# United States **Court of Appeals**  **for the Federal Circuit**

______________________ APPLE INC., Plaintiff

- Appellant

v.

UNITED STATES, Defendant

- Appellee

______________________

2019

- 1869

______________________ Appeal from the United States Court of International Trade in No. 1:13

- cv

- 00239

- CRK, Judge Claire R. Kelly.

______________________

Decided: July 2, 2020

______________________

C ATHERINE E MILY S TETSON , Hogan Lovells US LLP, Washington, DC, for plaintiff

- appellant. Also represented b y C RAIG A. L EWIS , M ICHAEL W EST ; J AMES E DWARD R ANSDELL , IV

, D AVID P HILLIPS S ANDERS , Cassidy Levy Kent USA LLP , Washington, DC

.

B EVERLY A. F ARRELL , International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Depar tment of Justice, New York, NY, for defendant

- appellee. Also represented by J USTIN R EINHART M ILLER ; J OSEPH H. H UNT , J EANNE D AVIDSON , Washington, DC; P AULA S. S MITH , Office of the Assistant Chief Counsel, U nited S tates Bureau of Customs and Border Protection, Case: 19-1869 Document: 46 Page: 1 Filed: 07/02/2020APPLE INC

. v. UNITED STATES 2

United States Department of Homeland Security , New York, NY

.

______________________
Before N EWMAN , D YK , and W ALLACH , Circuit Judges.

W ALLACH , Circuit Judge.
Appellant Apple Inc. (“ Apple ”) filed suit against Appellee United States (“the Government”) in the U.S. Court of International Trade (“CIT”), challenging U.S. Customs and Border Protection’ s (“Customs”) classification of Apple’s iPad 2 Smart Cover (“Smart Cover”) , model number MC939LL /A

, under Harmonized Tariff Schedule of the United States (“HTSUS”) Subheading 6307.90.98

. 1 Apple and the Government filed cross

- motions for summary judgment, with A pple contending that its subject merchandise is properly classified under HTSUS Subheading 8 473

. 30

. 51

, duty free, and the Government contending that Apple’s subject merchandise is properly classified under HTSUS Subheading 3926.90.99, at a duty rate of 5.3 percent ad valorem. The CIT denied Apple ’s Cross

- Motion and granted the Government ’s, concluding , inter alia, that the subject merchandise was properly classified under HTSUS Subheading 3926.90.99. Apple Inc. v. United States , 375 F. Supp. 3d 1288, 1305 (Ct . Int’l Trade 2019); see J.A. 1 (Judgment).
Apple appeals. We have jurisdiction pur suant to 28 U.S.C. § 1295(a)(5). We affirm

.

1 “All citations to the HTSUS refer to the 20[11] version, as determined by the date of importation of the merchandise.” LeMans Corp. v. United States , 660 F.3d 1311, 1314 n.2 (Fed. Cir. 2011). Case: 19-1869 Document: 46 Page: 2 Filed: 07/02/2020APPLE INC

. v. UNITED STATES 3

B ACKGROUND I. The Subject Merchandise
This appeal involves a single entry of merchandise

, made by Apple “ at the p ort of San Francisco International Airport, San Francisco, California on January 28 , 2011.” Apple , 375 F. Supp. 3d at 1295 ( citation omitted)

. 2 The entry consisted of two models of the Smart Cover, which “differ[ed] as to their outer layer,” with one mad e of leather and the other “composed of plastic.” Id. (citation omitted). Only the classification of the Smart Cover with plastic outer layer , model number MC939LL/A

, remains at issue

on appeal. See Appellant’s Br. 4; Appellee’s Br. 2. 3

The Smart Cove r is a “thin, durable cover” designed for exclusive use with the iPad 2. J.A. 164; see J.A. 306

– 07 ( Apple stipulating that the Smart Cover is described as a “computer cover” in commercial invoices ) ; see also Apple

, 375 F. Supp. 3d at 1295 (providing that t he Smart Cover is

“ sized to fit directly and precisely over the screen of an iPad 2”)

. 4 The Smart Cover is “rectangular in shape” and “is

2 Because the parties do not dispute the material facts, we cit e to CIT’s recitation of the facts for ease of reference. See Apple , 254 F. Supp. 3d at 1295

– 96.

3 The CIT held that Apple did “not have standing to challenge Customs’ classification of the leather Smart Covers ” because Customs had liquefied the leather Smart Covers duty

- free, such that Apple “ha [d] not suffered an injury or harm that the [CIT’s] order [could] redress.” Apple , 375 F. Supp. 3d at 1297. Apple does not challenge this on appeal. See Appellant’s Br. 4.

