Court Opinion

ID: 6824337
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:20:57.398116+00
Date Added: 2024-06-11T16:04:15.616427
License: Public Domain

Miller, Judge,

dissenting.

In holding that the Secretary’s finding of scientific equivalency is “amply supported by the record,” the majority appears to have directed its attention exclusively to the research purpose for which the Philips EM 201 microscope was intended to be used and to have ignored the other major purpose of use in training graduate and post-graduate *122students in basic principles of electron microscopy. Appellant declared in its first application, filed October 2, 1972, that “it is essential that we purchase a relatively uncomplicated instrument.” In its second application, filed July 9, 1973, appellant stated:
The model EMU-4C electron microscope is designed for research, is a relatively complex instrument and requires a skilled electron microscopist for its operation. More specifically, the Philips EM201 is a new microscope specifically designed for laboratories requiring relatively high levels of performance but also simplicity of operation. . . . The overriding consideration for the Philips EM201 is its relative simplicity of design and ease of operation on a daily basis.
In its comments on the second application, the only statement relevant to the foregoing made by NIH’s Florence Agreement Committee was:
The ETEM 101 made by Elektros, Inc. is simple and easy to use.
In its third and final application, filed February 20, 1974, appellant pointed out that an “unknown date in early 1973” the Electros ETEM 101 was introduced, but that it was not available at the time the Philips EM 201 was purchased on August 17, 1972. Attached to the application was a copy of the manufacturer’s description of the Philips EM 201, which includes the following statements:
For the first time, users with a minimum of experience in electron microscopy can be assured of achieving highest quality results, quickly and easily. This new instrument is designed to combine maximum simplicity of operation with high performance.
The comments on the third application by NIH’s Florence Agreement Committee which provided the basis for the Secretary’s finding of scientific equivalency did not again refer to the Elektros ETEM 101. However, the Committee said that “the description of the research or teaching does not establish a pertinent characteristic for the article that upholds duty-free entry.”
Regulation 15 CFR 701.2(n) provides that the term “pertinent specifications”—
does not extend to such characteristics as size, durability, complexity, ease of operation, ease of maintenance and versatility, unless the applicant can demonstrate that they are necessary for accomplishing the purposes for which the article is intended to be used.
I am satisfied that the record demonstrates that simplicity and ease of operation are necessary for the purposes of training students in basic principles of electron microscopy. No responsive comment, either by NIH’s Florence Agreement Committee or the Secretary (through the Director, Office of Import Programs, Domestic and International Business Administration), appears in the record to refute appellant’s claim *123that the Philips EM 201 possesses these pertinent characteristics and that the EMU-4C does not.1
Nor is there any evidence of record, much less “substantial evidence,” to support the Secretary’s finding of scientific equivalency on this point. Accordingly, the Secretary’s finding insofar as it relates to the purpose of use of the Philips EM 201 in training students in basic principles of electron microscopy should be reversed and the case remanded for the taking of testimony and/or the production of evidence on the basis of which an appropriate and responsive finding can be made on the relative simplicity and ease of operation of the Philips EM 201 and the EMU-4C.
In its first application, filed October 2, 1972, appellant stated that Forgflo Corporation, which had taken over the EMU series from RCA, was on the verge of bankruptcy and that the EMU series was no longer on the market. Actually Forgflo had filed a petition in bankruptcy in August 1971. In its second application, filed July 9, 1973, appellant stated that Forgflo was no longer in business pending resolution of the bankruptcy proceedings. In its third and final application, appellant (apparently in response to a comment on Adam David Co. by NIH’s Florence Agreement Committee on the second application) stated that Forgflo had gone into bankruptcy and that the Adam David Co., “a company unknown to experts in the field,” had stated (in 1973) that it was “manufacturing and selling the EMU-4C microscope.” It further stated that, at the time it purchased the Philips EM 201 on August 17, 1972, Forgflo was unable to furnish a guarantee of adequate service. Commenting on this point, NIH’s Florence Agreement Committee made the following statement: “Anticipated service needs . . . are not relevant to duty-free entry.” The Secretary’s decision contained no statement on the point of assured service.
The majority would overcome this reversible deficiency2 in the Secretary’s decision by relying on a letter in the record from the RCA Service Company dated December 10, 1973, fourteen months after appellant filed its first application and sixteen months after the electron microscope in question was purchased. The letter expresses a commit*124ment (as of December 10, 1973) that the Company “will provide service and parts to any individual or organization in the U.S.A. and Hawaii.” Although the letter recites lack of knowledge of any instance where service “has been refused to anyone,” it does not show when such service had been rendered in the past and, particularly, whether it was being rendered at the time of appellant’s purchase of the electron microscope. Indeed, in its second application, filed July 9, 1973, appellant stated it had been informed that RCA would only “continue to service their instruments on a parts-available basis.” Instead of giving “reasoned consideration” to this critical point, the Secretary failed to even comment upon it, apparently relying on NIH’s Florence Agreement Committee’s erroneous judgment that anticipated service needs are irrelevant.
Item 851.60, headnote 6, directs that the Secretary determine—
whether an instrument or apparatus of equivalent scientific value to such article, for the purposes for which the instrument or apparatus is intended to be used, is being manufactured in the United States.
As pointed out above, the congressional intent was that duty-free status be granted a foreign article where a domestic article is merely not as capable of fulfilling the purposes for which the foreign article is imported.3 It seems self-evident that lack of assurance of service on a $36,000 EMU-4C would indicate that the EMU-4C was not as capable of fulfilling appellant’s research and educational purposes as the $43,700 Philips EM 201 with assured service. Therefore, the Secretary’s finding of scientific equivalency should be reversed and the case remanded for the taking of testimony and/or the production of evidence on the basis of which an appropriate and responsive finding can be made on the question of whether there was a reasonable assurance of continued service on the EMU-4C at the time appellant purchased the Philips EM 201.4

