Kent Int'l, Inc. v. United States

Slip Op 19 - 85
UNITED STATES COURT OF INTERNATIONAL TRADE
KENT INTERNATIONAL, INC.,
Plaintiff, Before: Leo M. Gordon, Judge
v.
Court No. 15-00135
UNITED STATES,
Defendant.
OPINION and ORDER
[Plaintiff’s motion for partial summary judgment denied; Defendant’s motion for partial
summary judgment granted.]
Dated: July 9, 2019
Philip Yale Simons and Jerry P. Wiskin, Simons & Wiskin of South Amboy, NJ for
Plaintiff Kent International, Inc.
Monica P. Triana, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of New York, NY, for Defendant United States. With her on the
brief were Joseph H. Hunt, Assistant Attorney General, Amy M. Rubin, Assistant Director.
Of counsel on the brief was Yelena Slepak, Office of Assistant Chief Counsel,
International Trade Litigation, U.S. Customs and Border Protection of New York, NY.
Gordon, Judge: Plaintiff Kent International, Inc. (“Kent”) challenges the
classification by U.S. Customs and Border Protection (“Customs”) of Kent’s entries of the
imported “WeeRide Kangaroo Ltd. Center-Mounted Bicycle-Child Carrier” (“WeeRide
Carrier” or “subject merchandise”) under the Harmonized Tariff Schedule of the United
States (“HTSUS”). Before the court are cross-motions for summary judgment. See Pl.’s
Mot. for Partial Summ. J., ECF No. 37 (“Pl.’s Br.”); Def.’s Cross-Mot. for Partial Summ. J.
and Opp. to Pl.’s Mot. for Partial Summ. J., ECF No. 38 (“Def.’s Br.”); see also Pl.’s Resp.
to Def.’s Cross-Mot. for Partial Summ. J., ECF No. 41 (“Pl.’s Resp.”); Def.’s Reply in Supp.
Court No. 15-00135 Page 2
of Cross-Mot. for Partial Summ. J., ECF No. 42 (“Def.’s Reply”). Customs classified the
subject merchandise as “Parts and accessories of vehicles of heading 8711 to 8713: . . .
Other: . . . Other” under HTSUS subheading 8714.99.80, at a 10% duty rate. Plaintiff
claims that the subject merchandise is properly classified as “Seats (other than those
of heading 9402), whether or not convertible into beds, and parts thereof: … Other seats:
Of rubber or plastics: … Other” under HTSUS subheading 9401.80.40, at a 0% duty rate.
The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2012). For the reasons set
forth below, Plaintiff’s motion for partial summary judgment is denied, and Defendant’s
cross-motion for partial summary judgment is granted.
I. Undisputed Facts
The following facts are not in dispute. See generally Plaintiff’s Statement
of Material Facts Not in Dispute, ECF 37-1 (“Pl.’s Facts Stmt.”); Defendant’s Response
to Plaintiff’s Statement of Material Facts, ECF 38-3 (“Def.’s Resp. to Facts”); Defendant’s
Statement of Undisputed Material Facts, ECF 38-2 (“Def.’s Facts Stmt.”); Plaintiff’s
Response to Defendant’s Statement of Undisputed Material Facts, ECF 41-1 (“Pl.’s Resp.
to Facts”). The merchandise at issue is Plaintiff’s WeeRide Carrier. Def.’s Facts Stmt. ¶
1; Pl.’s Resp. to Facts at 1. The sole purpose of the WeeRide Carrier is to allow a child
to ride on an adult’s bicycle, situated between the adult seat and the front handlebars.
Def.’s Facts Stmt. ¶¶ 2–3; Pl.’s Resp. to Facts at 2–3. The WeeRide Carrier attaches to a
bicycle via a supporting bar, which is attached to the handlebar and seat post of an adult
bicycle. Pl.’s Facts Stmt. ¶ 5; Def.’s Facts Stmt. ¶ 6; Def.’s Resp. to Facts at 2. Plaintiff’s
Court No. 15-00135 Page 3
website identifies the WeeRide Carrier as an “accessory.” Def.’s Facts Stmt. ¶ 21; Pl.’s
Resp. to Facts at 6.
II. Standard of Review
The court reviews Customs’ protest decisions de novo. 28 U.S.C. § 2640(a)(1).
USCIT Rule 56 permits summary judgment when “there is no genuine issue as to any
material fact.” USCIT R. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247 (1986). In considering whether material facts are in dispute, the evidence must be
considered in the light most favorable to the non-moving party, drawing all reasonable
inferences in its favor. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970);
Anderson, 477 U.S. at 261 n.2.
A classification decision involves two steps. The first step addresses the proper
meaning of the relevant tariff provisions, which is a question of law. See Faus Group, Inc.
v. United States, 581 F.3d 1369, 1371–72 (Fed. Cir. 2009) (citing Orlando Food Corp. v.
