E.T. Horn Co. v. U.S.
| Decision Date | 12 May 2004 |
| Docket Number | Docket No. 03-1363. |
| Citation | 367 F.3d 1326 |
| Parties | E.T. HORN COMPANY, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Heather C. Litman, Stein Shostak Shostak & O'Hara, of Los Angeles, CA, argued for plaintiff-appellant. With her on the brief was Joseph P. Cox.
Saul Davis, Senior Trial Counsel, International Trade Field Office, United States Department of Justice, of New York, NY, argued for defendant-appellee. With him on the brief were Peter D. Keisler, Assistant Attorney General; and David M. Cohen, Director; Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC; and John J. Mahon, Acting Attorney in Charge, International Trade Field Office. Of counsel on the brief was Chi S. Choy, Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, Bureau of Customs and Border Protection, of New York, NY.
Before GAJARSA, LINN, and PROST, Circuit Judges.
E.T. Horn Company ("Horn") appeals the judgment of the Court of International Trade affirming the United States Customs Service's ("Customs'") classification of Horn's imports of dichloroethyl ether ("DCEE") under subheading 2909.19.1090 of the Harmonized Tariff Schedule of the United States ("HTSUS") as an "Other" ether of monohydric alcohol. E.T. Horn Co. v. United States, No. 98-11-03124, 2003 WL 649080 (Ct. Int'l Trade Feb. 27, 2003). Because the trial court properly interpreted the HTSUS and found that subheading 2909.19.1090 more specifically covers Horn's imports of DCEE, we affirm.
Horn produces and imports DCEE, which has the chemical formula Cl-CH2-CH2-O-CH2-CH2-Cl. DCEE is an acyclic ether; more particularly, it is a symmetrical acyclic ether because the carbon-containing groups (Cl-CH2-CH2) attached to the oxygen atom are the same. To produce its DCEE, Horn employs a patented processing formula that does not involve deriving DCEE from diethyl ether or a mono- or polyhydric alcohol, either by dehydration or by any other method.
For a number of years, Horn classified its imports of DCEE under subheading 2909.11.0000, which applies to diethyl ethers. It did so because DCEE is a structural derivative of diethyl ether, and Subheading Note 1 to Chapter 29 of the HTSUS states that:
Within any one heading of this chapter, derivatives of a chemical compound (or group of chemical compounds) are to be classified in the same subheading as that compound (or group of compounds) provided that they are not more specifically covered by any other subheading and that there is no residual subheading named "Other" in the series of subheadings concerned.
Subheading Note 1, Section VI, Chapter 29, HTSUS (emphasis on "Other" in original, other emphasis added) ("Note 1"). Because it is a structural derivative of diethyl ether, Horn classified its DCEE as diethyl ether, subject to a one percent tariff rate under subheading 2909.11.0000.
In 1996, the Los Angeles Customs office conducted a laboratory test of Horn's DCEE. The Los Angeles Customs Laboratory concluded that Horn's claimed DCEE was in fact DCEE. Accordingly, the Los Angeles Customs office continued to allow Horn to import the chemical under subheading 2909.11.0000 as a derivative of diethyl ether.
Despite the findings of the Los Angeles Customs Laboratory, the Customs office for the Port of Houston rejected Horn's entries of DCEE under subheading 2909.11.0000 and instead required classification under subheading 2909.19.1090, the provision for ethers of monohydric alcohols other than methyl tertiary-butyl ether ("MTBE"). At that time, the relevant portion of the HTSUS read as follows:
2909 Ethers, ether-alcohols, ether-phenols, ether-alcohol-phenols, alcohol peroxides
ether peroxides, ketone peroxides (whether or not chemically defined), and
their halogenated, sulfonated, nitrated or nitrosated derivatives
Acyclic ethers and their halogenated, sulfonated, nitrated or nitrosated
derivatives
2909.11.00 Diethyl ether .....................................................1%
2909.19 Other
2909.19.10 Ethers of monohydric alcohols .................................5.6%
2909.19.1010 Methyl tertiary-butyl ether (MTBE)
2909.19.1090 Other
Ethers of polyhydric alcohols
2909.19.3000 Triethylene glycol dichloride
2909.19.6000 Other
The Houston Customs office classified Horn's DCEE under subheading 2909.19.1090, subject to a duty rate of 5.6%,1 because it found that the subheading more specifically covered Horn's imports.
