Slip Op. 03-31
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE
AMERICAN SPORTING GOODS,
Plaintiff,
v. Court No. 95-05-00627
UNITED STATES,
Defendant.
[Judgment for plaintiff.]
Dated: March 20, 2003
Grunfeld, Desidero, Lebowitz, Silverman & Klestadt LLP (Robert B.
Silverman and Erik D. Smithweiss), for the plaintiff.
Robert D. McCallum, Jr., Assistant Attorney General, John J.
Mahon, Acting Attorney in Charge, International Trade Field
Office, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Bruce N. Stratvert), for the
defendant.
OPINION
GOLDBERG, Senior Judge: This matter is before the Court following
trial de novo. At issue is the proper classification of six
entries of certain footwear that the plaintiff calls “chula”
sandals (“sandals”). The parties agree on the basic nature of
the merchandise in dispute and that it is classifiable as
“[o]ther footwear with outer soles and uppers of rubber or
Court No. 95-05-00627 Page 2
plastics: [o]ther footwear” under heading 6402 of the 1994
Harmonized Tariff Schedule of the United States (“HTSUS”).
They part company with respect to a single issue: whether
the external surface area of the upper (“ESAU”) of the sandals is
more than 90 percent rubber or plastic. If, as the plaintiff
claims, such is the case, the parties agree that the sandals are
classifiable under subheading 6402.99.15, HTSUS, and dutiable at
a rate of 6 percent ad valorem. If, however, the ESAU is less
than or equal to 90 percent rubber or plastic, then Customs’s
classification of the sandals under subheading 6402.99.30, HTSUS,
and assessment of duty at a rate of 37.5 percent ad valorem must
stand. Upon review of the merchandise, the exhibits, the
testimony of record, and the applicable law, the Court finds in
favor of the plaintiff.
I.BACKGROUND
Prior to the dispute that gave rise to this litigation, the
plaintiff imported and distributed chula sandals manufactured
according to its design and specifications by an independent
factory in Shanghai, China.1 In May and June, 1994, the
plaintiff imported a total of six shipments comprising 65,736
1
According to the plaintiff, Customs's adverse tariff ruling
led it to modify subsequent production of chula sandals to
increase the percentage of rubber or plastic in the ESAU. This
alteration proved to be aesthetically unappealing and destroyed
the commercial viability of the product, leading the plaintiff to
cease production and importation of the sandals.
Court No. 95-05-00627 Page 3
pairs of such sandals in various sizes and styles for children,
youth, boys, men, and women, and entered them under HTSUS
6402.99.15 as “[o]ther footwear with outer soles and uppers of
rubber or plastics: [o]ther footwear: [o]ther: [h]aving uppers of
which over 90 percent of the external surface area . . . is
rubber or plastics . . . : [o]ther: [o]ther . . . .”
In June 1994, Customs tested a single sample from the first
shipment, a size 10 in one of the two men’s styles, and
determined that its ESAU was 89.7 percent rubber or plastic.
Consequently, Customs liquidated all six shipments of sandals
under subheading 6402.99.30, HTSUS, as “[o]ther footwear with
outer soles and uppers of rubber or plastics: [o]ther footwear:
[o]ther: [o]ther: [f]ootwear with open toes or open heels;
footwear of the slip-on type, that is held to the foot without
the use of laces or buckles or other fasteners . . . .”
The plaintiff protested the classification and provided
Customs with five additional sandals in other styles and sizes,
as well as analyses of the other half of each pair conducted by
an independent commercial laboratory that determined the ESAU of
each sample to be above 90 percent rubber or plastic. Customs
declined to conduct tests on these additional samples, denied the
protest on November 9, 1994, and denied a request for
reconsideration on February 13, 1995. The plaintiff then
Court No. 95-05-00627 Page 4
appealed the denial of protest to the Court of International
Trade, and the matter proceeded to bench trial.
The Court exercises jurisdiction pursuant to 28 U.S.C. §
1581(a).
II. DISCUSSION
A. Findings of Fact
Based on the evidence adduced at trial, together with the
supporting exhibits, the Court hereby adopts the following
findings of fact.
