Tyco Fire Products, L.P. v. United States , 841 F.3d 1353 ( 2016 )

United States Court of Appeals
for the Federal Circuit
______________________
TYCO FIRE PRODUCTS, LIMITED PARTNERSHIP,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2015-1968, 2015-1969
______________________
Appeals from the United States Court of International
Trade in Nos. 1:08-cv-00190-JAR, 1:08-cv-00194-JAR,
Senior Judge Jane A. Restani.
______________________
Decided: November 18, 2016
______________________
MICHAEL EDWARD ROLL, Pisani & Roll PLLC, Los An-
geles, CA, argued for appellant.
AMY RUBIN, International Trade Field Office, Com-
mercial Litigation Branch, Civil Division, United States
Department of Justice, New York, NY, argued for appel-
lee. Also represented by BENJAMIN C. MIZER, JEANNE E.
DAVIDSON; CHI S. CHOY, Office of Assistant Chief Counsel,
United States Customs and Border Protection, United
States Department of Homeland Security, New York, NY.
______________________
2 TYCO FIRE PRODUCTS, L.P. v. US
Before PROST, Chief Judge, DYK, and STOLL, Circuit
Judges.
DYK, Circuit Judge.
Tyco Fire Products L.P. (“Tyco”) appeals a decision of
the U.S. Court of International Trade (“CIT”), which
granted the government’s motion for summary judgment.
The CIT held that Tyco’s imported goods were properly
classified under subheading 7020.00.60 of the Harmo-
nized Tariff Schedule of the United States (“HTSUS”).
Tyco Fire Prods. L.P. v. United States, 82 F. Supp. 3d
1340, 1350 (Ct. Int’l Trade 2015) (“Summary Judgment
Op.”). We affirm.
BACKGROUND
The issue in this case is the proper classification of
certain liquid-filled glass bulbs according to the HTSUS.
Each bulb consists of a sealed, hollow glass tube that is
filled with colored liquid and an air bubble. A bulb of this
type is commonly used as a temperature-dependent
trigger component of fire sprinkler heads. Used in this
context, the bulb is installed into a sprinkler head, which
acts as a valve, such that the bulb is positioned to hold
the valve closed and prevent water from being released.
When the sprinkler head is exposed to fire, the bulb is
heated and the liquid inside the bulb expands until the
bulb ultimately shatters. When the bulb breaks, the
valve of the sprinkler system opens and releases a shower
of water intended to extinguish the fire.
Tyco’s bulbs can also be used in water heaters. As
used in that context, the bulb is positioned to hold open a
door to a water heater combustion chamber, which allows
air to flow into the chamber. When the temperature rises
to a particular threshold, the bulb shatters, forcing the
door shut and thereby cutting off the air supply to the
combustion chamber, extinguishing the flame.
TYCO FIRE PRODUCTS, L.P. v. US 3
Tyco purchased the bulbs from two German manufac-
turers, Job GmbH (“Job”) and Geissler Glasinstrumente
GmbH (“Geissler”). Between 2004 and 2006, Tyco im-
ported 42 different models of bulbs into the United States.
Of these models, Tyco used 39 in fire sprinkler systems.
Tyco used the other 3 models as thermal release devices
in water heaters.
The temperature threshold, or activation tempera-
ture, at which the bulb breaks corresponds to the temper-
ature rating for that model of bulb. Different models of
bulbs are designed to break at different temperatures,
and the temperature rating of each bulb is indicated by a
colored dye in the liquid. The liquid inside the Geissler
bulbs is triethylene glycol. The composition of the liquid
inside the Job bulbs is proprietary to Job. Other relevant
qualities of the bulb models include their response time
index, which relates to the amount of time required for
the bulb to reach its activation temperature; structural
strength; and compatibility with environmental condi-
tions.
