3G Mermet Fabric Corp. v. U.S.

• Decision Date: 13 March 2001
• Docket Number: SLIP OP. 01-28.,No. 98-04-00669.,98-04-00669.
• Citation: 135 F.Supp.2d 151
• Parties: 3G MERMET FABRIC CORP., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

135 F.Supp.2d 151

3G MERMET FABRIC CORP., Plaintiff, v. UNITED STATES, Defendant.

SLIP OP. 01-28.

No. 98-04-00669.

United States Court of International Trade.

March 13, 2001.

DeKieffer & Horgan, Washington, DC, (J. Kevin Horgan) for Plaintiffs.

Stuart E. Schiffer, Acting Assistant Attorney General, Joseph I. Liebman, Attorney-in-Charge, International Trade Field Office, Bruce N. Stratvert, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC, for Defendant.

OPINION

POGUE, Judge.

This case is before the court after trial de novo. At issue is the proper tariff classification under 19 U.S.C. § 1202 (1988), Harmonized Tariff Schedule of the United States ("HTSUS"), of 3G Mermet's ("Plaintiff") imported window shade fabrics. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a)(1994).

Background

In 1997, Plaintiff imported several varieties of window shade fabrics: Satiné 5500 Natté 4500, E Screen 4100, Flocké 11201,¹ Paradis 11600, and Auris 11190. The United States Customs Service ("Customs"), upon liquidation, classified the window shade fabrics as articles of glass fibers under subheadings 7019.59.40, HTSUS, and 7019.59.90, HTSUS, thereby assessing a duty of 8% and 9.9% ad valorem, respectively.² Plaintiff claims the merchandise should have been uniformly classified under subheading 3926.90.9890, HTSUS, as "Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other ... Other," with a duty rate of 5.3 % ad valorem.³

The General Rules of Interpretation ("GRI") of the HTSUS govern the proper classification of merchandise. See Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). Classification involves a two-step process. The court is required to: "(1) ascertain[ ] ... the proper meaning of specific terms in the tariff provision; and (2) determine[ ] ... whether the merchandise at issue comes within the description of such terms as properly construed." Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391 (Fed.Cir.1994).

Customs and Plaintiff agree that the fabrics are composite goods, prima facie classifiable in both chapter 39, as articles of plastic, and chapter 70, as articles of glass fibers. See Revised Pretrial Order, Schedule C, at ¶ 6. Each chapter refers to only one of the materials used to produce the fabrics; as a result, the parties agree that the analysis should not proceed under GRI 1 or 3(a). Rather, the parties debate whether the analysis should be in accordance with GRI 3(b) or (c).⁴ GRI 3(b) allows composite goods, not classifiable in accordance with GRI 3(a), to be classified as if consisting of the material giving the good its essential character. See GRI 3(b), HTSUS. Plaintiff argues that the window shade fabrics are essentially articles of plastic, and should be classified in chapter 39 pursuant to GRI 3(b). See Revised Pretrial Order, Schedule C-1, at ¶ 1, Schedule D-1, at ¶ 1. Customs, on the other hand, believes the goods should be classified in accordance with GRI 3(c), which allows classification under the heading occurring last in numerical order among those of equal merit.⁵ See id. at Schedule C-2, at ¶ 3, Schedule D-2.

The parties' analyses, however, do not adequately reflect the direction of the Explanatory Notes for chapter 39. See Harmonized Commodity Description and Coding System, Explanatory Notes (2nd ed. 1996)("Explanatory Notes"), at 598.⁶ These notes clarify the chapter heading by defining what constitutes an article of plastic, and apply to "combinations of plastics and materials other than textiles."⁷ Id. If a good retains the essential character of an article of plastic and fits within one of the subsections (a) through (d), the good is classifiable under chapter 39 as an article of plastic in accordance with GRI 1. See Orlando Food Corp., 140 F.3d at 1440 ("According to GRI 1, the HTSUS headings, as well as relative section or chapter notes, govern the classification of a product."). Thus, the issue for trial was whether the window shade fabrics retain the essential character of articles of plastic and meet the requirements of one of the subsections (a) through (d) of the General Explanatory Notes to chapter 39.⁸

Findings of Fact

The window shade fabrics at issue are used to produce exterior and interior roller shades, vertical blinds and vellum blinds. See Revised Pretrial Order, Schedule C, at ¶ 5. The fabrics are made in France by Plaintiff's parent company and then imported into the United States. See id. at ¶ 1. Once the fabrics are in the United States, Plaintiff sells them to window covering manufacturers, who cut the fabric to dimension and "put it on the hardware to the specification of the marketplace." Trial Transcript, at 8.

