[00:00:05] Speaker 01:
We got it.

[00:00:34] Speaker 01:
The United States Court of Appeals for their federal circuit is now opened and in session.

[00:01:03] Speaker 01:
God save the United States and this honorable court.

[00:01:07] Speaker 02:
Thank you.

[00:01:07] Speaker 02:
Be seated.

[00:01:13] Speaker 02:
Okay.

[00:01:13] Speaker 02:
The first argued case this morning is number 15-1666, the container store against the United States.

[00:01:22] Speaker 02:
Mr. Silverman.

[00:01:23] Speaker 04:
Good morning.

[00:01:32] Speaker 04:
May it please the court.

[00:01:33] Speaker 04:
This case comes to this court in an unusual situation.

[00:01:37] Speaker 04:
It's kind of like coming to the Supreme Court in the sense that we have two different decisions from the Court of International Trade on the identical merchandise.

[00:01:47] Speaker 04:
The first time, the Court of International Trade followed this court's decision in store wall, and they classified these pieces, top tracks and hanging standards, as parts of furniture under heading 9403.

[00:02:00] Speaker 04:
The second time,

[00:02:03] Speaker 04:
The court found that because the container store products were metal and the store wall products were plastic, that the court didn't have to follow store wall, which we think was definitely wrong.

[00:02:22] Speaker 03:
Is that the only distinction between TCS1 and this case?

[00:02:30] Speaker 03:
Didn't they say that they don't have to follow their decision in that case to follow Storewell?

[00:02:38] Speaker 04:
Well, the judge in TCS 2 said he doesn't have to follow TCS 1.

[00:02:45] Speaker 04:
But TCS 1 was following Storewell, so we think the judge should have followed Storewell.

[00:02:51] Speaker 04:
The distinctions between TCS 2 and TCS 1 are really small.

[00:02:55] Speaker 03:
One of them is... They're willing to forego any argument that somehow we should have been bound by TCS 1 and just focus us on store wall.

[00:03:03] Speaker 04:
I think we have to go right to store wall, Judge.

[00:03:05] Speaker 03:
Okay.

[00:03:05] Speaker 04:
Because I think two judges at the same level can come up to different conclusions.

[00:03:09] Speaker 02:
Okay.

[00:03:11] Speaker 02:
There is precedent which says very plainly that as far as customs classification and so on and duty assessment is concerned, explicitly stare decisis just doesn't apply.

[00:03:25] Speaker 02:
Do you agree with that appreciation of precedent?

[00:03:31] Speaker 02:
It's plainly said.

[00:03:32] Speaker 02:
Is there a way of confining it or limiting it otherwise?

[00:03:38] Speaker 02:
Or is it a fresh shot every time there's a new importation?

[00:03:43] Speaker 04:
My understanding is it goes back to the Stone and Downer case, which related to collateral estoppel, not stare decisis.

[00:03:51] Speaker 04:
But the result would be the same.

[00:03:52] Speaker 04:
Would it not?

[00:03:53] Speaker 04:
If it's a stop, then it's a stop.

[00:03:55] Speaker 04:
No, I think what happens, I think there's a slight difference.

[00:03:59] Speaker 04:
If you have collateral estoppel going your way, then you have issue preclusion.

[00:04:03] Speaker 04:
There's nothing even to talk about.

[00:04:05] Speaker 04:
But if you have stare decisis, what we left with from Stonewall is how the court interpreted the law.

[00:04:12] Speaker 04:
The facts relating to Stonewall are not our facts.

[00:04:15] Speaker 04:
I have a slightly different product.

[00:04:17] Speaker 04:
But in Stonewall, the court determined what the scope was of heading 9403 and what the notes were

[00:04:25] Speaker 04:
for chapter 94.

[00:04:27] Speaker 04:
And it's amazing the parallels between our products and the store wall products.

[00:04:32] Speaker 04:
The court said in TCS 2 that the products in our case are functional equivalents of the products in store wall.

[00:04:42] Speaker 04:
Well, that makes sense.

[00:04:43] Speaker 04:
Also, the end product, the unit furniture product, is a functional equivalent of the products in store wall.

