Brookside Veneers, Ltd. v. U.S.

Decision Date11 May 1988
Docket NumberNo. 87-1379,87-1379
Citation847 F.2d 786
Parties, 6 Fed. Cir. (T) 121 BROOKSIDE VENEERS, LTD., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant. Appeal
CourtU.S. Court of Appeals — Federal Circuit

Charles P. Deem, Stedina & Deem, New York City, argued for plaintiff-appellee.

Joseph I. Liebman, Atty. in Charge, International Trade Field Office, Dept. of Justice, Washington, D.C., argued for defendant-appellant. With him on the brief were Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director and Saul Davis.

Before MARKEY, Chief Judge, SKELTON and BALDWIN, Senior Circuit Judges.

BALDWIN, Senior Circuit Judge.

The United States (appellant) appeals from the judgment of the United States Court of International Trade, No. 81-9-01305, 1 sustaining Brookside Veneers, Ltd.'s (Brookside) claim that the imported materials in question were improperly classified as "[a]rticles not specifically provided for, of wood" under item 207.00 of Schedule 2, Part 1 of the Tariff Schedules of the United States (TSUS), and were correctly classifiable as "wood veneers, other" under TSUS Schedule 2, Part 3, item 240.03. Upon examination of the complete record and decisions below, this court finds that

the Court of International Trade incorrectly interpreted the relevant provisions of TSUS. We reverse.

Background

During 1979, 1980, and 1981, the only years at issue here, Brookside imported wood products from Italy which, at the time of entry, were invoiced as "Manmade Veneer" or "recomposed veneers." The merchandise is created by first slicing veneers from a block of natural wood. These veneers are then dyed, stacked one atop another in a predetermined sequence, glued, and bonded by cold pressing to form a solid block. New veneers are sliced from this manmade block at varying angles to obtain the final product. Thus, the resulting veneers are dyed wood sheets, each consisting of pieces of cold pressed dyed wood and adhesive. The particular patterns cut are in response to customer requests. These manmade veneers are used in the same manner and for the same purposes as natural veneers--e.g., in the construction of a myriad of items, and as wall panelling.

The United States Customs Service (Customs) classified and liquidated Brookside's veneers as articles of wood, not specifically provided for under TSUS item 207.00, and assessed duties of 8%, 7.6%, and 7.3% for the years 1979, 1980, and 1981, respectively. 19 U.S.C. Sec. 1500 et seq. (1976). After Brookside's protest under 19 U.S.C. Secs. 1514 and 1515 was denied, it commenced an action in the Court of International Trade seeking reclassification of the veneers under TSUS item 240.03, wood veneers, other, assessable at rates of 2%, 2%/Free, and Free for 1979, 1980, and 1981, respectively. 2

The Court of International Trade first considered "whether Congress manifested an intent to limit the definition of wood veneers to articles derived from logs and flitches." Slip op. at 6. The court held that the plain language of TSUS Schedule 2, Part 3, headnote 1(a) indicates a clear intent by Congress to limit wood veneers according to their source--logs and flitches. This provision also was relied on by the court for its finding that Congress did not intend that use be a consideration in classifying wood veneers under Schedule 2, Part 3.

The court next considered whether the manmade blocks from which Brookside's veneers are sliced are logs or flitches within the meaning of headnote 1(a). After reviewing standard lexicographic material, the court concluded that it is "not clear that the words log or flitch as provided by these definitions and enunciated by Congress in the provision defining wood veneers are precise and should be understood to mean a log or flitch in a natural state." Slip op. at 10. The court found that log or flitch reasonably includes Brookside's manmade block because the latter possesses an "essential resemblance" to logs as referred to in headnote 1(a). The court held that Brookside had rebutted the statutory presumption of correctness accorded customs classifications, and ordered a reclassification and reliquidation under item 240.03.

