Toyota Motor Sales, USA, Inc. v. United States, Consol. Court No. 81-1-00048.
| Citation | 7 CIT 178,585 F. Supp. 649 |
| Decision Date | 10 April 1984 |
| Docket Number | Consol. Court No. 81-1-00048. |
| Parties | TOYOTA MOTOR SALES, U.S.A., INC., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Cladouhos & Brashares, Washington, D.C., David D. Laufer, Los Angeles, Cal., of counsel (Harry W. Cladouhos, William C. Brashares, Paul M. Laurenza, Mari-Anne Pisarri, Washington, D.C., on the briefs), for plaintiff.
Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C., Joseph I. Liebman, Intern. Trade Field Office, New York City, of counsel (Saul Davis and Michael P. Maxwell, New York City, on the brief), for defendant.
This case concerns the proper classification of automotive cab chassis imported from Japan from January 1980 through July 1981. The chassis component of the import consists of a frame, suspension system, wheels, engine, and steering mechanism. The cab portion contains seats, a floor, doors, back panel, instrument panel, windows, climate control system, radio, and trim. When combined the cab and chassis comprise a fully operable motor vehicle. The following depicts a typical cab chassis as it looks upon importation.
After importation, a cargo-carrying, work-performing or passenger-carrying adjunct is added to the rear of the vehicle. When that adjunct is a cargo box the vehicle becomes a pickup truck. Other configurations render the vehicle a camper or recreational vehicle. In the vast majority of cases cab chassis are completed into pickup trucks.
These cab chassis were classified by the Customs Service under item 692.02 of the Tariff Schedules of the United States (TSUS) as unfinished automobile trucks valued at $1,000 or more. See General Interpretative Rule 10(h). The dutiable rate for item 692.02 is 25 percent ad valorem. See item 945.69 of the Appendix to the TSUS. Plaintiff Toyota Motor Sales maintains that the imports are classifiable under item 692.20, the eo nomine provision for automobile truck chassis, at a rate of 4 percent ad valorem. Alternatively, Toyota claims the cab chassis are classifiable under item 692.10 as "other" motor vehicles for the transport of persons or articles at the rate of 2.8 percent ad valorem.
The TSUS provisions for the classification and various claims are as follows:
GENERAL HEADNOTES AND RULES OF INTERPRETATION
10. General Interpretative Rules. — For the purposes of these schedules —
* * * * *
(h) unless the context requires otherwise, a tariff description for an article covers
such article, whether assembled or not assembled, and whether finished or not
finished
* * * * *
Schedule 6, Part 6, Subpart B
Motor vehicles (except motorcycles) for the transport of persons or articles
Automobile trucks valued at $1,000 or more, and motor buses
692.02 Automobile trucks .......................................... 8.5% ad val.1
* * * * *
692.10 Other ...................................................... 2.9% ad val.
* * * * *
Chassis, bodies (including cabs), and parts of the foregoing motor vehicles:
Bodies (including cabs) and chassis:
692.20 For automobile trucks and motor buses ......................... 4% ad val.
* * * * *
1 Rate temporarily increased. See item 945.69 in part 2B, Appendix to
Tariff Schedules.
Appendix to the Tariff Schedules, Part 2, Subpart B:
945.69 Automobile trucks valued $1,000 or more (provided for in item 692.02)
............................................................... 25% ad val.
Although Toyota has launched a multi-pronged attack, the essence of its argument is that cab chassis cannot be classified as trucks under item 692.02 because they are not within the common meaning of "truck," but come within the common meaning of "chassis." The court is not convinced and believes that the government's classification is correct. Accordingly, judgment shall enter for defendant.
This action had its genesis in 1963 with the so-called "Chicken War Proclamation."1 That proclamation changed the rate for automobile trucks valued over $1,000 from 8.5 percent to 25 percent. While not salient to Toyota in 1963, it was soon to figure prominently in Toyota's U.S. market.
