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Court Rules on Classification of Storage System Components

Monday, October 31, 2011
Sandler, Travis & Rosenberg Trade Report

The Court of International Trade ruled Oct. 26 in The Container Store v. U.S. that two components of a modular organization and storage system are properly classified as furniture parts under HTSUS 9403.90.80 (duty-free). U.S. Customs and Border Protection had classified these items as base metal mountings and fittings under HTSUS 8302.41.60 (3.9% duty).

The items at issue are known as top tracks and hanging standards and are core components of the storage system. The top track has a flat back and is designed to be fastened horizontally to a perpendicular surface (typically a wall or a door) using anchors and screws. The top and bottom edges of the top track protrude and bend downward and upward, respectively, to form the top track’s “upper lip” and “lower lip.” Hanging standards are specifically designed to be suspended from a top track, without the use of any hardware, by means of a groove that hooks onto the top track’s “lower lip.” Hanging standards must be used with a top track and cannot be mounted directly onto a wall or door. These components by themselves do not constitute a complete storage system and, unless accessorized with other components, cannot be used to organize or store anything.

Under a definition established in a previous case, the storage system of which the components at issue are a part is considered “unit furniture” because it consists of components that are fitted together with other pieces to form a larger system, is designed to be hung on or fixed to a wall and is assembled together so as to suit specific consumers’ particular needs. The U.S. argued, however, that if consumers accessorized the top tracks only with hooks (i.e., no drawers, shelves, etc.), this configuration would be a type of wall fixture and thus excluded from HTSUS heading 9403. However, the CIT points to the Court of Appeals for the Federal Circuit’s rejection of this argument in the earlier case, where it said that the storage system’s versatility and adaptability make it dissimilar to wall fixtures.

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