U.S. Customs and Border Protection (“Customs”) clas-
sified the bulbs as “other articles of glass” under HTSUS
subheading 7020.00.60 (“Heading 7020”), which has a 5%
rate of duty. Tyco protested Customs’ ruling and request-
ed further review, asserting that the bulbs are more
properly classified under subheading 8424.90.90, which
includes “Other” “Parts” of goods classified under heading
4 TYCO FIRE PRODUCTS, L.P. v. US
8424 and is duty-free. 1 Customs denied Tyco’s protest,
and Tyco appealed to the CIT. 2
On summary judgment, the CIT agreed with Customs
and held that the bulbs are properly classified as articles
of glass under Heading 7020. The court recognized that
Chapter Note 1(c) to Chapter 84 excludes from that
chapter “other articles for technical uses or parts thereof,
of glass (heading 7019 or 7020).” Consulting the Explana-
tory Notes (“EN”) to Chapter 84 of the Harmonized Com-
modity Description and Coding System (“HS”), of which
the HTSUS is an embodiment, see Pima W., Inc. v. United
States, 915 F. Supp. 399, 402 (Ct. Int’l Trade 1996), the
court determined that the bulbs are “of glass” within the
meaning of the exclusion and, therefore, they are not
classifiable under that chapter.
The court rejected Tyco’s assertion that the bulbs fall
within exceptions to the exclusion as set forth in the EN
to Chapter 84. Specifically, the EN provides:
[T]he following are, as a rule, to be taken to have
lost the character . . . of glass:
1 Heading 8424 includes “[m]echanical applianc-
es . . . for projecting, dispersing or spraying liquids or
powders; fire extinguishers, whether or not charged;
spray guns and similar appliances; . . . parts thereof.”
HTSUS, 84-30 (2004).
2 At the CIT and on appeal, Tyco asserts that the
three bulb models used in water heaters should be classi-
fied under a different subheading of HTSUS Chapter 84,
subheading 8419.90.10, as “[p]arts: [o]f instantaneous or
storage water heaters.” HTSUS, 84-24 (2004). Because
we affirm CIT’s holding that all of the bulbs are properly
excluded from Chapter 84 and have the essential charac-
ter of glass, our analysis is the same with respect to both
of Tyco’s proposed subheadings.
TYCO FIRE PRODUCTS, L.P. v. US 5
(i) Combinations of . . . glass components with a
high proportion of components of other materials
(e.g., of metal); also articles consisting of a high
proportion of . . . glass components incorporated or
permanently mounted in frames, cases or the like,
of other materials.
(ii) Combinations of static components of . . . glass
with mechanical components such as motors,
pumps, etc., of other materials (e.g., of metal).
EN Ch. 84 at 1393 (EN/AS 5, Feb. 2004). The court
determined that the bulbs do not contain a “high propor-
tion” of non-glass material and that the bulbs do not
comprise both a static and a mechanical component. The
court also consulted the ENs to Chapter 70 and Heading
7020 and determined that the bulbs have the essential
character of glass, and therefore they are properly classi-
fied under Heading 7020. Tyco appeals. We have juris-
diction pursuant to 28 U.S.C. § 1295(a)(5).
DISCUSSION
We review the CIT’s grant of summary judgment in a
customs classification case de novo. Rubie’s Costume Co.
v. United States, 337 F.3d 1350, 1354 (Fed. Cir. 2003).
The classification of an item under the headings of the
HTSUS involves a two-step process. Alcan Food Packag-
ing (Shelbyville) v. United States, 771 F.3d 1364, 1366
(Fed. Cir. 2014). First, the court determines the meaning
of the heading terms, and we review this issue of law
without deference. Id. Second, the court determines
whether the item falls within the scope of the heading
terms, and we review this finding of fact for clear error.
