Rkw Klerks Inc. v. United States

United States Court of Appeals
for the Federal Circuit
______________________
RKW KLERKS INC.,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2023-1210
______________________
Appeal from the United States Court of International
Trade in No. 1:20-cv-00001-MAB, Chief Judge Mark A.
Barnett.
______________________
Decided: March 7, 2024
______________________
P ATRICK CRAIG REED, Simons & Wiskin, New York, NY,
argued for plaintiff-appellant. Also represented by P HILIP
YALE SIMONS , J ERRY P. WISKIN, Manalapan, NJ.
L UKE MATHERS , Commercial Litigation Branch, Civil
Division, United States Department of Justice, New York,
NY, argued for defendant-appellee. Also represented by
BRIAN M. B OYNTON, AIMEE L EE , P ATRICIA M. MC CARTHY ,
J USTIN REINHART MILLER; F ARIHA K ABIR , Office of Assis-
tant Chief Counsel, Bureau of Customs and Border Protec-
tion, United States Department of Homeland Security,
New York, NY.
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RKW KLERKS INC. v. US 2
______________________
Before T ARANTO, CHEN, and CUNNINGHAM , Circuit Judges.
CHEN, Circuit Judge.
RKW Klerks Inc. (RKW) appeals the determination of
the United States Court of International Trade (CIT) that
the United States Customs and Border Protection (Cus-
toms) correctly classified RKW’s net wrap products in the
Harmonized Tariff Schedule of the United States (HTSUS).
RKW Klerks Inc. v. United States, 592 F. Supp. 3d 1349 (Ct.
Int’l Trade 2022) (CIT Decision). Because the CIT did not
err in determining that RKW’s net wraps are not a part of
harvesting or other agricultural machinery, we affirm.
BACKGROUND
RKW imports two types of net wrap, marketed as “Top
Net” and “Rondotex” (collectively, Netwraps). The
Netwraps are synthetic fabrics used to wrap round bales of
harvested crops released from baling machines such that
the bales maintain their compressed structure and are eas-
ier to transport. The Netwraps are made up of high-den-
sity polyethylene (HDPE) film layers that have been knit
on a Raschel machine and wrapped around a cardboard
core.
RKW is a subsidiary of RKW SE, a film producer that
manufactures materials such as shrink bottle wrap, pallet
stretch hoods, gardening and greenhouse films, trash bags,
and other packaging solutions. Neither RKW SE nor any
of its subsidiaries produce or sell any harvesting or agricul-
tural machinery.
At issue in this case is the proper classification of the
Netwraps in the HTSUS. Customs classified the Netwraps
under HTSUS Chapter 60 under subheading 6005.39.00 as
“warp knit fabric,” dutiable at the rate of 10% ad valorem.
The relevant portions of this chapter, which covers “knitted
or crocheted fabrics,” recite:
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RKW KLERKS INC. v. US 3
Chapter 60. Knitted or Crocheted Fabrics
6005: Warp knit fabrics (including those made on
galloon knitting machines), other than those of
headings 6001 and 6004:
6005.39 Of synthetic fibers:
6005.39.00 Other, printed
After Customs’s initial classification, RKW filed a pro-
test, which was deemed denied. RKW then appealed to the
CIT, filing a motion for summary judgment. The govern-
ment filed a cross-motion for summary judgment. In its
motion, RKW contended that the Netwraps should instead
be classified under Chapter 84, subheading 8433.90.50 as
“parts” of harvesting machinery or alternatively subhead-
ing 8436.99.00 as “parts” of other agricultural machinery.
