Bradford Industries, Inc. v. United States

Citations: 152 F.3d 1339; 20 I.T.R.D. (BNA) 1461; 1998 U.S. App. LEXIS 18628; 1998 WL 466799Docket: 98-1039

Court: Court of Appeals for the Federal Circuit; August 7, 1998; Federal Appellate Court

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In the case Bradford Industries, Inc. v. United States, the United States Court of Appeals for the Federal Circuit addressed the classification of imitation leather articles imported by Bradford. The court affirmed the classification by the United States Customs Service under Chapter 56 of the Harmonized Tariff Schedule of the United States (HTSUS), which imposes a duty rate of 12.5 percent ad valorem. 

Bradford's products, known as Temasoft and Forsoft, consist of a polyurethane sheet attached to a nonwoven textile sheet, where the textile is treated with liquid polyurethane. Customs classified the goods under HTSUS 5603.00.90 as "other nonwovens, whether or not impregnated, coated, covered or laminated," while Bradford contended they should be classified under HTSUS 3921.13.11 as sheets of cellular polyurethane plastics combined with textile materials.

The court noted that both classifications physically describe the products, but the Exclusionary Notes to Chapters 39 and 56 resolve any overlap. Specifically, Note 2(l) of Chapter 39 excludes goods classified under Chapter 56, while Note 3 of Chapter 56 excludes certain items from that chapter, which includes provisions that determine the classification based on the role of the textile material. 

The Court of International Trade found that the nonwoven textile sheet in Bradford's products serves multiple functions beyond reinforcement, such as acting as a carrier for the polyurethane and contributing to the products' overall characteristics and functionality. As a result, the court concluded that the imported products are not excluded from Chapter 56, affirming their classification under that chapter and rejecting Bradford's claim for classification under Chapter 39.

Classification of imported merchandise involves a two-step process: first, interpreting the relevant classification headings, a legal question reviewed without deference to the trial court; and second, determining the factual classification under properly construed tariff terms, which is reviewed for clear error. Bradford's appeal centers on the interpretation of Exclusionary Notes, arguing that the definition of "merely for reinforcing" is narrower than the broader interpretation by the Court of International Trade. Bradford claims that unfigured, unbleached, or uniformly dyed textile fabrics applied to one face of a plastic sheet serve only reinforcement purposes, while figured or elaborately worked textiles serve additional ornamental functions.

The Court determined that Note 3 does not support Bradford's binary distinction, as it refers only to "mere reinforcement." Consequently, any textile that serves functions beyond mere reinforcement is not excluded from Chapter 56. The Court identified several roles of the nonwoven textile in Bradford's products that exceed reinforcement, including providing dimension, stability, and adherence, thus affirming that these products are not excluded from Chapter 56. 

Bradford also referenced a General Explanatory Note from Chapter 39 to support its position, which makes an ornamentation/reinforcement distinction. However, this Note was not in effect at the time of importation, and the applicable Note from Chapter 56 only cross-referenced an Explanatory Note relevant to rubber products in Chapter 40, which does not pertain to the products in question. 

Ultimately, the Court of International Trade correctly classified Bradford's Temasoft and Forsoft imitation leather products under HTSUS 5603.00.90, affirming that Exclusionary Note 3 does not apply. The decision was therefore affirmed.