Pillowtex Corp. v. U.S.
| Decision Date | 16 March 1999 |
| Docket Number | No. 98-1227,98-1227 |
| Citation | 171 F.3d 1370 |
| Parties | PILLOWTEX CORPORATION, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Margaret R. Polito, Neville, Peterson & Williams, of New York, New York, argued for plaintiff-appellant. With her on the brief was John M. Peterson.
Mikki Graves Walser, Attorney, Civil Division, Commercial Litigation Branch, U.S. Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were David M. Cohen, Director, of Washington, DC, and Joseph I. Liebman, Attorney in Charge, of New York, New, York. Of counsel on the brief was Beth C. Brotman, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs Service, of New York, New York.
Paul C. Rosenthal, Collier, Shannon, Rill & Scott, PLLC, of Washington, DC, for amicus curiae Pacific Coast Feather Company, Inc. With him on the brief was John B. Brew.
Before RICH, PLAGER, and RADER, Circuit Judges.
Pillowtex Corporation ("Pillowtex") appeals from the judgment 1 of the United States Court of International Trade. That court sustained the classification by the United States Customs Service ("Customs") of Pillowtex's cotton-covered down comforters under subheading 9404.90.90 of the Harmonized Tariff Schedule of the United States 2 ("HTSUS"). Because we
hold that the Court of International Trade did not erroneously classify the subject merchandise, we affirm.
The merchandise at issue is comforters with 100% cotton outer shells that are stuffed with white duck down. The outer shells of the comforters do not have any detail work such as embroidery.
Heading 9404 of the HTSUS provides in pertinent part:
9404 Mattress supports; articles of bedding and similar furnishings (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered:
* * * * * *
9404.90 Other:
* * * * * *
9404.90.80 Other:
Of cotton, not containing any embroidery, lace, braid, edging, trimming, piping exceeding 6.35 mm or applique work.
9404.90.90 Other.
Under subheadings 9404.90.80 and 9404.90.90 are statistical suffixes that contain the following language: "Quilts, eiderdowns, comforters and similar articles:...." In addition, following that language in the statistical suffix of subheading 9404.90.90 is the phrase: "With outer shell of cotton."
In a final interpretive rule, 3 Customs classified down comforters with 100% cotton shells under subheading 9404.90.90, which provided for a duty at a rate of 14.5% ad valorem. In its ruling, Customs reasoned that its prior classification of such down comforters under subheading 9404.90.80, which carried a duty of 5% ad valorem, was erroneous because the essential character of the comforters is the down filling, not the cotton outer shell.
Appellant Pillowtex challenged the new classification by Customs in an action before the Court of International Trade, arguing that its down comforters should be classified under subheading 9404.90.80 rather than 9404.90.90.
Under several separate lines of reasoning, the Court of International Trade sustained Customs's classification of Pillowtex's comforters under subheading 9404.90.90.
The Court of International Trade first examined the common and commercial usage of the phrases "comforter of cotton" and "cotton comforter." The trial court found that testimony established that those phrases describe comforters stuffed with cotton. In addition, the trial court found that the term "of cotton," when used to describe a comforter, does not include in common or commercial parlance a down-filled comforter. Deciding that the subject merchandise was not within the common meaning of the phrase "comforter of cotton," the trial court rejected Pillowtex's argument that its down comforters fall under the "of cotton" subheading, HTSUS 9404.90.80.
The trial court next examined the wording of the substantive subheadings under HTSUS 9404. The trial court reasoned that the subject comforter could only be prima facie classifiable under subheading 9404.90.90, the final basket clause in heading 9404, because that subheading, according to the trial court, necessarily includes merchandise that is described by heading 9404 but not by any of the subheadings besides 9404.90.90.
The trial court further reasoned that the General Rules of Interpretation ("GRI") also confirm that the cotton-covered down comforters at issue should be classified under 9404.90.90. According to the trial court, GRI 2(b) provides that the "essential character" analysis of GRI 3(b) may be applied whenever the goods at issue consist of more than one material or substance.
