Faus Group, Inc. v. U.S.

Citation581 F.3d 1369
Decision Date25 September 2009
Docket NumberNo. 2008-1605.,2008-1605.
PartiesFAUS GROUP, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Daniel G. Jarcho, McKenna Long & Aldridge LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief was Brett I. Harris, Pisani & Roll PLLC, of Washington, DC.

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

Before SCHALL, PLAGER, and PROST, Circuit Judges.

PLAGER, Circuit Judge.

The issue in this classification case is whether laminated flooring panels imported by Faus Group, Inc. (Faus) are properly classified as "fiberboard" under heading 4411 of the Harmonized Tariff Schedules of the United States (HTSUS), as the United States Customs Service (Customs) classified the goods, or as "builders' joinery" under heading 4418, as Faus contends. The United States Court of International Trade sustained Customs's classification. For the reasons that follow, we hold that the proper classification is under heading 4418, and more specifically under subheading 4418.90.40, a residual provision. We therefore reverse the judgment of the Court of International Trade.

BACKGROUND

The imported goods at issue in this case are laminated flooring panels made with a core of fiberboard that has a density between 0.85 and 0.95 g/cm3. A color photograph overlay on each panel simulates the appearance of a natural wood product. The panels are non-structural finished articles designed to be installed by end users over a structural subfloor. Each panel has tongue-and-groove joints on its edges to facilitate assembly with other like flooring panels.

Customs classified the flooring panels under HTSUS heading 4411,1 which reads: "Fiberboard of wood or other ligneous materials, whether or not bonded with resins or other organic substances." Within heading 4411, Customs classified the goods under subheading 4411.19.40, a residual provision that reads: "Fiberboard of a density exceeding 0.8 g/cm3: Other: Other: Other." The duty rate for subheading 4411.19.40 is 6% ad valorem.

Faus protested Customs's classification. After Customs denied the protest, Faus filed suit in the Court of International Trade. Faus's complaint alleged that the merchandise is properly classifiable under heading 4418, which reads: "Builders' joinery and carpentry of wood, including cellular wood panels and assembled parquet panels; shingles and shakes." Faus asserted that within heading 4418 the proper subheading is 4418.30.00 ("Parquet panels"), free of duty. In the alternative Faus urged that the goods should be classified under subheading 4418.90.40 ("Other: Other"), at the rate of 3.2% ad valorem.

In response to the Government's position, Faus further alleged that if its flooring products are to be classified under the Government's preferred heading of 4411, the proper subheading is 4411.19.30, which reads: "Fiberboard of a density exceeding 0.8 g/cm3: Other: Other: Tileboard which has been continuously worked along any of its edges and is dedicated for use in the construction of walls, ceilings or other parts of buildings." Subheading 4411.19.30 is a duty-free provision.

The parties filed cross-motions for summary judgment. In a fifty-three page analysis, an analysis that can only be described as Talmudic in its breadth and thoroughness, the trial court parsed the verbiage contained in the competing headings, explored dictionary definitions, and sorted through a wealth of prior cases on the construction of HTSUS headings. Faus Group, Inc. v. United States, 358 F.Supp.2d 1244 (Ct. Int'l Trade 2004). The trial court determined that the imported goods are prima facie classifiable under both heading 4418 and heading 4411. Id. at 1249-65. The court then applied General Rule of Interpretation (GRI) 3(a), the rule of relative specificity, to conclude that the products should be classified under heading 4411 because it is the more specific of the two headings. Id. at 1266-69.

The parties had not addressed the question of under which subheading of 4411 the merchandise would fall if the panels were classifiable under that heading, relying instead on arguments presented in a companion case involving similar flooring panels, Witex, U.S.A., Inc. v. United States, 353 F.Supp.2d 1310 (Ct. Int'l Trade 2004). In that case, the trial court denied the parties' cross-motions for summary judgment after finding the record insufficient to either establish or exclude the possibility of a commercial designation for the term "tileboard" in subheading 4411.19.30. Applying its reasoning in Witex to this case, the trial court concluded that summary judgment was inappropriate and set the case for trial.

Faus subsequently abandoned its argument that the correct subheading under heading 4411 was 4411.19.30 ("tileboard"), and thus there were no triable issues remaining. The trial court, however, delayed entry of final judgment until final judgment in the Witex case was entered. After trial in Witex, the court found that the flooring panels at issue were not "tileboard," and therefore were properly classified by Customs under 4411.19.40, the residual provision for fiberboard. Witex, U.S.A., Inc. v. United States, 577 F.Supp.2d 1353 (Ct. Int'l Trade 2008). The trial court then entered final judgment against Faus in this case. Faus Group, Inc. v. United States, 575 F.Supp.2d 1388 (Ct. Int'l Trade 2008).

