Bauer Nike Hockey Usa, Inc. v. U.S., 04-1158.

• Citation: 393 F.3d 1246
• Decision Date: 20 December 2004
• Docket Number: No. 04-1158.,04-1158.
• Parties: BAUER NIKE HOCKEY USA, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

393 F.3d 1246

BAUER NIKE HOCKEY USA, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 04-1158.

United States Court of Appeals, Federal Circuit.

December 20, 2004.

Rehearing Denied February 15, 2005.

Susan M. Mathews, Sidley Austin Brown & Wood LLP, of San Francisco, California, argued for plaintiff-appellant. With her on the brief was Richard M. Belanger, of Washington, DC. Of counsel was Robert Torresen, of Washington, DC.

Amy M. Rubin, Attorney, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, of Washington, DC; and Barbara S. Williams, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Sheryl A. French, Office of Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York.

Before RADER, SCHALL, and PROST, Circuit Judges.

PROST, Circuit Judge.

Bauer Nike Hockey U.S.A., Inc. ("Bauer") appeals a judgment by the Court of International Trade, which held that the United States Customs Service ("Customs") correctly classified Bauer's imported hockey pants under subheading 6211.33.00 of the Harmonized Tariff Schedule of the United States ("HTSUS"). Bauer Nike Hockey USA, Inc. v. United States, 305 F.Supp.2d 1345 (Ct. Int'l Trade 2003). Sports clothing classified under subheading 6211.33.00 carried with it duty rates of slightly above 16% ad valorem from 1998 through 2000. Id. at 1347. Bauer claims that its merchandise should have been classified as ice-hockey equipment under subheading 9506.99.25, which was duty free during the relevant import years. Id. For the reasons that follow, we reverse the Court of International Trade's judgment affirming Customs' classification, and hold that Bauer's ice-hockey pants are most appropriately classified under subheading 9506.99.25.

I. BACKGROUND

The merchandise at issue consists of items known as "hockey pants" or "ice-hockey pants."¹ They are constructed of two primary components: an exterior nylon or polyester textile "shell" and an interior assembly of hard nylon plastic guards and soft polyurethane, polyethylene, or polyester foam padding attached to a belt. Id. at 1348. The internal guards, pads, and belt collectively comprise about 80% of the total weight of the hockey pants. Id. The hockey pants help protect the wearer from injury by absorbing and deflecting blows, collisions, and flying objects in areas where serious injury may occur from playing hockey, including the lower spine, kidneys, tail bone, ribs and lower abdomen, and hips. See id. In addition to their protective function, the pants were designed to provide comfort, fit, and ventilation to the wearer while playing hockey. Id. It is undisputed that these pants were specially designed and intended for use only while playing ice hockey.

In Headquarters Ruling 962072, Customs classified the hockey pants as garments of man-made fibers under subheading 6211.33.00 of Chapter 62.² It examined two styles of Bauer's hockey pants. In Bauer's "True Fit" style of hockey pants, the padding and belt are permanently attached to the textile component of the pants. Customs found the True Fit style pants to be "sports clothing" classifiable as a garment under Heading 6211. In the second style examined, the internal belt and padding in the front, around the thigh, and around the waist are removable from the shell or pants, which also had some sewn-in pads. As for these hockey pants with removable belt, Customs found that although the belt with pads was classifiable as ice-hockey equipment under subheading 9506.99.25,³ the textile shell of the pants was classifiable under subheading 6211.33.00. Because Customs found these other hockey pants qualified as composite goods, it analyzed, pursuant to General Rule of Interpretation ("GRI") 3(b), which material or component imparted the essential character to the goods. Customs determined that the textile shell "gives the article its form, covers the lower portion of the body, holds the pads in place, and itself provides some protection to the player." From its findings concerning the textile shell, Customs concluded that the goods in question were most appropriately classified under Heading 6211. Bauer challenged Customs' ruling before the Court of International Trade. Based on its analysis of the exception found in Note 1(e)⁴ to Chapter 95 and its understanding of what constituted "sports equipment" within that chapter, the Court of International Trade concluded that Customs correctly classified the hockey pants and granted Customs' motion for summary judgment while denying Bauer's cross-motion for summary judgment. Id. at 1358-59. Bauer timely appealed the Court of International Trade's judgment and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