[00:04:52] Speaker 04:
In addition to that, what we have is

[00:04:54] Speaker 04:
The government made the same arguments and store wall that they're making here and the same notes.

[00:05:00] Speaker 03:
One of the things I was a little confused about in your brief is no matter what we think of the merits of it, it seems like you were really focusing a lot on Judge Dyke's concurrence.

[00:05:12] Speaker 03:
But that's not the majority.

[00:05:15] Speaker 04:
You are correct, Your Honor.

[00:05:16] Speaker 04:
We focused on Judge Dyke's concurrence just for one point, that 9403 was a use provision.

[00:05:22] Speaker 04:
Okay.

[00:05:23] Speaker 04:
But the majority didn't say that?

[00:05:26] Speaker 04:
No, they did not.

[00:05:27] Speaker 03:
Okay.

[00:05:27] Speaker 03:
They didn't really say it wasn't, but they didn't say it was.

[00:05:30] Speaker 04:
Correct.

[00:05:31] Speaker 04:
They didn't have to get to that.

[00:05:32] Speaker 04:
But they did make a decision based on GIRI 1.

[00:05:35] Speaker 04:
They make a decision based on GIRI 1.

[00:05:37] Speaker 04:
That means there's only one tariff provision that applied to that merchandise.

[00:05:41] Speaker 04:
So here, merchandise started at chapter 39.

[00:05:44] Speaker 04:
There's a note in chapter 39 that says, if you have articles of chapter 94,

[00:05:50] Speaker 04:
you move them to chapter 94.

[00:05:53] Speaker 04:
Then there's a note in chapter 94 that said, if you have an article that is a part of general use as defined in section 15, that's a metal section, that you are to remove parts from chapter 94 and put them back into parts of general use.

[00:06:13] Speaker 04:
So that note, which was very much in play in Star Wars, says, not only do you move parts, the metal parts,

[00:06:21] Speaker 04:
that are parts of general use, but you also remove similar plastic parts.

[00:06:25] Speaker 04:
So our thinking was, if the parts in store wall were parts of general use, then the court would have excluded it from chapter 94.

[00:06:37] Speaker 04:
And then you would have had competing notes, one note moving it from 39 to 94, and one note moving it out of 94.

[00:06:51] Speaker 04:
because it would be like a part of general use.

[00:06:54] Speaker 04:
And the court didn't do that.

[00:06:55] Speaker 04:
They said, oh, we're only dealing with 94.

[00:06:58] Speaker 04:
And these arguments were made by the government.

[00:07:00] Speaker 04:
They're in their briefs.

[00:07:02] Speaker 04:
And the court never addressed it in its opinion, but it was before the court.

[00:07:07] Speaker 04:
So let's put stare decisis aside for a second.

[00:07:11] Speaker 04:
We think we're entitled to judgment just based on that.

[00:07:15] Speaker 04:
But there should be some kind of parallel between the products

[00:07:19] Speaker 04:
store wall and the products here.

[00:07:21] Speaker 04:
The fact that one's metal and one's plastic shouldn't make a difference.

[00:07:24] Speaker 03:
So you think that even without viewing it as a use provision, that 9403 is still more specific than 8302?

[00:07:36] Speaker 04:
OK.

[00:07:38] Speaker 04:
So let me answer your question this way.

[00:07:41] Speaker 04:
That only comes into play if this court believes that this merchandise is covered by Section 15.

[00:07:48] Speaker 04:
We don't think it even is covered by section 15.

[00:07:51] Speaker 04:
We don't think it is a part of general use.

[00:07:54] Speaker 03:
But even if it is, it's not there to inquire.

[00:07:57] Speaker 04:
If it is a part of general use and it's parts of furniture, the government concedes it's parts of furniture, the court believes it's parts of furniture.

[00:08:06] Speaker 04:
Then I have notes that cancel each other out.

[00:08:09] Speaker 04:
You have to go to relative specificity, GRI 3, and based on Judge Dyke's decision,

[00:08:16] Speaker 04:
a used provision will defeat an EO nominee provision.

[00:08:20] Speaker 03:
But can 9403 defeat the EO nominee provision even if it's not a used provision?

