There Goes My Pet Theory
The Federal Circuit has affirmed the Court of International Trade's decision in LeMans v. United States and has broken my heart in the process.
LeMans involves the tariff classification of apparel designed for motocross participants, which Customs and Border Protection classified in HTSUS Chapters 61 and 62. LeMans protested and challenged the classification in the Court of International Trade, which upheld Customs. LeMans' argument was that the merchandise should be classifiable as sports equipment in Chapter 95. I posted about the lower court decision here and even opined in the comments that I expected a reversal. I was wrong, and it has me annoyed.
In a case called Bauer-Nike, the Federal Circuit previously held that hockey pants, which include pads, are necessary, useful, and appropriate to the sport of playing hockey. As a result, consistent with the Explanatory Notes, hockey pants are sports equipment, not apparel. This was primarily by comparison to "pads" and "guards," which are listed in the Explanatory Notes to Chapter 95. Based on that, I have adopted the position that clothing adapted to a specific sport to the extent that it can be deemed appropriate, necessary, or useful to the sport would be sports equipment if not provided for more specifically elsewhere.
Instead, the Federal Circuit backed away from the Bauer-Nike. The Court held that the prior case is distinguishable because the hockey pants contain pads or guards and are, therefore, comparable to the sports equipment listed in the Explanatory Notes.
Just to be clear, I have no objection to the merchandise being prima facie classifiable as apparel in Chapters 61 and 62. My only issue is whether it is also prima facie classifiable as sports equipment. LeMans, on the other hand, did argue that the merchandise is so specialized that it cannot permissibly be classified as apparel. The Court noted the lack of protective or specialized features in the clothing and that some sports-specific apparel is specifically listed in Chapter 61 and 62 including swimwear and ski-suits. Thus, the Court found it to be classifiable with apparel.
The real trick was dealing with Bauer-Nike without disrupting the "necessary, useful, or appropriate" definition of sports equipment. To do that, the Court focused on the exemplars in the Explanatory Notes (including the aforementioned pads and guards). But, LeMans argued, there is no reason to get to the Explanatory Notes when the Federal Circuit has already defined the term, making the statute clear. To me, this is a persuasive argument that carried the day in the festive articles cases and elsewhere. Looking to the Explanatory Notes for the scope of a term the Court has already defined and for which there is no longer any ambiguity, strikes me as giving the EN's too much weight.
I still think there is life for Bauer-Nike outside of hockey. In particular, sports clothing that is protective in nature and can reasonably be considered to include pads or guards should fall within the scope of that decision. Despite that, this decision makes those arguments harder, and gives a boost to those darned Explanatory Notes.
LeMans involves the tariff classification of apparel designed for motocross participants, which Customs and Border Protection classified in HTSUS Chapters 61 and 62. LeMans protested and challenged the classification in the Court of International Trade, which upheld Customs. LeMans' argument was that the merchandise should be classifiable as sports equipment in Chapter 95. I posted about the lower court decision here and even opined in the comments that I expected a reversal. I was wrong, and it has me annoyed.
In a case called Bauer-Nike, the Federal Circuit previously held that hockey pants, which include pads, are necessary, useful, and appropriate to the sport of playing hockey. As a result, consistent with the Explanatory Notes, hockey pants are sports equipment, not apparel. This was primarily by comparison to "pads" and "guards," which are listed in the Explanatory Notes to Chapter 95. Based on that, I have adopted the position that clothing adapted to a specific sport to the extent that it can be deemed appropriate, necessary, or useful to the sport would be sports equipment if not provided for more specifically elsewhere.
Instead, the Federal Circuit backed away from the Bauer-Nike. The Court held that the prior case is distinguishable because the hockey pants contain pads or guards and are, therefore, comparable to the sports equipment listed in the Explanatory Notes.
Just to be clear, I have no objection to the merchandise being prima facie classifiable as apparel in Chapters 61 and 62. My only issue is whether it is also prima facie classifiable as sports equipment. LeMans, on the other hand, did argue that the merchandise is so specialized that it cannot permissibly be classified as apparel. The Court noted the lack of protective or specialized features in the clothing and that some sports-specific apparel is specifically listed in Chapter 61 and 62 including swimwear and ski-suits. Thus, the Court found it to be classifiable with apparel.
The real trick was dealing with Bauer-Nike without disrupting the "necessary, useful, or appropriate" definition of sports equipment. To do that, the Court focused on the exemplars in the Explanatory Notes (including the aforementioned pads and guards). But, LeMans argued, there is no reason to get to the Explanatory Notes when the Federal Circuit has already defined the term, making the statute clear. To me, this is a persuasive argument that carried the day in the festive articles cases and elsewhere. Looking to the Explanatory Notes for the scope of a term the Court has already defined and for which there is no longer any ambiguity, strikes me as giving the EN's too much weight.
I still think there is life for Bauer-Nike outside of hockey. In particular, sports clothing that is protective in nature and can reasonably be considered to include pads or guards should fall within the scope of that decision. Despite that, this decision makes those arguments harder, and gives a boost to those darned Explanatory Notes.
Comments
You would probably be interested in the decision of the Administrative Appeals TRibunal in Australia that leather motorcross uits care classifiale to Ch 95 as sprts equipment. Here is a link to the case:
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/AATA/2006/71.html?stem=0&synonyms=0&query=title(monza%20)