Document: 526 U.S. 380119 S.Ct. 1392143 L.Ed.2d 480 UNITED STATES v. HAGGAR APPAREL CO.(97-2044)127 F.3d 1460, vacated and remanded. SUPREME COURT OF THE No. 97 2044 STATES, PETITIONER COMPANY ON WRIT CERTIORARI TO APPEALS FOR FEDERAL CIRCUIT [April 21, 1999] Justice Kennedy delivered the opinion of Court. 1 This case concerns regulations relating to customs classification certain imported goods. The were issued by United States Customs Service with approval Secretary Treasury. question is whether these regulations, deemed controlling Treasury, are entitled judicial deference in a refund suit brought Court International Trade. Contrary position that Appeals for Federal Circuit, we hold regulation subject analysis required Chevron A. Inc. Natural Resources Defense Council, Inc., 467 837 (1984), if it reasonable interpretation implementation an ambiguous statutory provision, must be given deference. 2 * Respondent Haggar Apparel Co. designs, manufactures, markets apparel men. matter arises from proceeding duties imposed on men's trousers shipped respondent this country assembly plant controlled Mexico. fabric had been cut then Mexico, along thread, buttons, zippers necessary complete garments. App. 37 38. There sewn reshipped States. If full extent it, there would no dispute, mere without other steps, all agree garments have eligible duty exemption which claims. 3 Respondent, however, Government's view, added one step at Mexican plant: permapressing. Permapressing designed maintain garment's crease desired place avoid creases or wrinkles detract its proper appearance. various methods sequences permapressing can accomplished, respondent's contentions Treasury's categorical approach fails take differences into account. 4 For permapressed here, purchased treated chemical resin. Id., 37. After States, regular pressing there, baked oven facility before tagging shipping them baking operation took some 12 15 minutes. With right heat, preapplied was activated permapress quality imparted garment. delayed until articles returned extra, otherwise unnecessary steps retailers. 127 28; Pet. Cert. 20a 21a. In addition, maintained below, risk during unwanted might developed finished Ibid. 5 claimed process addition assembly, denied exemption; simply part process, or, words statute, "operatio[n] incidental process." Subheading 9802.00.80, Harmonized Tariff Schedule (HTSUS), 19 U.S.C. § 1202; Item 807.00, (TSUS), 1202 (1982 ed.). Respondent's made more difficult regulation, discussed further, deems operations additional manufacture, not process. See CFR 10.16(c) (1998). issue us force effect subsequent proceedings. 6 being sought articles, court declined treat as controlling. 938 F. Supp. 868, 874 875 (1996). making determination, relied detailed stemming Mast Industries, 668 F.2d 501 (CCPA 1981), leading precedent predecessor Circuit. fact, involved garment fabrication though Trade drew also cases involving operations. E.g., Supp., 872 (citing General Motors Corp. 976 716 (CA Fed. 1992) (painting sheet metal component parts used motor vehicles)). ruled favor respondent. 875. On review, Circuit analyze under Chevron, affirmed. 1462 (1997). We granted certiorari, 524 ___ (1998), now vacate judgment remand further II 7 statute relies provides importers partial imposed. extends to: 8 "Articles assembled abroad whole fabricated components, product (c) advanced value improved condition except such cleaning, lubricating painting." HTSUS, 1202. 9 (The HTSUS became law January 1, 1989, replacing provisions former TSUS. 3004. 807.00 TSUS, previous governs shipments case, identical 9802.00.80.) 10 relevant interpreting respect follows: 11 "Any significant operation, treatment than whose primary purpose fabrication, completion, physical improvement component, related effects substantial transformation article, shall regarded preclude application article. following examples considered : . 13 "(4) Chemical components impart new characteristics, showerproofing, permapressing, sanforizing, dying bleaching textiles." 14 adopted 1975 Commissioner upon Treasury Department, after notice-and-comment rulemaking. 39 Reg. 24651 (1974) (proposed regulation); 40 43021 (1975) (final regulation). contending within general purview framework, advances two sets arguments. First, citing terms enabling statutes, contends limited officers themselves intended govern adjudication importers' suits Second, reliance authority jurisdiction Trade, argues even Department did intend bear determination suits, empowered interpret tariff giving usual administering agency. 16 As first set arguments, says binds employees when they classify merchandise schedules but does bind themselves. scheme support view regulation. (which Department) charged goods provision instance. specific direction effect: "The shall, rules prescribed [of Treasury,] fix final rate applicable to" 1500(b). directed "establish promulgate inconsistent may secure just, impartial uniform appraisement assessment thereon ports entry." §1502(a). Headnote 11, ed.) (authorizing "to governing admission provisions" schedules); Note 20, (same). Secretary, turn, has delegated generally Secretary's approval. Dept. Order 165, T. D. 53160 (Dec. 15, 1952). 17 make "the entry" argue authorizes promulgation do nothing ensure field offices around according similar consistent scheme. bearing, respondent, rights importer. disagree. phrase explained simple fact decisions port where enter. assume Congress concerned only officials entry concern uniformity once entered proceedings commenced. tariffs mean thing another importers. It course possible, common, agencies give instructions legal opinions their form another, intending public. Cf. Crandon 494 152, 177 (1990) (Scalia, J., concurring judgment). authorization conclude, way. Like help define relations between Government regulated entities, authorized least clarify obligations 18 Our conclusion altered circumstance Representative (USTR), delegation President, Commission (ITC) responsibilities recommending proclaiming changes HTSUS. 