Court Opinion

ID: 818289
Source: CourtListenerOpinion
Date Created: 2013-02-02 23:34:10.098358+00
Date Added: 2024-06-11T13:19:12.750602
License: Public Domain

Slip Op. 07 - 17

           UNITED STATES COURT OF INTERNATIONAL TRADE

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VALUE VINYLS, INC.,                  :

                          Plaintiff, :

                    v.                 :   Court No. 01-00896

UNITED STATES,                         :

                          Defendant. :
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                             Opinion

[Upon cross-motions as to classification
 of certain plastic-coated textiles,
 summary judgment for the plaintiff.]

                                           Decided: January 30, 2007

     Givens & Johnston PLLC (Robert T. Givens and Rayburn Berry)
for the plaintiff.

     Peter D. Keisler, Assistant Attorney General; Barbara S.
Williams, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (James A. Curley); and Office of Assistant Chief Counsel,
International Trade Litigation, U.S. Bureau of Customs and Border
Protection (Beth C. Brotman), of counsel, for the defendant.

          AQUILINO, Senior Judge:      Courts are to interpret the

language of statutes so as to give effect to the intent of

Congress. E.g., Minor v. Mechanics Bank of Alexandria, 26 U.S. 46,

64 (1828); United States v. American Trucking Ass'ns, Inc., 310
Court No. 01-00896                                                  Page 2

U.S. 534, 542 (1940).       Sometimes they yield to the legislative

intent even when "it appears that a literal interpretation of the

statute involved would produce a result contrary to the apparent

legislative intent".      Procter & Gamble Mfg. Co. v. United States,

19 CCPA 415, 419, T.D. 45578 (1932).

     . . . All rules of construction must yield if the
     legislative intent is shown to be counter to the apparent
     intent indicated by such rule. The master rule in the
     construction of statutes is to so interpret them as to
     carry out the legislative intent.

Brecht    Corp.   v.   United   States,    25   CCPA   9,   13,   T.D.   48977

(1937)(citations omitted), quoting from United States v. Clay Adams

Co., 20 CCPA 285, 288, T.D. 46078 (1932).

            The "starting point for interpreting a statute is the

language of the statute itself."          Consumer Prod. Safety Comm'n v.

GTE Sylvania, Inc., 447 U.S. 102, 108 (1980).          And "where Congress

has clearly stated its intent in the language of a statute, a court

should not inquire further into the meaning of the statute."

Pillowtex Corp. v. United States, 171 F.3d 1370, 1373 (Fed.Cir.

1999).     However, when that is not the case, courts resort to

legislative history for assistance in interpreting the meaning.

See, e.g., Cherokee Nation of Oklahoma v. Leavitt, 543 U.S. 631

(2005).
Court No. 01-00896                                               Page 3

                                   I

          The parties to this action, which was commenced pursuant

to 28 U.S.C. §1581(a) and has been designated a test case pursuant

to USCIT Rule 84(b), have called these principles of the law into

account via cross-motions for summary judgment as to the correct

classification of imported goods that are described in plaintiff's

complaint, paragraph 1, as

     in sheet form of woven textile fabric, of a single
     polyester man-made fiber, coated or laminated such that
     it is completely encased or covered on both sides with
     compact polyvinyl chloride (PVC) non-cellular plastic
     (vinyl coated or laminated articles of such textile
     composition are commonly known as "supported" vinyls).

The complaint contests their classification by the U.S. Customs

Service, as it was still known during the times of their entry,

under subheading 3921.90.1950 of the Harmonized Tariff Schedule of

the United States ("HTSUS").

          Protests   of   this   approach   (in   lieu   of   plaintiff's

preferred classification under subheading 3921.90.11) precipitated

Service denial thereof per ruling HQ 963747 (June 25, 2001)1, which

concluded that the decision in Semperit Indus. Prods., Inc. v.

