Libbey Glass, Div. of Owens-Illinois, Inc. v. US

• Decision Date: 13 February 1990
• Docket Number: Court No. 84-03-00410.
• Citation: 736 F. Supp. 277
• Parties: LIBBEY GLASS, DIVISION OF OWENS-ILLINOIS, INC., Plaintiff, v. UNITED STATES, Defendant, and J.G. Durand International, Party-in-Interest.
• Court: U.S. Court of International Trade

736 F. Supp. 277

LIBBEY GLASS, DIVISION OF OWENS-ILLINOIS, INC., Plaintiff, v. UNITED STATES, Defendant, and J.G. Durand International, Party-in-Interest.

Court No. 84-03-00410.

United States Court of, International Trade.

February 13, 1990.

Stewart and Stewart, Eugene L. Stewart, Terence P. Stewart, Charles A. St. Charles and Wesley K. Caine (Arthur Smith, Sr. Atty., Libbey Glass Div. of Owens-Illinois, Inc., of counsel), for plaintiff.

Stuart M. Gerson, Asst. Atty. Gen., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, U.S. Dept. of Justice, Barbara M. Epstein, for defendant.

Barnes, Richardson & Colburn, David O. Elliott, Karin M. Burke and Sandra Liss Friedman, for party-in-interest.

OPINION

AQUILINO, Judge.

This action, brought pursuant to 28 U.S.C. § 1581(b) and § 2631(b), challenges that part of T.D. 83-154, 17 Cust. B. & Dec. 332, 340 (1983), which denied a petition by the plaintiff domestic manufacturer of glass beverageware to reclassify under items 546.52 through 546.68 of the Tariff Schedules of the United States (TSUS) "Artic Stemware" and "Artic Tumblers" imported from France.

The stemware entered sub nom. "Champagne", "Wine" and "Goblet", while the tumblers were denominated "Old Fashioned", "Hi-Ball" and "Beverage". Upon entry, each was classified under item 546.38, TSUS, which provided for:

Glassware ... pressed and toughened (specially tempered), chiefly used for preparing, serving, or storing food or beverages, or food or beverage ingredients ...... 12.5% ad val.

The complaint alleges that the glasses should have been classified as "other" per TSUS item 546.52 ("Valued not over $0.30 each ...... 44% ad val.") or item 546.60 ("Valued over $0.30 but not over $3 each ...... 30% ad val.").

I

Subsequent to trial of this action, Congress passed the Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, 102 Stat. 1107 et seq. Title I, Subtitle B thereof provided for implementation of the Harmonized Tariff Schedule (HTS), effective January 1, 1989. See id., § 1217(b), 102 Stat. at 1163, 19 U.S.C.A. § 3001 note (1989 Supp.). See also § 1213(b) (repealing section 201 of the Tariff Classification Act of 1962, Pub.L. No. 87-456, § 201, 76 Stat. 72, 74, which provided for publication of the TSUS).

The defendant has interposed a motion to dismiss the action as now moot, which is joined by the party-in-interest, according to the following argument:

The relief available to a prevailing plaintiff in this type of action is set out in 19 U.S.C. § 1516(f). Merchandise entered after the date of publication in the Federal Register of a decision adverse to the Government's position is to be classified, appraised, and assessed with duty in accordance with the final judicial decision. Even if this Court were to decide that the merchandise which is the subject of this action were properly classifiable under item 546.52 or 546.60, TSUS, as claimed by Libbey, that determination, assuming it were sustained following a possible appeal, would only have effect as to merchandise entered after publication in the Federal Register of notice of the court's decision.

Thus, the relief available under section 516 is prospective only, ... and even if this Court were to determine that the merchandise at issue here were properly classifiable as claimed by Libbey, this Court could grant no relief.¹

This is the view of the defendant, notwithstanding counsel's confirmation that, at the time this action commenced,

a clear controversy existed as to the correct classification under the TSUS of merchandise of the same class or kind as in the "test" entry.

During the period the TSUS was in force, the case here involved a justiciable controversy, i.e. the classification of merchandise of the same class or kind as that in the "test" entry, and a judicial decision affecting that class or kind of merchandise would clearly have been constitutional, although the decision would not affect any entry completed prior to the decision. There was real likelihood that there would be future entries which would be affected by the judgment of the court.²

In other words, according to the defendant, that "real likelihood" of a meaningful judgment in this action has been eliminated by the 1988 act.

However, in regard to entries of the merchandise at issue, those no longer in the future as well as those in that category, it is instructive to quote section 1211(d) of the omnibus act:

(d) CERTAIN PROTESTS AND PETITIONS UNDER THE CUSTOMS LAW.—

(1)(A) This subtitle may not be considered to divest the courts of jurisdiction over—

. . . . .

