Eastern Diamond Products Co. v. United States

DISSENTING OPINION

Donlon, Judge:

I do not concur with my learned colleagues that plaintiff has not made at least a prima facie showing that it is an American wholesaler and qualified as such, under section 516(b), to sue on this protest.

In our consideration we have the benefit not only of briefs filed by plaintiff and defendant, but also of an extensive brief filed as amicus curiae by counsel for General Electric Company, sole producer of synthetic diamond dust in the United States.

In its brief, defendant concedes that plaintiff is a bona fide wholesaler of diamond dust, even though it is what defendant calls a “small” wholesaler. I find nothing in the statute that limits the protection of section 516(b) to big business. Defendant’s position is well taken, on *69tbe record before us, that plaintiff is a wholesaler in the United States of diamond dust. I do not find anything, on the facts or in the law, that persuades me, as the majority are persuaded, that plaintiff is not an American wholesaler of diamond dust.

The facts as to plaintiff’s business seem to me not quite accurately described by the majority, when they state that plaintiff’s witness, Mrs. Chase, “testified that the plaintiff did not sell any diamond dust which was made in the United States * * I do not so read the record. What she said was that plaintiff did not sell any synthetic diamond dust made in the United States.

Testifying for plaintiff, Mrs. Claire Chase, secretary and a director of plaintiff corporation, stated that plaintiff did not import any diamond dust; that it now sells at wholesale only natural diamond dust; that natural diamond dust is of “foreign origin”; that plaintiff also sold at wholesale synthetic diamond dust until, in 1962, the administrative change in tariff classification (which is here protested) made it unprofitable to continue selling synthetic diamond dust at wholesale; that since this administrative action, plaintiff has sold only natural diamond dust in its wholesale business; that it could not purchase domestic synthetic diamond dust because General Electric Company, the only domestic producer, distributed its product at wholesale through a sole authorized representative; and that this exclusive sales arrangement of General Electric precluded plaintiff from doing business at a profit in wholesale selling of domestic synthetic diamond dust.

Mrs. Chase stated, and reiterated, that plaintiff does not import diamond dust; and, also, that it buys its diamond dust from Engelhard Hanovia, Inc., plaintiff in the incorporated case.

In their discussion of the decision of our appeals court in Mayers, Osterwald & Muhlfeld (Inc.) v. E. F. Bendler and United States, 18 CCPA 117, T.D. 44093, the majority seem to say that the grinding and polishing, within the United States, of imported diamonds of gem quality was found to make such diamonds American goods. I agree.

What I fail to follow is the distinction the majority seem to make, both in Diamond Tool Research Co., Inc. v. United States, 55 Cust. Ct. 37, C.D. 2551, and here, when that which is produced or sold in the United States is industrial diamond particles ground or reclaimed in the United States from diamond bort of foreign origin, produced to exacting industrial user specifications and graded, offered for sale, and sold as such. To my view, although equally of foreign origin as are gem diamonds, diamond particles before us in Diamond Tool Research, supra, in Mullins Industrial Diamond Corporation v. United States, 55 Cust. Ct. 72, C.D. 2553 (protest 63/15538), also decided today, and in this case, are goods that have entered the trade and *70commerce of the United. States, so that the manufacture, production,, or selling of them at wholesale within the United States, is a business described in section 516 (b).

Mayers, as an American wholesaler of gem diamonds, would have-been without opportunity to be heard in a matter directly affecting his interest, if our appeals court had held that Congress intended that an American wholesaler of gem diamonds of “foreign origin” did not meet the jurisdictional specification of section 516 (b).

Similarly, plaintiff here is denied by the majority an opportunity to protest classification in a matter shown to affect directly his business interest, because the diamond dust he bought and sold within the United States was of “foreign origin.” We have found that the protested classification is, indeed, erroneous.

Defendant’s position is that plaintiff “cannot conceivably have any immediate ‘economic interest’ in the relief they seek” because the record establishes that their business is “the wholesaling of natural diamond grit and natural diamond dust, which plaintiffs concede-to be products in competition with synthetic diamond grit in a range of significant uses. Simply put, what plaintiffs seek in these proceedings is to remove all or practically all duty on a product which they claim is fiercely competitive with the one in which they deal,, and by no stretch of the imagination is there to be found any proximate relationship between plaintiffs’ ‘economic interest’ and such relief.” (Defendant brief, pp. 18,19; emphasis copied.)

Defendant has not rebutted the testimony of record as to the competitive damage to plaintiff’s business that results from the erroneous-classification of synthetic diamond dust. This argument on the part of defendant is unsupported by the facts of record. The evidence of economic interest is before us.

My colleagues say that “House usage of the expression ‘American manufacturer or producer’ was but a paraphrase for its statutory proposal in the words ‘a manufacturer or producer in the United States.’ And the Senate adopted the House paraphrasing in rewriting the provisions of section 529, and enlarged the expression to include the words ‘American * * * wholesaler.’ ” [Emphasis added.] This statement accords with my own opinion, as I stated it in Diamond Tool Research Co., Inc. v. United States, supra, namely, that it is the American business, whether it be that of manufacturing or producing or wholesaling, to which Congress extended the protection afforded by the provisions of section 516 (b).

I do not follow my colleagues when, proceeding from that base, they find that plaintiff has the burden of showing that, in carrying on an American business of manufacturing or producing or selling at whole*71sale, it does not use goods of “foreign origin,” or only some undefined quantity of goods of “foreign origin.” To write this requirement into section 516 (b) is judicial legislation. It distorts the very concept the majority expressed of what is a manufacturer or producer or wholesaler in the United States, namely, one engaged in such business in the United States, so as to exclude certain such manufacturers, producers, and wholesalers, without any statutory language thus delimiting the class.

The interpretation of a statute which preserves its usefulness to fulfill the legislative purpose is to be preferred to a construction which does not. United States v. Peter Kiewit Sons Company of Canada, Ltd., 195 F. Supp. 752.

I do not here discuss the reasons for my finding that the merchandise which plaintiff sells in the United States at wholesale is merchandise of the same class or kind as the protested merchandise, and that the protested classification is improper. My reasons for both findings are stated in my opinion in Diamond Tool Research Co., Inc. v. United States, supra, decided today.

I dismiss the argument of amicus, which defendant does not argue, that plaintiff, by this protest, is 'attempting to do indirectly what it cannot do directly. That is not so. There is here no indirect attempt to do something. To the contrary, this is a protest filed directly under authority of a statute.

If plaintiff is an American wholesaler of merchandise, of the same class or kind as the imported merchandise, having a section 516(b) right to protest classification, and I find that plaintiff is; and if the protested classification is erroneous, and we have found that it is; then Congress, in section 202 of the Tariff Classification Act of 1962, P.L. 87-456, 76 Stat. 72, provided that such a plaintiff should be relieved of the continuing burden of the incorrect classification.

It is a novel thought which amicus urges on us, that those who act directly in conformity with the provisions of a statute, suitable to the attainment of benefits in their situation which Congress has expressly provided, should be cut off from those benefits if in some other situation and proceeding under other statutory provisions, they would not be entitled to like relief.

I do not repeat here a discussion of cases, cited by the parties, which were discussed either in the incorporated case or in Diamond Tool Research Co., Inc., supra. All arguments and all cited authorities I have fully considered.

The protest claim to classification under paragraph 1668 should be sustained. The other protest claims should be dismissed.