Libas, Ltd. v. United States

Slip Op. 00 - 110

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: RICHARD W. GOLDBERG, JUDGE

LIBAS, LTD.,

Plaintiff,

v.
Court No. 95-01-00014
UNITED STATES,

Defendant.

[Upon remand, Customs’s test fails to meet the standards of
reliability articulated by the Court of Appeals for the
Federal Circuit. The goods shall be reliquidated under HTSUS
5208.42.10.]

Dated: August 29, 2000

Law Offices of Elon A. Pollack (Elon A. Pollack and Eugene P.
Sands), for plaintiff.

David W. Ogden, Assistant Attorney General; Joseph I.
Liebman, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, United States
Department of Justice; Bruce N. Stratvert, Attorney,
International Trade Field Office, Commercial Litigation
Branch, Civil Division, United States Department of Justice;
Edward Maurer, of counsel, Office of Assistant Chief Counsel,
International Trade Litigation, United States Customs Service;
for defendant.
Libas, Ltd. v. United States, No. 95-01-00014 Page 2

OPINION

GOLDBERG, Judge: This classification case involves 32

bales of cotton fabric imported from India into the United

States in 1994. The United States Customs Service (“Customs”)

tested the fabric according to its “Methodology for the

[A]nalysis of Woven Fabric to Determine Whether Fabric had

been Power-loomed or Hand-loomed” (Customs’s test). Based on

the results, Customs determined the fabric was power-loomed

and classified it under subheading 5208.42.40 of the

Harmonized Tariff Schedule of the United States (“HTSUS”),

dutiable at a rate of 11.4% ad valorem and subject to a quota

restriction.

Plaintiff, Libas, Ltd., initiated this action in

1995 to challenge Customs’s classification. Plaintiff argued

that the fabric was hand-loomed, and should therefore have

been classified under HTSUS 5208.42.10, dutiable at a rate of

6% ad valorem. Plaintiff also argued that Customs was

required to accept the government of India’s certification

that the fabric was hand-loomed.

The Court held trial in May, 1996. In its

subsequent opinion, Libas Ltd. v. United States, 20 CIT 1215,

944 F. Supp. 938 (1996), aff’d in part and vacated in part,
Libas, Ltd. v. United States, No. 95-01-00014 Page 3

193 F.3d 1361 (Fed. Cir. 1999) (“Libas II”), the Court

sustained Customs’s classification. First, the Court held

that Customs was not required to accept as dispositive the

government of India’s certification that the fabric at issue

was hand-loomed; in the Court’s view, Customs acted within its

statutory authority when it independently assessed whether the

fabric at issue was hand-loomed or power-loomed. See 20 CIT

at 1218, 944 F. Supp. at 941. Second, based on the evidence

and testimony adduced at trial, the Court determined that the

fabric was properly classified as power-loomed. See 20 CIT at

1220, 944 F. Supp. at 942.

On appeal, the United States Court of Appeals for

the Federal Circuit (“Federal Circuit”) affirmed the Court’s

determination that Customs had the authority to independently

assess and reclassify fabric that had been certified as hand-

loomed by the Indian government. See Libas II, 193 F.3d at

1364. The Federal Circuit, however, vacated and remanded the

Court’s determination that the fabric was power-loomed. See

id. at 1369.

By statute, Customs’s classification of goods is

presumed to be correct. See 28 U.S.C. § 2639 (1994). The

presumption applies to every subsidiary fact necessary to
Libas, Ltd. v. United States, No. 95-01-00014 Page 4

support classification, see Commercial Aluminum Cookware Co.

v. United States, 20 CIT 1007, 1013, 938 F. Supp. 875, 881

(1996), including the “methods of weighing, measuring, and

testing merchandise used by customs officers and the results

obtained” therefrom. Exxon Corp. v. United States, 462 F.

Supp. 378, 381 (Cust. Ct. 1978) (quoting Consolidated Cork

Corp. v. United States, 54 Cust. Ct. 83 (1965)), aff’d 607

F.2d 985 (C.C.P.A. 1979). An importer may rebut the

presumption of correctness by “showing that [Customs’s]

methods or results are erroneous.” Id. at 382 (quoting same).

“If a Prima facie case is made out, the presumption is

destroyed and the Government has the burden of going forward

with the evidence.” Id. (quoting same).

