Ludvig Svensson (U.S.) Inc. v. U.S.
| Citation | 62 F.Supp.2d 1171 |
| Decision Date | 17 August 1999 |
| Docket Number | Court No. 97-03-00475.,Slip Op. 99-82. |
| Parties | LUDVIG SVENSSON (U.S.) INC., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
Simons & Wiskin (Philip Yale Simons, Jerry P. Wiskin), for Plaintiff.
David W. Ogden, Acting Assistant Attorney General of the United States; Joseph I. Liebman, Attorney-in-Charge, International Trade Field Office; Commercial Litigation Branch, Civil Division, United States Department of Justice (Barbara S. Williams, Aimee Lee); Office of Assistant Chief Counsel, United States Customs Service, (Sheryl A. French), of counsel, for Defendant.
Plaintiff, Ludvig Svensson (U.S.) Inc. ("Svensson"), commenced this action challenging the classification of its imported merchandise by the United States Customs Service ("Customs"). This Court has jurisdiction under 28 U.S.C. § 1581(a) (1994). The parties have cross-moved for summary judgment. For the reasons set out in the opinion which follows, the Court grants Plaintiff's motion for summary judgment.
I. Background
This case involves the classification of several different types of screening product manufactured in Sweden and imported in large rolls. The imported screening product is used solely in the construction of greenhouses to control the environment through shade and heat retention systems, and to control insects. Svensson claims that the imports should be afforded duty free treatment as parts of agricultural products. Customs classified the screens under various dutiable provisions based on component materials. The case turns on whether the screening product in its condition as imported has been advanced sufficiently to become a part and is therefore entitled to classification as parts of agricultural equipment or whether it remains a material subject to classification based on component materials.
The following material facts are not in dispute.
There are three types of screens in question: (1) environmental screens manufactured in two ways, either with or without backed aluminum foil strips; (2) insect screens, known as Econet screens; and, (3) plastic laminated screens used as greenhouse roofs, called QLS Ultra or Solarwoven screens. Pl.'s Response to Def.'s Statement of Undisputed Facts at ¶ 9 ("Pl.'s Response"). Def.'s Response to Pl.'s Statement of Undisputed Facts at ¶ 9 ("Def.'s Response").
Environmental screens are parts of shade and heat retention systems and are used to control the environment within a greenhouse. Pl.'s Response at ¶ 10. Def.'s Response at ¶ 10. The only commercial use of environmental screens is as part of a shade and heat retention system. Pl.'s Response at ¶ 23. Def.'s Response at ¶ 23. The screen is the most important part of a shade and heat retention system since it is this part which allows a greenhouse operator to modify the environment of a greenhouse. Pl.'s Response at ¶ 31. Def.'s Response at ¶ 31. In any shade and heat retention system which utilizes an environmental screen containing backed aluminum foil strips, the backed aluminum foil strips are essential to the proper functioning of the complete system. Pl.'s Response at ¶ 32. Def.'s Response at ¶ 32. Without the backed aluminum foil strips, the environmental screens at issue could not be manufactured. Pl.'s Response at ¶ 29. Def.'s Response at ¶ 29.
Insect screens are used to control the insect population within a greenhouse. Pl.'s Response at ¶ 11. Def.'s Response at ¶ 11. It is their only commercial use. Pl.'s Response at ¶ 24. Def.'s Response at ¶ 24.
The QLS Ultra screens are specifically manufactured to function as greenhouse roofs, and, therefore, parts of shade and heat retention systems. Pl.'s Response at ¶ 12. Def.'s Response at ¶ 12. This is the only commercial use of these screens. Pl.'s Response at ¶ 25. Def.'s Response at ¶ 25.
At the time of manufacture, the shade factor and energy savings properties of the screens, whether or not containing backed aluminum foil strips, are fixed and not altered by any post-importation processing. Pl.'s Response at ¶ 14-15. Def.'s Response at ¶ 14-15. In fact, each individual screen cut from a particular roll will have the same shade factor and energy savings properties as any other screen cut from the same roll. Pl.'s Response at ¶ 16. Def.'s Response at ¶ 16. Moreover, the post-importation processes of adding reinforcing tape, plastic hooks, or sewing of two lengths of screen together to obtain a specific width as requested by the customer, do not alter the shade factor or energy savings properties of the screens. Pl.'s Response at ¶ 17-18. Def.'s Response at ¶ 17-18.
At the time of importation, the use of the screens is known to be as part of shade and heat retention systems. Pl.'s Response at ¶ 34. Def.'s Response at ¶ 34. Moreover, the use of the screens is uniform throughout the United States. Pl.'s Response at ¶ 35. Def.'s Response at ¶ 35. In addition, shade and heat retention systems are agricultural machinery or equipment. Pl.'s Response at ¶ 37. Def.'s Response at ¶ 37.
The brief technical descriptions which follow are necessary to present a complete picture of the screens at issue. Svensson manufactures three types of environmental screens: (1) those consisting of strips of backed aluminum foil and plastic, incorporated in a network of longitudinal and transverse connection yarns, comprised of polyester, acrylic or high density polyethylene (2) those consisting of strips of backed aluminum foil without the plastic, incorporated in a network of longitudinal and transverse connection yarns; and (3) those consisting of plastic strips incorporated in a network of longitudinal and transverse connection yarns. Pl.'s Br. Supp. Summ. J. ("Pl.'s Br.") at 5.
