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

______________________ DECKERS CORPORATION, Plaintiff

- Appellant,

v.

UNITED STATES, Defendant

- Appellee.

______________________

2013

- 1356

______________________ Appeal from the United States Court of International Trade in No. 02

- CV

- 0732, Senior Judge Thomas J. Aquil ino, Jr.

______________________

Decided: May 13, 2014

______________________

P ATRICK D. G ILL , Rode & Qualey, of New York, New York, argued for plaintiff

- appellant. With him on the brief w as W ILLIAM J. M ALONEY

. Of counsel was R ICHARD B RIAN B URKE

.

M ARCELLA P OWELL , Trial Attorney, Commercial Lit igation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant

appellee. With her on the brief w ere A MY M. R UBIN , Acting Assistant Director, International Trade Field Office; S TUART F. D ELERY , Assistant Attorney General, and J EANNE E. D AVIDSON , Director, of Washington, DC,DECKERS CORPORATION v. US 2

and M ICHAEL W. H EYDRICH , Trial Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, New York.

______________________

Before P ROST , S CHALL , and O’M ALLEY , Circuit Jud ges.
O’M ALLEY , Circuit Judge

. This appeal is about the proper tariff classification categories of Teva® Sandals imported by Deckers Corp oration (“Deckers”) . Deckers appeals the final judgment and decision of the United States Court of International Trade, which determined that the Teva® Sports Sandals at issue are properly classified under subheading 6404.19.35 of the Harmonized Tariff Schedu le of the United States (“HTSUS”). Because both the Court of International Trade and this panel are bound by the ho lding of the panel in Deckers Corp. v. United States , 532 F.3d 1312 (Fed. Cir. 2008) (“ Deckers I ”), and that holding is conclusive of the question before us, we affirm

. B ACKGROUND Deckers imports a variety of Teva® Sports Sandals from Hong Kong for sale throughout the United States. 1 Deckers Corp. v. United States , 414 F. Supp. 2d 1252, 1252 (Ct. Int’l Trade 2005)

. The Sports Sandals all have

1 The Sports Sandals at issue in the Deckers I a ppeal included only the Pretty Rugged, Terradactyl, and Aquadactyl lines. Deckers Corp. , 414 F. Supp. 2d at 1252. The merchandise at issue in this appeal are the Pretty Rugged, Terradactyl, and Aquadactyl lines, as well as the Alp Pro, Vector, Terra Fi, Pretty Rugged Nylon, Circuit Nylon Women’s, Way Point Terra Fi, Terra Fi Buckle, Road Wraptor, Trail Wraptor a nd Ultimate Thong Guide lines

. None have fully enclosed uppers.DECKERS CORPORATION v. US 3

rubber or plastic soles and cloth or textile straps in the upper portion of the shoe. Decke rs I , 532 F.3d at 1313. Importantly, the toe and heel sections of all of the Sports Sandals at issue are open

, and the upper section of the Sport Sandals do not fully enclose the foot. Id. The Sports Sandals are shoes intended to be used for athletic

pu rsuits, such as running, jogging, hiking, canyone e ring, and a vari ety of water

- based activities.

The United States Customs and Border Protection Service (“Customs”) liquidated the sandals under su bheading 6404.19.35, HTSUS (“subheading 6404.19.35”). Deckers , 414 F. Supp. 2d at 1252. Subheading 6404.19.35 includes:

6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of te xtile material:
Footwear with outer soles of rubber or pla stics:

6404.19 Other: Footwear with open toes or open heels; footwear of the slip

- on type, that is held to the foot without the use of laces or buckles or other fasteners:

6404.19.35 Other.
Products classified under subheading 6404.19.35 are subject to a duty of 37.5% ad valorem

. Subheading 6404.19.35 is known as a “basket” provision that only becomes an appropriate subheading for classification if merchan dise can not be classified under a more specific subheading in heading 6404. E.M. Chem s. v. United States , 923 F. Supp. 202, 20 6 ( Ct. Int’l Trade 1996).
Deckers filed a protest against the subheading 6404.19.35 classification, requesting that the Sport Sa ndals be classified as either 6404.11.80, HTSUS, or 6404.11.90, HTSUS (“subheading 6404.11”). Deckers , 414DECKERS CORPORATION v. US 4

F. Supp. 2d at 1252. Both subheadings 6404.11.80 and 6404.11.90 include:

6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of te xtile material:
Footwear with outer soles of rubber or pla stics:

6404.11 Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like;

6404.11.80 Valued over $6.50 but not over $12 per pair

6404.11.90 Valued over $12 per pair
Products classified under subheading 6404.11.80 are subject to a duty of $0.90 per pair plus 20% ad valorem

. Products classified under subheading 6404.11.90 are subject to a duty of 20% ad valorem

. To be classified under subheadings 6404.11.80 or 6404.11.90

, the me rchandise must fit the description in subheading 6404.11

 they must be “sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like.”
In 2001, Deckers brought a test case before the Court of In ternational Trade regarding the classification dispute over the Sport Sandals. Deckers Corp. v. United S tates
, Court No. 02

- 00674. On November 14, 2002, Deckers also filed a summons with the Court of International Trade that would eventually mature into the pending appeal. Deckers then requested that the summons be suspended during the pendency of the test case , and the Court of International Trade granted Deckers’s motion to suspend

. On a motion for summary judgment in the test case, Deckers argued that Additional Note 2 to HTSUS Cha pter 64 defined the phrase “tennis shoes, basketball shoes, gym shoes, tra ining shoes and the like” of subheadingDECKERS CORPORATION v. US 5

6404.11. 2 Deckers , 414 F. Supp. 2d at 1257

- 58

. Specifica lly, Deckers claimed that Additional Note 2 makes clear that the named exem plars of subheading 6404.11 are interchangeable with the phrase “athletic footwear. ” Id. The Court of International Trade rejected this interpret ation as “tenuous.” Id. at 1258. To clarify the scope of subheading 6404.11, the Court of International Trade attempted to construe the “and the like” language of subheading 6404.11 through an ejusd em generis anal ysis, 3 but determined that there were outstanding factual issues to which Deckers should be entitled to respond at trial. Id. at 1258

- 61.
After trial, the Court of International Trade held that the Sports S andals should be classifie d under subheading

2 Additional Note 2 to Chapter 64 HTSUS states: “For the purposes of this chapter , the term ‘tennis shoes, basketball shoes, gym shoes, training shoes and the like’ covers athletic footwear other than sports footwear (as defined in note 1 above), whether or not principally used for such athletic games or purposes.” “Sports footwear

, ” as defined in Subheading Note 1 to Chapter 64 HTSUS, only applies to: “(a) [f]ootwear which is designed for a sporting activity and has, or has provision for the attac hment of spikes, sprigs, cleats, stops, clips, bars or the like; (b) [s]kating boots, ski

- boots and cross

- country ski foo twear, snowboard boots, wrestling boots, boxing boots and cycling shoes.” The “sports footwear” language of su bheading 6404.11 and Subheading Note 1 is not relevant to the present appeal.