Id.“The HTSUS General Rules of Interpretation (GRI)
and the Additional U.S. Rules of Interpretation (U.S. GRI)
govern the proper classification of all merchandise and
are applied in numerical order.” Carl Zeiss, Inc. v. United
6 TYCO FIRE PRODUCTS, L.P. v. US
States, 195 F.3d 1375, 1379 (Fed. Cir. 1999). According to
GRI 1, “a court first construes the language of the head-
ing, and any section or chapter notes in question, to
determine whether the product at issue is classifiable
under the heading.” Orlando Food Corp. v. United States,
140 F.3d 1437, 1440 (Fed. Cir. 1998). Chapter Notes are
legally binding. Arko Foods Int’l, Inc. v. United States,
654 F.3d 1361, 1364 (Fed. Cir. 2011). “Absent contrary
legislative intent, HTSUS terms are to be construed
according to their common and commercial meanings,
which are presumed to be the same. A court may rely
upon its own understanding of the terms used and may
consult lexicographic and scientific authorities, dictionar-
ies, and other reliable information sources.” Carl Zeiss,
195 F.3d at 1379.
I
Tyco first asserts that the CIT erred in holding that
Chapter Note 1(c) excludes the bulbs from Chapter 84.
Note 1(c) to Chapter 84 provides: “1. This chapter does not
cover: . . . (c) Laboratory glassware (heading 7017); ma-
chinery, appliances or other articles for technical uses or
parts thereof, of glass (heading 7019 or 7020); . . . .”
HTSUS, 84-1 (2004).
As an initial matter, we agree with the CIT that the
bulbs are “of glass” for purposes of Note 1(c). As we
discuss below, the bulbs have the essential character of
glass and are properly classifiable under Heading 7020.
This determination is sufficient to establish that each
bulb has the “the character of an article . . . of glass” for
purposes of Note 1(c) unless the bulb has “lost the charac-
ter . . . of glass” by virtue of one of the exceptions de-
scribed in the EN. EN Ch. 84 at 1393 (EN/AS 5, Feb.
2004). While the ENs are not controlling, “they do offer
guidance in interpreting [HTSUS] subheadings.” Lonza,
Inc. v. United States, 46 F.3d 1098, 1109 (Fed. Cir. 1995).
Both parties agree that we should look to the ENs in this
TYCO FIRE PRODUCTS, L.P. v. US 7
case. Tyco and the government focus their dispute re-
garding Note 1(c) on whether the bulbs are encompassed
by either the “high proportion” or the static and mechani-
cal component exceptions identified in the EN. Tyco
argues that the bulbs fall within the EN exceptions be-
cause the bulbs include a high proportion of non-glass
material and are each a combination of static and me-
chanical components. Tyco argues that they are, there-
fore, outside the exclusion for “articles of technical uses or
parts thereof, of glass” and are classifiable under Chapter
84.
A
As the CIT held, the bulbs do not fall under the EN
exception to Chapter 84 Note 1(c) for “[c]ombinations of
static components of . . . glass with mechanical compo-
nents” because they do not contain any mechanical com-
ponents within the meaning of the EN. EN Ch. 84 at
1393. Tyco asserts that the liquid inside the bulbs per-
forms a physically mechanical function when the liquid
expands in response to heat and exerts pressure on the
glass, causing the glass to shatter. Tyco cites to the
online Oxford Dictionary, https://en.oxforddictionaries.
com/definition/us/mechanical, for the proposition that
“mechanical” means “[r]elating to physical forces or
motion.” However, this source also defines the term to
mean “[w]orking or produced by machines or machinery”
and “[r]elating to machines or machinery.” Id.; see also
Webster’s Third New International Dictionary (Una-
bridged) 1400 (1981) (“1 a : of, relating to, or concerned
with machinery or tools”).
Importantly, Tyco’s interpretation of “mechanical” is
inconsistent with the examples of mechanical components
listed in the EN, “such as motors, pumps, etc., of other
materials (e.g., of metal),” EN Ch. 84 at 1393, which, by
the interpretive canon of ejusdem generis, indicate that
“mechanical components” means machinery. See Archer
8 TYCO FIRE PRODUCTS, L.P. v. US
Daniels Midland Co. v. United States, 561 F.3d 1308,
1313 (Fed. Cir. 2009) (“[I]t is well settled that when a list
of items is followed by a general word or phrase, the rule
of ejusdem generis is used to determine the scope of the
general word or phrase.” (citation omitted)).
