Tyco Fire Prods. L.P. v. United States

Decision Date21 June 2013
Docket NumberSlip Op. 13–78.,Court No. 08–00190.
Citation918 F.Supp.2d 1334
PartiesTYCO FIRE PRODUCTS L.P., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

OPINION TEXT STARTS HERE

Michael E. Roll, Pisani & Roll, of Los Angeles, CA, argued for the Plaintiff.

Amy M. Rubin, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, argued for the Defendant. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, and Barbara S. Williams, Attorney in Charge. Of counsel on the brief was Chi S. Choy, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

OPINION AND ORDER

RESTANI, Judge:

Tyco Fire Products L.P. (Tyco) appeals a U.S. Customs and Border Protection (“Customs”) ruling that Tyco's products—filled bulbs 1 it uses in fire sprinklers and water heaters—are classified under Chapter 70 of the Harmonized Tariff Schedule of the United States (HTSUS), as articles of glass.2 Tyco contends in its motion for summary judgment that the goods should be classified within Chapter 84, as parts of certain machines. Tyco asserts that its goods are properly classified under Heading 8419 or 8424 3 because the liquid compound inside the glass, not the glass itself, imparts the products with their essential character. Defendant United States asserts in its cross-motion for summary judgment that Customs' determination was correct. Alternatively, Defendant argues that Tyco has not proven that the filled bulbs are principally or solely used in particular machines, and therefore the court may not classify them as parts of such machines, at least not on summary judgment.

BACKGROUND

This matter involves entries made through the Port of Dallas–Fort Worth, Texas, from July 2004 until July 2006. Case File Entry Docs, Dkt. No. 1. Tyco was the importer of record on the entries at issue. See Pl.'s Statement of Material Facts Not in Dispute (“Pl.'s Facts”) ¶ 1; Def.'s Resp. to Pl.'s Statement of Material Facts as to Which There Are No Genuine Issues to be Tried (“Def.'s Resp.”) ¶ 1. Each imported product consists of a sealed glass bulb with an inner cavity that is filled with colored liquid. See Pl.'s Facts ¶ 21; Def.'s Resp. ¶ 21. The filled bulbs come in a variety of sizes in terms of length, diameter, and thickness. Pl.'s Facts ¶¶ 61–63, 65–69; Def.'s Resp. ¶¶ 61–63, 65–69. When a filled bulb is exposed to heat, the temperature of the glass increases, and the heat is transferred through the glass to the liquid. See Pl.'s Facts ¶¶ 25–26; Def.'s Resp. ¶¶ 25–26. As the liquid also heats, it expands in volume, and a bubble that is present in the filled bulb's cavity shrinks. Pl.'s Facts ¶ 27; Def.'s Resp. ¶ 27. Eventually, the bubble disappears, and the bulb's cavity is completely filled with liquid. Pl.'s Facts ¶ 27; Def.'s Resp. ¶ 27. Because the liquid no longer has space to expand within the cavity, pressure on the glass builds. Pl.'s Facts ¶ 27; Def.'s Resp. ¶ 27. Over time, the pressure increases to the point where the glass can no longer sustain the pressure on it, and the filled bulb explodes or fractures. Pl.'s Facts ¶ 27; Def.'s Resp. ¶ 27. Based on this mechanism, all of the filled bulbs at issue operate as thermal activation devices within some type of system.4 Pl.'s Facts ¶ 14; Def.'s Resp. ¶ 14.

In the case of a water-based fire sprinkler, the filled bulbs are mounted within the metal sprinkler head such that they hold closed a valve, preventing water from spraying out of the opening. Pl.'s Facts ¶¶ 11–12; Def.'s Resp. ¶¶ 11–12. When a certain temperature is reached, the glass breaks, releasing the valve and allowing water to be dispersed.5 Pl.'s Facts ¶ 28; Def.'s Resp. ¶ 28. In the case of filled bulbs used in water heater systems, the filled bulbs are situated within the device in a manner that holds open a door. Pl.'s Facts ¶ 28; Def.'s Resp. ¶ 28. The breaking of the glass allows the door within the system to close, cutting off the air supply to the combustion chamber, thereby preventing an explosion. Pl.'s Facts ¶ 28; Def.'s Resp. ¶ 28. Thirty-nine models of the filled bulbs are used by Tyco in fire sprinkler systems.6 Pl.'s Facts ¶ 10; Def.'s Resp. ¶ 10. The other three models are used by Tyco exclusively as thermal release devices for water heaters. Pl.'s Facts ¶ 79; Def.'s Resp. ¶ 79. According to Tyco's Rule 30(b)(6) agent,7 whether used in fire sprinkler systems or water heaters, the function of the filled bulb is [v]ery similar.” Pl.'s Dep. at 44.

