Customs Law

Sometimes, I hate this job. Pacific Northwest Equipment is a beautifully written, very logical decision of the Court of International Trade that just leaves me thinking it came to the wrong result. It's kind of like reading Hamlet except that in the end everyone lives happily ever after. The issue is an apparently simple classification question involving intermodal shipping platforms, which the plaintiff refers to as "platform containers." I am not 100% certain, but I think we are talking about that thing in the picture. It has no sides and no top. According to NAC International Group's web site, platform containers" Platform containers are basically flat rack containers with no bulkheads or posts, just a 20' x 8' or 40' x 8' piece of steel." The second picture is from their web site, although it shows a slightly different product, which has collapsible ends. So here is the question: Is a shipping platform a "container" for purpose...

UPDATED TO ADD A VERY IMPORTANT "NOT" Dell Products v. United States raises the question of just how many batteries are part of a computer set? According to the U.S. Court of International Trade, the answer is one. The facts of this case are simple enough. One notebook computer entered the United States (via an FTZ) with two batteries. The second battery was a consumer selected option. Customs classified one battery with the computer and the second battery as a battery. Importantly, the computer only has one battery compartment, so the two batteries cannot be used simultaneously. Dell's first argument was that the second battery combined with the computer and presumably the first battery constitute a functional unit and should be classified as a whole. HTSUS Section XVI, Note 4 states that a machine comprised of a number of individual components intended to contribute to a clearly defined function, may be classified in the heading appropriate to that function. This makes...

Everything else is the same. Go about your business.

This is an interesting article about fossils from China being intercepted in Chicago and returned to China. Good catch by the Customs and Border Protection officer. Good PR for my local Field Museum of Natural History too. The article says the fossils are 525 million year old paleovertebrates. They look like trilobites to me. Props to allegedly 6 year old Brian Lean for the photo and info on trilobites.

UPDATED: It seems very strange to me that a judge would ever have to caution the defendant in a high-stakes criminal trial against tweeting from the courtroom. In my limited experience in criminal trials (as a clerk to a federal judge), they are pretty somber affairs. I can't remember a situation in which it would have been appropriate for the defendant to fire off: "Liar! I never sold her more than 10g of cocaine. What a biyotch." But, time have changed. Now that my former governor is on trial for political corruption, the admonition might be well calculated. The former first couple of Illinois have been reality TV "stars" (not sure that is the right word). He as an Apprentice to Donald Trump and she as a jungle dwelling counterpoint to Heidi Montag . Plus, he has a radio show and both have Twitter accounts. That seems like the kind of defendant who might need a reminder to shut up. Update: For a more serious take on this trial, see the commentary by my friend...

It seems that Customs and Border Protection Commissioner Bersin is coming into office with a reasonable level of agency humility. According to press reports of his first policy speech, Bersin has pledged to repair the relationship between the agency and the trade. Among other things, Bersin promises to: Talk to the trade before taking action in contrast to what was done with respect to first sale valuation. Broadening trade outreach beyond COAC Segment trade customers and focus resources on the 10% of the trade that causes 90% of the non-compliance I characterize this as a sign of humility because it seems like an acknowledgement that the trade feels it has not been well-treated and that it might be at least partially justified. On the other hand, an inside-the-beltway type might see this as pandering to Congress, which has recently been moving toward mandated trade facilitation. Personally, given the current environment, I see it as a genuine effort at fence mending. Let's hope ...

Honda of America Mfg., Inc. v. United States We talked about this case when it was before the Court of International Trade and now the Court of Appeals for the Federal Circuit has spoken. The case involves the classification of oil bolts used in cars and motorcycles. Oil bolts are specialized fasteners that include a channel to permit the flow of oil while at the same time holding things in place. Customs classified the oil bolts as screws of 7318.15.80. Honda argued that the proper classification was as vehicle parts in Chapter 87. The first problem for Honda is that Section XVII, Note 2(b) says that "parts" for purposes of Chapter 87 does not include "parts of general use." The second problem is that parts of general use is defined to include fasteners of 7318. Thus, Honda can only win if the fastener is not also described in 7318. Unfortunately, the oil bolts, despite their name, satisfy the legal definition of screws of 7318.15.80 and nothing in the tariff lan...

