Sunday, May 22, 2011

Court Catch Up 3: In which Hot Surfaces Ignite

Graphite Sales v. United States is a classification case involving electric heating resistors. These are metal elements connected by wires to a power source. When electricity flows, the element heats up. If you are having trouble picturing that, look inside your toaster when it is on. We are talking about the red things, except that the resistors at issue are more compact are are used in gas appliances like stoves and clothes dryers. They heat up and ignite the gas in the appliance and serve as an alternative to a pilot light.

The classifications in play at the Court of International Trade were Heading 9613, "Cigarette lighters and other lighters, whether or not mechanical or electrical," and Heading 8516, "Electric heating resistors," among other things. The duty for 9613 is 3.9% and for 8516 is free. Now, please don't send me e-mails complaining that I am not dragging the classifications out to 10 digits. In this case, the headings are the only thing that matter. I know duty rates do not attach to headings. But, this is my summary. If you want to be picky, write your own.

Here, the parties actually stipulated to the legal conclusion that the goods are properly described as "electric heating resistors." So, they are prima facie classifiable there. However, the government points out that the products are also properly described as "other lighters, whether or not mechanical or electrical." That creates a classic classification problem, which would be perfect for a classroom example or text book, if someone were writing a text book on this. More on that later.

When a product is prima facie classifiable in two headings, the Court of International Trade turns to General Rule of Interpretation 3(a) and the rule of relative specificity. Under that rule, the description that is more specific will prevail. So, I say with my professor hat on, which is more specific: lighters or electric heating resistors? Usually, the description that covers fewer items or is harder to satisfy is considered to be more specific. Also, a use provision is generally considered to be more specific than an eo nomine description.

Here, the Court of International trade found that "electric heating resistors" is more specific. There are many kinds of lighters, but only one that is an electric heating resistor. And, according to the Court, both provisions are eo nomine tariff headings. Thus, 8516 prevails. According to the Court, the Explanatory Notes are consistent with that conclusion.

Here's my question: Isn't "lighter" a use provision? Doesn't it describe a product that is intended to create heat for the sole purpose of igniting something? The difference between a toaster heating element and a lighter is that the toaster is not intended to cause the bagel to burst into flames. That strikes me as a meaningful distinction. If "lighter" is a use provision, then it would be more specific than the eo nome description for electric heating resistors. Just a thought.

Speaking of textbooks. It turns out that someone is writing a text book on these questions. That would be me and my friend and co-author Damon Pike. Here is the pre-publication info. Watch this space for details.


Anonymous said...

Larry -

Re your final paragraph, that's a heck of a lot of information to try to pack into one book, and the spped at which things change nowadays makes me concerned that some of the info may be out of date prior to your publication date. But on the other hand, the more things seem to change, the more they actually remain pretty much the same.

Not that I'm likely to buy the book, since I still have too much Customs stuff stuck in my head that never seems to want to come out, but the press release, while offering a 10% pre=publication discount, doesn't bother to mention the price.

Good luck with the publication!

Your faithful Customs retiree.

Matt said...

This is why classification is so interesting...or at least I strangely find it interesting.

I think you take the use provision one step too far though. You say, "Doesn't it describe a product that is intended to create heat for the sole purpose of igniting something?" You may be actually describing a purpose and then a result: 1) a lighter's use is to create heat with a flame. 2) the result is igniting something, but that is more due to the composition of whatever it might be igniting.

In the same way the electric heating resistors use is to also create heat. So they both have the same 1). The next question is how; by using electric resistors, which more specifically describes the product than using a flame.

Just my thoughts, interesting post.