[00:08:26] Speaker 03:
That's really my question.

[00:08:29] Speaker 04:
I think it's more specific, but it's a closer question, Judge.

[00:08:34] Speaker 04:
But we don't think that our merchandise is considered a part of general use.

[00:08:44] Speaker 04:
Let's go back to section 15.

[00:08:46] Speaker 04:
In section 15, which covers 8302 and a bunch of other provisions, section 15, there's a note that says, if you have articles of chapter 94, you move them out of section 15.

[00:09:02] Speaker 04:
And again, we go back to chapter 94 that said, if you have parts of general use, you go out of chapter 94.

[00:09:12] Speaker 04:
So the government classified this.

[00:09:14] Speaker 04:
was arguing it should be classified under 8302 for metal mountings suitable for furniture.

[00:09:23] Speaker 04:
And now the exercise is, what's a metal mounting suitable for furniture?

[00:09:30] Speaker 04:
So there are a number of different, we look at common meaning, we look at legislative history, we look at explanatory.

[00:09:36] Speaker 03:
Well, we don't even get to legislative history unless it's ambiguous, right?

[00:09:40] Speaker 04:
That's correct.

[00:09:41] Speaker 03:
So did you argue below that those terms are ambiguous?

[00:09:43] Speaker 04:
Absolutely.

[00:09:44] Speaker 04:
What happened is the dictionary definitions of the term mounting are really all over the lot.

[00:10:01] Speaker 04:
So here's a collection of them.

[00:10:06] Speaker 04:
One of them says frame, support, embellishment, its base setting.

[00:10:12] Speaker 04:
It could be lots of different things.

[00:10:14] Speaker 04:
What the court did was they picked one definition.

[00:10:18] Speaker 04:
And as it turns out, it's a Merriam-Webster definition.

[00:10:23] Speaker 04:
It says mounting defined for kids.

[00:10:25] Speaker 04:
That's the one the judge focused on.

[00:10:29] Speaker 04:
And he says it's a frame or support that holds something.

[00:10:33] Speaker 04:
Then it also says a mounting for an engine, which would kind of put it into context.

[00:10:37] Speaker 04:
The judge didn't add that into his decision.

[00:10:42] Speaker 04:
The dictionary definitions for mounting are very, very broad.

[00:10:46] Speaker 04:
It can either be something that attaches to things.

[00:10:50] Speaker 04:
It could be something that's attached to something.

[00:10:53] Speaker 04:
But it's not the thing itself.

[00:10:54] Speaker 04:
Here, the top tracks and hanging standards form the back of this furniture.

[00:11:00] Speaker 03:
So your point is that by objecting to the vagueness of the dictionary definitions that you were effectively arguing ambiguity.

[00:11:08] Speaker 04:
Yes.

[00:11:08] Speaker 04:
We pointed the judge to the explanatory notes

[00:11:11] Speaker 04:
from the very, very beginning.

[00:11:13] Speaker 03:
OK.

[00:11:13] Speaker 03:
Did you point the judge to legislative history, or is that new for us?

[00:11:19] Speaker 04:
I think the legislative history is new.

[00:11:21] Speaker 04:
What we found was, when we look back, we found that, well, first we saw that in Storewall, the court looked to the explanatory notes and looked to legislative history, which in that case turned out to be the Brussels nomenclature.

[00:11:37] Speaker 04:
And we have the exact language from the Brussels nomenclature

[00:11:41] Speaker 04:
that appears in the explanatory notes for the harmonized tariff schedule.

[00:11:45] Speaker 04:
So we thought that was a helpful tool.

[00:11:47] Speaker 04:
If it worked in store wall, it should work here.

[00:11:50] Speaker 04:
So if you have dictionary definitions that go in lots of different directions, the court has to go beyond just those common meaning definitions and look at explanatory notes and legislative history and so on.

[00:12:04] Speaker 04:
And the explanatory notes here

[00:12:08] Speaker 04:
The judge cites them in his decision, different places.

[00:12:12] Speaker 04:
But our sense is that he really ignored them.

[00:12:14] Speaker 04:
He took one sentence and used it, which basically said, if you have something that's defined, that's used for a specific use, it still can go here.

