Len-Ron Mfg. Co., Inc. v. U.S.

• Decision Date: 03 July 2003
• Docket Number: No. 02-1495.,02-1495.
• Parties: LEN-RON MANUFACTURING CO., INC., Aramis, Inc. (doing business as Len-Ron Manufacturing Co.), Aramis, Inc., and Clinique Laboratories, Inc., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

334 F.3d 1304

LEN-RON MANUFACTURING CO., INC., Aramis, Inc. (doing business as Len-Ron Manufacturing Co.), Aramis, Inc., and Clinique Laboratories, Inc., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.

No. 02-1495.

United States Court of Appeals, Federal Circuit.

July 3, 2003.

COPYRIGHT MATERIAL OMITTED

William C. Shayne, Tompkins & Davidson, LLP, of New York, NY, argued for plaintiffs-appellants.

Mikki Graves Walser, Attorney, International Trade Field Office, Department of Justice, of New York, NY, argued for defendant-appellee. With her on the brief were Robert D. McCallum, Jr. Assistant Attorney General; David M. Cohen, Director; Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC; and John J. Mahon, Acting Attorney in Charge, International Trade Field Office, Department of Justice, of New York, New, NY. Of counsel was Chi S. Choy, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs Service, of New York, NY.

Before LINN, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and PROST, Circuit Judge.

PROST, Circuit Judge.

Len-Ron Manufacturing Co., Inc., Aramis, Inc., and Clinique Laboratories, Inc. (collectively "Len-Ron") appeal from the decision of the United States Court of International Trade granting the government's cross-motion for summary judgment that various cosmetic bags imported by Len-Ron were properly classified under subheading 4202.12 of the Harmonized Tariff Schedule of the United States ("HTSUS"). Len-Ron Mfg. Co. v. United States, 118 F.Supp.2d 1266 (Ct. Int'l Trade 2000). Because we conclude that the United States Court of International Trade correctly classified the imported goods, we affirm.

I

The imported goods at issue are small bags made of polyvinyl sheeting imported for use in cosmetic sales promotions. Len-Ron, 118 F.Supp.2d at 1270-71. These cosmetics bags "are supple, nonrigid and not supported by frames." Id. at 1270. They are of differing shapes and sizes and were variously invoiced by Len-Ron as "rectangular bag, halfmoon bag, fabric bag, travel bag, PVC sponge bag, reusable bag, cosmetic case, cosmetic bag, GWP sunnysider, hatbox U.S.A. bag, new stone open bag, horizontal tote, fabric mirror pouch, nylon cosmetic bag, generic bag, nylon drawstring bag, and cosmetic pouch." Id. The parties have stipulated that the cosmetics bags were intended to be used to contain and "to organize and segregate cosmetics [and toiletry products]." Id. at 1280.

The United States Customs Service ("Customs") initially classified the polyvinyl cosmetic bags at issue under subheading 4202.92,¹ a residual provision covering "[t]ravel, sports and similar bags" dutiable at a rate of 20 percent ad valorem. Id. at 1273. Len-Ron protested this classification and subsequently challenged it in the Court of International Trade. Len-Ron contended that the bags were properly classified as "[a]rticles of a kind normally carried in the pocket or in the handbag" under subheading 4202.32,² dutiable at a rate of 12.1 cents per kilogram plus 4.6 percent ad valorem. Id. at 1271. Before the Court of International Trade, the government argued that, as an alternative to Customs' initial classification, the bags could be classified as "vanity cases" under subheading 4202.12,³ dutiable at a rate of 20 percent ad valorem. Id.

On cross-motions for summary judgment, the Court of International Trade rejected Customs' initial classification and held the bags properly classifiable as "vanity cases" under subheading 4202.12. Id. at 1285. Although it found the cosmetics bags prima facie classifiable as both "vanity cases" and "[a]rticles of a kind normally carried in the pocket or the handbag," the court concluded that, under the rule of specificity, the merchandise at issue was most appropriately classified as "vanity cases."