Appellant argues that the trial court misapprehended the burden of proof which the statutory presumption of correctness places on Brookside. Appellant asserts that Brookside did not provide the trial court with a scintilla of factual evidence to support any of its contentions, and therefore the trial court erred in finding that Brookside successfully rebutted that presumption. The statutory presumption of correctness is explicitly stated in 28 U.S.C. Sec. 2639(a)(1):

[I]n any civil action commenced in the Court of International Trade under section 515, 516, or 516A of the Tariff Act of 1930, the decision of the Secretary of the Treasury, the administering authority, or the International Trade Commission is presumed to be correct. The burden of proving otherwise shall rest upon the party challenging such decision. 3

Appellant asserts that the trial court misapprehended Brookside's burden in overcoming this presumption because Brookside presented no lexicographic, legal, or other authority which suggests that the terms log and flitch can be defined to include Brookside's manmade blocks. Appellant argues further that the processing which Brookside's manmade blocks have undergone places them outside the definitions of log and flitch. Lastly, appellant claims headnote (1) is a clear legislative expression that veneers such as Brookside's, and the blocks from which they are cut, are outside the scope of item 240.03.

In opposition, Brookside argues that the stipulation of facts in lieu of trial included sufficient evidence, in the form of trade publications and company brochures, to support the trial court's conclusion. Brookside contends that the treatment of wood veneers under prior tariff schedules supports the conclusion that Congress intended to include under item 240.03 products which are commercially considered and used as wood veneer. Brookside also urges that commercial and use definitions, as well as legislation subsequent to the enactment of the items in question, dictate the result reached by the trial court. Finally, Brookside suggests that the definitions of log and flitch would create anomalous results if read to restrict those terms to their natural state. Instead, Brookside urges us to interpret log and flitch to include artificial logs and flitches.

OPINION

It is settled that the meaning of tariff terms is a question of law, while the determination of whether a particular item fits within that meaning is a question of fact. Stewart-Warner Corp. v. United States, 748 F.2d 663, 664-65 (Fed.Cir.1984); Daw Industries, Inc. v. United States, 714 F.2d 1140, 1141-42 (Fed.Cir.1983). In this case, we are presented with both questions. Before we can decide whether Brookside's merchandise is within item 240.03, we must first determine the scope of the terms wood veneer, log, and flitch as they are used in item 240.03.

Wood veneers are defined in headnote 1(a) of Schedule 2, Part 3 of TSUS as:

Wood sheets or strips, regardless of thickness, quality or intended use, produced by the slicing or rotary cutting of logs or flitches; and wood sheets, not over 1/4 inch in thickness, produced by sawing and of a type used to overlay inferior material.

It is a general rule of statutory construction that where Congress has clearly stated its intent in the language of a statute, a court should not inquire further. Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 570, 102 S.Ct. 3245, 3249, 73 L.Ed.2d 973 (1982); Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980); Reid v. Dept. of Commerce, 793 F.2d 277, 281-82 (Fed.Cir.1986). In headnote 1(a) Congress explicitly limited the definition of sliced wood veneers to those "sheets or strips" sliced from "logs or flitches." We agree with the trial court's conclusion that the use of the terms logs and flitches in headnote 1(a) was not superfluous. Rather, they were obviously inserted to limit sliced or rotary cut wood veneers under Schedule 2, Part 3 according to source. There is no disagreement that Brookside's veneers are sliced from manmade blocks, thus Brookside's veneers are subject to this limitation. However, Brookside argues that the language used in the Explanatory Notes accompanying items 240.02 through 240.06 of the Tariff Commission's Tariff Classification Study (1960), does not include a reference limiting wood veneers according to source, and therefore, no such limitation exists. This assertion fails to consider the express language of headnote 1(a). Contrary to Brookside's claims, headnote 1(a) is precisely the indication which Brookside says does not exist--that Congress intended to limit wood veneers according to their source. We decline Brookside's invitation to look behind the plain and unequivocal language of the statute.

Headnote 1(a) also expresses Congress' intent that wood veneers not be classified according to their "intended use." Where such a clear expression of legislative intent of the definitional limitations of a tariff term exists, it is inappropriate for a court to frustrate that intent by looking to the common and commercial use of the item to obtain a definition. Toyota Motor Sales, U.S.A., Inc. v. United States, 585 F.Supp. 649, 655 (Ct.Int'l Trade 1984), aff'd on the basis of the opinion below, 753 F.2d 1061 (Fed.Cir.1985). The limitation expressed in headnote 1(a) adequately expresses Congress' intent that, insofar as wood veneers are concerned, intended use, commercial or otherwise, is irrelevant for purposes of customs classification, and we reject Brookside's arguments to the contrary. Congress cannot be presumed to have adopted a definition of wood veneer which was reflective of the commercial uses of that product when headnote 1(a) specifically...

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