United States, 18 CIT 578, 855 F.Supp. 1292 (1994),

     1
       Plaintiff's Memorandum of Law, Exhibit 1 and Defendant's
Brief, Exhibit A.
Court No. 01-00896                                               Page 4

     is applicable to the subject products.         The court
     interpreted the statement "predominate by weight over any
     other single textile fiber" in regard to the HTSUS. The
     court determined that "the term 'predominate' . . .
     clearly refers to man-made fibers which, in terms of
     weight and relative to any other single textile fiber,
     constitute the stronger, main, or leading element, or
     hold advantage in numbers or quantity." . . . 18 CIT at
     585; 855 F.Supp. at 1298. Thus, pursuant to Semperit, in
     order for subheading 3921.90.11, HTSUS, to be applicable,
     the subject merchandise would have to be comprised of
     man-made fiber and another textile fiber. Because the
     products at issue are made up of only man-made fiber,
     subheading 3921.90.11, HTSUS, is not the correct tariff
     provision.2

The court had rendered its decision after determining that there

was no clear legislative intent.

            HQ 963747 refers, among other things, to findings by

Customs    that   plaintiff's   merchandise   weighed   less   than   1.492

kilograms per square meter, was 82 percent plastic and 18 percent

textile by weight, and consisted of "tarpaulin type material"3 used

in making truck covers and similar barrier coverings, dividers,

upholstery and signs and barriers.

                                    A

            There is no controversy over these findings of fact — or

over any other fact material to resolution of this case save the

     2
         Id. at 5.
     3
         Id. at 1.
Court No. 01-00896                                                     Page 5

genesis and meaning of the competing tariff provisions, which, of

course, are fundamentally issues of law.                 Compare Plaintiff's

Statement of Material Facts as to Which There are No Genuine Issues

to be Tried with Defendant's Response to Plaintiff's Statement of

Material Facts and Defendant's Statement of Material Facts Not in

Dispute.       In short, this matter is ripe for adjudication via

summary judgment.      Cf. Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 247-49 (1986).

           The parties agree that plaintiff's entries at issue

landed under HTSUS heading 3921 ("Other plates, sheets, film, foil

and strip, of plastics").            Their dispute focuses on subheading

.90.11 versus .90.19 which were set forth in the HTSUS (1998), for

example, as follows:

     3921.90      Other:
                           Combined with textile materials and
                           weighing not more than 1.492 kg/m2:
                                 Products with textile components
                                 in which man-made fibers predomi-
                                 nate by weight over any other
                                 single textile fiber:
     3921.90.11                        Over 70 percent by weight
                                       of plastics................ m2... 4.2%
                                                                   kg
     3921.90.15                        Other      ................ m2... 6.9%
                                                                   kg
     3921.90.19                  Other................................. 5.3%

Plaintiff's     position      herein,   however,    draws    upon   the   Tariff

Schedules of the United States ("TSUS") that preceded the adoption
Court No. 01-00896                                                    Page 6

of the HTSUS, in particular item 355.81 located in Schedule 3
("Textile Fibers and Textile Products"), Part 4 ("Fabrics of
Special Construction or For Special Purposes . . .") (1988), to
wit:
              Woven or knit fabrics (except pile or tufted fabrics),
                of textile materials, coated or filled with rubber
                or plastics material, or laminated with sheet rubber
                or plastics:
                                     *   *   *
                   Of man-made fibers:
       355.81           Over 70 percent by weight of rubber or
                        plastics........................ Sq. yd. 4.2% ad val.

       355.82          Other................................... 8.5% ad val.
                                    *   *   *
       355.85     Other................................ Sq. yd. 5.3% ad val.

See Plaintiff's Brief in Reply, Exhibit B. The court does not read

the parties' cross-motion papers as in disagreement that this TSUS

item is the predecessor of HTSUS subheading 3921.90.11, supra.

