Source: https://law.justia.com/cases/federal/appellate-courts/F3/304/1362/474325/
Timestamp: 2019-04-20 07:19:11
Document Index: 740625840

Matched Legal Cases: ['§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 1401', '§ 152', '§ 1401', '§ 1401', '§ 1401', '§ 1401']

Luigi Bormioli Corp., Inc., Plaintiff-appellant, v. United States, Defendant-appellee, 304 F.3d 1362 (Fed. Cir. 2002) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Federal Circuit › 2002 › Luigi Bormioli Corp., Inc., Plaintiff-appellant, v. United States, Defendant-appellee
Luigi Bormioli Corp., Inc., Plaintiff-appellant, v. United States, Defendant-appellee, 304 F.3d 1362 (Fed. Cir. 2002)
U.S. Court of Appeals for the Federal Circuit - 304 F.3d 1362 (Fed. Cir. 2002)
Luigi Bormioli Corp. ("Bormioli") appeals the judgment of the United States Court of International Trade granting summary judgment to the United States that the appraised transaction value of certain entries of Bormioli's imported glassware includes a charge of 1.25 percent of its invoice price. See Luigi Bormioli Corp. v. United States, 118 F. Supp. 2d 1345 (C.I.T.2000). The court held that Bormioli did not demonstrate that the 1.25 percent charge was a bona fide interest charge excludable from the transaction value of the merchandise pursuant to Treatment of Interest Charges in the Customs Value of Imported Merchandise, 19 Cust. B. & Dec. 258 (1985), 50 Fed. Reg. 27,886 (July 8, 1985) ("TD 85-111"). Because we agree with the Court of International Trade that the United States Customs Service ("Customs") correctly determined that Bormioli did not demonstrate that the 1.25 percent charge should be excluded from transaction value, we affirm.
The Court of International Trade granted summary judgment to the United States. Citing Christensen v. Harris County, 529 U.S. 576, 120 S. Ct. 1655, 146 L. Ed. 2d 621 (2000), the court refused to grant Chevron deference, or any deference, to TD 85-111, and instead performed a de novo review. The court nonetheless found that TD 85-111 was consistent with the 19 U.S.C. § 1401a statutory scheme, as well as with the decision on the treatment of interest reached by the Committee on Customs Valuation of the General Agreement on Tariffs and Trade ("GATT"). Therefore, the court applied the three TD 85-111 factors to Bormioli. It held that Bormioli met only the first because (1) Bormioli departed from the terms of the written agreement; (2) the Canadian transactions are irrelevant because only U.S. transactions may be used as a comparison; and (3) the interest rate was not comparable to that prevailing in Italy.
We review a grant of summary judgment by the Court of International Trade de novo. Int'l Light Metals v. United States, 194 F.3d 1355, 1361 (Fed. Cir. 1999). Statutory interpretation is a matter of law that we review without deference to the interpretation reached by the Court of International Trade. SKF USA Inc. v. United States, 263 F.3d 1369, 1378 (Fed. Cir. 2001).
We need not reach the issue of the level of deference owed to Customs' treatment of interest as set forth in TD 85-111. The government argues that TD 85-111 should receive deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984), while Bormioli argues that no deference is due. In United States v. Mead Corp., 533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001), a decision issued after briefing in this case, the Supreme Court held that an agency's statutory interpretations are due Chevron deference when "it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." Id. at 226-27, 121 S. Ct. 2164. The Court further made clear that even where an agency's interpretation is not entitled to Chevron deference, it may be entitled to some deference based on its "power to persuade" in accordance with the principles of Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct. 161, 89 L. Ed. 124 (1944); Mead, 533 U.S. at 228, 235, 121 S. Ct. 2164 (noting "the merit of its writer's thoroughness, logic and expertness, its fit with prior interpretations, and any other sources of weight."). We need not determine whether Chevron, Skidmore or any deference is applicable to TD 85-111, because, as more fully discussed below, we agree with the Court of International Trade that the meaning of TD 85-111 reflects a proper interpretation of 19 U.S.C. § 1401a based on our de novo consideration of the issue. See Thai Pineapple Canning Indus. Corp. v. United States, 273 F.3d 1077, 1083 (Fed. Cir. 2001) (declining to decide whether Chevron or Skidmore deference applied to policy where the distinction is of no moment to the case); see also Springfield, Inc. v. Buckles, 292 F.3d 813, 2002 WL 1300022 at *4 (D.C. Cir. 2002) (declining to resolve level of deference).