The relevant portions of this chapter, which covers “nu-
clear reactors, boilers, machinery and mechanical appli-
ances; parts thereof,” recite:
Chapter 84. Nuclear Reactors, Boilers, Machinery
and Mechanical Appliances; Parts Thereof
8433: Harvesting or threshing machinery, includ-
ing straw or fodder balers; grass or hay mowers;
machines for cleaning, sorting or grading eggs,
fruit or other agricultural produce, other than ma-
chinery of heading 8437; parts thereof:
8433.90 Parts
8433.90.50 Other
8436: Other agricultural, horticultural, forestry,
poultry-keeping or bee-keeping machinery, includ-
ing germination plant fitted with mechanical or
thermal equipment; poultry incubators and brood-
ers; parts thereof:
8436.99 Parts
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RKW KLERKS INC. v. US 4
8436.99.00 Other
The CIT held that the Netwraps are not classifiable as
parts of harvesting machinery or as parts of other agricul-
tural machinery and that Customs correctly classified the
Netwraps under 6005.39.00. The CIT thus denied RKW’s
motion for summary judgment and granted the govern-
ment’s cross-motion for summary judgment. RKW ap-
peals. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(5).
D ISCUSSION
We review the CIT’s grant of summary judgment as a
matter of law, deciding de novo the interpretation of tariff
provisions as well as whether there are genuine disputes of
material fact. Millenium Lumber Distrib. Ltd. v. United
States, 558 F.3d 1326, 1328 (Fed. Cir. 2009). “If we deter-
mine that there is no dispute of material facts, our review
of the classification of the goods collapses into a determina-
tion of the proper meaning and scope of the HTSUS terms
that, as a matter of statutory construction, is a question of
law.” Aves. In Leather, Inc. v. United States, 317 F.3d 1399,
1402 (Fed. Cir. 2003). Here, the nature and use of the
Netwraps are not in dispute and “the resolution of this ap-
peal turns on the determination of the proper scope of the
relevant classifications.” Bauerhin Techs. Ltd. P’ship v.
United States, 110 F.3d 774, 776 (Fed. Cir. 1997).
The HTSUS contains General Rules of Interpretation
(GRIs) that govern the classification of merchandise.
GRI 1 provides, “classification shall be determined accord-
ing to the terms of the headings and any relative section or
chapter notes.” When applying GRI 1, “[a] court first con-
strues the language of the heading, and any section or
chapter notes in question, to determine whether the prod-
uct at issue is classifiable under the heading.” Baxter
Healthcare Corp. of P.R. v. United States, 182 F.3d 1333,
1337 (Fed. Cir. 1999) (quoting Orlando Food Corp. v.
United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998)).
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RKW KLERKS INC. v. US 5
The question before us is whether the Netwraps can be
classified under heading 8433 or 8436 as “parts” of a ma-
chine, and if so, whether this classification should prevail
over an alternative classification under heading 6005 as a
warp knit fabric.1
There are multiple ways in which an imported item can
be considered a “part” of another article. The determina-
tion is specific to the particular facts presented in each
case. See Bauerhin, 110 F.3d at 779. We have held that if
an item is “dedicated solely for use with another article and
is not a separate and distinct commercial entity,” id., or is
an “integral, constituent, or component part, without
which the article to which it is to be joined, could not func-
tion as such article,” id. (quoting United States v.
Willoughby Camera Stores, Inc., 21 C.C.P.A. 322, 324
(1933)), then the item is a part. Id. The Netwraps do not
meet either scenario.
I
RKW contends that the Netwraps are dedicated solely
for use with baling machines, and therefore they are a part
of those machines. Appellant’s Br. 12–13. We disagree. As
our predecessor court has made clear, “the question of
whether the article is a part must be determined from the
nature of the article as it is applied to that use.” United
States v. Pompeo, 43 C.C.P.A. 9, 14 (1955). When an item
1 Although RKW also disputes whether the
Netwraps can be properly classified under heading 6005,
this argument was not raised to the CIT. See CIT Decision,
592 F. Supp. 3d at 1356–57. We therefore decline to ad-
dress the argument on appeal. In re Google Tech. Holdings
LLC, 980 F.3d 858, 863 (Fed. Cir. 2020) (“[A] position not
presented in the tribunal under review will not be consid-
ered on appeal in the absence of exceptional circum-
stances.”).