3 In an ejusdem generis analysis, “where an en umeration of specific things is followed by a general word or phrase, the general word or phrase is held to refer to things of the same kind as those specified.” Sports Graphics, Inc. v. United States , 24 F.3d 1390, 1392 (Fed. Cir. 1994).DECKERS CORPORATION v. US 6

6404.19.35. Deckers Corp. v. United States , 31 Ct. Int’l Trade 1367, 1372 (2007). Evidence at trial suggested that the Sport Sandals could be used as athletic footwear for some sports, but t he Court of International Trade co ncluded tha t the Sport Sandals could not be classified under subheading 6404.11 because they were “sandals ,” and not “shoes” as required by that subheading. Id. at 1373 (“Again, there is and can be little doubt that that
term [shoe] does not cover the Teva® s at issu e.”). The Court of International Trade noted that, while it is poss ible that certain forms of “human athletic activity have engendered mor e- propitious types of footwear,” the su bheadings at issue are not written to cover the Sports Sandals and it is for Congress, not the courts, to alter the HTSUS provisions to cover such footwear. Id.

T his c ourt affirmed the Court of International Trade’s classification in Deckers I

. T he Decker s I panel first held that Additional Note 2 to HTSUS Heading 6404 does not subsume the listed exem plars in subheading 6404.11; Note 2 merely explains that use alone does not establish proper classification in that subheading. 532 F.3d at 1315. 4 We also c larified the Court of International Trade’s interpretation of the term “shoes.” We found that “there can be n o doubt that sandals are ‘ shoes, ’” but that the Court of International Trade only noted that the Sport Sandals were not shoes as that term was int ended in subheading 6404.11. Id. at 1317.

We then performed an ejusdem generis analysis to d etermine the scope of the “and the like” term in subheading 6404.11. Id. at 1316

- 17. Deckers claimed that the esse ntial characteristic of the listed exemplars wa s that they were all athletic footwear, in essence repackaging its

4 D eckers does not contest this interpr etation in the present appeal.DECKERS CORPORATION v. US 7

Additional Note 2 argument. The court rejected this interpretation, holding that:

The evidence adduced at trial established that the fundamental feature that the exe m plars share is the design, specifically the e n closed upper , which contains features that stabilize the foot, and pr otect against abr a sion and impact. Because the sandals at i s sue have open toes and open heels, and lack the features of the named exemplars of 6404.11.80, HTSUS, the imported goods are not classifiable under that subheading, no t withstan ding their claimed status as athletic footwear.

Id. at 1317 (emphas e s added).
Deckers filed a complaint on March 22, 2010, seeking to reopen the summons that was suspended p ending resolution of Deckers I

. There, Deckers argued that the Sport Sandals fit within the eo nomin e category of “trai ning shoes” in subheading 6404.11. 5 Deckers submitted new evidence purportedly demonstrating undisputed facts that establish that the Sports S andals are “training shoes.” The Court of International Trade found that the holding in Deckers I precluded it from classifying the Sports Sandals under subheading 6404.11 because the Sports Sandals did not have enclosed uppers. Deckers Corp. v. United S tates
, No. 02

- 00732, 2013 WL 1924357, at *4 ( Ct. Int’l Trade Apr. 12, 2013) (“[T]he court cannot read the cited decision of the Court of Appeals for the Federal Circuit . . . as providing a basis for relief for

5 An eo nomine classification is one that “describes a commodity by a specific name, usually one common in commerce,” Nidec Corp. v. United States , 68 F.3d 1333, 1336 (Fed. Cir. 1995), an d “describes an article by a specific name, not by use ,” Aromont U.S.A.

, Inc. v. United States , 671 F.3d 1310, 1312 (Fed. Cir. 2012).DECKERS CORPORATION v. US 8

which the plaintiff so skillfully prays herei n.”). The Court of International Trade also stated that, in the original motion to s us pend in light of the earlier test case, Deckers argued that suspension of the pending appeal would be appropri ate because “[th at] test case involves the same plaintiff, the same defendant, the same class or kind of merchandise, i.e., sports sandals, and the same claims.” Id. B ecause the merchandise at issue was admittedly of the same character as in the test case, the Court of Inte rnational Trade held that it was bound by the holding of Deckers I under principle s of stare decisis

. Id. at *4

- 5.
Deckers timely appealed the determination of the Court of International Trade, and we have jur isdiction pursuant to 28 U.S.C. § 1295(a)(5).

D ISCUSSION

I
We review the Court of International Trade’s grant of summary judgment regarding a tariff classification wit hout deference. CamelBak Prods., LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 2011). We do accord some deference to a C ustoms classificati on determination pursuant to Skidmore v. Swift & Co

. , 323 U.S. 134 (1944), and United States v. Mead Corp. , 533 U.S. 218, 235 (2001), but only to the extent of Customs’ persuasive

power. Warner

- Lambert Co. v. United States , 407 F.3d 1207, 1209 (Fed. Cir. 2005). The Federal Circuit has “an independent responsibility to decide the legal issue of the proper meaning and scope of HTSUS terms.” Id.
Classification of imports under HTSUS involves two steps. Orlando Food Corp. v. United States , 140 F.3d 1437, 1439 (Fed. Cir. 1998); see also Cummins Inc. v. United States , 454 F.3d 1361, 1363 (Fed. Cir. 2006). First, the trial court must construe the meaning of terms in a given tariff provision. Orlando Food , 140 F.3d at 1439. This step is a question of law, whi ch we review deDECKERS CORPORATION v. US 9

novo

. MetChem, Inc. v. United States , 513 F.3d 1342, 1345 (Fed. Cir. 2008). Second, the trial court must d etermine if the merchandise at issue falls within the tariff provision that the court just construed. Orlando Food

, 140 F.3d 1439. This step is a question of fact, which we review for clear error. Home Depot U.S.A., Inc. v. United States , 491 F.3d 1334, 1335 (Fed. Cir. 2007).

II
Deckers’s arguments can be grouped into two categ ories : (1) the Court of International Trade erred in not analyzing new evidence Deckers presented to demo nstrate clear error in the Deckers I opinion so that Deckers could argue that stare decisis would not apply; and (2) the Court of International Trade erred in holding that stare decisis limi ted its classification decision because this appeal presents an issue of law that was not before the panel in Deckers I

. Deckers first claims that there can be no res judicata from Deckers I under United States v. Stone & Downer Co.

