Slip Op. 25-46
UNITED STATES COURT OF INTERNATIONAL TRADE
KEYSTONE AUTOMOTIVE OPERATIONS, INC.,
Plaintiff, Before: Jennifer Choe-Groves, Judge v. Court No. 21-00215 UNITED STATES,
Defendant.
OPINION AND ORDER
[Denying in part and granting in part Plaintiff’s Motion for Reconsideration or, in the Alternative, to Amend and Certify Order for Interlocutory Appeal and for Stay of Proceedings Pending Appeal.] Dated: April 18, 2025
Eric R. Rock, Austin J. Eighan, Lawrence R. Pilon, Michael G. Hodes, and Serhiy Kiyasov, Rock Trade Law, LLC, of Chicago, IL, for Plaintiff Keystone Automotive Operations, Inc.
Justin R. Miller, Attorney-in-Charge, International Trade Field Office, and Brandon A. Kennedy, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y. With them on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, and Patricia M. McCarthy, Director. Of Counsel was Valerie Sorensen-Clark, General Attorney, Office of the Assistant Chief Counsel for International Trade Litigation, U.S. Customs and Border Protection, of New York, N.Y. Edward F. Kenney and Alexandra Khrebtukova also appeared. Court No. 21-00215 Page 2
Choe-Groves, Judge: This case presents an issue of first impression for the
Court regarding the proper review of a Section 301 tariff exclusion provision.
Keystone Automotive Operations, Inc. (“Plaintiff” or “Keystone”) argues that the
Court should not have applied the standard tariff classification analysis of eo
nomine versus a principal use provision, but rather:
[T]he applicability of the exclusion is determined pursuant to the standard identified in the Federal Register notice published by the United States Trade Representative (“USTR”) implementing the Section 301 tariff exclusion at issue, which requires that the product qualifies for the exclusion if it is simply capable of being described by the exclusion language and does not require analysis under the General Rules of Interpretation (GRIs) and Additional Rules of Interpretation (ARIs) as eo nomine or principal use provision given that GRIs and ARIs are applied unless context otherwise requires.
Pl.’s Mot. Reconsider. or Amend & Certify Inter. Appeal & Stay (“Pl.’s
Mot.”) at 3, ECF No. 69 (emphasis omitted).
Before the Court is Plaintiff’s Motion for Reconsideration or, in the
Alternative, to Amend and Certify Order for Interlocutory Appeal and for Stay of
Proceedings Pending Appeal (“Plaintiff’s Motion”), filed in response to this
Court’s denial of cross-motions for summary judgment, Keystone Automotive
Operations, Inc. v. United States, 48 CIT __, __, 732 F. Supp. 3d 1339 (2024).
Pl.’s Mot. Defendant United States (“Defendant” or “Government”) responded in
opposition to Plaintiff’s motion for reconsideration. Def.’s Opp. Pl.’s Mot.
(“Def.’s Opp.”), ECF No. 74. Plaintiff replied in further support if its motion. Court No. 21-00215 Page 3
Pl.’s Reply Supp. Pl.’s Mot. (“Pl.’s Reply”), ECF No. 75. For the following
reasons, the Court grants in part and denies in part Plaintiff’s motion.
MOTION FOR RECONSIDERATION
I. Legal Standard
Plaintiff filed its motion for reconsideration pursuant to USCIT Rule 54(b).
Under USCIT Rule 54(b), any order or opinion “that adjudicates fewer than all the
claims or the rights and liabilities of fewer than all the parties [and] does not end
the action … may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.” USCIT R.
54(b). Rule 54(b) is appropriate because active issues still exist in this action and
no final judgment has yet been issued.1
A court may reconsider a non-final judgment pursuant to USCIT Rule 54
“‘as justice requires,’ meaning when the court determines that ‘reconsideration is
necessary under the relevant circumstances.’” Irwin Indus. Tool Co. v. United
States, 41 CIT __, __, 269 F. Supp. 3d 1294, 1300–01 (2017) (quoting Cobell v.
Norton, 355 F. Supp. 2d 531, 539 (D.D.C. 2005), aff’d, 920 F.3d 1356 (Fed. Cir.
