Arthur J. Humphreys, Inc. v. U.S.

• Decision Date: 24 August 1992
• Docket Number: No. 92-1032,92-1032
• Citation: 973 F.2d 1554
• Parties: ARTHUR J. HUMPHREYS, INC., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1554

973 F.2d 1554

14 ITRD 1647

ARTHUR J. HUMPHREYS, INC., Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 92-1032.

United States Court of Appeals, Federal Circuit.

Aug. 24, 1992.

Stephen S. Spraitzar, Law Offices of George Tuttle, A Professional Corp., of San Francisco, Cal., argued for plaintiff-appellee. With him on the brief was George R. Tuttle.

Saul Davis, Commercial Litigation Branch, Dept. of Justice, New York City, argued for defendant-appellant. With him on the brief were Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Joseph I. Liebman, Atty. in Charge, International Trade Field Office. Also on the brief were Steven Berke, Gen. Atty. and Edward N. Maurer, Office of Asst. Chief Counsel, Intern. Trade Litigation, U.S. Customs Service, of counsel.

Carol A. Joffe, William C. Ives and Robin W. Grover, Keck, Mahin & Cate, Washington, D.C., were on the brief for amicus curiae, American Hardboard Ass'n.

Before NEWMAN, Circuit Judge, SKELTON, Senior Circuit Judge, and MAYER, Circuit Judge.

SKELTON, Senior Circuit Judge.

In this case plaintiff Arthur J. Humphreys, Inc. challenges the classification of embossed vegetable hardboard fiber panels manufactured in Canada by a company named Canfor, and imported by it into the United States during the years 1980-1981 through plaintiff, its customhouse broker who entered the merchandise on behalf of Canfor. The panels were embossed to resemble brick, stucco, stone or wood patterns. Some were subjected to V-grooving on the face and portions of the edges, while the brick, stucco and stone patterns were cut to form straight edges. The panels were then prefinished with undercoats of paint and grainprinted to provide the appropriate color to the embossed patterns. The panels were manufactured and designed to be used as decorative wall and ceiling covering.

Customs classified the panels under item 245.30, TSUS, covering various types of At the trial, the court found that 90% of the merchandise is used for wall or ceiling covering, and the remaining 10% is used primarily in the construction of furniture and retail displays. In the opinion of the court the 10% of the merchandise used for purposes other than wall or ceiling panelling is not sufficient to make it a material with a variety of uses, such as hardboard.

                hardboard, whether or not face finished.   The plaintiff claims that the proper classification is under item 245.90, TSUS:  "building boards, not specially provided for, whether or not face finished:  other boards, of vegetable fibers (including wood fibers)....".   The plaintiff appealed the Custom classification to the Court of International Trade
                

In its initial opinion of May 3, 1991, the court held that the plaintiff had overcome the presumption of correctness attaching to the classification by Customs, and that the merchandise has been sufficiently advanced that it is no longer an input material commercially susceptible to multiple uses classificable as hardboard under item 245.30, and that it is properly classified under item 245.90. Judgment was entered for the plaintiff.

On August 16, 1991, the court granted defendant's motion for a rehearing and issued its final opinion in which it adhered to the reasoning and decision enunciated in its prior opinion. Accordingly, judgment was entered in favor of the plaintiff against the government, and Customs was ordered to reclassify plaintiff's merchandise in conformity with the opinion of the court and to refund to plaintiff any excess duties paid, with interest, in accordance with law. The court then dismissed the action.

The government appeals to this court, and generally makes the same arguments that it made to the trial court. Upon review by this court, we find that the issues raised by the government were thoroughly and persuasively addressed by Judge DiCarlo in his two opinions, copies of which are attached, in which judgment was entered for the plaintiff. Accordingly, we adopt his opinions as the decision of this court.

AFFIRMED.

APPENDIX

DiCARLO, Judge:

Plaintiff challenges the classification of several styles of vegetable fiber panels manufactured and designed to be used as decorative wall and ceiling covering. Customs classified the merchandise as hardboard under item 245.30, Tariff Schedules of the United States (TSUS). Plaintiff asserts the merchandise is properly classifiable as building board under item 245.90, TSUS. In the event the Court finds Customs' classification to be incorrect, Customs offers an alternative classification as laminated building board under item 245.80, TSUS. The Court finds plaintiff has overcome the presumption of correctness in Customs' classification and will remand this action to Customs if the government wishes to pursue its alternative classification.