Tyco purchases its filled bulbs from two different German producers—Job GmbH (“Job”) and Geissler Glasinstrumente GmbH (“Geissler”). Pl.'s Facts ¶ 57; Def.'s Resp. ¶ 57. The same type of liquid, triethylene glycol, is used in all filled bulbs produced by Geissler. See Pl.'s Facts ¶ 72; Def.'s Resp. ¶ 72. Tyco, which is related to only Geissler, is unable to identify the composition of the liquid in the Job filled bulbs at issue, but it believes that the liquid component in at least some of Job's filled bulbs is triethylene glycol. Pl.'s Facts ¶¶ 73–74.

Tyco's entries were liquidated by Customs under subheading 7020.00.60, which provides for [o]ther articles of glass: [o]ther.” 8 Pl.'s Mem. 2; Case File Entry Docs, Dkt. No. 1. Tyco claimed the filled bulbs were classifiable under subheading 8424.90.90, which provides for “other” “parts” of goods of Heading 8424, free of duty. Pl.'s Mem. 1–2. Tyco filed a timely protest and application for further review, challenging the classification of the merchandise at issue. See id. In response, Customs' headquarters issued a ruling, HQ 5116 (Nov. 20, 2007), available at,2007 WL 4901407, confirming that the filled bulbs were properly classified in Heading 7020 as articles of glass. Id. at 2–3. Customs based its position on statutory Note 1(c) of Chapter 84 which excludes from Chapter 84 parts of machinery or appliances “of glass.” HQ 5116 at 2. Tyco contends, however, that Note 1(c) does not apply to the filled bulbs at issue because they are not articles “of glass.” Id. at 16.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction in this case pursuant to 28 U.S.C. § 1581(a) (2006). Although Customs' decisions ordinarily are entitled to a presumption of correctness pursuant to 28 U.S.C. § 2639(a)(1), the court makes its determinations based upon the record before it, not upon the record developed by Customs. See United States v. Mead Corp., 533 U.S. 218, 233 n. 16, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Accordingly, the court makes findings of fact and conclusions of law de novo. See 28 § 2640(a). Summary judgment is appropriate when the parties' submissions “show[ ] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” USCIT R. 56(a). Where tariff classification is at issue, “summary judgment is appropriate when there is no genuine dispute as to the underlying factual issue of exactly what the merchandise is.” Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.Cir.1998).

Plaintiff has the burden of establishing that the government's classification of the product was incorrect, but it does not bear the burden of establishing the correct tariff classification; instead, the correct tariff classification will be determined by the court. See Jarvis Clark Co. v. United States, 733 F.2d 873, 878 (Fed.Cir.1984). In determining the correct tariff classification, the court first must “ascertain[ ] the proper meaning of specific terms in the tariff provision.” David W. Shenk & Co. v. United States, 960 F.Supp. 363, 365 (CIT 1997). That meaning is a question of law. See Russell Stadelman & Co. v. United States, 242 F.3d 1044, 1048 (Fed.Cir.2001). Second, the court must determine the tariff provision under which the subject merchandise is properly classified based upon the factual description of the goods. See Bausch & Lomb, 148 F.3d at 1365. This ultimate determination is also a question of law. Id. at 1365–66. The statutory presumption of correctness given Customs' classification decisions by § 2639(a)(1) does not apply if the court is presented solely with a question of law by a proper motion for summary judgment. See Universal Elecs., Inc. v. United States, 112 F.3d 488, 492 (Fed.Cir.1997).

DISCUSSION

The General Rules of Interpretation (“GRIs”) and, if applicable, the Additional U.S. Rules of Interpretation (“ARIs”) of the HTSUS provide the analyticalframework for the court's classification of goods. N. Am. Processing Co. v. United States, 236 F.3d 695, 698 (Fed.Cir.2001). For additional guidance as to the scope and meaning of tariff headings and notes, the court also may consider the Explanatory Notes (“ENs”) to the Harmonized Commodity Description and Coding System, developed by the World Customs Organization. Lynteq, Inc. v. United States, 976 F.2d 693, 699 (Fed.Cir.1992). Although the ENs are not part of U.S. law and therefore not binding on the court, they are “indicative of proper interpretation” of the tariff schedule. Id. (quoting H.R.Rep. No. 100–576, at 549 (1988) (Conf. Rep.), reprinted in, 1988 U.S.C.C.A.N. 1547, 1582) (internal quotation marks omitted).

GRI 1 instructs that tariff classification is to “be determined according to the terms of the headings and any relative section or chapter notes.” The chapter and section notes of the HTSUS are not interpretive rules; rather, they are statutory law, and therefore, they must be considered in resolving classification disputes. See Libas, Ltd. v. United States, 193 F.3d 1361, 1364 (Fed.Cir.1999) (recognizing the controlling authority of chapter notes). Goods that cannot be classified solely by reference to GRI 1 must be classified by reference to the subsequent GRIs in numerical order. See N. Am. Processing, 236 F.3d at 698. “The HTSUS is designed so that most classification questions can be answered by GRI 1....” Telebrands Corp. v. United States, 865...

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