1 Defendant opposes Plaintiff’s motion for reconsideration, claiming that Keystone attempts merely to “re-litigate” the case and relies on an argument not supported by law. Def.’s Opp. at 4–9. Defendant asserts that Keystone failed to identify a “fundamental or significant flaw” in the Court’s prior opinion as required by USCIT Rule 59. Id. As noted above, USCIT Rule 54(b) is appropriate because a final judgment has not yet been rendered in this case, and thus USCIT Rule 59 pertaining to final judgments is not appropriate here. Court No. 21-00215 Page 4
2019)). The grounds for reconsideration include “an intervening change in the
controlling law, the availability of new evidence, the need to correct a clear factual
or legal error, or the need to prevent manifest injustice.” Ford Motor Co. v. United
States, 30 CIT 1587, 1588 (2006); see also Irwin Indus. Tool, 41 CIT at __, 269 F.
Supp. 3d at 1301.
The Court may also consider whether it “previously ‘patently’
misunderstood the parties[.]” Irwin Indus. Tool Co., 41 CIT at __, 269 F. Supp. 3d
at 1301. The party filing the motion to reconsider carries the burden of proving
that “some harm, legal or at least tangible,” would accompany a denial of the
motion. Cobell, 355 F. Supp. 2d at 540. A motion for reconsideration is not an
opportunity for the losing party “to re-litigate the case or present arguments it
previously raised.” Totes-Isotoner Corp. v. United States, 32 CIT 1172, 1173, 580
F. Supp. 2d 1371, 1374 (2008).
II. Discussion
Plaintiff asserts “that this Court misunderstood or misapprehended the initial
issue presented by Plaintiff.” Pl.’s Mot. at 3. Plaintiff claims that this Court
misunderstood Plaintiff’s position as an eo nomine argument, when Plaintiff was
actually arguing that the exclusion set forth in U.S. Note 20(iii)(213) to Subchapter
III of Chapter 99 of the Harmonized Tariff Schedule of the United States
(“HTSUS”) should not be analyzed as a principal use or eo nomine provision under Court No. 21-00215 Page 5
the General Rules of Interpretation (“GRIs”) or Additional Rules of Interpretation
(“ARIs”). Id. at 8–11.
Instead, Plaintiff argues that “the applicability of the exclusion is determined
pursuant to the standard identified in the Federal Register notice published by the
United States Trade Representative (“USTR”) implementing the Section 301 tariff
exclusion at issue, which requires that the product qualifies for the exclusion if it is
simply capable of being described by the exclusion language.” Id. at 3. Plaintiff
avers that the Federal Register notice creates a “context” that “otherwise requires”
the Court to forego an eo nomine or principal use analysis under the GRIs or ARIs.
Id. at 3–4. Plaintiff states “that to the best of its understanding this argument (the
significance of the phrase ‘unless context otherwise requires’ in GRIs and ARIs
and the prevailing standard outlined in Federal Register notice) was not discussed
in the Slip Opinion.” Id. at 4.
In other words, Plaintiff argues that the Federal Register language ‘unless
context otherwise requires’ creates a new legal standard that supersedes the normal
analysis under the GRIs and ARIs usually applied by courts in cases analyzing the
applicability of HTSUS to subject merchandise.
The Court conducted a traditional eo nomine versus principal use analysis in
its prior Opinion. Keystone, 48 CIT at __, 732 F. Supp. 3d at 1348–52. The Court
notes that in Plaintiff’s response to Defendant’s cross-motion for summary Court No. 21-00215 Page 6
judgment and reply in support of its own motion for summary judgment, Plaintiff
explained that its interpretation of the Section 301 exclusion provision is “akin” to
an eo nomine provision. Pl.’s Resp. Def.’s Cross-Mot. Summ. J. & Reply Further
Supp. Pl.’s Mot. Summ. J. (“Pl.’s Resp. Br.”) at 1112, ECF Nos. 53, 54;
Keystone, 48 CIT at __,732 F. Supp. 3d at 1348 (“Thus, the Court must assess
initially whether U.S. Note 20(iii) to Subchapter III of Chapter 99 of the HTSUS is
a use provision as alleged by the Government or an eo nomine provision as alleged
by Plaintiff.”).
