United States Court of International Trade
Remand Results Sustained
Before the court in Golden Dragon Precise Copper Tube Group, Inc. et al. v. United States, Slip Op. 16-80, Court No. 14-00116 (August 23, 2016) were the Final Results of Redetermination Pursuant to Court Order, Golden Dragon Precise Copper Tube Group, Inc., et al. v. United States, Court No. 14-00116, ECF No. 89 (Mar. 23, 2016) (“Remand Results”) filed by defendant’s Department of Commerce, International Trade Administration (“Commerce”). Commerce filed these Remand Results pursuant to Golden Dragon Precise Copper Tube Group, Inc. v. United States, Court No. 14-00116, Slip Op. 16-17 (Feb. 22, 2016) (“Golden Dragon III”), which granted a voluntary remand of the final results of the second administrative review of Seamless Refined Copper Pipe and Tube From the People’s Republic of China, 79 Fed. Reg. 23324 (Apr. 28, 2014), subsequently amended, 79 Fed. Reg. 47091 (Aug. 12, 2014) (“Final Results”).
As for evidence of subsidization, Golden Dragon continued to argue to reject the Furukuwa statement. However, there was no direct evidence of receipt of a subsidy, and Commerce affirmatively determined that Furukawa had not received such a benefit during the POR, and therefore reasonably did not reject the Furukawa statement. Additionally, Commerce reasonably determined that an unambiguous declaration of production of goods identical to those produced by the respondent was preferable to a less clear declaration of goods produced, and Golden Dragon did not present evidence that persuaded otherwise. Finally, the Furukuwa statement was contemporaneous and need not be supported by an auditor’s opinion to be accepted. For these reasons the remand results were sustained.
United States Court of Appeals for the Federal Circuit
Cell Phone Cases are Not “Similar Containers” Within Meaning of Harmonized Tariff Schedule Heading 4202
The Court of Appeals for the Federal Circuit has affirmed the Court of International Trade’s decision in Otter Products LLC v. United States, holding that cell phone cases are classified as “other” articles of plastic under Harmonized Tariff Schedule (HTS) subheading 3926.90.9989, dutiable at a rate of 5.3% ad valorem. The CAFC rejected the government’s contention that the products were classifiable as “similar containers”, under HTS subheading 4202.99.90, dutiable at a rate of 20% ad valorem. Otter Products LLC v. United States, No. 2015-1688 (August 24, 2016).
The question at the heart of the case was whether cell phone cases were “similar containers”, when compared to travel, sport and similar bags, jewelry cases, CD cases, and other goods provided for in HTS Heading 4202. In previous decisions, the CAFC and the Court of International Trade had ruled that the key characteristics of “similar containers” was that, like the named exemplars in the tariff provision, they served to organize, protect, store, and/or carry items. Otter Products claimed that, in order for an item to be classified as a “similar container”, it had to perform all four of the specified functions – organizing, protecting, storing and carrying. The government argued that a product was a “similar container” if it performed any one of those functions.
To be sure, prior court decisions had been confusing on this point. The Federal Circuit, in Otter Products, clarified that there is no requirement that a “similar container” perform all four functions. However, a reviewing court or Customs authority is required to review whether an item performs these functions, and consider whether, collectively, the functions of an article are like those of a named container.
Examining each function, the court first found that the cell phone cases did not “organize” their contents. The concept of “organizing” suggests more than one item might be contained in a container. While a camera case might include a single camera, it would typically also include other accessories, such as spare lenses, films, straps and the like. Since a cell phone case can only hold a single item—and snugly – it did not “organize”.
The CAFC also said the cell phone cases did not “store” their contents. The concept of “storing”, the court said, implied setting something aside for future use. Cell phone cases do not do this, but rather the phone remains accessible and functional the entire time it is in the case
Next, the CAFC held that the cell phone cases did not “carry” their contents. While a cell phone might be transported in its case, the case adds no functionality – the phone could be transported without the case.
Both parties conceded, and the CIT found, that the cases did “protect” their contents. However, the single function of protection was not sufficient to make the goods “similar containers” in the context of Heading 4202.
While the Otter Products case applies to cell phone cases, CBP has taken similar positions with respect to the classification of things such as laptop covers, covers for tablet computers, and covers/stands for laptop computers. Importers of these products may also be able to seek refunds of duties from the government.