[00:12:24] Speaker 04:
But most of the explanatory notes limit what's a mounting suitable for furniture to an embellishment type thing, to an accessory type thing.

[00:12:36] Speaker 04:
It says in there clearly,

[00:12:38] Speaker 04:
It doesn't include essential part of the structure of an article.

[00:12:43] Speaker 04:
Well, without our top tracks and hanging standards, there is no unit furniture.

[00:12:49] Speaker 04:
You can't get any more essential to the structure than those articles.

[00:12:54] Speaker 04:
It also gives you examples of things that are those structural pieces.

[00:12:58] Speaker 04:
It gives you the swivel in one of those chairs that turn around, and it gives you window frames.

[00:13:03] Speaker 04:
And ours are just like that.

[00:13:05] Speaker 04:
Without the swivel in a swivel chair, you have no chair.

[00:13:07] Speaker 04:
without the top tracks and hanging standards, you have no unit furniture.

[00:13:11] Speaker 02:
Is it correct that what you've been telling us accords with the initial, the very first customs classification?

[00:13:20] Speaker 02:
Yes, Your Honor.

[00:13:21] Speaker 02:
On the first decision.

[00:13:22] Speaker 04:
Oh, yes.

[00:13:23] Speaker 04:
This was argued in Container Store 1 and in Container Store 2.

[00:13:28] Speaker 04:
OK.

[00:13:28] Speaker 04:
And it's kind of interesting that there were some rulings issued by the Custom Service.

[00:13:35] Speaker 02:
Not whether it was argued, what was decided.

[00:13:37] Speaker 02:
At what stage in the history, at least as you argued it to us, the position you're now taking had a previous decision on the premises that you've now argued.

[00:13:51] Speaker 04:
Is that correct?

[00:13:52] Speaker 04:
Even the custom service found that the provision for mounting suitable for furniture was limited to non-structural type items.

[00:14:01] Speaker 04:
And they've come away from that obviously in this litigation.

[00:14:04] Speaker 04:
But that was their position at the administrative agency.

[00:14:06] Speaker 04:
That was my question.

[00:14:07] Speaker 02:
Let's hear from the government because I'm going to ask counsel the same question.

[00:14:12] Speaker 04:
Thank you, Your Honor.

[00:14:13] Speaker 02:
Thank you.

[00:14:19] Speaker 02:
Ms.

[00:14:20] Speaker 02:
Powell.

[00:14:20] Speaker 02:
And as you see, what's troubling me is at what stage can an importer feel that there is a classification that has been assessed and the duties paid and so on, and in this case reviewed

[00:14:33] Speaker 02:
that can be relied on rather than having to start afresh with another importation?

[00:14:40] Speaker 00:
Well, Your Honor, to answer that question, as counsel had referred to, there is the principle of stone and downer.

[00:14:47] Speaker 00:
And so to the extent that there hasn't been a ruling on a classification by this court, an importer can relitigate their merchandise, and so can the government.

[00:15:01] Speaker 02:
But you're not saying customs can keep changing its mind until a court intervenes?

[00:15:07] Speaker 00:
Oh, absolutely not.

[00:15:08] Speaker 00:
Let me go back and explain what happened in container store one.

[00:15:12] Speaker 00:
Container store one was briefed at the same time as store wall at the CIT.

[00:15:18] Speaker 00:
But our case sort of sat while store wall went forward.

[00:15:22] Speaker 00:
In container store one, the issue of unit furniture was never brought up.

[00:15:25] Speaker 00:
In the container store one, they argued that the merchandise was shelved furniture.

[00:15:30] Speaker 00:
Neither party put forth any arguments on unit furniture.

[00:15:34] Speaker 02:
We know what they argued, but the items were the same, I gather.

[00:15:40] Speaker 00:
Yes.

[00:15:41] Speaker 00:
But once Storewall, this court decided Storewall, it decided a definition for unit furniture, which then caused us to reassess our arguments in light of Storewall and any new arguments we wanted to

[00:15:56] Speaker 00:
put forth, we had to go back to the trial court and do that because this court would have never heard them before.