Because the Court did not address Plaintiff’s novel legal theory in its prior
Opinion, the Court grants in part Keystone’s motion for reconsideration to discuss
the appropriate standard of review and to address Keystone’s novel interpretative
theory.
RECONSIDERATION OF MOTION FOR SUMMARY JUDGMENT
I. Background
The Parties previously filed cross-motions for summary judgment. Pl.’s
Mot. Summ. J. (“Pl.’s Br.”), ECF Nos. 48, 49; Def.’s Cross-Mot. Summ. J. &
Mem. Law Supp. & Opp’n Pl.’s Mot. Summ. J. (“Def.’s Br.”), ECF Nos. 50, 51.
Keystone argued that its subject merchandise fell within the exclusion from the
25% ad valorem rate of duty set forth in U.S. Note 20(iii)(213) to Subchapter III of Court No. 21-00215 Page 7
Chapter 99 of the HTSUS because the subject merchandise met the description of
“side protective attachments.” Pl.’s Br. at 6, 10–18.
U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS
provides an exclusion to the 25% ad valorem rate of duty for “[t]ire carrier
attachments, roof racks, fender liners, side protective attachments, the foregoing of
steel (described in statistical reporting number 8708.29.5060)” imported from the
People’s Republic of China (“China”). U.S. Note 20(iii)(213), Subchapter III,
Chapter 99, HTSUS; see generally Notice of Product Exclusion Extensions
(“Exclusion Notice”), 85 Fed. Reg. 48,600 (USTR Aug. 11, 2020) (China’s acts,
policies, and practices related to technology transfer, intellectual property, and
innovation). In the Exclusion Notice, USTR explained that the exclusions, such as
the one set forth in U.S. Note 20(iii)(213), “are available for any product that meets
the description in the Annex, regardless of whether the importer filed an exclusion
request.” Exclusion Notice, 85 Fed. Reg. at 48,601.
The Government countered that the tariff provision is a principal use
provision. Def.’s Br. at 13–7he Government explained that the exclusion
applied only to subject merchandise with the principal use of providing protection.
Id.The Government argued that Keystone’s subject merchandise were not eligible
for the Section 301 exclusion because the bars’ primary function and use were to Court No. 21-00215 Page 8
serve as a step to assist individuals entering and exiting high road clearance
vehicles. Id. at 13–26.
In its response to the Government’s motion for summary judgment,
Keystone asserted that “neither the Exclusion Extension Notice, 85 Fed. Reg. at
48,601, nor any other relevant Federal Register Notices, dictate[d] when or how
the various exclusions must be considered as eo nomine provisions or exclusions
based on principal or actual use.” Pl.’s Resp. Br. at 12. Keystone explained “that
each exclusion stands for itself.” Id. As more plainly stated in its motion for
summary judgment, Plaintiff argued that the Court should abandon the traditional
principal use and eo nomine dichotomy and instead only analyze whether
Keystone’s subject merchandise “meets the description” of the exclusion
provision. Pl.’s Br. at 6, 1213.
In its prior Opinion, the Court began by assessing whether U.S. Note
20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS is a principal use
provision or an eo nomine provision. Keystone, 48 CIT at __, 732 F. Supp. 3d at
1348–51. The Government argued that U.S. Note 20(iii)(213) is a principal use
provision. Def.’s Br. at 13–14. Plaintiff argued that U.S. Note 20(iii)(213) is not a
principal use provision because “conditioning an exclusion on some additional
characteristic or criterion that is not part of the exclusion’s description—such as Court No. 21-00215 Page 9
principal use—will result in a limitation that is not provided for and not intended
by the drafters of the exclusion language.” Pl.’s Resp. Br. at 12.
Applying ARI 1(a), the Court held that U.S. Note 20(iii)(213), Subchapter
III, Chapter 99, HTSUS is a principal use provision and the subject merchandise
must be used for protection of the vehicle to qualify for exclusion. Keystone, 48
CIT at __, 732 F. Supp. 3d at 1349–50. The Court also analyzed whether U.S.
Note 20(iii)(213) is an eo nomine provision. Id. at 1350–51. The Court held that
the exclusion is not an eo nomine provision based on the lack of evidence on the
record showing that the term “side protective attachments” identified a product by
a specific name or a product common in commerce, including Keystone’s subject
merchandise. Id. at 1351.
