Composite Technology International Inc. v. United States

Slip Op. 15 -
UNITED STATES COURT OF INTERNATIONAL TRADE
COMPOSITE TECHNOLOGY
INTERNATIONAL, INC.,
Plaintiff,
v.
UNITED STATES,
Defendant.
Before: 	Nicholas Tsoucalas,
Senior Judge
Court No. 13-00205
OPINION
[Plaintiff’s motion for summary judgment is denied; Defendant’s
cross-motion for summary judgment is granted.]
Dated:
Joseph P. Cox and Mandy A. Edwards, Stein Shostak Shostak Pollack
& O'Hara, LLP, of Los Angeles, CA, for Plaintiff.
Stephen 	C. 	Tosini, 	Senior 	Trial 	Counsel, 	Commercial 	Litigation
Branch, Civil Division, U.S. Department of Justice, of Washington
D.C., for Defendant. 	With him on the brief were Benjamin C. Mizer,
Principal 	Deputy 	Assistant 	Attorney 	General, 	Jeanne 	E. 	Davidson,
Director, Patricia M. McCarthy, Assistant Director. 	Of counsel on
the 	action 	was 	Yelena 	Slepak, 	Office 	of 	the 	Assistant 	Chief
Counsel, International Trade Litigation, United States Customs and
Border Protection, of New York, NY.
Tsoucalas, Senior Judge: 	This case is before the court
on 	cross-motions 	for 	summary 	judgment. 	See 	Pl.’s 	Mot. 	For 	Summ.
J., ECF No. 27 (“Pl.’s Br.”); Def.’s Cross-Mot. For Summ. J., ECF
No. 32 (“Def.’s Br.”); Pl.’s Resp. to Def.’s Cross-Mot. For Summ.
J., ECF No. 33; Def.’s Reply in Support of its Cross-Mot. For Summ.
J., 	ECF 	No. 	34. 	Plaintiff 	Composite 	Technology 	International,
110
September 28, 2015
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Inc. 	(“Composite”) 	challenges 	the 	decision 	of 	Defendant 	U.S.
Customs 	and 	Border 	Protection 	(“Customs”) 	denying 	Plaintiff’s
protest, 	which 	claimed 	that 	the 	imported 	merchandise 	is 	properly
classified duty free under Harmonized Tariff Schedule of the United
States (“HTSUS”) subheading 4412.99.51 (2012), “Plywood, veneered
panels and similar laminated wood: Other: Other: With at least one
outer 	ply 	of 	nonconiferous 	wood: 	Other: 	Other.” 	For 	the 	reasons
stated 	below, 	the 	product 	at 	issue 	here 	is 	properly 	classified
under 	HTSUS 	subheading 	4421.90.97, 	and 	accordingly, 	Defendant’s
cross-motion 	for 	summary 	judgment 	is 	granted 	and 	Plaintiff’s
motion for summary judgment is denied.
BACKGROUND
The 	following 	facts 	are 	not 	in 	dispute. 	Plaintiff 	is
the importer of record. 	Compl. ¶ 3, June 19, 2013, ECF No. 5. 	In
the 	instant 	action 	Plaintiff 	imported 	merchandise 	under 	Protest
No. 2006-13-100540. 	Pl.’s Br. Att. 2 at ¶ 1.
Pursuant to 19 U.S.C. § 1514(a)(4) (2012), on March 18,
2013, 	Plaintiff 	filed 	its 	protest 	to 	challenge 	Customs’ 	decision
to 	assess 	duty 	at 	the 	rate 	of 	3.3% 	ad 	valorem. 	Id. 	at 	¶ 	3.
Plaintiff 	claimed 	that 	the 	imported 	merchandise 	is 	properly
classified duty free under HTSUS 4412.99.51 as “Plywood, veneered
panels and similar laminated wood: Other: Other: With at least one
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outer 	ply 	of 	nonconiferous 	wood: 	Other: 	Other.” 	Id. 	at 	¶ 	4. 	On
April 	17, 	2013, 	Customs 	denied 	the 	protest, 	concluding 	that
Composite’s 	merchandise 	is 	classifiable 	under 	4421.90.97, 	as
“Other articles of wood: Other: Other: Other.” 	Id. at ¶ 5.
The 	merchandise 	is 	wooden 	door 	stiles 	and 	rails 	that
consist of a 9.5 millimeter-thick pine cap laminated to a base of
laminated 	poplar 	wood 	layers, 	each 	with 	a 	thickness 	of 	less 	than
six 	millimeters. 	Id. 	at 	¶ 	7, 	8. 	The 	merchandise 	has 	a 	surface
layer of pine wood that is used as the exposed surface. 	Id. at ¶
10. 	Two of the imported items, the “79" MSD Latch Stile with 3/8"
cap and the 79 Prem Stile with 3/8" Cap, have a rebate cut at both
ends of the wood.” 	Id. at ¶ 13. 	Other than the rebate cuts, the
seven 	imported 	items 	are 	constructed 	the 	same, 	except 	that 	they
are imported in various lengths and thicknesses. 	Id. at ¶ 14.
