Sparks Belting Co. v. United States

• Decision Date: 01 June 2010
• Docket Number: Slip Op. 10-63.,Court No. 02-00245.
• Citation: 715 F.Supp.2d 1305
• Parties: SPARKS BELTING COMPANY, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

715 F.Supp.2d 1305

SPARKS BELTING COMPANY, Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 10-63. Court No. 02-00245.

United States Court ofInternational Trade.

June 1, 2010.

COPYRIGHT MATERIAL OMITTED.

Edmund Maciorowski, P.C. (Edmund Maciorowski), Bloomfield Hills, MI, for Plaintiff.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney-in-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Aimee Lee); Chi S. Choy, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, Of Counsel, for Defendant.

OPINION

TSOUCALAS, Senior Judge.

At issue is the proper classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) for certain merchandise imported by Plaintiff Sparks Belting Company (“Sparks”). This action, which has been designated a test case pursuant to USCIT Rule 84, is before the Court on cross-motions for summary judgment. For the reasons set forth below, the Court finds that no genuine issues of material fact remain and this dispute may be resolved pursuant to USCIT Rule 56.

I. Background

The present action involves several entries made between March and September of 2000 through the port of Detroit, Michigan. The subject imports are described in the commercial invoices and other entry documents as “conveyor belts”. See Pl.'s Statement of Material Facts as to Which There is No Genuine Issue to be Tried (“Pl.'s Facts”) ¶ 12; Def.'s Resp. to Pl.'s Statement of Material Facts as to Which There is No Genuine Issue to be Tried (“Def.'s Resp. to Pl.'s Facts”) ¶ 12. The merchandise is designed and used in industrial applications for the conveyance of food products and other goods. See Pl.'s Facts at ¶ 25.

Upon liquidation of the entries, the merchandise was classified and assessed with duties by U.S. Customs and Border Protection (“Customs” or the “Government”) under either Subheading 5910.00.10, HTSUS, ¹ with an assessed duty rate of 5.6% ad valorem, or Subheading 5910.00.90, HTSUS, with a duty rate of 3.6% ad valorem. See Entries, Protests. The relevant portions of Heading 5910 are as follows:

Sparks protested Customs' classification of the subject merchandise, asserting that classification was proper under either 5903.10.15, HTSUS, or 5903.20.15, HTSUS, both with dutiable rates of 1.4% ad valorem. See Protests. After Customs denied Plaintiff's protest at the port level, Sparks filed a timely summons with the Court disputing the classification of the subject imports. All liquidated duties, charges and exactions for the subject entries have been paid prior to the commencement of this action. See Compl. at ¶ 3.

During discovery, Defendant served interrogatories on Sparks in order to obtain samples of specific measurements. See Def.'s Br. at Ex. 2. Sparks submitted ten sample pieces of the subject merchandise and a proposed stipulation in early autumn of 2008. With one exception in August of 2009, Plaintiff did not produce any further samples to Defendant. See Def.'s Br. at 2; id. at Ex. 3. The Government proceeded to file a motion to compel more samples. See Pl.'s Mot. to Compel (Doc. 25). The Court denied Defendant's motion on the basis that the Government had ample time to attain the samples but failed to, given that the case had been ongoing since 2002 and that discovery had concluded. See Mem. Order Den. Def.'s Mot. to Compel dated Aug. 31, 2009 (Doc. 29).

Both Plaintiff and Defendant concurrently moved for summary judgment. ² As evidentiary support, the parties have submitted numerous documents including the briefs for summary judgment and responsive documents thereto. See Pl.'s Mot. for Summ. J. (“Pl.'s Br.”); Def.'s Resp. to Pl.'s Mot. for Summ. J. (“Def.'s Resp.”); Pl.'s Reply to Def.'s Resp. to Pl.'s Mot. for Summ. J. (“Pl.'s Reply”); Def.'s Mot. for Summ. J. (“Def.'s Br.”); and Pl.'s Resp. to Def.'s Mot. for Summ. J. (“Pl.'s Resp.”); Def.'s Reply to Pl.'s Resp. to Def.'s Mot. for Summ. J. (“Def.'s Reply”). Sparks, who had originally named twenty-four entries containing eighteen products, abandoned its claims concerning all but seven entries containing eight different products. ³ See Summons; Def.'s Statement of Material Facts as to Which There is No Genuine Issue to be Tried (“Def.'s Facts”) ¶¶ 1-2; Pl.'s Resp. to Def.'s Statement of Material Facts as to Which There is No Genuine Issue to be Tried (“Pl.'s Resp. to Def.'s Facts”) ¶ 1; Pl.'s Br. at 2, n.2. Accordingly, this Court dismisses the claims abandoned by Sparks. ⁴

On March 31, 2010, Defendant moved to strike portions of the affidavit of Ivo Spaargaren, attached as an exhibit to Plaintiff's brief. See Def.'s Mot. to Strike (Doc. 41). This Court granted Defendant's motion, ruling that parts of Spaargaren's affidavit lacked a basis of personal knowledge in contravention of USCIT Rule 56(e). See Mem. Order Granting Def.'s Mot. to Strike, dated Apr. 20, 2010 (Doc. 47).