, 274 U.S. 225 (1927). In Stone & Downer , the S upreme Court held that res judicata principles did not apply to C ustoms classification cases

, in what was then the Court of Customs Appeals, unless a later case involves the exact same importation event as the prior decision. Id. at 236

- 37.
Deckers then argues that the Deckers I holding

— that “training shoes” must have en closed uppers

— is clearly

erroneous, and Deckers I would therefore not be binding on the Court of International Trade or this panel purs uant to Schott Optical Gla ss, Inc. v. United States , 750 F.2d 62 (Fed. Cir. 1984). According to Deckers, Schott Optical permits any court

— includin g any subsequent panel of this c ourt

— to review a prior interpretation of a classific ation provision by this c ourt and to disregard that interpr etation upon a showing of clear error. Deckers states that the Deckers I decision was clearly erroneous because anyDECKERS CORPORATION v. US 10

shoe that is “designed, marketed, sold and used as a training shoe” should be classified eo nomine as a training shoe in subheading 6404.11 , whether it has an enclosed upper or not

. Appellant Br. 33. Deck ers argues that t he Sport Sandals are merely an evolutionary step in impro ving traditional training shoes by providing greater breathability, and that tariff terms are written to em brace future improvements to merchandise that maintain the same f unction as their predecessors.

Deckers also claims that stare decisis is not relevant to this appeal. In addition to analyzing Additional Note 2, Deckers I interpret ed the “and the like” la nguage of su bheading 6404.11 through an ejusdem generis analysis. For the present appeal

, Deckers states that it has intr oduced new evidence demonstrating that the Sports Sa ndals meet the eo nomine category of “training shoes” under subheading 6404.11. D eckers thus argues that the

eo nomine analysis of “training shoes” is a completely independent legal issue from the ejusdem generis analysis of “and the like” in Deckers I , eve n though both analyses involve interpretation of the same HTSUS subheading.
The government argues that the holding of Stone & Downer

— that res judicata does not bar classification challenges to later entries of the same type of mercha ndise by the same party

— is irrelevant. It argues that basic principles of stare decisis and concep ts of what constitutes binding precedent prevent either the Court of Intern ational Trade or this panel from reconsidering the legal princip le set forth in Deckers I

. The government argues that, because a prior ejusdem generis analysis of a su bheading can inform a later court’s construction of a named exemplar under an eo nomine analysis, no new legal issue is raised here. The government concludes that, because both Deckers I and this appeal involve the construction of subheading 6404.11, and because Decke rs I involved analys is of the term “training shoes,” this appeal does not present a new legal issue and stare decisis may apply.DECKERS CORPORATION v. US 11

T he government claims , moreover, that, even if our prior decision in Schott Optical allows a trial court to find clear error in a precedential decision by a higher court in classification cases, Deckers has not demonstrated clear

error in Deckers I.
We agree with the government that Deckers I both decided the issue that governs this appeal and is binding on this panel.

III

O ur analysis focuses on two questions , b oth of which are related to whether Deckers I is binding on this panel : (1) Does the eo nomine analysis of the “training shoes” exemplar in subheading 6404.11 pose a new le gal question not present in Deckers I ?
(2) If the D eckers I panel did analyze the same legal issue that is presently on appeal, do Stone & Dow ner and our previous opinions require either the Court of International Trade or this panel to hear evidence of claimed clear error in a prior precede ntial opinion i n classification cases?

Stare decisis “protect s the legitimate expectations of those who live under the law” and prevents “an arbitrary discretion in the courts.” Hubbard v. United States , 514 U.S. 695, 716 (1 995) (Scalia, J., concurring in part) (quo tin g Alexander Hamilton, T HE F EDERALIST No. 78 (C. Rossiter ed. 1961)). The Supreme Court has held that stare decisis “promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee , 501 U.S. 808, 827 (1991). We have recognized that stare decisis exists to “enhance[] predictability and efficiency in dispute resolution and legal proceedings” through creation of settled expectations in prior decisions of the court. Lighting Ballast Control LLC v. PhilipsDECKERS CORPORATION v. US 12

Elec s

. N. Am. Corp.

, 744 F.3d 1272, 1281 (Fed. Cir. 2014) (en banc). The courts thus abide by the theory of stare decisis to promote these twin pillars of jurisprudence: predictability and stability. Id. at 1282

. Stare decisis “deals only with law” and each prior precedential holding of the court becomes a “statement of the law, or precedent, binding in future cases before the same court or another court owing obedience to its dec ision.” Mendenhall v. Cedar Rapids, Inc. , 5 F.3d 1557, 1570 (Fed. Cir. 1993) (i nternal citations removed). S tare decisis , therefore, is limited to only the legal determin ations made in a prior precedential opinion and does not apply to either issues of fact, such as classification of specific goods within a construed tariff provisio n, or issues of law that were not part of a holding in a prior decision. Avenues in Leather v. United States , 423 F.3d 1326, 1331 (Fed. Cir. 2005) (“ Avenues III ”).

S COPE OF S TARE D ECISIS U NDER D ECKERS I
Deckers claims that the legal issues in the present appeal are not the same legal issues determined by the Deckers I panel, thereby precluding any reliance on stare decisis principles. In particular, Deckers argues that an ejusdem generis analysis of a tariff classification subhea ding is a different legal issue than an eo nomine analysis of a listed exemplar within that same subheading. We disagree.

1

T o prevail on this theory , Deckers would have to prove that an ejusdem generis analysis, which identifies the essential characteristics shared by all products under a given subheading, including the listed exemplars under that subheading, would not inform the common meaning of a listed exemplar in an eo nomine analysis. Deckers
cannot do so

. I n construing a tariff term, the court first
must determine if Congress “clearly defined the term inDECKERS CORPORATION v. US 13

either the HTSUS or its legislative history.” Russell Stadelman & Co. v United States

, 242 F.3d 1044, 1048 (Fed. Cir. 2001). If, as here, the term is not clearly d efine d by Congress, the term’s “correct meaning is its

common . . . meaning in absence of evidence to the contr ary.” Id.
Ejusdem generis analysis “requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms.” Sports Graphics , Inc. v. United States , 24 F.3d 1390, 1392 (Fed. Cir. 1994). While ejusdem generis may not be necessary in the interpretation of a tariff provision if legislative intent is clear

, Sandoz Chem. Works, Inc. v. United States , 50 C.C.P.A. 31, 35 (1963)

, ejusdem generis is a tool

we can use to appropriately construe a statu to ry prov ision, M eco Elec. Prods. v. United States , 14 Ct. Int’l Trade 181, 190 (1990)

. I n determining the shared characteri stics of a list of named exemplars, an ejusdem generis analysis attempts to divine congressional intent, which is the purpose behind construing HTSUS provisions. See,
e.g. , D.N.&E. Walter & Co. v. United States , 43 C.C.P.A. 100, 102 (1956) (performing an ejusdem generis analysis on a list of rug style exemplars to determine a congre ssional intent to limit that p rovision to only woven a rt icles ).

