The United States Court of Appeals for the Federal Circuit ruled on the appeal by LeMans Corporation against the United States regarding the classification of imported motocross apparel. The appeal, stemming from a decision by the U.S. Court of International Trade, contested the classification of motocross jerseys, pants, and motorcycle jackets as apparel under Chapters 61 and 62 of the Harmonized Tariff Schedule of the United States (HTSUS). LeMans argued these items should be classified as sports equipment under Chapter 95, asserting they are specifically designed for sporting use.
The court upheld the classification made by U.S. Customs and Border Protection, stating that the merchandise was correctly classified as apparel, thereby affirming the duty rates applied to these imports. The subject merchandise included various models of motocross jerseys, pants, and jackets, which shared similar characteristics. For example, the motocross jerseys were constructed from synthetic, abrasion-resistant materials and featured protective padding, indicating their design was suitable for motocross activities.
Judge O'Malley delivered the opinion of the court, with Judges Gajarsa and Mayer also participating. The decision reinforces the appropriateness of Customs' classification and duty assessments for LeMans's imported items.
LeMans's motocross pants are constructed from heavy-duty nylon for impact and abrasion protection, featuring mesh panels for ventilation, heat-resistant leather or synthetic inner legs, and spandex/stretch for mobility. They include sewn-in and removable foam padding in the knee and thigh areas, weighing nearly fifty percent of the pants. The motorcycle jackets are made from durable materials, including heavyweight waxed cotton and nylon, with molded rubber padding in the elbows, shoulders, and back, providing impact protection for street riding. The padding constitutes approximately 20-25% of the jackets' weight. Customs classified the motocross jerseys under HTSUS subheading 6110.30.30 at a 32% duty rate, the pants under 6210.40.50 at 7.1%, and various motorcycle jackets under Heading 6201 with differing duty rates (7.1%, 27.7%, and 6.2%). LeMans protested these classifications, asserting they should fall under Chapter 95, with lower duty rates. Customs denied the protests, prompting LeMans to file a civil action in the Court of International Trade (CIT) under 19 U.S.C. 1515. The CIT upheld Customs' classifications after reviewing the HTSUS headings and definitions, determining the jerseys qualify as "sweaters," the pants as garments made from specified materials, and the jackets as "overcoats," while rejecting LeMans’s claim for classification as sports equipment under Heading 9506.
The court referenced the dictionary definition of "equipment" and its previous ruling in *Rollerblade, Inc. v. United States*, establishing that "equipment" includes items specifically designed for athletic use. It concluded that while LeMans’s products are useful for motocross and motorcycle riding, they do not qualify as sports equipment according to the Explanatory Notes for Heading 9506, which lists typical sports requisites like skis and tennis rackets. The court noted that protective equipment examples focus on non-clothing items, and Chapter 95 explicitly excludes sports clothing, reinforcing the classification of LeMans’s merchandise as apparel rather than sports equipment. The court distinguished this case from *Bauer Nike Hockey USA, Inc. v. United States*, where hockey pants were classified as sports equipment due to a different analysis.
LeMans appealed, arguing that its goods are specialized for motocross and should be classified as sports equipment. However, the court found that the merchandise is appropriately classified as wearing apparel under Chapters 61 and 62, rejecting LeMans's claims as overly broad. The court emphasized that the classification of merchandise is governed by the General Rules of Interpretation (GRIs) of the HTSUS, specifically GRI 1, which prioritizes the headings and chapter notes for classification.
Terms in the Harmonized Tariff Schedule of the United States (HTSUS) are interpreted based on their common meanings unless defined otherwise. The World Customs Organization’s Explanatory Notes, while not legally binding, provide persuasive guidance for tariff interpretation. When merchandise can be classified under multiple HTSUS headings, General Rule of Interpretation (GRI) 3 is applied, prioritizing the heading with the most specific description.
In evaluating whether Customs correctly classified the merchandise as apparel under Chapters 61 and 62, LeMans does not dispute the definitions used by the Court of International Trade (CIT) for relevant terms (sweater, pullover, garment, overcoat) or their application to the merchandise. Instead, LeMans argues that the items are specialized sports equipment rather than "wearing apparel," asserting that any apparel features are incidental. LeMans cites a precedent, Rubie’s Costume Co. v. United States, where costumes were classified as “festive articles” instead of wearing apparel based on their limited use and characteristics.
In that case, the court concluded that the costumes were not traditional wearing apparel due to their rare usage and lack of durability. However, the merchandise in this case exhibits characteristics more akin to ordinary apparel, including varying sizes and durability for repeated wear. Furthermore, unlike the costumes in Rubie’s, the items here are designed to provide optimal fit and comfort for sports participation, rendering LeMans’s reliance on the Rubie’s decision inappropriate.
