Customs classified the merchandise as plywood of Heading 4412. Kahrs sought classification as "builders' joinery" (including assembled parquet panels) of Heading 4418.
The Federal Circuit's first step was to define "plywood" based on reliable sources and also on prior decisions of the Court. In the end, the Court found that plywood has three important characteristic. First, it consists of at least three layers. Second, the layers are arranged with the grains at right angles. Third, the layers are bonded together.
There does not appear to have been much dispute that Kahrs' merchandise meets this definition of plywood. Kahrs, however, argued that the flooring had unique features distinguishing it from plywood and making it suitable for use as flooring. In response, the Court noted that "plywood" is an eo nomine tariff description and that it includes all forms of the merchandise, including improved forms. Further, the Court would not add a use limitation into an eo nomine tariff heading except where the tariff language suggests that limitation. [Side Note: See ADM v. US, and here for where the Court found that to be the case.] A final problem for Kahrs was that the Explanatory Notes to 4412 state that:
This heading also covers plywood panels or veneered panels, used as flooring panels, and sometimes referred to as "parquet flooring." These panels have a thin veneer of wood affixed to the surface, so as to simulate a flooring panel made up of parquet trips.Based on all of this analysis, the Federal Circuit held that the merchandise was prima facie classifiable in 4412 as plywood.
Despite that conclusions, the Court needed to see whether the goods were also classifiable in 4418. According to both the Court of International Trade and the Federal Circuit, the sine qua non of parquet is that it consists of inlaid wood strips forming a geometric pattern. Apparently, the "geometric pattern" needs to be more complex than parallel flooring strips. Consequently, this was not parquet. Further, the Court found that "plywood" is a more specific description than is "builders' joinery." Consequently, even if the goods were described in both headings, then 4412 would still prevail.
As a result, the Court of International Trade's decision was affirmed.
Note: the picture is to make my father nostalgic for Boston Garden.