An eo nomine analysis, on the other hand, attempts to determine the common meaning of a specific listed exe mplar in a HTSUS subheading. Nidec Corp. v. United States , 68 F.3 d 1333, 1336 (Fed. Cir. 1995); United States v. M&D Miller, Inc. , 41 C.C.P.A. 226, 229 (1954) (“An eo nomine provision in the tariff law

. . . is what the co mmonly accepted meaning of the term happens to be, and where such common meaning is easily and clearly dete rmined through judicial decisions and reports to Congres s on the subject by recognized authorities, such findings presumptively include the commercial as well as theDECKERS CORPORATION v. US 14

common meaning.”). Eo nomine designations include all forms of an article, including future improvements to that article. Nootka Packing Co. v. United States , 22 C.C.P.A. 464, 470 (1935). Eo nomine terms are thus forward

looking, such that they include technological advanc ements , as long a s the improved article performs the same essential function as the named exemplar. See, e.g.

, Household Mfg. Co. v. United States , 62 Cu s t. Ct. 198 (1969); Kaysons Imp. Corp. v. United States , 56 Cust. Ct. 146 (1966). An eo nomine designation, however, can be limited by “a shown contrary legislative intent, judicial decision, or administrative practice to the c ontrary.” Nootka Packing Co. , 22 C.C.P.A. at 470. T he Cus toms Court , which was the predecessor to the Court of Intern ational Trade, 6 has held that, if a named exemplar is limited by other language in the tariff provision or legisl ative history, the eo no mine analysis will only include articles that “ possess the essential characteristics of the specifically named or enumerated article.” M.H. Garvey Co. v. United States , 6 5 Cust. Ct. 434, 444

- 45 (1970); id. at 444 (stating “[t]he indispensable prerequisite , however, is that the controverted merchandise possess the essential characteristics of the named article”) ; see also Airflow Tech., Inc. v. United States , 524 F.3d 1287, 1292 (Fed. Cir. 2008) (using ejusdem generis to determine the essential characteristics of a phrase that itself limited an eo nomine term)

. We thus use both eo nomine and ejusdem generis analyses to determine the common meaning of a classification term and to establish congressional intent with

resp ect to an HTS US subheading. I n Air flow Technolog y , we used the interpretation of an “or the like” phrase

6 The Customs Court became the U.S. Court of I nternational Trade in 1980. Customs Courts Act of 1980, Pub. L. No. 96

- 417, 94 Stat. 1727.DECKERS CORPORATION v. US 15

through both ejusdem generis and dictionary definitions

, similar to an eo nomine analysis, to arrive at the common meaning of an HTSUS subheading term

. Airflow Tech s. , 524 F.3d at 1292. Our opinion in Outer Circle Products is also instructive. In Outer Circle Products , we sought to determine if “soft

- sided, flexible wraps” should be class ified under HTSUS subheading 4202.92.90 or 3924.10.50. Outer Circle Prods. v. United States , 590 F.3d 1323, 1325 (Fed Cir. 2010) . We previously had construed heading 4202 in SGI, Inc. v. United States , 122 F.3d 1468 (Fed. Cir. 1997), holding that heading 4202 does “not include containers that organize, store, prote ct, or carry food or beverages” pursuant to an ejusdem generis analysis. The Court of International Trade concluded that SGI was not relevant to the dispute before it, because SGI involved an ejusdem generis analysis of heading 4202, while the then

curren t case involved an eo nomine analysis under that

same heading. Id. at 1326. We disagreed

, finding SGI not only relevant to the eo nomine analysis , but “contro lling in this case,” because the SGI panel expressly found that none of the listed exemplars “involve[d] containment of any food or beverage.” Id.
Thus, w hile an ejusdem generis analysis may not be necessary if the common meaning of an eo nomine term is apparent, where an ejusdem generis analysis has occurred and we have concluded that Congressional intent can be gleaned therefrom, we may not later ignore that concl usion. As we said in Airflow Technology and Outer Circle Products

, an ejusdem generis analysis informs the scope and common meaning of each of the listed exemplars in an HTSU S subheading , which is the same goal of an eo nomine inquiry. For these reasons, Deckers is incorrect that the Deckers I court did not examine the legal issues in the present appeal

— both Deckers I and the present appeal involve the construction of subhead ing 6404.11.DECKERS CORPORATION v. US 16

2

Our conclusion that no new legal issue is raised in this a ppeal is consistent with our resolutions in what the parties refer to as the Avenues in Leather cases. In Avenues in Leather, Inc. v. United States , 178 F.3d 1241 (Fed. Cir. 1999) ( “Avenues I ”), we affirmed a Court of Intern ational Trade dete rmination that “leather ‘ folios ’ . . . used
to store
, organize

, and carry papers, books, pens, pencils, and the like ” should be classified under HTSUS subhea ding 4202.11.00 rather than subheadin g 4820.10.20

. Id. at 1242, 1244

- 45. We found, under an ejusdem generis analysis, that the unifying purpose of goods under hea ding 4202 was “organizing, storing, protecting, and carr ying various items.” Id. at 1244

- 45. In Avenues in Leather

, Inc. v. United States , 317 F.3d 1399 (Fed. Cir. 2003) (“

Avenues II ”), the issue on appeal involved the classific ation of Calcu -Folios

— binders with zippered sides con tai ning a c alculator and three ring binder

— and, specifically, whether they should be classified under subheading 4202.12.20 or 4820.30.00. Id. at 1401

- 02. The Court of In ternational Trade found the Calcu

- Folios to be “su bstantially similar” to the folios of Avenues I

, and held that it was bound by Avenues I through stare decisis

. Id. at 1402.
On appeal, we held that the Court of International Trade had confounded concepts of claim and issue precl usion

— which do not apply in classification cases under Stone & Down er

— and stare decisis

. Id. By concluding that no new issue of law was raised in Av enues II solely because the products were “substantially similar” to the products at issue in Avenues I

, the Court of International Trade actually applied collateral estoppel

— or, more accurately, issue preclusion

— princi ples, rather than honoring stare decisis

. Id. at 1404. T he Avenues II panel explained that the legal issue on appeal in Avenues II involved the construction of subheading 4820.30.00. Id. at 1403

- 04. In Avenues I , the panel construed headingDECKERS CORPORATION v. US 17

4202. Therefore, Avenues I did not involve any determ inations of law regarding subheading 4820.30.00 that could be binding on the panel in Avenues II

. Id. In add ition, we noted that the merchandise at issue in Avenues II was different from the merchandise in Avenues I. Id. O n remand, the Court of International Trade held that the Calcu -Folios should be classified under subheading 4820.10.2020 because the folios did not share the esse ntial characteristics of Heading 4202 , the heading at issue in Avenues I

. Avenues III , 423 F.3d at 1329

- 30. On appeal, we affirmed and held that Avenues I is only bin ding with respect to its legal determination of the “common characteristics” identified for heading 4202. Id. at 1331. Avenues I did not bind the Court of International Trade regarding how the specific Calcu

