## United States Court of Appeals for the Federal Circuit

2007-1136

TIMBER PRODUCTS CO., Plaintiff-Appellant,

v.

UNITED STATES Defendant-Appellee.
Beth C. Ring , Sandler, Travis & Rosenb erg, P.A., of New York, New York, argued for plaintiff-appellant. With her on the brief were Gilbert Lee Sandler , Edward Joffe , and Arthur Purcell

. Mikki Graves Walser , Attorney, International Tr ade Field Office, Commercial Litigation Branch, Civil Divisi on, United States Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were Peter D. Keisler , Assistant Attorney General, Jeanne E. Davidson , Director, and Barbara S. Williams , Attorney in Charge. Of counsel on the brief was Michael W. Heydrich , Office of the Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York. Appealed from: United States Court of International Trade Judge Donald C. Pogue

## United States Court of Appeals for the Federal Circuit

2007-1136

TIMBER PRODUCTS CO., Plaintiff-Appellant,

v.
UNITED STATES, Defendant-Appellee.

Appeal from the United States Court of International Trade in case no. 01-00216, Judge Donald C. Pogue.

__________________________ DECIDED: January 24, 2008

__________________________

Before SCHALL, Circuit Judge , PLAGER, Senior Circuit Judge , and MOORE, Circuit Judge

. SCHALL, Circuit Judge

.

This case involves the tariff classifica tion of plywood import ed into the United States from Brazil by Timber Products Co. (“Timber”). Timber appeals the final decision of the United States Court of International Trade, following a tr ial, that the United States Bureau of Customs and Border Protection (“C ustoms”) correctly classified Timber’splywood entries under subheading 4412.14.30 of the Harmoni zed Tariff Schedule of the United States (“HTSUS”). 1 Timber Prods. Co. v. United States , 462 F. Supp. 2d 1342, 1363 (Ct. Int’l Trade 2006) (“Timber III ”). That subheading imposes a duty of 8% ad valorem . Harmonized Tariff Schedule, HTSU S 4412.14.30. Tim ber had urged classification under HTSUS subheading 4412.13. 40, which covers “Plywood . . . [w]ith at least one outer ply of the follo wing tropical woods: . . . ‘Virola.’” 2 Entries under that subheading are duty-free. Harmonized Tariff Schedule, HTSUS 4412.13.40. It is undisputed that, under HTSUS 4412.13. 40, the common meani ng of “Virola” is limited to the botanical genus Virola spp. Before the Court of International Trade, Timber sought to establish t hat “Virola” has a broader “co mmercial designation” within the plywood trade that encompasses many di fferent woods, including the “Sumauma,” “Faveira,” “Amesclao,” “Braz ilian White,” “White Virola (Virola spp.)” and “Edaiply

1 Subheading 4412.14.30, HTSUS (1997), reads: 4412 Plywood, veneered panels and similar laminated wood: Plywood consisting solely of sheets of wood, each ply not exceeding 6 mm in thickness: Other, with at least one outer ply of nonconiferous wood: 4412.14.30 Other 2 Subheading 4412.13.40, HTSUS (1997), reads: 4412 Plywood, veneered panels and similar laminated wood: Plywood consisting solely of sheets of wood, each ply not exceeding 6 mm in thickness: With at least one outer ply of tropic al wood specified in subheading note 1 to this chapter: 4412.13.40 Other: With at least one outer ply of the following tropical woods: Dark Red Meranti, Light Red Meranti, White Lauan, Sipo, Limba, Okoume, Obeche, Acajou d’Afriquee, Sapelli, Virola , Mahogany, Palissandre de Para, Palissandre de Rio or Palissandre de Rose. (emphasis added).

2007-1136 2Faveria” woods listed on its entry invoices. 3 Timber thus sought to establish a commercial designation for “Virola” that w ould encompass each of the species listed on its invoices, thereby qualifying its plywo od for duty-free treatm ent. In sustaining Customs’ classification of Ti mber’s plywood in Timber III , the Court of International Trade held that Timber had failed to establish a commercial designation for “Virola.” We affirm. BACKGROUND
I Plywood consists of three or more w ooden sheets pressed together, with each sheet referred to as a “ply.” One outer ply is called the “face” ply; the other outer ply is called the “backing”; the middle ply or plie s comprise the “core.” Although these component plies may present different specie s of wood, plywood is identified based on the species found on its “face” ply. Between July 1996 and Dece mber 1997, Timber import ed the plywood at issue into the United States from Brazil. However, due to the particular nature of the manufacturing and exporting proce sses in Brazil, in which various species of wood are first mixed together and then so rted by quality rather than species, the exact botanical identity of the face ply of Timber’s impor ted plywood was unknown. Thus, the names appearing on the entry documents for Timber’s plywood imports did not necessarily reflect the botanical species on the face plies, since Tim ber could not determine this information. Timber’s shipping and entry documents, though, listed the subject

3 As discussed below, “commercial designat ion” refers to a definite, uniform, and general commercial meaning for a term that is so widespread throughout the relevant industry that, for tariff purposes, it effectively supers edes the common meaning of the term.