See, e.g., Plaintiff's Memorandum of Law, Exhibit 2, second page

(Conversion of the Tariff Schedules of the Unites States Annotated

Into the Nomenclature Structure of the Harmonized System, Annex

III: Cross-Reference From Converted Tariff Schedule to Present

TSUSA, p. 288, USITC Pub. 1400 (June 1983)).             And the court could

conclude that, were TSUS item 355.81 still in effect4, plaintiff's

merchandise     would   be   correctly    classifiable    thereunder.       See

       4
       TSUS General Headnote and Rule of Interpretation 9(f)(i)
(1988) defined "of" when used between the description of an article
and a material to mean the "article is wholly or in chief value of
the named material".
Court No. 01-00896                                                   Page 7

Spradling Int'l, Inc. v. United States, 17 CIT 40, 811 F.Supp. 687

(1993).

             To be sure, such a conclusion would not directly govern

this case, although the plaintiff points back to that item in

vigorously pressing that "there is in fact very considerable

legislative history demonstrating that Congress did intend [HTSUS

3921.90.11] to include plastic coated textiles consisting of a

single man-made fiber."           Motion for Summary Judgment, p. 3.

(boldface and underscoring deleted).              That history includes a

presidential request that the U.S. International Trade Commission

("USITC"), in preparing for the conversion of the TSUS into HTSUS,

"avoid,    to    the   extent   practicable     and   consonant    with   sound

nomenclature principles, changes in rates of duty on individual

products."      USITC, Institution of Investigation for the Conversion

of the Tariff Schedules of the United States into the Nomenclature

Structure of the Harmonized System, 46 Fed.Reg. 47,897 (Sept. 30,

1981).    And, at the time of adoption of the HTSUS, a congressional

report stated that the "conferees believe that the HTS fairly

reflects     existing    tariff   and   quota    treatment   and    that    the

conversion is essentially revenue-neutral." H.R. Rep. No. 100-576,

p. 548 (1988). See generally Omnibus Trade and Competitiveness Act

of 1988, Pub. L. No. 100-418, 102 Stat. 1107.
Court No. 01-00896                                            Page 8

          Annex I to USITC Publication 1400, page 39-10 (June

1983), contained a version of subheading 3921.90.11 with the

language "in which the textile material is in chief value of man-

made fibers". Chief-value is defined by General Legal Note 8(e) to

that publication to mean when "such material exceeds in value each

other single component material of the article".        That deviation

from the defined term "of", meaning "wholly or in chief value" in

TSUS 355.81, to direct use of "chief value", and in omitting the

words "wholly or" in that 1983 possible conversion, could be of

concern but for Annex III to USITC Publication 1400, which reflects

the precise intent of the conversion.

          Annex III served the purpose of equating items in the

TSUS to subheadings in the new HTSUS in the planned conversion. As

evidenced by the schedules, HTSUS subheading 3921.90.11 is clearly

the successor to TSUS item 355.81 while HTSUS 3921.90.19 has its

own, multiple predecessors, ranging from items 355.15 to 355.85,

non-inclusive   and,   notably,   excluding   355.81.    Although   the

differing language of the provisions could indicate change in

meaning, given the demonstrated executive and legislative intent to

leave the tariff provisions intact to the extent possible, this

court can conclude that the U.S. government intended that HTSUS

subheading 3921.90.11 apply to supported textiles of the kind now

at bar, supplanting precedent TSUS item 355.81.
Court No. 01-00896                                               Page 9

