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Showing posts from 2017

Recently, On Discovery

This has nothing to do with Michael Burnham or tardigrades . Discovery disputes are pretty uncommon in the Court of International Trade, and for good reason. Most CIT cases, these days, are “on the record” reviews of antidumping and countervailing duty decisions from the Department of Commerce or International Trade Commission. Those cases do not involve discovery about which to have a dispute. Most customs cases are tariff classification cases in which there is not often a real dispute about the nature of the imported product. That means the cases turn on questions of law, not fact, thereby limiting the genuine (if not perceived) need for discovery. Penalty cases area a whole different world. In penalty cases, the Department of Justice is often trying to figure out what happened and, more important, what it can prove. That means penalty cases often involve a lot of discovery requests from the government directed at the defendant and its personnel. For its part, the defendant oft

In the Zone

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At the moment, my family and I are hiding from the Chicago winter in Panama. There is no sign of winter here. There is, however, a big canal. From my current poolside seat, I can see freighters, container ships, and tankers, lined up waiting to enter the canal on the pacific side. I am told they wait can be about 24 hours or more and that the 80 km transit can take 8 hours or more. It is very cool to see this in real life. Although I have spent my entire career dealing with supply chains, I rarely need to actually see the supply chain in action. Here, it is unavoidable. So, off to the Miraflores locks for a closer look. (c) 2017 LMFriedman (c) 2017 LMFriedman Happy new year to all of you.

How the Sausage Casing is Made

Continuing my effort to catch up on 2017 customs decision from the Court of International Trade, we come to Kalle USA, Inc. v. United States. For lots of reasons, I am going to treat this carefully. First and foremost, this is a case litigated by my law firm. As far as I know, this is not final, and I will not say anything about the matter that is not consistent with the position we advanced in the CIT. On top of that, I have a case pending before the Court that raises similar issues. Therefore, this post is just the facts and just the conclusions of law. Kalle imports lay-flat tubes that are layers of plastic and textile materials. The long edge of the tube is sealed with glue. These tubes are used as casings for sausages and sometimes cheese. There are two versions of the casing at issue. For the majority of the merchandise, the textile is about 140 micrometers compared to 20 micrometers for the plastic. The textile value is € 0.96/165 cm compared to € 0.73/165 cm for the plastic.

Is a Santa Suit Apparel?

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It is Christmas Eve as I write this while on my way to warmer climes. This short vacation is a good opportunity to catch up on court decisions and blog posts. The fact that it is Christmas makes a discussion, however brief, of Rubies Costume Co. v. United States timely. This particular Rubies case involves a Santa jacket and pants. Apparently, it is a particularly well-made Santa costume. Among other characteristics, it features a zippered jacket with lining and finished sleeve cuffs. The pant legs are unfinished, but are designed to be tucked into black shoe covers, meaning they do not show. The costume sells for about $100 and includes a fabric-care label specifying that it be dry cleaned. I think this is an image of the item in question: We have been over some of this ground in previous posts. See here and here for example. The basic question is whether these garments are wearing apparel of Chapter 61 of the HTSUS or whether they are festive articles of Chapter 95. Ther

Consolidated Fibers: What the EAJA?

Consolidated Fibers, Inc. v. United States involves an importer’s motion for attorneys’ fees under the Equal Access to Justice Act (“EAJA”). And, it is a cautionary tale for importers and customs lawyers. The underlying facts are not too complicated. Consolidated entered polyester stable fiber from Korea. At the time of entry, it deposited the 7.9% estimated dumping duties that were then due. Because the producer was subject to administrative review, the liquidation of the entry was suspended. On December 10, 2007, Commerce published the results of the review and determined the assessment rate to be 48.14%. On January 14, 2008, Commerce issued instructions to Customs to liquidate the entries at the assessment rate. CBP failed to act on those instructions until May 6, 2011 when it published a bulletin notice of liquidation stating that the entry liquidated by operation of law on June 10, 2008 at the 7.9% deposit rate. But, shortly thereafter, on June 17, 2011, CBP “rate advanced” th

