Bauer Nike Hockey USA v. United States

Citation: Not availableDocket: 2004-1158

Court: Court of Appeals for the Federal Circuit; December 19, 2004; Federal Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Bauer Nike Hockey U.S.A. Inc. appeals a judgment from the Court of International Trade, which upheld the United States Customs Service's classification of Bauer's imported hockey pants under subheading 6211.33.00 of the Harmonized Tariff Schedule of the United States (HTSUS), resulting in a duty rate of over 16% from 1998 to 2000. Bauer contends that the hockey pants should be classified as ice-hockey equipment under subheading 9506.99.25, which was duty-free during the relevant period. The court found that the hockey pants, consisting of a nylon or polyester shell and an interior assembly of protective guards and padding, were specifically designed for ice hockey use and provided injury protection while also ensuring comfort and ventilation. Customs had previously classified two styles of Bauer's hockey pants, determining that while one style was classified as sports clothing under subheading 6211, the removable components of the second style were classified as ice-hockey equipment. Ultimately, the appellate court reversed the previous classification, ruling that Bauer's hockey pants are more appropriately classified under subheading 9506.99.25.

Customs classified certain hockey pants as composite goods under Heading 6211, determining that the textile shell provided essential character due to its function in form, coverage, and protection. Bauer contested this classification in the Court of International Trade, which upheld Customs’ ruling, granting summary judgment to Customs and denying Bauer’s cross-motion. Bauer appealed the decision, and the court confirmed jurisdiction under 28 U.S.C. 1295(a)(5).

The classification process involves a two-step legal review: first, interpreting relevant tariff terms, and second, identifying the appropriate tariff provision. While the court reviews these interpretations independently, it defers to Customs’ classification decisions based on their persuasive authority as per Skidmore v. Swift. 

The General Rules of Interpretation (GRI) under the Harmonized Tariff Schedule of the United States (HTSUS) guide classification. The court must first identify the applicable heading and then examine subheadings for precise classification, using common meanings and the Explanatory Notes as interpretative tools.

Bauer argued for classification under Chapter 95, subheading 9506.99.25, relating to sports equipment, but the Court of International Trade interpreted “equipment” as essential for gameplay. The court rejected Bauer’s stance since it acknowledged that ice hockey could be played without hockey pants, thus ruling against Bauer's classification argument.

Disagreement is expressed with the Court of International Trade's interpretation regarding the classification of "equipment" as it pertains to sports. The Court asserted that the term refers only to articles deemed essential for sports, a view countered by the argument that the definition of equipment encompasses items specifically designed for athletic activities, without limiting it to those deemed necessary. The previous case, Rollerblade, Inc. v. United States, did not restrict the term "equipment" to only indispensable items, as the inclusion of “only” was misapplied. Additionally, the Court misinterpreted a Customs ruling that emphasized essential requisites for sports, again reading in an unwarranted limitation. Dictionary definitions cited do not support the necessity criterion, as they utilize disjunctive terms. It is undisputed that Bauer's pants were specifically designed for ice hockey, leading to the conclusion that they are classifiable as ice-hockey equipment under subheading 9506.99.25. The government maintained that the pants could be classified as sports clothing under Chapter 62 based on an expired note allowing duty-free entry. However, there is no authority supporting the expansion of this note beyond its intended purpose, nor evidence that the prior classification of ice-hockey pants as equipment had changed under the new tariff system. Without explicit legislative intent for reclassification, the original classification as ice-hockey equipment is upheld, regardless of the government's alternative arguments for clothing classification under subheading 6211.33.00.

When goods can be classified under multiple headings, GRI 3 provides guidance for determining the appropriate classification. According to GRI 3(a), the heading offering the most specific description should be prioritized over those that are more general. This specificity is assessed based on the precision of the requirements for the goods. If headings are equally specific, GRI 3(b) may be utilized, but only after confirming that the headings each refer to only part of the merchandise's materials. In this case, Customs incorrectly used the "essential character" test under GRI 3(b) for hockey pants featuring removable padding and plastic plates. The Court found that the textile component is integral to the classification and that the specificity rule in GRI 3(a) effectively resolves the classification issue. 

A comparison was made between Heading 6211, covering various garments, and Heading 9506, which includes sports equipment. Neither heading was found to be more specific than the other, and both chapters have exclusionary notes that would typically prevent the classification of the hockey pants under both. Thus, the specific description must be evaluated before considering exclusionary notes. The reliance on exclusionary notes before applying the specificity rule, as Customs did, could lead to inconsistent classifications based solely on the order of analysis. For example, starting with Chapter 95 might have led to a classification of the pants solely under that chapter, contrary to the original ruling under Chapter 62.

Subheading 6211.33.00 pertains to garments made of "man-made fibers," while subheading 9506.99.25 specifically addresses "ice-hockey and field-hockey articles and equipment, except balls and skates, and parts and accessories thereof." Bauer’s hockey pants are more accurately described under subheading 9506.99.25 due to its specificity compared to the broader reference in subheading 6211.33.00. Note 1(t) under Section XI excludes articles of Chapter 95, leading to the conclusion that the merchandise cannot be classified under Chapter 62. No other notes prevent classification under subheading 9506.99.25. Therefore, it is determined that Bauer’s merchandise is appropriately classified under subheading 9506.99.25. The Court of International Trade's decision affirming Customs’ classification is reversed.