2007-1136 3merchandise as “Sumauma (C. Pentanda) Plyw ood,” “Faveira (Parkia Spp.) Plywood,” “Amesclao (T. Burseaefolia) Plywood,” “Brazilian White Rotary Cut Plywood,” “White Virola Plywood,” “White Virola (Virola sp p.) Plywood,” and “Edaiply Faveira (Parkia spp.).” “Virola” refers to a botanical genus consis ting of approximately 45 to 60 different species of tropical hardwood. The term “Virola spp.” denotes all species of the genus Virola. “Virola” is also a commercial term used within the pl ywood trade. See Timber III , 462 F. Supp. 2d at 1347. The terms “Sumauma,” “Faveira,” “Edaiply Faveira,” “Amesclao,” and “Brazilian White” are each tr ade or common terms for various species of tropical hardwood from botanical genera other than “Virola.” Id. When Timber’s plywood was imported, plywood with an outer ply of tropical hardwood (such as “Virola”) was classifi ed under HTSUS subh eading 4412.13.40 and therefore duty-free. Id. In contrast, plywood with an ou ter ply of “other” nonconiferous wood was classified under HTSUS subheading 4412.14.30 and subject to a duty of 8% ad valorem . Id. Timber sought to classify its merchan dise as “Virola” under subheading 4412.13.40 in order to re ceive duty-free treatm ent under that provisio n. Timber argued to Customs that there was an established co mmercial designation for the term “Virola” in subheading 4412.13.40 that extended beyond the botanica l genus “Virola” and that encompassed various types of wood, includi ng the types of wood listed on its entries. More specifically, Timber argued that the te rm “Virola” is a commercial designation in the plywood trade for a group of approximately thirty-five “near species” of tropical hardwood with similar physical pr operties, including density and hardness. Customs,

2007-1136 4however, disagreed and liqu idated the plywood under subheading 4412.14.30, the residual provision that r equires an 8% duty ad valorem . Id. II After Customs denied protests filed by Timber in accordance with 19 U.S.C. § 1514, Timber filed suit in the Court of Inte rnational Trade. In due course, ruling on the parties’ cross-motions for summary judgment, the court held that Customs had correctly classified the merchandise at issue un der subheading 4412.14. 30 rather than subheading 4412.13.40. The court did so afte r concluding that Timber had failed to adequately prove its asserted commercial designati on for Virola. Timber Prods. Co. v. United States , 341 F. Supp. 2d 1241, 1251 (C t. Int’l Trade 2004) (“Timber I ”). In reaching that conclusion, t he court ruled that Timber was required to prove a commercial meaning for Virola that appli ed throughout every trade contemplated by the HTSUS. In other words, Timber had to demonstrate that it s proposed commercial designation applied not only th roughout the plywood industry , but also throughout every other trade that impor ted “Virola.” Id. at 1248-49. Timber appealed the dec ision in Timber I to this court. On appeal, we held that the Court of International Trade had erred in its commerc ial designation analysis by requiring evidence from beyond the plywood i ndustry. We stated that the “relevant trade for analyzing whether a tariff term has an established commercial meaning is determined by the merchandise before the court in a par ticular case, not by all merchandise to which the tariff term might appl y.” Timber Prods. v. United States , 417 F.3d 1198, 1202 (Fed. Cir. 2005) (“Timber II ”). Accordingly, we vacated the decision of the Court of International Tr ade and remanded the case to t he court with the instruction

2007-1136 5that it consider whether Tim ber had proven a commercial designation of “Virola” within the plywood trade alone, and whether t he subject merchandise was within that commercial designation. Id. at 1203. III A The law relating to commercial desi gnation is well settled. The proper interpretation of a tariff classification provisi on is a question of law. Mita Copystar Am. v. United States , 21 F.3d 1079, 1082 (Fed. Cir. 1994). W hen a tariff term is not defined in either the HTSUS or its le gislative history, the term’s correct meaning is presumed to be its common meaning in the absence of evidenc e to the contrary. Rohm & Haas Co. v. United States , 727 F.2d 1095, 1097 (Fed. Cir. 1984). One who argues that a tariff term should not be given its common meaning “must prove that ‘there is a different commercial meaning in existence which is definite, uniform, and general throughout the trade.’” Id

