Avenues in Leather, Inc. v. U.S.

• Decision Date: 20 May 1999
• Docket Number: No. 98-1511,98-1511
• Citation: 178 F.3d 1241
• Parties: AVENUES IN LEATHER, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

178 F.3d 1241

AVENUES IN LEATHER, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 98-1511.

United States Court of Appeals, Federal Circuit.

May 20, 1999.

James Caffentzis, Fitch, King and Caffentzis, of New York, New York, argued for plaintiff-appellant.

Amy M. Rubin, Attorney, Civil Division, Commercial Litigation Branch, International Trade Field Office, U.S. Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were David M. Cohen, Director, Commercial Litigation Branch, U.S. Department of Justice, of Washington, DC, and Joseph I. Liebman, Attorney in Charge, International Trade Field Office.

Before CLEVENGER, Circuit Judge, SKELTON, Senior Circuit Judge, and GAJARSA, Circuit Judge.

CLEVENGER, Circuit Judge.

Avenues in Leather, Inc., appeals the Court of International Trade's decision upholding the tariff classification and rate of duty imposed by the United States Customs Service on large leather cases or "folios" upon their importation into the United States. See Avenues in Leather, Inc. v. United States, 11 F.Supp.2d 719 (Ct. Int'l Trade 1998). Because we agree with the Court of International Trade that the goods were properly classified, we affirm.

I

The imported goods at issue are four types of leather "folios," which the parties agree are so similar as to require identical classification. Broadly speaking, the folios are used to store, organize, and carry papers, books, pens, pencils, and the like. They can be opened and closed; each of the folios measures at least 13 inches tall by 10 inches wide when closed. Contents can be secured by the use of a three-sided zipper and gusset or by the several pockets located both inside and outside the folios. A three-ring binder is attached to the interior spine of each folio, and a lined notepad is provided. The outside of the folios are covered with leather, contain large pockets, and have handles either built into the spine or recessed into the pockets.

Upon their importation, the United States Customs Service ("Customs") classified the folios under Harmonized Tariff Schedule of the United States ("HTSUS") subheading 4202.11.00 ("Heading 4202"), which covers:

4202 Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and back packs, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composite leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper:

Trunks, suitcases vanity cases, attache cases, briefcases, school satchels and similar containers:

4202.11.00 With outer surface of leather, of composition leather, or of patent leather.

Avenues in Leather, Inc. ("Avenues") argued, however, that the folios should instead be classified under HTSUS subheading 4820.10.20 ("Heading 4820"), which provides:

4820 Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (loose-leaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers (including cover boards and book jackets) of paper or paperboard:

4820.10 Registers, account books, notebooks, order books, receipt books, letter pads and similar articles:

4820.10.20 Diaries, notebooks and address books, bound; memorandum pads, letter pads and similar articles

The real-world difference between these two classifications is significant: items classified under Heading 4202.11.00 are dutiable at eight percent ad valorem, while items under 4820.10.20 are dutiable at four percent.

Avenues took its dispute with Customs to the Court of International Trade, filing suit in 1994. On cross-motions for summary judgment, that court noted that the parties agreed that no material facts were in dispute. See Avenues in Leather, 11 F.Supp.2d at 723. The Court of International Trade concluded that, under the rule of ejusdem generis ¹--calling for the classification of imported articles with exemplars with which they share the same essential characteristics or purposes that unite the listed exemplars--Customs' decision to enter the goods under Heading 4202 was correct. See id. at 724. The Court of International Trade held that the primary purpose of the imported folios is consistent with the primary purpose of the listed exemplars in Heading 4202, and that there is a strong physical similarity between the folios and the 4202 exemplars. See id. at 724-25. The Court of International Trade granted Customs' motion for summary judgment, dismissing the action.

This appeal followed, vesting us with jurisdiction under 28 U.S.C. § 1295(a)(5) (1994).

II

We review the trial court's grant of summary judgment for correctness as a matter of law. See Sharp Microelectronics Tech., Inc. v. United States, 122 F.3d 1446, 1449 (Fed.Cir.1997); Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed.Cir.1994). As in this case, where there are no disputed material facts regarding the imported merchandise, our analysis of whether the merchandise has been properly classified reduces to a determination of the proper meaning and scope of the terms used in the tariff provision. See SGI, Inc. v. United States, 122 F.3d 1468, 1471 (Fed.Cir.1997); Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391 (Fed.Cir.1994).

The law of this court has been that the interpretation of tariff provisions are an issue of law which we review de novo. See Sharp Microelectronics, 122 F.3d at 1449; Sports Graphics, 24 F.3d at 1391. In United States v. Haggar Apparel Co., --- U.S. ----, 119 S.Ct. 1392, 143 L.Ed.2d 480 (1999), the Supreme Court held that Customs' interpretation of the HTSUS, as evinced in issued regulations, is entitled to deference under the rubric of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Although this case is distinct from Haggar in that no Customs regulations are at issue, we recognize that the Supreme Court's pronouncement may nonetheless raise questions regarding the proper standard of review of Customs' interpretation of the HTSUS. Because neither party has raised this issue, and because--as described below--we accept Customs' interpretative position even under a more searching de novo review, we leave the standard of review question for another day.

The issue before us is whether the properly-interpreted scope of HTSUS Heading 4202 or HTSUS Heading 4820 encompasses Avenues' imported folios. Avenues argues first that classification in Heading 4202 is improper, and second that classification in Heading 4820 is proper regardless of whether classification in Heading 4202 is possible. There is no dispute that the folios are not specifically listed as an exemplar in either Heading 4202 or 4820. However, each Heading contains a general phrase following the listed exemplars, making clear that the Headings are to cover "similar containers" in the case of Heading 4202, and "similar articles" in the case of Heading 4820. This court has held that when a list of items is followed by a general word or phrase, the rule of ejusdem generis is used to determine the scope of the general word or phrase. See Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed.Cir.1995). In classification cases, ejusdem generis requires that, for any imported merchandise to fall within the scope of the general term or phrase, the merchandise must possess the same essential characteristics or purposes that unite the listed examples preceding the general term or phrase. See id.; Sports Graphics, 24 F.3d at 1392. This court has further clarified the ejusdem generis principle to make clear that a classification is inappropriate when an imported article has a specific and primary purpose that is inconsistent with that of the listed exemplars in a particular heading. See, e.g., SGI, 122 F.3d at 1472; Sports Graphics, 24 F.3d at 1393. Thus, under an ejusdem generis analysis, a court must consider the common characteristics or unifying purpose of the listed exemplars in a heading as well as consider the specific primary purpose of the imported merchandise. Classification of imported merchandise under ejusdem generis is appropriate only if the imported merchandise shares the characteristics or purpose and does not have a more specific primary purpose that is inconsistent with the listed exemplars. See SGI, 122 F.3d at 1472 (classification under ejusdem generis inappropriate when "none of the exemplars involves [the primary purpose of the imported goods]"); Sports Graphics, 24 F.3d at 1392-93 (because the specific primary purpose was distinct from the essential characteristics of the listed exemplars, ejusdem generis classification is improper).

A

Avenues acknowledges that the essential characteristics of the listed exemplars in Heading 4202 are those of "organizing, storing, protecting, and carrying various items," Totes, 69 F.3d at 498, and that the...