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Classification Upheld in Case Involving Consideration of Use

Thursday, March 22, 2018
Sandler, Travis & Rosenberg Trade Report

Following its controversial decision that the use of certain screws should be considered in determining their classification even though the two subheadings at issue are both eo nomine provisions, the Court of Appeals for the Federal Circuit has upheld the Court of International Trade’s ruling that the screws are properly considered self-tapping screws.

The screws at issue are made with corrosion-resistant case-hardened steel and are used to mate dissimilar composite materials such as sheet metal, plastics, medium-density fiberboard, and melamine. One model has a flat self-countersinking head designed to cut away at the top layer of the material as the screw is driven into place. Two others have much smaller heads that are designed to prevent the screws from cracking and splitting the target material. Each model is available in a variety of lengths, diameters, and thread designs. U.S. Customs and Border Protection classified the screws as other wood screws under HTSUS 7318.12.00 (12.5 percent duty), whereas the plaintiff claimed classification as self-tapping screws under HTSUS 7318.14.10 (6.2 percent duty).

In a 2014 split decision, the CAFC cited judicial precedent as having established that the use of articles may, under certain circumstances, be considered in tariff classification according to eo nomine provisions. A judicial inquiry involving an eo nomine provision, the CAFC said, may thus include the article’s physical characteristics as well as what features it has for typical users, how it is designed and for what objectives, and how it is marketed. A dissenting opinion criticized this determination and said it “blurs the boundaries between eo nomine and principal use provisions in ways that will promote confusion and error in future classification cases.”

The CIT subsequently issued a remand decision finding that (1) the common and commercial meaning of a wood screw is a screw that forms its own thread by compressing surrounding material designed to fasten wood to wood or other fibrous material and (2) the common and commercial meaning of a self-tapping screw is a specially hardened screw that meets minimum torsional strength requirements, can cut away material to form a mating thread in non-fibrous material, and is designed to fasten non-fibrous materials to either fibrous or non-fibrous materials. Pursuant to the CAFC’s direction, the CIT considered use and found no authority to suggest that a self-tapping screw is limited to use with non-fibrous materials. As a result, given their physical characteristics as well as their intended use in applications that require a screw that cut its threads through non-fibrous materials, the CIT concluded that the screws at issue are properly classified as self-tapping screws.

The U.S. argued in its appeal that the common and commercial meaning of a self-tapping screw is one exclusively designed for use in non-wood applications. The CAFC responded that while its previous decision instructed the CIT to consider the use of the screws, the U.S. “now seeks to elevate use as the sole consideration,” which would “all but abrogate the foundational tenet of tariff classification that eo nomine provisions are distinct from use provisions.” Instead, the CAFC stated that the CIT’s findings on the common and commercial meanings of the terms at issue are “amply supported by the source material of record,” which includes dictionary definitions that do not conclusively identify the anchoring material as the key distinction between wood screws and self-tapping screws.

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