714 F.3d 1363 (Fed. Cir. 2013), 2012-1411, Deckers Outdoor Corp. v. United States

Docket Nº:2012-1411.
Citation:714 F.3d 1363
Opinion Judge:MAYER, Circuit Judge.
Party Name:DECKERS OUTDOOR CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
Attorney:Patrick D. Gill, Rode & Qualey, of New York, NY, argued for plaintiff-appellant. With him on the brief were William J. Maloney and Eleanore Kelly-Kobayashi. Beverly A. Farrell, Trial Attorney, Civil Division, Commercial Litigation Branch, of New York, NY, argued for defendant-appellee. On the bri...
Judge Panel:Before DYK, MAYER, and REYNA, Circuit Judges. Opinion for the court filed by Circuit Judge MAYER. Dissenting opinion filed by Circuit Judge DYK. DYK, Circuit Judge, dissenting.
Case Date:May 08, 2013
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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714 F.3d 1363 (Fed. Cir. 2013)

DECKERS OUTDOOR CORPORATION, Plaintiff-Appellant,

v.

UNITED STATES, Defendant-Appellee.

No. 2012-1411.

United States Court of Appeals, Federal Circuit.

May 8, 2013

Page 1364

Patrick D. Gill, Rode & Qualey, of New York, NY, argued for plaintiff-appellant. With him on the brief were William J. Maloney and Eleanore Kelly-Kobayashi.

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Beverly A. Farrell, Trial Attorney, Civil Division, Commercial Litigation Branch, of New York, NY, argued for defendant-appellee. On the brief were Stuart Delery, Acting Assistant Attorney General, and Jeanne E. Davidson, Director, of Washington, DC; Barbara S. Williams, Attorney in Charge, and Marcella Powell, of New York, NY. Of counsel on the brief was Yalena Slepak, Trial Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, NY.

Before DYK, MAYER, and REYNA, Circuit Judges.

MAYER, Circuit Judge.

Deckers Outdoor Corporation (" Deckers" ) appeals a final judgment of the United States Court of International Trade (" Trade Court" ) that held that pull-on boots were properly classified under subheading 6404.19.35 (" Subheading 19.35" ) of the Harmonized Tariff Schedule of the United States (" HTSUS" ). See Deckers Outdoor Corp. v. United States, 844 F.Supp.2d 1324 (Ct.Int'l Trade 2012) (" Trade Court Decision " ). Because we conclude that the merchandise at issue was correctly classified as " footwear of the slip-on type" under Subheading 19.35, we affirm.

I. BACKGROUND

Deckers imported UGG® Classic Crochet boots into the United States in 2006 and 2007. These boots have a knit upper portion and a rubber sole. They do not have laces, buckles, or other fasteners. The parties agree that the merchandise in question " is sold as boots, that the boots can be pulled on with the hands, and that the boots extend above the ankle[.]" Trade Court Decision, 844 F.Supp.2d at 1327 (citations and internal quotation marks omitted).

At liquidation, United States Customs and Border Protection (" Customs" ) classified the Classic Crochet boots under Subheading 19.35, which covers:

Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners, the foregoing except footwear of subheading 6404.19.20 and except footwear having a foxing or foxing-like band wholly or almost wholly of rubber or plastics applied or molded at the sole and overlapping the upper[.]

Subheading 19.35 (emphasis added).

Deckers filed a protest challenging the classification of the merchandise, arguing that it should be reclassified under HTSUS subheading 6404.19.90 (" Subheading 19.90" ), a basket provision which covers " [f]ootwear with outer soles of rubber ... and uppers of textile materials" that is " [v]alued [at] over $12/pair." Merchandise classified under Subheading 19.35 was subject to a duty rate of 37.5% ad valorem, whereas merchandise classified under Subheading 19.90 was subject to a duty rate of 9% ad valorem. See Trade Court Decision, 844 F.Supp.2d at 1326.

After Customs denied its protest, Deckers filed suit at the Trade Court. Deckers argued that the term " footwear of the slip-on type" as used in Subheading 19.35 only encompasses footwear that does not extend above the ankle. Id. at 1328. In support, Deckers cited to dictionary definitions of the term " slip-on" in which the only type of footwear specifically mentioned was a " shoe." See id. at 1332. Deckers also pointed to language from a Senate Finance Committee Report on the

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Multilateral Trade Negotiations of 1979, which stated that " [t]he final U.S. position provides separate categories for boots and slip-on footwear...." S. Comm. on Fin., Agreements Being Negotiated at the Multilateral Trade Negotiations in Geneva— U.S. Int'l Trade Comm'n Investigation No. 332-101, 96th Cong. 126 (Comm. Print 1979) (" Trade Negotiations Report " ).