United States, 140 F.3d 1437, 1439 (Fed. Cir. 1998)). The second step involves
determining whether the merchandise at issue falls within a particular tariff provision as
construed, which, when disputed, is a question of fact. Id.
When there is no factual dispute regarding the merchandise, the resolution of the
classification issue turns on the first step, determining the proper meaning and scope
of the relevant tariff provisions. See Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378
(Fed. Cir. 1999); Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365–66 (Fed.
Cir. 1998). This is such a case, and summary judgment is appropriate. See Bausch &
Lomb, 148 F.3d at 1365–66.
Court No. 15-00135 Page 4
III. Discussion
Classification disputes under the HTSUS are resolved by reference to the General
Rules of Interpretation (“GRIs”) and the Additional U.S. Rules of Interpretation. See Carl
Zeiss, 195 F.3d at 1379. The GRIs are applied in numerical order. Id. Interpretation of the
HTSUS begins with the language of the tariff headings, subheadings, their section and
chapter notes, and may also be aided by the Explanatory Notes (“ENs”) published by the
World Customs Organization. Id. Under GRI 1, classification is determined by “the terms
of the headings and any relevant section or chapter notes.” Avenues in Leather, Inc. v.
United States, 423 F.3d 1326, 1333 (Fed. Cir. 2005). The HTSUS section and chapter
notes “are not optional interpretive rules, but are statutory law . . . .” Id. “GRI 1 is
paramount. . . . The HTSUS is designed so that most classification questions can be
answered by GRI 1 . . . . The headings and relevant notes are to be exhausted before
inquiries, such as those of GRI 3, are considered . . . .” Telebrands Corp. v. United States,
36 CIT ___, ___, 865 F. Supp. 2d 1277, 1280 (2012).
Under GRI 1, merchandise that is described “in whole by a single classification
heading or subheading” is classifiable under that heading or subheading. CamelBak
Prods. LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 2011). If that single
classification applies, the succeeding GRIs are inoperative. Mita Copystar Am. v. United
States, 160 F.3d 710, 712 (Fed. Cir. 1998).
The court construes a tariff term according to its common and commercial
meanings, and may rely on lexicographic authorities and its own understanding of the
term. See Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed. Cir. 2003).
Court No. 15-00135 Page 5
The court may also refer to ENs “accompanying a tariff subheading, which – although not
controlling – provide interpretive guidance.” E.T. Horn Co. v. United States, 367 F.3d
1326, 1329 (Fed. Cir. 2004) (citing Len-Ron, 334 F.3d at 1309).
The dispute before the court is whether Kent’s WeeRide Carrier is properly
classified under HTSUS heading 8714 as an accessory to a bicycle or heading 9401 as
a seat. The pertinent provisions of Chapters 87 and 94 of the HTSUS are as follows:
8714 Parts and accessories of vehicles of headings 8711 to
8713 …
8714.99 Other: …
8714.99.80 Other
…
9401 Seats (other than those of heading 9402), whether or
not convertible into beds, and parts thereof: …
9401.80 Other seats: …
9401.80.40 Other
HTSUS subheadings 8714.99.80, 9401.80.40. The subheadings are eo nomine
provisions meaning they “[d]escribe[ ] an article by a specific name, not by use.” Aromont
USA, Inc. v. United States, 671 F.3d 1310, 1312 (Fed. Cir. 2012) (citing CamelBak Prods.,
649 F.3d at 1364). An eo nomine provision covers all forms of the named article absent
limiting language or contrary legislative intent. Nidec Corp. v. United States, 68 F.3d 1333,
1336 (Fed. Cir. 1995).
Defendant argues that Customs correctly classified the WeeRide Carrier under
HTSUS heading 8714 that covers “[p]arts and accessories of vehicles of heading 8711
Court No. 15-00135 Page 6
to 8713,” which includes “[b]icycles and other cycles (including delivery tricycles), not
motorized . . .” under HTSUS heading 8712. See Def.’s Br. at 7–12. Defendant contends
that the WeeRide Carrier fits under heading 8714 because it is an “accessory” to a bicycle.
Id. at 8. Defendant further argues that the subject merchandise is an “accessory” under
heading 8714 in that an “accessory” is defined as “something extra; thing added help in
a secondary way; . . . a piece of optional equipment for convenience, comfort,
appearance, etc.” See id. at 7–8 (citing Webster’s New World Dictionary (3d. C. ed.
1988)). Defendant maintains that because the WeeRide Carrier allows a child to ride with
an adult on a bicycle, it is an accessory that adds “to the effectiveness and convenience”
of a bicycle by allowing two individuals to be transported at one time. Id. at 8.