JURISDICITON AND STANDARD OF REVIEW
The 	court 	has 	jurisdiction 	pursuant 	to 	28 	U.S.C. 	§
1581(a) 	(2012). 	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
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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.
While 	the 	court 	accords 	deference 	to 	Customs
classification 	rulings 	relative 	to 	their 	“power 	to 	persuade,”
United 	States 	v. 	Mead 	Corp., 	533 	U.S. 	218, 	235 	(2001) 	(citing
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Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)), the court has
“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) (citing Rocknel
Fastener, 	Inc. 	v. 	United 	States, 	267 	F.3d 	1354, 	1358 	(Fed. 	Cir.
2001)).
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 	published 	by 	the 	World
Customs Organization. 	Id. 	“GRI 1 is paramount . . . The HTSUS is
designed so that most classification questions can be answered by
GRI 	1 	. 	. 	. 	.” 	Telebrands 	Corp. 	v. 	United 	States, 	36 	CIT 	___,
___, 865 F. Supp. 2d 1277, 1280 (2012).
Pursuant 	to 	GRI 	1, 	merchandise 	that 	is 	described 	“in
whole 	by 	a 	single 	classification 	heading 	or 	subheading” 	is
classifiable 	under 	that 	heading. 	CamelBak 	Prods. 	LLC 	v. 	United
States, 	649 	F.3d 	1361, 	1364 	(Fed. 	Cir. 	2011). 	If 	that 	single
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classification applies, the succeeding GRIs are inoperative. 	Mita
Copystar Am. v. United States, 160 F.3d 710, 712 (Fed. Cir. 1998).
Here, 	GRI 	1 	resolves 	the 	classification 	of 	Composite’s
merchandise.
The 	court 	construes 	tariff 	terms 	according 	to 	their
common 	and 	commercial 	meanings, 	and 	may 	rely 	on 	both 	its 	own
understanding 	of 	the 	term 	as 	well 	as 	upon 	lexicographic 	and
scientific 	authorities. 	See 	Len-Ron 	Mfg. 	Co. 	v. 	United 	States,
334 F.3d 1304, 1309 (Fed. Cir. 2003). 	The court may also refer to
the 	Explanatory 	Notes 	“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 issue before the court in the instant action concerns
whether 	Composite’s 	merchandise 	is 	properly 	classified 	under
heading 	4412 	as 	“[p]lywood,” 	“veneered 	panels,” 	or 	“similar
laminated wood,” or under heading 4421 as “other articles of wood.”
Plaintiff 	argues 	that 	Composite’s 	merchandise 	is 	classifiable
under 	heading 	4412. 	Pl.’s 	Br. 	at 	1. 	Plaintiff 	insists 	that 	the
subject 	merchandise 	fits 	squarely 	within 	the 	common 	meaning 	of
“veneered 	panels,” 	provided 	by 	lexicographical 	sources 	and
supported 	by 	the 	Explanatory 	Notes. 	Id. 	at 	2. 	Plaintiff 	relies
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on the litigation in Boen Hardwood Flooring, Inc. v. United States,
26 	CIT 	253 	(2002), 	reh’g 	granted, 	27 	CIT 	40 	(2003), 	rev'd, 	357
F.3d 1262 (Fed. Cir. 2004) to support its contention that the 9.5
millimeter 	pine 	caps 	on 	its 	products 	must 	be 	treated 	as 	veneers.
Id. 	at 	15-18. 	In 	the 	alternative, 	Plaintiff 	contends 	that 	the
subject 	merchandise 	constitutes 	“similar 	laminated 	wood” 	because
it is “laminated wood,” and it possesses numerous characteristics
in 	common 	with 	wood 	merchandise 	classified 	under 	Heading 	4412.
Id. at 18–20. 	It does not appear that the Plaintiff asserts that
Composite’s 	merchandise 	can 	be 	classified 	as 	“plywood” 	under
heading 4412.
As required by GRI 1, the court begins its inquiry with
the relative sections and chapter notes to headings 4412. 	Heading
4412, 	HTSUS, 	provides 	for 	“Plywood, 	veneered 	panels 	and 	similar
laminated 	wood.” 	The 	explanatory 	notes 	to 	heading 	4412 	defines
veneered 	panels 	as 	“panels 	consisting 	of 	a 	thin 	veneer 	of 	wood
affixed 	to 	a 	base.” 	4412 	Explanatory 	Note. 	Apart 	from 	stating
that a veneered panel must be “thin,” heading 4412 does not specify
the 	specific 	size 	a 	wooden 	product 	must 	be 	in 	order 	to 	be
classified 	as 	a 	veneered 	panel. 	The 	HTSUS, 	though, 	provides
further 	guidance 	with 	regards 	to 	the 	specific 	size 	requirements
for a wooden product to be considered a veneered panel in heading
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4408. 	Heading 	4408 	defines 	sheets 	for 	veneering 	as 	having 	“a
thickness not exceeding 6 mm.” 	HTSUS 4408 (emphasis added).