B
The other exception is for articles of glass that have “a
high proportion of components of other materials” relative
to the glass component. EN Ch. 84 at 1393. The parties
both address “high proportion” in terms of relative
weight. 3 It is undisputed that, depending on the bulb
model, the liquid component comprises 16–31% of the
total weight of the bulb, with the glass component com-
prising the remainder. Accordingly, we must determine
the meaning of the term, “high proportion.”
As the CIT noted, neither the EN nor the HTSUS de-
fines “high proportion.” The CIT looked for guidance in
the Explanatory Notes to the Brussels Tariff Nomencla-
ture (“BTN”), and the government urges that we do so as
well. The BTN was an international tariff classification
system that preceded the HS. The CIT pointed out that
Chapter 84 to the BTN had an exclusionary Note 1(c),
excluding “machinery and appliances and parts thereof, of
glass,” that was similar to the current Note 1(c) of Chap-
ter 84 of the HTSUS. J.A. 758; see Summary Judgment
Op. at 1347. In 1970, the Nomenclature Committee
amended the Explanatory Note to BTN Chapter 84 to
include language that is, in relevant part, identical to the
language of the current EN to Chapter 84 as reproduced
3 To the extent that Tyco also argues that the liquid
component plays a critical role in the function of the
bulbs, we see no basis for such a qualitative analysis in
determining whether the bulbs contain a high proportion
of liquid.
TYCO FIRE PRODUCTS, L.P. v. US 9
above. It appears that a motivation for the 1970 amend-
ment was to provide that “the distinguishing criteria laid
down in [BTN] Explanatory Note 90.25 should also apply
to the machines and appliances of” BTN Chapter 84. 4 J.A.
764. The Explanatory Note to BTN Chapter 90.25, in
turn, provided that “instruments normally cease to have
the essential character of glassware when they consist
partly of glass but are mainly of other materials.” J.A.
777.
The CIT concluded from this “history behind the EN”
that the “high proportion” language of the current EN to
Chapter 84 should be interpreted to mean “mainly.”
Summary Judgment Op. at 1347. The court held that
Tyco’s bulbs, which consist of up to 31% of liquid by
weight, did not consist “mainly of liquid rather than of
glass,” and therefore, they did not have a high proportion
of liquid. Id.The government urges that this analysis is correct,
but provides no explanation as to why the BTN Explana-
tory Notes—and any amendments thereto—should be
treated as a form of legislative history to the current
HTSUS. Certainly, prior to 1989, when the Tariff Sched-
ules of the United States (“TSUS”) was in effect, see
Omnibus Trade and Competitiveness Act of 1988, Pub L.
No. 100-418, 102 Stat. 1107, 1148, 1163 (1988), the BTN
was viewed as a source of legislative history to aid in
interpreting the TSUS. See, e.g., W. Bend Co. v. United
States, 892 F.2d 69, 71–72 (Fed. Cir. 1989) (“[T]he Brus-
sels Nomenclature . . . may be treated as legislative histo-
4 The Nomenclature Committee originally intended
that the new language would be inserted in the Explana-
tory Notes to BTN Section XVI, which encompassed
Chapter 84, see J.A. 764, but ultimately decided to insert
the language into the Explanatory Note to Chapter 84
specifically, see J.A. 765–70.
10 TYCO FIRE PRODUCTS, L.P. v. US
ry to the [TSUS] provisions where the language of the
tariff provision and a Brussels section is very similar.”).
But the TSUS is no longer in effect, and therefore, the
extent to which the BTN remains a relevant source of
interpretive guidance is not clear. Shortly after the
HTSUS was implemented, in 1989, the U.S. Customs
Service issued a “Guidance for Interpretation of Harmo-
nized System,” (“Guidance”) which set forth its views on
the weight to be afforded the Explanatory Notes of the
BTN. 54 Fed. Reg. 35,127 (Aug. 23, 1989). The Guidance,
to which the government did not call to our attention,
explained that the HS replaced the Customs Cooperation
Council Nomenclature (“CCCN”), which was “first known
as the” BTN. Id. at 35,128. The Guidance stated that
“[t]he CCCN ENs have no value in interpreting the HS.