Plaintiff acknowledges that the WeeRide Carrier is prima facie classifiable as an
accessory to a bicycle under subheading 8714.99.80. See Pl.’s Reply at 3. Despite this,
it argues that the subject merchandise is also prima facie classifiable under subheading
9401.80.40, a provision for seats that is more specific than the subheading for a bicycle
accessory. See Pl.’s Br. at 10–11. Plaintiff relies on Additional U.S. Rule of Interpretation
(“ARI”) 1(c) as support for its claim that the subject merchandise is classifiable as a “seat”
under heading 9401, rather than as a bicycle “accessory” under heading 8714. Pl.’s Br.
at 23. ARI 1(c) provides that “absent special language or context”:
(c) a provision for parts of an article covers products solely or
principally used as a part of such articles but a provision for
“parts and accessories” shall not prevail over a specific
provision for such part or accessory . . .
ARI 1(c).
Court No. 15-00135 Page 7
Plaintiff maintains that there is no special language or context that would require
the classification of the WeeRide Carrier as a bicycle accessory rather than the specific
provision for “seats” under heading 9401. Pl.’s Br. at 24. Plaintiff further contends that the
court must apply the relative specificity analysis under GRI 3(a) to resolve this
classification dispute. See Pl.’s Resp. at 3 (“GRI 1 does not determine the classification
of the WeeRide seats in issue. . . . GRI 3(a) provides that the most specific provision
is preferred over a more general provision.”). GRI 3 calls for a relative specificity analysis
when two goods are prima facie classifiable under two or more headings, and provides
that the heading with the most specific description shall be preferred.
Defendant responds that no relative specificity analysis is required as Note 1(h)
of Chapter 94 (“Note 1(h)”) prevents classification of the subject merchandise under
heading 9401. Def.’s Br. at 11. Note 1(h) states that “[t]his Chapter does not cover . . .
Articles of heading 8714 . . . .” Defendant argues that Note 1(h) provides “special
language or context” that renders ARI 1(c) inapplicable. Id. at 8–9. In Defendant’s view,
because Note 1(h) excludes “[a]rticles of heading 8714,” and the subject merchandise
is classifiable under that heading, it therefore cannot be classified under heading 9401.
Id. at 11.
Contrary to Defendant, Plaintiff maintains that Note 1(h) cannot apply to resolve
this classification dispute prior to the completion of a relative specificity analysis. See Pl.’s
Br. 25–29; Pl.’s Resp. 2–4. Plaintiff contends that Note 1(h) to Chapter 94 does not “come
into play unless and until a relative specificity analysis is performed.” Pl.’s Br. at 25–29
(citing Sharp Microelectronics Technology Inc. v. United States, 122 F.3d 1446 (Fed. Cir.
Court No. 15-00135 Page 8
1997), Bauer Nike Hockey USA v. United States, 393 F.3d 1246 (Fed. Cir. 2004), and
a footnote in ADC Telecommunications, Inc. v. United States, Court No. 13-00400, 39 CIT
___, 2017 WL 4708021 (Oct. 18, 2017), aff’d, 916 F.3d 1013 (2019)).
The court disagrees. While there is ample case law to support the preclusive effect
of an exclusionary note under GRI 1, Plaintiff fails to demonstrate that the court must
conduct a relative specificity analysis under GRI 3 prior to applying an exclusionary note.
As previously noted, under GRI 1, the court relies on headings and chapter notes
to classify merchandise. See Avenues in Leather, Inc., 423 F.3d at 1333. If Note 1(h)
is applicable, it would exclude the subject merchandise from classification under
Chapter 94. See, e.g., id., 423 F.3d at 1333–34 (“Note 1(h) to Chapter 48 states that the
Chapter does not cover ‘[a]rticles of heading 4202 (for example travel goods).’ Thus, if the
articles are prima facie classifiable under Heading 4202, then applying Note 1(h),
the articles are specifically excluded from classification under Heading 4820.”); Midwest
of Cannon Falls, Inc. v. United States, 122 F.3d 1423, 1429 (Fed. Cir. 1997) (“Note 2(ij)
to chapter 69 states that the chapter does not cover ‘Articles of chapter 95.’ Accordingly,
the issue here is whether the items at issue prima facie are classifiable under heading
9505. If so, then pursuant to note 2(ij), chapter 69, the items cannot fall under chapter 69
and must be classified under chapter 95.”), superseded on other grounds as stated in
WWRD US, LLC v. United States, 886 F.3d 1228 (Fed. Cir. 2018).
Plaintiff’s reliance on Sharp and Bauer to avoid the application of Note 1(h) under
GRI 1 is misplaced. In Sharp, the plaintiff argued that Customs incorrectly classified
certain glass cells under HTSUS heading 9013, and contended that the merchandise was
Court No. 15-00135 Page 9
properly classified under HTSUS subheading 8473.30.40. 122 F.3d at 1447–48.
