Sharp Microelectronics Technology, Inc. v. U.S., 97-1013
| Decision Date | 02 September 1997 |
| Docket Number | No. 97-1013,97-1013 |
| Citation | 122 F.3d 1446 |
| Parties | SHARP MICROELECTRONICS TECHNOLOGY, INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Fusae Nara, Donovan Leisure Newton & Irvine, New York City, argued for Plaintiff-Appellant. With him on the brief were Peter J. Gartland and David S. Versfelt.
Amy M. Rubin, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, International Trade Field Office, New York City, argued for Defendant-Appellee. With her on the brief were Frank W. Hunger, Assistant Attorney General, and David M. Cohen, Director, Department of Justice, Washington, DC, and Joseph I. Liebman, Attorney in Charge, and Chi S. Choy, International Trade Field Office, New York City.
Before CLEVENGER, RADER, and BRYSON, Circuit Judges.
Sharp Microelectronics Technology, Inc. (Sharp) appeals from the judgment of the Court of International Trade upholding the classification by the United States Customs Service (Customs) of Sharp's imported glass cells as "[l]iquid crystal devices not constituting articles provided for more specifically in other headings ... Other devices ... Other," under the Harmonized Tariff Schedule of the United States (HTSUS), subheading 9013.80.60. Sharp Microelectronics Tech., Inc. v. United States, 932 F.Supp. 1499 (Ct Int'l Trade 1996). Exercising our jurisdiction under 28 U.S.C. § 1295(a)(5) (1994), we affirm.
The imported glass cells at issue in this case consist of two pieces of processed glass with a layer of liquid crystal material injected between them. Together, the materials are referred to as "display glass," which displays text and graphics created from coded signals received by the display glass from the central processing unit of an automatic data processing machine. The parties have stipulated that the only use for the imported items is as parts for the display screens of computers.
Subheading 9013.80.60 of the HTSUS reads in relevant part
9013 Liquid crystal devices not constituting articles
provided for more specifically in other headings
9013.80 Other devices, appliances and instruments
9013.80.60 Other
The duty attached to such articles is 9 percent.
The Explanatory Note to heading 9013 provides in relevant part:
This heading includes: (1) Liquid crystal devices consisting of a liquid crystal layer sandwiched between two sheets or plates of glass or plastics, whether or not fitted with electrical connections, presented in the piece or cut to special shapes and not constituting articles described more specifically in other headings of the Nomenclature....
When Customs classified Sharp's display glass under subheading 9013.80.60, Sharp disagreed, arguing that the subject entries should instead be classified under subheading 8473.30.40 (parts and accessories of machines of automatic data processing machines), or subheading 8471.92.30 (input or output display units of automatic data processing machines), or subheading 8531.20.00 (indicator panels incorporating liquid crystal devices). After the contested entries were liquidated pursuant to Customs' classification, Sharp filed a timely protest. Upon Customs' denial of the protest, Sharp brought suit in the Court of International Trade.
On stipulated facts, the parties filed cross motions for summary judgment in the Court of International Trade. Sharp did not pursue its contention that the display glass should be classified under subheading 8531.20.00, and it does not appeal from the judgment that the display glass cannot be classified under subheading 8471.92.30. Consequently, we will visit the decision of the Court of International Trade only insofar as it relates to Sharp's contention that the display glass must be classified under subheading 8473.30.40 and to Customs' stance that the proper classification provision is subheading 9013.80.60.
Because Sharp's display glass fits the description of liquid crystal devices contained in heading 9013 and the Explanatory Note thereto, the Court of International Trade proceeded to determine whether the articles in question are "provided for more specifically in other headings," that being the relevant question posed on the face of heading 9013. Since the alternative subheading proposed by Sharp is a parts provision, the Court of International Trade first considered whether the display glass falls within the terms of subheading 8473.30.40, which provides in relevant part:
8473.30 Parts and accessories of the machines of heading
8471 [automatic data processing machines]:
8473.30.40 Not incorporating a cathode ray tube
After concluding that the display glass is an integral component of a finished automatic data processing machine without which it would not operate as intended, and that the use of Sharp's display glass at, or immediately before, the date of importation is solely or principally for use in automatic data processing machines, the Court of International Trade decided that Sharp's display glass can be described as a part of an automatic data processing machine. The government does not challenge that particular decision.
