Michael Simon Design, Inc. v. United States

609 F.3d 1335, 32 I.T.R.D. (BNA) 1129, 2010 U.S. App. LEXIS 12486, 2010 WL 2430955
CourtCourt of Appeals for the Federal Circuit
DecidedJune 18, 2010
Docket2009-1571
StatusPublished
Cited by9 cases

This text of 609 F.3d 1335 (Michael Simon Design, 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
Michael Simon Design, Inc. v. United States, 609 F.3d 1335, 32 I.T.R.D. (BNA) 1129, 2010 U.S. App. LEXIS 12486, 2010 WL 2430955 (Fed. Cir. 2010).

Opinion

BRYSON, Circuit Judge.

The appellants, three importers of foreign-made goods, filed actions in the Court of International Trade challenging certain modifications to the U.S. tariff schedule made by Presidential proclamation. The Court of International Trade denied the appellants’ request for judicial review of the modifications. We affirm.

I

The Harmonized Tariff Schedule of the United States (“HTSUS”) is the United States’ implementation of the 1983 International Convention on the Harmonized Commodity Description and Coding System (“the Convention”), which created a single international system of nomenclature to classify goods for customs purposes. As periodic changes are made to the international harmonized tariff system, the HTSUS is correspondingly modified pursuant to a statutory scheme established by the Omnibus Trade and Competitiveness Act of 1988. Under that system, the President may modify the HTSUS by proclamation, based on recommendations made by the International Trade Commission. Specifically, 19 U.S.C. § 3006(a) provides as follows:

The President may proclaim modifications, based on the recommendations by the Commission under section 3005 of this title, to the Harmonized Tariff Schedule if the President determines that the modifications-—
(1) are in conformity with United States obligations under the Convention; and
(2) do not run counter to the national economic interest of the United States.

The Commission assists the President by keeping the HTSUS under “continuous review” and by recommending to the President such changes as the Commission considers “necessary or appropriate” to comport with the United States’ obligations under the Convention. 19 U.S.C. § 3005(a). In formulating its recommendations, the Commission institutes a formal investigation, solicits the views of interested federal agencies and the public, *1337 and ultimately issues a final report to the President. Id. § 3005(b), (c). As a general matter, the Commission may not recommend a modification to the HTSUS unless the change is consistent with the international harmonized system under the Convention, is “consistent with sound nomenclature principles,” and “ensures substantial rate neutrality.” Id. § 3005(d)(1)(A)-(C). However, the Commission may recommend a rate change if the proposed change is “consequent to, or necessitated by, nomenclature modifications that are recommended under [section 3005].” Id. § 3005(d)(2).

In June 2004, the World Customs Organization proposed several amendments to the international harmonized system, including changes to Chapter 95, which covers “[t]oys, games and sports equipment; parts and accessories thereof.” Of particular relevance here, the addition of Note l(v) to Chapter 95 excluded apparel and other similar “articles having a utilitarian function” from duty-free classification under Chapter 95. In September 2004, the Commission instituted Investigation No. 1205-6 and invited public comment on its recommended corresponding amendments to the HTSUS.

Although the appellants did not submit any comments to the Commission in conjunction with Investigation No. 1205-6, two entities provided commentary regarding Note l(v) to Chapter 95. Those comments argued that Note l(v) conflicted with recent decisions of this court holding that certain utilitarian articles are entitled to duty-free classification as “festive articles.” In response, the Commission proposed the creation of two subheadings to maintain substantial rate neutrality for two categories of festive articles: (1) “utilitarian articles of a kind used in the home in the performance of specific religious or cultural ritual celebrations for religious or cultural holidays” and (2) “utilitarian articles in the form of a three-dimensional representation of a symbol or motif clearly associated with a specific holiday in the United States.” Those duty-free carve-outs did not encompass festive apparel of the type imported by the appellants.

In April 2006, the Commission issued its final report to the President. Among its recommendations, the report included the addition of Note l(v) and the subheadings for festive articles. Following the required 60-day legislative “lay-over period,” the President issued Proclamation 8097 adopting all of the Commission’s recommended modifications to the HTSUS. Proclamation No. 8097, 72 Fed.Reg. 453 (Jan. 4, 2007). Those modifications became effective on February 3, 2007.

The appellants filed separate but substantially identical complaints in the Court of International Trade challenging the modifications to the HTSUS. Invoking the Administrative Procedure Act (“APA”), the appellants alleged that they had been “adversely affected or aggrieved by the ITC’s decision to implement” the 2007 HTSUS modifications, and that the modifications were implemented in violation of law. They asserted that the trial court had jurisdiction to entertain the action pursuant to 28 U.S.C. § 1581(i) and that it should order that “the ITC’s amendments to HTSUS Chapter 95 Note l(v) and subheading 9817.95.05 are not in accordance with law as they violated 19 U.S.C. § 3005.”

The court consolidated the cases and then dismissed the consolidated action. The court noted that when a party invokes the general-review provisions of the APA, and no other statute provides a cause of action, the contested agency action must be “final” in order to be subject to judicial review. The final action in this case, the court concluded, was the President’s proclamation adopting the proposed HTSUS *1338 modifications, not the Commission’s recommendation. The court explained that under 19 U.S.C. § 3005 the Commission plays only an advisory role by preparing recommendations that the President is free under 19 U.S.C. § 3006 to accept or reject. Because the Commission’s actions are not final, the court held, they are not subject to APA review. The court also held that the President’s proclamation was unreviewable under the APA, because the President is not an “agency,” and thus his actions do not constitute “agency action” within the meaning of the APA. Moreover, the court noted that because the President acts at his “complete discretion” in deciding whether to adopt the Commission’s recommended modifications under 19 U.S.C. § 3006, and because the Commission’s recommendations “carry no direct consequences,” the court lacked authority to review the lawfulness of the agency’s recommendations to the President. Following the order of dismissal, the appellants took this appeal.

II

The appellants argue that the Court of International Trade erred by dismissing their actions.

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609 F.3d 1335, 32 I.T.R.D. (BNA) 1129, 2010 U.S. App. LEXIS 12486, 2010 WL 2430955, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michael-simon-design-inc-v-united-states-cafc-2010.