Headings and subheadings in Chapters 61 and 62 of the HTSUS do not differentiate between general and specialized apparel. Specialized items, such as sports apparel, remain classified as apparel. Chapter 62 includes specific headings for garments like track suits and swimwear, which are designed for particular athletic activities. Generally, wearing apparel is created to offer comfort and protection for specific situations. The case referenced, Daw Indus. Inc. v. United States, emphasizes that not all specialized items, such as crash helmets, qualify as wearing apparel. The CIT's classification of LeMans’s goods as wearing apparel under Chapters 61 and 62 was therefore deemed appropriate.
LeMans argues that its merchandise should also be classified as sports equipment under Chapter 95, specifically heading 9506, which pertains to articles for physical exercise and sports. However, the classification as sports equipment requires application of GRI 3(a), which was not considered necessary because the merchandise is not prima facie classifiable as such. The term “sports equipment” lacks a specific definition in the HTSUS, so common meanings are applied. The CIT correctly cited the dictionary definition, indicating that equipment should be necessary, useful, or appropriate for a sport. Previous rulings established that while some items are essential for a sport, others that are designed for specific athletic use may also qualify as sports equipment. In a relevant case involving ice-hockey pants, it was determined that such pants were appropriately classified as sports equipment, as they were designed specifically for that sport, highlighting that "appropriate" items can also fall under the definition of sports equipment.
LeMans contends that “sports equipment” encompasses goods that are necessary, useful, or specifically designed for a sport, asserting that the merchandise in question qualifies under these definitions. LeMans cites a CIT statement indicating the merchandise is tailored for motocross and power sports. Under this interpretation, LeMans argues that the exclusive design for a sport necessitates classifying the merchandise as sports equipment, leading to further analysis under GRI 3(a) for specificity.
However, the court disagrees with LeMans's narrow interpretation, particularly challenging its reliance on the case Bauer. In Bauer, the CIT ruled that ice hockey pants were not considered sports equipment since they were not indispensable for playing hockey, as the sport could be performed without them. The court emphasizes that the design of merchandise does not automatically classify it as sports equipment and distinguishes the ice hockey pants from the subject merchandise based on their construction.
Furthermore, the court notes that the Explanatory Notes to Section 9506 provide significant interpretative guidance regarding “sports equipment.” While these notes are not legally binding, they are seen as persuasive. The CIT's findings and the government’s appeal suggest that the Explanatory Notes further support the conclusion that LeMans's merchandise does not meet the criteria for classification as sports equipment.
Past cases have upheld the clear text of relevant Explanatory Notes unless compelling reasons exist to disregard them, as supported by decisions in Agfa Corp. v. United States and BASF Corp. v. United States. In this instance, the Explanatory Notes to Section 9506 clarify that "sports equipment" includes items worn by users that are primarily protective rather than apparel-like. The Court of International Trade (CIT) concluded that examples listed in Subsection (B) focus on non-clothing items and do not represent apparel similar to the merchandise in question. Example 13 specifically lists protective gear such as fencing masks and pads, without mentioning items with significant textile components.
LeMans argues that the CIT misapplied the Explanatory Notes by claiming that the examples in EN 95.06(B) are not exhaustive and that they conflict with the definition of "sports equipment." However, these arguments are unconvincing; the CIT utilized the examples to inform its interpretation without excluding the possibility of classifying LeMans' goods as sports equipment. The Explanatory Notes serve to clarify rather than conflict with the term "sports equipment."
The use of Explanatory Notes for interpreting the Harmonized Tariff Schedule of the United States (HTSUS) headings is appropriate, as established in StoreWALL, LLC v. United States. This case differs from Airflow Technology, where Explanatory Notes were disregarded because they contradicted a subheading term. In the current case, the examples in EN 95.06(B) do not contradict or exceed the definitions of "sports equipment" proposed by LeMans, which include items necessary for or specifically designed for sports. LeMans' reference to Rubie’s does not support its claim, as that case emphasized the need for clear congressional intent before incorporating characteristics from Explanatory Notes into HTSUS headings.
Rubie’s case does not support LeMans' argument, as it was previously established that the costumes involved were not classified as “fancy dress” under textile chapters 61 and 62. Accepting the government’s distinction between “accessories” and “wearing apparel” would contradict this prior ruling. Additionally, the Explanatory Notes in Rubie’s provided only seven examples of items with “incidental characteristics,” whereas the current case presents fourteen categories of goods with over fifty items that are predominantly non-apparel-like. This substantial evidence indicates that “sports equipment” does not include apparel like the subject merchandise. The CIT correctly referred to the Explanatory Notes of Section 9506 for interpretation, as most examples listed are items not worn on the body, such as tennis nets and playground equipment, or are held or fastened accessories. The few wearable items are primarily protective and are intended to complement sports apparel. Consequently, the subject merchandise does not meet the classification criteria for sports equipment under Chapter 95. The CIT's judgment is upheld, with each party bearing its own costs. Furthermore, Note 1(e) of Chapter 95 supports the conclusion that “sports clothing or fancy dress” is excluded, ensuring that the classification aligns with the previously established findings without conflicting with the warnings from Bauer regarding the potential for arbitrary classifications based on chapter analysis.