- Folios should be class ified , which is an issue of fact

. Id. In the Avenues in Leather series of cases, we explained that : (1) a prior legal interpretation regarding construction of a specific HTSUS provision can be binding on the Court of International Trade or later panels; but that (2) interpretation of a different subheading creates a different legal issue , pr ecluding app lication of stare decisis

. Here

, Deckers seeks an interpretation of the “training shoes” exemplar under subheading 6404.11. This is the same subheading interpreted in Deckers I

. T hough we used an ejusdem generis analysis in Deckers I , we held that “[t]he evidence adduced at trial established that the fundamental feature that the exemplars share is the design, specifically the enclosed upper

. . . . ” Deckers I

, 532 F.3d at 1317 (emphasis added) . In our ejusdem generis analysis, we looked to each of the l isted exemplars in determining the shared characteristic in subheading 6404.11. We stated, moreover, that, for the reasons expressed in the eju sd em generis analysis, the sandals at issue were “ not the kind of shoes to which subheading 6404.11.80 refers.” Id. at 1318. Therefore, because Deckers I and the present appeal involve the same legalDECKERS CORPORATION v. US 18

issue

— construction of subheading 6404.11

— any legal conclusion regarding the scope of that heading in Deckers I presumptively applies.

C LEAR E RROR E XCEPTION TO S TARE D ECISIS

Deckers I provides a binding construction of subhea ding 6404.11 such that any merchandise classified into that subheading must include “enclosed uppers.” Deckers I

, 532 F.3d at 1316

- 17. Since it is uncontroverted that the Sports Sandals do not have enclosed uppers, the Court of International Trade correctly held that the Sports Sa ndals cannot be classified into subheading 6404.11 and, thus, should be classified into subheading 6404.19.35

. Deckers claims , however, that

, even if the conclusions in Deckers I presumptively control , both the Court of Inte rnational Trade and this panel may revisit Deckers I and reject it if we find it to have been clearly erroneous

— which Deckers says it was. Deckers points to our opinion in Schott Optical

, asserting that we there recognized a “clear error” exception to stare decisis. In particular, Deckers argues that the Court of International Trade erred by not considering new evidence presented by Deckers showing that the Deckers I panel committed clear

error in its construction of subheading 6404.11 , as it was required to do under Schott Optical

. We disagree. Dec kers reads too much into Schott Optical

. 1
In this Circuit, a later panel is bound by the determ inations of a prior panel, unless relieved of that obligat ion by an en banc order of the c ourt or a decision of the S upreme Court . We thus must determine what Schott Optical held and whe ther it governs our resolution of this appeal. W e begin by considering the legal landscape leading up to the decision in Schott Optical

. Prior to 1890, the federal district courts located at l ocal port s of entry handled all litigation regarding dutiesDECKERS CORPORATION v. US 19

on imports. Giles S. Rich, A Brief History of the United States Court of Customs and Patent Appeals 6 (1980). The district courts, however, were not consistent in their construction of tariff provisions. In response, Congress created the nine

- member Board of General Appraisers in 1890 , which would eve ntually become the United States Customs Court and, later, the Court of International Trade

. McKinley Tariff Administrative Act of 1890 , § 12, 26 Stat. 131, 136

. D ecisions of the Board of General Appraisers could be appealed to the Circuit Court s of Appeals

— once they were created in 1891

— and, therea fter, to the United States Supreme Court. Rich

, supra, at 6- 7. In 1909, however, Congress removed tariff interpr etations from the purview of the federal courts , including the Supreme Court, by creatin g the United States Court of Customs Appeals. 7 Act of August 5, 1909, § 29 , 36 Stat. 11, 105

. T he decisions of the Court of Customs Appeals

, which always sat en banc, were not re viewable by a ny Article III courts, neither the Circuit Courts of Appeal s,

n or the Supreme Court. Id. The Court of Customs A ppeals was thus the court of last resort for classification determinations.

Between 1909 and 1914, the Court of Customs A ppeals recognized the importance of principles of stare decisis , stating that, “ whe re a question has been well considered and deliberately determined in one court, another court of coordinate jurisdiction at least is not at liberty to disturb or unsettle the law of the first case, unless impelled thereto by the most cogent reasons.” Uni ted States v. Schwartz & Co. , 3 U.S. Cust. App. 24, 51

7 The Court of Customs Appeals was not considered to be an Article III court, Ex parte Bakelite Corp. , 27 9 U.S. 438, 460 (1929), until Congress declared the Court to be an Article III court in 1958. Act of August 25, 1958, § 1, 72 Stat. 848, 848.DECKERS CORPORATION v. US 20

(Ct. Cust. App. 1912); see also Perry, Ryer & Co. v. United States , 2 U.S. Cust. App. 374, 380 (Ct. Cust. App. 1911)

. Thus, it was Court of Customs Appeals ’ practice to follow its own prior precedents, where applicable. Because the Court of Customs Appeals was a court of last resort, however, it understood that it could not be inflexibly bound by its prior holdings and had to allow for some ability to overtu rn prior erroneous holdings

. United States v. Bauer , 3 U.S. Cust. App. 343, 344 (Ct. Cust. App. 1912 ) (“ Under the doctrine of stare decisis we should proceed with caution in disturbing conclusions which were deliberately reached upon full argument. This r ule does not preclude our examination of new questions, nor should we go to the length of reaffirming an erroneous position when firmly convinced that we are in error .”); see also United States v. Lun Chong & Co. , 3 U.S. Cust. App. 468, 469 (Ct. Cust. App. 1912) (holding that it is inappr opriate to apply “ stare decisis ” or allow the record of a former case to be used in a pending case, as permitted under then

- existing court rules, where the government failed to demonstrate factual similarity between the pri or decision and pending appeal)

. In 1914, Congress granted the Supreme Court limited appellate review of the decisions of the Court of Customs Appeals where construction of the Constitution or any treaties were drawn into question

, or where the Attorney General decided that the case was of such importance as to require Supreme Court review. Act of August 22, 38 Stat. 703 , 703 (1914). Even with limited Supreme Court review available, the Court of Customs Appeals continued to apply stare decisis to its prior holdings

, except where convinced it had committed c lear error in a prior decision. See, e.g.

, United States v. Mills & Gibbs , 8 U.S. Cust. App. 422, 428 (Ct. Cust. App. 1918) (“The doctrine of stare decisis is invoked by the imp orters, and our decision might well have been rested thereon, but partly because of the unquestioned sincere belief of the [petitioner] thatDECKERS CORPORATION v. US 21

we have committ ed error and also because if so we desire to correct it, we have carefully considered the whole subj ect matter

. ”).
In 1926, Congress replaced the Board of General A ppraisers with the U.S. Customs Court, which retained the jurisdiction and powers of the Board. Act of May 28, 1926, ch. 411, 44 Stat. 669. As with appeals from the Board, appeals from the C ustoms Court went to the Court of Customs Appeals.

2
In 1927, t he Supreme Court in Stone & Downer a ttempted to clarify the review process for classification determinations. The Supreme Court upheld the Court of Customs Appeals ’ practice that the “general principle of res judicata should have only limited application to [Court of Customs Appeals] judgments.” 8 Stone & Downer , 274 U.S. at 236. The Court justified its holding on two ind e8 The Supreme Court, in Stone & Downer

, used the phrase “ res judicata ” in discussing preclusion in the C ustoms classification context. B ased on the examples the Court provided, however, it appears that, in modern parlance, the Court was referring to issue preclusion. Id. at 236

- 37. We have referred to Stone & Downer as var iously limiting either res judicata

, Schott Optical , 750 F.2d at 64 (“Under Stone & Downer , the d octrine of res judic ata

. . . would not bar Schott from relitigating either the meaning of ‘ optical glass ’ or the classification of its filters

.

. . . ” ), or collateral estoppel, Avenues III , 423 F.3d at 1330 (“It is well settled that collateral estoppel does not pr event an importer from successive litigation over the classification of merchandise, even when the subsequent importations involve the ‘same issue of fact and the same question of law.’” (quoting Stone & Downer , 274 U.S. at 234)).DECKERS CORPORATION v. US 22

pendent grounds . First, it noted that the Court of Cu stoms Appeal s had not been subject to any a ppellate r eview for its first five years

, and was only subject to limited appel late re view after that point. Id. at 233

- 35. A nd , it pointed out that the Board of General Appraisers had adopted the practice of allowing the record and test i mony of prior classification determinations to be entered in later, related decisions under Rule 22 of its Rules of Procedure and Practice. Id

. at 234

- 35. The Court held that

, “objection to the [se] practice [s] has never been made before,” which represents “strong evidence not only of the wisdom of the practice but of general acquiescence in its validity.” Id. at 237. Second, the Court grounded its decision on policy considerations. If an earlier importer receives a favorable classification co nstruction

, but a later importer receives a less

- favorable construction for esse ntially the same merchandise , the government should be able to challenge that earlier construction and the early importer should not receive a c ompetitive advantage due solely to the timing of the importation. Id. at 236. These, the Court stated, “were doubtless the reasons which actuated the Court of Customs Appeals when the question was first presented to it to hold that the general principle of res judicata should have only limited application to its judgments.” Id.

The Stone & Downer opinion did not discuss stare d ecisis , however, or even address the binding role of prior legal determinations on later Court of Customs Appeals deci sions. It also did not upset the general approach of the Court of Customs Appeals to stare decisis in classific ation cases

— while an importer may relitigate factual issues unique to a new importation, it is still bound by prior legal constructions of the Court of Customs Appeals

, unless the Court of Customs Appeals found its own prior construction to be clearly erroneous

.DECKERS CORPORATION v. US 23

3
On March 2, 1929, Congress renamed the Court of Customs Appeals the United States Court of Customs and Patent Appeals (“CCPA”) and transferred jurisdiction over appeals from the Patent Office from the Court of Appeals for the District of Columbia to the new CCPA

. Act of March 2, 1929, §§ 1, 2, 45 Stat. 1475, 1475

- 76. Im portantly, the five

- judge CCPA , like its predecessor, always sat en banc as a five

- judge panel. Celestaire, I nc. v. United States , 120 F.3d 1232, 1235 (Fed. Cir. 1997) (“[T] he Court of Customs and Patent Appeals always sat in [sic] banc and therefore later decisions overcome earlier inconsistent ones .”).
The CCPA largely continued the Court of Customs Appeals’ approach to stare decisis . The CCPA held that the construction of a tariff provision by the CCPA cre ates bind ing precedent under stare decisis

. United States v. F.M. Jabara & Bros. , 19 C.C.P.A. 76, 78 (1931) ; United States v. Decorative Novelty Co. , 17 C.C.P.A. 211, 212 (1929)

. T he CCPA also continued the Court of Customs Appeals ’ practice of review ing a prior CCPA tariff inte rpretation for clear error , as the CCPA was also the court of last resort aside from permissive Supreme Court review through certiorari. Unit ed States v. Consol. Kan. City Smelting & Ref. Co.

, 18 C.C.P.A. 346, 348 ( 1931) . I mportantly, the CCPA held that the clear error exception to stare decisis only allowed a court to reject a prior decision of a coordinate court regarding an issue of l aw if the court believed there wa s clear error in that prior decision. Raphael v. United States , 23 C.C.P.A. 253, 258 (1936)

. 9

9 For example , the CCPA found that stare decisis did not prohibit reconsideration of legal issues where that issue was not fully presented in a prior case and is co ntrolling. See, e.g.

, S hell E. Petroleum Products v. UnitedDECKERS CORPORATION v. US 24

While early CCPA decisions outlined the general co ncept of the clear error exception to stare decisis , s tarting with Adolphe Hurst & Co, Inc. v. United States , 33 C.C.P.A. 96 (1946), the CCPA began to clarify its a pproach to stare decisis in classification determinations. In Adolphe Hurst , the CCPA held that the trial court “properly relied upon our decision” in a prior case and was bound to the opinions of the appellate court by stare decisis , but that the CCPA could review its own prior decisions and overrule those decisions upon a showing of

error. Id. at 101. The CCPA subsequently explained that judicial decisions “must be understood in

. . . context” and should “not . . . be expanded to embrace . . . a factual situation other than, different from, and contrary to, the facts of the case to which the language applies and is used.” United States v. R.J. Sa u nders & Co. , 42 C.C.P.A. 128, 136 (1955)

. The CCPA’s opinion in United States v. Mercantil Di stribuidora , S.A. , 45 C.C.P.A. 20 (1957) (Rich, J.) (“ Mercantil II” )

, contains one of the clearest discussions of the CCPA’s approach to stare decisis in classific ation cases. The CCPA initially affirmed , in Mercantil I

, the Customs Court’s classification of prepared beef. Id. at 20

- 21. In a later action, t he government attempted to reargue the same issues presented in Mercantil I

, but also suppl emented the recor d with two exhibits that had not prev iously been considered. Id. The Customs Court held that

S tates

, 28 C.C.P.A. 155, 157 (1940) (finding that stare decisis did not apply because the record in the second appeal presented new evidence such that the issues were “explained with a clarity that presents an entirely diffe rent view of the issue”); Frank P. Dow Co. v. United States

, 21 C.C.P.A. 282 , 2 89

- 90 (1933) (finding clear error where directly applicable legislative history was not presented in the first appeal).DECKERS CORPORATION v. US 25

Mercantil I “is stare decisis of this litigation.” Id. at 23. The CCPA affirmed that decision. Id. at 27. In doing so,
t he CCPA stated that “ [t] he public policy of putting an end to litigation and of not reopening questions which have been decided is a sound one, subject only to the qualification that clear error should not be perpetuated.” Id. at 23

- 24 (emphasis in original)

. The CCPA also d esc ribed the appropriate standard it would apply in revisi ting its past classifications

— “sound policy dictates that prior decisions shall stand until the court is convinced they are wrong.” Id. at 24 (emphasis in original).

