Timber Products Co. v. U.S., 2007-1136.
| Decision Date | 24 January 2008 |
| Docket Number | No. 2007-1136.,2007-1136. |
| Citation | 515 F.3d 1213 |
| Parties | TIMBER PRODUCTS CO., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Federal Circuit |
Beth C. Ring, Sandler, Travis & Rosenberg, P.A., of New York, NY, argued for plaintiff-appellant. With her on the, brief were Gilbert Lee Sandler, Edward Joffe, and Arthur Purcell.
Mikki Graves Walser, Attorney, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, NY, argued for defendant-appellee. With her on the brief were Peter D. Keisler, Assistant Attorney General, Jeanne E. Davidson, Director, and Barbara S. Williams, Attorney in Charge. Of counsel on the brief was Michael W. Heydrich, Office of the Assistant Chief Counsel, United States Customs and Border Protection, of New York, NY.
Before SCHALL, Circuit Judge, PLAGER, Senior Circuit Judge, and MOORE, Circuit Judge.
This case involves the tariff classification of plywood imported into the United States from Brazil by Timber Products Co. ("Timber"). Timber appeals the final decision of the United States Court of International Trade, following a trial, that the United States Bureau of Customs and Border Protection ("Customs") correctly classified Timber's plywood entries under subheading 4412.14.30 of the Harmonized Tariff Schedule of the United States ("HTSUS").1 Timber Prods. Co. v. United States, 462 F.Supp.2d 1342, 1363 (Ct. Int'l Trade 2006) ("Timber III"). That subheading imposes a duty of 8% ad valorem. Harmonized Tariff Schedule, HTSUS 4412.14.30. Timber had urged classification under HTSUS subheading 4412.13.40, which covers "Plywood . . . [w]ith at least one outer ply of the following tropical woods: ... `Virola.'"2 Entries under that subheading are duty-free. Harmonized Tariff Schedule, HTSUS 4412.13.40.
It is undisputed that, under HTSUS 4412.13.40, the common meaning of "Virola" is limited to the botanical genus Virola spp. Before the Court of. International Trade, Timber sought to establish that "Virola" has a broader "commercial designation" within the plywood trade that encompasses many different woods, including the "Sumauma," "Faveira," "Amesclao," "Brazilian White," "White Virola (Virola spp.)" and "Edaiply Faveria" woods listed on its entry invoices.3 Timber thus sought to establish a commercial designation for "Virola" that would encompass each of the species listed on its invoices, thereby qualifying its plywood for duty-free treatment. In sustaining Customs' classification of Timber's plywood in. Timber III, the Court of International Trade held that Timber had failed to establish a commercial designation for "Virola." We affirm.
Plywood consists of three or more wooden sheets pressed together, with each sheet referred to as a "ply." One outer ply is called the "face" ply; the other outer ply is called the "backing"; the middle ply or plies comprise the "core." Although these component plies may present different species of wood, plywood is identified based on the species found on its "face" ply
Between July 1996 and December 1997, Timber imported the plywood at issue into the United States from Brazil. However, due to the particular nature of the manufacturing and exporting processes in Brazil, in which various species of wood are first mixed together and then sorted by quality rather than species, the exact botanical identity of the face ply of Timber's imported plywood was unknown. Thus, the names appearing on the entry documents for Timber's plywood imports did not necessarily reflect the botanical species on the face plies, since Timber could not determine this information. Timber's shipping and entry documents, though, listed the subject merchandise as "Sumauma (C. Pentanda) Plywood," "Amesclao (T. Burseaefolia) Plywood," "Brazilian White Rotary Cut Plywood," "White Virola Plywood," and "Edaiply Faveira (Parkia spp.)."
"Virola" refers to a botanical genus consisting of approximately 45 to 60 different species of tropical hardwood. The term "Virola spp." denotes all species of the genus Virola. "Virola" is also a commercial term used within the plywood trade. See Timber III, 462 F.Supp.2d at 1347. The terms "Sumauma," "Faveira," "Edaiply Faveira," "Amesclao," and "Brazilian White" are each trade or common terms for various species of tropical hardwood from botanical genera other than "Virola." Id.
When Timber's plywood was imported, plywood with an outer ply of tropical hardwood (such as "Virola") was classified under HTSUS subheading 4412.13.40 and therefore duty-free. Id. In contrast, plywood with an outer ply of "other" nonconiferous wood was classified under HTSUS subheading 4412.14.30 and subject to a duty of 8% ad valorem. Id.
