Stare Decisis in my Eyes

Lately, I have been thinking a lot about stare decisis.  [Hence the title.]  Those of you who saw my panel at the Court of International Trade Judicial Conference probably know why.  It turns out that I will be discussing much the same territory at the 2009 International Trade Update at Georgetown Law (March 5-6).

I was, therefore, interested to see Outer Circle Products v. U.S., from the CIT.  The case involves the classification of zipper wraps for bottle and jugs of various sizes.  You've likely seen these at picnics or tailgate parties.  They sound similar to the foam or foam and fabric jackets you can wrap around a beer bottle to keep it cool and your hands warm and dry.  Customs and Border Protection classified the merchandise in heading 4202, the provision covering trunks, suitcases, bottle cases, etc. and similar containers.  The specific provision used at liquidation carried a 10.3% rate of duty.  The importer argued for classification as tableware, kitchenware, and other household articles of plastic in Harmonized Tariff Schedule heading 3924.

One of plaintiff's primary arguments was that this issue had been effectively decided by earlier decisions that should control.  Those cases involved merchandise designed transport beverages.  In both cases, the merchandise was held to be classifiable in 3924.

The problem for OCP is that the bottle wraps are not, as imported, capable of transporting beverages.  If these look anything like the ones I have seen, they have openings at the bottom and, of course, a zipper.  That means, in their condition as imported, they do not function as beverage holders (at least that is what the Court held).

But, my interest is in the stare decisis argument.  For family members reading along, stare decisis is the principal that cases should be decided consistent with prior decisions of the same court or a superior court in the same jurisdiction.  This makes for predictability and uniformity in treatment and is considered to be a good thing (except in most of the rest of the world).  Stare decisis gives way where the judge finds the prior case was erroneous or something has changed in the facts or law (we call that distinguishing the cases).  

In its decision, the Court of International Trade said the following:
Because the doctrine of stare decisis applies only to legal issues and not issues of fact, this Court is burdened by the previous holding in SGI only to the extent that such issues apply. The determination of whether the merchandise at issue comes within the description of either HTSUS Heading 3924 or 4202, however, is a question of fact. Therefore, the classification of soft-sided cooler bags in SGI is not stare decisis to the classification of the subject imports in this case.
 Thus, we have an object lesson in the impact of the two-step process of tariff classification.  Step one: determine the meaning of the tariff term.  That is a question of law.  Stare decisis applies. Step two: determine whether the thing falls within the scope of the tariff term as construed in step one.  That is a question a fact.  Stare decisis does not apply.

If stare decisis does not apply, what prevents me from relitigating this issue on every subsequent entry of the same merchandise.  Normally, a lawyer's answer to that would be res judicata in both its claim preclusion and issue preclusion modes.  But, the answer is not so easy in customs law.  That is because of a Supreme Court case called United States v. Stone & Downer, 274 U.S. 225 (1927).  That case let stand a rule that res judicata does not apply in classification cases.

In preparation for Georgetown, I am trying to wrap my head more firmly around Stone & Downer.  I'm pretty sure I know where I am headed on this, but I still have work to do (or have done).  So for now, all I have is that stare decisis applies, res judicata does not, but it seems clear that neither importers nor the U.S. Department of Justice is free to take repeated thwacks at the classification pinata.  More to follow.

Comments

Post a Comment

Popular posts from this blog

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl
Read more

Target on Finality

Image
In the last post , about the Federal Circuit’s very important decision on due process and allegations of evasion of antidumping duties, I made a snarky, offhand comment that the government believes “liquidation is magic.” That was in the context of the government arguing that Customs’ liquidation of entries mooted an appeal, thereby taking away the importer’s right to further judicial review. I said that knowing full well that I still needed to write this post summarizing Target Corp. v. United States in which Target made what I want to be a valid and righteous argument that Customs’ improper liquidation of entries at a favorable rate of antidumping duty prevents the Court of International Trade from ordering Customs to collect the legally applicable duties. But it turns out that while liquidation is an important legal step, in at least one unusual circumstance it is not sufficiently powerful to overcome the full force of an Article III court. Understanding this case requires a lot
Read more

CAFC: EAPA Process Really Does Violate Due Process

Image
Hot on the heels of my complaining about how the EAPA law and process is stacked against importers, the Court of Appeals for the Federal Circuit has issued an important decision that will have a major impact on how those cases work. If you are unfamiliar with evasion cases under the Enforce and Protect Act and how Customs and Border Protection handles them, go back and look at these two posts: Part 1 , Part 2. Royal Brush Manufacturing, Inc. v. United States , is the decision in an evasion case against Royal Brush involving pencils allegedly transshipped from China through the Philippines. Customs determined that there was evasion of an antidumping duty order based in part on evidence that was not disclosed to Royal. Specifically, Customs sent a representative to the facility in the Philippines to photograph the interior and provide a report. Customs refused to disclose all the photographs to Royal. Moreover, CBP's report concluded that the facility did not have sufficient capacit
Read more