Huffy Corp. v. US
| Decision Date | 09 January 1990 |
| Docket Number | Court No. 83-12-01795. |
| Citation | 730 F. Supp. 432 |
| Parties | HUFFY CORP., Plaintiff, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Lamb & Lerch, Sidney H. Kuflik, New York City, for plaintiff.
Stuart M. Gerson, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, Mark S. Sochaczewsky, and (Karen Binder, U.S. Customs Service, New York City, of counsel), for defendant.
The question presented in this case pertains to the proper classification, for customs duty purposes, of certain merchandise imported from the Republic of Korea, and described on the customs invoices as "outer casings" and "inner tubes," for bicycle tires.
The merchandise was classified by the Customs Service under separate items of the Tariff Schedules of the United States (TSUS). The "outer casings" were classified as "pneumatic tires: ... bicycle," under item 772.48, TSUS, with duty at the rate of 5 per centum ad valorem. The "inner tubes" were classified as "tubes: bicycle," under item 772.57, TSUS, with duty at the rate of 15 per centum ad valorem.
Plaintiff protests these classifications, and contends that the imported merchandise, i.e., both the "outer casings" and the "inner tubes," constitutes an "entirety" that is properly classifiable as "pneumatic tires: ... bicycle," under item 772.48, TSUS, with duty at the rate of 5 per centum ad valorem. In the alternative, plaintiff contends that if the court holds that the imported merchandise is not to be classified as an "entirety," then the "outer casings" are properly classifiable as "tires, other than pneumatic tires," under item 772.54, TSUS, with duty at the rate of 3.1 per centum ad valorem.
The parties have stipulated the pertinent facts. Admittedly, the imported merchandise consists of "outer casings," "inner tubes," and "rim strips," for bicycle tires. Plaintiff, however, does not contest the classification of the "rim strips," which were classified as "other parts of bicycles," under item 732.42, TSUS, with duty at the rate of 14.2 per centum ad valorem.
The merchandise, which was included in a single entry, consists of six "part numbers," each of a different size and style, with equal numbers of "outer casings" and "inner tubes" of each part number. The "outer casings" and "inner tubes" of each part number are "matched and compatible for purposes of sizing, volumetric content and valve stem sizing." The "outer casings" provide "structural strength and durability to the ... bicycle tire," and the tread of the "outer casings" supply "traction and handling for the bicycle." The "inner tubes" "hold and maintain the pressurized air, and provide a cushion of air to support the bicycle as it is propelled along the surface." The parties have specifically agreed that "in its imported condition and without an inner tube, plaintiff's ... outer casing cannot contain and maintain pressurized air."
The pertinent statutory provisions of the tariff schedules are as follows:
In essence, therefore, the question presented is whether the "outer casings" have been properly classified by Customs as "pneumatic tires: ... bicycle," under item 772.48, TSUS, and the "inner tubes" as "tubes: bicycle," under item 772.57, TSUS, or whether the "outer casings" and "inner tubes" are properly classifiable as an "entirety," as "pneumatic tires: ... bicycle," under item 772.48, TSUS, as claimed by plaintiff. Alternatively, if the court holds that the imported merchandise, consisting of the "outer casings" and "inner tubes," does not constitute an "entirety," the question presented is whether the "outer casings" are properly classifiable as "tires, other than pneumatic tires," under item 772.54, TSUS, as claimed by plaintiff.
In order to decide these questions the court must consider "whether the government's classification is correct, both independently and in comparison with the importer's alternative." Jarvis Clark Co. v. United States, 733 F.2d 873, 878, reh'g denied, 739 F.2d 628 (Fed.Cir.1984). Pursuant to 28 U.S.C. § 2639(a)(1) (1982), the government's classification is presumed to be correct, and the burden of proof is upon the party challenging the classification. See Jarvis Clark Co., 733 F.2d at 876.