After Mercantil II , the CCPA’s a pproach to stare dec isis in classification cases became fairly established and consistent. The CCPA continued to state that “it is not the province of a lower court to set aside the ruling of an appellate court,” so the Customs Court would appropriat ely d ismiss cases that challenge d established tariff co nstructions on stare decisis grounds. R.J. Saunders & Co. v. United States , 45 C.C.P.A. 87, 89 (1958) ; cf. B. Axelrod & Co. v. United States , 70 Cust. Ct. 117, 123

- 24 (1973) (invoking the clear error doctr ine and declining to follow a prior, unappealed decision of the Customs Court) . The CCPA, sitting (as it always did) as an en banc court when reviewing decisions of the Customs Court , could review its prior classification constructions, but would only dis regard stare decisis after a convincing showing of clear

error. See, e.g.

, United Merchs., Inc. v. United States, 468 F.2d 208, 210 (C.C.P.A. 1972) (“A readjudication of issues previously determined demands a clear and convincing showing of error, a requirement not satisfied by rearg ument of the former issues on the same record.”); Manca, Inc. v. United States , 47 C.C.P.A. 103, 105 (1960) (“On principles of stare decis is [our prior holding] is controlling, as held below, unless the importer can show that the decision was clearly erroneous or that the imported me rchandise here involved is not the same in kind.”); J. Eisenberg, Inc. v. United States , 46 C.C.P.A. 11, 14 (1 958) ;DECKERS CORPORATION v. US 26

United States v. Charles H Demarest, Inc., 45 C.C.P.A. 109, 111 (1958).

The CCPA c a ses Deckers relies up on in arguing that both this panel and the Court of International Trade should entertain a clear error review of Deckers I , such as United States v. Dodge & Olcott, Inc. , 47 C.C.P.A. 100 (1960)

, or H.W. Robinson Air Freight Corp. v. United States , 48 C.C.P.A. 148 (1961), are them selves consistent with prior CCPA practice. In Dodge & Olcott , the CCPA noted that it is “unfair both to the courts and to the parties” to relitigate issues previously determined “except upon a clear and convincing show ing of error. ” Dodge & Olcott , 47 C.C.P.A. at 103. This standard is not satisfied by “reargument of the former issues on the same or a merely cumulative r ecord.” Id. In H.W. Robinson , the CCPA first held that the Customs Court correctly determined that a prior CCPA opinion was controlling

. H.W. Robinson , 48 C.C.P.A. at 150. The CCPA then concluded

, however, that its prior opinion was “bereft of its rationale, and contra to strong indicia of Congressional intent as found in the statutory language and the legislative hist ory.” Id. at 151. Because there was clear evidence that the prior construction of the operative p rovision was inco nsistent with Congressional intent, the en banc CCPA invoked the clear error doctrine and declined to apply stare decisis to its own prior en banc decision

. Id. at 151

- 52. H.W. Robinson demon strated just how substan tial a hurdle the part y challenging a prior CCPA holding faced

— the party had to show that the prior CCPA inte rpretation was clearly inconsistent with evidence of plain language or Congressional intent. 10

10 Even in some of the last decisions of the CCPA, prior to formation of the Federal Circuit, the CCPA mai ntained a limited scope of clear error review. See United States v. Elbe Prods. Corp. , 655 F.2d 1107, 1109

- 10DECKERS CORPORATION v. US 27

4
On April 2, 1982, Congress created the Federal Ci rcuit by merging the CCP A and the United States Court of Claims. Federal Courts Improvement Act of 1982, 96 Stat. 25. In our first published opinion, sitting en banc, we adopted the case law of the CCPA as our binding precedent. South Corp. v United States , 690 F.2d 1368, 1369 (Fed. Cir. 1982) (en banc). “[T] he Court of Customs and Patent Appeals always sat in [sic] banc” and , ther efore, the most recent decision of the CCPA control s as precedent over prior inconsistent decisions. Celestaire

, 120 F.3d at 1235

. We have also adopted the rule that a panel of this court

— which normally sits in panels of three, and not en banc

— is bound by the precedential decisions of prior panels unless and until overruled by an intervening Supreme Court or en banc decision

. Robert Bosch, LLC v. Pylon Mfg. Corp. , 719 F.3d 1305, 1316 (Fed. Cir. 2013) (en banc) ; UMC Elecs

. Co. v. United States , 816 F.2d 647, 652 n.6 (Fed. Cir. 1987) ; Kimberly

- Clark Corp. v. Fort Howard Paper Co. , 772 F.2d 860, 863 (Fed. Cir. 1985); Mother's Rest., Inc. v. Mama's Pi zza, Inc. , 723 F.2d 1566, 1573 (Fed. Cir. 1983). Thus, we as a panel are bound by prior CCPA decisions unless and until those CCPA decisions are overturned en banc or through S upreme Court intervention , just as we are bound by other panel decisions of thi s c ourt

. We first substantively analyzed the role of stare dec isis in classification cases in Schott Optical Glass, Inc. v. United States , 750 F.2d 62 (Fed. Cir. 1984). In Schott

(C.C.P.A. 1981); Dep’t of Energy v. Westland , 565 F.2d 685, 689

- 90 (C.C.P.A. 1977) (“The position of this court on the role of stare decisis is clear and consistent with that of the other appellate courts. A readjudication of issues previously determined demands a clear and convincing showing of error.”).DECKERS CORPORATION v. US 28

Optical , the importer challenged the classification of filter glass used in instrume nts such as spectrophotometers. Id. at 63

- 64. In a first appeal , the Customs Court and the CCPA held that the term “optical glass” did not include an additional requirement involving the refractive index of the glass. 11 Schott Optical Glass, Inc. v. United States

, 468 F. Supp. 1318 , 1323

- 25 (Cust. Ct. 1979), aff’d

, 612 F.2d 1283 (C.C.P.A. 1979). Schott Optical then cha llenged the prior CCPA determination before the Court of International Trade in the context of a subsequent impo rtation. That cou rt held , however, that it was bound to the interpretation of “optical glass” previously established by the CCPA

. Schott Optical Glass, Inc. v. United States

, 587 F. Supp. 69 , 70

- 71 (Ct. Int’l Trade 1984). The Court of International Trade also excluded al l evidence which Schott Optical introduced relating to the meaning of “optical glass .” Id. On appeal, we first recognized that, as established in Stone & Downer , there is no res judicata bar to classification challenges in a later importation of the same merchandise by the same parties. Schott Opt ical, 750 F.2d at 64 (“[T]he Supreme Court held that in customs classification cases a determination of fact or law with respect to one importation is not res judicata as to another importation of the same merchandise by the same parties. The opportunity to relitigate applies to questions of construction of the classifying statute as well as to questions of fact as to the merchandise.”)

