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WWRD US, LLC v. United States

United States Court of Appeals, Federal Circuit

April 2, 2018

WWRD US, LLC, Plaintiff-Appellant
UNITED STATES, Defendant-Appellee

          Appeal from the United States Court of International Trade in No. 1:11-cv-00238-MAB, Judge Mark A. Barnett.

          Daniel J. Gluck, Simon Gluck & Kane LLP, New York, NY, argued for plaintiff-appellant.

          Also represented by Christopher M. Kane, Mariana del Rio Kostenwein.

          Beverly A. Farrell, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellee.

          Also represented by Chad A. Readler, Robert E. Kirschman, Jr., Jeanne E. Davidson, Amy Rubin; Sheryl French, Office of the Assistant Chief Counsel, United States Bureau of Cus- toms and Border Protection, United States Department of Homeland Security, New York, NY.

          Before Taranto, Clevenger, and Chen, Circuit Judges.


         WWRD US, LLC ("WWRD") appeals the United States Court of International Trade's ("CIT") final decision denying WWRD's motion for summary judgment and granting the Government's cross-motion for summary judgment. In doing so, the CIT agreed with the U.S. Customs and Border Patrol's ("CBP") classification of WWRD's subject imports, finding the articles were not eligible for duty-free treatment. WWRD U.S., LLC v. United States, 211 F.Supp.3d 1365 (Ct. Int'l Trade 2017). We affirm.


         Between October 2009 and February 2010, WWRD imported a series of decorative ceramic plates and mugs from its "Old Britain Castles" dinnerware collections; decorative ceramic plates and gravy boats from its "His Majesty" dinnerware collection; and crystal flutes, punch bowls, and hurricane lamps from its "12 Days of Christmas" collection. All of the subject imports had festive motifs, such as Christmas trees, hollies, or turkeys, and were intended to be used during Thanksgiving or Christmas dinner. Upon arrival in the United States, the CBP classified the articles based on their constituent materials, placing the various goods in subheadings 6912.00.39, [1] 7013.22.50, 7013.41.50, and 9405.50.40 of the Harmonized Tariff Schedule of the United States ("HTSUS"). WWRD filed multiple protests, arguing the articles should be classified in 9817.95.01, a duty-free subsection of the HTSUS covering certain festive goods. Specifically, HTSUS 9817.95.01 provides duty-free status for "[a]rticles classifiable in subheadings 3924.10, 3926.90, 6307.90, 6911.10, 6912.00, 7013.22, 7013.28, 7013.41, 7013.49, 9405.20, 9405.40, or 9405.50, the foregoing meeting the descriptions set forth below: Utilitarian articles of a kind used in the home in the performance of specific religious or cultural ritual celebrations for religious or cultural holidays, or religious festive occasions, such as Seder plates, blessing cups, menorahs or kinaras." After the CBP denied WWRD's protests, WWRD filed a complaint with the CIT, challenging the denials. WWRD argued that Thanksgiving and Christmas dinners are specific cultural ritual celebrations, its articles are used in the performance of such celebrations, and thus its articles belong in HSTUS 9817.95.01.

         When presented with cross-motions for summary judgment, the trial court began by discussing the history of subheading 9817.95.01. Specifically, the court noted that, before the creation of subheading 9817.95.01, utilitarian items associated with holiday or festive occasions were classified within Chapter 95, under heading 9505. This heading provided broad duty-free coverage for "[f]estive, carnival or other entertainment articles, " as interpreted by our line of cases beginning with Midwest of Cannon Falls, Inc. v. United States, 122 F.3d 1423 (Fed. Cir. 1997). However, in 2007, Chapter 95 was amended to add Note 1(v), which removed "[t]ableware, kitchenware, toilet articles, carpets, and other textile floor coverings, apparel, bed linen, table linen, toilet linen, kitchen linen and similar articles having a utilitarian function (classified according to their constituent material)" from the scope of Chapter 95. But Note 1(v) also referred to subheadings 9817.95.01 and 9817.95.05, [2] which provided duty-free status to a select subset of articles that would have lost such status under the Note. Thus, while many festive utilitarian articles are no longer eligible for duty-free status, those used "in the performance of specific religious or cultural ritual celebrations" are still eligible.

         The parties disputed only whether WWRD's subject imports are used "in the performance of specific religious or cultural ritual celebrations, " and therefore the trial court set about defining the scope of this phrase in subheading 9817.95.01. In assessing the phrase, the CIT analyzed the text of the subheading using the General Rules of Interpretation ("GRI"). But because the section and chapter of the HTSUS did not assist in defining the phrase, the court gave the terms in the subheading their ordinary meaning, with specific focus on the word "ritual."

         The court concluded that Thanksgiving and Christmas are cultural holidays, and the associated dinners are cultural celebrations, but not specific rituals. The court found that "rituals generally encompass specific scripted acts or series of acts that are customarily performed in an often formal or solemn manner." WWRD, 211 F.Supp.3d at 1375. While these dinners occur annually during religious or cultural holidays, that alone is not sufficient; the dinners themselves lack specific formal or solemn acts. See id. ("[I]f subheading 9817.95.01 was intended to cover utilitarian items used in the home during religious or cultural celebrations, whenever they routinely occur, and whatever they might entail, the term 'ritual' could have been omitted altogether.").

         The trial court then turned to the exemplars provided in the subheading - the Seder plates, blessing cups, menorahs or kinaras. Under the statutory construction rule of ejusdem generis ("of the same kind"), the trial court reasoned that the subject imports must "possess the essential characteristics or purposes that unite the [example] articles enumerated . . . ." Id. at 1376 (quoting Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1392 (Fed. Cir. 1994)). The court distinguished the exemplars, which served specific purposes to advance their respective rituals, from the subject imports, which were "merely decorative items used to serve food and beverages or provide lighting." Id. ...

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