4 T he iPad 2 is a “portable,” “automatic data processing machine classifiable under [HTSUS] [H] eading 8471.” Apple , 375 F. Supp. 3d at 1295; see HTSUS H eading 8471 (covering “automatic data processing machines”); HTSUS Ch. 84 Note 5(A) (explaining that, “[f]or the Case: 19-1869 Document: 46 Page: 3 Filed: 07/02/2020APPLE INC

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constructed of [ four ] rectangular panels” that may be

“ fold [ ed ]

. . . into a [triangular] ‘ stand ’ p osition” for viewing the iPad’s screen. Apple , 375 F. Supp. 3d at 1295

– 96; see J.A. 71 (Apple expert declaration, explain ing that the Smart Cover consists of “four panels” that may be folded to function as both a cover and a stand), 78

– 79 (advertising materials with images of the Smart C over “fold[ed] into

. . . [a] stand”), 164 (advertising materials, explaining that the “Sm art Cover d o e s double duty as a

. . . stand”). Its exterior “is comp o se d of plastic,” Apple , 375 F. Supp. 3d at 1295 n.8 ; see id. (noting that Apple avers that the exterior is, more specifically, “comprised of polyethylene and polyurethane” ) , with interior microfiber lining to clean the iPad 2’s

screen , id. at 1296, and “an a luminum hinge” spine

, i d. at 1295. “The Smart Cover aligns with” and “attache [s] to the iPad 2” by means of “magnets that are integrated into the edge of the iPad 2 and the Smart Cover’s spine.” Id. ; see J.A. 80 (advertising materials, explaining that ma gnets within the iPad 2 “align

. . . with the Smart Cover hinge” and that “magnets inside the Smart Cover help it stay put”). The iPad 2 contains a sensor such that, “when the Smart Cover is closed, the iPad 2 automatically enters sleep mode, and when it is open, the iPad 2 [automatically]
turns on [

. ] ” Apple , 375 F. Supp. 3d at 1296; see J.A. 80 (similar).
II. Procedural History

In July 2011

, Customs liquidated the plastic Smart Covers under HTSUS S ubheading 6307.90.98

, at a duty rate of 7 percent ad valorem

. Apple , 375 F. Supp. 3d at 1295;

purposes of [HTSUS] [H]eading 8471,

. . . ‘automatic data processing machines’ means machines capable of,” inter alia, “[s]toring the processing program or programs and at least the data immediately necessary for the execution of the program” and “[b]eing freely programmed i n accordance with the requirements of the user”). Case: 19-1869 Document: 46 Page: 4 Filed: 07/02/2020APPLE INC

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see HTSUS Subheading 6307.90.98 (cov er ing “ Other made up articles, includi ng dress patterns: Other: Other ” )

. Apple filed a protest of this action, asserting that the Smart Cover should have been classif ied under HTSUS S ubheading 8473.30.51, duty free. App le , 375 F. Supp. 3d at 129 4 ;

see 19 U.S.C

. § 151 4 (providing that an importer may protest to Customs “the classification and rate and amount of duties chargeable” on an entry); HTSUS 8473.30.51 (covering “ Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principallywith machines of headings 8469 to 8472: Parts and accessories of the machines of heading 8471: Other”)

. In October 2012, Customs issued ruling HQ H216396, “address[ing] the proper classification” of two different Smart Cover models “materially similar” to, but not the

same as that at issue here

. A pp le , 375 F. Supp. 3d at 1293

– 94 ; see J.A. 55 (HQ H216396 ) (addressing Smart Cover model nos. MS309/LLA and MD301/LLA, with plastic and leather exteriors, respectively). HQ H216396 “ rejected [Apple’s] position ” that Smart Covers “ are classifiable under [HTSUS] [H] eading 8473 ” and “ ruled that the plastic iPad Smart Cover is properly classified under [HTSUS] [S] ubheading 3926.90.99,” at a duty rate of 5.3 percent ad valorem. A pp le , 375 F. Supp. 3d at 129 4 ; see HTSUS Subheading 3926.90.99 (covering “Other articles of plastics and articles of other material s of headings 3901 to 3914: Other: Other”) ; see also J.A. 61 ( HQ H216396 ) . In January 2013, Customs denied App le’s protest. A pp le , 375 F. Supp. 3d at 1293 ; see 19 U.S.C

. § 1515 (providing Customs with the authority to review protests made under 19 U.S.C

. § 151 4).

