Rocknel Fastener Inc. v. U. S.

• Decision Date: 04 October 2001
• Docket Number: No. 01-1006,01-1006
• Citation: 267 F.3d 1354
• Parties: (Fed. Cir. 2001) ROCKNEL FASTENER, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee
• Court: U.S. Court of Appeals — Federal Circuit

Page 1354

267 F.3d 1354 (Fed. Cir. 2001)

ROCKNEL FASTENER, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 01-1006

United States Court of Appeals for the Federal Circuit

October 4, 2001

Appealed from: United States Court of International Trade

Steven P. Sonnenberg, Sonnenberg & Anderson, of Chicago, Illinois, argued for plaintiff-appellant. Of counsel was Michael J. Cunningham.

Amy M. Rubin, Attorney, Civil Division, Commercial Litigation Branch, International Trade Field Office, of New York, New York, argued for defendant-appellee. With her on the brief were Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC; and Joseph I. Liebman, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Sheryl A. French, Attorney, Office of Assistant Chief Counsel, United States Customs Service, of New York, New York.

Before SCHALL, BRYSON, and DYK, Circuit Judges.

BRYSON, Circuit Judge.

Rocknel Fastener, Inc., appeals from the decision of the Court of International Trade upholding the tariff schedule classification by the United States Customs Service of certain fasteners imported by Rocknel. Rocknel Fastener, Inc. v. United States, 118 F. Supp. 2d 1238 (Ct. Int'l Trade 2000). We affirm.

I

The products at issue in this case consist of a variety of metal fasteners that Rocknel imported from Japan in 1997. The fasteners, which are fabricated from metal alloys, have rod-shaped bodies and hexagonally shaped heads. Their bodies are fully or partially threaded. Rocknel has admitted that the fasteners were designed to be installed in holes of assembled parts and that the fasteners were designed to be tightened or released by turning their heads.

The Customs Service liquidated the fasteners under subheading 7318.15.80 of the Harmonized Tariff Schedule of the United States ("HTSUS"). Subsequently, Rocknel filed a protest, claiming that the fasteners should have been classified under HTSUS subheading 7318.15.20.

Heading 7318 of the HTSUS covers "screws, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers . . . and similar articles of iron and steel." Six-digit subheading 7318.15 narrows that category to threaded articles consisting of "other screws and bolts." That six-digit subheading is further divided into several eight-digit subheadings, including the two at issue in this case. Subheading 7318.15.20, which Rocknel argues should have been applied to the fasteners in this case, covers "bolts." Subheading 7318.15.80, which Customs applied, covers "other" items having threads with a diameter of six millimeters or more.

After Customs denied the protest, Rocknel appealed to the Court of International Trade. The court concluded that the tariff schedule required that the terms "bolt" and "screw" be given mutually exclusive definitions. The court further concluded that the definition of the terms "bolt" and "screw" found in Specification B18.2.1, Specifications for Identification of Bolts and Screws, published by the American National Standards Institute (ANSI) and the American Society of Mechanical Engineers (ASME) ("the ANSI Specification") accurately reflected both the common and the commercial meaning of those terms. Because Customs had looked to the ANSI Specification as the source of the definitions of "bolt" and "screw" for tariff classification purposes, and because Rocknel had admitted that under the ANSI Specification the fasteners at issue in this case would be classified as screws and not bolts, the court granted summary judgment to Customs upholding the agency's classification of the fasteners. This appeal followed.

II

A

The meaning of a tariff term, a matter of statutory construction, presents a question of law. Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1366 (Fed. Cir. 1998). When, as in this case, a tariff term is not defined in either the HTSUS or its legislative history, "the term's correct meaning is its common meaning." Mita Copystar Am. v. United States, 21 F.3d 1079, 1087 (Fed. Cir. 1994). The common meaning of a term used in commerce is presumed to be the same as its commercial meaning. Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989). To ascertain the common meaning of a term, a court may consult "dictionaries scientific authorities, and other reliable information sources" and "lexicographic and other materials." C.J. Tower & Sons v. United States, 673 F.2d 1268, 1271 (CCPA 1982); Simod, 872 F.2d at 1576.

