Value Vinyls, Inc. v. U.S.

• Decision Date: 16 June 2009
• Docket Number: No. 2007-1562.,2007-1562.
• Citation: 568 F.3d 1374
• Parties: VALUE VINYLS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

568 F.3d 1374

VALUE VINYLS, INC., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 2007-1562.

United States Court of Appeals, Federal Circuit.

June 16, 2009.

Robert T. Givens, Givens & Johnston, PLLC, of Houston, TX, argued for plaintiff-appellee.

Marcella Powell, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, NY, argued for defendant-appellant. With her on the brief were Barbara S. Williams, Attorney in Charge, International Trade Field Office, and Jeanne E. Davidson, Director, of Washington, DC. Of counsel was Beth C. Brotman, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, NY.

Before NEWMAN and MOORE, Circuit Judges, and GETTLEMAN, District Judge.^*

Opinion for the court filed by Circuit Judge NEWMAN. Dissenting opinion filed by District Judge GETTLEMAN.

NEWMAN, Circuit Judge.

This appeal concerns the proper classification of a plastic-coated textile product imported by Value Vinyls, Inc. The question is whether the Court of International Trade correctly concluded that the imported product, whose textile component is made entirely of man-made fibers, is a "product with textile components in which man-made fibers predominate by weight over any other single textile fiber" and hence is classified under subheading 3921.90.11 of the Harmonized Tariff Schedule of the United States (HTSUS), or whether, as the government argues, this category does not include product made entirely of man-made fibers. We conclude that the Court of International Trade correctly classified the subject goods.

BACKGROUND

Value Vinyls' product is a plastic-coated fabric material that is imported in sheets, and is used in making products such as truck covers, barrier coverings, dividers, upholstery, signs, and barriers. The product is comprised of a textile layer made from a polyester fiber, coated on both sides with a layer of compact polyvinyl chloride. Value Vinyls imported the goods during 1998, 1999, and 2000, through the ports of Los Angeles, San Francisco, and Dallas. Upon import, United States Bureau of Customs and Border Protection ("Customs") (formerly known as the United States Customs Service, see 6 U.S.C. § 542 & notes) classified the goods under HTSUS subheading 3921.90.19, at a duty rate of 5.3% ad valorem. Value Vinyls protested, arguing that subheading 3921.90.11 was the proper classification, at a duty rate of 4.2% ad valorem. Customs denied the protests, and Value Vinyls challenged the classification in the Court of International Trade.

The Court of International Trade held that subheading 3921.90.11, which includes "textile components in which man-made fibers predominate by weight over any other single textile fiber," encompasses product whose textile component contains only man-made fibers. Value Vinyls, Inc. v. United States, No. 01-00896, 2007 WL 273839 (Ct. Int'l Trade Jan. 30, 2007). The court granted rehearing, and then adhered to its decision. Value Vinyls, Inc. v. United States, No. 01-00896, 2007 WL 2071535 (Ct. Int'l Trade July 20, 2007). The government appeals.

DISCUSSION

Interpretation of the tariff schedules, as a question of statutory interpretation, is reviewed as a matter of law. Degussa v. United States, 508 F.3d 1044, 1047 (Fed.Cir.2007). Whether a particular imported product fits within a correctly interpreted tariff provision is a question of fact, which we review for clear error. Id. In this case, the only question is interpretation of the tariff schedule. See General Elec. Co.-Med. Systems Group v. United States, 247 F.3d 1231, 1235 (Fed.Cir.2001) ("When there is no genuine dispute over the nature of the merchandise, the classification of the merchandise is a question of law.").

The HTSUS is organized by chapters, which encompass broad subject matter categories; headings, which set forth particular classes of merchandise; and subheadings, which further separate goods within each class. See Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). Following the General Rules of Interpretation (GRI) of the HTSUS, the classification of merchandise is determined according to the terms of the headings and subheadings and any relevant section or chapter notes. See id. at 1440.