1. Production of the subject merchandise
Mr. John Thomas, vice-president of the plaintiff,2 testified
that eligibility for the lower tariff rate applicable under
subheading 6402.99.15, HTSUS, was, together with aesthetic
appeal, the primary consideration in the design of the sandals.
Before mass production of the subject merchandise began, the
plaintiff prepared a prototype pattern in a size 8, and confirmed
that it exceeded the 90 percent threshold by several percentage
points, as intended. Prototypes for the other models and sizes
were unnecessary because the sandal design was scalable, so that
the percentage of rubber and plastic in the ESAU would not change
markedly from one type of sandal to the next. The importance of
maintaining the “duty feature” was communicated to the Shanghai
2
Mr. Thomas is responsible for design, development, and quality
control, and has more than 30 years experience in product design.
His testimony was substantially unimpeached.
Court No. 95-05-00627 Page 5
factory fulfilling the plaintiff’s orders, a request familiar to
the factory from its production for other U.S. importers.
However, the production of sandals is not a matter of
scientific precision. Production variances occur because the
upper is connected to the sole by hand. The sole is mounted on a
last, and the straps of the sandal are pulled through the slots
in the sole and fastened; how slackly or tautly this is done
necessarily affects the total ESAU of the sandal. Because hand-
lasting introduces greater risk of production variances, the
plaintiff’s employees visually inspect ten percent of all pairs
in a shipment for unacceptable production variances, and examine
the entire lot if five percent of the initial pairs sampled
evince a defect.
2. Measurement of the ESAU of footwear
Customs Laboratory Method 64-01 (“Method 64-01") establishes
the proper methodology for measuring the ESAU of footwear.3
According to Method 64-01, either of two instruments is
permissible to conduct such measurements: a polar compensating
planimeter (“polar planimeter”), or an image analyzer. Because
3
The parties agree that Method 64-01 sets forth the accepted
methodology for testing the ESAU of footwear, but dispute whether
their respective testers properly adhered to it. Because the
reliability of the methodology is not in doubt, the standards for
evaluating reliability enumerated by the Supreme Court in Daubert
v. Merrell Dow, 509 U.S. 579 (1993), and by the Court of Appeals
in Libas, Ltd. v. United States, 193 F.3d 1361 (Fed. Cir. 1999),
are not relevant to the disposition of this case.
Court No. 95-05-00627 Page 6
both of these instruments are capable of measuring only two-
dimensional surfaces, the three-dimensional footwear uppers must
be reduced to two dimensions in order to be measured.
To that end, Method 64-01 directs the tester to: (1)
identify all external surfaces to be included in the
determination of the size of the upper; (2) cut off all such
external surfaces, and, if necessary, cut them again so that they
lie flat; (3) trace around the border of surfaces to be measured
in white if necessary to heighten the contrast with surrounding
surfaces; (4) lay the detached external surfaces flat and
photocopy the image4; (5) trace around the area of each material
type (e.g., plastic or textile) on the photocopied image of the
ESAU; (6) use a polar planimeter or image analyzer to measure at
least twice the relative surface area of each material; and (7)
calculate the average value for the area of each material and the
average total area of all materials, and then calculate the
relative percentage area for each material.
According to Customs's guidelines, the external surface to
be included in the determination of the area of the upper “is, in
general, the outside surface of what you see covering the foot
4
Despite the instruction in Method 64-01, strictly speaking it
is no longer necessary to produce a photocopy for use by an image
analyzer, as an image analyzer is usually paired with a
photoreceptive scanner that records a two-dimensional image of
the sample. Nevertheless, the necessity of ensuring that the
sample lies flat remains constant in either case.
Court No. 95-05-00627 Page 7
. . . when the [footwear] is worn.” Treas. Decision 93-88 (Oct.
25th, 1993). Thus, with respect to the sandals at issue here, a
tester would not include the lower, inner portion of the strap
binding the wearer’s foot in place, to the extent that it were
overlaid by (and attached by velcro to) the upper, outer portion
of that same strap. Unspecified by Method 64-01 and Customs
guidelines, however, is the extent to which the upper strap
should overlie the lower one. This issue has ramifications in
the instant case, because a portion of the lower strap is
composed of textile (i.e., not rubber or plastic) that is exposed
if the velcro on the upper strap is not matched precisely to the
velcro on the lower strap.