II. Contentions of the Parties

Sparks contends that its summary judgment motion should be granted because Customs improperly classified the subject imports under Heading 5910, HTSUS, despite Chapter Note 6 which excludes “[t]ransmission or conveyor belting, of textile material, of a thickness of less than 3 mm” from that heading. Sparks alleges that the subject articles are properly classified under HTSUS subheadings 5903.10.15 or 5903.20.15, depending on whether they are coated with polyvinyl chloride or polyurethane, respectively.

The Government asserts that summary judgment is appropriate in its favor for several reasons. Regarding the products not represented by a sample, Defendant posits that Sparks failed to establish elements essential to its case and upon which it bears the burden of proof. Further, according to Defendant, the subject imports cannot be classified under Sparks' claimed classification provisions because those subheadings contemplate the products being a fabric in accordance with Note 9 to Section XI of the HTSUS, which the subject merchandise are not. Finally, with regard to Entry 0054859-2, Defendant submits that the Court lacks jurisdiction because Sparks's protest of that entry has already been granted.

III. Summary Judgment and Standard of Review

Summary judgment is appropriate when there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. USCIT R. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). At the summary judgment stage, the question to be answered is “whether there is the need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Processed Plastic Co. v. United States, 29 CIT 1129, 1132, 395 F.Supp.2d 1296, 1299 (2005) ( internal citation omitted ). The purpose of summary judgment is to avoid a clearly unnecessary trial. See Seal-Flex, Inc. v. Athletic Track and Court Constr., 98 F.3d 1318, 1321 (Fed.Cir.1996) ( citing Matsushita Electric Indus. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

The fact that both parties have moved for summary judgment “does not mean that the court must grant judgment as a matter of law for one side or the other; summary judgment in favor of either party is not proper if disputes remain as to material facts.” Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed.Cir.1987) (internal citation omitted). In classification cases, summary judgment is appropriate when “there is no genuine dispute as to ... what the merchandise is.” Ero Indus., Inc. v. United States, 24 CIT 1175, 1179, 118 F.Supp.2d. 1356, 1359 (2000). In other words, if no dispute over a material fact would impact the outcome of the suit and the action focuses solely on the proper classification of the merchandise, a court may grant summary judgment. See Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.Cir.1998).

Ultimately, it is the Court's duty to determine the correct classification. See Jarvis Clark Co. v. United States, 733 F.2d 873, 876 (Fed.Cir.1984). Classification cases are reviewed de novo by this Court, pursuant to 28 U.S.C. § 2640(a). See Cargill, Inc. v. United States, 28 CIT 401, 408, 318 F.Supp.2d 1279, 1287 (2004). The Court must determine whether “the government's classification is correct, both independently and in comparison with the importer's alternative.” Sumitomo Corp. of America v. United States, 18 CIT 501, 505, 855 F.Supp. 1283, 1287 (1994).

In order to establish the proper classification of imported merchandise, the Court applies a two-step analysis whereby it “(1) ascertain[s] the proper meaning of the specific terms in the tariff provision; and [then] (2) determin[es] whether the merchandise at issue comes within the description of such terms as [ ] properly construed.” Global Sourcing Group v. United States, 33 CIT ----, ----, 611 F.Supp.2d 1367, 1371 (2009) ( citing Pillowtex Corp. v. United States, 171 F.3d 1370, 1373 (Fed.Cir.1999)). The first step of the analysis is a question of law and the second is a question of fact. See Pillowtex, 171 F.3d at 1373.

The General Rules of Interpretation (“GRIs”) direct classification of merchandise under the HTSUS. See Boen Hardwood Flooring, Inc. v. United States, 357 F.3d 1262, 1264 (Fed.Cir.2004). The GRIs are applied in numerical order; once a particular rule provides proper classification, a court may not consider any subsequent GRI. See Mita Copystar Am. v. United States, 160 F.3d 710, 712 (Fed.Cir.1998). The first GRI holds that “classification shall be determined according to the terms of the headings and any relative section or chapter notes.” GRI 1; see also Orlando Food Corp. v. United States, 140 F.3d 1437,...