3004(c), 3005, 3006; 443 (1992). These powers pertain changing amending themselves; date importation. Government, acknowledged oral argument Service, USTR ITC, schedules. Tr. Oral Arg. 14. cites portion itself views regulatory own agents' decisions, affecting later subsection (a) 10.11 introduces §10.16 same time. Section 10.11(a) "[t]he definitions follow promulgated inform public constructions interpretations assure partially exempt "[n]othing purports restrict others review matters contained therein." 20 language, our suffice displace rule Subsections (b) §10.11 together serve introduce kinds follow. 10.11(b) advises claimant comply both substantive "documentary requirements" forth §10.24. importer documentary requirements, foreclosed decision. §10.11(b). contrast, recites "purports Assuming complies requirements §10.24, disclaimer §10.11(a) applicable, bring challenging Customs' decision federal court. 21 Apart underscoring distinction quoted language thought surplusage merely confirms existence review. Even unnecessary, tacit instruction courts disregard regulations. Particularly light agency utilized rulemaking issuing implies sufficient departure conventional contemporary administrative practice ought adopt absent different structure express III 22 reasons given, statutes authorizing warrant deference; persuades lesser effect. turn second major contention, reviewing customary framework. 23 inapplicable, rely 28 2643. provides: 24 "If unable determine correct basis evidence presented any civil action, order retrial rehearing purposes, adjudicative procedures considers reach decision." 25 decision, well "make determinations record court," §2640(a), consider grounds agency, §2638, said agency's 26 A central theme trial be, de novo, hence owes principles. Brief 28. premise. Valid establish norms. Courts while applying new- found facts, just conducting instance conform rulings rules, precedents. Though chosen direct pay views, find directive statutes. Scalia, Judicial Deference Administrative Interpretations Law, 1989 Duke L. J. 511, 515 516 (suggesting "[i]f specified [a statute] novo," inappropriate). De novo presume foundation law. here impairing factual determinations, apply those law, novo. 27 held presenting issue, because " 'reach decision' determining F.3d, 1462; see Rollerblade, 112 481, 483 1997); Universal Elecs. 488, 491 493 1997). point these, applied manner. expertise construing command reaching regulation's particular course, disclose imprecise imperfect statute. "One doubtless imagine questionable applications test limits authority." Babbitt Sweet Home Chapter, Communities Great Ore., 687, 714 (1995) (O'Connor, concurring). considering relation situations, conclude unreasonable it. instances, will control. Under determines "Congress directly spoken precise issue," "that end matter; court, unambiguously expressed intent Congress." U.S., 842 843. If, "fills gap defines term way legislature's revealed design, [that] 'controlling weight.' NationsBank N. C., Variable Annuity Life Ins. Co., 513 251, 257 (quoting supra, 844). 29 ambiguous, purposes analysis, inartful deficient. present exemplifies familiar proposition need not, likely cannot, anticipate circumstances policy Here so unforeseen situations manner Congress' intent. claims gives stating (to grant abroad) specifics (finding painting, example, assembly). nonetheless, use discretion how best implement covered statute's terms. Those instructive congressional purpose, instances should parallel, address. 30 Finally, supporting amicus contend historical cases. 6; Bar Association Amicus Curiae 11. history, say, clear convince thwart early 1809, Chief Marshall noted doubtful, respected construction understood treasury department questions." Vowell, Cranch 368, 372. P. Reed, Role & Law 289 (1997) ("Consistent methodology, long cases, sustained represent statute"); cf. Zenith Radio 437 443, 450 (1978) (deferring Department's "longstanding interpretation" countervailing Act). IV 31 disregarded. Application framework beginning analysis. courts, must, appropriate, Atlantic Mut. Commissioner, 523 382, 389 (1998) (when Internal Revenue Code task confronts decide, represents one"). somewhat like Tax Court, guides complex specialized area law; positioned evaluate mandate preconditions present. B 32 applicability general, certiorari question, asking met "operations process," Because determined go ultimately warrants 33 arguments turning details facts manufacturing including here. instance, pure synthetic fabric, apparently pressed Mexico facility. 33, 37; 47. Yet ovenbaking minutes pressing, notwithstanding characteristics could achieved period time lieu ovenbaking. 79 87. Moreover, refers "[c]hemical permapressing," 10.16(c)(4) undisputed resin 34 open quantity is, standpoint itself, less permits, reference pressing-only operation. raise fares addressed Declining granted, Appeals. 35 vacated, remanded opinion. 36 ordered. Opinion Stevens, 38 41 whom Ginsburg joins, dissenting part. 42 explicates, begins standard exemption, concludes relatively indicate interpreted. (listing taking meet standard); (same); standard). Surely effort enumerate "significant" common permissible sensible. Nothing history convinces me otherwise; my opinion, clearly valid. 43 strongest challenge misinterpreted misapplied excluded examples: "Chemical permapressing." entries textile mill, ovenbaked assembly. fabric; require resin-treatment, 8a 9a, 15a 16a; 34, cannot pressing-plus-ovenbaking, alone, species 44 rather obvious answer contention. One certainly discern meaningful difference hand, using (or perhaps extended pressing) substance added. Based difference, logically accord understanding latter "chemical treatment" exemption. Indeed, distinguishing fashion kind line-drawing job legislation contains When lines drawn "stationary source" air pollution, performed "incidental always opposite sides line almost identical. That consequence, necessarily compromise integrity applied. 45 elaboration Service's denial allowance scope congressionally authority. decide reasonableness I Court's disposition case. Kumho Tire Carmichael, __, __ (1999) (Stevens, part). But since parties enlighten issues, think clear, reverse do, join Parts I, II, well-reasoned

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