Otter Prods., LLC v. United States

• Decision Date: 24 August 2016
• Docket Number: 2015–1866
• Citation: 834 F.3d 1369
• Parties: Otter Products, LLC, Plaintiff–Appellee v. United States, Defendant–Appellant
• Court: U.S. Court of Appeals — Federal Circuit

834 F.3d 1369

Otter Products, LLC, Plaintiff–Appellee

v.United States, Defendant–Appellant

2015–1866

United States Court of Appeals, Federal Circuit.

Decided: August 24, 2016

Louis Stefan Mastriani , Adduci, Mastriani & Schaumberg, LLP, Washington, DC, argued for plaintiff-appellee. Also represented by Munford Page Hall II, Beau Jackson, Dana Watts, Giang Tonthat .

Beverly A. Farrell , International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellant. Also represented by Benjamin C. Mizer, Jeanne E. Davidson, Amy M. Rubin; Beth C. Brotman , Office of Assistant Chief Counsel, International Trade Litigation, United States Bureau of Customs and Border Protection, United States Department of Homeland Security, New York, NY.

Before Prost, Chief Judge, O'Malley, and Chen, Circuit Judges.

O'Malley, Circuit Judge.

The United States appeals the judgment of the United States Court of International Trade rendered on cross motions for summary judgment in which the court classified the subject merchandise, imported by Otter Products, LLC (“OtterBox”), under subheading 3926.90.9980 of the Harmonized Tariff Schedule of the United States (“HTSUS”) as “[o]ther articles of plastics” instead of as “similar containers” under HTSUS subheading 4202.99.00. See Otter Products, LLC v. United States , 70 F.Supp.3d 1281 (Ct. Int'l Trade 2015). We affirm .

BACKGROUND

A. The Subject Merchandise

OtterBox is the owner and importer of record of the subject merchandise. The specific goods at issue are durable and protective cases designed for certain styles of smartphones—Blackberry Curve 9220, 9310, and 9320; iPhone 4S; Samsung i500; and the HTC4 My Touch—and an iPod touch, 4^thgeneration. The cases consist of two styles: the Commuter and the Defender Series. There is no dispute as to which merchandise is at issue.

OtterBox described the Commuter Series cases as “durable protective products comprised of two basic pieces: a silicone mid-layer and, most importantly, a rigid outer plastic shell.” Otter Products , 70 F.Supp.3d at 1286 (citation and internal quotation marks omitted). The Commuter Series cases “have a smooth exterior, designed to allow them to slide easily in and out of pockets.” Id. (citation and internal quotation marks omitted). “[T]he plastic components of these cases ‘do not cover or enclose the screen’ of the device but do allow the consumer ‘the option of affixing to the screen of the electronic device a thin, plastic, self-adhesive film to protect the screen.’ ” Id. (citation omitted).

OtterBox described the Defender Series cases as consisting of four pieces: “a clear protective plastic membrane, a high-impact polycarbonate shell, a plastic belt clip holster, and a durable outer silicone cover.” Id. (citation and internal quotation mark omitted).

All of the cases at issue were imported into the United States through the port of Memphis, Tennessee between April 23, 2012, and July 11, 2012. Id. at 1284.

B. Customs' Classification

Customs classified the cases as “similar containers” under HTSUS subheading 4202.99.00 with a duty rate of 20% ad valorem . The relevant portions of HTSUS Heading 4202 are:

4202

Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper:

4202.99

Other:

Of materials (other than leather, composition leather, sheeting of plastics, textile materials, vulcanized fiber or paperboard) wholly or mainly covered with paper:

4202.99.9000

Other............................................................20%

OtterBox paid duties at the 20% ad valorem rate, and the goods were liquidated between March 8, 2013, and May 24, 2013, at that rate. OtterBox timely protested the liquidation of the entries and sought accelerated disposition. The protest was deemed denied on August 1, 2013.

C. Court of International Trade Decision

OtterBox filed a complaint in the Court of International Trade contesting the denial of its protest under 19 U.S.C. § 1515. Joint Appendix (“J.A.”) 39. Therein, OtterBox alleged that the subject merchandise should have been classified as “other articles of plastics” under HTSUS subheading 3926.90.99, at a duty rate of 5.3% ad valorem . J.A. 49. The parties filed cross-motions for summary judgment.

