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.
Wednesday, January 14, 2009
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:
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.