In reaching this conclusion, the court first found that the bags were properly classified under Heading 4202, which covers "travel goods, handbags and similar containers," and then considered classification under each of the three competing subheadings advocated by the parties. Beginning with subheading 4202.12, the court noted that this subheading includes an eo nomine tariff designation for "vanity cases." Id. at 1280. Finding that the term was not clearly defined within HTSUS and that Congress did not specify any intent as to the definition of the term, the court turned to dictionary sources. After comparing several definitions, the court concluded that the common meaning of the term "vanity case" includes "a small handbag or case used to hold cosmetics." Id. The court rejected an argument by Len-Ron that this definition should be narrowed based on terminology used in the drafting process allegedly indicating that the term "vanity cases," as used in HTSUS, was intended to be the equivalent of a French term that meant a small piece of luggage for carrying cosmetics. Id. at 1280-81. Accordingly, finding that Len-Ron's cosmetics bags met the common meaning of "vanity cases," the court held them to be prima facie classifiable under subheading 4202.12. Id. at 1281.

Turning to subheading 4202.32, "[a]rticles of a kind normally carried in the pocket or in the handbag," the court noted that the parties had stipulated that the cosmetics bags were small enough to be carried in a handbag and that women frequently carry cosmetics in their handbags. Id. at 1283. In addition, the court cited expert testimony that "women normally carry cosmetics bags in their handbags." Id. Accordingly, the court held that Len-Ron's cosmetic bags were prima facie classifiable under subheading 4202.32. Id. at 1284.

In considering the last of the three competing subheadings, the court held that because it had found the merchandise at issue prima facie classifiable under two alternative subheadings that covered the cosmetic bags more specifically, classification under the residual provision encompassing "[t]ravel, sports and similar bags" would be incorrect. Id. at 1284. The court therefore rejected classification under subheading 4202.92.45. Id.

With respect to the remaining two subheadings, the court applied the rule of specificity set out in HTSUS General Rules of Interpretation ("GRIs"). Id. at 1285. GRI 3(a) provides that "[t]he [sub]heading which provides the most specific description shall be preferred to [sub]headings providing a more general description." Id. The court noted that, generally, a "use" provision (i.e., a provision describing articles by the manner in which they are used as opposed to by name) was considered more specific than an eo nomine provision (in which an item is identified by name). Id. However, the court also noted that this rule only applies when two subheadings "equally describe" the item at issue, and concluded that in this case, "vanity cases" more specifically describes the bags at issue. Id. The court therefore held that the bags were more appropriately classified as "vanity cases" under subheading 4202.12 rather than as "[a]rticles of a kind normally carried in the pocket or in the handbag" under subheading 4202.32.

II

We review the Court of International Trade's grant of summary judgment without deference. Mead Corp. v. United States, 283 F.3d 1342, 1345 (Fed.Cir.2002). If we determine that there is no dispute of material fact, "our review of the classification of the goods collapses into a determination of the proper meaning and scope of the HTSUS terms that, as a matter of statutory construction, is a question of law," which we review de novo. Aves. in Leather, Inc. v. United States, 317 F.3d 1399, 1402 (Fed.Cir.2003) (citing Mead, 283 F.3d at 1345-46).

The GRIs of HTSUS and the Additional United States Rules of Interpretation guide our classification of goods. JVC Co. of Am. v. United States, 234 F.3d 1348, 1352 (Fed.Cir.2000). GRI 1 requires that a classification analysis begin by considering the language of the potentially applicable headings. Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed. Cir.1998). "Only after determining that a product is classifiable under the heading should the court look to the subheadings to find the correct classification for the merchandise." Id. Under GRI 3(a), when goods are prima facie classifiable under two or more headings, the merchandise should be classified under the heading that provides the most specific description. Id. at 1441.

HTSUS terms are construed according to their common and commercial meanings, which are presumed to be the same absent contrary legislative intent. N. Am. Processing Co. v. United States, 236 F.3d 695, 698 (Fed.Cir.2001). In construing a tariff term, the court may rely on its own understanding of the term as well as upon lexicographic and scientific authorities. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed.Cir. 1994). The court may also refer to the Explanatory Notes accompanying a tariff subheading. Id. While these notes are not controlling legislative history, they are nonetheless intended to clarify the scope of HTSUS subheadings and to offer guidance in their interpretation. Id.

III

The principal issue in this appeal involves the correct definition of the tariff term "vanity case."⁴ As described above, the Court of International Trade found that "vanity case" meant "a small handbag or case used to hold cosmetics," which ultimately led it to conclude that the bags were properly classified as "vanity cases" under subheading 4202.12 of HTSUS. Len-Ron contends that this definition violates "fundamental rules of statutory construction" because "[t]he dictionary definitions on which the court relied were inconsistent, vague and overly broad" and "the court failed to resolve these discrepancies." Thus, Len-Ron argues that the trial court erred, inter alia, because its definition improperly fails to incorporate expert testimony regarding the characteristics of vanity cases, is impermissibly...