
Pl.’s First Set of Discovery Responses to Def. 12, Mar. 10, 2016, ECF No. 61–1 (“Pl.
Interrogatory Resps.”). Plaintiff provided the following response:
Invoice Description Catalog Description
503 CL.2 ARMSLEEVE WO.MITTEN A ... Natural Rubber Armsleeve,
without gauntlet
503 CL.2 ARMSLEEVE W. MITTEN B ... Natural Rubber Armsleeve,
with gauntlet
MITTEN G ... Natural Rubber Armsleeve,
separate gauntlet
Pl. Interrogatory Resps. 12–13. Plaintiff was asked to “produce each and every document,
catalog, brochure and/or specification that relates to your response to subpart (a), above.” See
Pl. Interrogatory Resps. 13. Plaintiff responded by referring to the page in its catalogue that
provides product information for Series 500 arm-sleeves and gauntlets. See id. Notably absent
from Plaintiff’s interrogatory responses are any references to models of Series 900 arm-sleeves
and gauntlets. The court must presume that Plaintiff’s answers to Defendant’s interrogatories
were complete. See Hickman, 329 U.S. at 509. By failing to include Series 900 arm-sleeves and
gauntlets in the depositions and interrogatory responses, the court must conclude that Plaintiff
waived its claim with respect to such merchandise.
The absence of any reference to Series 900 arm-sleeves and gauntlets in Plaintiff’s
submissions in connection with its motion for summary judgment also supports that Plaintiff
Court No. 11-00532 Page 18
waived its classification claim regarding such models of arm-sleeves and gauntlets. It is “well
established that arguments not raised in the opening brief are waived.” SmithKline Beecham
Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006) (citing Cross Med. Prods., Inc. v.
Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1320–21 n.3 (Fed. Cir. 2005); see also
Novosteel SA v. United States, 284 F.3d 1261, 1273–74 (Fed. Cir. 2002). In its USCIT Rule
56.3 statement of facts, Plaintiff states that the merchandise subject to this action “include[s]
Series 120, 145, 180, and 185 in compression hosiery, and Series 500 arm compression sleeves.”
Pl. Facts ¶ 5. Plaintiff’s motion for summary judgment does not refer to specific models of
graduated compression arm-sleeves and gauntlets. Nothing in Plaintiff’s statement of facts or
opening brief evinces that Customs’ classification of Series 900 arm-sleeves and gauntlets is at
issue. The only direct references to Series 900 arm-sleeves and gauntlets in this action are found
in documents submitted after Plaintiff filed its opening brief. See Pl. Facts Resp. ¶ 8; Pl. Letter
2; Pl. Reply 4. The court concludes that Plaintiff’s failure to include Series 900 arm-sleeves and
gauntlets in its motion, pleadings, and discovery responses constituted a waiver of its
classification claim for those models of merchandise.
CONCLUSION
For the foregoing reasons, (1) the court lacks subject matter jurisdiction over Plaintiff’s
claim concerning the classification of Series 180, 400, 500, and 900 graduated compression
hosiery, and (2) Plaintiff has waived its claim with respect to the classification of Series 900
arm-sleeves and gauntlets. Plaintiff’s classification claims regarding these models of
merchandise are dismissed. The graduated compression products that remain subject to this
Court No. 11-00532 Page 19
action are Series 120, 145, and 185 models of graduated compression hosiery and Series 500
arm-sleeves and gauntlets.
Judgment on the dismissed classification claims will be entered accordingly.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: February 28, 2017
New York, New York