The Trade Court rejected Deckers' arguments and granted the government's motion for summary judgment. The court noted that Footwear Definitions, Treas. Dec. 93-88, 27 Cust. B. & Dec. No. 46, 1993 CUSBUL LEXIS 108, at *24 (Oct. 25, 1993) (" Treasury Decision 93-88 " ), a Customs publication designed to assist importers in understanding classification requirements, specifically provides that the term " slip-on" includes " [a] boot which must be pulled on." The court determined, after reviewing several dictionary definitions of the term " slip-on," that " the absence of fasteners is determinative ... in whether an item is or is not a slip-on." Trade Court Decision, 844 F.Supp.2d at 1332. The court concluded, moreover, that the clause " without the use of laces or buckles or other fasteners" that follows the phrase " footwear of the slip-on type" in Subheading 19.35 " serves to explain and elaborate upon" the meaning of the term " slip-on." Id. at 1331 (internal quotation marks omitted). Because the Classic Crochet boots have no laces, buckles, or other functional fasteners, the Trade Court concluded that they were properly classified under Subheading 19.35. Id. at 1332-33.

Deckers then filed a timely appeal with this court. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

II. DISCUSSION

A. STANDARD OF REVIEW

We review de novo the Trade Court's grant of summary judgment on tariff classifications. LeMans Corp. v. United States, 660 F.3d 1311, 1315 (Fed.Cir.2011); Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed.Cir.2006). A classification decision requires two underlying steps: (1) determining the proper meaning of the tariff provisions, which is a question of law; and (2) determining the correct heading under which the disputed goods fall, which is a question of fact. Outer Circle Prods. v. United States, 590 F.3d 1323, 1325 (Fed.Cir.2010). In reviewing tariff classifications, we accord deference to a Customs' classification ruling in proportion to its " power to persuade" under the principles articulated in Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). See United States v. Mead Corp., 533 U.S. 218, 221, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (explaining that a Customs' tariff classification " ruling is eligible to claim respect according to its persuasiveness" ).

B. THE HTSUS

The HTSUS is organized by headings and each of these headings has one or more subheadings. Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). The headings contain " general categories of merchandise," whereas " the subheadings provide a more particularized segregation of the goods within each category." Id. The tariff classification of merchandise under the HTSUS is governed by the principles set forth in the General Rules of Interpretation (" GRIs" ). See LeMans, 660 F.3d at 1316. These GRIs must be applied in numerical order. Arko Foods Int'l, Inc. v. United States, 654 F.3d 1361, 1364 (Fed.Cir.2011).

On appeal, Deckers asserts that Customs erred in classifying the Classic Crochet boots as " footwear of the slip-on type" under Subheading 19.35. In support, it

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advances two principal arguments. First, it contends that the term " footwear of the slip-on type" as used in Subheading 19.35 only applies to shoes and does not encompass boots. In Deckers' view, " [f]ootwear of the slip-on type is a category of footwear, specifically a sub-category of shoes, but not a sub-category of boots." Second, Deckers asserts that because the Classic Crochet boots must be " pulled on" with the hands, they do not qualify as " slip-on" footwear.

We find neither of these arguments persuasive. The statutory language, the definition of " slip-on" contained in Treasury Decision 93-88, and the common and commercial understanding of the term " slip-on," all support the Trade Court's determination that the Classic Crochet boots fall squarely within the scope of Subheading 19.35.

C. THE STATUTORY LANGUAGE

" [W]here Congress has clearly stated its intent in the language of a statute, a court should not inquire further into the meaning of the statute." Pillowtex Corp. v. United States, 171 F.3d 1370, 1373 (Fed.Cir.1999); see also Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992) (" We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there." ). GRI 1 thus recognizes that the first step in determining whether goods have been properly classified is to examine the language of the relevant HTSUS headings and subheadings. See Arko Foods, 654 F.3d at 1364.

Deckers' argument that boots are excluded from the scope of Subheading 19.35 is contravened by the plain language of the statute. Subheading 19.35 is not limited to shoes, but instead covers " footwear of the slip-on type." Subheading 19.35 (emphasis added). As Deckers acknowledges, the term " footwear" plainly encompasses both shoes and boots.1 See Br. of Appellant 8 (acknowledging that the Classic Crochet boots are " footwear with outer soles of rubber or plastic" ). Certain HTSUS provisions refer specifically to shoes. See HTSUS 6404.11 (referring to " tennis shoes," " basketball shoes," and " gym shoes" ); id. 6403.19.30 (referring to " golf shoes" ). Other HTSUS provisions refer specifically to boots. See id. 6402.12.00 (referring to " [s]ki-boots" and " snowboard boots" ). In drafting Subheading 19.35, however, Congress did not use the term " shoe" or "...

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