In this case, Customs’s classification of the fabric

as power-loomed and the test Customs used to arrive at that

determination were both presumed to be correct. The Federal

Circuit found that Customs’s presumption of correctness had

been overcome, however, because “Libas’ [sic] argument at

trial against the reliability of [Customs’s] test was

sufficient to rebut the statutory presumption of correctness

accorded Customs classifications.” Libas II, 193 F.3d at 1366

n.2.
Libas, Ltd. v. United States, No. 95-01-00014 Page 5

Given this posture, the Federal Circuit found

wanting the Court’s determination that Customs’s

classification was correct. In the Federal Circuit’s view,

the Court relied solely on the results of Customs’s test,

filed as part of the official record, to conclude that the

fabric was power-loomed, see id. at 1365, but “did not

ascertain whether, or explain why, the Customs test was

reliable according to appropriate standards.” Id. at 1367.

To assess the reliability of Customs’s test, the

Federal Circuit stated that the Court should have employed the

standards articulated by the United States Supreme Court in

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579

(1993). See Libas II, 193 F.3d at 1366-67. The Daubert

standards are: (1) whether a theory or technique, such as

Customs’s test, has been tested; (2) whether it has been

subjected to peer review and publication; (3) its known or

potential rate of error; and (4) whether it is generally or

widely accepted. See Daubert, 509 U.S. at 593-94.

Importantly, the Federal Circuit counseled that the Daubert

standards bear not only on whether evidence is admissible, but

also on how much or how little weight the Court should accord
Libas, Ltd. v. United States, No. 95-01-00014 Page 6

such evidence.1 See Libas II, 193 F.3d at 1366.

In light of the Daubert standard, the Federal

Circuit found the record before it “insufficient . . . to make

a determination of . . . [the] reliability [of Customs’s test]

with any confidence,” and advised that “[f]urther evidentiary

hearings are probably called for.” Id. at 1369. In accordance

with those instructions, the Court conducted a hearing to

assess the reliability of Customs’s test.

At the hearing, defendant failed to establish that

its test satisfied any of the Daubert standards cited by the

Federal Circuit. And while the Daubert factors are not a

1
The Court makes no judgment as to whether the
Federal Circuit’s determination that Daubert bears on weight
as well as admissibility is limited to cases in which, as
here, the Court is acting as the trier of fact and the
evidence at issue is already part of the record. Cf. Exxon
Corp. v. United States, 45 Fed. Cl. 581, 682 n.206 (Fed. Cl.
1999) (internal citations omitted) (“Daubert and Kumho Tire
are, of course, concerned with the admissibility of expert
opinion testimony under Federal Rule of Evidence 702. Here at
bar, in contrast, we address the sufficiency of expert opinion
testimony already in the record . . . However, our application
of the Daubert standard of evidentiary reliability is
consistent with the ‘hard look’ doctrine, under which the
district courts have a duty to evaluate the reliability of
expert opinion testimony, even after such testimony is in the
record, in order to determine whether the case should go to
the jury. Here at bar, sitting as the trier of fact, this
court thinks that it is clear beyond cavil that the Daubert
reliability standard may properly be taken into consideration
in evaluating the probative weight of expert opinion testimony
already in the record.”).
Libas, Ltd. v. United States, No. 95-01-00014 Page 7

“definitive checklist or test,” Daubert, 509 U.S. at 593,

defendant also failed to demonstrate that its test bears any

other indicia of reliability.

According to Daubert, one of the “key question[s]”

the Court should consider is whether a theory or technique

“can be (and has been) tested.” 509 U.S. at 593. Daubert

also directs the Court to “consider the known or potential

rate of error” of a theory or technique. Id. at 594. In this

case, defendant’s three expert witnesses stated that, in their

opinion, Customs’s test was a reliable method for

distinguishing between hand-loomed and power-loomed fabric.

Defendant failed, however, to demonstrate that Customs’s test

(1) measures what it purports to, and (2) does so within an

acceptable rate of error.