A funny thing happened on the way to deciding BP Products America, Inc. v. United States , the Court of International Trade had to deal with the question of what to do when the parties ask the Court to take into consideration information from Wikipedia. For anyone who has been living without electricity or access to print media for the last five years, Wikipedia is a communally edited encyclopedia of just about everything from the profound to the ridiculously mundane . Wikipedia is not Britannica in that it's content is subject to change by just about anyone. The theory is based on the concept of the wisdom of the herd. By letting everyone comment, the good information will push out the bad (a least over time). The question is whether Wikipedia is authoritative enough to constitute formal evidence in a court proceeding or for purposes of judicial notice. Much has been written on this question in legal circles. See, e.g., this article . In the context of this case, the Court was a...

In a weird example of synchronicity , while walking to work today I was listening to Brian Dunning's Skeptoid podcast discussion of relic dinosaurs such as the Ropen of New Guinea and Mokele-Mbembe of Congo. As I crossed Michigan Avenue, I found this: Unfortunately, rather than being a living T-Rex, it is a promotion for the Field Museum of Natural History, which is celebrating the anniversary of its acquisition of Sue, the T-Rex skeleton. Sue, for the record, is 65 million years old.

For those of you not following my increasingly rare tweets (www.twitter.com/customslawblog), I should note that one of my favorite issues is headed to the Supreme Court. That issue is whether it is permissible to purchase branded merchandise abroad and import it without the consent (in this case) of the copyright holder. More commonly, these cases revolve around trademarks and whether the product is materially different from the authorized U.S. product. This, however, is a copyright case. In either case, what we are talking about here is called parallel importation or the gray market. This case will clarify a gap left in the prior Supreme Court decision on the topic, which was Quality King v. L'Anza . In that case, a U.S. company sold hair-care products to a distributor in the U.K., who sold them to someone in Malta (of all places). Someone found the goods there at a bargain price and re-imported them to the U.S. where they were sold at discount shops. L'Anza, seeking to protec...

you will find my lungs. On your right is my heart. The reason for that bit of bike and charnel house humor is brought to you by the fact that I rode my bike to work for the first time yesterday. I am still feeling it today. Still, it was a nice sunny day. Pretty cold at the start of the ride and a bit windy on the way home, but overall, a pleasant commute. I did cheat a bit by driving half way, but its the thought that counts, not my ironic carbon footprint . While I am linking to reruns from this blog, I wish you all a happy Tariff of Abominations Day !

For my buddy Lowell, I am tagging this entry as "Cycling." The Court of International Trade has ruled that a hydration system worn on the back while engaged in physical activity such as cycling is, for all intents and purposes, a backpack. Let's see how it got there. The merchandise consisted of Camelbak-brand hydration systems. These clever products are liquid reservoirs and a delivery tube mounted in a backpack. Here is an example , which may not have been involved in the actual case. The thirsty cyclist or other athlete can sip fluids from the reservoir via the tube and a valve. As you can see, the hydration system also holds cargo, as would an ordinary backpack. The question in Camelbak Products v. United States, was whether for tariff classification purposes the hydration systems are "traveling bags" or "sport bags," on the one hand, or are "insulated food or beverage bags" on the other hand. Both possible classifications are in HTSUS h...

The Court of International Trade issued a couple decisions on May 6 that are worthy of note on technical grounds. In Shinyei Corp. of America, the plaintiff filed protests to challenge liquidation instructions relating to the assessment of antidumping duties. Unfortunately, that is a challenge to a decision of the U.S. Department of Commerce, not Customs and Border Protection. As a result, the customs protest was invalid and the subsequent case not properly before the Court on the basis of 28 USC 1581(a). The Court struck the complaint and gave Shinyei 30 days in which to amend the complaint, at which time it will likely assert jurisdiction on the basis of 1581(i). The other case is Great American Insurance Co. This case goes to a fundamental requirement for getting into Court to challenge a liquidation: you need to pay the duties before you ask for them back. Under 28 USC 2637(a), a civil action contesting the denial of a protest may be brought in the Court of International Trade on...

What happens if Customs and Border Protection sits on your protest for two years or more? There has been a notion among importers that the protest is automatically denied and can be challenged in Court. I think the basis for this is three fold. First, both the statute and the regulation are clear that Customs "shall" act on the protest within two years. See 19 USC sec. 1515(a) and 19 CFR sec. 174.21(a). Second, in cases where the importer requests accelerated disposition of the protest, a failure to act is deemed to be a denial. And third, there just should be some sort of consequence for Customs' failure to act. In Hitachi Home Electronics (America), Inc. v. United States , the Court of International Trade settles the question. Basically, it comes down to the fact that neither the statute nor the regulation imposes any consequence for Customs' failure to meet the two-year deadline. Absent some consequence, the law treats the apparent deadline as a directory guideline...