The parties agree that the goods here at issue are within chapter 39 and under heading 3921 for "Other plates, sheets, film, foil and strip, of plastics." The dispute is between subheadings 3921.90.11 and 3921.90.19. The relevant provisions follow:

                3921        Other plates, sheets, film, foil and strip, of
                            plastics
                                                  * * *
                3921.90     Other
                                 Combined with textile materials and
                                 weighing not more than 1.492 kg/m2
                                       Products with textile components
                                       in which man-made fibers predominate
                                       by weight over any other
                                       single textile fiber
                3921.90.11                    Over 70 percent by
                                              weight of plastics .... 4.2%
                3921.90.15                    Other (229) ........... 6.5%
                3921.90.19             Other ........................ 5.3%
                

All agree that Value Vinyls' product satisfies the overall weight criterion of heading 3921.90, and the seventy percent plastics threshold of 3921.90.11. The question is whether the textile definition "man-made fibers predominate by weight over any other single textile fiber" includes textiles made entirely of man-made fibers.

The government argues that the word "predominate" requires two or more components, and thus cannot apply to a situation where only one fiber is present. Thus the government argues that Value Vinyls' goods cannot be included in 3921.90.11, and must instead be placed in the catch-all "Other" of subheading 3921.90.19. The government cites several dictionary definitions of the word "predominate" in support of this argument, but its chief support comes from an earlier decision of the Court of International Trade, which interpreted the word "predominate" in the way the government proposes, albeit for different goods in a different subheading of a different chapter of the HTSUS. In Semperit Industrial Products, Inc. v. United States, 855 F.Supp. 1292, 1298 (Ct. Int'l Trade 1994), the court held that the plaintiff's industrial conveyor belt products made with vulcanized rubber combined with textiles made entirely of man-made fibers are properly classified under HTSUS subheading 4010.91.19. The government argues that the court adopted the plain meaning of "predominate" in Semperit, and that this settled meaning must apply throughout the HTSUS, rendering it not only unnecessary but improper for the court to redefine the term for the HTSUS subheading that applies to Value Vinyls' goods.

The Court of International Trade explained that it had found the language of 3921.90.11 ambiguous, and resorted to the legislative history including the conversion history to resolve that ambiguity, and to ensure that it reached the correct result. The court also recognized that the Semperit definition did not control the different HTSUS categories here at issue, and in all events is not binding precedent. See D & L Supply Co. v. United States, 22 Ct. Int'l Trade 539, 540 (1998) ("[T]he Court notes that it is not bound by a decision of another judge of the same court, although such a decision may be persuasive precedent."). The court recognized that its ultimate obligation was "to find the correct result, by whatever procedure is best suited to the case at hand." Jarvis Clark Co. v. United States, 733 F.2d 873, 878 (Fed. Cir.1984). The court then independently analyzed the tariff provisions relevant to the Value Vinyls goods.

The Court of International Trade found the history of conversion from the corresponding class in the prior Tariff Schedule of the United States (TSUS) to be particularly enlightening as to whether Congress intended to exclude textiles made wholly of man-made fibers from the scope of HTSUS subheading 3921.90.11. The court observed that goods with textiles made wholly of man-made fibers had previously been included in the predecessor to 3921.90.11. After assessing the relevant history and other indicia of statutory intent, the court concluded that the imported goods, with textile components made wholly of man-made fibers, are within subheading 3921.90.11, and that the catch-all "Other" of subheading 3921.90.19 includes textiles with a less than predominant amount of man-made fibers.

We conclude that the Court of International Trade correctly determined the meaning of "predominate" in the context of subheading 3921.90. See generally Helvering v. Stockholms Enskilda Bank, 293 U.S. 84, 93-94, 55 S.Ct. 50, 79 L.Ed. 211 (1934) ("The intention of the lawmaker ... is to be ascertained, not by taking the word or clause in question from its setting and viewing it apart, but by considering it in connection with the context, the general purposes of the statute in which it is found, the occasion and circumstances of its use, and other appropriate tests for the ascertainment of the legislative will."). The history of conversion from the TSUS to the HTSUS makes especially clear that there was no substantive change intended in the scope of the TSUS subheading when converted to the HTSUS subheading now at issue. Whatever generality of meaning is borne by the word "predominate," the history of the relevant provisions shows that the "man-made fibers predominate by weight" provision includes textiles made wholly of man-made fibers.

The Conversion Report issued by the International Trade Commission, the cognizant agency, states that HTSUS subheading 3921.90.11 corresponds to the former TSUS subheading 355.81, which covered plastic-coated fabrics whose textile component was made "of man-made fibers." The government agrees...