          The Trade and Tariff Act of 1984, Pub. L. No. 98-573, 98

Stat. 2948, altered Schedule 3 of the TSUS with the intent that

such amendment provide for imports to be included in items 355.65

to 355.85 "regardless of the relative value of the contained

textile fibers, rubber, and plastics" and, additionally, restored

the classification of "many products previously classified in

schedule 3".5     Following Congress's corrective elimination of

relative value as a determinative element in the TSUS, the Office

of the U.S. Trade Representative published the Proposed United

States   Tariff   Schedule   Annotated   in   the   Harmonized    System

Nomenclature (July 1987), replacing the 1983 language of proposed

HTSUS subheading 3921.90.11, "textile material is in chief value of

man-made fibers", with "textile components in which man-made fibers

     5
       S. Rep. No. 98-308, p. 6 (1983). See also H.R. Conf. Rep.
No. 98-1156, p. 5 (1984). That Senate Report states:

          As a result of two recent decisions . . . [in]
     United States v. Canadian Vinyl Industries, 64 CC.P.A. 97
     (1977), and United States v. Elbe Products Corp., [68
     CCPA 72] (1981), that ruled against the government's
     position on classification, many products previously
     classified in schedule 3 are now entering lower duty
     rates under schedule 7. The committee is convinced that
     the court erred in interpreting the law and Congressional
     intent with respect to the proper classification of these
     coated fabrics. The purpose of section 111 is to reverse
     the court's decisions and to restore the proper
     classification of these fabrics to that understood by the
     Customs Service and Congress prior to the decisions.
Court No. 01-00896                                                      Page 10

predominate by weight over any other single textile fiber", the

latter being the language now under consideration herein.                On its

face, that change eliminated the previously-defined term "chief

value" and replaced it with similar albeit undefined, comparative

language with respect to weight rather than value.

                                          B

               Whatever   the   precise       presidential   and   congressional

intent, defendant's position now is that "the operative language of

3921.90.11 . . . brought about a change in meaning in that

provision when compared to item 355.81, TSUS."               Defendant's Brief,

p. 4.       It prays for this court's deference to HQ 963747, which is

"eligible to claim respect" per United States v. Mead Corp., 533

U.S. 218, 221 (2001), to the extent of

        the thoroughness evident           in its consideration, the
        validity of its reasoning,        its consistency with earlier
        and later pronouncements,         and all those factors which
        give it power to persuade,        if lacking power to control.

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).

               In acknowledging that it is a "primary function of the

courts to determine legislative intent"6, HQ 963747 merely states

        6
            Supra n. 1, p. 3.
Court No. 01-00896                                                   Page 11

that, in regard to the applicability of Semperit, supra, "[n]o

contrary legislative intent was found" and that the "protestant's

argument and exhaustive presentation of the legislative history of

tariff     treatment      of   man-made   textile     articles    [are]     not

persua[sive]."7

              As indicated, this court is not so unconvinced, but it

clearly     understands    defendant's    adherence   to   and   reliance    on

Semperit Indus. Prods., Inc. v. United States, 18 CIT 578, 855

F.Supp. 1292 (1994). In fact, in that case the defendant had urged

the   court    to     follow   its   interpretation   of   "[w]ith   textile

components in which man-made fibers predominate by weight over any

other single textile fiber" that it

      does not require the presence of more than one "class of"
      textile fiber in order for man-made fibers "to
      predominate by weight over any other single textile
      fiber."

           Defendant maintains "the common meaning of the term
      'predominates' does not require the physical presence of
      another entity for comparison."     . . . In addition,
      defendant asserts "[e]ven if a comparison is indicated by
      definition or use [of the term 'predominate,'] neither
      the definitions or use of the term in the HTSUS require
      the actual physical presence of another entity (e.g.,
      textile fibers other than man-made fibers), rather than
      the complete absence of any other entity, for
      comparison." . . . Defendant also claims the use of the

      7
          Id. at 4.
Court No. 01-00896                                                      Page 12

     term "predominate" in subheading 4010.91.15 "merely
     requires that man-made fibers be superior in weight * * *
     or dominate over 'any other single textile fiber.'" . . .
     In sum, according to defendant, "[t]he fact that the
     statute provides instructions for situations where other
     textile fibers may be present with man-made fibers does
     not mean that articles in which only man-made fibers are
     present are precluded from classification under HTSUS
     subheading 4010.91.15."

18 CIT at 582-83, 855 F.Supp. at 1296 (emphasis in original;

citations omitted). That language was found in a different chapter

of the HTSUS, 40, and under a different heading, 4010, encompassing

much different merchandise than that at bar, namely, industrial

conveyor belts produced from a combination of vulcanized rubber and

textile material. Be those differences as they were, the plaintiff

in Semperit, much like Value Vinyls, Inc. now, asserted that

     Customs' classification d[id] not accord with cross-
     reference tables found in the ITC Report which correlate
     former TSUS items with HTSUS subheadings. . . .