The Court then analyzed whether Keystone’s subject merchandise are “side
protective attachments” under a principal use analysis. Id. at 1351–52. The Court
applied the Carborundum factors to the undisputed facts on the record and held that
the undisputed facts were insufficient for the Court to fully analyze whether the
subject merchandise were commercially fungible with the side protective
attachments described in the exclusion. Id. The Court denied the cross-motions
for summary judgment and ordered that the case proceed to a bench trial. Id. at
1353. Court No. 21-00215 Page 10
II. Applicable Law on Tariff Classification
a. Jurisdiction and Standard of Review
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(a).
The Court reviews classification cases de novo based on the record made before
the Court. 28 U.S.C. § 2640(a); Cont’l Auto. Sys., Inc. v. United States, 46 CIT
__, __, 589 F. Supp. 3d 1215, 1220 (2022); Telebrands Corp. v. United States, 36
CIT 1231, 1234, 865 F. Supp. 2d 1277, 1279–80 (2012).
The Court will 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). To raise a genuine issue of material fact, a
party cannot rest upon mere allegations or denials and must point to sufficient
supporting evidence for the claimed factual dispute to require resolution of the
differing versions of the truth at trial. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248–49 (1986); Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd.,
731 F.2d 831, 835–36 (Fed. Cir. 1984).
b. Legal Framework
The HTSUS is the statutory basis that governs the classification of
merchandise imported into the United States. See Wilton Indus., Inc. v. United
States, 741 F.3d 1263, 1266 (Fed. Cir. 2013). The HTSUS is the United States’
implementation of the international Harmonized System, which was drafted and is Court No. 21-00215 Page 11
maintained by the Harmonized System Committee (“HSC”) of the World Customs
Organization (“WCO”), formally the Customs Cooperation Council. See Michael
Simon Design, Inc. v. United States, 609 F.3d 1335, 1336 (Fed. Cir. 2010); Sharp
Microelectronics Tech., Inc. v. United States, 122 F.3d 1446, 1451 (Fed. Cir.
1997).
On August 23, 1988, Congress enacted the Omnibus Trade and
Competitiveness Act of 1988, which adopted the new tariff nomenclature the
HTSUS. Pub. L. No. 100418, 102 Stat. 1107 (1988); Marubeni Am. Corp. v.
United States, 35 F.3d 530, 532 (Fed. Cir. 1994). The United States adopted the
HTSUS pursuant to The Trade Act of 1974, 19 U.S.C. §§ 2101–2495, which
“mandated that the United States participate in the development of an international
product nomenclature known as the Harmonized System.” Marubeni Am. Corp.,
35 F.3d at 532. The HTSUS became effective on January 1, 1989. Id.
Under the Act, the United States agreed to actively review the HTSUS,
promote the uniform application of the International Convention on the
Harmonized Commodity Description and Coding System, keep its tariffs current
with amendments from the WCO, and ensure that the HTSUS keeps current with
changes in technology and changes in patterns of international trade. 19 U.S.C. §§
3005–3010; see also Michael Simon Design, Inc., 609 F.3d at 1336. Court No. 21-00215 Page 12
To facilitate its purpose of promoting a uniform interpretation of the
Harmonized System, the HSC published the Explanatory Notes to the Harmonized
System. See BASF Corp. v. United States, 35 CIT 1478, 1481 (2011). The
Explanatory Notes provide commentary on the scope of the tariff schedule
headings, as well as on the legal texts, including rules of interpretation. See H.R.
Conf. Rep. No. 100–576, 100th Cong., 2d Sess. 549 (1988) at 26–27, reprinted in
1988 U.S.C.C.A.N. 1547, 1582.
According to the HTSUS’s Preface, the legal text of the HTSUS includes all
provisions enacted by Congress, “including ‘Section and Chapter notes.’” Honda
of Am. Mfg., Inc. v. United States, 607 F.3d 771, 773 (Fed. Cir. 2010). The
Section and Chapter Notes “are not optional interpretive rules, but are statutory
law.” Park B. Smith, Ltd. v. United States, 347 F.3d 922, 926 (Fed. Cir. 2003).