In July 2013

, Apple filed a summons and complaint before the CIT, contesting Customs ’ denial of Apple’s protest. Apple , 375 F. Supp. 3d at 1294; see 28 U.S.C. § 1581(a) (giving the CIT “exclusive jurisdiction of a ny civil action commenced to contest the denial of a protest, in whole or in part, under [19 U.S.C

. § 1515 ]”). T he parties cross

- mo ved Case: 19-1869 Document: 46 Page: 5 Filed: 07/02/2020APPLE INC

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for summary judgment. Apple , 375 F. Supp. 3d at 1292

. Apple contin ued to argue for classification of its merchandise under HTSUS S ubheading 8473.30.51, duty free

. Id

.The Government sought classification of Apple’s merchandise under HTSUS S ubheading 3926.90.99, in keeping with HQ H216396 , rather than HTSUS S ubheading 6 307.90.98, under which Customs had originally liquidated the plastic Smart Covers. Id. at 1292

– 93.

T he CIT concluded that the plastic Smart Cover s “are properly classifiable within [HTSUS] [S] ubheading 3926.90.99.” Id. at 1305. The CIT reasoned that, because HTSUS S ubheading 8473.30.51 expressly excludes accessories that are “covers, carrying cases and the like

, ” id.
at 130 0 , and Apple’s Smart Cover was, undisputedly, an accessory, but also a cover, the Smart Cover could not be properly classified under HTSUS S ubheading 8473.30.51

, id. at 1303. The CIT then conclude d that, while the Smart Cover is a “composite good,” composed of, inter alia, a “plastic outer layer,” “ a microfiber lining, an aluminum hinge, and magnets,” “[t]he plastic ou ter layer of the Smart Cover gives the merchandise its essential character ,” such that the plastic Smart Cover is properly classifiable under HTSUS S ubheading 3926.90.99. Id. at 1304.

D ISCUSSION I. Standard of Review and Legal Framework
The CIT “grant[s] summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” U.S. C t. Int’l Trade R. 56(a). We review the CIT’s grant of summary judgment de nov o, applying “ the same standard employed by the [ CIT ] in assess ing Customs’ classification determinations

. ” Otter Prods., LLC v. United States , 834 F.3d 1369, 1374

– 75 (Fed. Cir. 2016) (internal citation omitted)

. “[ W ] e give great weight to the informed

op inion of the CIT and it is nearly always the starting point of our analysis.” Schlumberger Tech. Corp. v. United Case: 19-1869 Document: 46 Page: 6 Filed: 07/02/2020APPLE INC

. v. UNITED STATES 7

States , 845 F.3d 1158, 1162 (Fed. Cir. 2017) (internal quotation marks, alterations, and citation omitted).

“The classification of merchandi se involves a two

- step inquiry.” ADC Telecomms., Inc. v. United States , 916 F.3d 1013, 1017 (Fed. Cir. 2019). First, we “determin[e] the

proper meaning ” of the terms within the relevant tariff provision, “ which is a question of law, ” and, second, we dete rmine whether the subject merchandise “falls within ” those terms, “ which is a question of fact. ” Sigma

- Tau Health Sci., Inc. v. United States , 838 F.3d 1272, 1276 (Fed. Cir. 2016). “ The first step presents a question of law that we review de novo, whereas the second involves an issue of fact that we review for clear error. ” Schlumberger , 845 F.3d at 1162. “Where, as here, no genuine dispute exists as to the
natur e of the subject merchandise, the two

- step inquiry collapses into a question of law we review de novo.” ADC , 916F.3d at 1017 (internal quotation marks and citation omitted).
The HTSUS governs the classification of merchandise imported into the United States. See Wilton Indus., Inc. v. United States , 741 F.3d 1263, 1266 (Fed. Cir. 2013). The HTSUS is “ considered

. . . [a] statutory provision [] of law for all purposes.” 19 U.S.C. § 3004(c)(1); see Chemtall, Inc. v. United States , 878 F.3d 1012, 1026 (Fed. Cir. 2017) (explaining that “the tenth

- digit statistical s uffixes

. . . are not stat utory,” as those suffixes are not incorporated in the HTSUS’s legal text). “The HTSUS scheme is organized by headings, each of which has one or more subheadings; the headings set forth general categories of merchandise, and the subheadings provide a more particularized segregation of the goods within each category.” Wilton Indus. , 741 F.3dat 1266. “The first four digits of an HTSUS provision constitute the heading, whereas the remaining digits reflect subheadings.” Schlumberger , 845 F.3d at 1163 n.4. “[T]he headings and subheadings

. . . are enumerated in chapters1 through 99 of the HTSUS (each of which has its own section and chapter notes) [.] ” R.T. Foods, Inc. v. United Case: 19-1869 Document: 46 Page: 7 Filed: 07/02/2020APPLE INC

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States , 757 F.3d 1349, 1353 (Fed. Cir. 2014). There are two types of HTSUS hea dings, “ eo nomine [and] use provisions.” Schlumberger , 845 F.3d at 1164. “[ A ] n eo nomine provision

