Wagner Spray Tech Corp., Inc. v. U.S.

• Decision Date: 04 May 2007
• Docket Number: Slip Op. 07-64.,Court No. 04-00521.
• Citation: 493 F.Supp.2d 1265
• Parties: WAGNER SPRAY TECH CORPORATION, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

493 F.Supp.2d 1265

WAGNER SPRAY TECH CORPORATION, INC., Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 07-64.

Court No. 04-00521.

United States Court of International Trade.

May 4, 2007.

Neville Peterson LLP, (Margaret R. Polito and Curtis W. Knauss) for Plaintiff Wagner Spray Tech Corporation, Inc.

Peter D. Keisler, Assistant Attorney General; Barbara S. Williams, Attorneyin-Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Amy M. Rubin); and Chi S. Choy, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of Counsel, for Defendant United States.

OPINION

WALLACH, Judge.

I INTRODUCTION

This matter is before the court on Plaintiff's Rule 56 Motion for Summary Judgment and Defendant's Cross-Motion for Summary Judgment. Plaintiff, Wagner Spray Tech Corporation, Inc. ("Wagner") challenges the United States Customs and. Border Protection's ("Customs") classification of its imported merchandise under Heading 9603 of the Harmonized Tariff Schedule of the United States (2003) ("HTSUS") as "paint rollers" and "paint pads" at a duty rate of 7.5% or 4% ad valorem, respectively. Plaintiff contends that the subject merchandise is properly classified at lower rates or duty free under HTSUS Headings 8413 and 8424 as "[p]umps for liquid ..." and "[m]echanical appliances ... for projecting, dispersing or spraying liquids." The court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(a). Because the subject merchandise can be classified as paint rollers and pads under HTSUS Heading 9603, Plaintiff's Motion for Summary Judgment is denied and Defendant's Cross-Motion for Summary Judgment is granted.

II BACKGROUND

Plaintiff is the patent holder of component parts of a painting system designed to hold paint in a reservoir within the handle of the painting device and express the paint upon contact with the surface to be covered.¹ According to Plaintiff, the purpose of its products is "to allow painters and homeowners to apply paint or stain to a surface without being required to repeatedly bend down to fill the pad or roller with paint or stain." Complaint ¶ 12. Between November 15, 2002 and July 17, 2003 Wagner entered subject merchandise known as "Paint-N-Roll," "PaintMate Plus," "StainMate" and "Trim-It" (collectively "Wagner products") through the port of Minneapolis, Minnesota. Summons, Court No. 04-00521 (October 14, 2004); Amended Summons, Court No. 04-00521 (May 10, 2005). Customs liquidated all entries between April 11, 2003 and May 28, 2004 and classified the subject merchandise under HTSUS Heading 9603, Subheadings 9603.40.2000 or 9603.40.4020,² as "Paint Rollers" and "Paint Pads," assessing a duty of 7.5% or 4% on the merchandise depending on whether the products were classified as rollers or pads. Complaint ¶ 18; see also Defendant's Memorandum in Support of its Cross-Motion for Summary Judgment and in Opposition to Plaintiff's Motion for Summary Judgment ("Defendant's Motion") at 1. Plaintiff paid all liquidated duties, taxes and fees associated with the entries at issue. Complaint ¶ 3; Answer ¶ 3. Wagner filed a protest on June 16, 2003 contesting Customs' classification of its imported merchandise.³ Amended Summons. Customs denied Plaintiff's protest on May 26, 2004.⁴ Id. Plaintiff filed another protest concerning the importation of identical merchandise classified under HTSUS Heading 9603 on August 11, 2004, which was denied on August 18, 2004.⁵ Id. On October 14, 2004, Plaintiff timely commenced a civil action contesting Customs' denial of these protests pursuant to 28 U.S.C. § 1581(a). In Plaintiff's Motion, it asserts that the merchandise is properly classified in any of HTSUS Subheadings 8413.20.00,⁶ 8424.20, 8424.20. 10 or 8424.20.90.⁷ Both parties to this case submitted motions for summary judgment. The court may only grant a motion for summary judgment in classification cases where there is no genuine issue as to what the merchandise is, or where none of the articles' "pertinent characteristics" are in dispute. Rollerblade, Inc. v. United States, 112 F.3d 481, 483 (Fed.Cir.1997). The parties' disagreements on the issues of fact are not material to the outcome of this case and therefore do not preclude entry of a summary judgment.⁸ Oral argument was held on February 7, 2007.