The United States adopted the transaction valuation method of appraisal in 19 U.S.C. § 1401a(b) (codifying section 402(b) of the Trade Agreements Act of 1930, amended by the Trade Agreements Act of 1979). Paragraph (b) (1) of that section provides: "The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States, plus [certain additional] amounts ..." 19 U.S.C. § 1401a(b) (1) (1994) (emphasis added).1 These additional amounts (set forth in sub-paragraphs (A)-(E) of the statute) are to be added to the "price actually paid or payable" only if they are not otherwise included in that price, and if they are based on sufficient information. Id. Congress also expressly excluded certain charges from transaction value (such as certain taxes and post-importation costs).2 Section 1401a(b) (3) specifies that these enumerated excluded costs are not included in transaction value if they are identified separately from the "price actually paid or payable" and from any cost or other item referred to in section (b) (1). 19 U.S.C. § 1401a(b) (3) (1994).
19 U.S.C. § 1401a(b) (4) (A) (emphases added). We have interpreted the term "total payment" in the "price actually paid or payable" definition to be "all-inclusive." Generra Sportswear Co. v. United States, 905 F.2d 377, 379 (Fed. Cir. 1990). Therefore, we have held that the "price actually paid or payable" includes payments made by the buyer to the seller in exchange for merchandise even if the payment "represents something other than the per se value of the goods." Id. at 379-80 (holding that quota payments were properly included in the "price actually paid or payable"). This interpretation is consistent with the broad definition of "price actually paid or payable" adopted by the GATT.3
Within this framework, Customs issued a series of interpretive rulings expressly addressing the question of when it would consider interest payments to be part of the "price actually paid or payable" for merchandise, and hence part of the transaction value. See TAA No. 14, 542150 MK (January 6, 1981) (hereinafter "TAA 14"); TAA No. 31, 542275 TLL (June 11, 1981) (hereinafter "TAA 31"); and TAA No. 43, HQ 542627, 16 Cust. B. & D. 866 (December 17, 1981) (hereinafter "TAA 43"). In these rulings, Customs stated that only those interest payments which were part of an "overall financing arrangement" (TAA 43), or those which were paid by a buyer to a third party unrelated to a seller and which did not accrue to the seller's benefit (TAA 31) were not dutiable. See TD 85-111; TAA 43; TAA 31. For example, in TAA 43, Customs considered a financing arrangement that allowed an importer to delay paying its supplier for merchandise on the condition that it paid its supplier interest for the period of the delay. Customs found that because (1) the proposed financial relationship bore "no relationship to the particular sale," (2) the supplier had the right to renegotiate the interest rate if the going rate changed sufficiently, and (3) the financing arrangement was "fully documented as being separate from the import transaction," Customs would not consider the interest payments to be part of "the price actually paid or payable" for the imported merchandise. TAA 43. However, " [a]ll other interest payments associated with imported goods, including those paid to a seller and relating to the purchase of specific goods (TAA 14 and 31) were considered dutiable." TD 85-111; see also TAA No. 14 (holding that interest charges separately identified from the price payable were to be included in transaction value); see also TAA 31.
We must first consider whether TD 85-111 is consistent with the statute. Although all the detailed criteria of TD 85-111 cannot be found in the explicit language of the statute, we think that the statute must be interpreted to be consistent with GATT obligations, absent contrary indications in the statutory language or its legislative history. See Fed.-Mogul Corp. v. United States, 63 F.3d 1572, 1581 (Fed. Cir. 1990) (" [A]bsent express Congressional language to the contrary, statutes should not be interpreted to conflict with international obligations."). Here there are no such contrary indications. The GATT approach is quite consistent with the statute. Like 19 U.S.C. § 1401a(b) (4) (A), the GATT broadly defines "price actually paid or payable." See 1994 GATT Interpretive Note. GATT is also consistent with the policy of the statute. The GATT parameters not only provide a uniform method to evaluate when "interest" charges are included in transaction value, but they also serve to prevent importers from manipulating the amount of duties assessed on particular merchandise by simply designating part of the payment made for that merchandise as "interest." Without a policy that requires both sufficient documentation of the transaction, and evidence of comparable prevailing rates and sales, an importer could easily reduce the "price actually paid or payable" of the goods by denominating charges that actually represented a portion of the price of the goods as "interest." Thus, we construe the statute to make it consistent with GATT.
Under that construction, TD 85-111 is consistent with the statute because it is the same as GATT. Like the 1984 GATT Committee decision on the treatment of interest charges, TD 85-111 does not only apply to "unitary prices." See 1984 GATT Committee decision. Rather, it serves as a tool to evaluate all " [c]harges for interest under a financing arrangement entered into by the buyer and relating to the purchase of imported goods." Id. TD 85-111, like the 1984 GATT Committee decision, includes a criterion that the charges be separately documented from "the price actually paid or payable for the goods." Id. (stating the criterion that " [t]he charges are distinguished from the price actually paid or payable for goods."). TD 85-111 and the 1984 GATT Committee decision are otherwise identical. Both include the requirements that the financing arrangement be made in writing; the buyer can demonstrate that the goods are actually sold at the price declared as the price paid or payable; and the buyer can demonstrate that the claimed rate of interest does not exceed the rate for such transactions prevailing in the country where and at the time when the financing was provided. Id.; TD 85-11. Thus, in all relevant respects, TD 85-111 and the 1984 GATT Committee decision set forth the same criteria.
