Sigvaris, Inc. v. United States, Slip Op. 17–60

• Citation: 227 F.Supp.3d 1327
• Decision Date: 17 May 2017
• Docket Number: Slip Op. 17–60,Court No. 11–00532
• Parties: SIGVARIS, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

227 F.Supp.3d 1327

SIGVARIS, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 17–60

Court No. 11–00532

United States Court of International Trade.

May 17, 2017

John M. Peterson , Russell A. Semmel , and Elyssa R. Emsellem , Neville Peterson, LLP, of New York, NY, argued for Plaintiff Sigvaris, Inc.Alexander J. Vanderweide , Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, argued for Defendant United States. With him on the brief were Benjamin C. Mizer , Principal Deputy Assistant Attorney General, and Amy M. Rubin , Assistant Director. Of counsel on the brief was Beth C. Brotman , Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of New York, NY.

OPINION

Choe–Groves, Judge:

This case addresses whether various models of graduated compression hosiery, arm-sleeves, and gauntlets (fingerless, glove-like articles worn on the hands) are specially designed for the use or benefit of handicapped persons and are therefore duty-free under the Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific, and Cultural Materials ("Nairobi Protocol") and the Harmonized Tariff Schedule of the United States ("HTSUS").¹ Before the court are cross-motions for summary judgment. See Pl.'s Mot. Summ. J., Dec. 21, 2015, ECF No. 56; Mem. Sigvaris, Inc., Supp. Pl.'s Mot. Summ. J., Dec. 21, 2015, ECF No. 56–2 ("Pl. Br."); Def.'s Cross–Mot. Summ. J. 1–2, Mar. 10, 2016, ECF No. 61; Def.'s Mem. Supp. Cross–Mot. Summ. J. 20–46, Mar. 10, 2016, ECF No. 61 ("Def. Br.").

Sigvaris, Inc. ("Plaintiff") argues that U.S. Customs and Border Protection ("Customs") improperly denied its protests that challenged the classification of its imported graduated compression merchandise. See Pl. Br. 1. Plaintiff contends that all of its compression products are entitled to duty free treatment because the products are classifiable under the Nairobi Protocol and HTSUS subheading 9817.00.96, which covers "[a]rticles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons."² See Pl. Br. 3–21. The United States ("Defendant" or "Government") maintains that Customs properly classified the imported graduated compression merchandise as not specially designed for handicapped persons. See Def. Br. 5–21.

For the reasons discussed below, the court (1) denies Plaintiff's motion for summary judgment and grants Defendant's cross-motion for summary judgment with respect to the classification of the models of hosiery at issue, which were properly classified by Customs under HTSUS subheading 6115.10.40 as "[o]ther graduated compression hosiery: ... [o]f synthetic fibers"; and (2) grants Plaintiff's motion for summary judgment and denies Defendant's cross-motion for summary judgment with respect to the classification of the models of arm-sleeves and gauntlets at issue, which are classifiable under the Nairobi Protocol and HTSUS subheading 9817.00.96 as articles specially designed for the use or benefit of physically handicapped persons.

UNDISPUTED FACTS

As required by USCIT Rule 56.3, Plaintiff and Defendant submitted separate statements of material facts and responses thereto. See Statement of Material Facts as to Which no Genuine Issue Exists, Dec. 21, 2015, ECF No. 56–1 ("Pl. Facts"); Def.'s Resp. Pl.'s Statement of Material Facts as to Which no Genuine Issues Exists, Mar. 10, 2016, ECF No. 61 ("Def. Facts Resp."); Def.'s Statement of Undisputed Material Facts, Mar. 10, 2016, ECF No. 61 ("Def. Facts"); Pl.'s Resp. Def.'s Statement of Undisputed Material Facts, June 1, 2016, ECF No. 66–1 ("Pl. Facts Resp."). The following facts are not in dispute.

A. Jurisdictional and Procedural Facts

Plaintiff imported 105 entries of graduated compression merchandise into the United States at the Port of Atlanta in Georgia between September 2008 and November 2010. See Pl. Facts ¶¶ 1–2; Def. Facts Resp. ¶¶ 1–2. The entries were liquidated by Customs between August 2009 and September 2011. See Pl. Facts ¶ 3; Def. Facts Resp. ¶ 3. Customs classified the graduated compression merchandise under various provisions of the HTSUS as follows: (1) the hosiery at a duty rate of 14.6% ad valorem under HTSUS subheading 6115.10.40 as "Other graduated compression hosiery: ... Of synthetic fibers" or duty free under HTSUS subheading 6115.10.05 as "Graduated compression hosiery (for example, stockings for varicose veins

): Surgical panty home [sic] and surgical stockings with graduated compression for orthopedic treatment"; (2) the arm-sleeves under HTSUS subheading 6307.90.98 as "Other made up articles, including dress patterns: ... Other: ... Other" dutiable at 7% ad valorem ; and (3) the gauntlets under HTSUS subheading 6116.93.88 as "Gloves, mittens and mitts, knitted or crocheted: ... Other: ... Of synthetic fibers: ... Other: Without fourchettes" dutiable at 18.6% ad valorem . See Pl. Facts ¶ 3; Def. Facts Resp. ¶ 3; see also Summons, Dec. 22, 2011, ECF No. 1.