They are the ENs to a different system; one which is now
virtually nonexistent since most nations have adopted the
HS.” Id. The Guidance further explained,
[w]hen the HS was drafted it was decided to pre-
pare an entirely new convention to implement it.
It was the intention of the [Harmonized System
Committee] to start anew; to have a new conven-
tion unencumbered by the many years of action by
the Nomenclature Committee. Although the HS
is primarily based on the CCCN, it is a new and
different nomenclature with a convention that
provides for substantial difference in its voting
membership.
Id. at 35,129.
We need not decide, however, whether the BTN pro-
vides relevant guidance as to the meaning of the HTSUS,
for we conclude that a different—and governing—
interpretative methodology ultimately leads to the same
result. Dictionary definitions of the word “proportion,”
TYCO FIRE PRODUCTS, L.P. v. US 11
previous to 1989 when the HTSUS was adopted, generally
defined that term to mean “ratio.” 5 See McGraw-Hill
Dictionary of Scientific and Technical Terms 1507 (4th ed.
1989) (“The proportion of two quantities is their ratio.”);
Webster’s New World Dictionary: Third College Edition
1079 (1988) (“proportion 1 the comparative relation
between parts, things, or elements with respect to size,
amount, degree, etc.; ratio”); 2 Webster’s Third New
International Dictionary 1819 (1986) (“proportion: 1 a :
the relation of one part to another or to the whole with
respect to magnitude, quantity, or degree : relative size :
ratio”). These definitions suggest that, absent clarifying
context, a “high proportion” of one component of a greater
whole means that there exists a high ratio of that compo-
nent compared to the other components. Where, as here,
there are only two components, (i.e., the liquid component
and the glass component), a high proportion or ratio of
one component generally means that the component
accounts for more than 50% of the whole.
We do not suggest that “high proportion” means
greater than 50% in all situations. This would not be the
case where there are more than two components. There
are also situations where comparison to past or common
practice would support an interpretation of “high propor-
tion” meaning something less than 50% for a two-
component whole. For instance, Tyco points to the EN to
heading 4017, where the EN to that heading provides that
“[h]ard rubber . . . is obtained by vulcanising rubber with
a high proportion (more than 15 parts per hundred parts
of rubber) of combined sulfur.” EN Heading 4017 at 775
(EN/AS 2, Aug. 2002). This appears to be a situation in
5 We appropriately may take notice of dictionary
definitions when construing terms of the HTSUS and its
notes. See Warner-Lambert Co. v. United States, 407 F.3d
1207, 1209 (Fed. Cir. 2005).
12 TYCO FIRE PRODUCTS, L.P. v. US
which in practice the proportion of sulfur is always less
than the proportion of rubber and “high proportion” is
used apparently to refer to the high end of what is nor-
mal. But this case is not a situation where there is addi-
tional context suggesting that we should ascribe a
different meaning to “high proportion.” Here, 31% by
weight of the liquid component does not constitute a “high
proportion” as set forth in the EN to Chapter 84.
Accordingly, because the bulbs are “of glass” within
the meaning of Chapter Note 1(c) and they do not fall
within either exception identified in the EN, they are not
properly classifiable under Chapter 84.
II
Having concluded that the bulbs are not classifiable
under Chapter 84, we now determine whether Customs
properly classified the bulbs under Heading 7020. The
EN to Heading 7020 explains, “[t]his heading covers glass
articles (including glass parts of articles) not covered by
other headings of this Chapter or of other Chapters of the
Nomenclature. These articles remain here even if com-
bined with materials other than glass, provided they
retain the essential character of glass articles.” EN Head-
ing 7020 at 1178 (2002) (italicization added). Because the
bulbs each have a glass component that is combined with
a liquid component, we must determine whether the glass
component or the liquid component imparts the bulbs’
essential character. We agree with the CIT that the bulbs
have the essential character of glass.