3. Deficiencies in Customs’s test for ESAU
In June 1994, the Customs Testing Laboratory analyzed the
sample pulled at random from the plaintiff's inital shipment of
subject merchandise. The first Customs analyst, Mr. Melvin
Barber, tested the sandal twice using an image analyzer, and
determined the ESAU to be composed of 89.3 and 90.1 percent
rubber or plastic on the first and second occasions,
respectively. Because his results were close to and above the 90
percent threshold, a different Customs tester, Mr. Brian Kennedy,
performed a third test, and obtained a result of 89.7 percent
rubber or plastic. The raw data for the three tests was
aggregated, yielding a final, official determination that the
Court No. 95-05-00627 Page 8
ESAU was 89.74 percent rubber or plastic. On the basis of this
determination, Customs liquidated the sandals under subheading
6402.99.30, HTSUS, and denied the plaintiff’s subsequent protest.
The sample and a single rather poorly-contrasted photocopy of the
sample were retained, but the individual calculations with
respect to each part of the sample were lost. Neither Mr. Barber
nor Mr. Kennedy was deposed or testified at trial. In 1997,
after the instant suit was initiated, Customs retested the
original sample five times, and obtained measurements of the ESAU
ranging from 88.2 to 89.9 percent rubber or plastic.
In preparation for the instant litigation, the plaintiff
commissioned Consumer Testing Laboratories ("CTL"),5 to examine
the sample tested by Customs as well as Customs's analyses of
that sample. Mr. Hemant Patel,6 who at that time was CTL’s
laboratory technical manager, used a polar planimeter7 to test
both the image obtained by Customs in 1994 from the original
sample, as well as photocopies of the sample that he made
5
CTL is a commercial testing laboratory that regularly tests
the ESAU of footwear for persons in the import community. The
Court of International Trade accepted CTL’s footwear ESAU
analyses in a previous case. See Hi-Tech Sports USA v. United
States, 21 CIT 212, 213, 958 F. Supp. 637, 638 (1997).
6
Mr. Patel holds a master’s degree in mechanical engineering
from the Massachusetts Institute of Technology, and has tested
footwear at CTL since the 1970's, conducting several thousands
ESAU tests. He is now a vice-president at CTL.
7
Mr. Patel used a Planex-5 planimeter, which had been tested and
shown to be accurate within -0.062 percent, well within the ±0.2
percent tolerance specified by Method 64-01.
Court No. 95-05-00627 Page 9
himself.8 He found that the ESAU of Customs's own 1994 image was
90.47 percent rubber or plastic. His calculations for each of
the three photocopies that he made of the original sample yielded
an ESAU of 92.10, 91.29, and 91.08 percent rubber or plastic,
respectively.
In addition, Mr. Patel found that approximately 0.25 square
inches of the ESAU, composed of rubber or plastic, was improperly
not severed from the outer sole of the original sample. He
calculated that including this portion in the determination of
the ESAU would increase the rubber or plastic proportion of that
area by approximately 0.05 percentage points. Dr. Doemeny
conceded Custom’s error, but stated that the magnitude of the
error would not materially alter Customs’s classification
decision.
Mr. Patel suggested that the discrepancies between Customs's
results and his own could be inferred from deficiencies in
Customs’s 1997 tests. First, Mr. Patel emphasized that an
accurate analysis requires that the samples be completely flat
when photocopied or scanned. The presence of shadowing, and the
oval shape of circles on the straps, indicated that the images
that Customs obtained in 1997 were not made when the sample was
lying completely flat. Second, he testified that the velcro
8
Mr. Patel did not test the first set of photocopies that he
made of the sample, because he found that he had not followed the
correct procedure for obtaining a proper photocopied image.