[00:16:02] Speaker 00:
So that's why there's a Container Store 2.

[00:16:03] Speaker 03:
The reality is it does feel like you've got Container Store 1 where the government loses, you've got Storewell where the government loses, and it does feel like you just keep going back to the well because you're not happy with the conclusions of various courts that are ruling against you.

[00:16:17] Speaker 00:
Well, let me actually explain why we're here in Container Store 2.

[00:16:22] Speaker 00:
It's not because we're unhappy.

[00:16:24] Speaker 00:
It's because store wall changed the landscape.

[00:16:27] Speaker 00:
It set forth the definition of unit furniture.

[00:16:29] Speaker 00:
So we had to assess if an entire ELFAC system came in, would it fall under unit furniture?

[00:16:36] Speaker 00:
And that's why we're going back in this case.

[00:16:39] Speaker 00:
And in the Container Store 1 case, there was an error.

[00:16:43] Speaker 00:
We didn't appeal it, again, because of store wall.

[00:16:46] Speaker 00:
And we would have had to put forth new arguments.

[00:16:48] Speaker 00:
The error that was in Container Store 1 was that the judge there stopped at Container Store 1.

[00:16:54] Speaker 00:
By the time she didn't do a proper parts analysis, Container Store 1 just said the merchandise is similar to store wall because of the definition of unit furniture.

[00:17:05] Speaker 00:
The definition of unit furniture is stare decisis.

[00:17:08] Speaker 00:
But there's a second part to the analysis.

[00:17:11] Speaker 00:
There's a parts analysis.

[00:17:12] Speaker 00:
The parts analysis that the court undertook in Container Store 1 was simply the parts are dedicated to the alpha system.

[00:17:19] Speaker 00:
That was the end of the parts analysis.

[00:17:21] Speaker 02:
So that can be changed with each successive importation?

[00:17:26] Speaker 00:
I'm not sure it can be changed, but the analysis that she undertook was incorrect.

[00:17:33] Speaker 02:
Well, shouldn't the first one apply and that would end it?

[00:17:37] Speaker 00:
The first container store, should it apply?

[00:17:39] Speaker 02:
The first classification.

[00:17:42] Speaker 00:
No, because Stone and Downer, you can litigate again.

[00:17:46] Speaker 00:
And we're not just litigating again.

[00:17:48] Speaker 00:
Like I said, Storewall changed it.

[00:17:51] Speaker 03:
So the second part of the analysis... But wait, TCS1 was decided after Storewall.

[00:17:55] Speaker 00:
Yes.

[00:17:56] Speaker 00:
Exactly.

[00:17:57] Speaker 00:
And the court never gave us an opportunity to present any new arguments in light of Starwall, despite the fact that she sent us a letter asking us about Starwall.

[00:18:05] Speaker 00:
And the government, in that letter back to her, said we should wait.

[00:18:10] Speaker 00:
And yes, and we think we might have some arguments regarding Starwall.

[00:18:14] Speaker 00:
But instead of asking the parties for more briefing, she just decided the case.

[00:18:18] Speaker 03:
Well, what's the difference?

[00:18:21] Speaker 03:
Can you distinguish the function of the materials that issue in store wall and those that issue here?

[00:18:27] Speaker 00:
Absolutely.

[00:18:28] Speaker 00:
The materials in store wall are called slat walls.

[00:18:32] Speaker 00:
And those slat walls are huge panels that you put on the wall, sort of like building material.

[00:18:36] Speaker 00:
Like when you go into a store, you'll see slat wall.

[00:18:39] Speaker 00:
And within the slat wall, there's these grooves.

[00:18:41] Speaker 00:
And you put the hooks in the grooves, and then you can put your baskets or your shelves.

[00:18:46] Speaker 00:
It has an aesthetic look to it.

[00:18:48] Speaker 00:
It comes in many colors.

[00:18:49] Speaker 00:
It's mildew resistant.

[00:18:50] Speaker 00:
It's waterproof.

[00:18:51] Speaker 00:
So the actual panel is the thing that makes StoreWall.

[00:18:55] Speaker 00:
Here, the top tracks and hanging standards are hardware.

