Mead Corp. v. U.S., 98-1569.

• Decision Date: 08 March 2002
• Docket Number: No. 98-1569.,98-1569.
• Citation: 283 F.3d 1342
• Parties: THE MEAD CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

283 F.3d 1342

THE MEAD CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 98-1569.

United States Court of Appeals, Federal Circuit.

March 8, 2002.

J. Peter Coll, Jr., Orrick, Herrington & Sutcliffe, LLP, of New York, New York, filed a brief on remand from the Supreme Court of the United States for plaintiff-appellant. With him on the brief was Kristen Bancroft. Of counsel on the brief was Sidney H. Kuflik, Lamb & Lerch, of New York, New York.

Amy M. Rubin, Attorney, Civil Division, International Trade Field Office, Department of Justice, of New York, New York, filed a brief on remand from the Supreme Court of the United States for defendant-appellee. With her on the brief was David M. Cohen, Director, Civil Division, Commercial Litigation Branch Department of Justice, of Washington, DC. Of counsel on the brief was Karen P. Binder, Assistant Chief Counsel, U.S. Customs Service, of New York, New York. Of counsel were William Kanter, and Bruce G. Forrest, Attorneys, Appellate Staff, Civil Division, Department of Justice, of Washington, DC; and Allan L. Martin, Associate Chief Counsel, and Lou Brenner, Attorney, U.S. Customs Service, of Washington, DC; and Edward N. Maurer, Attorney, U.S. Customs Service, of New York, New York.

Terence P. Stewart, Stewart and Stewart, of Washington, DC; David Serko, Serko & Simon, LLP, of New York, New York; Richard M. Belanger, Powell, Goldstein, Frazer & Murphy, LLP, of Washington, DC; and Peter Jay Baskin, Sharretts, Paley, Carter & Blauvelt, P.C., of New York, New York, for amicus curiae Customs and International Trade Bar Association.

Before NEWMAN, RADER, and SCHALL, Circuit Judges.

RADER, Circuit Judge.

This case is before this court on remand from the Supreme Court of the United States. United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (Mead III). In Mead Corp. v. United States, 185 F.3d 1304 (Fed.Cir. 1999) (Mead II), this court reversed the Court of International Trade's affirmance of a tariff classification from the U.S. Customs Service (Customs). Customs had classified day planners imported by Mead Corporation (Mead) as bound diaries. In reversing the trial court, this court accorded no deference to the Customs classification. The Supreme Court vacated the judgment of this court in Mead II and remanded because this court did not accord deference to the classification under Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944).

In reconsidering the merits, this court applies Skidmore deference to the classification ruling at issue. Because Customs' classification of Mead's day planners within subheading 4820.10.20 of the Harmonized Tariff Schedules of the United States (HTSUS) does not persuade under the Skidmore standard, this court reverses.

I.

At issue are five models of Mead's day planners (model nos. 47192, 47062, 47124, 47104, and 47102). The day planners differ from each other only stylistically based on size (ranging from 7 1/2" × 4 3/8" to 12" × 10 5/8"), outer jacket cover material, and type of closure. The basic model contains a calendar, a section for daily notes, a section for telephone numbers and addresses, and a notepad. The larger models contain the features of the basic model with additional items such as a daily planner section, plastic ruler, plastic pouch, credit card holder, and computer diskette holder. A loose-leaf ringed binder holds the contents of the day planner, except for the notepad, which fits into the rear flap of the day planner's outer cover.

In a January 11, 1993 ruling, Customs classified the subject planners as bound diaries under subheading 4820.10.20 (emphasis added):

                    4820         Registers, account books
                                 notebooks, order books, receipt
                                 books, letter pads
                                 memorandum pads, diaries
                                 and similar articles, exercise
                                 books, blotting pads
                                 binders (looseleaf or other)
                                 folders, file covers, manifold
                                 business forms, interleaved
                                 carbon sets and other
                                 articles of stationery, of
                                 paper or paperboard; albums
                                 for sample or for collections
                                 and book covers
                                 (including cover boards and
                                 book jackets) of paper or
                                 paperboard:
                    4820.10      Registers, account books,
                                 notebooks, order books, receipt
                                 books, letter pads,
                                 memorandum pads, diaries
                                 and similar articles:
                    4820.10.20   Diaries, notebooks and address
                                 books, bound; memorandum
                                 pads, letter pads
                                 and similar articles
                

Customs' original 1993 ruling offered little explanation for classifying Mead's day planners as bound diaries. After Mead protested, Customs issued a new ruling on October 21, 1994, with more detailed reasoning about the classification under subheading 4820.10.20. This 1994 ruling is at issue in this case.