The Federal Circuit noted

that the reliability of the test has not
been established by the obvious and natural
method of double-blind testing. That would
involve running the Customs test on fabric,
the source of which was known in some other
way, perhaps by direct observation, and
determining whether testers who themselves
had no knowledge of whether test samples
were hand-loomed or power-loomed could
reliably distinguish power-loomed from hand-
loomed fabric within a respectable rate of
error. Testing a methodology in this manner
would satisfy two of the Daubert factors,
verification and known error rate, and for
Libas, Ltd. v. United States, No. 95-01-00014 Page 8

this reason would enhance confidence in the
reliability of the test.

Id. at 1368. When asked by the Court whether Customs’s test

could be tested in the manner described above, Dr. Irene Good,

a specialist in textile and fiber analysis and one of

defendant’s experts, answered in the affirmative. Yet,

defendant presented no evidence that Customs’s test had ever

been tested in this manner.

In fact, Dr. Desiree Koslin, one of defendant’s

experts from the trial proceedings, testified that she had

tested Customs’s test. Yet, prior to applying Customs’s test

to a given piece of fabric, she knew in advance whether that

fabric was hand-loomed or power-loomed. Because she was not

“blind” to the correct answer, the Court attaches less weight

to Dr. Koslin’s testimony that Customs’s test is a reliable

method for distinguishing between hand-loomed and power-loomed

fabrics.2 Cf. Ruffin v. Shaw Indus., Inc., 149 F.3d 294, 300

(4th Cir. 1998) (finding testimony inadmissible because, among

other things, examiner was not “blinded” to which mice were

2
Dr. Koslin also testified that her personal method
of examination “dovetails” with Customs’s test. Notably,
however, Customs did not offer evidence that Dr. Koslin’s
methodology has itself been tested for accuracy, i.e. that Dr.
Koslin is able to identify, without advance knowledge of the
correct result, fabric as hand-loomed or power-loomed within
an acceptable rate of error.
Libas, Ltd. v. United States, No. 95-01-00014 Page 9

control group members and which were experimental).

Moreover, both Dr. Koslin and Ms. Mary Carrillo,

Textile Analyst at the United States Customs Laboratory and

one of defendant’s witnesses at the trial proceedings,

testified that Customs’s test was 100% foolproof and thus had

an error rate of zero. Ms. Carrillo further testified that

Customs’s test is completely error-free because multiple

analysts, each with years of experience and training, apply it

to each sample. Ms. Carrillo testified that in her

experience, Customs’s test has never led to inconclusive

results, nor have analysts disagreed as to the origin of a

particular fabric.

The Court attaches little weight to Dr. Koslin and

Ms. Carrillo’s testimony on this point. First, little

credence can be accorded the witnesses’ belief that Customs’s

test is foolproof, when the accuracy of Customs’s test has

never been measured in any scientific way. Second, that

Customs analysts never reach different conclusions as to

whether fabric is hand-loomed or power-loomed is questionable

in light of the same experts’ testimony that a number of the

criteria in Customs’s test are “qualitative” or “subjective.”

Indeed, Customs analysts must use their judgment to determine
Libas, Ltd. v. United States, No. 95-01-00014 Page 10

a number of criteria, such as whether cut fringe is “uniform,”

variation between areas is “minimal,” yarn is “complex,” and

knots are “minimal.” See Def.’s Ex. 1. For the foregoing

reasons, Customs’s test fails to meet Daubert’s standards of

testability and error rate.

Under Daubert, “[w]idespread acceptance can be

an[other] important factor in” assessing the reliability of a

theory or technique. Daubert, 509 U.S. at 594. In an attempt

to demonstrate such acceptance, defendant offered Exhibit 13,

a “Check-Sheet for Identification of Handloom Items.”

Defendant claimed that the “check-sheet” was used by the

Government of India (“GOI”) to distinguish between hand-loomed

and power-loomed fabrics. Another exhibit purported to show

the concordance between the “check-sheet” and Customs’s test.

See Def.’s Ex. 1.

Defendant was unable to authenticate the “check-

sheet,” however. Although the words “Government of India

(GOI)” were handwritten at the top of the document, the

government witness testifying at the time, Mr. Richard

Crichton of the U.S. Customs Service, did not know who wrote

them. The “check-sheet” was also undated and unsigned. Given

its uncertain lineage and defendant’s failure to offer an
Libas, Ltd. v. United States, No. 95-01-00014 Page 11

affidavit certifying that it was an accurate representation of

the actual test used by the GOI, the Court excluded the

“check-sheet.” See Fed. R. Evid. 901 (requiring

authentication or identification).