Chapter 99 of the HTSUS includes U.S. Notes, which are enacted by
Congress or proclaimed by the President. See Maple Leaf Mktg., Inc. v. United
States, 45 CIT __, __, 528 F. Supp. 3d 1365, 1370 (2021) (“The President
implemented the tariffs by modifying Subchapter III of Chapter 99 of the
Harmonized Tariff Schedule of the United States (‘HTSUS’) to add a new note and
a new tariff provision under the heading 9903.80.01.”). “Unless the context
requires otherwise, the general notes and rules of interpretation, the section notes,
and the [notes to prior HTSUS chapters]” apply to Chapter 99. U.S. Note 2, Court No. 21-00215 Page 13
Subchapter III, Chapter 99, HTSUS. The exclusion at issue is incorporated into
the HTSUS as part of a note of Chapter 99, and Chapter 99 contains secondary
headings that carry additional duties for certain goods.
For decades, courts have applied the GRIs and the ARIs when determining
“[t]he proper classification of merchandise entering the United States.” Orlando
Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed. Cir. 1998); StarKist Co. v.
United States, 29 F.4th 1359, 1361 (Fed. Cir. 2022) (“The interpretation of HTSUS
provisions is undertaken through General Rules of Interpretation (“GRIs”) and the
Additional U.S. Rules of Interpretation (“ARIs”).” (citing BASF Corp. v. United
States, 482 F.3d 1324, 1325–26 (Fed. Cir. 2007)). “The application of the GRIs
and ARIs is rigid.” StarKist Co., 29 F.4th at 1361. In a case “where a party
disputes a classification under a particular subheading, [courts] apply GRI 1 as a
substantive rule of interpretation.” Id.
“There are two types of HTSUS headings, eo nomine and use provisions.”
S.C. Johnson & Son Inc. v. United States, 999 F.3d 1382, 1388 (Fed. Cir. 2021);
Apple Inc. v. United States, 964 F.3d 1087, 1093 (Fed. Cir. 2020); see Aromont
USA, Inc. v. United States, 671 F.3d 1310, 1312 (Fed. Cir. 2012); Carl Zeiss, Inc.
v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999); see also GRK Canada, Ltd.
v. United States, 761 F.3d 1354, 1361 (Fed. Cir. 2014) (Reyna, J. Dissenting) (“A
foundational tenet of tariff classification law is that eo nomine provisions are Court No. 21-00215 Page 14
distinct from use provisions and do not depend on the principal or actual use of the
imported merchandise in the United States.”). “An eo nomine provision ‘describes
an article by a specific name,’ whereas a use provision describes articles according
to their principal or actual use.” Schlumberger Tech. Corp. v. United States, 845
F.3d 1158, 1164 (Fed. Cir. 2017) (quoting Aromont, 671 F.3d at 1312).
Determining whether a tariff provision is an eo nomine provision or a use
provision is one of the first determinations that a court makes in a classification
analysis. E.g., S.C. Johnson & Son, Inc. v. United States, 42 CIT __, __, 335 F.
Supp. 3d 1294, 1299 (2018) (“The first issue concerns whether Plaintiff’s
merchandise is prima facie classifiable under HTSUS Heading 3923. The court
must assess whether HTSUS Heading 3923 is an eo nomine provision or a use
provision at the outset, as that distinction guides the analysis.”); Schlumberger
Tech. Corp., 845 F.3d at 1164 (“We first must assess whether the subject Headings
constitute eo nomine or use provisions because different rules and analysis will
apply depending upon the heading type.”).
For example, ARI 1 only applies to tariff classifications when the
classification decision is controlled by use. Primal Lite, Inc. v. United States, 182
F.3d 1362, 1363 (Fed. Cir. 1999). Then, different subsections of ARI 1 will apply
based on whether the provision is an “actual use” or “principal use” provision. Id. Court No. 21-00215 Page 15
ARI 1(a) governs “principal use” provisions, while ARI 1(b) governs “actual use”
provisions.” Id.