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RKW KLERKS INC. v. US 6
is dedicated solely for use with another article such that
the item has no independent function or purpose except to
operate in conjunction with the larger article, that item is
a “part.” See Bauerhin, 110 F.3d at 779. Our predecessor
court held in Pompeo that a supercharger, which is a device
used to increase the power of an automobile engine, was a
part of an automobile because it was “dedicated solely for
use upon automobiles.” 43 C.C.P.A. at 14. Likewise, in
Bauerhin, we held that a canopy for child car seats was a
part of the seat because it was dedicated solely for use with
the seats. 110 F.3d at 779. In both of these instances, the
items at issue were considered parts because they could not
serve a function apart from being a component of the larger
article.
This is unlike the relationship between the Netwraps
and baling machines, at least because Netwraps have ad-
ditional function outside of the machine. While the record
may reflect that “Netwraps are designed specifically for use
in the balers,” we agree with the CIT that the Netwraps
are being used by baling machines as inputs and exit baling
machines as part of products—wrapped hay bales—that
serve a function outside of and independent from the ma-
chine. CIT Decision, 592 F. Supp. 3d at 1358–60. The CIT
reasoned that the Netwraps are “inserted into a chamber
in the baler, fed through the baler, and wrapped around
the compressed crops, and then remain with the bale once
it has been released from the baler—they do not remain af-
fixed to the balers. The Netwraps are thus a disposable in-
put and not a part of round baling machines.” Id. at 1360
(citation omitted). It does not follow that because the
Netwraps are used as inputs to baling machines, they nec-
essarily are “dedicated solely for use” with and are a part
of the baling machines. In fact, as RKW confirmed, the
Netwraps serve their key function—maintaining the shape
of the compressed hay bale—outside of the machine, rather
than when they are being used by the machine. Id. at 1359;
J.A. 218.
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RKW KLERKS INC. v. US 7
When an item is consumable—like bullets in a gun, sta-
ples in a stapler, or film in a camera—although the con-
sumable is used by a particular machine, the consumable
is not dedicated solely for use with the machine (and thus
a machine part) simply because it is used exclusively by the
machine. In United States v. American Express Company,
our predecessor court explained that film is not a part of a
camera in part because “the function of a camera is to con-
vert an unexposed sensitized film into an exposed film. The
exposed film is, therefore, a product of the camera, not an
integral part of such camera.” 29 C.C.P.A. 87, 93 (1941)
(emphasis added). Here, the output product of the baling
machine is the Netwrap packaged around a hay bale, and
the Netwrap is never a part of the baling machine.
RKW analogizes the Netwraps to the products at issue
in National Carloading Corporation v. United States, 53
C.C.P.A. 57 (1966), and Mita Copystar America v. United
States, 160 F.3d 710 (Fed. Cir. 1998). However, both of
these cases are distinguishable.
In National Carloading, our predecessor court held
that spark plugs were not classifiable as parts of automo-
biles. 53 C.C.P.A. at 59, 61. There, the court relied in part
on a holding in Lodge Spark Plug Co v. United States, 44
Cust. Ct. 448 (1960), that spark plugs were instead classi-
fied as a part of an internal combustion engine. RKW relies
on National Carloading’s discussion of Lodge Spark Plug
to argue the spark plugs were consumed in their use and
needed to be replaced and yet were still considered a part
of a combustion engine. Appellant’s Br. 21. However, the
spark plugs at issue in Lodge Spark Plug were not inputs
into the combustion engine and did not exit as a functional
output each time the engine was run. Unlike the spark
plugs, which operated alongside an engine for the entirety
of their useful life and only served a function within an en-
gine, the Netwraps here continue to perform their compres-
sion function on a hay bale once they have exited the baling
machine.