Court No. 95-05-00627 Page 10
visible on the lower strap in the 1997 images indicated that
Customs's tester had failed to "normalize" the straps--i.e., to
match velcro-to-velcro, which both he and Mr. Thomas testified
was the normal position for the straps.9
Dr. Paul Doemeny and Ms. Marian Samarin of the Customs
Service Laboratory10 both took the stand in part to refute Mr.
Patel's testimony. Ms. Samarin explained that the 1997 tests
were conducted purely in consideration of the pending litigation,
and that the Customs testers were deliberately tweaking the
sample as an experiment.11 However, neither Dr. Doemeny nor Ms.
Samarin had direct knowledge of how the 1994 image was obtained,
so neither was able to testify as to whether the sample in that
image was lying completely flat.
9
Mr. Patel testified--although his recollection of this event
was hazy--that a Customs official lecturing at a footwear
conference had stated that the normal procedure was to match
velcro to velcro. One of the two Customs officials at the
conference testified that he could not recall giving such an
instruction. Mr. Thomas explained that, from a design and
marketing standpoint, matching velcro-to-velcro produced the most
attractive appearance for the sandal.
10
Dr. Doemeny holds a Ph.D. in Chemistry and has worked as an
assistant research chemist at the Customs Testing Laboratory
since 1973. Ms. Samarin has worked at the Customs Testing
Laboratory as a full-time footwear analyst since 1990.
11
The Court gives credence to this testimony. At the same time,
it bears notice that Ms. Samarin did maintain that the original
sample was positioned completely flat for the 1997 tests. Ms.
Samarin testified that the apparent oval shape of the circles
could be shadows caused by the scanner for the image analyzer,
and Dr. Doemeny testified that the apparent shadows in the 1997
images could actually be velcro.
Court No. 95-05-00627 Page 11
In addition, both gave contradictory testimony with respect
to whether the lower and upper straps should be normalized so
that they match velcro-to-velcro. Dr. Doemeny testified that in
the initial test, the straps were matched velcro-to-velcro, but
subsequently stated that they should be laid according to their
"natural crease." Ms. Samarin testified that it was not normal
Customs practice to match velcro-on-velcro. However, in her
deposition testimony, she claimed that it was normal practice to
match velcro-to-velcro, but that to do so would not be
appropriate in this case because the strap would bulge, and that
instead the strap should be cut to eliminate such a bulge. There
was no evidence that any Customs analyst consistently followed
this or any other practice, however.
4. Plaintiff’s tests for ESAU
After learning of Customs's initial test result finding an
ESAU of 89.7 percent rubber or plastic, one Ms. Jane Y. Mo, an
employee of the plaintiff who did not testify,12 apparently
contacted the Shanghai factory to confirm that the sandals were
produced to the plaintiff's specifications including with respect
to the percentage of rubber and plastic in the ESAU. Mr. Thomas
12
The substance of Ms. Mo's actions were recounted by Mr.
Thomas. Although Customs did not object on this ground, much of
the testimony concerning Ms. Mo's actions is hearsay. The Court
recounts it here because it is useful background information and
is not central to the disposition of the case.
Court No. 95-05-00627 Page 12
also instructed Ms. Mo to select13 additional samples from the
entries for analysis by CTL.14 At CTL, Mr. Jim Bibeault15 tested
the five samples, which included sizes 9 and 11 of men’s sandals
in the same style as the initial sample tested by Customs;
ladies’ sizes 5 and 7; and a youth’s size 6. The aggregate
percentage of rubber or plastic in the ESAU of each sample was
91.7; 91.8; 91.3; 92.9; and 91.7, respectively. Mr. Bibeault's
work and results were supervised by Mr. Patel, and Mr. Bibeault
testified that he paid particular care to the necessity of
ensuring that the sample was flat before photocopying, and of
normalizing the straps.
B. Conclusions of Law
Customs’s tariff classification decisions enjoy a statutory
presumption of correctness, and the burden of proving otherwise
rests upon the party challenging such decisions. 28 U.S.C. §
2639(a). However, the presumption of correctness “does not add
evidentiary weight; it simply places the burden of proof on the
13
Mr. Thomas testified that he instructed Ms. Mo to pull, or
have the warehouse manager pull, the samples at random, and that
she would have done so, but there is no real evidence either to
confirm or refute this detail.
