Schott Optical Glass, Inc. v. U.S.

• Decision Date: 11 December 1984
• Docket Number: No. 84-1040,84-1040
• Citation: 750 F.2d 62
• Parties: , 3 Fed. Cir. (T) 35 SCHOTT OPTICAL GLASS, INC., Appellant, v. UNITED STATES, Appellee. Appeal
• Court: U.S. Court of Appeals — Federal Circuit

Page 62

750 F.2d 62

6 ITRD 1529, 3 Fed. Cir. (T) 35

SCHOTT OPTICAL GLASS, INC., Appellant, v. UNITED STATES, Appellee.

Appeal No. 84-1040.

United States Court of Appeals Federal Circuit.

Dec. 11, 1984.

Richard C. King (argued), Fitch, King & Caffentzis, New York City, for appellant.

John J. Mahon (argued), Dept. of Justice, New York City, for appellee. With him on brief were Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Washington, D.C., and Joseph I. Liebman, Charge Intern. Trade Field Office, New York City.

Carl W. Schwarz and Wesley K. Caine, Metzger, Shadayc & Schwarz, Washington, D.C., was on brief, for amicus curiae.

Before FRIEDMAN, BENNETT, and NEWMAN, Circuit Judges.

FRIEDMAN, Circuit Judge.

This is an appeal from the judgment of the United States Court of International Trade in Schott Optical Glass, Inc. v. United States, 587 F.Supp. 69, sustaining the Customs Service's classification of the appellant's imported glass. That court held that a prior decision upholding the identical classification of similar glass the appellant imported was stare decisis, and it refused to allow the appellant to introduce evidence designed to show that the prior decision was clearly erroneous. We reverse and remand to allow the appellant to produce that evidence.

I

The merchandise consists of seven types of filter glass used in optical instruments such as spectrometers, spectrophotometers and solar filter simulators. Two of the filters--one nearly colorless and the other colorless--transmit visible light while absorbing specific wavelengths in the ultraviolet or infrared spectrum. The remaining five types are dark glass which absorb most of the visible light, transmitting either the ultraviolet or infrared light.

The Customs Service classified the importations as "other optical glass" under item 540.67 of the Tariff Schedules of the United States (TSUS). The appellant (Schott) contends that six of the seven should have been classified as "colored or special glass" under item 542.92 and the remaining type as "ordinary glass" under item 542.42.

There was an earlier case between the same parties in which the courts upheld the Customs Service's classification as "optical glass" of colored filter glass imported by the appellant. In Schott Optical Glass, Inc. v. United States, 468 F.Supp. 1318 (Cust.Ct.), aff'd 612 F.2d 1283 (CCPA 1979) (Schott I ), the Customs Court, on the basis of prior decisions, ruled that glass classified as optical glass under item 540.67 TSUS is presumed to be (a) very high quality, (b) used for optical instruments, and (c) capable of performing an optical function, 468 F.Supp. at 1322. It held that Schott failed to sustain its burden of proving that its glass did not come within the foregoing standards. The Court of Customs and Patent Appeals affirmed, holding that the common meaning of optical glass (which governed its tariff classification) does not include the additional requirement (which Schott urged it did) that the glass have a specifically controlled refractive index and dispersion. 612 F.2d at 1286.

During the trial of the present case, the Court of International Trade ruled that Schott I had determined the common meaning of "optical glass" for tariff purposes and that it was bound by that decision. The court excluded all evidence relating to the common meaning of the tariff term, which Schott wanted to introduce to show that the earlier decision in Schott I was The Court of International Trade concluded that under stare decisis the common meaning of optical glass as determined in Schott I was controlling. 587 F.Supp. at 71. The court rejected Schott's claim that the former decision was clearly erroneous, stating that the Court of Customs and Patent Appeals had already rejected the arguments upon which that claim rests. The court held that the filters in this case met the three-part test for optical glass and that the Customs Service therefore had properly classified them in that category.

clearly erroneous because it adopted an erroneous meaning for "optical glass."

II

In United States v. Stone & Downer Co., 274 U.S. 225, 47 S.Ct. 616, 71 L.Ed. 1013 (1927), the Supreme Court held that in customs classification cases a determination of fact or law with respect to one importation is not res judicata as to another importation of the same merchandise by the same parties. The opportunity to relitigate applies to questions of construction of the classifying statute as well as to questions of fact as to the merchandise. 274 U.S. at 236, 47 S.Ct. at 619. This narrow exception to the doctrine of res judicata applies only in customs classification cases and not in reappraisement cases. See J.E. Bernard & Co. v. United States, 324 F.Supp. 496 (Cust.Ct.1971).

Under Stone & Downer, the doctrine of res judicata--which bars litigation by the same parties of the same issues previously adjudicated, Commissioner v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948)--would not bar Schott from relitigating either the meaning of "optical glass" or the classification of its filters in this case as within that category. The Court of International Trade, however, held that such relitigation was barred by stare decisis, under which courts generally refuse to examine legal issues previously decided in another case. United States v. Mercantil Distribuidora, S.A., 45 CCPA 20, 23-24 (1957). The Court of International Trade held that the meaning of "other optical glass" had been decided in Schott I and that that decision precluded it from considering...