Although the language of GRI 3 limits the application of the "essential character" analysis to situations where the goods at issue are prima facie classifiable under two or more headings, the trial court nonetheless applied that analysis to the subject merchandise that it had already concluded was prima facie classifiable under only one heading. The trial court found that the "essential character" of the comforters at issue is their insulating quality, which is imparted by the down filling, not the cotton shells. Under this line of reasoning, the trial court also confirmed its conclusion that the down comforters are properly classified under subheading 9404.90.90.
On appeal, Pillowtex argues that the trial court incorrectly classified the down comforters. Pillowtex asserts that the trial court improperly considered the "common meaning" of the term "of cotton" because that tariff term is clearly defined by the terms of headings and the GRIs. In addition, Pillowtex argues that the trial court should not have applied the "essential character" provision of GRI 3(b) because the goods are not prima facie classifiable under two headings. Pillowtex also argues that the phrase "stuffed or internally fitted with any material" from the heading 9404 should be given effect as though set forth in subheading 9404.90.90. Furthermore, Pillowtex argues that since Congress intended the HTSUS to be revenue-neutral, under the HTSUS comforters cannot be assessed a duty rate that is higher than the duty rate for comforters under the prior Tariff Schedule for the United States.
Determining whether imported merchandise has been properly classified under an appropriate tariff provision is ultimately a question of law over which this court exercises complete and independent review. See Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.Cir.1998); Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391 (Fed.Cir.1994). Resolution of that issue entails a two-step process: (1) ascertaining the proper meaning of specific terms in the tariff provision; and (2) determining whether the merchandise at issue comes within the description of such terms as properly construed. See Bausch & Lomb, 148 F.3d at 1365. The first step is a question of law over which this court exercises complete and independent review. See id. The second step is a question of fact which this court reviews for clear error. See id.
Pillowtex contends that the trial court incorrectly classified the down comforters because it improperly considered the "common meaning" of the term "of cotton." According to Pillowtex, that tariff term is clearly defined by the terms of heading 9404 and subheading 9404.90.90, by GRIs 1 and 2(b), and Additional U.S. Rule of Interpretation 1(d). As explained below, contrary to Pillowtex's assertion, the term "of cotton" is not defined by heading 9404, subheading 9404.90.90, or any of the interpretive rules.
It is a general rule of statutory construction that where Congress has clearly stated its intent in the language of a statute, a court should not inquire further into the meaning of the statute. See Brookside Veneers, Ltd. v. United States, 847 F.2d 786, 788 (Fed.Cir.1988). Accordingly, GRI 1 recognizes that the first step in analyzing the classification issue is to examine the terms of the headings and any relevant section or chapter notes. See Mita Copystar Am. v. United States, 160 F.3d 710, 712 (Fed.Cir.1998). Thus, to determine if Congress has clearly stated its intent for the tariff term "of cotton," we must analyze the language of the provision at issue.
Heading 9404 encompasses "[m]attress supports; articles of bedding and similar furnishings." There is no dispute that comforters do fall under this heading since they are similar to the examples listed in the heading language: "for example, mattresses Neither subheading 9404.90.80 nor 9404.90.90 explicitly lists comforters by name and hence do not offer an explanation of what are comforters "of cotton." However, the statistical suffixes under both subheadings do explicitly list comforters by name. One statistical suffix under subheading 9404.90.90 even specifically creates a category for items, including comforters, with outer shells of cotton. Thus, at first glance, it would seem that comforters with outer shells of cotton should be classified under subheading 9404.90.90. However, classification of merchandise should not be based upon the wording of statistical suffixes, because statistical annotations, including statistical suffixes, are not part of the legal text of the HTSUS. See HTSUS Stat. Notes 2(a), 2(b); see also Pima Western, Inc. v. United States, 915 F.Supp. 399 (Ct. Int'l Trade 1996). Therefore, further examination of the legal text of the HTSUS must be conducted to determine the proper classification of the subject merchandise.
quilts, eiderdowns, cushions, pouffes and pillows." However, nothing in the language of the heading sheds any light onto the definition of the term "of cotton."
Since comforters are articles of bedding stuffed with some kind of material, it is clear that comforters,...
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