[00:18:59] Speaker 00:
When you go into the container store, you don't go in and ask for top tracks and hanging standards.

[00:19:03] Speaker 00:
Your goal is to create a closet.

[00:19:05] Speaker 00:
How many drawers do you need?

[00:19:06] Speaker 00:
How many shelves do you need?

[00:19:07] Speaker 00:
How many baskets do you need?

[00:19:08] Speaker 00:
They work exactly the same way.

[00:19:10] Speaker 00:
At the end of the day, high level, they're organizational systems.

[00:19:14] Speaker 00:
But the merchandise in StoreWall, the merchandise in the container store is just hardware.

[00:19:18] Speaker 00:
The standards are no different than standards.

[00:19:21] Speaker 03:
It's just hardware because it's metal as opposed to plastic?

[00:19:23] Speaker 03:
No.

[00:19:24] Speaker 03:
Or not mold resistant?

[00:19:25] Speaker 03:
I'm not sure I understand.

[00:19:27] Speaker 00:
It's different because it's hardware.

[00:19:29] Speaker 00:
The standards, they might be specific to alpha, but they're no different.

[00:19:33] Speaker 00:
They don't operate any different than when you go into Home Depot and buy a standard, just because the alpha doesn't take them out of being hardware.

[00:19:41] Speaker 00:
They're the things that you need to affix your shelves to the wall.

[00:19:45] Speaker 00:
And the distinction here is not just simply that one's plastic is one metal.

[00:19:49] Speaker 00:
One's metal.

[00:19:50] Speaker 00:
And that metal is what brings in note 1D.

[00:19:54] Speaker 03:
So your description of the differences would seem to be putting you into use land.

[00:20:01] Speaker 03:
In other words, putting you into the question of is it a use provision?

[00:20:05] Speaker 03:
And then you buck up right against Judge Dyke's concurrence.

[00:20:09] Speaker 00:
No.

[00:20:10] Speaker 00:
Your Honor, I understand what you're saying.

[00:20:15] Speaker 00:
Classification is based on the headings, the chapter notes, and the section notes.

[00:20:22] Speaker 00:
Here, we have the headings, 9403, 8302.

[00:20:27] Speaker 00:
Then we go to the notes.

[00:20:28] Speaker 00:
That's the part where the container store 1, in our opinion, wasn't correct.

[00:20:35] Speaker 00:
The note is 1D.

[00:20:36] Speaker 00:
1D takes you out of 94, and you have to do an analysis of note 1D because the merchandise is metal.

[00:20:44] Speaker 00:
That's what's different.

[00:20:46] Speaker 00:
It's not that they're simply metal.

[00:20:47] Speaker 00:
Being metal implicates Note 1D.

[00:20:50] Speaker 00:
And Note 1D says, if it's a part of general use, it comes out of 94.

[00:20:55] Speaker 00:
So essentially, we don't classify merchandise as to whether it's similar or not.

[00:20:59] Speaker 00:
We classify it based on the headings.

[00:21:01] Speaker 00:
So based on the headings and the notes.

[00:21:04] Speaker 00:
And the note takes you to 1D.

[00:21:06] Speaker 00:
And 1D takes you to 8302 and whether the merchandise is classifiable in 8302.

[00:21:11] Speaker 00:
And that takes you to what the language of 8302 is.

[00:21:15] Speaker 00:
And to back that up, there's an additional rule of interpretation, Note 1C.

[00:21:21] Speaker 00:
Note 1C governs parts as well.

[00:21:23] Speaker 00:
And that backs up what I was saying is that additional rule of interpretation Note 1C says, if you have a specific provision for parts, it doesn't go in a generic provision.

[00:21:34] Speaker 00:
So there's a parts analysis that wasn't undertaken in Container Store 1.

[00:21:39] Speaker 00:
And it wasn't at issue in Container Store 1 because Note 1D wasn't implicated.

[00:21:44] Speaker 03:
1D is a use rule, right?

[00:21:46] Speaker 03:
A general use rule?

[00:21:48] Speaker 03:
Note 1D?

[00:21:49] Speaker 00:
Yeah.

[00:21:49] Speaker 00:
Note 1D says if you have a merchandise that falls under the term parts of general use, it comes out of 94.