. . . describes an article by a specific name.” CamelBak Prods., LLC v. United States , 649 F.3d 1361, 1364 (Fed. Cir. 2011) (citation omitted). A use provision describes an article by its principal or actual use. See Aromont USA, Inc. v. United States , 671 F.3d 1310, 1313 (Fed. Cir. 2012).
The HTSUS “contains the ‘General Notes,’ the ‘ General Rules of Interpretation’ (‘GRI’), the ‘Additional [U.S.] Rulesof Interpretation’ (‘ARI’), and various appendices for particular categories of goods.” R.T. Foods , 757 F.3d at 1353 (footnote omitted). The GRI and ARI govern the classification of g oods within the HTSUS. See Otter Prods. , 834 F.3d at 1375. The GRI “govern the proper classification of all merchandise[.]” Carl Zeiss, Inc. v. United States , 195 F.3d 1375, 1379 (Fed. Cir. 1999). The ARI are specific to use provisions. See Schlumberg er , 845 F.3d at 1163 n.5 (explaining that the ARI do not apply to eo nomine provisions ).

The GRI “ apply in numerical order, meaning that subsequent rules are inapplicable if a preceding rule provides proper classification.” Id. at 1163

. GRI 1 provides, i n relevant part, that “classification shall be determined according to the terms of the headings and any relative sec tion or chapter notes.” GRI 1 . “Under GRI 1, [we] first construe[] the language of the heading, and any section or chapter notes in quest ion, to determine whether the product at issue is classifiable under the heading.” Schlumberger , 845F.3d at 1163 (internal quotation marks and citation omitted). “[T]he possible headings are to be evaluated without reference to their subheadings, which cannot be used to expand the scope of their respective headings.” R.T. Foods

,757 F.3d at 1353 (citations omitted). “Absent contrary legislative intent, HTSUS terms are to be construed accordingto their common and commercial meanings, which are presumed to be the same.” Well Luck Co. v. United States , 887 Case: 19-1869 Document: 46 Page: 8 Filed: 07/02/2020APPLE INC

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F.3d 1106, 1111 (Fed. Cir. 2018) (internal quotation marks and citation omitted). “To discern the common meaning ofa tariff term, we may consult dictionaries, scientific authorities, and other reliable information sources.” Kahrs Int’l, Inc. v. United States , 713 F.3d 640, 6 44 (Fed. Cir. 2013) (citation omitted). We may also consider the relevant Explanatory Notes (“EN”). See Fuji Am. Corp. v. United States

, 519 F.3d 1355, 1357 (Fed. Cir. 2008). “The [E]xplanatory [N]otes provide persuasive guidance and are generally indic ative of the proper interpretation, though they do not constitute binding authority.” Chemtall , 878 F.3d at 1019 (internal quotation marks and citation omitted).

GRI 3 provides guidance when “ goods are, prima facie, classifi able under two or m ore headings .” GRI 3. 5 In such cases “[t]he heading which provides the most specific description shall be preferred to headings provid ing a more general description. ” GRI 3(a). “Under this rule of relative specificity, we look to the provision with requirements th at are more difficult to satisfy and that describe the article with the greatest degree of accuracy and certainty.” Carl Zeiss , 195 F.3d at 1380 (internal quotation marks and citation omitted)

. “[C]omposite goods” that “ cannot be classified by reference to [GRI] 3(a), shall be classified as if they consisted of the material or component which gives them their essential character [.]” GRI 3(b). The essential character inquiry “var[ies] as between different kinds of goods,” and “ may, for example, be determ ined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.” Home Depot U.S.A., Inc. v. United States

, 491 F.3d 1334, 1336

– 37 (Fed. Cir. 2007) (quoting EN (VIII) to GRI 3(b)). “[T] he essential character of the subject

5 GRI 2 applies to “incomplete or unfinished article[s],” GRI 2(a), and “mixtures or combinations of [a] material or substance,” GRI 2(b), and is not relevant here

. Case: 19-1869 Document: 46 Page: 9 Filed: 07/02/2020APPLE INC

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articles is a question of fact .” CamelBak , 649 F.3d at 1369

. Once we determine the appropriate heading, we apply GRI 6 to determine the appropriate subheading. GRI 6 (providing that “the classification of goods ” by subheadings

“ shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis , to the above [GRI], on the understanding that only subheadings a t the same level are comparable ” ).

The ARI contain specific rules for interpreting use provisions in the HTSUS. See ARI 1(a)

– (d). ARI 1(a) provides that, when a tariff provision is “controlled by use (other than actual use),” then classification “is to be determined in ac cordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use [

. ] ” ARI 1(b) govern s classification by “actual use. ” “[A]ctual use” considers only the “[a]ctual use of the imported goods”; “principal use”considers a variety of factors, including actual use, “to classify particular merchandise according to the ordinary use of such merchandise, even though particu lar imported goods may be put to some atypical use.” Aromont , 671 F.3d
at 1313

– 14 (internal quotation marks and citation omitted).