One of the reasons I am a lawyer and not, say, a medical doctor or research scientist is that my skill with chemistry peaked out right around learning Avogadro's Number (6.02 x 10^23). When it came to balancing equations, things started to break poorly. But, I am one of those non-scientist science geeks that likes to toss around words like "valence number" and "entropy" whenever possible. Entropy is a good one that I use as an excuse for not putting my laundry where it belongs. Despite my lack of bona fides in the field, I do help companies import and export chemicals. Hence, I was interested to see the introduction of the Safe Chemicals Act of 2010. This is essentially a re-write of the current Toxic Substances Control Act of 1976. The proposed law flips much of the responsibility for proving chemicals to be safe from the current EPA to the companies involved in the production or sale of the merchandise. Rather than regurgitate (also a nice technical term) my o...

Yes, I do exports too, although not often here. But, this is important news, so I am passing it along. In a policy speech yesterday , Defense Secretary Gates proposed a sweeping overhaul of the U.S. export control process. Under the current bifurcated system, the State Department controls the exports of munitions and the Commerce Department controls the exports of dual-use technology. According to the proposal, following a three-phase retooling, there will be a single agency charged with licensing and enforcement and a single list to check for licensing requirements. According to the White House press release, implantation will go like this: Phase I makes significant and immediate improvements to the existing system and establishes the framework necessary to create the new system, including making preparations for any legislative proposals. This phase includes implementing specific reform actions already in process and initiating review of new ones. Control List – refine, understa...

From past off-topic posts, you may know that I am a fan of the blog Cryptomundo on which Loren Coleman and others report on the science and pseudo-science (generally in the comments more than the posts) of searching for hidden animals. You know, hunting for Bigfoot, Nessie, and their ilk. One such creature is the Steller Sea Cow . Unlike other cryptids, the SSC was a species known to science. It was, however, hunted to extinction by the end of the 18th century. Despite that, there appears to be hope in some quarters that the SSC, like the alleged Congolese sauropod Mokele-Mbembe and lingering Tasmanian thylacines , may still survive in isolated populations. Why am I bringing this up here? Because everyday (more or less), I check the Federal Register for any tidbits that might be useful or interesting for my work or for you. Today, I was shocked to see a notice from the National Oceanographic and Atmospheric Administration issuing a letter of authorization for the taking of Steller S...

I have been at this blog for five years today. That outstrips the average blog life by a significant factor. I believe I read somewhere that the typical law-related blog (i.e., "blawg") has a life expectancy of three years, so I feel like I have accomplished something. I recognize (and regret) that things have been slow here on the blog. That is true for a number of reasons that do not include any waning interest on my part. I have not been doing much off-topic posting, though. That means I post when customs-related things happen. And, I tend to focus on the bigger-picture items or the items that strike me a legally significant. That's why you don't find a lot of broker and logistics related information here. I assume you guys have worked out the details of how to transfer your ISF data, for example. I am hopeful that the appointment of Commissioner Bersin will shake lose some policy changes and I am always watching the Court of International Trade and the Court of Ap...

Usually, I stay away from antidumping cases. This is, after all, the Customs Law Blog. I leave it to others to run the trade law blog. But, Sioux Honey v. Hartford is an interesting case from many perspectives despite the underlying issues having to do with trade relief. The theory in this case is that many sureties negligently issued bonds to new shippers of products subject to antidumping and countervailing duty orders and, as a result, caused injury to the domestic industry. That injury resulted, I gather, from the continued ability of the companies to export to the U.S. market at less than normal value when the importers were likely to subsequently default on the duties owed. Or something like that. As a result, the U.S. collected less in duties and distributed less to the domestic industries under the Continued Dumping and Subsidy Offset Act of 2000 (the "Byrd Amendment"). At base, the theory is that the domestic parties in a dumping case are third-party beneficiaries o...

Every litigator knows the importance of pleadings. The complaint is the document that sets the parameters of your case. If you claim someone trespassed on your property, the complain needs to say that you own the property and that the defendant was there uninvited. For years, the federal courts have held parties to a standard called "notice pleading." Under this standard, the plaintiff needs to tell the defendant enough to notify the defendant the nature of the claim against it and the basic facts supporting the claim. The notice pleading standard was intended to avoid having meritorious claims dismissed on technicalities and make sure that plaintiffs get their day in court. The pleading pendulum has swung a bit back toward a more technical style of pleading. Under a 2007 Supreme Court decision, plaintiffs need to include sufficient factual allegations to raise the right to relief above speculation even when read with the assumption that all the facts are true. So, it is not ...