Samsung Int'l, Inc. v. United States

• Decision Date: 21 November 2012
• Docket Number: Slip Op. 12-144,Court No. 10-00015
• Parties: SAMSUNG INTERNATIONAL, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

SAMSUNG INTERNATIONAL, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 12-144 Court No. 10-00015

UNITED STATES COURT OF INTERNATIONAL TRADE

Dated: November 21, 2012

Before: Jane A. Restani, Judge

Public Version

[Plaintiff's motion for summary judgment in classification case denied. Defendant's cross-motion for summary judgment granted.]

OPINION

Felicia L. Nowels, Akerman Senterfitt, of Tallahassee, FL, argued for plaintiff.

Marcella Powell, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, argued for defendant. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, and Barbara S. Williams, Attorney in Charge. Of counsel on the brief was Paula Smith, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

Restani, Judge: This matter is before the court on cross-motions for summary judgment by Plaintiff Samsung International, Inc. ("Samsung") and Defendant United States ("the Government") pursuant to USCIT Rule 56. Samsung challenges the U.S. Bureau of Customs and Border Protection's ("Customs") liquidation of certain entries and its denial ofSamsung's protests relating to the classification of plasma televisions and video monitors.¹ Pl.'s Mot. and Mem. in Supp. for Summ. J. ("Pl.'s Br.") 1. Samsung argues its imported plasma televisions and video monitors are eligible for preferential duty free treatment under the North American Free Trade Agreement ("NAFTA"). Id. This issue turns on the classification of Samsung's Plasma Display Panel Module ("PDP Module"), which is manufactured in Korea and is a component of the imported televisions and video monitors. For the reasons below, the court denies Samsung's motion for summary judgment and grants the Government's cross-motion for summary judgment.

FACTS

The parties do not dispute the following facts related to the procedural background of this case. Samsung imported flat panel plasma televisions and video monitors ("the imported goods") into the United States from Mexico between December 2004 and June 2005 under subheading 8528.12.72, Harmonized Tariff Schedule of the United States ("HTSUS"), and 8528.21.70, HTSUS, respectively.² Pl.'s Br. 2; Statement of Undisputed Material Facts ("Pl.'s Facts") ¶ 1; Def.'s Resp. ¶ 1. The imported goods contained either a V3 orV4 version of the PDP Module. Pl.'s Facts ¶ 14; Def.'s Resp. ¶ 14.

Samsung timely filed a request for NAFTA post-importation duty refunds on the imported goods. Pl.'s Facts ¶ 3; Def.'s Resp. ¶ 3. Customs denied the request based on two prior Customs rulings: NY K83248 and NY K83886. Pl.'s Facts ¶ 4; Def.'s Resp. ¶ 4. These rulings had classified plasma screens combined with various electronic assemblies as "flat panel screen assemblies" ("FPSAs") under HTSUS 8529.90.53. See NY K83248 (Feb. 20, 2004), Pl.'s Ex. 21 at 8 (classifying as a FPSA a glass plasma screen combined with an "address assembly, the scan A & B assemblies and various connector assemblies"); NY K83886 (Mar. 9, 2004), Pl.'s Ex. 21 at 9 (classifying as a FPSA a glass plasma screen combined with "electronic assemblies and various connector assemblies"). Customs found that Samsung's PDP Modules were FPSAs because they consisted of a glass plasma screen combined with various electronics assemblies. Def.'s Resp. to Pl.'s First Interrog., Def.'s Ex. X at ¶ 7. Because the applicable NAFTA Rules of Origin did not accord NAFTA preferential treatment to televisions and video monitors that incorporated FPSAs originating from non-NAFTA countries, Customs concluded that Samsung's imported goods, which incorporated the Korean-made FPSAs, were not entitled to NAFTA preferential treatment and denied Samsung's duty refund request. Id. ¶ 8; see also Pl.'s Facts ¶ 4; Def.'s Resp. ¶ 4.

Samsung timely filed protests and applications for further review of the denial of its requested NAFTA refunds, arguing that the incorporated PDP Modules did not constitute FPSAs of HTSUS 8529.90.53. Pl.'s Facts ¶ 6; Def.'s Resp. ¶ 6. Customs did not issue a denial of Samsung's protests and applications for further review. Pl.'s Facts ¶ 7; Def.'s Resp. ¶ 7. In November 2009, Samsung timely filed a request for accelerated disposition. Pl.'s Facts ¶ 8;Def.'s Resp. ¶ 8. Commerce did not respond to the request for accelerated disposition and the protests were deemed denied under 19 U.S.C. § 1515(b) and 19 C.F.R. § 174.22(d). Pl.'s Facts ¶ 9; Def.'s Resp. ¶ 9.