II. The CIT Did Not Err in Grant ing Summary Judgment to the Government

A. HTSUS H eading 8473 Excludes “Covers ” Including Apple’s Smart Cover

The CIT concluded that , because HTSUS Heading 8473 expressly excludes accessories that are “covers, carrying cases and the like,” Apple’s Smart Cover, as a cover, could not be properly classified under HTSUS Heading 8473

. Apple, 375 F. Supp. 3d at 1301

– 02

. Apple argues the CIT erred in its interpretation of HTSUS Heading 8473, because , while Heading 8473 excludes accessories that are “covers,” the Explanatory Note to HTSUS Heading 8473 Case: 19-1869 Document: 46 Page: 10 Filed: 07/02/2020APPLE INC

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“creates an exception” to this exclus ion, for “covers that also act as stands for certain machines.” Appel lant’s Br. 16 (capitalization normalized)

. Apple argues that because the “Smart Cover is an ‘accessory’ and a ‘cover’ that is also a ‘stand,’ it is properly classified within [HTSUS] He ading 8473.” Id. at 31 (capitalization normalized). We disagree with Apple.
The CIT did not err in concluding that HTSUS Heading 8473 expressly excludes “cover s, ” including the Smart Cover. Tariff classification “ shall be determined according to the ter ms of the headings and any relevant section or chapter notes.” GRI 1

. HTSUS Heading 8473 encompasses

“ accessories” except for “ covers, carrying cases and the like [.]” HTSUS Heading 8473 ( covering “ [p]arts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with [certain] machines” )

. The section and chapter notes for HTSUS Heading 8473 provide no additional relevant guidance. See generally HTSUS S ect. XVI Notes; HTSUS Ch. 84 Notes. It is uncontested that the Smart Cover is an “accessory” within the meaning of HTSUS Heading 8473

. Appellant’s Br. 34 ; Appellee’s Br. 14 ; see Apple, 375 F. Supp. 3d at 1300 (“An ‘accessory’ is therefore something that relates directly to andserves a secondary or subordinate function to the item accessorized.”)

. It is uncontested that the Smart Cover is a “cover” w ithin the mean ing of HTSUS Heading 8473. Appell ant’s Br. 34; Appellee’s Br. 14; see Apple

, 375 F. Supp. 3d at 1301 (“A ‘cover’ is therefore something that goes over or encompasses a specific object and offers protection. ”). Accordingly, Apple’s Smart Cover is expressly excluded from the scope of HTSUS Heading 8473. See Schlumberger , 845 F.3d at 1163 ( providing that the GRI “apply innumerical order,” such that “subsequent rules are inapplicable if a preceding rule provides proper classi fication”); see also Conn

. Nat ’l Bank v. Germain , 503 U.S. 249, 254 (1992) (providing that “[w] hen the words of a statute are unambiguous, then, this first canon [of statutory interpretation] Case: 19-1869 Document: 46 Page: 11 Filed: 07/02/2020APPLE INC

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is also the last : ‘judicial inquiry is complete’ ” (quoting Rubin v. United States , 449 U.S. 424, 430 (1981) ) ).
Apple ’s counterargument s are unpersuasive

. Apple argues that

, because the Explanatory Note to HTSUS Heading 8473 “creates an exception to [HTSUS] [H] eading 8473for covers that also act as stands for certain machines,” Appellant’s Br. 16 (capitalization normalized) , “ [HTSUS] Heading 8473 captures hybrid stand

- c overs like the Smart Cov er,” id. at 15. First, t his argument misunderstands the purpose of Explanatory Notes . Explana tory Notes cannot create an exception to an HTSUS h eading. Explanatory Notes are “generally useful as guides to the scope of unclear HTSUS headings, but they are not legally binding .” Sigma

- Tau, 838 F.3d at 1280 (internal quotation marks, alterations , and citation omitted) ; see H.R. R EP . N o

. 100

– 576, at 549 (1988) (Conf. Rep.)

