GRK Canada, Ltd. v. United States

• Decision Date: 14 January 2013
• Citation: 884 F.Supp.2d 1340
• Parties: GRK CANADA, LTD., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

884 F.Supp.2d 1340

GRK CANADA, LTD., Plaintiff,

v.UNITED STATES, Defendant.

United States Court of

International Trade.

Slip Op. 13–7.

Court No. 09–00390.

Jan. 14, 2013.

Montgomery, McCracken, Walker & Rhoads, LLP (Craig E. Ziegler), Philadelphia, PA, for Plaintiff.

Stuart F. Delery, Principal Acting Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Jason M. Kenner); and Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection (Beth Brotman), of counsel, for Defendant.

OPINION

BARZILAY, Senior Judge:

This case is before the court on cross-motions for summary judgment. Plaintiff GRK Canada, Ltd. (“GRK”), challenges the decision of Defendant U.S. Customs and Border Protection (“Customs”) denying GRK's protest of Custom's classification of its R4 Screws and Trim Head Screws within the Harmonized Tariff Schedule of the United States (“HTSUS”). Customs classified the merchandise as “other wood screws” under subheading 7318.12.00 of the HTSUS, which carries a 12.5% ad valorem duty. Plaintiff claims that the merchandise is properly classified as “self-tapping screws” under subheading 7318.14.10 of the HTSUS, which carries a 6.2% ad valorem duty. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a). For the reasons set forth below, Plaintiff's motion for summary judgment is granted and Defendant's motion is denied.

I. STANDARD OF REVIEW

The court reviews Customs' protest decisions de novo.28 U.S.C. § 2640(a)(1). USCIT Rule 56 permits summary judgment when “there is no genuine issue as to any material fact....” USCIT R. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering whether material facts are in dispute, the evidence must be considered in a light most favorable to the non-moving party, drawing all reasonable inferences in its favor, as well as all doubts over factual issues. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Anderson, 477 U.S. at 253–54, 106 S.Ct. 2505.

A classification decision involves two steps. The first addresses the proper meaning of the relevant tariff provisions, a question of law. See Faus Group, Inc. v. United States, 581 F.3d 1369, 1371–72 (Fed.Cir.2009) (citing Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998)). The second step determines the nature of the imported merchandise and is a question of fact. See id. When there is no factual dispute regarding the merchandise, as is the case here, the resolution of the classification issue turns on the first step, determining the proper meaning and scope of the relevant tariff provisions. See Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378 (Fed.Cir.1999); Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365–66 (Fed.Cir.1998).

While the court accords deference to Customs' classification rulings relative to their “power to persuade,” United States v. Mead Corp., 533 U.S. 218, 235, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (citing Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)), the court has “an independent responsibility to decide the legal issue of the proper meaning and scope of HTSUS terms.” Warner–Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed.Cir.2005) (citing Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1358 (Fed.Cir.2001)).

II. UNDISPUTED FACTS

The following facts are not in dispute. GRK imports steel screws into the United States. There are two styles of screws at issue in this case: (1) GRK model R4 Screws and (2) GRK model Trim Head Screws. There are two variations of Trim Head Screws: (1) RT Composite Trim Head Screws and (2) Fin/Trim Head Screws. GRK entered the subject screws between January 2008 and August 2008. The screws are made of corrosion resistant case hardened steel, have heads, shanks, threads, points, and are of various lengths and diameters.

The head of a screw is the end that resembles a mushroom top and allows it to be turned or driven into the target material. After being fastened the head normally comes to rest along the surface of the material to which it is fastened. The cylindrical portion of the screw from the underside of the head to the tip is known as the shank. It can be fully or partially threaded. The threaded portion of a screw can be recognized as the male part of the screw with spiraling metal threads that create female threads in the target material. The tip of a screw (also called the point) is the part that first enters the target material.

