Richards Medical Co. v. U.S.

• Decision Date: 03 August 1990
• Docket Number: No. 89-1693,89-1693
• Citation: 910 F.2d 828
• Parties: RICHARDS MEDICAL COMPANY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 828

910 F.2d 828

12 ITRD 1625

RICHARDS MEDICAL COMPANY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant.

No. 89-1693.

United States Court of Appeals Federal Circuit.

Aug. 3, 1990.

Lester L. Hewitt and Paul E. Krieger (argued), Pravel, Gambrell, Hewitt, Kimball & Krieger, Houston, Tex., for plaintiff-appellee. With them on the brief, was Eugene R. Montalvo.

Joseph I. Liebman (argued), Atty. in Charge, Intern. Trade Field Office, New York City, for defendant-appellant. With him on the brief, were Stuart M. Gerson, Asst. Atty. Gen. and David M. Cohen, Director.

Before RICH, Circuit Judge, and BALDWIN and WILL ^*, Senior Circuit Judges.

RICH, Circuit Judge.

The United States Customs Service (Customs) appeals from the June 27, 1989 Judgment of the United States Court of International Trade (CIT), Court No. 84-10-01337, ordering Customs to liquidate certain medical instruments imported by Richards Medical Company (Richards) in accordance with item 960.15 of the Tariff Schedules of the United States (TSUS). The CIT's opinion is reported at Richards Medical Co. v. United States, 720 F.Supp. 998 (CIT 1989). We affirm.

BACKGROUND

In 1982, Congress passed the Educational, Scientific, and Cultural Materials Importation Act of 1982 ¹ (the Act), providing for temporary duty-free entry of various merchandise, including "[a]rticles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons." This particular exemption from duty was subsequently inserted as items 960.10, 960.12 and 960.15 of the TSUS. Also, as provided by the Act, the following was inserted as Headnote 2 of Part 4 of TSUS Schedule 9:

2. For the purpose of items 960.10, 960.12, and 960.15--

(a) The term "physically or mentally handicapped persons " includes any person suffering from a permanent or chronic physical or mental impairment which substantially limits one or more major life activities, such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.

(b) These items do not cover--

(i) articles for acute or transient disability;

(ii) spectacles, dentures, and cosmetic articles for individuals not substantially disabled;

(iii) therapeutic and diagnostic articles; and

(iv) medicines or drugs.

Richards imported three different kinds of hip prosthesis systems (the Autophor, Spectron, and Xenophor systems), as well as medical instruments specifically designed and sold for use with the different Richards appealed the classification of the instruments to the CIT. Upon review of the statutory language and the limited legislative history, the CIT concluded that the term "therapeutic" in the Act distinguishes articles which are used to heal the condition causing a handicap (therapeutic) from articles which are merely designed to compensate for, or adapt to, the handicapped condition (not therapeutic). Richards Medical, 720 F.Supp. at 1000. The CIT further found that a hip prosthesis does not heal handicapped persons nor cure the disease which caused the handicap, and thus is not therapeutic within the meaning of the Act. Since, concluded the CIT, the medical instruments have no other use than with the prosthesis systems and are used for the benefit of handicapped persons, classification of the instruments under item 960.15 was warranted. Customs appealed.

                kinds of systems.  Customs classified the hip prosthesis systems under item 960.15, TSUS, 2 thus entitling them to duty-free treatment, but classified the instruments under item 709.27, TSUS. 3   Customs denied the subsequent protests by Richards seeking classification of the instruments under item 960.15, on the grounds that they were "therapeutic," and thus ineligible for classification under item 960.15 by headnote 2(b)(iii). 4
                

OPINION

What appears at first to be a single issue--are instruments used to implant hip prostheses therapeutic--is actually two issues: (1) what is the meaning of therapeutic within the context of the Act; and (2) are instruments used to implant hip prostheses within that meaning. The first issue is a question of law subject to review de novo, and the second issue is a question of fact subject to the clearly erroneous standard. Hasbro Industries, Inc. v. United States, 879 F.2d 838, 840 (Fed.Cir.1989).

The first issue, that of the meaning of "therapeutic," is essentially an issue of statutory construction. As with all questions of statutory construction, we start first with the plain meaning of the statute, and then go to other extrinsic aids such as legislative history if necessary. Johns-Manville Corp. v. United States, 855 F.2d 1556, 1559 (Fed.Cir.1988).

Customs' primary argument with respect to the plain or common meaning of the word "therapeutic" is that it is not limited to treatments which are intended to be curative, but also encompasses treatments which are alleviative or palliative. In support of this argument, Customs relies not only on numerous dictionary and encyclopedia definitions, but also on prior case law involving the meaning of "therapeutic" in other statutes. For example, J.E. Bernard & Co. v. United States, 262 F.Supp. 434, 58 Cust.Ct. 23, 28, C.D. 2872 (1967) indicates that "therapeutic qualities embrace the alleviative or palliative, as well as the curative or healing qualities."

However, the only conclusion we can reach after reviewing the various definitions from different sources which the parties have provided for us is that the word "therapeutic" has many different meanings and is subject to both broad and narrow interpretations. The question is, which definition best invokes the intent of...