. (quoting Moscahlades Bros. v. United States , 42 CCPA 78, 82 (1954)). “The concept of commercial designation ‘was int ended to apply to cases where the trade designation is so universal and well understood that the Congress, and all the trade, are supposed to have been fully ac quainted with the practice at the time the law was enacted.’” Id

. (quoting Jas. Akeroyd & Co. v. United States , 15 Ct. Cust. 440, 443 (1928)). Proof of commercial designation is a question of fa ct that must be established in each case. Id

. Finally, if the statute indicate s a clear Congressional intent, this unambiguous intent must always prevail over any commercial designation. See United States v. Stone & Downer , 16 Ct. Cust. 82, 85 (1928). T he burden of proof rests on the party claiming the commerc ial designation, which must be established by a

2007-1136 6preponderance of the evidence. See United States v. M.J. Brandenstein & Co. , 17 CCPA 480, 485 (1930).
B On remand, and following a trial, the C ourt of Internationa l Trade held that Timber had failed to prove its commercial designation fo r “Virola.” Timber III , 462 F. Supp. 2d at 1363. Although it found no clear legislative intent that would preclude a commercial designation analysis, the court determined that Timber had failed to prove its proposed commercial designation for “V irola” because the testimonial and documentary evidence revealed a commercial meaning for the term that was “general,” but neither “uniform” nor “definite.” Preliminarily, the court obser ved that it was “ not entirely clear what definition of ‘Virola plywood’ [Timber] wishes to adopt.” Timber III , 462 F. Supp. 2d at 1354 n.13. Noting what had been argued in Timber I , the court stated that it was unclear whether Timber was urging that t he commercial meaning for “Virola plywood” encompassed “a group of approximately thirty-f ive ‘near species’ of tropi cal hardwood with similar physical properties,” or a broader definition encompassing “hardwood plywood made from mixed tropical spec ies from Brazil.” Id. In any event, the c ourt determined, Timber had failed to establish that, in the plywood trade, “Virola” was a commercial designation for either a group of thirty-f ive near species of tropical har dwood or a product that was a mixture of such tropical hardwood species. Id. at 1363. First, the court concluded that Timber had failed to show that its proposed commercial designation was uniform. T he court reached this conclusion based upon what it viewed as inconsistencies between the testimony of witnesses presented by

2007-1136 7Timber. Some witnesses testified that “Vir ola” represented “a mi xture of tropical hardwood species from Brazil, ” while others maintained that “Virola” referred to “approximately thirty-five different species, including botanical Virola.” Id. at 1355. Likewise, some witnesses emphasized that “Virola” plywood came from Brazil, while others stated that it also ca me from places throughout Sout h America other than Brazil. Id. Various marketing material s further contradicted the witness testimony, the court found. Id. at 1356-57. Similarly, the court concluded that Tim ber had failed to show that its proposed commercial designation for “Virola” was definit e. The court determined that Timber’s witnesses could not agree on the component species properly included within the commercial meaning of “Virola.” Id. at 1358. Rather, witnesses “c ould only agree on a few of the species that are in cluded in the purported commercia l designation of Virola.” Id. Moreover, the court viewed these witnesses as identifying “very different numbers for the constituent species[,] from ‘five or six, ’ to twenty to thirty, to thirty-five.” Id. Because, in the Court of Internationa l Trade’s view, contradictory evidence rendered Timber’s proposed commercial designat ion neither uniform nor definite, the court affirmed Customs’ classification of Timber’s plywood. The court therefore sustained Customs’ denial of Timber’s protest. DISCUSSION
I We have jurisdiction over Timber’s appeal pursuant to 28 U.S.C. § 1295(a)(5). Following a trial, we review t he Court of International Trade’s findings of fact for clear error. Ford Motor Co. v. United States , 286 F.3d 1335, 1340 (Fed. Cir. 2002). A finding