. We recognized, however, that the holding of Stone & Downer did not address principles of stare decisis , citing to Mercantil II

. Id. We then held that, because the binding effect of a prior classification can be overcome by a showing of clear error, the Court of International Trade should have permitted the challeng ing party to introd uc e evidence of

11 As noted above, subsequently, the Customs Court became the U.S. Court of Internationa l Trade. Customs Courts Act of 1980, Pub. L. No. 96

- 417, 94 Stat. 1727.DECKERS CORPORATION v. US 29

“clear error” in that court so it could urge a contrary result. Specifically, we said that “[a] court will reexamine and overrule a prior decision that was clearly erroneous.” Schott Optical, 750 F.2d at 64 (citing H.W. Robinson an d Adolphe Hurst ).
Importantly, H.W. Robinson and Adolphe Hurst

, the cases upon which Schott Optical relied, involved an en banc CCPA overruling a prior en banc CCPA decision. When considered in the historical context of our predece ssor court, Schott Opti cal is consistent with our current approach to stare decisis for en banc opinions

, where the
most recent en banc decision on a specific matter ove rrules prior en banc decisions. Doe v. United States , 372 F.3d 1347, 1355 (Fed. Cir. 2004). If taken out of this context, as Deckers suggests, Schott Optical would be inconsistent with our approach to stare decisis among panel decisions , where we are bound by prior panel dec isions until they are overruled by the court en banc or the Supreme Court. Robert Bosch, LLC , 719 F.3d at 1316

. Schott Optical ’s reliance on John C. Rogers & Co. v. United States , 63 C.C.P.A. 10 (1975), Dodge & Olcott, Inc.

, Mercantil II

, and Adolphe Hurst

, when stating that “ [i]n a number of cases . . . parties were permitted to relitigat e the common meaning of tariff terms, with or without intro duction of new evidence, ” supports the conclusion that the holding there is narrower than Deckers claims. Schott Optical , 750 F.2d at 65. Again, the cited cases all involved an en banc CCPA analyzing new evidence in reviewing a prior en banc CCPA opinion. I n John C. Rogers & Co.

, Dodge & Olcott , and Mercantil II , the CCPA failed to find clear error in prior CCPA opinion s, even though the en banc CCPA considered new evi dence in the

re spective subs equent appeals. Finally, Adolphe Hurst h eld that it wa s proper for the trial court to dismiss a classification case on stare decisis grounds without clear error review if a prior appellate court opinion construed the term at issue. Adolphe Hurst , 33 C.C.P.A. at 101.DECKERS CORPORATION v. US 30

While there is some dictum in Schott Optical which implies that conclusions regarding the continuing validity of a prior appellate decision can be made by the trial court, or a subsequent panel of this court, we do not read Schott Optical that way. At most, opinions express ed by the Court of International Trade or a subsequent panel regarding an earlier Federal Circuit panel decision would constitute invitations to the en banc court to revisit the legal issue raised. 12 The panel in Schott Optical had no authority to go further

— it could not have overruled our decision in Mother’s Restaurant . If it intended to do so, moreover, we would be bound to ignore it. Newell Cos., Inc. v. Kenney Mfg. Co. , 864 F.2d 757, 765 (Fed. Cir. 1988) (“This co urt has adopted the rule that prior decisions of a panel of the court are binding precedent on subsequent panels unless and until overturned in [sic] banc. Where there is a direct conflict, the precedential decision is the first.” (internal citations omit ted)); see also Johnston v. IVAC Corp. , 885 F.2d 1574, 1579 (Fed. Cir. 1989) (“Where conflicting statements such as these appear in our prec edent, the panel is obligated to review the cases and reco ncile or explain the statements, if possible. If not

reco ncilable and if not merely conflicting dicta, the panel is obligated to follow the earlier case law which is the binding precedent.”).
We therefore hold that, while a party may challenge a prior construction of a tariff provision by a panel of this
court in a classification case and may seek to introduce evidence of purported clear error in the prior classification

12 See Schott Optical , 750 F.2d at 65 (“We cannot say whether [the new evidence], when added to the evidence in the prior case and subjected to cross

- examination when testimonial, would cause either the Court of International Trade or this court on appeal to conclude that the prior decision was clearly erroneous.”).DECKERS CORPORATION v. US 31

to preserve the issue for potential en banc review

, both the Court of International Trade an d any subsequent panel of this c ourt are bound by t he earlier panel’s class ification construction

. It is only as an en banc court that we can review and alter a tariff classification construction b y a prior panel. This approach is consistent with our treatment of stare decisis in other areas of law and is consistent with the approach of our predecessor court, the CCPA.

5
After considering our historical approach to stare d ecisis in C ustoms classification cases, including that of our predecessor courts, we hold that the construction of a C ustoms classific ation provision by a panel of this c ourt is binding upon both the Court of International Trade and subsequent panels of this court in later protest cases involving the same subheading or heading. While , in line with Stone & Downer , an importer may seek pe rmission
to introduce evidence in the Court of International Trade of clear error in a prior C ustoms ruling, see Stone & Downer , 274 U.S. at 2 36 (noting the Court of Customs Ap peals’ holding that “the g eneral principle of res judicata should have only limi ted application to its judgments.” (emphasis added)), the trial court and this court are constrained by stare decisis to reach the same legal co nclusions as were reached by a panel of this court . Only th rough an en banc opinion, intervening Supreme Court precedent

, or a change in the underlying statute by Co ngress can we deviate from our prior construction through a showing of clear error. Of course, our holding does not prevent an importer or the government from arguing, or the Court of Internation al Trade or a later panel of this

c ourt from concluding

, that a different governing legal issue is involved in the later appeal, such that stare decisis is not implicated

— as was true in Avenues II

— or that the imported merchandise is materially differentDECKERS CORPORATION v. US 32

from the merchandise in the earlier case

— as we found in Avenues II and Avenues III

. We therefore affirm the holding of the Court of Inte rnational Trade granting the government’s motion for summary judgment. In Deckers I

, we construed subhea ding 6404.11. We are bound by that panel’s interpretation of subheading 6404.11, as the Court of International Trade held below. Because all of the Sports Sandals at issue in the present appeal indisputabl y do not have “enclosed uppers,” the Court of International Trade

c orrectly determined that the Sport Sandals could not be classified under subheading 6404.11.80 or 6404.11.90. If Deckers seeks to overturn the Deckers I court’s constru ction of subheading 6404.11, it will need to seek review en banc.

C ONCLUSION

Because Deckers presents the same issue of law that was before this c ourt in Deckers I

, both the Court of International T rade and this panel are bound by the Deckers I construction of subheading 6404.11 under principles of stare decisis . Accordingly, we affirm t he decision of the Court of International Trade granting the government’s motion for summary judgment.

AFFIRMED