Brother Intern. Corp. v. U.S.

Decision Date31 July 2002
Docket NumberNo. 00-01-00007.,Slip Op. 02-80.,00-01-00007.
Citation248 F.Supp.2d 1224
PartiesBROTHER INTERNATIONAL CORP., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade
OPINION

GOLDBERG, Senior Judge.

This case is before the Court upon cross-motions for summary judgment. At issue is the proper tariff classification of a part, styled model number "PC 101," used in certain multifunction center ("MFC") machines and facsimile machines. The plaintiff importer, Brother International Corp. ("Brother"), which manufactures the MFC and facsimile machines that use the PC 101, claims that the subject merchandise should be classified under subheading 8473.30.50 of the Harmonized Tariff Schedule of the United States ("HTSUS") (1998), and may be entered duty free. The United States Customs Service ("Customs") argues that the subject merchandise should be classified under subheading 3702.44.00, HTSUS, dutiable at a rate of 3.7% ad valorem. For the reasons that follow, the Court finds that there are no material facts in dispute and that the subject merchandise must be classified under subheading 8473.30.50, HTSUS, and accordingly grants summary judgment for Brother.

1. BACKGROUND

The PC 101 is a part, commonly labled a "printing cartridge,"1 that consists of a plastic housing with two gears on each side. Inside the plastic housing is a roll of chemically treated polyethylene terephthalate ("PET") film, mounted on a feed spool and attached to an uptake spool. The PC 101 is specifically designed and constructed to be used in four models of MFC machines2 and five models of facsimile machines manufactured and sold by Brother. When the PC 101 has been inserted into an appropriate MFC machine, and the machine receives a command to print, the gears of the PC 101 interact with those of the MFC machine to advance and position the roll of PET film. The MFC machine's thermal print head then heats the PET film, thereby transferring the film's chemicals to plain paper in a pattern that creates the characters and images desired by the user. Without the PC 101 installed, none of the aforementioned MFC or facsimile machines could function in their intended manner, as they would be unable to print.

Between January and March of 1998, Brother entered four shipments of the subject merchandise at the port of Los Angeles. In January 1999, Customs liquidated the entries, classifying the merchandise as "... [p]arts of facsimile machines: [o]ther," under subheading 8517.90.08, HTSUS, dutiable at 2.4% ad valorem. Brother filed timely protests, claiming that the subject merchandise should be classified as "[p]arts and accessories ... suitable for use solely or principally with ... machines of heading 8471:[n]to incorporating a cathode ray tube: [o]ther," under subheading 8473.30.50, HTSUS. Brother argued that the PC 101 was principally used in MFC machines rather than facsimile machines, and that the MFC machines that used the PC 101 were similar in all respects to another Brother MFC machine that Customs Headquarters had previously ruled classifiable under heading 8471. See U.S. Customs Service Headquarters Ruling 961153 (March 30, 1998). Customs denied the protests.

Brother paid all liquidated duties before timely commencing this action. In its response to Brother's Complaint, Customs filed a counterclaim in which it alleged that the subject merchandise is properly classified under subheading 3702.44.00, HTSUS, as "[p]hotographic film in rolls, sensitized, unexposed, of any material other than paper, paperboard or textiles ... without perforations ... [o]f a width exceeding 105mm but not exceeding 610mm," dutiable at a rate of 3.7% ad valorem. Both parties moved for summary judgment.

The Court has jurisdiction under 28 U.S.C. §§ 1581(a) and 1583.

II. DISCUSSION

A. Standard of Review

Summary judgment should be granted "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.C.I.T. R. 56(c). "The proper scope and meaning of a tariff classification term is a question of law to be reviewed de novo, while determining whether the goods at issue fall within a particular tariff term as properly construed is a question of fact." Franklin v. United States, 289 F.3d 753, 757 (Fed.Cir.2002) (citations omitted). That the latter determination is a question of fact does not preclude an award of summary judgment "when there is no genuine dispute as to the underlying factual issue of exactly what the merchandise is." Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.Cir.1998). Thus, the Court must grant summary judgment where the "nature and use" of the subject merchandise is not in dispute, id. (quoting Nissho Iwai Am. Corp. v. United States, 143 F.3d 1470, 1472-73 (Fed.Cir. 1998)), or where "none of the pertinent characteristics of the merchandise is in dispute, and thus the sole issue is a matter of properly interpreting the classification term at issue ... to determine whether the scope of that term is broad enough to encompass the items with the particular characteristics." Bausch & Lomb, 148 F.3d at 1365 (ellipsis in original) (quoting IKO Indus., Ltd. v. United States, 105 F.3d 624, 626-27 (Fed. Cir.1997)).