II. DISCUSSION

A. Standard of review

Deciding whether imported merchandise has been properly classified under the tariff provisions is a question of law over which this court exercises complete and independent review. Pillowtex Corp. v. United States, 171 F.3d 1370, 1373 (Fed.Cir.1999). Resolution of that issue involves a two-step process. Id. First, the court must construe the disputed terms in the relevant tariff provisions. Id. Second, the court must determine which tariff provision, as correctly construed, most properly encompasses the merchandise at issue. Id. Despite our de novo review of interpretations of tariff provisions, we give deference to the classification decisions by Customs interpreting provisions of the HTSUS in proportion to their "power to persuade" under the principles of Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944). See United Techs. Corp. v. United States, 315 F.3d 1320, 1322 (Fed.Cir.2003).

B. General rules of classification

The proper classification of merchandise is governed generally by the GRI to the HTSUS. Boen Hardwood Flooring, Inc. v. United States, 357 F.3d 1262, 1264 (Fed.Cir.2004). The first step in analyzing the classification issue is to determine the applicable heading, if possible, by looking to the terms of the headings and section or chapter notes, in accordance with GRI 1. Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed.Cir.1998). Provided that the product is classifiable under a heading, a court must then look to the subheadings to find the correct classification of the merchandise in question. Absent contrary definitions in the HTSUS or legislative history, we construe the terms used in the headings and subheadings according to their "common and popular meaning," which may be drawn from our "own understanding, dictionaries and other reliable sources." Medline Indus., Inc. v. United States, 62 F.3d 1407, 1409 (Fed.Cir.1995). In addition, we may look to the Explanatory Notes accompanying a tariff subheading as a persuasive, but not binding, interpretative guide. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed.Cir.1994).

C. Analysis

Bauer disputes whether its hockey pants may be classified under Chapter 62, subheading 6211.33.00, which is directed to garments of man-made fiber, and urges that its pants should have been classified under Chapter 95, subheading 9506.99.25, which is directed, with certain exclusions, to ice hockey and field hockey articles and equipment.

1.

After reviewing case law, a previous Customs ruling, and definitions from a dictionary, the Court of International Trade construed the term "equipment" in subheading 9506.99.25 to mean "equipment essential to the play of the game, sport, or athletic activity." Bauer, 305 F.Supp.2d at 1356-57. Because Bauer conceded that it is possible to engage in ice hockey without hockey pants, the Court of International Trade rejected Bauer's argument that the subject merchandise may be classified as hockey "equipment" under 9506.99.25. Id. at 1357.

We disagree with the Court of International Trade's reading of the material it reviewed to reach its conclusion. The Court of International Trade suggested that we held in Rollerblade, Inc. v. United States, 282 F.3d 1349 (Fed.Cir.2002), that the term "equipment" meant only articles that are indispensable to the relevant sport or athletic activity. Bauer, 305 F.Supp.2d at 1356. Contrary to the Court of International Trade's perception, we acknowledged only that the "definition offered for `equipment' includes those articles that are necessary and specifically designed for use in athletics and other sports." Rollerblade, 282 F.3d at 1354. Because we did not use the word "only" immediately following "includes" in Rollerblade, we gave no opinion whether items that are not necessary but are specially designed for use in athletics or other sports constitute "equipment." The Court of International Trade also attempted to draw support from a Customs ruling, which concluded that the term equipment "includes the requisites needed in connection with the play of sports and athletics that being the equipment essential to the play of the game, sport, or athletic activity." Bauer, 305 F.Supp.2d at 1356 (emphasis added by the Court of International Trade) (citing N.Y. D85049 (Dec. 14, 1998)). Again, the Court of International Trade read in the word "only" immediately following the word "includes" when there appears to be no basis for limiting sports "equipment" to only sports "requisites." As for dictionary definitions, the Court of International Trade quoted Webster's Third New International Dictionary ("Webster's"), which defined "equipment" to mean "the equipping of a person or thing" and "equip" as "to provide with what is necessary, useful or appropriate." Webster's 768 (1993). This definition provides no support for the Court of International Trade's conclusion that an item must...