, as reprinted in 1988 U.S.C.C.A.N. 1547, 1582 ( “A lt hough generally indicative of proper interpretation of the various provisions of the [ HTSUS ], the Explanato ry Notes

. . . are not legally binding ,” and, therefore “ should not be treated as dispositive. ” ). They cannot be used to “ narrow ” or amend or create ambiguity in “ the language of [a] [ HTSUS ] heading [

. ] ” Rubie’ s Costume Co. v. United States , 337 F.3d 1350, 1359 (Fed. Cir. 2003)

. Second

, Apple’s argument is premised o n a faulty reading of Explanatory Note 84.73. The plain language of Explan atory Note 84.73 does not support the conclusion that HTSUS Heading 8473 encompasses hybrid cover

- stands. Explanatory Note 84.73 pro vides, in full:
[HTSUS Heading 8473] excludes covers, carrying cases and felt pads; these are classified in their appropri ate headings. It also excludes articles of furniture (e.g., cupboards and tables) whether or not specially designed for office use (heading 94.03). However, stands for machines of headings 84.69 to Case: 19-1869 Document: 46 Page: 12 Filed: 07/02/2020APPLE INC

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84.72 not normally usable except with the machines in qu estion, remain in this heading.

EN 84.73. Apple argues that we should read the first and second sentence of the Explanatory Note as a continuous

“ general list” of exclusions, Appellant’s Br. 20 ; see id. at 17

– 18 (arguing that the “covers and furniture exclusions areunited by parallel language” and are “grammatically interdependent”), with the third sentence, “[t]he stands proviso [,] craft[ing] an exception ” from both preceding exclusions, id. at 20. Apple’s rea ding is incorrect. It is contra ry to “ the [rule] of the last antecedent and its corollary, the rule of punctuation [.]” Finisar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008)

. It is also directly controverted by the drafting history of Explanatory Note 84.73. See WestRock Va

. Corp. v. United States , 941 F.3d 1315, 1320 (Fed. Cir. 2019) (“[S]tatements from the legislative history illuminate [the drafter’s] intent [.]”).

The “rule of the last antecedent ” provides that, absent “other,” contrary “indicia of meaning,” “a limiting clause or phrase

. . . should ordinarily be read as modifying only the noun or phrase that it immediately follows.” Lockhart v. United States , 136 S. Ct. 958, 962

– 63 (2016) (quotin g Barnhart v. Thomas , 540 U.S. 20, 26 (2003) ). T he first two sentences of Explanatory Note 84.73 are no t a continuous list. They are two discrete sentences that provide two distinct exclusions

. See U.S. Nat ’l Bank of Or

. v. Indep. Ins. Agents of Am., In c. , 508 U.S. 439, 454 (1993) (“[T] he meaning of astatute will typically heed the commands of its punctuation. ”). The first sentence consists of two independent clauses separated by a semicolon: It mirrors the language of HTSUS Heading 8473 to exclude “covers, carry ing cases[,] and felt pads ” ; it indicates those goods should be

“ classified in their appropriate heading s,” whatever those

are . EN 84.73; see HTSUS Heading 8473 (excluding “covers, carrying cases[,] and the lik e”). The second sentence adds a new category of excluded goods

, using parentheticals to better define and explain its application : HTSUS Case: 19-1869 Document: 46 Page: 13 Filed: 07/02/2020APPLE INC

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Heading 8473 also excludes “ articles of furniture (e.g., cupboards and tables) whether or not specially designed for office use ”

— those are already covered by another HTSUS Heading “ ( [HTSUS] [H]eading 94 03 ) .” EN 84.73; see HTSUS Heading 9403 (covering “Other furniture and parts thereof

, ” including “[m]etal furniture” like “racks, display cases, shelves, partitions and ot her similar fixtures,” and “wooden furniture ” )

. They are not “one collective point,” as Apple believes. Appellant’s Br. 21

. Rather, “ [e] ach clause ,” each sentence, “ is dis tinct and ends with a period

, strongly

sugges ting that each may be understood completely without reading any fur ther. ” Ja ma v. Immigration & Customs Enf’ t , 543 U.S. 335, 344 (2005) . W ith their “varied syntax” and dissimilar goods, the two exclusion s make

— at best

— a discontinuous list. See Lockhart , 136 S. Ct. at 963 (explaining that when “ a list of terms or phrases ” has “varied syntax” or “items that readers are [not] used to seeing listed together,” that list should not be read as a “ ‘ single, integrated list ’ ” with a terminal qualifier modif ying each i tem or phrase (quoting Jama , 543 U.S. at 344 n.4 ) )

. The third and final sentence of Explanatory Note 84.73 carves out an exception: “ However, stands for machines of [HTSUS] [H] eadings 84.69 to 84.72 not normally usable except with the machines in question, remain in this heading. ” EN 84.73. T o the extent it relates to the precedingexclusions, it is governed by “the rule of the last antecedent.” Lockhart , 136 S. Ct. at 962 (explaini ng that, w hen presented with “ a list of terms or phrases followed by a limit ing clause, we

. . . typically appl[y] an interpretive strategy cal led the ‘ rule of the last anteced ent ’ ” ). This means that it only applies to the exclusion immediately preceding it

