Ugg Intern., Inc. v. US

• Decision Date: 04 February 1993
• Docket Number: Court No. 91-01-00016.
• Citation: 813 F. Supp. 848,17 CIT 79
• Parties: UGG INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

813 F. Supp. 848

17 CIT 79

UGG INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.

Court No. 91-01-00016.

United States Court of International Trade.

February 4, 1993.

Grunfeld, Desiderio, Lebowitz & Silverman, Steven P. Florsheim, New York City, for plaintiff.

Stuart M. Gerson, Acting Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Mark S. Sochaczewsky, Stephen Berke, U.S. Customs Service, Washington, DC, of counsel, for defendant.

OPINION AND JUDGMENT

CARMAN, Judge:

Plaintiff, Ugg International, Inc., challenges the classification and liquidation of its imported merchandise, Ugg brand boots, pursuant to section 515 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1515(a) (1988). This Court has jurisdiction under 28 U.S.C. § 1581(a) (1988) and, for the reasons which follow, grants plaintiff's motion for summary judgment in part and denies plaintiff's motion in part. The Court denies defendant's motion in all respects.

I. BACKGROUND

A. The Merchandise

The merchandise at issue consists of Ugg brand boots. Plaintiff manufactures its boots from sheepskins which have been tanned with the wool on and applies soles made from rubber or plastics. The skin side of the sheepskin forms the boots' uppers and the wool side of the sheepskin faces the inside and lines the boots. Plaintiff imports its merchandise in various sizes to accommodate men, women and children.

B. Relevant Statutory Provisions

Plaintiff relies on the following provisions of the Harmonized Tariff Schedules of the United States (HTSUS):

                1.  6403 (con.)     Footwear with outer soles of rubber, plastics, leather or composition
                                    leather and uppers of leather (con.)
                                            Other footwear (con.)
                    6403.91                        Covering the ankle (con.)
                    (con.)                             Other
                    6403.91.60                         For men, youths and boys . . 
                                                       . . .
                    6403.91.90                         For other persons . . .
                
                

                2.                        CHAPTER 64
                    Notes
                    . . . .
                    4.    Subject to note 3 of this chapter:
                                (a)     The material of the upper shall be taken to be the constituent
                                        material having the greatest external surface area, no
                                        account being taken of accessories or reinforcements such
                                        as ankle patches, edging, ornamentation, buckles, tabs, eyelet
                                        stays or similar attachments.
                Defendant relies on the following HTSUS provisions:
                1. 6405           Other footwear:
                                  . . . .
                   6405.90        Other:
                                  . . . .
                   6405.90.90     Other . . . .
                2.                         CHAPTER 43
                   Notes
                   1.     Throughout the tariff schedule references to "furskins," other than to
                          raw furskins of heading 4301, apply to hides or skins of all animals which
                          have been tanned or dressed with the hair on. (Emphasis in original).
                In addition, the following HTSUS provision is relevant:
                2.                          CHAPTER 64
                   Additional U.S. Notes
                   1.          For purposes of this chapter:
                   . . . .
                          (b)    The term "footwear for men, youths and boys" covers footwear of
                                 American youths' size 11-½ and larger for males, and does not
                                 include footwear commonly worn by both sexes. (Emphasis in
                                 original).
                

C. Customs' Classification

The United States Customs Service (Customs) classified the imported merchandise under HTSUS subheading 6405.90.90. Subheading 6405.90.90 applies to "Other footwear: .... Other: .... Other: ...." Pursuant to this subheading, Customs imposed duties totalling 12.5% ad valorem.

Plaintiff filed timely protests pursuant to 19 U.S.C. § 1514(a) (1988) contesting Customs' classification. Customs subsequently denied the protests and, after having paid all liquidated duties, plaintiff commenced this action within the time allowed by law. On December 18, 1991, this Court granted plaintiff's motion to designate this action a test case under USCIT R. 84(b).

II. CONTENTIONS OF THE PARTIES

A. Plaintiff

Plaintiff advances four arguments supporting its motion for summary judgment. First, plaintiff relies on Chapter 64, Note 4(a) to assert that only the outer surface of the Ugg boots is relevant in determining whether the boots have leather uppers. Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment and in Opposition to Defendant's Motion for Summary Judgment at 6 (Plaintiff's Brief). Plaintiff contends the boots meet the requirements of subheadings 6403.91.60 and 6403.91.90 because the boots' external surface consists entirely of suede leather.