A. Production Process

The materials are produced by one of two processes. See Revised Pretrial Order, Schedule C, at ¶ 4. Three variations of the window shade fabric, Satiné 5500, Natté 4500, and E Screen 4100, are woven from strands of yarn that are produced by coating colorless glass fibers with variously colored PVC plastic prior to weaving. See id. These window shade fabrics are made by taking a fiberglass core and passing it through several PVC coatings. See Trial Transcript, at 6. The individual PVC coated fiberglass yarns are then woven together. See id. After the weaving process, the coated yarns are heated through a "tenturing" process.⁹ The heat allows the coating of intersecting yarns to adhere to each other, giving the fabric some stability. The difference between the fabrics, such as Satinè and Nattè, is due to the size of the monofilaments and the pattern resulting from the weaving structure.¹⁰ See Trial Transcript, at 91.

The rest of the imported window shade fabrics — Auris and Paradis — are produced by weaving strands of colorless glass fibers into a mesh. See Revised Pretrial Order, Schedule C, at ¶ 4. This mesh is then coated with either acrylic or PVC plastic. As with Satinè, Nattè, and E Screen, the fabric is subjected to the tenturing process.

The manufacturing process for Auris and Paradis results in "sheets" of plastic. "Sheet" is defined as a "material in the form of a continuous stem covering or coating." Trial Transcript, at 28. "Sheet" may also be defined as "a broad, thin, usually rectangular mass or piece of material." American Heritage 1661; see also Sarne Handbags Corp. v. United States, 24 CIT ___, ___ 100 F.Supp.2d 1126, 1136 (2000)(classifying a handbag with a plastic outer surface as "Handbags ... [w]ith outer surface of sheeting of plastic"), Bradford Indus. v. United States, 152 F.3d 1339, 1340 (Fed.Cir.1998)(referring to a non-woven textile dipped into liquid polyurethane as composed of a polyurethane sheet attached to a non-woven textile sheet). These two fabrics are formed by dipping a mesh of glass fibers into plastic, producing a broad, thin piece of material composed of a continuous coating of plastic. See Trial Transcript, at 29.

As stipulated in the pretrial order, for all of these fabrics the relative value and weight of the plastic is generally greater than the value and weight of the fiberglass. See Revised Pretrial Order, Schedule C, at ¶ 7. With the exception of Paradis, the relative value of the plastic is at least sixty percent. Id. The material composition of the window shade fabrics by weight is at least ten percent more plastic than fiberglass, except for two fabrics, Paradis and Auris. All of the fabrics' thin, flexible character is a result of the composition and manufacturing process of the window shade fabrics.

B. Strength of Plastic and Fiberglass

Window shade fabrics need to be able to withstand a weight bar and constant movement either up and down or back and forth over the window. At trial it was demonstrated that neither plastic nor fiberglass alone has the strength necessary for these functions. Rather, manufacturers achieve the requisite strength by coating some core material with plastic, thereby making a stronger good. This core material serves two roles: it reinforces the plastic and gives the plastic support.

A plastic window shade fabric with no core material can be torn with relatively little trouble, as demonstrated by Dr. McCluney at trial. See Trial Transcript, at 180. An uncoated fiberglass window shade fabric would also fall apart easily. Uncoated fiberglass is very brittle and can be easily manipulated. Several witnesses at trial demonstrated the fragile nature of the fiberglass. A light touch to an uncoated fiberglass weave causes the material to come apart. Although fiberglass has a high tensile strength, uncoated, the fibers rub against each other permitting the fabric to break easily. Once the fiberglass is coated, it is embedded in the plastic, preventing the fibers from rubbing against each other.¹¹ The embedded fiberglass helps to strengthen the plastic.

Although a core material is indispensable in order for the window shade fabrics to function, this material need not be fiberglass. Fiberglass is not the only core material used in similar fabrics in the window shade fabric industry. Several samples of window shade fabrics produced by Plaintiff's competitors, largely using polyester cores coated with PVC, were introduced at trial. According to Plaintiff's production manager, the core material could be a small metal wire or, presumably, even plastic itself. See Trial Transcript, at 107-08. The ability to substitute fiberglass with another core material demonstrates the dispensability of fiberglass in window shade fabrics.

C. Function of the Window Shade Fabrics

The record at trial establishes that the principal concern of Plaintiff's customers is the control of solar radiation.¹² See id. at 8, 18, and 185. Although the fabrics are also used for decoration, meet minimum safety and fire resistance requirements, and need to withstand continual opening and closing, on this record, these functions are secondary. These...