Convertors Div. of American Hosp. Supply Corp. v. U.S.

• Decision Date: 16 November 1988
• Docket Number: No. 88-1185,88-1185
• Citation: 861 F.2d 710
• Parties: CONVERTORS DIVISION OF AMERICAN HOSPITAL SUPPLY CORPORATION, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 710

861 F.2d 710

10 ITRD 2008

CONVERTORS DIVISION OF AMERICAN HOSPITAL SUPPLY CORPORATION Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

Appeal No. 88-1185.

United States Court of Appeals Federal Circuit.

Nov. 16, 1988.

Allan H. Kamnitz, Sharretts, Paley, Carter and Blauvelt, P.C., New York City, argued for plaintiff-appellant. Donald W. Paley and Ned H. Marshak, Sharretts, Paley, Carter and Blauvelt, P.C., were on the brief for plaintiff-appellant.

Mark S. Sochaczewsky, Commercial Litigation Branch, Dept. of Justice, of New York City, argued for defendant-appellee. With him on the brief were John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director and Joseph I. Liebman, Attorney in Charge, International Trade Field Office.

Before MARKEY, Chief Judge, NIES and MICHEL, Circuit Judges.

MICHEL, Circuit Judge.

DECISION

Convertors Division of American Hospital Supply Corporation (Convertors) appeals the decision of the Court of International Trade, 680 F.Supp. 1562 (Ct.Int'l Trade 1987), granting the government summary judgment in Convertors' action protesting the classification of Convertors' headwear as "headwear, of man-made fibers," Item 703.15, T.S.U.S., ^* instead of as "other headwear," Item 703.75, T.S.U.S. We affirm.

Background

This classification dispute involves disposable headwear produced from a nonwoven material, textile thread, and for some styles, rubber elastic. Convertors ordered the nonwoven material from another company which manufactured the material in accordance with Convertors' specifications. Convertors then cut the material at its plant and sent the material to Mexico where it was assembled into headwear.

The nonwoven material was produced by combining woodpulp; shortlength, uncrimped and untwisted polyester fibers; resin binders; and fire retardants to create a "web" utilizing a wet forming process. The polyester fibers reinforce the web material and reduce the stiffness that would otherwise result from using an all woodpulp web. Both parties agree that the most costly substance in the headwear is the polyester.

Because the headwear contained polyester fibers, the Customs Service classified Convertors' headwear as "headwear, of man-made fibers: not in part of braid: not knit." Item 703.15, T.S.U.S. Under this classification, the headwear was subject to a duty of 25 cents per pound plus 20 percent ad valorem. Convertors argued that the polyester fibers in this headwear were not suitable for the manufacture of textiles and thus could not meet the definition for man-made fibers as specified under T.S.U.S. Schedule 3, Part 1, Subpart E., 2. (a). Convertors asserted in the alternative that its product was in chief value paper. Since no specific tariff classification exists for "headwear, of paper," Convertors argued its headwear should have been classified as "other headwear," Item 703.75, T.S.U.S., which was subject to a duty of 8.5 percent ad valorem.

Both parties moved for summary judgment. The Court of International Trade granted the government's motion because it held the polyester fibers in the headwear were man-made fibers for the purposes of tariff classification and the headwear was indeed in chief value of man-made fibers. Convertors appeals, arguing that the Court of International Trade erred in this determination. Convertors further asserts that a genuine issue of material fact exists as to the essential character of the nonwoven material, i.e., whether it is paper or fabric.

OPINION

"Summary judgment is properly granted only where there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390 (Fed.Cir.1987). The court must resolve all significant doubt over material factual issues, if any, in favor of the nonmovant and draw all reasonable inferences against the party whose motion is being considered. Id. at 1390-91. Where the only issue before the Court of International Trade was the meaning of the tariff terms, a question of law, see Childcraft Education Corp. v. United States, 742 F.2d 1413, 1414 (Fed.Cir.1984), our court independently determines the meaning of those terms and need not defer to the trial court. See Chula Vista City School District v. Bennett, 824 F.2d 1573, 1579 (Fed.Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 774, 98 L.Ed.2d 861 (1988).

Both parties agree that the headwear at issue is classifiable, generally, under Schedule 7, Part 1--"Footwear; Headwear and Hat Braids; Gloves; Luggage, Handbags, Billfolds, and Other Flat Goods"--of the T.S.U.S. However, Convertors asserts that the Court of International Trade erred when it granted summary judgment on the issue of the particular classification of the headwear within Schedule 7. Specifically, Convertors argues that the government's chief value calculation, and the Court of International Trade's affirmance thereof, was erroneous because the polyester fibers should have been considered an ingredient of the paper in the headwear and, therefore, not a basis for any chief value calculation, rather than as a separate component of the headwear material for the purposes of the chief value calculation. We disagree. Furthermore, because we hold that the headwear is in chief value of man-made fibers, we do not reach Convertors' claim that a genuine issue of material fact exists as to whether the material is paper or fabric.

The general headnotes for the Tariff Act of 1930 define the word "of" in a classification such as "headwear, of man-made fibers," to mean "that the article is wholly or in chief value of the named material." General Headnote 9(f)(i)....