The Senate report on H.R. 8664, which became the Educational, Scientific and Cultural Materials Importation Act of 1966, establishes an intention that duty-free status be granted a foreign article where a domestic article is merely not as capable of fulfilling the purposes for which the foreign article is imported.
(2) Equivalency of scientific value
Under the bill the determination of equivalent scientific value is to be in terms of equivalent scientific value for the purposes for which the instrument or apparatus is intended to be used. This will prevent the bill from resulting in the duty-free entry of an instrument or apparatus in a case where there is available a domestic article which, though different from the foreign article in some scientific characteristics, nevertheless is as capable as is the foreign one of fulfilling the purposes for which the instrument or apparatus is intended to be used.
S. Rep. No. 1678, 89th Cong., 2d Sess. 12 (1966). The House report is practically verbatim. H.R. Rep. No. 1779, 89th Cong., 2d Sess. 18 (1966).

,‘The function of the court is to assure that the agency has given reasoned consideration to all the material facts and issues.” Greater Boston Television Corp. v. F.C.C., 444 F. 2d 841, 851 (D.C. Cir.), cert. denied, 403 U.S. 923 (1971).

 It is noted that Regulation 15 CFR 701.11(b) provides that, in determining whether a U.S. manufacturer is able and willing to produce on order or custom-make an instrument or apparatus, the Deputy Assistant Secretary shall take into account the “normal commercial practices applicable to the production and delivery of instruments, apparatus, or accessories of the same general category.” I agree with the majority that assurance of service is not covered by this regulation. However, such a gap in the regulations does not diminish the relevance of assurance of service in finding scientific equivalency under the law, construed to give effect to the congressional intent.

Appellant cites approval on October 21, 1972, of a duty-free application by Purdue University for an EM 201 microscope purchased in 1971; also approval on May 17, 1973, of a similar application by the University of Minnesota. The record with respect to these applications is not before us, so they cannot be regarded as precedents. However, following remand, the Secretary might wish to take them into consideration or comment on them for their bearing on the point of uniform treatment of applications.