— the “furniture” exclusion. See Barnhart , 540 U.S. at 26 ( “Referential and qualifying words and phrases, where nocontrary intention appears, refer solely to the last antecedent” ( quoting 2A N. Singer, Sutherland on Statutory Construction § 47.33, p. 36 9 (6th rev. ed. 2000) ) )

. Accordingly

, Explanatory Note 84.73 indicates that HTSUS Heading Case: 19-1869 Document: 46 Page: 14 Filed: 07/02/2020APPLE INC

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8473 excludes “covers, carrying cases[,] and felt pads ” without exception. EN 84.73; see HTSUS Heading 8473 (similar). It further indicates that HTSUS Heading 8473 excludes “furniture,” such as “ cupboards and tables

, ” unless that furniture is a “stand[] normally usable ” only with certain, specified machinery

. EN 84.73; see HTSUS Heading 8473 (enumerating relevant machin ery)

. If any doubt still remained, t he drafting history of HTSUS Heading 8473 and EN 84.73 confirm s our reading. Specifically, t he subcommittee responsible for drafting both HTSUS Heading 8473 and EN 84.73 drafted the exclusions separately, with the “st ands” exception connected to the “furniture exclusion. ” J.A. 297

– 99. The subcommittee first amended HTSUS Heading 8473 so that, rather than cover only “[p]arts

. . . of [certain] machinery,” it covered “ [ p ] arts and accessories (other than covers, carryin g cases[,] and the like) of [certain] machine [ s ] [.]” J.A. 299. The subcommittee explained that this amendment “would make it clear that the heading includes certain auxiliary devices (e.g., copy holders and automatic spacing devices for typewriters) whic h, because they are detachable and of optional use, were not really parts of office appliances.” J.A. 297. The subcommittee elected to “exclude ‘covers, carrying cases and the like,’” from HTSUS Heading 8473, in keeping with “earlier decisions regarding [other] machines[.]” J.A. 297

– 98. The subcommittee amended Explanatory Note 84.73 to reflect the “[e]xclu [ sion ] [ of ] carrying cases, covers, felt pads, etc.” J.A. 298. The subcommittee only then turned to the question of “[s]pecial articles of furniture supporting office appliances” and

“ decided to add a paragraph [to Explanatory Note 84.73] stating that the present heading covers stands for officemachines, not normally usable except with those machines. ” J.A. 298. This shows tha t
, when drafting Explanatory Note 84.73, the subcommittee considered theexempted “stands” to be “[s]pecial articles of furniture,” unrelated to any “[e]xclusions” for “carrying cases, covers, Case: 19-1869 Document: 46 Page: 15 Filed: 07/02/2020APPLE INC

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[and] felt pads.” J.A. 298. This confirms, as the language of E xplanatory N ote 84.73 suggests, that Explanatory Note 84.73 ’s “covers” exclusion and “furniture” exclusion are distinct, and that the “stand” exception applies only to the immediately preceding “furniture” exclusion. EN 84.73. Explanatory Note 84.73, t herefore

, does not suggest, muchless create, an exception to HTSUS Heading 8473’s exclusion of “covers” for hybrid cover

- stands.
Apple further argues that, because HTSUS Heading 8473 is a “principal

- use provision,” Appellant’s Br. 33, the CIT erred by f ailing to consider the Smart Cover’s principal use as a stand, id. at 34. Apple argues that “because the Smart Cover is not just a cover, it does not fall within” HTSUS Heading 8473’s “exclusion” of covers. Id. (emphasis omitted). This argument is witho ut merit

. It is predicated on the assumption that Explanatory Note 84

. 73
creates a n exception for hybrid cover

- stands to HTSUS Heading 8473’s exclusion of covers. See Appellant’s Br. 34 (arguing that “[t]he Smart Cover” is classifiable under HTSUS Heading 8473 “because it is a ‘stand’ according to the

. . . requirements of the Explanatory Notes proviso” (citing EN 84.73) ) . As discussed above, it does not . Further, whi le HTSUS Heading 8473 is a principle

- use provision, this does not alter our reading of “cover.” HTSUS Heading 8473 requires that an accessory be “ suitable for use solely or principally with [certain] machines

. ” HTSUS Heading 8473

. It is uncontested that Apple’s Smart Cover is “solely or principally” for use with the iPad 2. Apple, 375 F. Supp. 3d at 1295

– 96. T his does not obviate the need to apply GRI 1 to the remaining terms of HTSUS Heading 8473

. S ee Carl Zeiss , 195 F.3d at 1379 (explaining that the GRI “govern the proper classification of all merchan dise ” ). Nor does it compel us to give the terms of HTSUS Heading 8473 a meaning other than their “common and commercial meaning

. ” Well Luck , 887 F.3d at 1111 (internal quotation marks and citation omitted)

. Accordingly, the CIT properly concluded that HTSUS Heading 8473 expressly excludes Case: 19-1869 Document: 46 Page: 16 Filed: 07/02/2020APPLE INC

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covers, and, as such, does not encompass Apple’s Smart Cover.