14
The plaintiff also sent a sample or samples for analysis to
U.S. Testing, a different commercial testing laboratory, but
there is no evidence that such an analysis was ever conducted.
15
Since June 1993, Mr. Bibeault has worked as a testing engineer
at CTL, where he peforms approximately 300 polar planimeter tests
a year.
Court No. 95-05-00627 Page 13
challenger.” Anhydrides & Chems., Inc. v. United States, 130
F.3d 1481, 1486 (Fed. Cir. 1997).16 Thus, although
the methods of weighing, measuring, and testing
merchandise used by [C]ustoms officers and the results
obtained are presumed to be correct, . . . this
presumption may be rebutted by showing that such
methods or results are erroneous. Furthermore, the
presumption does not have evidentiary value and may not
be weighted against relevant and material proof offered
by the plaintiffs. If a prima facie case is made out,
the presumption is destroyed, and the Government has
the burden of going forward with the evidence.
Aluminum Co. of America v. United States, 60 CCPA 148, 151, 477
F.2d 1396, 1398-99 (1973) (quoting with approval Consolidated
Cork Co. v. United States, 54 Cust. Ct. 83, 85 (1965)) (citations
omitted).
In Aluminum Co., the court considered the claim of a
plaintiff who argued that Customs had erred by classifying the
subject merchandise as fluorspar containing not over 97 percent
by weight calcium fluoride. The court found that the plaintiff
established its prima facie case by submitting evidence of
16
Moreover, the presumption of correctness applies only to the
factual basis of such decisions, and not to their legal
component, with respect to which the Court of International Trade
exercises de novo review. See Universal Elecs., Inc. v. United
States, 112 F.3d 488, 492 (Fed. Cir. 1997); Anhydrides, 130 F.3d
1485-1486. However, because the Court agrees with the parties
that the subject merchandise should be classified under either of
their competing proposed classifications, the disposition of this
case turns on a purely factual issue, viz., whether the ESAU of
the sandals is greater than 90 percent plastic. Cf. Anhydrides,
130 F.3d at 1482-83 ("The application of the correctly
interpreted tariff classification to a particular article is a
question of fact.").
Court No. 95-05-00627 Page 14
multiple analyses of the merchandise, conducted according to
Customs’s own established testing method, each of which showed
the calcium fluoride content to exceed 97 percent. 60 CCPA at
151, 477 F.2d at 1399. After weighing the evidence, the court
found that the preponderance of the evidence supported the
plaintiff’s proposed classification, and ruled accordingly. Id.
at 151-52; 477 F.2d at 1399-1400.
Thus, the plaintiff in a case such as this may make out a
prima facie case either by showing that Customs’s results or
methods are erroneous, Consolidated Cork, 54 Cust. Ct. at 85, or
by “submitting evidence of analysis [that the plaintiff] applied
to the merchandise which gave a result different from that
claimed by the Government.” Aluminum Co., 60 CCPA at 151, 477
F.2d at 1399. The plaintiff here has done both. The question
becomes, therefore, whether this evidence, when weighed against
that produced by Customs, is such that the plaintiff has carried
its burden of proving by a preponderance of the evidence that the
rubber or plastic content of the ESAU of the subject merchandise
is greater than 90 percent.
The Court finds that the plaintiff has met its burden, for
three related reasons. First, the plaintiff raised some doubts
about the precision of Customs’s 1994 test, by noting the minor
but still important failure to sever the upper cleanly from the
sole, and by highlighting Customs’s inability to define a
Court No. 95-05-00627 Page 15
standard practice with respect to matching the upper and lower
straps, suggesting a confused or inconsistent approach in that
regard. While it may not be fair to impute the deficiencies in
Customs’s 1997 tests to the 1994 tests (about which Customs’s
records are scant), as Customs’s witnesses and counsel expressly
disclaimed reliance on the 1997 tests, that fact points to a
second consideration. Stated plainly, the plaintiff adduced
evidence of its own test on six different samples, each of which
was determined to have an ESAU above 90 percent rubber and
plastic, whereas Customs relied only on its original,
underdocumented test on a single sample.17 More extensive
testing is particularly likely to be more reliable with respect
to merchandise such as the plaintiff’s that is subject to normal
production variances. Nor was Customs able to point to any
significant flaws in the plaintiff’s own test results.