2007-1136 8is clearly erroneous when, alt hough there is evidence to s upport it, the reviewing court is left with a “definite and firm conviction t hat a mistake has been committed.” United States v. United States Gypsum Co. , 333 U.S. 364, 395 (1948). We review the Court of International Trade’s legal conclusions de novo . Texport Oil Co. v. United States , 185 F.3d 1291, 1294 (Fed. Cir. 1999). “Proof of commercial designat ion is a question of fact reviewed under the clearly e rroneous standard.” Russell Stadelman & Co. v. United States , 242 F.3d 1044, 1048 (Fed. Cir. 2001) (citing Rohm & Haas , 727 F.2d at 1097).
II Before turning to the arguments Ti mber makes on appeal, we address a preliminary contention by the government. As just seen, the Court of International Trade concluded that the HTSU S contained no clear Congressi onal intent with respect to the meaning of the term Virola so as to preclude a commercial designation analysis. The government urges to the contrary, howev er. According to the government, there was a clear Congressional intent to limit the meaning of “Virola” to its common botanical meaning, which encompasses “any wood of a tree of the genus ‘v irola,’ but not the wood of trees of othe r genuses.” Timber I , 341 F. Supp. 2d at 1247. We reject the government’s argument on this point. We are bound by our decision in Timber II as law of the case. See Arizona v. California , 460 U.S. 605, 608 (1983) ( noting that the law of the case doctrine “posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case.”). In Timber II , we necessarily concluded that there wa s no clear Congressional intent that would preclude a commercial designation analysis with respect to the term “Virola.”

2007-1136 9Otherwise, there would have been no reason fo r a remand to the Court of International Trade for such an analysis, which was undertaken in Timber III

. III We turn now to Timber’s arguments on appeal. Timber contends that the Court of International Trade erred in finding its propos ed commercial designation of “Virola” neither uniform nor definite. It contends t hat, on both points, the court made clearly erroneous findings of fact and committed errors of law. A In order for a commerci al designation to be uniform, it must be the same throughout the trade. As seen, the Court of International Trade concluded that Timber’s proffered commercial designation of “Virola” —a term referring to either a group of tropical hardwood species with similar properties or a term referring to a product that is a mixture of such species—was not uniform bec ause of inconsistencies in the testimony of Timber’s witnesses. Tim ber contends that the court cl early erred in finding such inconsistencies because its analysis was bas ed on what Timber terms “two fallacious premises.” First, according to Timber, it never said “Virola” was a commercial designation for approximately thir ty-five species of trees. In stead, Timber asserts, it consistently stated that the term referred to a mixture of tropical sp ecies from Brazil. Second, Timber argues that, in any even t, a definition encompa ssing approximately thirty-five species is not inconsistent with one encompassing a mixture of such species. As we understand it, Timber is arguing that t here are no inconsistencies between the two separate definitions identif ied by the Court of Inter national Trade, one of which emphasizes that “Virola” represents a mixtur e of tropical hardwood species from Brazil,

2007-1136 10while the other indicates that “Virola” refers to approximately thirty-five different species, including botanical “Virola.” In essence, Timber argues t hat these definitions are not inconsistent because they are not contradictory. We reject Timber’s arguments. In the firs t place, we see no error in the Court of International Trade’s statement that Timber had taken the pos ition that “Virola” was a commercial designation for approximately thirty-f ive species of trees. Indeed, we said precisely that in Timber II . See 417 F.3d at 1200 (“According to Timber, the term ‘Virola’ is a commercial designation in t he plywood trade for a gr oup of approximately thirty-five ‘near-species’ of tropical hardwo od with similar physical properties, including density and hardness.”). Most importantly, however, t he testimony of Timber’s witnesses was, as the Court of International Trade found, inconsistent. As the court indicated in its opinion, there was a “dispari ty between the various definitions provided” by Timber’s witnesses, “because one em phasizes that the plywood represents a mixture of tropical hardwood species from Braz il, while the other em phasizes that there are approximately thirty-five di fferent species, including bot anical Virola.” Timber III , 462 F. Supp. 2d at 1355. Furthermore, the court observed, one witness testified that Virola plywood could in fact come “from places other than Brazil.” Id. In addition, the court examined various marketing material s and other printed publications which contradicted Timber’s assertion that “V irola” plywood was known throughout the plywood industry as a mi xture of hardwood specie s from Brazil. Id. at 1356-57. In short, the testimonial and doc umentary evidence demonstrate s that Timber was unable to establish a commercial designation for “V irola” that was the same throughout the plywood trade.

2007-1136 11Neither do we think that the Court of International Trade vi ewed the uniformity issue through the wrong legal prism. We reject Timber’s contention that the positions it took in Timber I and Timber III had to contradict each other in order to be inconsistent. In our view, contradiction is a sufficient , but not necessary, condition for finding inconsistency. Accepting Timber’s contention would undermine the commercial designation analysis by encouraging importers to advance excessively broad, vague, or ambiguous definitions simply to avoid contradict ion. We think that, in order to establish a commercial designation, a party must do more than simply show the absence of contradiction between differ ent terms. It must prove a widely understood commercial meaning that applies everywhere th roughout the relevant industry. In this case, Timber failed to carry that burden. B In order for a commercial designation to be definite, it must be certain of understanding. As seen, the Court of International Trade found that Timber’s witnesses could not agree on the component species properly included within the proposed commercial meaning of “Virola,” with witne sses identifying a disparate number of component species ranging from as few as five or six to as many as thirty-five. Timber III , 462 F. Supp. 2d at 1358. Timber cont ends that the court’s finding was based upon an incorrect standard of proof. According to Timber, the court erred by focusing on the component species of Virola rather th an the final plywood product, which, it says, was defined as a mixture. Leaving aside for the moment the uncerta inty the Court of International Trade identified in Timber’s diffe ring positions in Timber I and Timber III , we do not agree that