B

. Apple’s Smart Cover Is Properly Classified Under HTSUS He ading 3926
Having concluded that “the Smart Cover,” as “a cover

, ” was “excluded from [HTSUS] [H]eading 8473,” Apple , 375 F. Supp. 3d at 1303 , the CIT turned to HTSUS Headings 3926 and 63 0 7

, id. at 1304

. The CIT considered both headings, and concluded that , while “[t]he Smart Cover is

. . . a composite good ,” made of plastic and fabric and therefore

“ prima facie classifiable under either ” HTSUS Heading 3926 or 63 0 7 , because “[t] he plastic outer layer of the Smart Cover gives the merchandise its essential character,” it was properly classified under HTSUS Head ing 3926. Id. at 1304. Apple argues that the CIT “erred in applying [ GRI 3 ( b ) ’s essential character analysis] to classify the Smart Cover under [HTSUS] Heading 3926,” because , “ [h]ad the [C IT] read Explanatory Note 84.73 correctly, it would have classified the Smart C over under [HTSUS] Heading 8473[.]” Appellant’s Br. 40 (capitalization normalized)

. The Government argues that the CIT correctly classified Apple’s Smart Cover under HTSUS Hea ding 3926, rather than, as Customs had, under HTSUSHeading 6307, because “[t]he plastic Smart Cover is a composite good whose plastic outer layer provides its essential character [

. ] ” Appellee’s Br. 28 (capitalization normalized)

. We agree with the Gov er n m e nt

. The CIT did not err in concluding that Apple’s Smart Cover is properly classified under HTSUS Heading 3926. HTSUS Heading 6307 covers “[o]ther made up articles, ” of any textile material, “ including dress pat terns. ” HTSUS Heading 6307 ; see HTSUS Ch. 63 Note 1 . HTSUS Heading 3926 covers “[o]ther articles of plastics and articles of other Case: 19-1869 Document: 46 Page: 17 Filed: 07/02/2020APPLE INC

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materials of [HTSUS] [H]eading [s] 3901 to 3914 .” 6 Apple’s Smart Cover is composed of various materials including “microfiber lining ” and a “plastic outer layer

. ” Apple , 375 F. Supp. 3d at 1304. It is, therefore, a composite good

, seeGRI 3(b) (providing that a “composite good” is one “consisting of different materials or made up of different components”) , and “ prima f acie [] classifiable under ” either HTSUS H ead ing, GRI 3

. Because neither HTSUS Heading 3926 nor 6307 is more specific, see HTSUS Headings 3926 (providing a catch

- all provision for “[o]ther articles of plastics”), 6307 (providing a catch all provision for “[o]ther made up [textile] articles”), we proceed to GRI 3(b). GRI 3(b) provides that otherwise unclassifiable composite goods must be “ classified as if they consisted of the material or component which gives them their essential character [.]” GRI 3(b)

. Neither party challenges the CIT’s finding that
t he Smart Cover’s “ plastic outer layer

. . . [ provides ] its essential character. ” Apple , 375 F. Supp. at 1304

– 05; see Appellant’s Br. 40

– 41 (arguing that the CIT “erred” in its essential character analysis based on “ the [ CIT’s] mistaken reading of Explanatory Note 84.73”) ; Appellee’s Br. 28

– 31 (arguing that the Smart Cover’s plastic outer layer gives it its essential character). The Smart Cover therefore, is properly classified under HTSUS Heading 3926. Accordingl y , the CIT did not err in classifying Apple’s Smart Cover under HTSUS Subheading 3926.90.99

.

6 “Plastics” for the purposes of HTSUS Heading 3926 are “materials . . . which are or have been capable, either at the moment of polymeri z ation or at some subsequent stage, of being formed under external influence (usuallyheat and pressure, if necessary with a solvent or plasticiser) by molding, casting, extruding, rolling [,] or other process into shapes which are retained on the removal of the external influence. ” HTSUS Ch. 39 Note 1. Case: 19-1869 Document: 46 Page: 18 Filed: 07/02/2020APPLE INC

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C ONCLUSION

We have considered Apple ’s remaining arguments and find them unpersuasive. Accordingly, the Judgment of the U.S. Court of International Trade is

AFFIRMED Case: 19-1869 Document: 46 Page: 19 Filed: 07/02/2020