Millenium Lumber Distribution Ltd. v. U.S.

• Decision Date: 05 March 2009
• Docket Number: No. 2007-1401.,2007-1401.
• Citation: 558 F.3d 1326
• Parties: MILLENIUM LUMBER DISTRIBUTION LTD., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

558 F.3d 1326

MILLENIUM LUMBER DISTRIBUTION LTD., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 2007-1401.

United States Court of Appeals, Federal Circuit.

March 5, 2009.

Joel R. Junker, Joel R. Junker & Associates, Seattle, WA, argued for plaintiff-appellant. With him on the brief was William N. Baldwin.

Aimee Lee, Trial Attorney, Commercial Litigation Branch, Civil Division, International Trade Office, United States Department of Justice, New York, NY, argued for defendant-appellee. With her on the brief were Jeanne E. Davidson, Director, and Barbara S. Williams, Attorney in Charge, International Trade Field Office. Of counsel was Chi S. Choy, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, New York, NY.

Before MAYER, CLEVENGER, and RADER, Circuit Judges.

CLEVENGER, Circuit Judge.

This case involves the tariff classification of Canadian lumber imported into the United States by Millenium Lumber Distribution, Ltd. ("Millenium"). Millenium appeals the decision of the United States Court of International Trade granting summary judgment in favor of the United States ("the government") that the United States Bureau of Customs and Border Protection ("Customs") correctly classified Millenium's imported lumber under heading 4407 of the Harmonized Tariff Schedule of the United States ("HTSUS"). Millenium Lumber Distrib. Ltd. v. United States, No. 02-595, 2007 WL 1116148 (CIT 2007). HTSUS heading ("heading") 4407 covers certain "[w]ood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding 6 mm." In granting the government's motion, the court denied Millenium's cross-motion for summary judgment to classify the subject lumber under heading 4418, which covers "[b]uilders' joinery and carpentry of wood" or alternatively under heading 4421 which covers certain "[o]ther articles of wood." Millenium, 2007 WL 1116148, at *1, 7. We affirm.

I

Millenium imported approximately 215 entries of cut lumber between October 1999 and January 2001 under HTSUS subheading 4418.90.40. The imported merchandise included 2x3, 2x4, and 2x6 spruce/pine/fir lumber of various grades, cut to various even-foot lengths ranging from 5 to 20 feet. Each board had a 90° square-cut end, and an angle cut between 67.4° and 80.5° on the board's opposite end. Millenium, 2007 WL 1116148, at *1. According to Millenium, it sold all of the subject lumber to truss manufacturers, either directly or through wholesalers.¹

In December 2000, Customs notified Millenium that it was classifying the subject merchandise under HTSUS subheading 4407.10.0015 rather than under Millenium's entered HTSUS subheading 4418.90.40. Customs liquidated the merchandise accordingly. Millenium filed two protests, which were both denied, and then commenced this action in the Court of International Trade pursuant to 28 U.S.C. § 1581(a). Millenium, 2007 WL 1116148, at *1

The parties filed cross motions for summary judgment. Millenium asserted that the imported merchandise was classifiable under heading 4418 as "[b]uilders' joinery and carpentry of wood" or alternatively under heading 4421 as "[o]ther articles of wood." The government maintained that Millenium's imported merchandise was standard dimensional lumber, classifiable under heading 4407 as "[w]ood sawn or chipped lengthwise ... of a thickness exceeding 6 mm." The court agreed with the government and granted summary judgment accordingly. Millenium, 2007 WL 1116148, at *1, 7.

II

Millenium appeals the grant of summary judgment upholding Customs' classification of the imported lumber under heading 4407. Millenium asserts that the court should have instead granted Millenium's summary judgment motion and classified the lumber under heading 4418 or, in the alternative, under heading 4421. We have jurisdiction over Millenium's appeal pursuant to 28 U.S.C. § 1295(a)(5).

We review a grant of summary judgment by the Court of International Trade for correctness as a matter of law and decide de novo the proper interpretation of the tariff provisions as well as whether there are genuine issues of material fact to preclude summary judgment. Rollerblade, Inc. v. United States, 282 F.3d 1349, 1351 (Fed.Cir.2002). In reviewing summary judgment decisions, we must bear in mind the parties' burdens as well as the evidentiary standards under the applicable law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Proper classification of goods under the HTSUS entails first ascertaining the meaning of specific terms in the tariff provisions and then determining whether the subject merchandise comes within the description of those terms. Rollerblade, 282 F.3d at 1351. The proper meaning of the tariff provisions is a question of law, whereas the determination of whether the subject imports properly fall within the scope of the possible headings is a question of fact. Universal Elecs. Inc. v. United States, 112 F.3d 488, 491 (Fed.Cir.1997). Because Customs' classification decisions are presumed correct, Millenium bears the burden of proving otherwise. See Rollerblade, 282 F.3d at 1351.

The General Rules of Interpretation ("GRIs") govern classification of merchandise under the HTSUS. N. Am. Processing Co. v. United States, 236 F.3d 695, 698 (Fed.Cir.2001). Under GRI 1, the court must determine the appropriate classification "according to the terms of the headings and any relative section or chapter notes." The terms of the HTSUS are construed according to their common commercial meanings. Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed. Cir.2003). "Although the Explanatory Notes are not legally binding or dispositive, they may be consulted for guidance and are generally indicative of the proper interpretation of the various HTSUS provisions." N. Am. Processing, 236 F.3d at 698.

III

Heading 4407 provides for "[w]ood sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded, or finger-jointed, of a thickness exceeding 6 mm." The explanatory note to heading 4407 provides that "[w]ith few exceptions, this heading covers all wood and timber, of any length but of a thickness exceeding 6 mm." Note 44.07, Vol. 2, Explanatory Notes, World Customs Organization (2d ed.1996) [hereinafter Explanatory Note]. Despite its breadth, heading 4407 excludes merchandise that meets heading 4418's more specific terms. Id. While the parties agree that Millenium's imported lumber falls within heading 4407's broad terms, they dispute whether the merchandise also falls under the more specific heading 4418.

Heading 4418 covers "[b]uilders' joinery and carpentry of wood." The explanatory note to heading 4418 provides that "[t]his heading applies to woodwork, including that of wood marquetry or inlaid wood, used in the construction of any kind of building, etc., in the form of assembled goods or as recognizable unassembled pieces." 44.18 Explanatory Note. Carpentry includes woodwork "used for structural purposes or in scaffoldings, arch supports, etc." Id. To qualify as "recognizable unassembled pieces" of particular articles, the subject merchandise must be "dedicated solely or principally for use in those articles." Baxter Healthcare Corp. of P.R. v. United States, 182 F.3d 1333, 1339 (Fed. Cir.1999). In addition, unassembled pieces must be more than just basic material generally suitable for use in the finished article. Rather, "if the item as imported can be made into multiple parts of articles, the item must identify and fix with certainty the individual parts that are to be made from it." Id.

In granting the government's motion for summary judgment, the court explained that the subject merchandise was not identifiable or fixed with certainty as unassembled truss pieces because "the evidence on the record demonstrates that there is no genuine issue as to the fact that some or all of the imported lumber would require significant additional processing in order to be assembled into completed wood trusses." Millenium, 2007 WL 1116148, at *4. In particular, the court explained that the even-foot-length boards would not generally be suitable for use without recutting because building plans seldom call for nothing but even-foot-length trusses. Millenium, 2007 WL 1116148, at *5. The court further explained that the subject merchandise was also not sufficiently advanced to be dedicated solely or principally for use in completed wood trusses because the lumber maintained its identity and usefulness as general sawn lumber for...