The parties agree that the essential character test set
forth in the EN to Heading 7020 is analogous to the
essential character test typically performed pursuant to
GRI 3(b). 6 Although “essential character” is not defined
6 GRI 3 provides:
TYCO FIRE PRODUCTS, L.P. v. US 13
in the GRIs, the EN to GRI 3(b) provides, “[t]he factor
which determines essential character will vary as be-
tween different kinds of goods. It may, for example, be
determined by the nature of the material or component,
its bulk, quantity, weight or value, or by the role of a
constituent material in relation to the use of the goods.”
EN GRI at 4 (2002); see also Home Depot, U.S.A., Inc. v.
United States, 427 F. Supp. 2d 1278, 1293 (Ct. Int’l Trade
2006) (identifying “other possible considerations” such as
“ordinary common sense” and the article’s recognized
names, invoice and catalogue descriptions, size, primary
function, and uses), aff’d, 491 F.3d 1334 (Fed. Cir. 2007).
One component can impart the article’s essential charac-
ter even if two components are both indispensable to the
use of the article. See Alcan, 771 F.3d at 1367.
While we recognize Tyco’s engineer’s testimony that
the liquid component is “the brains behind the operation”
of the triggers, Tyco Br. at 8 (internal quotation marks
omitted), we agree with the CIT’s determination that both
the glass and the liquid components “play critical roles in
the proper functioning of the filled bulb,” in view of “pri-
mary considerations . . . includ[ing] 1) the response time
required, 2) the load the filled bulb will have to bear, 3)
the environmental conditions the bulb will be placed into,
and 4) the temperature rating.” Summary Judgment Op.
When . . . goods are, prima facie, classifiable un-
der two or more headings, classification shall be
effected as follows: . . . (b) Mixtures, composite
goods consisting of different materials or made up
of different components . . . shall be classified as if
they consisted of the material or component which
gives them their essential character, insofar as
this criterion is applicable.
HTSUS, GN-1 (2004) (emphasis added).
14 TYCO FIRE PRODUCTS, L.P. v. US
at 1349. Turning to other factors for determining essen-
tial character, the evidence shows that for each bulb
model the glass weighs more than the liquid. Tyco con-
cedes that the relative weight factor favors the govern-
ment. The glass is also the more expensive component in
all of the imported bulbs except the smallest models and
the water heater models. Furthermore, as Tyco admits,
the bulbs are sometimes referred to as “glass bulbs,” and
much of the packaging and marketing materials in the
record use similar terminology. See La Crosse Tech., Ltd.
v. United States, 723 F.3d 1353, 1361 (Fed. Cir. 2013)
(considering the name of the devices in determining their
essential character); United China & Glass Co. v. United
States, 293 F. Supp. 734, 737 (Cust. Ct. 1968) (“[I]t is not
uncommon that an article is called by the name denoted
by its essential character . . . .”). Finally, as the CIT
noted, Congress amended the HTSUS in 2006 to create a
temporary duty-free subheading specifically encompass-
ing the types of bulbs at issue. See Tax Relief and Health
Care Act of 2006, Pub. L. No. 109–432, § 1331, 120 Stat.
2922, 3124. The temporary subheading also referred to
the items as “[l]iquid-filled glass bulbs.” See id.(“9902.24.26: Liquid-filled glass bulbs designed for sprin-
kler systems and other release devices (provided for in
subheading 7020.00.60)”). 7
In light of this evidence, we see no error in the CIT’s
conclusion that the bulbs have the essential character of
glass and are properly classified under Heading 7020.
7 The subheading, which was later increased to a
0.9% rate of duty, expired entirely in 2012. See United
States Manufacturing Enhancement Act of 2010, Pub. L.
No. 111–227, § 3001(b)(10), 124 Stat. 2409, 2476.
TYCO FIRE PRODUCTS, L.P. v. US 15
CONCLUSION
For the foregoing reasons, we conclude that the bulbs
are excluded from Chapter 84 and are properly classifia-
ble under Heading 7020 of the HTSUS.
AFFIRMED
COSTS
Costs to the United States.