Prior to 1971 Toyota pickup trucks imported into the United States were valued under $1,000 and, consequently, were classified under item 692.10 as other motor vehicles at the then prevailing rate of 3.5 percent ad valorem. Because the value of its U.S.-destined pickup trucks would soon exceed $1,000, Toyota wrote to Customs on November 13, 1971, seeking an advisory ruling as to the classification of its pickup trucks if imported as a cab chassis, i.e., without the rear bed assembly. Toyota suggested in that letter that the cab chassis be classified under item 692.10—as other motor vehicles valued under $1,000. It further requested that the rear bed assembly be classified under item 692.20 as chassis or bodies for automobiles trucks, or under item 692.27 as other parts of motor vehicles. Although Toyota specifically requested that only the rear bed assembly— the cargo box—be classified under item 692.20 as a body for automobile trucks, Customs, in a reply letter dated March 22, 1972, advised Toyota that the imported cab chassis would be classifiable as chassis under item 692.20 at the then prevailing rate of 5 percent ad valorem. Toyota's cab chassis were so classified and continued to be so classified until 1980.
In that year this admittedly established and uniform administrative practice was changed by Customs in T.D. 80-137, 45 Fed.Reg. 35,057 (1980). Relying on the principles announced six months earlier in Daisy-Heddon v. United States, 66 CCPA 97, C.A.D. 1228, 600 F.2d 799 (1979), Customs concluded that its past practice was clearly wrong. Briefly, Daisy-Heddon held that substantial completion, not essentiality, was the test to be applied in determining whether an article could be classified as unfinished under General Interpretative Rule 10(h). Relying on the guidelines set forth in Daisy-Heddon, Customs determined that the lightweight cab chassis imported by Toyota—those weighing less than 6,000 lbs.—were unfinished automobile trucks dutiable under item 692.02. Customs began classifying plaintiff's imported lightweight cab chassis under that item number. This action soon followed.2
The central issue at the trial was whether a cab chassis is a "chassis" within the common meaning of that term as used in item 692.20 of the TSUS. The testimony of various automotive industry experts focused on industry definitions of such terms as "chassis," "cab," "cab chassis," "truck" and "body." Not surprisingly, the testimony was highly controverted on the issue of whether a cab chassis is a "chassis" under industry nomenclature. A flood of exhibits depicting cab chassis denominated as "chassis" were introduced by plaintiff. The government offered an offsetting number of its own exhibits showing cab chassis denominated as "trucks."
Plaintiff's witnesses, consisting primarily of engineers, sales personnel and planning managers from Toyota, Ford Motor Company, General Motors and Chrysler, testified in the main that the imported cab chassis was considered a "chassis" within the industry. Defendant's witnesses were likewise represented by various segments of the truck industry. There was a consensus among the government's witnesses that a cab chassis is not a chassis as that term is understood within the industry, with some of the government's witnesses considering a cab chassis to be an incomplete truck, others believing it to be a truck.
Despite the contrariety of opinion, on one point all witnesses agreed—a pickup truck consists of three major components: the chassis, the cab and the cargo box. By stipulation the parties further agreed that 97.2 percent of imported cab chassis are completed into pickup trucks by the addition of a cargo box and that the imported cab chassis comprise 90 percent of a complete truck in terms of parts, labor and value.
Against this background, the court considers the threshold question of the common meaning of "chassis."
One of the pivotal issues in this case is whether the imported cab chassis comes within the common meaning of the eo nomine provision for chassis in item 692.20. The law regarding common meaning is well-established. First, tariff terms are construed in accordance with their common and commercial meaning, Nippon Kogaku (USA), Inc. v. United States, 69 CCPA ___, 673 F.2d 380 (1982), and it is presumed that Congress framed the tariff acts according to the general usage and denomination of the trade. Nylos Trading Co. v. United States, 37 CCPA 71, C.A.D. 422 (1949). Second, the common meaning of a tariff term is a question of law to be determined by the court. American Express Co. v. United States, 39 CCPA 8, C.A.D. 456 (1951). In answering the question of a term's common meaning courts may consult dictionaries, lexicons, scientific authorities and other reliable sources as an aid. C.J. Tower & Sons v. United States, 69 CCPA ___, 673 F.2d 1268 (1982). Third, the meaning to be given a descriptive term used in a tariff act is that which it had at the time of the law's enactment. United States v. O. Brager-Larsen, 36 CCPA 1, 3-4, C.A.D. 388 (1948). A subsequent definition may not be used to expand the meaning of a term, but is an aid to clarifying it. Sears Roebuck & Co. v. United States, 46 CCPA 79, 82, C.A.D. 701 (1959).
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