III. Analysis
Plaintiff contends that according to USTR’s intent as the drafter of the
Section 301 exclusion provisions, the Court should abandon the traditional
principal use and eo nomine dichotomy and instead only analyze whether
Keystone’s subject merchandise “meets the description” of the exclusion
provision. Pl.’s Br. at 6.2
At the outset, the Court observes that an eo nomine analysis of whether a
product is described by the terms of a tariff provision is identical to Keystone’s
view that the product should be analyzed as whether it “meets the description” of
the exclusion provision. There is no discernible difference between Keystone’s
proffered analysis of whether a product “meets the description” or an eo nomine
analysis. Thus, Keystone’s argument seems to be that the Court should be
precluded from performing a principal use analysis for Section 301 exclusions.
See Pl.’s Mot. at 34, 813.
Keystone avers that the GRIs and ARIs that govern tariff classification
analyses do not apply in certain contexts. Id. at 1113. Keystone hinges its
2 Notably, Plaintiff does not allege that an inherent conflict exists between the language of the exclusion and the HTSUS provision. Thus, the proper theory of interpretation is the central issue. Court No. 21-00215 Page 16
argument on two phrases, one from U.S. Note 2, Subchapter III, Chapter 99, of the
HTSUS and one from the USTR’s Exclusion Notice.
Keystone avers that the phrase “[u]nless the context requires otherwise,” in
the introduction to U.S. Note 2, Subchapter III, Chapter 99, of the HTSUS was
intended to instruct the courts that “the general notes and rules of interpretation,
the section notes, and the chapter notes” may not apply to Chapter 99’s provisions
in certain circumstances. Id. at 9. Keystone asserts that the phrase “the exclusions
are available for any product that meets the description in the Annex” found in the
Exclusion Notice published by the USTR in the Federal Register establishes a new
description-based standard of review and supplants longstanding judicial precedent
on interpreting HTSUS provisions. Id. at 10; Pl.’s Reply at 510; see Exclusion
Notice, 85 Fed. Reg. at 48,601. Keystone argues that “the applicability of the
exclusion is determined pursuant to the standard identified in the Federal Register
notice published by the United States Trade Representative (“USTR”)
implementing the Section 301 tariff exclusion at issue, which requires that the
product qualifies for the exclusion if it is simply capable of being described by the
exclusion language.” Pl.’s Mot. at 3.
Keystone avers that the Federal Register notice creates a “context” that
“otherwise requires” the Court to forego an eo nomine or principal use analysis
under the GRIs or ARIs. Id. at 34. Keystone maintains that the Exclusion Notice Court No. 21-00215 Page 17
published in the Federal Register promulgated a new description-based standard of
review for courts to apply. Id. at 9.
At no point in any of its briefing before this Court does Plaintiff cite to a
legal authority that supports its theory. Plaintiff provides no justification for this
Court to abandon long-standing precedent governing its interpretation of HTSUS
headings and subheadings due to vague language in a Federal Register notice or a
Chapter Note in the HTSUS. Plaintiff fails to support its assertion that the Court
should deviate from interpreting the HTSUS in accordance with the GRIs and
ARIs.
Keystone did not cite to any source – either legislative history or case law –
that supports its argument that the phrase “unless the context requires otherwise” in
the Federal Register established a new standard of review for courts that supplants
the applicability of the GRIs and ARIs or the traditional dichotomy of eo nomine
and use provisions. For example, Keystone asserts that “the drafters knew that
there could be circumstances where there is special language or context—whether
embedded within the HTSUS or provided in other publications relevant to the
analysis—that supersedes the use of ARI 1(a) ‘principal use’ analysis even if the
provision itself is incorporated into the HTSUS[,]” but Keystone fails to support
this assertion with any source of legal authority. Pl.’s Reply at 6. Keystone avers
that “[i]t is not the exclusion itself, but the language in the Federal Register Notice, Court No. 21-00215 Page 18
which constitutes ‘special language or context’ in this case[,]” but again Keystone
fails to support this contention with any source of legal authority. Id. at 7.
