American Bayridge Corp. v. U.S., Slip Op. 98-166.
| Decision Date | 16 December 1998 |
| Docket Number | Court No. 98-08-02682.,Slip Op. 98-166. |
| Citation | 35 F.Supp.2d 922 |
| Parties | AMERICAN BAYRIDGE CORP., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
Kirkland & Ellis (Kenneth G. Weigel, Paul F. Brinkman), for Plaintiff.
Frank W. Hunger, Assistant Attorney General, Joseph I. Liebman, Attorney-in-Charge International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Barbara S. Williams, Aimee Lee), Allan Martin, Office of Associate Chief Counsel, United States Customs Service (Louis Brenner Jr.), of counsel, for Defendant.
Dewey Ballantine, L.L.P. (Myles V. Lynk, John A. Ragosta, Frank J. Schweitzer, Timothy E. Punke, Dominick L. Bianchi, David A. Bentley), for amicus curiae, Coalition for Fair Lumber Imports.
Weil, Gotshal & Manges, L.L.P. (M. Jean Anderson), for amicus curiae, The Government of Canada.
Pepper Hamilton, L.L.P. (Elliot J. Feldman, Gregory C. Dorris), for amicus curiae, The Gouvernement du Québec.
Following several countervailing duty investigations involving softwood lumber imports from Canada into the United States, see Certain Softwood Lumber Products from Canada, 57 Fed.Reg. 22,570 (Dept. Commerce 1992), the governments of Canada and the United States signed an agreement in 1996 providing for a ceiling on the number of board feet of such lumber permitted to be imported from Canada to the United States. Softwood Lumber Agreement, May 29, 1996, U.S.-Can., 25 I.L.M. 1197 (the "Agreement").
Exports from Canada were to be controlled by means of export permits and fees administered by the Canadian provincial governments. Imports classified within heading 44.07 of the Harmonized Tariff Schedule of the United States ("HTSUS") were specifically covered by the terms of the Agreement; imports classified within heading 44.18, HTSUS, were not. In 1997, North Star Wholesale Lumber ("North Star") sought a classification ruling from the United States Customs Service ("Customs") on a product described as a predrilled stud. By ruling dated February 18, 1997, Customs classified these drilled spruce-pine-fir studs under subheading 4418.90.4040, HTSUS ("the North Star Ruling").
After initiating a notice and comment procedure, see Tariff Classification of Drilled Softwood Lumber, 62 Fed.Reg. 55, 667 (Dept. Treas.1997); Tariff Classification of Drilled Softwood Lumber, 63 Fed.Reg. 17,927 (Dept. Treas.1998); Customs B. & Dec. at 56-57 (Apr. 15, 1998), Customs revoked the North Star Ruling on July 1, 1998. Customs Ruling HQ 961555 (July 1, 1998).
The first Federal Register notice, soliciting comments on the issue of predrilled studs, stated:
until the resolution of this issue, we are restricting the determination in N.Y. B81564 [the North Star Ruling] to the facts of that specific case, and as such, there should be no reliance by third parties on N.Y. B81564 for prospective or future importations of drilled softwood lumber. Claims for detrimental reliance under § 177.9, Customs Regulations (19 CFR 177.9), will not be entertained for actions occurring on or after the date of publication of this notice.
62 Fed.Reg. 55,667 (Dept.Treas.1997).
In the revocation notice, Customs recited the effective date of the revocation as "effective for merchandise entered or withdrawn from warehouse for consumption on or after (60 days from date of publication in the Customs Bulletin)." HQ 961555. Nevertheless, in its administrative message announcing the revocation, Customs instructed its port personnel that the revocation would be effective on the date of publication for all importers except for North Star, the holder of the original ruling, and that such importations of predrilled studs would require permits pursuant to the Agreement. Admin. Message 98-0537 (July 1, 1998).
On June 30, 1998, the National Lumber and Building Materials Association, the National Association of Home Builders, the Canadian Wholesale and Remanufacturing Lumber Association and Jackpine Forest Products, Ltd. sought a declaratory judgment and permanent injunctive relief against Customs' revocation of the original ruling classifying the predrilled studs in HTSUS heading 44.18 and the failure to provide a sixty day grace period to third party importers, pursuant to 19 U.S.C. § 1625(c). National Lumber and Bldg. Material Dealers Assoc. v. United States, No. 98-06-02426 (CIT June 30, 1998). That action was dismissed on July 16, 1998, pursuant to an agreement among the parties providing for importation of the product at issue and an expedited liquidation, protest and litigation schedule.
This case is the result of the agreed-upon procedure, and presents the Court with two distinct issues: the proper classification of the predrilled studs, the merchandise at issue; and, whether 19 U.S.C. § 1625(c) grants third party importers a sixty day grace period, after proper revocation of an existing ruling, within which to continue importations under the previous classification.
Plaintiff, American Bayridge Corp. ("Bayridge"), has invoked this Court's jurisdiction under 28 U.S.C. § 1581(a), challenging a decision of Customs which denied Bayridge's protest filed pursuant to section 515 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1581(a) (1994). The action involves the proper classification of predrilled studs within Chapter 44 of the HTSUS.
With a few exceptions, this heading covers all wood and timber, of any length but of a thickness exceeding 6 mm, sawn or chipped along the general direction of the grain or cut by slicing or peeling. Such wood and timber includes sawn beams, planks, flitches, boards, laths, etc., and products regarded as the equivalent of sawn wood or timber, which are obtained by the use of chipping machines and which have been chipped to extremely accurate dimensions, a process which results in a surface better than that obtained by sawing and which thereby renders subsequent planing unnecessary. It also includes sheets of sliced or peeled (rotary cut) wood, and strips and friezes for parquet flooring, other than those which have been continuously shaped along any of their edges or faces (heading 44.09).
* * *
The products of this heading may be planed (whether or not the angle formed by two adjacent sides is slightly rounded during the planing process), sanded or end-jointed, e.g., finger-jointed (see the General Explanatory Note to this Chapter).
The heading also excludes:
(a) Wood roughly squared, e.g., by coarse sawing (heading 44.03).
(b) Chipwood and the like (heading 44.04).
(c) Veneer sheets and sheets for plywood (and other wood not elsewhere specified or included) of a thickness not exceeding 6 mm (heading 44.08).
(d) Wood continuously shaped along any of its edges or faces, of heading 44.09.
(e) Strips of plywood or veneered wood for parquet flooring (heading 44.12).
(f) Builders' joinery and carpentry (heading 44.18).
Heading/Subheading Article Description
4418 Builders' joinery and carpentry of wood, including cellular wood panels
and assembled parquet panels; shingles and shakes
4418.10.00 00 Windows, French-windows and their frames
4418.20 Doors and their frames and thresholds
4418.20.40 00 French doors
4418.20.80 Other
30 Flush doors
60 Other
4418.30.00 00 Parquet panels
4418.40.00 Formwork (shuttering) for concrete constructional
work
4418.50.00 Shingles and shakes
* * *
4418.90 Other:
4418.90.20 00 Edge-glued lumber
4418.90.40 Other
10 Beams and arches, laminated
20 Roof trusses
40 Other fabricated structural wood members
50 Prefabricated partitions and panels for buildings
90 Other
This heading applies to woodwork, including that of wood marquetry or inlaid wood, used in the construction of any kind of building, etc., in the form of assembled goods or as recognizable unassembled pieces (e.g., prepared with tenons, mortises, dovetails or other similar joints for assembly), whether or not...
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