Adc Telecommunications, Inc. v. United States

916 F.3d 1013
CourtCourt of Appeals for the Federal Circuit
DecidedFebruary 19, 2019
Docket2018-1316
StatusPublished
Cited by7 cases

This text of 916 F.3d 1013 (Adc Telecommunications, Inc. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adc Telecommunications, Inc. v. United States, 916 F.3d 1013 (Fed. Cir. 2019).

Opinion

Wallach, Circuit Judge.

Appellant ADC Telecommunications, Inc. ("ADC") sued Appellee United States ("the Government") in the U.S. Court of International Trade ("CIT"), challenging U.S. Customs and Border Protection's ("Customs") classification of imported Value Added Modules ("VAM") consisting of fiber optic telecommunications network equipment under Harmonized Tariff Schedule of the United States ("HTSUS") 1 Subheading 9013.80.90, which bears a duty rate of 4.5% ad valorem . ADC and the Government filed cross-motions for summary judgment, with ADC arguing that the subject merchandise should be classified under HTSUS Subheading 8517.62.00, which bears a duty-free rate. The CIT denied ADC's Cross-Motion, and granted the Government's Cross-Motion, holding that Customs properly classified the subject merchandise under HTSUS Subheading 9013.80.90. ADC Telecomms., Inc. v. United States , No. 13-00400, 2017 WL 4708021 , at *9 (Ct. Int'l Trade Oct. 18, 2017) ; see J.A. 12 (Judgment).

ADC appeals. We have jurisdiction pursuant to 28 U.S.C. § 1295 (a)(5) (2012). We affirm.

BACKGROUND

The subject merchandise "consists of fiber optic telecommunications network equipment" and "is included in [ADC's VAMs] product line." ADC , 2017 WL 4708021 , at *2 (citations omitted). 2 "Fiber *1016 optic telecommunications networks operate by pulses of light in the infrared wavelength range, which transmit voice, sound, images, video, e-mail messages, and other information from one point in the network to another." Id. (citations omitted). "The wavelength of the light typically used to transmit data in a fiber optic telecommunications network is approximately 1260 nanometers to 1650 nanometers; whereas human eyes can see light only in the wavelength range from about 400 nanometers to 700 nanometers," meaning "humans would not be able to see the light that is used" in the subject merchandise. Id. (citations omitted).

The VAM product line "is intended to ease installation of the articles into [ADC]'s telecommunications network operator customers' fiber optic networks" by including "connectors on the ends of the fibers, eliminating the need for telecommunications network providers to splice the fibers into their networks," and protective "housing" or "jacketing over the actual fiber itself" to prevent damage to the optical fibers "either during the installation process or from the environment during use." Id. (citations omitted). There are three categories of products in the VAM product line: (1) splitter modules, which "take individual signals from a single optical fiber and divide them, enabling that single signal to reach multiple telecommunication network subscribers," (2) monitor modules, which "allow access to signaling and control functions of a communications network in order to evaluate performance and detect problems," and (3) wavelength division multiplexer ("WDM") modules, which "permit infrared signals of two different wavelengths to travel simultaneously on a single fiber, thereby increasing the capacity." Id. (citations and footnotes omitted). The subject merchandise "is used primarily or exclusively for purposes of data transmission in a telecommunications network ... exclusively using light in the infrared wavelength range," and the merchandise does not "contain any electronic components or electrical circuit boards." Id. at *3 (citations omitted).

The CIT determined that HTSUS Heading 9013, which covers "other optical appliances and instruments, not specified or included elsewhere in this chapter," is "an apt description of [ADC's] VAMs ... because such appliances and instruments, used in conjunction with the 'optical fibers' of [HTSUS H]eading 9001 ... are plainly covered by [C]hapter 90." Id. at *6 (internal quotation marks omitted). The CIT explained that HTSUS Heading 8517, which covers "other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network)," "would appear apt insofar as it describes the sole purpose of the VAMs." Id . at *5 (internal quotation marks omitted). However, the CIT concluded that the subject merchandise "are prima facie classifiable" in HTSUS Heading 9013, and because they are included in Chapter 90, they are "therefore excluded from [C]hapter 85 pursuant to [Section XVI] Note 1(m)." Id . at *6 (italics omitted).

DISCUSSION

I. Standard of Review

We review the CIT's decision to grant summary judgment de novo, applying the same standard used by the CIT to assess Customs' classification. See Otter Prods., LLC v. United States , 834 F.3d 1369 , 1374-75 (Fed. Cir. 2016). "Although we review the decision of the CIT de novo, we give great weight to the informed opinion *1017 of the CIT and it is nearly always the starting point of our analysis." Schlumberger Tech. Corp. v. United States , 845 F.3d 1158 , 1162 (Fed. Cir. 2017) (internal quotation marks, alterations, and citation omitted). The CIT "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." USCIT R. 56(a).

The classification of merchandise involves a two-step inquiry. See LeMans , 660 F.3d at 1315. First, we ascertain the meaning of the terms within the relevant tariff provision, which is a question of law, and, second, we determine whether the subject merchandise fits within those terms, which is a question of fact. See Sigma-Tau HealthSci., Inc. v. United States

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Bluebook (online)
916 F.3d 1013, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adc-telecommunications-inc-v-united-states-cafc-2019.