Keystone attempts to flip established precedent on its head and structure its
interpretative framework as one in which application of the GRIs, ARIs, and eo
nomine/use analysis are a last resort, and instead, argues that tariff exclusions
should be analyzed first according to “context.” Pl.’s Mot. at 34, 911. In this
case, Keystone explains that “a product qualifies for the applicable exclusion if it is
simply capable of being described by the exclusion language and does not require
analysis under GRIs and ARIs as eo nomine or principal use provision given that
GRIs and ARIs are applied unless context otherwise requires.” Id. at 9. Keystone
acknowledges its failure to support its argument with any legal source and explains
that “the standard of review of the tariff exclusion is an issue of first impression for
this Court or any other court in the United States.” Pl.’s Reply at 7.
This Court has “an independent responsibility to decide the legal issue of the
proper meaning and scope of HTSUS terms,” Warner-Lambert Co. v. United
States, 407 F.3d 1207, 1209 (Fed. Cir. 2005) (citing Rocknel Fastener, Inc. v.
United States, 267 F.3d 1354, 1358 (Fed. Cir. 2001)), and must determine
“whether the government’s classification is correct, both independently and in
comparison with the importer’s alternative.” Jarvis Clark Co. v. United States, 733
F.2d 873, 878 (Fed. Cir. 1984). As explained above, the classification of Court No. 21-00215 Page 19
merchandise under the HTSUS is governed by the principles set forth in the GRIs
and the ARIs. See Orlando Food Corp., 140 F.3d at 1439. The GRIs are applied
in numerical order, and the court may only apply subsequent GRIs if the
classification of the imported goods cannot be accomplished by reference to a
preceding GRI. Carl Zeiss, Inc., 195 F.3d at 1379; Mita Copystar Am. v. United
States, 160 F.3d 710, 712 (Fed. Cir. 1998). GRI 1 states that “for legal purposes,
classification shall be determined according to the terms of the headings and any
relative Section or Chapter Notes and, provided such headings or Notes do not
otherwise require, according to the [remaining GRIs.]” GRI 1, HTSUS.
The Court observes that Plaintiff’s argument regarding the apparent intent of
USTR as the “drafters of the exclusion language” is ambiguous at best. The
HTSUS Chapter Notes and the Federal Register notice regarding the Section 301
exclusion provisions do not state that a principal use analysis is prohibited, nor do
the provisions state that the GRIs and ARIs shall not be applied. The Section 301
exclusion provisions also do not attempt to impose any standards of review that
might apply to the U.S. Court of International Trade or the U.S. Court of Appeals
for the Federal Circuit (“CAFC”).
Moreover, the Court notes that the Government argued in its briefs and
during oral argument that the Section 301 exclusion provision at issue was a
principal use provision, Def.’s Br. at 1327; Def.’s Opp. 24, rather than Court No. 21-00215 Page 20
advocating for Keystone’s view that USTR was a “drafter” who intended for the
Court to avoid a principal use and eo nomine analysis. If USTR’s intent in drafting
the Section 301 tariff exclusion provision was to circumvent the principal use and
eo nomine analysis, then presumably the Defendant would have made this
argument before the Court as an advocate on behalf of the Government. The U.S.
Department of Justice would have been in the best position to clarify any drafting
intent held by its client agency USTR in written briefs and oral arguments before
this Court. Instead of advocating for USTR’s supposed intent that Keystone
espouses, the Government made the contrary argument that the Section 301
exclusion was a principal use provision.
The Court holds that there is no basis to depart from the standard rules of
tariff interpretation for the Section 301 exclusion provisions. No precedential
support for Keystone’s proposed standard of review exists. To the extent that
Plaintiff moves this Court to reconsider and grant Plaintiff’s motion for summary
judgment on the basis of this novel theory, Plaintiff’s motion is denied. The
Court’s prior ruling denying the cross-motions for summary judgment, holding that
U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS is a principal
use provision, and setting this case for a bench trial remains unchanged. Court No. 21-00215 Page 21
IV. Certification for Interlocutory Appeal
In the alternative, Keystone asks that the court certify the following question
for interlocutory appeal to the CAFC pursuant to 28 U.S.C. § 1292(d)(1):
Whether the language of the Federal Register notice requires that the product qualifies for the exclusion if it is simply capable of being described by the exclusion language and does not require analysis under GRIs and ARIs as eo nomine or principal use provision given that GRIs and ARIs are applied unless context otherwise requires.