III STANDARD OF REVIEW

A motion for summary judgment shall be granted if "the pleadings, depositions answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." USCIT R. 56(c). Where both parties have moved for summary judgment the court need not grant either motion because "summary judgment for 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). However, "the Court of International Trade has not hesitated to decide classification cases on summary judgment when that was appropriate." Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed.Cir.1998). In classification cases, summary judgment is appropriate where there is no underlying factual issue of what the merchandise is, because "the proper classification under which [an article] falls ... has always been treated as a question of law." Id. at 1366; see also Mead Corp. v. United States, 283 F.3d 1342, 1345-46 (Fed.Cir.2002). The court employs a two-step analysis when deciding classification cases: "the first step concerns the proper meaning of the tariff provisions at hand ... [t]he second step concerns whether the subject imports properly fall within the scope of the possible headings." Universal Elecs. Inc. v. United States, 112 F.3d 488, 491 (Fed.Cir. 1997). In addition, because Customs' factual determination is statutorily presumed to be correct, "the party challenging the classification ... bears the burden of proof." Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed.Cir.1995) (citing 28 U.S.C. § 2639(a)(1)). The court reviews de novo classification cases brought pursuant to § 1581(a) in accordance with 28 U.S.C. § 2640(a).

IV ANALYSIS

The Imported Wagner Products Were Properly Classified by Customs under the Eo Nomine Designation of HTSUS Heading 9603

A General Rules for Classification of Goods

The proper classification of merchandise entering the United States is governed by the General Rules of Interpretation ("GRI") of the Harmonized Tariff Schedules of the United States. See, e.g., Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998). GRI 1 in pertinent part states that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes." GRI 1, HTSUS. For clarification of the scope of a tariff heading, the court may refer to the Explanatory Notes ("ENs") accompanying each heading, which is the Customs Cooperation Council's official interpretation of the HTSUS. See, e.g., Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378 n. 1 (Fed.Cir.1999). Although the Explanatory Notes are not controlling "they should be consulted for guidance" and are "generally indicative of the proper interpretation of the various provisions of the [HTSUS]" and "thus useful in ascertaining the classification of merchandise under the system." H.R. Conf. Rep. No. 100-576 at 549 (1987), reprinted in Legislative History of the Omnibus Trade and Competitiveness Act of 1988 (1988); see also Carl Zeiss, 195 F.3d at 1378 n. 1.

An eo nomine provision describes goods according to "their common and commercial meaning." Carl Zeiss, 195 F.3d at 1379. A court may "rely upon its own understanding of the terms used" or consult lexicography or other reliable sources to define the tariff term. Id. In addition, "[a]n eo nomine provision that names an article without terms of limitation, absent evidence of a contrary legislative intent, is deemed to include all forms of the article." Chevron Chem. Co. v. United States, 23 CIT 500, 505, 59 F.Supp.2d 1361 (1999) (citing Nootka Packing Co. v. United States, 22 C.C.P.A. 464, 469-70 (1935)). Furthermore, "an article which has been improved or amplified but whose essential characteristic is preserved or only incidentally altered is not excluded from an unlimited eo nomine statutory designation." Casio, Inc. v. United States, 73 F.3d 1095, 1098 (Fed.Cir. 1996) (citing Robert Bosch Corp. v. United States, 63 Cust. Ct. 96, 103-04 (1969)). If classification is not resolved satisfactorily by application of GRI 1, the court will refer to the succeeding GRIs in numerical order. See, e.g., Conair Corp. v. United States, Slip Op. 05-95, 2005 WL 1941649, *2, 2005 Ct. Int'l Trade LEXIS 104, at *7 (CIT August 12, 2005).

When goods are prima facie classifiable under two or more headings, classification is resolved by application of GRI 3. GRI 3, HTSUS; see also Bauer Nike Hockey USA, Inc. v. United States, 393 F.3d 1246, 1252 (Fed.Cir.2004). GRI 3(a) provides that the more specific description of a good shall be preferred over a more general description. Id. To discern which is the more specific description "a court `looks to the provision with requirements that are more difficult to satisfy and that describe the article with the greatest degree of accuracy'" in accordance with the "relative specificity" analysis mandated by GRI 3(a). Len-Ron Mfg. Co., Inc. v. United States, 334 F.3d 1304, 1313 (Fed.Cir. 2003) (quoting Carl Zeiss, 195 F.3d at 1380). The Explanatory Notes to GRI 3(a) provide that "[a] description by name is more specific than a description by class." Explanatory Note, Rule 3(a) (2003). GRI 3(b) assumes that the article is a composite good, not encompassed by a single heading, which will be classified according to the component of the subject merchandise which imparts the...