In August 2004, prior to Samsung's importation of the imported products, a NAFTA Customs subgroup issued a definition of "flat panel screen assemblies." Pl.'s Facts ¶¶ 65-66; Def.'s Resp. ¶¶ 65-66. The NAFTA subgroup stated that "[f]or purposes of tariff item 8529.90.ee, the phrase 'flat panel screen assemblies' means an assembly consisting of at least drive electronics, control electronics and a display device, other than LCD technologies." NAFTA Customs Subgroup, Clarification of TV technologies: Flat panel screen assemblies (Aug. 4, 2004) ("NAFTA Clarification"), Def.'s Ex. A at 3; see Pl.'s Facts ¶ 67; Def.'s Resp. ¶ 67. The NAFTA Clarification also stated that "[i]f at least one of the components of the definition of 'flat panel screen assemblies' is not incorporated, such assembly shall not be classifiable within tariff item 8529.90.ee." NAFTA Clarification at 3 n.2. The NAFTA subgroup did not define control electronics, drive electronics, or display device. Id.; see Pl.'s Facts ¶ 68; Def.'s Resp. ¶ 68. In October 2006, after the goods were imported and NAFTA treatment denied, but before the protests were deemed denied, Customs issued the Pioneer Revocation Ruling, HQ W967693 (Oct. 12, 2006) ("Pioneer Ruling"), Def.'s Ex. E; Pl.'s Facts ¶ 71; Def.'s Resp. ¶ 71.³

The parties do not dispute the following facts related to the components and function of the PDP Modules. Both the V3 and V4 versions of the PDP Module were manufactured in Korea. Pl.'s Facts ¶ 13; Def.'s Resp. ¶ 13; Def.'s Statement of Undisputed Facts ("Def.'s Facts") ¶ 3; Pl.'s Resp. to Def.'s Statement of Undisputed Facts ("Pl.'s Resp.") ¶ 3. The V3 PDP Module consisted of glass panels, a X Driver, a Y Driver, a Column Driver, a Logic Board, Logic Buffers, a chassis, and a power supply. Pl.'s Facts ¶ 46; Def.'s Resp. ¶ 46. The glass panels contained plasma glass, X electrodes, Y electrodes, and Column electrodes.⁴ Pl.'s Facts ¶ 48; Def.'s Resp. ¶ 48. The V4 Module contained the same components, but its Logic Board was not attached to the Module at the time of importation. Pl.'s Facts ¶¶ 43-44; Def.'s Resp. ¶¶ 43-44. The Logic Board of the V3 PDP Module⁵ contained several integrated circuits, including a Sequence Processor, Data Processor, Data Distributor, read only memory processors, and a Decoder. Def.'s Facts ¶ 8; Pl.'s Resp. ¶ 8. Once in Mexico, the PDP Modules were combined with a Main Board, which was manufactured in Mexico, front and rear covers, cables, and various connectors, fasteners, and other parts to produce the finished video monitors and televisions. Pl.'s Facts ¶¶ 18, 31; Def.'s Resp. ¶¶ 18, 31.

The Main Board receives signals, in various formats from an outside source, such as a DVD player or a cable box, processes all of these signals, and converts the signals into aLow Voltage Differential Signal ("LVDS"). See Pl.'s Facts ¶ 38; Def.'s Resp. ¶ 38. The LVDS signal is a compressed image data signal composed of synchronization signals (V-sync and H-sync signals)⁶ and raw image data signals, which include "Red Green Blue" information. Pl.'s Facts ¶¶ 28, 39; Def.'s Resp. ¶¶ 28, 39. The Main Board sends the data in LVDS format to the Logic Board, which is located on the PDP Module. Pl.'s Facts ¶¶ 38-39; Def.'s Resp. ¶¶ 38-39.

Because the Drivers on the PDP Module cannot understand a LVDS signal, the Logic Board's Decoder takes the LVDS signal from the Main Board and converts it into a format that the Drivers can understand. Def.'s Facts ¶¶ 15, 16; Pl.'s Resp. ¶¶ 15, 16. The Decoder then sends the video information and instructions to the Logic Board's Sequence Processor.⁷ Def.'s Facts ¶ 17; Pl.'s Resp. ¶ 17. The Sequence Processor converts the sync signals into timing information. Def.'s Facts ¶ 19; Pl.'s Resp. ¶ 19. The Sequence Processor then takes the video information and instructions from the Decoder and converts those instructions in accordance with the timing information derived from the sync signal. Def.'s Facts ¶ 18; Pl.'s Resp. ¶ 18. The signal is then sent to the Data Processor, which performs part of the "subfield pattern" process.⁸ Def.'s Facts ¶ 28; Pl.'s Facts ¶ 25. Finally, the signal is sent to the Data Distributor.Def.'s Facts ¶ 29; Pl.'s Resp. ¶ 29. The Data Distributor stores the data in its memory and routes the data to the appropriate Driver. See Def.'s Facts ¶¶ 30-31. This ends the functions of the Logic Board. The Drivers take the information from the Logic Board and "make and deliver driving waveforms [i.e. electrical pulses]," that are sent to the respective electrodes (i.e. the X Driver sends a waveform to the X electrodes), thereby illuminating the pixels and plasma gas to create an image. Pl.'s Facts ¶ 60; Def.'s Resp. ¶ 60.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over the denial of a timely protest under 28 U.S.C. § 1581(a). The proper classification of imported merchandise involves a two step analysis: (1) ascertaining the proper meaning of specific terms in the tariff provision, which is a question of law; and (2) determining whether the merchandise at issue comes within the description of such terms as properly construed, which is a question of fact. Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed. Cir. 2006). Both questions are decided de novo. 28 U.S.C. § 2640(a)(1).

Summary judgment is appropriate if there is "no genuine issue as to any material fact" and "the movant is entitled to judgment as a matter of law." USCIT R. 56(c). A...