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RKW KLERKS INC. v. US 8
In Mita Copystar, we held that toner cartridges for pho-
tocopying machines were parts of the photocopier. 160
F.3d at 713. However, at issue in Mita Copystar was the
toner cartridge, which included both the cartridge housing
and toner inside. In the earlier-decided case, Mita
Copystar v. United States (Mita I), which concerned only
characterization of the toners and associated chemical de-
velopers, not the cartridges, we determined that the toners
and developers were properly characterized as “chemical
preparations for photographic use.” 21 F.3d 1079, 1081
n.1, 1084 (Fed. Cir. 1994). The follow-on decision in Mita
Copystar differed from Mita I in that the product at issue
in Mita Copystar included the cartridge housing that me-
chanically interacted with the machine to deliver and apply
toner to paper. Here, RKW argues that the Netwraps are
analogous to the toner and the cardboard core that the
Netwraps are wound on is analogous to the cartridge, and
thus the Netwraps are a part of the machine. Appellant’s
Br. 23. This argument assumes that the cardboard core,
like the cartridge housing in Mita Copystar, is a part of the
machine. However, here, the HTSUS specifically excludes
the cardboard core from being a part of an agricultural ma-
chine. Note 1(c) to the HTSUS section containing Chapter
84 explicitly excludes “[b]obbins, spools, cops, cones, cores,
reels or similar supports of any material” from classifica-
tion within that section.2 We therefore find RKW’s analogy
lacking and do not understand Mita Copystar to control the
classification of the Netwraps.
Additionally, under the “dedicated solely for use” in-
quiry, the article cannot be a distinct and separate com-
mercial entity. “[W]here an article ‘performs its separate
2 We also note that here, unlike a printer cartridge
and a printer, the cardboard core is not mechanically inter-
acting with any component of the machine to output the
bale of hay. See J.A. 127, 215–16.
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RKW KLERKS INC. v. US 9
function without loss of any of its essential characteristics,’
and, whether separate or joined, is ‘complete in itself,’ that
article is a ‘distinct and separate commercial entity’ and
not a ‘part.’” ABB, Inc. v. United States, 421 F.3d 1274,
1277 (Fed. Cir. 2005) (quoting Willoughby Camera, 21
C.C.P.A. at 325). Here, the Netwraps constitute a complete
product even without the baling machine. The record also
reflects that the Netwraps and baling machines are sold
separately because neither RKW nor its parent company
RKW SE sells any kind of harvesting or agricultural ma-
chinery. While an item that is sold separately and has an
independent commercial demand is not necessarily ex-
cluded from being a part, such features of a commercial ar-
ticle are certainly probative. See Rollerblade, Inc. v. United
States, 282 F.3d 1349, 1354 (Fed. Cir. 2002) (holding roller
skating protective gear was not classifiable as “parts” of
roller skates and noting that the gear “sell[s] separately
from the roller skates”). In light of our foregoing analysis,
under the circumstances, we conclude that the Netwraps
are commercial articles that are distinct and separate from
baling machines.
II
RKW also challenges the CIT’s determination that the
Netwraps are not integral to the function of the baling ma-
chine. We agree with the government that a baling ma-
chine is capable of performing its function of collecting crop
pieces and compacting those pieces into the shape of a bale
without the Netwraps. See J.A. 46 (Defendant’s State-
ment of Undisputed Facts ¶ 21), 49 (Plaintiff’s Response
¶ 21). Netwraps are no more “integral” to the baler ma-
chine’s function than the hay the machine compresses into
a bale. We thus agree with the CIT that the Netwraps
“have their own distinct function—to maintain the shape
of the bale after it has been compressed and released from
the baler.” CIT Decision, 592 F. Supp. 3d at 1359 (empha-
sis added). We therefore determine that the Netwraps are
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RKW KLERKS INC. v. US 10
not integral to the compression function of the baling ma-
chine.
III
RKW does not present any basis for classifying the
Netwraps as parts beyond the points discussed above. Be-
cause we determine that the Netwraps are not dedicated
solely for use with baling machines and are not an integral,
constituent, or component part of baling machines, we hold
that the Netwraps are not a part of harvesting machinery
or other agricultural machinery. We therefore need not ad-
dress whether classification as a part of a machine under
Chapter 84 prevails over a classification as other warp knit
fabric under Chapter 60.
CONCLUSION
We have considered RKW’s remaining arguments and
find them unpersuasive. For the foregoing reasons, we af-
firm the CIT’s denial of RKW’s motion for summary judg-
ment and grant of the government’s cross-motion for
summary judgment.
AFFIRMED
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