The pine cap rails and stiles at issue here have a face
plies 	that 	exceed 	six 	millimeters 	in 	thickness, 	and 	therefore
conflicts with the language found in headings 4412, 4408, and their
respective 	explanatory 	notes 	discussed 	above. 	See 	Def.’s 	Br. 	at
Attachment B, ECF 32.2. 	The court therefore agrees with Defendant
that 	Composite’s 	merchandise 	cannot 	be 	classified 	as 	veneered
panels under heading 4412.
Plaintiff 	argues 	that 	the 	Federal 	Circuit’s 	holding 	in
Boen 	supports 	its 	contention 	that 	Composite’s 	merchandise 	is
classifiable 	under 	heading 	4412. 	The 	court 	disagrees. 	In 	Boen,
the 	Federal 	Circuit 	held 	that 	the 	subject 	merchandise 	in 	dispute
was 	of 	a 	plywood 	construction. 	See 	Boen, 	357 	F.3d 	at 	1265–66.
Although heading 4412 covers plywood, veneered panels, and similar
laminated wood, the three types of wooden plies are not synonymous.
4412 	Explanatory 	Note 	(Outlining 	each 	wooden 	plies’ 	specific
characteristics). 	The 	Federal 	Circuit 	in 	Boen 	defined 	plywood,
but 	made 	no 	ruling 	as 	to 	what 	constitutes 	a 	veneer 	panel. 	Boen
therefore 	does 	not 	support 	Plaintiff’s 	position 	that 	Composite’s
merchandise is classifiable as a veneered panel.
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Additionally, 	the 	court 	disagrees 	with 	Composite 	that
its 	merchandise 	is 	classifiable 	under 	heading 	4412 	as 	“similar
laminated 	wood.” 	Pl. 	Br. 	at 	18-20. 	“Similar 	laminated 	wood” 	is
defined in the Explanatory Notes for HTSUS heading 4412 as follows:
[1] Blockboard, laminboard and battenboard, in which the
core 	is 	thick 	and 	composed 	of 	blocks, 	laths 	or 	battens
of wood glued together and surfaced with the outer plies.
Panels of this kind are very rigid and strong and can be
used 	without 	framing 	or 	backing.
[2] Panels in which the wooden core is replaced by other
materials 	such 	as 	a 	layer 	or 	layers 	of 	particle 	board,
fibreboard, wood waste glued together, asbestos or cork.
Def.’s 	Br. 	at 	Attachment 	B 	at 	1. 	The 	merchandise’s 	base 	layers
consist 	of 	wood 	of 	a 	thickness 	of 	less 	than 	two 	millimeters.
Plaintiff does not allege that the merchandise contains a core of
“blocks, 	laths, 	or 	battens.” 	Moreover, 	the 	merchandise 	here 	is
composed of wood and thus cannot fit within the second category of
the 	“similar 	laminated 	wood” 	definition. 	Because 	Composite’s
merchandise 	does 	not 	meet 	the 	requirements 	outlined 	by 	the 	HTSUS
and 	its 	respective 	explanatory 	notes 	with 	regards 	to 	what
constitutes 	“similar 	laminated 	wood,” 	the 	court 	concludes 	that
Composite’s 	merchandise 	cannot 	be 	classified 	as 	being 	a 	“similar
laminated wood” under heading 4412.
As 	such, 	Composite’s 	merchandise 	is 	not 	classifiable
under 	Heading 	4412. 	Plaintiff 	has 	not 	provided 	the 	court 	with 	a
narrative to support its classification under any other heading in
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Chapter 	44 	of 	the 	HTSUS, 	thus 	the 	only 	remaining 	heading 	under
which 	the 	subject 	merchandise 	may 	be 	classified 	is 	heading 	4421.
Heading 4421 covers “other articles of wood” but excludes any that
are 	“specified 	or 	included 	in 	the 	preceding 	headings.” 	4421
Explanatory 	Note. 	Accordingly, 	since 	the 	subject 	merchandise 	in
the 	instant 	case 	cannot 	be 	classified 	under 	any 	other 	heading 	in
chapter 	44, 	the 	court 	concludes 	that 	the 	merchandise 	is 	properly
classified under heading 4421.
CONCLUSION
For the foregoing reasons, the court denies Plaintiff’s
motion 	for 	summary 	judgment, 	grants 	Defendant’s 	cross-motion 	for
summary judgment, and holds that Composite’s merchandise at issue
is properly classified under subheading 4421.90.97.
/s/ Nicholas Tsoucalas
Nicholas Tsoucalas
Senior Judge
Dated: __________________
New York, New York
September 28, 2015
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