2007-1136 12the Court of International Trade applied an incorrect standard of proof. Assuming arguendo that “Virola” plywood is a product characterized by a mixture of tropical species, the ability, or lack thereof, to identif y the species of woods within that mixture is probative as to whether Timber’s proffe red commercial meaning was “certain of understanding” and commonly understood throughout the ent ire plywood industry. Thus, although an exact agreement among ev ery witness may have been unnecessary, the Court of International Trade reasonabl y required a general consensus as to the approximate number of specie s properly included within th e commercial meaning of “Virola” plywood. 4 It found no such general consensus after examining the testimonial and documentary evidence presented at trial. The evidence fully supports the finding of the Court of International Trade that Timber failed to establish a definite commercial designation. To give just one example, John Rego, who was President of Gulfstr eam Traders, Ltd., which represented the

4 Timber argues that the decision in United States v. Ge orgia Pulp & Paper Manufacturing Co. , 3 CCPA 410 (1912), supports the proposition that a definite commercial designation does not require agr eement as to the entire universe of individual components. That case is inapposite, however. In Georgia Pulp , the subject merchandise consisted of various woodwork ing machines; the question was whether they could be properly classified for tariff pur poses as “machine tools.” 3 CCPA at 410. The government sought to establish a comme rcial designation for “machine tools” that included only metalworking machines and ex cluded woodworking mach ines such as the merchandise at issue. Id. at 411. Although witnesses disagreed as to whether certain metalworking machines were machine tools, “they were at no disagreement that a machine tool was in the trade understood to be one that worked metal in some manner and was limited thereto.” Id. at 413. Thus, all of t he witnesses in fact agreed that the commercial meaning of “machine tool” in cluded only metalworking machines and excluded the imported woodworking machi nes. Because the witnesses uniformly agreed that the commercial designation exclude d the imported merchandise, their disagreement over whether specific metalwo rking machines were within the meaning of “machine tool” was irrelevant. Here, howev er, because Timber sought to establish a commercial designation for “Virola” that included various species of wood, the witnesses’ disagreements as to the component species covered by the term “Virola” was relevant to whether the proposed commerc ial designation for “Virola” was definite.

2007-1136 13largest Brazilian mills that m anufactured and sold “Virola plyw ood” to the United States, testified that “the composit ion of the groups of woods comprising ‘Virola plywood’ changed over time.” Timber III , 462 F. Supp. 2d at 1348, 135 7. Likewise, the court found that “witnesses could only agree on a few of the species that are included in the purported commercial designation,” and that those witnesses identified a disparate range of component species from as low as five or six to as many as thirty-five. Id. at 1358. These discrepancies, co mbined with the fact that Timber offered different definitions throughout t he litigation, supports the Court of International Trade’s finding that the commercial designation of “Virola” that Timber offered was not certain of understanding throughout the entire plywood industry. Accordingly, the Court of International Trade’s determinati on that Timber’s commercial designation of “Virola” was not definite was not clearly erroneous. IV Timber’s final argument on ap peal is that even if “Virol a” is limited to its common botanical meaning, Entry number 334-1066732-4, which was invo iced as “White Virola (Virola spp.),” should nonetheless have b een liquidated duty-fr ee under subheading 4412.13.40. In other words, because this en try was invoiced according to the common botanical meaning of Virola, it necessarily qualifies for duty-free treatment under subheading 4412.13.40 of the HTSU S. To hold otherwise, Ti mber argues, would render that statutory provision a nullity, because even merchandise invoiced according to the common meaning of Virola woul d not come within the meaning of that provision. We reject this argument. It is not the invoice but the goods that determine classification. Timber has been unable to veri fy the actual contents of it s shipments due to the mixing

2007-1136 142007-1136 15 of species during the plywood manufacturing process employed by Brazilian mills. Because of this failure of pr oof, the Court of International Trade did not err in sustaining Customs’ liquidation of this entry. CONCLUSION For the foregoing reasons, the decision of the Court of International Trade sustaining Customs’ classifica tion of Timber’s entries of plywood products is affirmed.

AFFIRMED