GRK's R4 screws (of all sizes) have a flat self-countersinking head with saw-blade-like cutting teeth and six self-contained cutting pockets on the underside of the head. This design eliminates the need to perform a separate countersinking operation because the underside of the head cuts away the top layer of material as the screw is driven into place. R4 screws with a length of 1 1/4 inches and longer have a patented thread design GRK refers to as “W–Cut” threading. It is located near the tip, along the threaded portion of the screw. R4 screws with a length of 2 inches and longer have a secondary area of threading GRK refers to as “CEE” threading. It is located closer to the head, directly underneath the unthreaded part of the shank. R4 screws without “CEE” threading simply have a partially unthreaded shank. The “W–Cut” threading acts like a saw blade and cuts through the material as the screw is being driven into place, while the “CEE” threading enlarges the screw hole to allow the two materials being fastened together to settle easily around the non-threaded portion of the screw.

GRK's Trim Head Screws have much smaller heads (the smallest available) that are designed to prevent the screws from cracking and splitting the target material. Trim Head Screws with a length of 1 1/4 inches and longer have “W–Cut” threading. GRK's RT Composite Trim Head Screws (a variation of the Trim Head Screw) have a second set of threads near the head, underneath the unthreaded shank, called reverse threading. Reverse threading allows the head of the screw to be less noticeable along the surface of the target material. GRK's Fin/Trim Head Screws (the other type of Trim Head Screw) do not have reverse threading and simply have a partially unthreaded shank.

Both GRK models (R4 and Trim Head screws) have gimlet points, which is a type of tip characterized by a sharp threaded point. GRK's screws have point angles between 25 and 35 degrees. In addition to having gimlet points, R4 screws of 1 1/4 inches and longer have a feature called a Type 17 point that GRK refers to commercially as a “Zip–Tip.” Trim Head Screws of all sizes have Type 17 points. A Type 17 point is a gimlet point with a slot or groove with sharp edges cut into it. It allows the screw's insertion into the material to start more easily by giving the point an additional cutting edge, thereby reducing the torque needed to drive the screw into place. A Type 17 point cuts and removes material as it is being turned into the target material.

Both models are manufactured to meet certain minimum torsional strength requirements. Torsional requirements measure the ability of a screw to resist torque forces that cause it to twist off course as it is being driven into the material. The subject screws are available in carbon steel and stainless steel. The carbon steel versions are made of heat-treated, case-hardened steel. The stainless steel versions have been hardened through a process called draw hardening.

The subject screws can be used in wood, sheet metal, plastics, medium-density fiberboard, polyvinyl chloride (PVC) board, cement fiberboard, melamine, arborite, and other man-made composite materials. More specifically, GRK's R4 Screws are recommended for use in wood, particle board, plastic, sheet metal, cement fiber board and wood decking, pressure treated lumber decking, cedar and redwood decking. GRK's Trim Head Screws are recommended for most fine carpentry applications and trim applications, and can be used to anchor composite decking material to wood beams.

III. DISCUSSION

The “General Rules of Interpretation (“GRIs”) govern classification of merchandise under the HTSUS, and are applied in numerical order.” Honda of America Mfg. v. United States, 607 F.3d 771, 773 (Fed.Cir.2010) (internal quotations and citations omitted). “What is clear from the legislative history of the World Customs Organization (“WCO”) and case law is that GRI 1 is paramount.” Telebrands Corp. v. United States, 36 CIT ––––, ––––, 865 F.Supp.2d 1277, 1280 (2012). When determining the correct classification for merchandise, a court first construes the language of the headings in question, in light of any related section or chapter notes. See GRI 1; Faus Grp., Inc. v. United States, 581 F.3d 1369, 1372 (Fed.Cir.2009) (citing Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed.Cir.1998)).¹ The “terms of the HTSUS are construed according to their common commercial meanings.” Millenium Lumber Distrib. Ltd. v. United States, 558 F.3d 1326, 1329 (Fed.Cir.2009). To ascertain the common commercial meaning of a tariff term, the court “may rely on its own understanding of the term as well as lexicographic and scientific authorities.” Len–Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed.Cir.2003). The court may also refer to the Harmonized Description and Coding System's Explanatory Notes (“Explanatory Notes”) “accompanying a tariff subheading, which-although not controlling-provide interpretive guidance.” E.T. Horn Co. v. United States, 367 F.3d 1326, 1329 (Fed.Cir.2004) (citing Len–Ron, 334 F.3d at 1309).

There is no dispute that GRK's screws are covered by HTSUS Heading 7318, which provides for “ screws, bolts, nuts, coach screws, screw hooks, rivets,...