In a decision dated May 26, 2015, the Court of International Trade granted OtterBox's motion, finding that the cases are not classifiable as “similar containers” under Heading 4202, but instead are properly classified under Heading 3926, as other articles of plastics. At the outset, the court noted that, because there is no genuine dispute as to the physical nature of the goods, the analysis “focuses on the legal question of whether heading 4202, HTSUS, is the proper tariff heading for the subject merchandise, or if not, which other heading, including 3926, HTSUS, is the proper heading.” Otter Products , 70 F.Supp.3d at 1287. The Court of International Trade explained that, because the goods are not listed eo nomine (by name) in Heading 4202, the relevant inquiry is whether the cases are “similar containers” to the exemplars listed therein. Id. at 1288. The court concluded that they are not. Id. The Court of International Trade explained that, to fall under the general phrase “similar containers,” the merchandise must possess the same essential characteristics or purposes that unite the exemplars. Id . Pursuant to this court's precedent, the Court of International Trade noted that four characteristics unite the exemplars of Heading 4202: organizing, storing, protecting, and carrying. Id. at 1289 (citing Avenues In Leather, Inc. v. United States (Avenues III ), 423 F.3d 1326, 1331 (Fed. Cir. 2005) ).

The Court of International Trade began its analysis by looking to the common dictionary definition of the phrase “similar container,” which requires that the merchandise be a “receptacle or object, which resembles or is of a like nature or kind to the listed exemplars, and is designed or has the capacity to contain, store, or hold certain articles.” Id. at 1288–89. The court found that “the Commuter and Defender Series cases do not fall within the common or commercial meaning of the phrase ‘similar containers' ” because each of the objects listed in Heading 4202 “allow an article to be placed inside them and/or taken out without much effort by opening or closing the receptacle.” Id. at 1289. “In contrast, the cases at issue are specifically designed for and fit snuggly [sic] over particular electronic devices.... It takes some effort to remove a case from an electronic device where the case generally remains on the device in a semi-permanent manner.” Id.

The Court of International Trade found that, although the subject cases protect, they do not organize, store, or carry. Next, the Court of International Trade agreed with OtterBox that the exemplars in Heading 4202 have another characteristic that the Commuter and Defender Series cases do not share: “the inability to use items when inside those containers.” Id. at 1292. While the listed examples “are not ones which permit the use of the enclosed item,” the electronic devices enclosed by the subject merchandise “retain their full, 100 percent functionality while inside an OtterBox case.” Id. (citation and internal quotation marks omitted). Accordingly, the fact that the electronic device remains fully functional is inconsistent with objects enclosed by the exemplars listed in Heading 4202.

The court concluded that OtterBox satisfied its burden of showing that the cases are not classifiable in Heading 4202. The court then found that the subject merchandise is properly classifiable under Heading 3926 because both the Commuter Series and Defender Series cases are made of materials listed in chapter 39. Specifically, the Commuter Series consists of two basic components: the rigid outer plastic shell and the silicone mid-layer. Id. at 1294. The Defender Series consists of four pieces: “a clear protective plastic membrane, a high-impact polycarbonate shell, a plastic belt clip holster, and a durable outer silicone cover.” Id . Because none of the specific subheadings in chapter 39 refer to the subject merchandise, the Court of International Trade found that it is properly classified under 3926.90.9980: “[o]ther articles of plastics.” Id. at 1295. The court therefore granted OtterBox's motion for summary judgment and denied the government's cross-motion. The government timely appealed to this court.

DISCUSSION

“We review a grant of summary judgment by the Court of International Trade for correctness as a matter of law and decide de novo the proper interpretation of the tariff provisions as well as whether there are genuine issues of material fact to preclude summary judgment.” Millenium Lumber Distrib. v. United States , 558 F.3d 1326, 1328 (Fed. Cir. 2009).

We employ the same standard employed by the Court of International Trade in assessing Customs' classification determinations. LeMans Corp. v. United States , 660 F.3d 1311, 1315 (Fed. Cir. 2011). A classification decision involves two steps. First, the court must “ascertain [ ] the meaning of specific terms in the tariff provisions.” Victoria's Secret Direct, LLC v. United States , 769 F.3d 1102, 1106 (Fed. Cir. 2014) (quoting Millenium , 558 F.3d at 1328 ). Second, the court determines “whether the subject merchandise comes within the description...