The Government maintained that the classification dispute should be settled by
“Note 1(m) of Section XVI of the HTSUS, which provides that ‘[t]his section [which
includes chapter 84 and thus subheading 8473.30.40] does not cover ... Articles of
Chapter 90 [including subheading 9013.80.60].’” Id. at 1448. The Federal Circuit held that
Note 1(m) alone could not resolve the disputed classification because the precise
language of heading 9013 expressly required a relative specificity analysis. See 122 F.3d
at 1450. Sharp is inapplicable here as neither heading 8714 nor 9401 mandate a relative
specificity analysis.
In Bauer, the court resolved a dispute over hockey pants and whether they were
properly classified by Customs under HTSUS subheading 6211.33.00 or by the plaintiff
under subheading 9506.99.25. See 393 F.3d at 1248. The court noted that Note 1(t) of
Section XI to Chapter 62 excluded articles of Chapter 95 from being classified under
Chapter 62 and Note 1(e) to Chapter 95 excluded “sports clothing . . . of textiles,
of chapter 61 or 62.” Id., 393 F.3d at 1252 n.6. Due to these competing and mutually
exclusive exclusionary notes, the court used a relative specificity analysis to determine
the heading that provided the most specific description of the merchandise. Id. at 1252–
53. Unlike in Bauer, the resolution of the present classification dispute involves only one
exclusionary note, i.e., Note 1(h). Accordingly, Bauer is inapplicable.
ADC, however, is instructive. In ADC, there was a dispute about the classification
of the plaintiff’s fiber optic telecommunications network equipment as assessed
by Customs under subheading 9013.80.90 or as claimed by the plaintiff under
Court No. 15-00135 Page 10
subheading 8517.62.00. The plaintiff argued that the merchandise at issue was prima
facie classifiable under both headings and that the classification must be resolved under
GRI 3. See ADC, 39 CIT at ___, 2017 WL 4708021 at *6. The Government argued that
the court should resolve the classification under GRI 1 “because the plaintiff's optical
devices are excluded from chapter 85 by Note 1(m) to Section XVI (which covers chapter
85, HTSUS), which provides: ‘this section does not cover ... [a]rticles of Chapter 90.’” Id.
(citation omitted). The court agreed that the relative specificity test under GRI 3 was not
applicable, stating: “[s]imply put: as to which of chapter 90 and chapter 85 provides
the ‘more specific’ heading on an article's classification, there is no ‘comparison’ involved,
because Note 1(m) renders GRI 3 inapplicable.” Id. Consequently, the court determined
that the merchandise was classified under heading 9013. Id., 39 CIT at ___, 2017
WL 4708021 at *9.
The Court of Appeals affirmed, explaining:
We start with the language of the heading, looking to the
relevant section and chapter notes . . . . HTSUS Heading 8517
covers “[t]elephone sets, including telephones for cellular
networks or for other wireless networks” and “other apparatus
for the transmission or reception of voice, images or other
data . . . .” Chapter 85 of the HTSUS is contained in Section
XVI, and Note 1 to Section XVI provides that “[t]his section
does not cover . . . (m) [a]rticles of [C]hapter 90.” Therefore,
because the subject merchandise is classifiable in HTSUS
Heading 9013, which is found in Chapter 90, . . ., it is not
classifiable in Section XVI, in which HTSUS Heading 8517 is
found.
916 F.3d at 1023–24.
Court No. 15-00135 Page 11
As in ADC, the court here is faced with competing provisions where one heading
has a note excluding merchandise classifiable in the competing heading. Accordingly,
because the WeeRide Carrier is classifiable under heading 8714, see supra Section III.A,
the court determines that Note 1(h) excludes the subject merchandise from being
classified under heading 9401. 1
IV. Conclusion
For the foregoing reasons, the court concludes that Customs properly classified
the WeeRide Carrier under HTSUS subheading 8714.99.80. Accordingly, Plaintiff’s
motion for partial summary judgment is denied, and Defendant’s cross-motion for partial
summary judgment is granted. In view of the court’s decision, it is hereby
ORDERED that the parties shall consult regarding Counts 2 and 3 of Plaintiff’s
Complaint and shall file a proposed scheduling order on or before July 23, 2019 for the
disposition of those Counts.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: July 9, 2019
New York, New York
1 Because the court concludes that the subject merchandise is properly classified under
heading 8714 due to the application of Note 1(h) pursuant to GRI 1, the court does not
reach Plaintiff’s arguments relying on supplemental authorities that support classification
of the subject merchandise under Chapter 94 pursuant to GRI 3. See Pl.’s Br. at 12–24
(relying on, inter alia, the definition of “furniture” in Note 2 to Chapter 94; the ENs to
Chapter 87; and CBP’s Informed Compliance Publication on Vehicles, etc.).