Within each type of environmental screen with backed aluminum foil strips, the number of those strips varies according to the amount of shade and heat which a greenhouse operator may need. A greenhouse operator chooses the appropriate screen depending upon a variety of factors, including the crop grown and regional climactic conditions. Id. at 14. In certain instances, no backed aluminum foil is necessary in a screen if maximum sunlight, humidity and heat are required. Id.
Environmental screens are incorporated into shade and heat retention systems. These systems consist of the screens along with drive motors, cables, aluminum and steel supports, brackets, pulleys, fasteners, and support wires. Id. at 12. Shade and heat retention systems are installed inside almost all commercial greenhouses. Id. Greenhouse manufacturers either produce greenhouses with the shade and heat retention system installed as original equipment or build greenhouses with enough space in the roof area to accommodate such a system should the greenhouse operator decide to install it once the greenhouse is erected. Id.
Insect screens, known as Econet screens, are made of high density polyethylene yarn and ultra violet stabilized acrylic yarns. Id. at 15. Svensson manufactures six types of insect screens, each with rectangular openings of a different size. Id. At the time of manufacture, some screens have loops woven into the screen, while others are attached to a frame. Id. These screens are used to regulate the presence of insects and are manufactured on conventional weaving machinery. Id. at 5. These screens are not parts of shade and heat retention systems.
There are two types of plastic laminated screens used as greenhouse roofs: QLS Ultra and Solarwoven screens. Id. at 15. The QLS Ultra screen is made of woven monofilament yarn and polyolefin strips laminated with low density polyethylene with hanging wire woven into the screen for installation on hooks. Id. The Solarwoven screens are made of woven polyethylene strips laminated with polyethylene and are used as a roof, a side wall, or in roll up applications. Id. These screens are incorporated into shade and heat retention systems, and may be used alone as roofs where there is no need to closely regulate nighttime temperatures or as part of retractable roofs. Id.
All environmental screens and all plastic laminated screens used as greenhouse roofs are manufactured on a machine which was specially designed by Göran Henningsson of AB Ludvig Svensson, and is described in United States Letters Patent 4,399,671 of August 23, 1983. Id. at 9. In the production of these screens, the yarns, backed aluminum foil sheet (when applicable), plastic sheet, polyester hanging wire, and the hinge yarn are simultaneously fed into the screen-making machine. Id. This specially designed machine both cuts the plastic and backed aluminum foil sheet into strips, and also knits the yarn resulting in finished product. Id.
The screens are imported in rolls which are several hundred feet long. Id. at 16. Svensson performs some post-importation processing before selling the screens to customers, principally cutting the screens to length to meet customers' specifications. Id. Where the width of a customer's greenhouse is greater than standard, Svensson sews two pieces of screen together by machine along the length and then cuts the sewn screen as required. Id. Plastic hooks may also be installed if a customer's greenhouse requires. Id. Svensson adds the hooks and an off-the-shelf thermally setting reenforcing electrical tape. The tape is placed on the screen by a machine and the process takes a few seconds. Id.
The following are the HTSUS subheadings under consideration:
1. Customs' classification of QLS Ultra screens; duty assessed at 8.3% ad valorem:1
5903 Textile fabrics impregnated
coated, covered or
laminated with plastics
* * * *
5903.90.25 Other
2. Customs' classification of screens without backed aluminum foil strips; duty assessed at 13% ad valorem:
...To continue reading
Request your trial
-
Kyocera Indus. Ceramics Corp. v. U.S.
...need for physical markings yet the number of parts was fixed with certainty prior to importation). In Ludvig Svensson (U.S.) Inc. v. United States, 23 CIT 573, 62 F.Supp.2d 1171 (1999), the function and composition of screens for greenhouses that were of high technology, design and planning......
-
RKW Klerks Inc. v. United States
...the potential inputs that round balers can use to wrap round bales.Plaintiff also seeks to rely on Ludvig Svensson (U.S.) Inc. v. United States , 23 C.I.T. 573, 62 F. Supp. 2d 1171 (1999), to argue that the Netwraps are properly classified as "parts." See Pl.’s Mem. at 14–17; Pl.’s Reply at......
-
Airflow Tech., Inc. v. United States
...see also Pl.'s Brief at 22–25 (citing cases); Pl.'s Reply Brief at 14–15 (same). But see Ludvig Svensson (U.S.) Inc. v. United States, 23 CIT 573, 580–81, 62 F.Supp.2d 1171, 1178–79 (1999) (classifying screening used solely in construction of greenhouses, which is imported in rolls and cut ......
-
Abb, Inc. v. U.S.
...C.C.P.A. 322, 324 (1933), and reconciling it with United States v. Pompeo, 43 C.C.P.A. 9 (1955)). But see Ludvig Svensson Inc. v. United States, 23 CIT 573, 62 F.Supp.2d 1171 (1999) (characterizing Bauerhin as requiring an item to meet both definitions of "part"). A putative part fails to m......