The government agrees with the Court of International Trade that the ANSI Specification represents the common meaning of the terms "bolt" and "screw." Rocknel disputes that the ANSI Specification embodies the common meaning of the terms and asserts that Customs has not satisfied its burden of showing why a non-common meaning should be adopted. See Rohm & Haas Co. v. United States, 727 F.2d 1095, 1097 (Fed. Cir. 1984) ("One who argues that a term in the tariff laws should not be given its common or dictionary meaning must prove that there is a different commercial meaning in existence which is definite, uniform, and general throughout the trade.").

B

At the outset, we must consider whether, and to what extent, Customs' classification decision in this case is entitled to deference. The Court of International Trade, relying on this court's decision in Mead Corp. v. United States, 185 F.3d 1304 (Fed. Cir. 1999), concluded that no deference was due Customs' classification. Although the Court of International Trade correctly applied our decision in Mead, that decision has been superseded by the Supreme Court's subsequent decision in the Mead case. United States v. Mead Corp., 121 S. Ct. 2164 (2001). The Supreme Court held that when Customs has not promulgated a regulation, but has simply issued a classification ruling implicitly interpreting an HTSUS provision, the ruling is not entitled to so-called Chevron deference, see Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). Nonetheless, the Court held that a classification ruling is entitled to some deference in accordance with the principles of Skidmore v. Swift & Co., 323 U.S. 134 (1944). Mead, 121 S. Ct. at 2168; see also Gen. Elec. Co. - Med. Sys. Group v. United States, 2001 U.S. App. LEXIS 15971 (Fed. Cir. July 17, 2001); Heartland By-Products, Inc. v. United States, 2001 U.S. App. LEXIS 19346 (Fed. Cir. Aug. 30, 2001). As the Court explained in Skidmore,

The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

323 U.S. at 140. Likewise, Mead indicates that when considering the degree of deference to accord a Customs classification ruling, a court should consider "its writer's thoroughness, logic, and expertness, its fit with prior interpretations, and any other sources of weight." 121 S. Ct. at 2176.

Customs has not issued a regulation regarding construction of the terms "bolt" and "screw" in the tariff schedule. However, Customs' policy of applying the ANSI Specification has been established in Headquarters Ruling Letters dating back more than 16 years, see Headquarters Ruling Letter 951362 (June 24, 1992); Headquarters Ruling Letter 074950 (Feb. 15, 1985), and in a Customs Service publication, Distinguishing Bolts from Screws (April 1995). The rulings and the publication contain detailed guidance as to the distinction between bolts and screws, consistent with the ANSI Specification. Because the classification in this case is supported by thorough analysis in Customs' publications and decisions, and is consistent with prior interpretations of the pertinent provisions of the HTSUS by Customs over a period of years, the Supreme Court's decision in Mead indicates that Customs' decision to interpret the provisions of HTSUS subheadings 7318.15.20 and 7318.15.80 according to the definitions contained in the ANSI Specification must be accorded some deference by the courts. As the Supreme Court recognized, the regulatory scheme at issue in this case is highly detailed, and Customs "can bring the benefit of specialized experience to bear on the subtle questions in this case." Mead, 121 S. Ct. at 2175. For that reason, while we recognize our independent responsibility to decide the legal issue of the proper tariff classification in this case, we also recognize our responsibility to give some deference to Customs' interpretation as we do so.

C

Rocknel argues that the Court of International Trade erred when it assigned the terms "bolt" and "screw" mutually exclusive definitions. Rocknel asserts that because subheading 7318.15.20 is an eo nomine classification for "bolts," while subheading 7318.15.80 is a "basket" category for "other" products, the correct classification requires only that a particular fastener satisfy the definition of a "bolt," regardless of whether it might also be regarded as being a screw.

We agree with the Court of International Trade that whether or not heading 7318.15.80 is considered to be a "basket" category, the structure of the tariff schedule requires that the terms "bolt" and "screw" be given mutually exclusive definitions. Simply put, because subheading 7318.15 covers bolts and screws, and subheading 7318.15.20 covers bolts, subheading 7318.15.80 is necessarily limited to screws. Therefore, the proper classification of a particular fastener requires a determination whether the fastener is a bolt or a screw and does not allow for the possibility that the fastener might qualify as either.

D

The ANSI Specification that Customs adopted as the basis for its distinction between bolts and screws is included in Fastener Standards (6th ed. 1988)...