Deckers Corporation v. United States

752 F.3d 949, 2014 WL 1887658, 36 I.T.R.D. (BNA) 69, 2014 U.S. App. LEXIS 8868
CourtCourt of Appeals for the Federal Circuit
DecidedMay 13, 2014
Docket2013-1356
StatusPublished
Cited by50 cases

This text of 752 F.3d 949 (Deckers Corporation 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
Deckers Corporation v. United States, 752 F.3d 949, 2014 WL 1887658, 36 I.T.R.D. (BNA) 69, 2014 U.S. App. LEXIS 8868 (Fed. Cir. 2014).

Opinion

O’MALLEY, Circuit Judge.

This appeal is about the proper tariff classification categories of Teva® Sandals imported by Deckers Corporation (“Deck-ers”). Deckers appeals the final judgment and decision of the United States Court of International Trade, which determined that the Teva® Sports Sandals at issue are properly classified under subheading 6404.19.35of the Harmonized Tariff Schedule of the United States (“HTSUS”). Because both the Court of International Trade and this panel are bound by the holding of the panel in Deckers Corp. v. United States, 532 F.3d 1312 (Fed.Cir.2008) (“Deckers I”), and that holding is conclusive of the question before us, we affirm.

Background

Deckers imports a variety of Teva® Sports Sandals from Hong Kong for sale throughout the United States. 1 Deckers Corp. v. United States, 414 F.Supp.2d 1252, 1252 (Ct. Int’l Trade 2005). The Sports Sandals all have rubber or plastic soles and cloth or textile straps in the upper portion of the shoe. Deckers I, 532 F.3d at 1313. Importantly, the toe and heel sections of all of the Sports Sandals at issue are open, and the upper section of the Sport Sandals do not fully enclose the foot. Id. The Sports Sandals are shoes intended to be used for athletic pursuits, such as running, jogging, hiking, canyo-neering, and a variety of water-based activities.

The United States Customs and Border Protection Service (“Customs”) liquidated the sandals under subheading 6404.19.35, HTSUS (“subheading 6404.19.35”). Deckers, 414 F.Supp.2d at 1252. Subheading 6404.19.35 includes:

6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile material:
Footwear with outer soles of rubber or plasties:
6404.19 Other: Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners:

6404.19.35Other.

Products classified under subheading 6404.19.35 are subject to a duty of 37.5% ad valorem. Subheading 6404.19.35 is known as a “basket” provision that only becomes an appropriate subheading for classification if merchandise cannot be classified under a more specific subheading in heading 6404. E.M. Chems. v. United States, 923 F.Supp. 202, 206 (Ct. Int’l Trade 1996).

Deckers filed a protest against the subheading 6404.19.35 classification, requesting that the Sport Sandals be classified as either 6404.11.80, HTSUS, or 6404.11.90, HTSUS (“subheading 6404.11”). Deckers, *952 414 F.Supp.2d at 1252. Both subheadings 6404.11.80 and 6404.11.90 include:

6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile material: Footwear with outer soles of rubber or plastics:
6404.11 Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like;
6404.11.80Valued over $6.50 but not over $12 per pair
6404.11.90 Valued over $12 per pair

Products classified under subheading 6404.11.80 are subject to a duty of $0.90 per pair plus 20% ad valorem. Products classified under subheading 6404.11.90 are subject to a duty of 20% ad valorem. To be classified under subheadings 6404.11.80 or 6404.11.90, the merchandise must fit the description in subheading 6404.11 — they must be “sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like.”

In 2001, Deckers brought a test case before the Court of International Trade regarding the classification dispute over the Sport Sandals. Deckers Corp. v. United States, Court No. 02-00674. On November 14, 2002, Deckers also filed a summons with the Court of International Trade that would eventually mature into the pending appeal. Deckers then requested that the summons be suspended during the pendency of the test case, and the Court of International Trade granted Deckers’s motion to suspend.

On a motion for summary judgment in the test case, Deckers argued, that Additional Note 2 to HTSUS Chapter 64 defined the phrase “tennis shoes, basketball shoes, gym shoes, training shoes and the like” of subheading 6404.11. 2 Deckers, 414 F.Supp.2d at 1257-58. Specifically, Deck-ers claimed that Additional Note 2 makes clear that the named exemplars of subheading 6404.11. are interchangeable with the phrase “athletic footwear.” Id. The Court of International Trade rejected this interpretation as “tenuous.” Id. at 1258. To clarify the scope of subheading 6404.11, the Court of International Trade attempted to construe the “and the like” language of subheading 6404.11 through an ejusdem generis analysis, 3 but determined that there were outstanding factual issues to which Deckers should be entitled to respond at trial. Id. at 1258-61.

After trial, the Court of International Trade held that the Sports Sandals should be classified under subheading 6404.19.35. Deckers Corp. v. United States, 31 C.I.T. 1367, 1372 (2007). Evidence at trial suggested that the Sport Sandals could be used as athletic footwear for some sports, but the Court of International Trade concluded that the Sport Sandals could not be *953 classified under subheading 6404.11 because they were “sandals,” and not “shoes” as required by that subheading. Id. at 1373 (“Again, there is and can be little doubt that that term [shoe] does not cover the Teva®s at issue.”). The Court of International Trade noted that, while it is possible that certain forms of “human athletic activity have engendered more-propitious types of footwear,” the subheadings at issue are not written to cover the Sports Sandals and it is for Congress, not the courts, to alter the HTSUS provisions to cover such footwear. Id.

This court affirmed the Court of International Trade’s classification in Deckers I. The Deckers I panel first held that Additional Note 2 to HTSUS Heading 6404 does not subsume the listed exemplars in subheading 6404.11; Note 2 merely explains that use alone does not establish proper classification in that subheading. 532 F.3d at 1315. 4 We also clarified the Court of International Trade’s interpretation of the term “shoes.” We found that “there can be no doubt that sandals are ‘shoes,’ ” but that the Court of International Trade only noted that the Sport Sandals were not shoes as that term was intended in subheading 6404.11. Id. at 1317.

We then performed an ejusdem generis

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752 F.3d 949, 2014 WL 1887658, 36 I.T.R.D. (BNA) 69, 2014 U.S. App. LEXIS 8868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/deckers-corporation-v-united-states-cafc-2014.