BACKGROUND

The merchandise consists of various styles of rigid panels six millimeters thick; 10 are four feet by eight feet and one is four feet by four feet. The rectangular panels are designed and manufactured for use as wall paneling. The square panel is designed and manufactured for use as ceiling tile.

Some of the wall panels are designed to simulate the appearance of various wooden surfaces. The "Buckingham" style, for example, is designed to simulate formal inlaid woodwork typical of an English library. The "Colonial Pine" style simulates molded knotty pine paneling. All of the wood grain patterns have interior grooving which is either embossed or machined onto the panel during the manufacturing process. These panels have grooves at varying distances with at least one every 16 inches. In addition to creating a decorative pattern, the grooves have the ancillary function of hiding nails used to secure the panels to studs in the wall.

Other styles simulate non-wood surfaces. "Manor House," for example, is embossed with a brick pattern. "Hacienda" has the look of lightly troweled stucco. The ceiling panel is similar to "Hacienda" except that it has interior grooving to give the appearance of 12 inch square tiles.

Several styles of the merchandise have functional edgework. The edgework ensures proper installation to produce the desired pattern. The remaining styles have straight edges because the order in which the panels are installed does not affect the pattern.

Customs classified the merchandise under item 245.30, TSUS, covering various types of hardboard, whether or not face finished. Plaintiff claims the proper classification is under item 245.90, TSUS: "[b]uilding boards, not specially provided for, whether or not face finished: other boards, of vegetable fibers (including wood fibers)...." The government proposes, as an alternative classification, item 245.80, TSUS: "[b]uilding boards, not specially provided for, whether or not face finished: [l]aminated boards bonded in whole or in part, or impregnated, with synthetic resins...."

At the trial, the parties entered into stipulations of fact and the Court made findings of facts on the record. One of the findings the Court made is that 90% of the merchandise is used as wall or ceiling covering. The remaining 10% is used primarily in the construction of furniture and retail displays.

DISCUSSION

The meaning of a tariff term is a question of law. Digital Equip. Corp. v. United States, 889 F.2d 267, 268 (Fed.Cir.1989). Whether a particular article fits within the meaning of a tariff term is a question of fact. Brookside Veneers, Ltd. v. United States, 6 Fed.Cir. (T) 121, 124, 847 F.2d 786, 788, cert. denied, 488 U.S. 943, 109 S.Ct. 369, 102 L.Ed.2d 358 (1988).

The TSUS provision for hardboard is an eo nomine provision. In the absence of limitations or a contrary legislative intent, an eo nomine provision includes all forms of the product. C.T. Takahashi & Co. v. United States, 74 Cust.Ct., 38, 46, C.D. 4583 (1975); see also Tomoegawa USA, Inc. v. United States, 12 CIT 112, 116, 681 F.Supp. 867, 870, aff'd in part, vacated and remanded in part, 861 F.2d 1275 (Fed.Cir.1988). An improvement in merchandise provided for eo nomine does not remove it from classification under the eo nomine designation. Takahashi, 74 Cust.Ct. at 46. Nevertheless, if the merchandise is advanced so as to become the article for which the material was intended, it may fall outside the eo nomine classification. See, e.g., A.N. Deringer, Inc. v. United States, 61 Cust.Ct. 66, 72, C.D. 3530, 287 F.Supp. 1016, 1021 (1968) (wooden wedges used in construction not sufficiently advanced to be classified as a manufacture of wood rather than as lumber).

Plaintiff maintains its merchandise is a form of processed hardboard that has become the article for which the material was intended; in this case, building board. The government counters that since plaintiff's merchandise has commercially significant uses beyond those for building board, it has not ceased to be classifiable as hardboard. Furthermore, the government warns that accepting plaintiff's argument would so enlarge the scope of the TSUS provision for building boards that provisions for similar merchandise will become superfluous.

This Court has previously considered the three TSUS items at issue. See American Hardboard Assoc. v. United States, 12 CIT 714, 1988 WL 84132 (1988). In American Hardboard, Customs initially classified prefinished lap siding with a plastic locking spline attached to the back as building board under TSUS item 245.90. After a remand, the merchandise was reclassified as laminated building board under item 245.80, TSUS. Plaintiff claimed the proper classification was as hardboard under item 245.30, TSUS. Id. at 714.

I. Hardboard

A. Fungibility and the American Hardboard Standard

In American Hardboard, the court considered the legislative history as embodied in the Tariff Classification Study to determine the meaning of the term hardboard. According to the study:

Hardboard is used chiefly in construction, in cabinet and millwork, in furniture and fixtures, and...