(ii) any petition by an American manufacturer, producer, or wholesaler under ... 19 U.S.C. 1516;

covering articles entered before the effective date of the Harmonized Tariff Schedule.

(B) Nothing in this subtitle shall affect the jurisdiction of the courts with respect to articles entered after the effective date of the Harmonized Tariff Schedule.

(2)(A) If any protest or petition referred to in paragraph (1)(A) is sustained in whole or in part by a final judicial decision, the entries subject to that protest or petition and made before the effective date of the Harmonized Tariff Schedule shall be liquidated or reliquidated, as appropriate, in accordance with such final judicial decision under the old Schedules.

(B) At the earliest practicable date after the effective date of the Harmonized Tariff Schedule, the Commission shall initiate an investigation under ... 19 U.S.C. 1332 of those final judicial decisions referred to in subparagraph (A) that—

(i) are published during the 2-year period beginning on February 1, 1988; and

(ii) would have affected tariff treatment if they had been published during the period of the conversion of the old Schedules into the format of the Convention.

No later than September 1, 1990, the Commission shall report the results of the investigation to the President, the Committee on Ways and Means, and the Committee on Finance, and shall recommend those changes to the Harmonized Tariff Schedule that the Commission would have recommended if the final decisions concerned had been made before the conversion into the format of the Convention occurred.

(3) The President shall review all changes recommended by the Commission under paragraph (2)(B) and shall, as soon as practicable, proclaim such of those changes, if any, which he decides are necessary or appropriate to conform such Schedule to the final judicial decisions. Any such change shall be effective with respect to—

(A) entries made on or after the date of such proclamation; and

(B) entries made on or after the effective date of the Harmonized Tariff Schedule if, notwithstanding ... 19 U.S.C. 1514, application for liquidation or reliquidation thereof is made by the importer to the customs officer concerned within 180 days after the effective date of such proclamation.

(4) If any protest or petition referred to in paragraph (1)(A) is not sustained in whole or in part by a final judicial decision, the entries subject to that petition or protest and made before the effective date of the Harmonized Tariff Schedule shall be liquidated or reliquidated, as appropriate, in accordance with the final judicial decision under the old Schedules.

102 Stat. at 1154-55.

On its face, this statute does not lend much support to defendant's motion. The claim that plaintiff's reliance thereon is "completely misplaced ... inasmuch as its petition does not cover articles entered prior to the effective date of the HTSUS"³, citing subsection 1211(d)(1)(A)(ii), is off the mark. The existence of entries subsequent to commencement of this action and to trial (and prior to January 1, 1989) is all but a given. Rather, defendant's better point is that affirmative relief in an action such as this is prospective the grant thereof, citing, for example, National Corn Growers Association v. Baker, 840 F.2d 1547, 1554 (Fed.Cir.1988), and National Corn Growers Association v. Von Raab, 10 CIT 762, 764, 768, 650 F.Supp. 1007, 1009, 1012 (1986), aff'd, 814 F.2d 651 (Fed.Cir.1987), and since that moment has not yet arrived herein, while the HTS has, this matter is now moot.

However, as discussed in part II of this opinion, this action focuses on the meaning of "toughened (specially tempered)" in item 546.38, TSUS, supra, which terminology was also found in TSUS item 544.31 (covering flat safety glass). While the party-in-interest points out that the terminology has not survived for flat glass in the HTS, "toughened (specially tempered)" still applies to glass beverageware per the new Schedule's subheading 7013.29.05.

The defendant relies on Allen Sugar Company v. Brady, 13 CIT ___, 706 F.Supp. 49 (1989), which involved a petition filed with Customs pursuant to 19 U.S.C. § 1516, contesting classification of blended sweetener products from edible preparations containing sugar. Before any action thereon by the Service, the HTS went into effect, whereupon the government moved to dismiss for lack of jurisdiction on the ground of failure to exhaust administrative remedies. The court granted the motion. In doing so, it also pointed out that HTS classification implicated an "entirely different law":

... The question of classification under the TSUS is not germane to the question of classification under the HTSUS in this circumstance.

... Item 1701.99.00, HTSUS, is under the auspices of different guidelines which employ a different means of characterizing the merchandise. The present guideline, General Rule of Interpretation 3(b), states that the "essential character" of a blend will be the basis of its classification, rather than the product's "chief use," which was the basis under the headnote to repealed item 183.05, Schedule 1, Part 15, Subpart B, Headnote 3, TSUS. 13 CIT at ___, 706 F.Supp. at 53.

The same cannot be said of the classification in controversy here. Thus, the court is unable to conclude that this...