Customs's classification decisions enjoy a statutory presumption of correctness. 28 U.S.C. § 2639(a)(1) (2000). Citing Tomoegawa USA Inc. v. United States, 12 CIT 112, 681 F.Supp. 867 (1988), aff'd in part 7 Fed. Cir. (T) 29, 861 F.2d 1275 (1988), and Universal Elecs., Inc. v. United States, 20 CIT 337 (1996), aff'd 112 F.3d 488 (Fed.Cir.1997), Brother argues that Customs's classification is not entitled to this presumption in the instant case, because Customs has admitted that its initial classification of the subject merchandise was erroneous.

If the Court were to find that material facts were sufficiently in dispute as to preclude an award of summary judgment, Brother would be correct. Instead, Brother's argument is moot, for "when the Court is presented with a question of law in a proper motion for summary judgment, th[e statutory] presumption [of correctness] is not relevant." Marathon Oil Co. v. United States, 24 CIT ___, ___, 93 F.Supp.2d 1277, 1279 (2000). The statutory presumption of correctness is simply "a procedural device that is designed to allocate, between the two litigants in a lawsuit, the burden of producing evidence in sufficient quantity." Universal Elecs. Inc. v. United States, 112 F.3d 488, 492 (Fed.Cir. 1997). "[W]ith respect to pure questions of law, such as the proper interpretation of a particular tariff provision or term[,] ... the importer has no duty to produce evidence as to what the law means because evidence is irrelevant to that legal inquiry." Id. Thus, in a case such as this one, where the Court determines that there are no material facts in dispute, Customs's proposed classification is not entitled to the statutory presumption of correctness.3

However, there exists an important distinction between a presumption of correctness, which is a procedural device that allocates evidentiary burdens between two parties to a litigation, and the notion of deference, which is governed by standards of review. See Universal Elecs., 112 F.3d at 493. The Court does owe deference to Customs's classification rulings "in accordance with the principles set forth in Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944)." Franklin, 289 F.3d at 757 (citing United States v. Mead Corp., 533 U.S. 218, 234-35, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001); Mead Corp. v. United States, 283 F.3d 1342, 1346 (Fed. Cir.2002)). The Court of International Trade gives deference to Customs's classification rulings proportional to their "power to persuade," Mead, 533 U.S. at 235, 121 S.Ct. 2164 (quoting Skidmore, 323 U.S. at 140, 65 S.Ct. 161), in accordance with their "thoroughness, logic and expertness, [ ] fit with prior interpretations, and any other sources of weight." Mead, 533 U.S. at 235, 121 S.Ct. 2164. That Customs has abandoned its original classification of the subject merchandise, and now advances another in its litigation briefs, is certainly one factor the Court is entitled to consider in assessing the persuasive power of Customs's proposed classification.

B. The Parties' Arguments

Brother claims that the PC 101 is prima facie classifiable under heading 8473 of the HTSUS as a "[p]art[ ] ... suitable for use solely or principally with machines of headings 8469 to 8472." Brother argues that the PC 101 is a "part" because it is integral to the successful functioning of the machines in which it is used, and that unrebutted evidence proves it is used "principally" with MFC machines, which are classifiable under heading 8471.4

Citing Bauerhin Techs. Ltd. P'ship v. United States, 110 F.3d 774 (Fed.Cir. 1997), Brother observes that an imported item is classifiable as a part if it passes either of two tests: (1) it is an "integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article," id. at 779 (quoting United States v. Willoughby Camera Stores, 21 C.C.P.A. 322 (1933)), or (2) it is "dedicated solely for use with another article." Bauerhin, 110 F.3d at 779 (citing United States v. Pompeo, 43 C.C.P.A. 9 (1955)). Brother claims that the PC 101 passes both tests. It is an integral part of MFC machines because without the PC 101, such machines could not function in...

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