General Electric Company v. United States
| Decision Date | 19 April 2001 |
| Docket Number | DEFENDANT-APPELLEE,PLAINTIFF-APPELLANT,No. 00-1263,00-1263 |
| Citation | 247 F.3d 1231 |
| Parties | (Fed. Cir. 2001) GENERAL ELECTRIC COMPANY - MEDICAL SYSTEMS GROUP,, v. UNITED STATES, |
| Court | U.S. Court of Appeals — Federal Circuit |
Appealed from: United States Court of International Trade
Patrick C. Reed, Wasserman, Schneider, Babb & Reed, of New York, New York, argued for plaintiff-appellant.
Amy M. Rubin, Trial Attorney, Commercial Litigation Branch, Civil Division, International Trade Field Office, Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief David M. Cohen, Director, Commercial Litigation Branch, Civil Division, of Washington, Dc; and Joseph I. Liebman, Attorney In Charge, International Trade Field Office. Of counsel on the brief was Beth C. Brotman, Attorney, Office of Assistant Chief Counsel, United States Customs Service, International Trade Litigation, of New York, New York.
Before Mayer, Chief Judge, Michel and Gajarsa, Circuit Judges.
General Electric Company-Medical Systems Group (GE) appeals the judgment of the United States Court of International Trade, General Elec. Co.-Med. Sys. Group v. United States, 86 F. Supp. 2d 1291 (Ct. Int'l Trade 2000), which granted the United States Customs Service's (Customs) motion for summary judgment dismissing GE's challenge to Customs' classification of its merchandise. We reverse.
Between 1992 and 1994, GE imported 98 multiformat cameras (MFCs), 97 of which were for use solely with computerized tomography (CT) x-ray scanners. One MFC, of a different model, was for use with a magnetic resonance imaging (MRI) system. A MFC is an apparatus containing an internal cathode-ray-tube monitor that displays a computer-generated image and a camera assembly that photographs the monitor's display screen. When connected to the CT or MRI system, the computer-generated image created from the CT system's x-rays or the MRI system's magnetic resonances is transmitted to the MFC's display monitor. The camera lens is aimed at the screen monitor in order to photograph the screen and the displayed image. The MFC produces a hard-copy photograph on x-ray film. The term "multiformat" refers to the apparatus' ability to produce multiple images on a single sheet of x-ray film. Because of the electro-magnetic field produced by the MRI system, MFC models designed for use in CT systems cannot be used with MRI systems. The cathode-ray-tube monitor assembly in the MFC model for MRI systems is enclosed in a metal protective shield.
Although the manufacturer sets the lens assembly of the MFC in a fixed position, there are several ways to adjust its output quality. The internal display monitor has an adjustment knob accessible to the system operator. This affects the finished photograph because the camera records the image displayed on the screen. In addition, the distance between the lens and the film plane in the camera assembly, and thereby the picture quality, may be adjusted by inserting or removing washers. Finally, the focus ring on the unit's "small image" lens may be adjusted by removing a factory installed silicone seal. These last two adjustments are intended to be performed only by a trained service engineer during periodic maintenance scheduled every three months.
The primary issue in this case is the proper classification under the Harmonized Tariff Schedule of the United States (HTSUS) for the 97 MFCs used exclusively in CT systems. The parties dispute which of the following headings and subheadings constitute the proper classification for MFCs:
9006 Photographic (other than cinematographic) cameras; ...
Other cameras
9006.59 Other
9006.59.40 Fixed focus . .
Other than fixed focus
9006.59.90 Valued over $10 each
9022 Apparatus based on the use of X-rays ..., including
...X-raytubes and other X-ray generators, . . . control
panels and desks, screens, examination or treatment
tables, chairs and the like; parts and accessories thereof:
...
9022.90 Other, including parts and accessories:
...
Parts and accessories:
...
Other:
9022.90.60 Of apparatus based on the use of X-rays
9022.90.61
HTSUS (1992 ed. Supp. 1).
Customs classified the MFCs under subheading 9006.59.40 as fixed focus cameras. GE timely protested the classification, which Customs denied, and GE challenged the classification in the Court of International Trade. GE claimed that the MFCs are more properly classified under subheading 9006.59.90, as other than fixed focus cameras valued at over $10 each. In the alternative, GE claimed that the MFCs should be classified under subheading 8479.89.90, as other machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter.
GE moved for partial summary judgment on the 9006.59.90 claim and Customs cross-moved for summary judgment dismissing both of GE's claims. In its reply, GE did not oppose Customs' cross-motion as to the 8479.89.90 claim, but filed a proposed amended consolidated complaint that incorporated a new claim. It based the new claim in-part on statements in Customs' reply brief that the display monitor is separate from the camera assembly. GE argued that because the MFCs contain both a camera and a display monitor separate from the camera, they are a combination apparatus, and are properly classified under subheading 9022.90.60 as parts and accessories, other, of apparatus based on the use of x-rays.
GE did not file a formal motion to amend its complaint under local rule 15(a) and did not amend its motion for partial summary judgment. Its reply brief argued that the 9022.90.60 claim had been litigated with the implied or express consent of the defendant, and, therefore, under local rule 15(b), the pleading should be amended to conform to the evidence. In its reply brief, Customs addressed GE's 9022.90.60 claim and both parties discussed the claim in their post-argument briefs.
The Court of International Trade declined to consider the amended complaint under local rule 15(a). In addition, the court rejected GE's argument that it should amend the pleadings to conform to the evidence under local rule 15(b). The court stated that rule 15(b) only applies when a trial has been or is being held, not when summary judgment was entered before trial. However, the court recognized its duty, under Jarvis-Clark Co. v. United States, 733 F.2d 873 (Fed. Cir. 1984), to find the correct result, and reviewed the proposed alternative classification. The court held that MFCs did not fall under subheading 9022.90.60 because they are not exclusively or primarily used with CT scanner systems and MFCs are not "presented with" any "x-ray apparatus." It therefore held that MFCs are separately presented cameras properly classified under heading 9006. The court granted Customs' motion for summary judgment dismissing the claims and denied GE's motion for summary judgment because MFCs are fixed focus cameras properly classified under subheading 9006.59.40. GE appeals the classification of MFCs under heading 9006 and in the alternative argues that MFCs are not fixed focus under 9006.59.40, but rather other than fixed focus and properly classified under subheading 9006.59.90. We have jurisdiction pursuant to 28 U.S.C. §§ 1295(a)(5) (1994).
We review a grant of summary judgment by the Court of International Trade de novo. Mitsubishi Int'l Corp v. United States, 182 F.3d 884, (Fed. Cir. 1999). Furhtermore, where Customs has not issued a regulation, but merely a classification ruling implicitly interpreting an HTSUS provision, we accord the classification deference in accordance with Skidmore v. Swift & Co., 323 U.S. 134 (1944). United States v. Mead Corp., 533 U.S., 121 S.Ct. 2164, 2168 (2001). However, despite Customs' relative expertise, for the reasons stated below, we find its...
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