Pl.’s Mot. at 1516. Before a court certifies an issue for interlocutory appeal, there
must be (1) “a controlling question of law on which there is substantial difference
of opinion; and (2) immediate appeal must materially advance the ultimate
termination of the litigation.” Totes-Isotoner Corp., 32 CIT at 1180, 580 F. Supp.
2d at 1379 (citing Volkswagen of Am., Inc. v. United States, 22 CIT 280, 284, 4 F.
Supp. 2d 1259, 1263 (1998)). Keystone must satisfy both elements for this Court
to consider certifying its question for interlocutory appeal. See Irwin Indus. Tool
Co., 269 F. Supp. 3d at 1300 (noting that “a court has the discretion to grant a
motion to reconsider brought under Rule 54(b)”). Keystone fails to satisfy this
two-part standard.
“To determine if a ‘substantial ground for difference of opinion’ exists under
§ 1292(b), courts must examine to what extent the controlling law is unclear.”
Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010). A substantial ground
for difference of opinion exists when “the circuits are in dispute on the question Court No. 21-00215 Page 22
and the court of appeals of the circuit has not spoken on the point, if complicated
questions arise under foreign law, or if novel and difficult questions of first
impression are presented.” Id. (quoting 3 Federal Procedure, Lawyers Edition §
3:212 (2010)). The losing party’s mere disagreement with the ruling is not enough.
See Totes-Isotoner Corp., 32 CIT at 1180, 580 F. Supp. 2d at 1379 (citing First
Am. Corp. v. Al–Nahyan, 948 F.Supp. 1107, 1116 (D.D.C. 1996)).
Keystone’s argument in support of its unique interpretation theory is devoid
of any conflicting law. Keystone points to no circuit split or inconsistent opinions
within this jurisdiction. While this may be an issue of first impression in the sense
that “neither this Court nor any other court in the United States has addressed the
applicability of Section 301 tariff exclusions in the past,” Pl.’s Reply at 13, this is
not the first new tariff provision or exclusion to be implemented. As noted in the
section above, Keystone has failed to cite any support for its assertion that a certain
phrase or term in any Federal Register notice can supplant the standard rules
governing interpretation of the HTSUS or that the courts must start anew in
defining standards of review each time a new tariff provision or exclusion is
implemented.
Although Keystone has failed to show that any substantial ground for
difference of opinion exists, even if Keystone’s proposed question was certified for
appeal, it would not “materially advance the ultimate termination of the litigation.” Court No. 21-00215 Page 23
Totes-Isotoner Corp., 32 CIT at 1180, 580 F. Supp. 2d at 1379. In determining
whether an interlocutory appeal would materially advance the ultimate termination
of the litigation, the court “must assess the probability that its decision, of which an
immediate appeal is sought, is in error as well as the extent to which additional
time and expense may be saved by an interlocutory appeal.” Marsuda-Rodgers
Int’l v. United States, 13 CIT 886, 887 (1989).
Keystone is proposing that this Court abandon long-standing precedent on
statutory interpretation of HTSUS provisions and apply a new interpretative
theory. If the CAFC accepted Keystone’s appeal, it would need to adopt
Keystone’s novel, unsubstantiated theory and set forth new legal standards for this
Court to apply to the facts of this case. Not only is that unlikely, but it also would
not put this case on the fast-track to termination. The CAFC would likely remand
the case back to this Court with a new legal standard, and the Court would
essentially start all over again to apply new law.
Because Keystone failed to satisfy both conditions for interlocutory appeal,
the Court denies Keystone’s motion to amend and certify for interlocutory appeal
and for stay of proceedings pending appeal. Court No. 21-00215 Page 24
CONCLUSION
Accordingly, it is hereby
ORDERED that Plaintiff’s Motion for Reconsideration, ECF No. 69, is
granted in part and denied in part, and it is further
ORDERED that Plaintiff’s Motion to Amend and Certify Order for
Interlocutory Appeal and for Stay of Proceedings Pending Appeal, ECF No. 69, is
denied, and it is further
ORDERED that a bench trial will be held on a date to be determined.
/s/ Jennifer Choe-Groves Jennifer Choe-Groves, Judge Dated: April 18, 2025 New York, New York