Bonus 2017 DiCarlo-CIT Lecture at JMLS

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The Center for International Law at the John Marshall Law School has moved the annual DiCarlo-Court of International Trade Lecture back to the fall semester. That means we are having second one in calendar 2017. The event is Tuesday, November 14. Registration and details are available here . There will be two CLE panels including one featuring ethics credit. The first panel will discuss the status of NAFTA with perspectives from the U.S., Canada, and Mexico. The second will focus on the ethical and practical issues related to conducting an corporate  internal investigation. These are great events for the Chicago-area trade community. Please come out to support the program, get CLE credit, and hear from expert speakers.

Welcome to Android & CustomsMobile

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This is going to be one of my old-school posts mostly about something other than customs law. It is about my history with mobile devices and my current heartache. Deal with it. At the end, I get to a more relevant review of the CustomsMobile app. Around 2001, I used something called a Handspring Visor with a VisorPhone attachment. It was basically a Palm Pilot with a slot for extension modules, and its was both functional and cool. When that stopped being cool, around 2004 I switched over to a Palm Treo 650. That was a great device. It was compact, had a web browser and, if I remember right, would sync with my work email and contacts. That was great until a guy I know doused it in coffee. I wrote about that in 2005. In 2006, I replaced that with a new Treo 700p, which I also wrote about . That post garnered one of my favorite comments ever, from then-New York Times tech columnist David Pogue . After that, I had brief dalliance with Android in the form of a Motorola Droi

Bankruptcy and Customs Penalties

Lawyers often have a tendency to wrongly believe that some question of particular interest to them is wholly unique and has never been addressed. The resolution of the matter, therefore, will “make new law” and put the lawyer into the legal history books. The opposite also happens. We often believe we know something to be true and assume that there must be precedent supporting whatever proposition we hope is the law. Such was the case with the impact of a bankruptcy filing in the course of a civil penalty case at the Court of International Trade. There had been an understanding among some importers and certainly among some members of the bankruptcy bar that filing for bankruptcy protection would automatically stay the penalty case pending the outcome of the bankruptcy process. The stay derives from 11 U.S.C. §362 (a), which states the following: Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application

Home Depot and Entry Hardware

Home Depot and stores if its ilk are one of the many places I go to find out how little I know about a great many things. Generally, I employ a "three step test" for home improvement projects. Under that test, if the project requires more than three process steps or three steps up a ladder, I outsource the job. That means there are vast arrays of hardware items to which I have had little or no exposure. On the other hand, I have done a lot of tariff classifications of power tools, hand tools, lawn and garden products, and home appliances (and parts thereof). Consequently, when I do wander into a Home Depot I sometimes pick up the odd lock washer or large forged hand tool and ask questions like "Is this in scope?" or "Is this really Made in USA?" The actual Home Depot company , on the other, recently asked the U.S. Court of International Trade to classify various pieces of door hardware. The merchandise consisted of packaged exterior door knobs and trim,

XYZ/Milecrest Survives Motion to Dismiss

XYZ, it turns out, is a company called Milecrest Corporation. This is the next chapter of the modern XYZ affair at the Court of International Trade. If you are not up to speed on what is happening, read my earlier posts ( here , here and here ). In this Court of International Trade case, Milecrest has asked the Court of International Trade to review the decision by Customs and Border Protection to grant Lever Brother protection to Duracell-branded batteries. Granting that protection, as explained in the earlier posts, would make it more difficult for Milecrest to import and sell Duracell batteries. To do so, they will need to be marked indicating that they were not intended for the U.S. market and that they differ materially from the authorized product. At this stage, Duracell and the United States have moved to dismiss the case arguing that Milecrest has not stated a claim for which it is entitled to relief or, in the alternative, that the Court of International Trade do