Faus filed a timely appeal. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

DISCUSSION

The specific issue before us on appeal is whether the laminated flooring panels imported by Faus are properly classified under heading 4411, fiberboard, as the Government contends, or under heading 4418, builders' joinery, as Faus contends. The trial court ultimately decided this issue in favor of the Government.

A classification decision involves two steps. The first step addresses the proper meaning of the relevant tariff provisions, which is a question of law. Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). The second step involves determining whether the merchandise at issue falls within a particular tariff provision as construed, which, when disputed, is a question of fact. Id. However, when, as here, there is no factual dispute regarding the merchandise, its structure and use, the resolution of the classification issue turns on the first step, determining the proper meaning and scope of the relevant tariff provisions. See Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378 (Fed.Cir.1999); Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365-66 (Fed.Cir.1998). While we accord deference to a Customs classification ruling relative to its "power to persuade," United States v. Mead Corp., 533 U.S. 218, 235, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (citing Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)), we have "an independent responsibility to decide the legal issue of the proper meaning and scope of HTSUS terms." Warner-Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed.Cir.2005) (citing Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1358 (Fed.Cir.2001)).

When determining the correct classification for merchandise, a court first construes the language of the headings in question, in light of any related section or chapter notes. Orlando Food, 140 F.3d at 1440 (citing GRI 1). If goods are prima facie classifiable under two or more headings, the court compares the language of the headings and classifies the goods under the heading providing the most specific description. Id. (citing GRI 3). Only after determining the proper heading does the court look to the subheadings to decide the correct classification for the merchandise. Id. (citing GRI 6).

As did the trial court, we begin our analysis with heading 4418. Faus argues that the trial court correctly determined that the laminated flooring panels at issue are prima facie classifiable under that heading as "[b]uilders' joinery." The Government responds that, under a proper interpretation of heading 4418, that classification cannot be applied to the merchandise in question.

We agree with Faus. Based on the definitions of the term's two key words, "builders'" and "joinery," the trial court defined "builders' joinery" as "already joined pieces of wood or wood products capable of being joined with joints" that "function as non-structural elements of a building" and are used as "finishing ... for the interior of a building." Faus, 358 F.Supp.2d at 1253. The court also noted that according to Note 3 to HTSUS Chapter 44, heading 4418 applies to articles of fiberboard just as it applies to articles of wood.

The Government does not challenge the trial court's definition of "builders' joinery," a definition we accept for purposes of this case. Nor does the Government contend that the flooring panels imported by Faus fail to meet that general description. Instead, the Government maintains that heading 4418 includes only the products specifically identified in the heading, and to non-structural builders' products that are outside the scope of other headings. The trial court rejected the Government's position, and so do we.

First, while the plain language of heading 4418 states that builders' joinery "includ[es] cellular wood panels and assembled parquet panels," that does not indicate that the heading is limited only to those exemplars. Furthermore, nothing in heading 4418 suggests that it applies only to products that are not described by the language of other...

To continue reading

Request your trial
55 cases
  • Plexus Corp. v. United States
    • United States
    • U.S. Court of International Trade
    • December 22, 2020
    ......, multiplexers and remultiplexers designed and marketed by Harmonic, Inc. ("Harmonic EMRs"). Joint Stmt. Facts ¶¶ 1, 2, 5, 6. Harmonic, Inc. ... , the court concluded that the term is "intended to encompass a group of devices or a collection or set of materials, instruments or appliances ... Faus Group, Inc. v. United States , 581 F.3d 1369, 1371-72 (Fed. Cir. 2009). ... [sic] the description of the specifications to see if that would tell us how a particular device is being used," he responded that there is "no way ......
  • Quaker Pet Grp., LLC v. United States
    • United States
    • U.S. Court of International Trade
    • February 12, 2018
    ... 287 F.Supp.3d 1348 QUAKER PET GROUP", LLC, Plaintiff, v. UNITED STATES, Defendant. Slip Op. 18–9 Court No. 13\xE2"... action, Quaker Pet, the importer of record, was sold to Worldwise, Inc. Letter from Plaintiff's Counsel, ECF No. 61. Worldwise has continued to ... of the headings and any relative section or chapter notes." 8 See Faus Grp., Inc. v. United States , 581 F.3d 1369, 1372 (Fed. Cir. 2009) (citing ......
  • Specialty Commodities Inc. v. United States
    • United States
    • U.S. Court of International Trade
    • December 2, 2016
    ...Elecs., Inc. v. United States , No. 09–00043, 2013 WL 6728681, at *2 (C.I.T. Dec. 23, 2013) (citing Faus Grp., Inc. v. United States , 581 F.3d 1369, 1372 (Fed. Cir. 2009). In addition, "the proper meaning and scope of the relevant provisions and a determination of the preferred heading for......
  • GRK Canada, Ltd. v. United States
    • United States
    • U.S. Court of International Trade
    • January 14, 2013
    ......Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In ... See Faus Group, Inc. v. United States, 581 F.3d 1369, 1371–72 (Fed.Cir.2009) ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT