On Appeal, Importer Pushes Back Against CIT Reasoning That Planners Were Diaries

The Court of International Trade was wrong to rule that imported calendar planners should be classified by CBP as diaries instead of calendars, the importer said in its opening brief to the U.S. Court of Appeals for the Federal Circuit on May 24 (Blue Sky The Color of Imagination v. U.S., Fed. Cir. # 24-1710).

The importer, Blue Sky The Color of Imagination, said CIT Judge Jane Restani erred when she said the planners fit the definition of a "diary" and should be entered under that Harmonized Tariff Schedule subheading instead (see 2404100052). The subheading, 4820.10.20.10, carries a 25% Section 301 tariff.

Blue Sky said it has been importing its planners “for over 20 years” under the duty-free calendar heading. It was only in 2019, “shortly after the imposition of Section 301 tariffs,” that CBP reclassified its planners as “other” paper products under subheading 4820.10.40, which also carries a 25% duty.

The importer argued that a prior CAFC case, Mead, is binding precedent. The Mead decision included language that described diaries as records of past events, it said, while Blue Sky’s planners are intended to be records of future events.

However, CIT illegally went against this precedent by holding that “today it is also ‘a book in which you write things that you must remember to do,’” the importer said, citing Restani’s opinion. It said Restani’s determination to rely on French and British English definitions of the word “diary” was a “novel, alternative rationale” that was “set forth in a single footnote in its decision.”

Further, CIT “raised the issue sua sponte for the first time during oral argument and did not allow the parties to brief the issue,” it claimed.

Restani claimed that the trade court didn't need to follow Mead because it had been based on pre-HTS case law, Blue Sky said. But it said that was wrong because, in Mead, CAFC “explicitly” reviewed the definition of “diary” under the HTS classification system.

The CIT judge also cited “a single CIT case,” Gerson Co., to argue that Mead was not relevant because the Mead court hadn’t considered the Harmonized System’s explanatory notes to its own heading 4910, Blue Sky said. But “Gerson is inapposite,” it said, because it “does not address the issue of whether a lower court must follow this Court’s legal precedent on the meaning of a tariff term” and because the page Restani cited didn’t mention explanatory notes (ENs).

The importer also took issue with the reasoning Restani used that landed its products under the “diaries” subheading.

“In its pursuit of the British English and French meaning of the term 'diary,' [CIT] neglected its obligation to determine the common and commercial meaning of the term in the U.S., which this Court has repeatedly concluded is the proper standard for a court to use to determine a tariff term’s correct meaning,” Blue Sky said.

None of the cases the trade court relied on held that only British English or French definitions can be used in interpreting definitions, it said. In all three cases, CIT cited American dictionaries or other sources, too.

The importer also pointed out that the HS’ explanatory notes aren’t binding, and that “absent clear showing of Congressional intent, this Court will not import incidental characteristics of the examples in the ENs into the headings of the” HTS.

Blue Sky also disagreed with Restani’s analysis of the relevant EN. Restani found that “the EN’s explanation that its exclusion of diaries includes ‘so-called engagement calendars’ confirms that the word diary within the HTSUS is intended to capture both the retrospective definition of a diary and the prospective definition,” but “the opposite is true,” it said.

It said the EN defines “engagement calendars” as a type of diary. The definition of an “engagement calendar” indicates that it is also a record of only past events, it said.

Instead, Blue Sky’s planners are “calendars of any kind” under Harmonized Tariff Schedule heading 4910, the company said. It claimed that its products’ "essential character" is described by that heading and that the method of analysis required by HTS General Rule of Interpretation 1 looks to the most specific heading and subheading that describes the product.

Further, heading 4910 is the proper classification for the planners because it is “last in the numerical sequence of the tariff,” Blue Sky said.