We disagree. Bormioli confuses the legal inclusion of a charge in the "price actually paid or payable" with the physical listing or invoicing of the "price actually paid or payable." Whether or not a charge is "included" in the "price actually paid or payable" is, in part, a legal construct. See 19 U.S.C. § 1401a(b) (4) (A) ("The term `price actually paid or payable' means the total payment (whether direct or indirect ...) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller"); see also 1994 GATT Interpretive Note. Charges may be legally "included in" the "price actually paid or payable" even if the seller "separately" listed or invoiced the charges from the price of the merchandise. See Generra Sportswear Co., 905 F.2d at 378-79 (quota charges invoiced separately from the "price" of the merchandise were nevertheless included); see also All Channel Products v. United States, 982 F.2d 513-514 (Fed. Cir. 1992) (foreign inland freight charges separately identified on the invoices for the merchandise were included in "price actually paid or payable" pursuant to 19 U.S.C. § 1401a(b) and applicable regulations); 19 C.F.R. § 152.103 (1999) (providing detailed instructions and examples for calculating the "price actually paid or payable," e.g. adding $350 to the $1850 "price" paid where the $350 represented an indirect payment settling a debt owed by the seller). However, where a charge must be "separately identified" from "the price actually paid or payable," then physical documentation of that charge separately from the documentation of "the price actually paid or payable" (rather than merely the constructive legal inclusion of the charge in the price), is at issue. See, e.g., 19 U.S.C. § 1401a(b) (3) (allowing items "separately identified" from the "price actually paid or payable" and other costs to be excluded from transaction value).
As outlined above, the relevant statute defining the "price actually paid or payable" for the merchandise is inclusive. See 19 U.S.C. § 1401a(b) (4) (A) ("` [P]rice actually paid or payable' means the total payment (whether direct or indirect ...) made, or to be made, for imported merchandise by the buyer to, or for the benefit of, the seller.") (emphases added); see also Generra Sportswear Co., 905 F.2d at 379-80 (" [P]rice actually paid or payable" includes payments even where the payment "represents something other than the per se value of the goods."). The statute does not suggest that "interest" payments are excluded. According to the statute, if a payment was made by the buyer to the seller "for the merchandise," it is to be included in the price paid or payable. Id. If a payment was not made "for the merchandise," then the payment would be excluded. Bormioli's focus on dictionary definitions of "interest" begs the question.
Finally, the Court of International Trade did not err in granting the United States summary judgment that Bormioli's interest payments did not satisfy the TD 85-111 criteria. Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." U.S. Ct. Int'l Trade Rule 56(c).
We agree that the parties to a written financing arrangement may contractually modify the terms of their agreement. However, for the financing arrangement to comport with TD 85-111, the modifications also must be in writing. Further, while Customs may choose to ignore a de minimis variation from the terms of a written financing arrangement, the parties' repeated violation of the salient terms of the arrangement must remove it from coverage under TD 85-111. TD 85-111 does not merely require that the parties have a written financing arrangement, but that the written financing arrangement actually govern the payments at issue. See TD 85-111 (requiring that the financing arrangement "in question" be in writing); see also 1984 GATT Committee decision (referring to " [c]harges for interest under a financing arrangement entered into by the buyer and relating to the purchase of imported goods...." and requiring such financing arrangement to be in writing). Were it otherwise, the parties could manipulate the transaction by setting up a "written financing arrangement" without adhering to any of its terms.
Because the TD 85-111 requirements are conjunctive, we need not address whether Bormioli satisfied the final requirement: that "where required by Customs, the buyer can demonstrate that [1] [t]he goods undergoing appraisement are actually sold at the price declared as the price actually paid or payable, and [2] [t]he claimed rate of interest does not exceed the level for such transaction prevailing in the country where, and at the time, when the financing was provided." See TD 85-111. For these reasons, the judgment of the Court of International Trade is
19 U.S.C. § 1401a(b) (1) (1994).
19 U.S.C. § 1401a(b) (3) (1994).
"The price actually paid or payable is the total payment made or to be made by the buyer to or for the benefit of the seller for the imported goods. The payment need not necessarily take the form of a transfer of money ... Payment may be made directly or indirectly...." Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Annex I, Interpretative Notes, Note to Article 1, "Price Actually Paid or Payable," 1994 WL 761483 (GATT) (emphasis added) (hereinafter "1994 GATT Interpretive Note").