CAFC Judge Slams Denial of Rehearing of Case on Use Factors in 'Eo Nomine' Classification
A Federal Circuit judge slammed the majority opinion in a recent tariff classification case that stands to “breed confusion” among importers, in a dissent from his court’s Dec. 8 decision not to allow a rehearing of the case (here). The Court of Appeals for the Federal Circuit had ruled in an August decision on screws imported by GRK Canada that a product’s use may be considered in some circumstances when interpreting “eo nomine” provisions in the tariff schedule (see 14080420). Circuit Judge Evan Wallach said the ruling conflated two separate types of analyses for classifying merchandise, violating the statutory framework for classification as well as the court’s own precedent. He was joined in the dissent by Circuit Judge Jimmie Reyna, who wrote a similar dissent when the opinion was first issued.
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According to Wallach’s dissent, tariff headings have long been divided into two distinct categories: eo nomine provisions, which describe a product by name, and use provisions, which depend on the actual or principal use of merchandise. Classification under eo nomine headings is decided by the General Rules of Interpretation, while the Additional Rules of Interpretation govern use headings.
CAFC’s majority opinion in GRK Canada blurred the line between the two categories by finding use a factor in a dispute over whether to classify the company’s screws under headings that identify the screws by name, said Wallach. CAFC has only found use a consideration for eo nomine headings in “very limited” circumstances, said Wallach, citing several Federal Circuit decisions. Worse, the majority included an “explicit endorsement” of the adoption of the Additional Rules of Interpretation for eo nomine headings, said Wallach. “Any suggestion that the ARIs may need to be reached in the context of an eo nomine analysis is foreign to our classification case law, and conflicts with the clear statutory language of the ARIs,” he said.
Despite dissents from the only two Federal Circuit judges with a background in trade law, as well as Circuit Judge Pauline Newman, the GRK Leather decision now heads back down to the Court of International Trade. Without the rehearing requested by GRK Canada, “the majority opinion upends a once-clear analytical framework and will breed confusion in future cases,” said Wallach.
(GRK Canada Ltd., v. U.S., CAFC #2013-1255, dated 12/08/14)