18 CIT at 582, 855 F.Supp. at 1296 (citations omitted).              The court

concurred.

             The   court   disagreed     not   only   with   the   defendant's

interpretation      of   the   meaning    of   "predominate"8,     it    held     a

differing view9 of the USITC's cross-reference tables:

     8
         See 18 CIT at 585-86, 855 F.Supp. at 1298-99.
     9
         Cf. 18 CIT at 583-84, 855 F.Supp. at 1300.
Court No. 01-00896                                        Page 13

          The ITC Report cited by plaintiff further supports
     the Court's conclusions in this case. As noted above,
     the Report correlates the TSUS provision under which
     Customs formerly classified the belts, item 358.16, to
     HTSUS subheading 4010.91.19, the provision upon which
     plaintiff relies, and to two other subheadings that are
     immaterial to this action. . . . Notably, the Report
     does not pair the former TSUS provision with the HTSUS
     subheading upon which defendant relies, 4010.91.15.
     Similarly, the Report matches defendant's claimed
     provision, subheading 4010.91.15, to item 358.14, TSUS,
     a provision that Customs did not apply to the subject
     merchandise.   . . . Although the ITC Report is not
     entitled to "great weight," it is nevertheless "clearly
     relevant to the Court's inquiry" as it provides some
     indication of the intended relationship between the
     former provisions under the TSUS and the new provisions
     under the HTSUS. Beloit Corp. v. United States, 18 CIT
     67, 81, 843 F.Supp. 1489, 1499, 1500 (1994).       As a
     result, the Court finds the ITC Report supplies
     additional support for the conclusion that Customs
     incorrectly classified the subject merchandise under
     subheading 4010.91.15 rather than under subheading
     4010.91.19.

18 CIT at 588, 855 F.Supp. at 1300 (USITC citations omitted).   Cf.

Anhydrides & Chemicals, Inc. v. United States, 130 F.3d 1481, 1483-

84 (Fed.Cir. 1997).

           Given the legislative history, including the expectation

that the conversion from TSUS to HTSUS be revenue neutral, this

court need not have inquired further into the meaning of the

statute.   Cf. Pillowtex Corp. v. United States, supra.
Court No. 01-00896                                           Page 14

                                 II

           In view of the foregoing, plaintiff's motion for summary

judgment should be granted and defendant's cross-motion denied.

Final judgment will enter accordingly.

Decided:   New York, New York
           January 30, 2007

                                /s/Thomas J. Aquilino, Jr.
                                        Senior Judge
                            J U D G M E N T

             UNITED STATES COURT OF INTERNATIONAL TRADE

               Thomas J. Aquilino, Jr., Senior Judge

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VALUE VINYLS, INC.,
                                       :
                          Plaintiff,
                                       :
               v.                                 Court No. 01-00896

UNITED STATES,                                :

                          Defendant.   :
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          This case having been duly submitted for decision; and

the court, after due deliberation, having rendered a decision

herein;   Now therefore, in conformity with said decision, it is

          ORDERED, ADJUDGED and DECREED that plaintiff’s motion

for summary judgment be, and it hereby is, granted; and it is

further hereby

          ORDERED, ADJUDGED and DECREED that the merchandise that

underlies this case is correctly classifiable under subheading

3921.90.11   of   the   Harmonized   Tariff   Schedule   of   the   United

States; and it is further hereby

          ORDERED   that   Customs   and   Border   Protection,     United

States Department of Homeland Security, reliquidate any entries
Court No. 01-00896                                              Page 2

of said merchandise that have not been liquidated under the

aforesaid   HTSUS   subheading   and   refund   to   the   plaintiff   any

excess duties paid, together with interest thereon as provided

by law.

Decided: New York, New York
         January 30, 2007

                                 /s/ Thomas J. Aquilino, Jr.
                                          Senior Judge