Next, the Court of International Trade considered whether Sharp's display glass is provided for more specifically in the parts provision than it is in the liquid crystal devices provision. For two reasons, the Court of International Trade concluded that the parts provision does not more specifically describe Sharp's display glass.
First, the Court of International Trade resorted to Note 1(m) of Section XVI of the HTSUS, which provides that "[t]his section [which includes chapter 84 and thus subheading 8473.30.40] does not cover ... Articles of Chapter 90 [including subheading 9013.80.60]." Note 1(m) thus states a rule of interpretation that articles which are described in Chapter 90 cannot be classified in Chapter 84. Having concluded previously that Sharp's display could be classified either as a liquid crystal device or as a part of an automatic data processing machine--the choice dependent only on whether the parts provision more specifically describes the articles--the court read Note 1(m) to deflect Sharp's display glass from the embrace of the parts provision. In essence, the court deemed Note 1(m) to preclude more specific provision for the display glass in the parts subheading.
Second, the court concluded that even if Note 1(m) does not answer the question of whether the parts provision is more specific than the liquid crystal device provision, the same result would obtain in a straightforward relative specificity analysis mandated by the terms of heading 9013. To perform that analysis, the court stated that it must look to the provision with "requirements which are more difficult to satisfy and which describe the article with the greatest degree of accuracy and certainty," citing Amersham Corp. v. United States, 564 F.Supp. 813, 824 (Ct. Int'l Trade 1983). The court also noted "in passing" that the relative specificity analysis it was undertaking was mandated by heading 9013 ("not ... provided for more specifically in other headings") and General Rules of Interpretation (GRI) 1 of the HTSUS and not by GRI 3(a) (). Finally, in order to complete its relative specificity analysis, the court referred to Additional U.S. Rule of Interpretation 1(c), which provides that "a provision for 'parts' or 'parts and accessories' shall not prevail over a specific provision for such part or accessory."
With those interpretative tools in hand, the court concluded that Sharp's display glass, except for the relative specificity consideration, is precisely described by heading 9013 and the Explanatory Note thereto, thus satisfying the accuracy and certainty tests. Turning to the parts provision, the court concluded that it is less difficult to satisfy because it is "easier to be classified as a part or accessory of any of the machines enumerated above than it is to be a liquid crystal device." 932 F.Supp. at 1507. In response to Sharp's argument that, as a general proposition, a parts provision will prevail over a basket provision, the court invoked Rule 1(c), noting that even if subheading 9013.80.60 were treated as a basket provision, it nonetheless more specifically describes the display glass than the parts provision, and hence displaces the general rule that a parts provision will prevail over a basket provision. Id. at 1507-08 n. 7.
We review the trial court's grant of summary judgment for correctness as a matter of law. See Mita Copystar America v. United States, 21 F.3d 1079, 1082 (Fed.Cir.1994). Because the central issue here concerns the legal scope of the pertinent classification terms, and because such issue is a question of law, we review the issue de novo. See Universal Elecs. Inc. v. United States, 112 F.3d 488, 493 (Fed.Cir.1997) (); Rollerblade, Inc. v. United States, 112 F.3d 481, 484 (Fed.Cir.1997) ().
Sharp has timely appealed the judgment of the Court of International Trade. Sharp contends that the Court of International Trade erred in three regards. First, it argues that heading 9013 is a genuine basket provision, and that under traditional rules of interpretation in classification cases, a parts provision must prevail over a basket provision, when the articles in question are described by both provisions. Second, Sharp faults the...
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