Plaintiff filed timely protests contesting the classification of several models of compression products and seeking duty free treatment of its merchandise. See Protest Nos. 1704–10–100013, –10–100018, –10–100068, –10–100240, –10–100258, –11–100057, –11–100189, –11–100352, –11–100414. All nine of Plaintiff's protests were deemed denied by Customs on December 12, 2011.³ See Summons; Compl. ¶ 4, Mar. 30, 2012, ECF No. 6. Plaintiff paid liquidated duties according to Customs' classification of the merchandise. See Pl. Facts ¶ 4; Def. Facts Resp. ¶ 4. Thereafter, Plaintiff commenced this action. See Summons.

B. Facts Regarding the Imported Compression Products

The imported merchandise consists of various models of graduated compression products, each differing in style, material, length, and compression level. See Def. Facts ¶¶ 1–8; Pl. Facts Resp. ¶¶ 1–8. Each model is designed to apply a fixed range of graduated compression measured in millimeters of mercury ("mmHg"). See Def. Facts ¶ 3–4; Pl. Facts Resp. ¶ 3–4. Graduated compression applies maximum pressure at the furthest point in the extremity and decreases gradually up the limb. See Pl. Facts ¶ 6; Def. Facts Resp. ¶ 6; Def. Facts ¶¶ 3–4; Pl. Facts Resp. ¶¶ 3–4. The compression products "are made on special circular knitting machines that use elasticized material to impart compression characteristics ... [,] to ensure the product is made for the proper measurements and to exert the correct pressure." Pl. Facts ¶ 7; Def. Facts Resp. ¶ 7.

The imported graduated compression hosiery consists of products from three product lines—the 120 Support Therapy Sheer Fashion Series for women ("Series 120"), the 145 Support Therapy Classic Dress Series for women ("Series 145"), and the 185 Support Therapy Classic Dress Series for men ("Series 185"). See Def. Facts ¶ 2; Pl. Facts Resp. ¶ 2; Pl. Facts ¶ 5; Def. Facts Resp. ¶ 5. Series 120 hosiery is available in a variety of models, including 120P (pantyhose), 120M (maternity pantyhose), 120N (thigh-high hosiery), 120C (calf-length hosiery), and 120CO (calf-length hosiery with open toe). See Def. Facts ¶ 5; Pl. Facts Resp. ¶ 5. Series 120 models are "made of a combination of nylon and spandex, and in some products, also silicone." Def. Facts ¶ 6; Pl. Facts Resp. ¶ 6. Series 145 and Series 185 models of compression hosiery "are calf-length graduated support dress socks made of a combination of nylon and spandex." Def. Facts ¶ 7; Pl. Facts Resp. ¶ 7. All of the hosiery models at issue from these product lines exert 15–20 mmHg of compression. See Def. Facts ¶¶ 6–7; Pl. Facts Resp. ¶¶ 6–7; see also Pl. Exs. Rule 56.3 Statement of Facts and Mem. Ex. A at 000029–30, 000035, Dec. 21, 2015, ECF No. 56–4 ("Ex. A"). The compression applied by the hosiery is greatest at the ankle and gradually decreases as the stocking moves up the leg.⁴ See Pl. Facts ¶ 6; Def. Facts Resp. ¶ 6; Def. Facts ¶ 3; Pl. Facts Resp. ¶ 3.

The imported graduated compression arm-sleeves and gauntlets are part of the 500 Medical Therapy Natural Rubber Series ("Series 500"). See Def. Facts ¶ 8; Pl. Facts Resp. ¶ 8. Series 500 arm-sleeves and gauntlets are available in the following models: 503A (arm-sleeve without gauntlet), 503B (arm-sleeve with gauntlet), and 503Gs2 and 503GM2 (separate gauntlets). See Def. Facts ¶ 8; Pl. Facts Resp. ¶ 8. These arm-sleeves and gauntlets "are made of a combination of nylon and natural latex rubber." Def. Facts ¶ 8; Pl. Facts Resp. ¶ 8. The arm-sleeves and gauntlets apply 30–40 mmHg of compression, which is greatest at the wrist and, in the case of the arm-sleeves, decreases gradually as the sleeve moves up the arm. See Pl. Facts ¶¶ 1, 6; Def. Facts Resp. ¶¶ 1, 6; Def. Facts ¶ 8; Pl. Facts Resp. ¶ 8.

C. Facts Regarding Chronic Venous Disease, Chronic Venous Insufficiency

, and Lymphedema

Chronic venous disease ("CVD") "is a mechanical problem of the lower limbs in which the walls of veins and valves are, to relative degrees of severity, damaged, obstructed, [or] leaking." Def. Facts ¶ 9; Pl. Facts Resp. ¶ 9. The severity of CVD is graded according to the Clinical, Etiology, Anatomy, Pathophysiology ("CEAP") scale where no clinical signs of CVD are classified under C0, small varicose veins

are classified under C1, large varicose veins are classified under C2, edema is classified under C3, skin change with no ulceration is classified under C5, and skin change with an active ulceration is classified under C6. See Def. Facts ¶ 11; Pl. Facts Resp. ¶ 11. A quarter of adult Americans have varicose veins, many of whom do not suffer from any discomfort or other symptoms of CVD. See Def. Facts ¶ 20; Pl. Facts Resp. ¶ 20. "The symptoms of CVD can be managed by graduated compression therapy, or in the case of superficial and varicose veins

, treated surgically, but the underlying conditions giving rise to CVD cannot be fixed or cured." Def. Facts ¶ 10; Pl. Facts Resp. ¶ 10. Chronic...