Contending that there are no genuine issues of material fact, both parties move for summary judgment pursuant to Rule 56 of the Rules of this court. Upon examining the pertinent tariff schedules, relevant case law, lexicographic definitions, and supporting papers, the court concludes that there are no genuine issues of material fact, that plaintiff has successfully rebutted the presumption of correctness that attaches to the classification by Customs, and that the bicycle "outer casings" and bicycle "inner tubes" are properly classifiable as an "entirety" as "pneumatic tires: ... bicycle," under item 772.48, TSUS. Hence, plaintiff's motion for summary judgment is granted, and defendant's cross-motion for summary judgment is denied.
On a motion for summary judgment, it is the function of the court to determine whether there are any factual disputes that are material to the resolution of the action. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). Furthermore, "the court may not resolve or try factual issues on a motion for summary judgment." Phone-Mate, Inc. v. United States, 12 CIT ___, 690 F.Supp. 1048, 1050 (1988), aff'd, 867 F.2d 1404 (Fed.Cir.1989). The court may grant a motion for "summary judgment ... against a party who fails to present sufficient evidence `to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Liberty Lobby, Inc. v. Rees, 852 F.2d 595, 598 (D.C.Cir.1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986)), cert. denied, ___ U.S. ___, 109 S.Ct. 1118, 103 L.Ed.2d 181 (1989). In ruling on cross-motions for summary judgment, if no genuine issues of material fact exist, the court must determine whether either party "is entitled to a judgment as a matter of law." USCIT R. 56(d).
In support of its motion, plaintiff contends that the bicycle "outer casings" and bicycle "inner tubes," "properly matched to function together on a bicycle, and ... imported together in equal numbers, are together classifiable under item 772.48, TSUS, as a bicycle pneumatic tire." More specifically, plaintiff contends that the "outer casings" cannot be classified separately as "pneumatic tires: ... bicycle," because "the term pneumatic refers to the ability to inflate an article and it is a stipulated fact that the ... outer casing ... is unable to contain and maintain pressurized air without an inner tube." (emphasis in original).
In upholding Customs' classification, the defendant maintains that "while plaintiff argues that a bicycle pneumatic tire, by definition, incorporates a tube, and cites definitions in support of its claim, those definitions cannot prevail over congressional intent." (citation omitted). Defendant submits that "it is apparent that Congress intended that bicycle tires (outer casings) and bicycle tubes were to be classified separately under the TSUS...."
It is evident from the stipulated facts and submissions that there is no material issue of fact in dispute, but rather, an issue of law. Namely, the parties dispute whether item 772.48, TSUS, for "pneumatic tires: ... bicycle," encompasses or provides for "outer casings" of a pneumatic tire even though without the corresponding "inner tube," the "outer casing" cannot maintain pressurized air or serve as a bicycle tire.
It is fundamental that the meaning of terms used in the TSUS is "a question of law." Convertors Div. of Am. Hosp. Supply Corp. v. United States, 861 F.2d 710, 712 (Fed.Cir.1988). Hence, since the question presented is one of law, the court may grant an appropriate motion for summary judgment.
It is basic in customs law that "it is the function of the court to interpret the tariff acts in a manner that will fulfill or carry out the intent of Congress." Phone-Mate, Inc. v. United States, 12 CIT ___, 690 F.Supp. 1048, 1051 (1988) (citing Sandoz Chem. Works, Inc. v. United States, 43 CCPA 152, 156, C.A.D. 623 (1956)), aff'd, 867 F.2d 1404 (Fed.Cir.1989). This court has repeatedly stated that "the initial source for the determination of congressional intent is the specific language of the tariff provision, which is to be given its common or commercial meaning." Id. (citing Ameliotex, Inc. v. United States, 65 CCPA 22, 25, C.A.D. 1200, 565 F.2d 674, 677 (1977)). In this case, the parties have stipulated that "there is no special commercial designation of the term `pneumatic bicycle tire' different from the common meaning of said term." Hence, as is stated in Pistorino & Co. v. United States, 82 Cust.Ct. 168, 175-76, C.D. 4799 (1979), "it is well established in customs law that the common...
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