17
In this case, Customs has persisted in a mistaken belief that
some special talismanic power or authority attaches to the
results of the test on which it based its original classification
decision. The Court must make its determination on the basis of
the record before it, comprising the evidence introduced at
trial, rather than that developed by Customs. Automatic Plastic
Molding, Inc. v. United States, Slip Op. 02-120, at 3-4 (CIT
October 5, 2002) (quoting United States v. Mead Corp., 533 U.S.
218, 233 n.16 (2001)). In light of Customs's poor custody of the
data for the initial test results and its failure to make
available the persons who conducted the 1994 tests, any other
rule would make it very difficult indeed for the plaintiff to
prevail.
Court No. 95-05-00627 Page 16
Still, the plaintiff’s evidence can hardly be called
overwhelming,18 and it might not have been enough to triumph were
it not for the fact that Customs went to trial already backed up
against its own goal line. That is to say, the third and
decisive factor in this case is that Customs's evidence that the
ESAU was equal to or less than 90 percent rubber or plastic is
inherently weakened by the fact that its own tests produced
results so close to the borderline. To be sure, there are no
ties in Customs classification decisions, and if the evidence
clearly showed that the ESAU of the subject merchandise were
89.99 or even 90.00 percent rubber or plastic, Custom’s
classification would be upheld. At the same time, the Court
believes it is incumbent upon the Customs Service to recognize
that in especially close cases--where even one of Customs's own
tests exceeds the 90 percent threshold--the agency has a special
duty to ensure that its determinations are accurate and well-
substantiated.
As the court explained in Consolidated Cork, “the final
determination in situations where the merchandise approaches the
borderline set by the tariff act depends upon the accuracy of the
18
In particular, the Court notes that the plaintiff failed to
substantiate testimony that the additional samples were pulled at
random, and failed to have more than one commercial testing
facility analyze the subject merchandise. Cf. Aluminum Co., 60
CCPA at 151, 477 F.2d at 1400 (noting with approval that multiple
analysts at multiple facilities had tested plaintiff’s
merchandise).
Court No. 95-05-00627 Page 17
methods used and their application by the chemists who performed
the tests.” 54 Cust. Ct. at 87. The court in that case scorned
the decision of Customs officials to test only 11 ounces from an
entry of 22,050 pounds of granulated cork. “For such a result to
be drawn from so small a sample, extreme niceness of weighing and
measurement is required. The slightest error would be
fantastically multiplied in the final result.” 54 Cust. Ct. at
88. The court likewise observed that the plaintiff’s experts
conducted fifteen tests compared to Customs’s single test. See
54 Cust. Ct. at 88 (“Since 15 tests were made, it is possible to
check the accuracy of the tests against each other. . . . As the
record stands, these tests are more likely to be accurate and
representative of the density of the entire shipment than the
single one made by the Government chemist.”).
The Court does recognize the practical limitations on the
resources of both the Customs Service and the import community,
and does not suggest that it is either practicable or desirable
that the testing process continue ad nauseum, particularly if it
initial results do not suggest a close case. In this instance,
however, Customs's results were close to the threshold, and the
plaintiff adduced additional evidence showing both deficiencies
in Customs's tests and the probable outcome of those tests had
they been error-free. While the plaintiff's case is not
overwhelming, it is enough to meet its burden to prove by a
Court No. 95-05-00627 Page 18
preponderance of the evidence that the ESAU of the subject
merchandise was greater than 90 percent rubber or plastic.
III. CONCLUSION
The preponderance of the record evidence establishes that
Customs erred in classifying the subject merchandise under
subheading 6402.99.30, HTSUS, and that the merchandise is
properly classifiable under 6402.99.15, HTSUS. The Court will
enter judgment accordingly.
________________________
Richard W. Goldberg
Senior Judge
Dated: March 20, 2003
New York, New York