Ruling of the Week: Shark Tank and Customs

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I never make an effort to watch Shark Tank . However, for some reason I am always running across it. I always get sucked in. I think the discussions of business valuation and strategy are interesting. I am certain they are very distilled through the editing process, but hearing successful investors critique an entrepreneur's pitch is fascinating to me. Not long ago, I saw a guy pitch an iPhone case that has a monochrome screen affixed to the back. Using its own battery and Bluetooth connection to the phone, the second screen continuously displays updates, pictures, and other data. The device is called a popSlate (review) . How would you classify that? It turns out, not as a radio transmitter/receiver of 8517, which is where CBP previously classified smart watches that use Bluetooth to get updates from the phone. In this case, CBP held that the screen provides the essential character. As such, Customs classified it as an other machine or apparatus having individual func

Irwin Tools: Pliers are Still Pliers

Remember the Irwin Tools Case? That case considered whether certain locking pliers were properly classified as wrenches or as either pliers or clamps. The Court of International Trade held that the plaintiff had overcome the presumption that Customs correctly classified the pliers as wrenches. But, because Irwin had not moved for summary judgment, the Court could not give a final classification. Subsequently, Irwin moved for summary judgment and the government moved for reconsideration of the original decision. If you have not read my original post on this case, please do so. The CIT has now handed Irwin a complete victory. The gist of the prior ruling is that a wrench has a head that fits snugly over or around the head of a fastener and a single handle that can be turned to apply torque. Pliers, on the other hand, have two handles and two jaws that pivot and must be squeezed to grasp an object. A clamp has a frame of some kind and two opposing surfaces that can be adjusted by a

Uniform Practices and Treatments: Kent International

You may have noticed that I am not doing a particularly good job of blogging these days. I have no good excuse for that other than the fact that I have a job that is not blogging. But, I realize and am gratified to know that people read this blog and expect it to be up to date. I am making an effort to do that. I will have a lot of time in airplanes this week, so I’ll try and knock out some updates. Kent International, Inc. v. United (Slip Op 17-123) addresses the question of whether Customs and Border Protection had an “established and uniform practice” or a “treatment” applicable to the classification of a product known as the “WeeRide Kangaroo” child bicycle seat. We talk about this product previously here . In the phase of the case we are discussing now, the United States has moved to dismiss the counts of Kent’s complaint alleging an established uniform practice and a treatment. At this juncture, the question presented is whether Kent has alleged sufficient facts to suggest tha

Blog Contest

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I am back in the mix for the Expert Institute legal blog competition. Do me a favor and vote here .

The Great Bulb Debate

Our next case to discuss in The Gerson Company v. United States , which involves the tariff classification of artificial candles in the form of tea lights and candles. These are “artificial” because rather than being consumable candles with a wick that burns, they are translucent plastic or wax with a battery that powers an LED that simulates the appearance of a burning wick. You have probably seen these at a million restaurants that drop the tea lights into decorative holders on the table to create artificial ambiance. Customs classified these items in Heading 9405, which covers lamps and lighting fittings including search lights and spotlights, and parts thereof, not specified elsewhere. The importer’s primary argument was that the faux candles are classifiable in Heading 8543 as electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85. Specifically, the importer claimed the correct classification was as electric luminescent l

The Great Unmasking

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As we know from my previous post , XYZ is the pseudonym of a company that imports Duracell batteries through channels that are not authorized by Duracell. That makes XYZ a “parallel importer” or “gray market importer.” Putting the best possible spin on its business model, XYZ finds opportunities to bring quality products to consumers at lower prices by taking advantage of imbalances in Duracell’s global pricing. In this model, Duracell has been fully and completely compensated through its foreign sale and is trying to thwart XYZ only to keep its U.S. price high. So, XYZ is arguably the champion of the common consumer. XYZ is, of course, operating in the realm of many righteous warriors for freedom and justice who have adopted a nom de guerre or “code name” to protect their identity from evil doers. Young Bruce Wayne could only do so much to protect Gotham. Batman, on the other hand, can operate at (or well passed) the edge of legality to take on the enemies of justice. Spider-Man ha