Horn disagreed and filed a Protest and Application for Further Review on January 3, 1997. In response, Customs issued Headquarters Ruling Letter No. 961,207 on April 27, 1998. It concluded that Horn's DCEE should be classified under subheading 2909.19.1090 as an "Other" ether of monohydric alcohol.
Horn appealed to the United States Court of International Trade claiming that DCEE is not an ether of monohydric alcohol because it is not produced from monohydric alcohol and does not contain a monohydric alcohol in its structure. The court found the issue ripe for summary judgment because it depended upon interpretation of the tariff schedule rather than the physical characteristics of the imported merchandise.
Applying the language of Note 1, the Court of International Trade began by addressing the question of whether DCEE is an ether of monohydric alcohol and therefore more specifically provided for under subheading 2909.19.1090. Based on relevant chemical dictionary definitions, the Explanatory Notes to sub-chapter IV under 29.09 ("Explanatory Notes"), and the statutory structure, the court agreed with the government that an ether should be classified according to its structural relationship to a particular alcohol. The Court of International Trade further concluded that the process of dehydration defines that relationship and that the key structural aspect to evaluate is the correspondence of the carbon backbones. Based on its interpretation of the tariff schedule, the court classified Horn's DCEE as an "Other" ether of monohydric alcohol under subheading 2909.19.1090.
Because it found that subheading 2909.19.1090 more specifically provided for DCEE, the Court of International Trade did not address the other Note 1 issues — whether DCEE was covered by a residual "Other" provision or was a derivative of diethyl ether.
Horn timely appealed the Court of International Trade's decision. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).
"We review the grant of summary judgment by the Court of International Trade de novo." Pomeroy Collection, Ltd. v. United States, 336 F.3d 1370, 1371 (Fed.Cir.2003). Here, summary judgment is appropriate because there are no genuine issues of material fact regarding the nature of the imported DCEE. See Gen. Elec. Co. v. United States, 247 F.3d 1231, 1234 (Fed.Cir.2001). Instead, the outcome depends on the interpretation of the HTSUS, which we determine de novo. See id.
"The proper classification of merchandise is governed by the General Rules of Interpretation (GRI) to the HTSUS." Id. at 1235. GRI 1 states that a product's classification is determined by first looking to the headings and section or chapter notes. Orlando Food Corp. v. United States, 140 F.3d 1437, 1440 (Fed.Cir.1998). "Only after determining that a product is classifiable under the heading should the court look to the subheadings to find the correct classification for the merchandise." Id. Absent contrary definitions in the HTSUS or legislative history, we construe HTSUS terms according to their common and commercial meanings. Medline Indus. Inc. v. United States, 62 F.3d 1407 (Fed.Cir.1995); see also Len-Ron Mfg. Co., Inc. v. United States, 334 F.3d 1304, 1309 (Fed.Cir.2003). Furthermore, we may rely upon our own understanding of a term as well as lexicographic and scientific authorities. Len-Ron, 334 F.3d at 1309. Finally, we refer to the Explanatory Notes accompanying a tariff subheading, which — although not controlling — provide interpretive guidance. Id.
On appeal, Horn argues that, under Note 1, its DCEE must be classified under subheading 2909.11.0000. Although it concedes that its DCEE does not specifically belong under subheading 2909.11.0000 because it is not diethyl ether, Horn contends that neither of the Note 1 exceptions applies; thus, its DCEE should be classified as a derivative of diethyl ether. First, Horn argues that its DCEE is not more specifically provided for under subheading 2909.19 because it is not an ether "of" — meaning "made from" — either mono- or polyhydric alcohol. Alternatively, Horn believes that if subheading 2909.19 covers structural derivatives, its DCEE is not specifically covered under subheading 2909.19 because it lacks a shared carbon-oxygen backbone with any mono- or polyhydric alcohols. Finally, Horn argues, there is no residual "Other" provision in the same series of subheadings — no goods may be classified in the six-digit subheading 2909.19 "Other" provision. Thus, because neither of the Note 1 exceptions applies, Horn concludes that its DCEE should be classified as a derivative of diethyl ether.
The government counters that the Court of International Trade properly classified Horn's DCEE imports under subheading 2909.19.1090. The government agrees with Horn that, under Note 1, subheading 2909.11.0000 does not specifically provide for Horn's DCEE. The agreement ends there, however, because the government believes that subheading 2909.19 both more specifically provides for DCEE and also serves as a residual "Other" provision. In either case, the government contends, Note 1 requires classification under 2909.19, specifically 2909.19.1090. Accordingly, the government...
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