Such was GRK Canada. The Court of Appeals chose the use-side, it did. Told the lower court to consider use, even when to the thing a name the tariff gives. Two masters of the tariff struggled for the name-side they did, but the Court went to the use-side.
But a Chosen One there is. Bring balance to the law, the Honorable Circuit Judge Reyna did.
[I'm done, being Yoda is surprisingly exhausting.]
My point is that, in my opinion, the prior decision of the Court of Appeals for the Federal Circuit in GRK Canada, Inc. v. United States, upset the normal course of classification by inserting considerations of use into the analysis of eo nomine tariff provisions.
The case involves the tariff provisions for wood screws (7318.12) and for self-tapping screws (7318.14). Both are eo nomine classifications, though the names suggest a use. In its first ruling on this issue, the Court of International Trade focused on the physical characteristics of the merchandise and of products commonly and commercially known as wood screws and self-tapping screws. The CIT gave no weight to evidence of use in making its determination.
On appeal, the Federal Circuit held that the CIT was incorrect to essentially ignore use. The Court instructed that when an eo nomine tariff classification suggests a particular use, evidence of use consistent with that eo nomine designation is relevant and should be considered. The Federal Circuit sent the case back to the CIT for reconsideration.
On remand, the trade court took note of the evidence of use and reiterated the physical differences between wood screws and self-tapping screws. The Court then held that the proffered evidence of use, while taken into consideration, did not overcome the evidence of physical characteristics consistent with the name of the product.
Now, the Federal Circuit has decided the second appeal in this case. This time, Circuit Judge Reyna, who, along with Judge Wallach, had dissented in the previous decision to deny a rehearing of the case, drafted the opinion for the panel. I do not often name specific judges in these posts. In this case, it is relevant that Judge Reyna had dissented. It is also relevant that both Judge Reyna and Judge Wallach come from a trade background.
This time, the Federal Circuit acknowledged that the CIT had followed its instructions to consider evidence of use. The Court then held:
For the reasons set forth in the Court of International Trade’s opinion, we find these common and commercial meanings of “other wood screws” and “self-tapping screws” to be amply supported by the source material of record without further elaboration. We thus hold that (1) the common and commercial meaning of “other wood screw” under HTSUS 7318.12 is “a screw that forms its own thread by compressing surrounding material designed to fasten wood to wood or other fibrous material,” and (2) the common and commercial meaning of “self-tapping screw” under HTSUS 7318.14 is a “specially hardened screw, that meets minimum torsional strength requirements, that can cut away material to form a mating thread in non-fibrous material, and is designed to fasten nonfibrous materials, such as metal, to either fibrous or nonfibrous materials.”
Then, the Court performed a Judicial mind trick that can only be accomplished with a lifetime appointment and a high concentration midichlorians: it said, "We decline to accept the Government’s invitation to elevate the role of use in our interpretation of the eo nomine provisions at issue here." I realize the Court means "elevate the role of use above a mere consideration," but it certainly looks to me like that invitation came from the Court. The Government just accepted it.
This is a good decision. While it leaves the original GRK decision in place, it literally restores the balance to the Force, I mean to the law. Use is something the CIT (and presumably Customs and Border Protection) can look at. But, based on this decision, it seems clear that objective physical characteristics will carry the day when interpreting eo nomine tariff language.