Moving for summary judgment in the trial court, Mead asserted both that its imports were not diaries and were not bound. Either contention, if accepted, compels classification under the "other" provision of subheading 4820.10.40. Under that subheading, Mead would owe no tariff on the imported articles, in contrast with the 4.0% tariff assessed in Customs' 1993 ruling. In support of its motion, Mead submitted dictionary definitions of the terms at issue, affidavits from seven individuals from the U.S. stationery goods industry, and affidavits from two bookbinding experts. The Government cross-moved for summary judgment in support of Customs' classification, offering its own definitions of "diary" and "bound," and submitting supporting affidavits.

In a July 14, 1998 opinion (No. 98-101), the trial court granted the Government's motion. The Court of International Trade broadly defined "diaries" as "articles whose principle purpose is to allow a person to make daily notations concerning events of importance." Under that definition, the trial court decided that Mead's day planners qualify as diaries even though they admittedly contain "supplementary material" — non-diary elements such as a section for addresses and telephone numbers. With respect to the term "bound," the trial court opined: "The common meaning of `bound' is fastened. The irrevocability of the fastening is not important so long as it goes beyond the transitory role of packaging." The trial court thus found that Mead's day planners, whose contents fit in a loose-leaf ringed binder, fall within that broad definition of "bound."

Mead argued for a different definition of "diaries": "A book for recording a person's observations, thoughts and/or events." Mead further contended that "bound" applies only when pages are "permanently secured along one edge between covers in a manner traditionally performed by a bookbinder." Reversing the Court of International Trade, this court held that Mead's day planners were neither "diaries" nor "bound." Mead II, 185 F.3d at 1311. Thus, this court concluded that the day planners required classification under the "other" provision of subheading 4820.10.40. In reaching its conclusion, this court did not accord ordinary classification rulings the deference described in Chevron U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).

The United States then petitioned for a writ of certiorari to the United States Supreme Court. The Supreme Court granted certiorari, 530 U.S. 1202, 120 S.Ct. 2193, 147 L.Ed.2d 231 (2000), to determine "the limits of Chevron deference owed to administrative practice in applying a statute." Mead III, 533 U.S. at 226, 121 S.Ct. at 2171. The Court held that classification rulings, although "beyond the Chevron pale," may merit some deference under Skidmore. Id. at 220, 121 S.Ct. at 2167. The Court vacated and remanded the earlier judgment of this court with instructions to consider Customs' classification ruling under the principles in Skidmore. Id. at 237-38, 121 S.Ct. at 2177.

II.

This court reviews the Court of International Trade's grant of summary judgment without deference. Sharp Microelectronics Tech., Inc. v. United States, 122 F.3d 1446, 1449 (Fed.Cir.1997). Where, as here, the parties do not dispute material facts regarding the imported goods, this court's review of the classification of the goods collapses into a determination of the proper meaning and scope of the HTSUS terms, which, as a matter of statutory interpretation, is a question of law. See SGI, Inc. v. United States, 122 F.3d 1468, 1471 (Fed.Cir.1997).

In keeping with the Supreme Court's instructions in Mead III, this court affords a classification ruling deference in accordance with the principles set forth in Skidmore. Mead III, 533 U.S. at 219-20, 121 S.Ct. at 2167. Under Skidmore, a classification ruling receives a measure of deference proportional to its "power to persuade." Id.; Skidmore, 323 U.S. at 140, 65 S.Ct. 161. That power to persuade depends on the thoroughness evident in the classification ruling, the validity of its reasoning, its consistency with earlier and later pronouncements, the formality attendant the particular ruling,¹ and all those factors that give it power to persuade. Mead III, 533 U.S. at 219-20, 121 S.Ct. at 2167; Skidmore, 323 U.S. at 140, 65 S.Ct. 161. In addition, Customs' relative expertise in administering the tariff statute often lends further persuasiveness to a classification ruling, entitling the ruling to a greater measure of deference. While this court therefore recognizes its responsibility to accord a classification ruling the degree of deference commensurate with its power to persuade, this court also recognizes its independent responsibility to decide the legal issue regarding the proper meaning and scope of...