Timber sought to classify its merchandise as "Virola" under subheading 4412.13.40 in order to receive duty-free treatment under that provision. Timber argued to Customs that there was an established commercial designation for the term "Virola" in subheading 4412.13.40 that extended beyond the botanical genus "Virola" and that encompassed various types of wood, including the types of wood listed on its entries. More specifically, Timber argued that the term "Virola" is a commercial designation in the plywood trade for a group of approximately thirty-five "near species" of tropical hardwood with similar physical properties, including density and hardness. Customs, however, disagreed and liquidated the plywood under subheading 4412.14.30, the residual provision that requires an 8% duty ad valorem. Id.
After Customs denied protests filed by Timber in accordance with 19 U.S.C. § 1514, Timber filed suit in the Court of International Trade. In due course, ruling on the parties' cross-motions for summary judgment, the court held that Customs had correctly classified the merchandise at issue under subheading 4412.14.30 rather than subheading 4412.13.40. The court did so after concluding that Timber had failed to adequately prove its asserted commercial designation for Virola. Timber Prods. Co. v. United States, 341 F.Supp.2d 1241, 1251 (Ct. Int'l Trade 2004) ("Timber I"). In reaching that conclusion, the court ruled that Timber was required to prove a commercial meaning for Virola that applied throughout every trade contemplated by the HTSUS. In other words, Timber had to demonstrate that its proposed commercial designation applied not only throughout the plywood industry, but also throughout every other trade that imported "Virola." Id. at 1248-49.
Timber appealed the decision in Timber I to this court. On appeal, we held that the Court of International Trade had erred in its commercial designation analysis by requiring evidence from beyond the plywood industry. We stated that the "relevant trade for analyzing whether a tariff term has an established commercial meaning is determined by the merchandise before the court in a particular case, not by all merchandise to which the tariff term might apply." Timber Prods. v. United States, 417 F.3d 1198, 1202 (Fed.Cir.2005) ("Timber II"). Accordingly, we vacated the decision of the Court of International Trade and remanded the case to the court with the instruction that it consider whether Timber had proven a commercial designation of "Virola" within the plywood trade alone, and whether the subject merchandise was within that commercial designation. Id. at 1203.
The law relating to commercial designation is well settled. The proper interpretation of a tariff classification provision is a question of law. Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed.Cir.1994). When a tariff term is not defined in either the HTSUS or its legislative history, the term's correct meaning is presumed to be its common meaning in the absence of evidence to the contrary. Rohm & Haas Co. v. United States, 727 F.2d 1095, 1097 (Fed.Cir.1984). One who argues that a tariff term should not be given its common meaning "must prove that `there is a different commercial meaning in existence which is definite, uniform, and general throughout the trade.'" Id. (quoting Moscahlades Bros. v. United States, 42 C.C.P.A. 78, 82 (1954)). "The concept of commercial designation `was intended to apply to cases where the trade designation is so universal and well understood that the Congress, and all the trade, are supposed to have been fully acquainted with the practice at the time the law was enacted.'" Id. (quoting Jas. Akeroyd & Co. v. United States, 15 Ct. Cust. 440, 443 (1928)). Proof of commercial designation is a question of fact that must be established in each case. Id. Finally, if the statute indicates a clear Congressional intent, this unambiguous intent must always prevail over any commercial designation. See United States v. Stone & Downer, 16 Ct. Cust. 82, 85 (1928). The burden of proof rests on the party claiming the commercial designation, which must be established by a preponderance of the evidence. See United States v. M.J. Brandenstein & Co., 17 C.C.P.A. 480, 485 (1930).
On remand, and following a trial; the Court of International Trade held that Timber had failed to prove its commercial designation for "Virola." Timber III, 462 F.Supp.2d at 1363. Although it found no clear legislative intent that would preclude a commercial designation analysis, the court determined that Timber had failed to prove its proposed commercial designation for "Virola" because the testimonial and documentary evidence revealed a commercial meaning for the term that was "general," but neither "uniform" nor "definite."
Preliminarily, the court observed that it was "not entirely clear what definition of `Virola plywood' [Timber] wishes to adopt." Timber III, 462 F.Supp.2d at 1354 n. 13. Noting what had been argued in Timber I, the court stated that it was unclear whether Timber was urging that the commercial...
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