Second, plaintiff maintains even without Chapter 64, Note 4(a), ordinary commercial understanding demonstrates the boots have leather uppers. Plaintiff's Response to Defendant's Reply to Plaintiff's Motion for Summary Judgment at 3-4 (Plaintiff's Reply Brief). Plaintiff argues commercial understanding defines tariff terminology and because commerce recognizes the boots as having leather uppers, the boots have leather uppers for tariff purposes as well. Id.

Third, plaintiff contends the HTSUS "furskin" provisions do not apply to its merchandise. Plaintiff's Brief at 4, 7-8. Plaintiff urges the language used to define furskins in Chapter 43, Note 1 limits the application of the term "furskin" to instances where the term itself appears. Id. at 7. Therefore, because the term "furskin" does not appear in Chapter 64 or in any of the provisions in question, the term is inapplicable to its merchandise. Id.

Fourth, plaintiff asserts Customs improperly refused to classify the Ugg boots according to the gender of the person likely to wear the boots. Plaintiff's Brief at 9. Although plaintiff acknowledges its boots are unisex, plaintiff maintains only men wear men's size 8½ and larger and Customs should have classified boots in these sizes as men's footwear under subheading 6403.91.60. Id. at 9-10.

B. Defendant

Defendant contends it is entitled to summary judgment for three principal reasons. First, defendant claims footwear with furskin uppers, such as sheepskin, is not properly classifiable as having leather uppers. Memorandum of Law in Support of Defendant's Motion for Summary Judgment at 5 (Defendant's Brief). Although defendant concedes the sheepskin uppers at issue are commercially recognized as a form of leather, defendant maintains, for tariff purposes, the uppers can not be classified as leather. Id. at 5 n. 2. Instead, defendant argues that the uppers of the Ugg boots fall within the scope of the furskin definition set forth in Chapter 43, Note 1. Id. at 10. Defendant, however, offers no authority to support this assertion. According to defendant, because the HTSUS does not provide for footwear with furskin uppers, Customs properly classified plaintiff's merchandise under HTSUS subheading 6405.90.90. Id.

Second, defendant claims Chapter 64, Note 4(a) does not apply to plaintiff's merchandise. Defendant's Reply Memorandum in Support of its Motion for Summary Judgment and in Opposition to Plaintiff's Cross-Motion for Summary Judgment at 2 (Defendant's Reply Brief). Defendant urges that the definition of uppers contained in Chapter 64, Note 4(a) only applies if the uppers at issue contain more than one material, but offers no authority to support this assertion. Id. Defendant asserts the uppers at issue in the instant case contain only one material — furskin — and consequently Chapter 64, Note 4(a) is inapplicable. Id.

Third, assuming the Court finds plaintiff's merchandise properly classifiable as leather rather than furskin, defendant contends it is improper to classify the boots according to the gender of the likely wearer. Defendant's Reply Brief at 4. Defendant asserts plaintiff has not demonstrated which sizes in the Ugg boots women commonly wear and therefore splitting the classification of the boots between HTSUS subheadings 6403.91.60 and 6403.91.90 is inappropriate. Id.

III. DISCUSSION

A. Presumption of Correctness

As in all customs cases, a statutory presumption of correctness attaches to classifications by the Customs Service and the party challenging the classification has the burden of overcoming this presumption. 28 U.S.C. § 2639(a)(1) (1988). To determine whether an importer has overcome the statutory presumption, the Court must consider whether "the government's classification is correct, both independently and in comparison with the importer's alternative." Jarvis Clark Co. v. United States, 2 Fed.Cir. (T) 70, 75, 733 F.2d 873, 878, reh'g denied, 2 Fed.Cir. (T) 97, 739 F.2d 628 (1984). This statutory presumption of correctness governs all classification cases regardless of whether the Court conducts a trial or considers a motion for summary judgment.

B. Summary Judgment

This test case is before the Court on cross-motions for summary judgment. Under the rules of this Court, summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." USCIT R. 56(d). "The very mission of the summary judgment procedure is to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." FED. R.CIV.P. 56(e) advisory committee note on the 1963 amendments. The Court will deny summary judgment if the parties present "a dispute about a fact such that a reasonable trier of fact could return a verdict against the movant." Pfaff Am. Sales Corp. v. United States, 16 CIT ___, Slip-Op. 92-226 at 5, 1992 WL 391085 (Dec. 18, 1992) (citations omitted). In assessing the parties' claims, the Court...