Aside from its attempt to demonstrate the purported

similarities between Customs’s test and the GOI’s, defendant

did not offer evidence to show similarities to any other test.

Upon examination, Dr. Koslin testified that countries other

than the United States and the GOI, such as France, must

distinguish between hand-loomed and power-loomed fabrics, yet

defendant did not submit a copy of the test used by any other

country. And other than the testimony of Dr. Koslin that the

methodology she uses and teaches is based on similar factors,

defendant did not offer documentation of a test used by any

other entity, such as a museum, auction house, conservation

organization, private lab, or the American Society for Testing

and Materials. In this way, defendant failed to demonstrate

that its test enjoyed widespread acceptance among other

countries and organizations concerned with distinguishing

between hand-loomed and power-loomed goods.

Finally, defendant failed to show that its test has

been published and subjected to peer review. See Daubert, 509
Libas, Ltd. v. United States, No. 95-01-00014 Page 12

U.S. at 593. The Supreme Court acknowledged that “[s]ome

propositions . . . are . . . of too limited interest to be

published,” id., and that “[i]t might not be surprising in a

particular case . . . that a claim made by a scientific

witness has never been the subject of peer review, for the

particular application at issue may never previously have

interested any scientist.” Kumho Tire Co., Ltd. v.

Carmichael, 526 U.S. 137, 151 (1999). It may well be that the

community concerned with distinguishing between hand-loomed

and power-loomed fabrics is extremely limited. Nonetheless,

the Court comments on this factor because, while not

dispositive, “submission to the scrutiny of the scientific

community is a component of ‘good science,’ in part because it

increases the likelihood that substantive flaws in methodology

will be detected.” Daubert, 509 U.S. at 593.

According to Ms. Carrillo, Customs’s test has never

been published outside of the Customs Technical Bulletin.

Further, Ms. Carrillo was not aware of any publication that

discussed Customs’s test, nor did she believe that it had been

the subject of peer review. While Ms. Carrillo believed that

other labs used tests similar to that of Customs, she could

not point to peer review or publication of those tests. And
Libas, Ltd. v. United States, No. 95-01-00014 Page 13

while Dr. Koslin testified that she had tested Customs’s test,

she did not publish her results.

The bulk of the evidence presented by defendant at

trial focused on the test Customs used to determine that the

fabric at issue was power-loomed. See Libas, 20 CIT at 1218-

20, 944 F. Supp. at 942-43. Upon reconsideration, Customs’s

test does not meet any of the Daubert factors, nor did

defendant point to any other indicia of reliability.

Therefore, the Court now accords the test little weight.

Apart from Customs’s test, defendant’s experts testified that,

in their opinion, the fabric was power-loomed. Their personal

methodologies for determining this, however, have themselves

never been tested, have no known error rate, have never been

published, and have never been subjected to peer review.

Without reliable evidence, defendant fails to prove that the

fabric at issue was power-loomed.

At the original trial, several of plaintiff’s

witnesses offered compelling testimony that, based on first-

hand experience, the fabric at issue was hand-loomed.

Plaintiff’s main witness, Mary Jane Leland, Professor Emeritus

at California State University at Long Beach, testified that

the fabric at issue is typical of fabric produced on a hand-
Libas, Ltd. v. United States, No. 95-01-00014 Page 14

powered fly shuttle loom in the Madras area of India.

Professor Leland testified that she has observed “skilled

master weaver[s who] can loom fabric by hand with results that

cannot be distinguished from those obtained by a machine

loom.” Libas, 20 CIT at 1220, 944 F. Supp. at 942. Further,

Mr. S. Ponnuswamy, partner in JLC International (“JLC”) of

Madras, India, testified that JLC purchased the fabric at

issue from two master weavers located in Kovur, India. Mr.

Ponnuswamy testified that he personally observed similar

fabric being hand-loomed in Kovur under the supervision of the

master weavers.

Because Customs’s test does not meet the standards

for reliability, the weight of the evidence now supports the

conclusion that the fabric is hand-loomed. Accordingly, the

fabric shall be reliquidated under HTSUS 5208.42.10.

__________________________________

Richard W. Goldberg
JUDGE
Dated: August 29, 2000
New York, New York.