[00:21:58] Speaker 00:
And to determine what parts of general use are, you have to look at the definition of parts of general use.

[00:22:04] Speaker 00:
And that's in note 2 to section 15.

[00:22:08] Speaker 00:
And note 2 to section 15 lists a bunch of headings

[00:22:12] Speaker 00:
that are considered parts of general use, and 8302 is there.

[00:22:16] Speaker 00:
So it's not the fact that it's just metal versus plastic, or are they the same.

[00:22:21] Speaker 00:
You have to go with, how do we classify merchandise?

[00:22:24] Speaker 00:
Step one, we look at the headings.

[00:22:25] Speaker 00:
Step two, we look at the notes.

[00:22:27] Speaker 00:
The note is 1D.

[00:22:29] Speaker 00:
Does it fall within note 1D?

[00:22:30] Speaker 00:
Well, note 1D takes you to note 2C, parts of general use, 8302, that takes you to the heading.

[00:22:37] Speaker 00:
Do they fall within the heading?

[00:22:39] Speaker 00:
Yes.

[00:22:39] Speaker 00:
As a trial court correctly,

[00:22:41] Speaker 00:
determined these products are mountings suitable for furniture because they support the shelving, they support the baskets, and together with brackets, they support the other items.

[00:22:57] Speaker 03:
Do you see a distinction between accessory mountings and fittings versus mountings and fittings?

[00:23:03] Speaker 00:
Well, Your Honor, the accessory mountings and fittings language is in the explanatory note.

[00:23:10] Speaker 00:
When we're looking at the explanatory note, we definitely don't want to import things from the note into the heading.

[00:23:18] Speaker 03:
So we're only supposed to look at it for the things that help you?

[00:23:21] Speaker 00:
No.

[00:23:21] Speaker 00:
I'm just saying because the container store wants to read a limitation into the heading taken from the note.

[00:23:29] Speaker 00:
Back to the word accessory, accessory fittings and mountings.

[00:23:32] Speaker 00:
That note generally says things like handles, clasps, hinges,

[00:23:40] Speaker 00:
fall within that.

[00:23:42] Speaker 00:
And brackets, standards, top tracks, they're all, I don't know if we want an accessory, but they don't make the product.

[00:23:54] Speaker 00:
That's how you would fix them to the wall.

[00:23:57] Speaker 00:
It's no different as when I go into Home Depot and I want to buy shelving.

[00:24:00] Speaker 00:
I buy a standard and something to fix to the wall.

[00:24:05] Speaker 00:
It's no different because it's called alpha.

[00:24:07] Speaker 00:
And that's what the note says, 8302.

[00:24:10] Speaker 00:
and this court's Honda decision, a part of general use can be specialized.

[00:24:14] Speaker 00:
It can be a bulk for a Honda car and still go in 8302.

[00:24:19] Speaker 03:
But Honda, wasn't it restricted to those statutory provisions that were under review?

[00:24:24] Speaker 03:
I mean, why would Honda apply here?

[00:24:26] Speaker 00:
Honda applies because it shows the print.

[00:24:29] Speaker 00:
And as they say in the decision, the notes work out how you actually arrive at the classification.

[00:24:38] Speaker 00:
So it's helpful.

[00:24:39] Speaker 00:
And to follow the analysis, the analysis starts with the exclusionary notes.

[00:24:44] Speaker 00:
And then it goes on to say, essentially at the end of the day, if you're a bulk, even if you're specifically for a Honda, you come out of that provision and you go into the parts of general use provision.

[00:24:56] Speaker 03:
So what you do is you read Honda extraordinarily broadly, and yet you read Storewall, which is much more factually consistent with these circumstances very narrowly.

[00:25:10] Speaker 00:
But I think what you just said is key factually.

[00:25:14] Speaker 00:
Starry decisis is really limited to the actual legal holding.

[00:25:20] Speaker 00:
The legal holding in Starwall was just the unit furniture.

[00:25:25] Speaker 00:
That's the legal holding.

[00:25:26] Speaker 00:
That's the starry decisis.

[00:25:27] Speaker 00:
And we don't have a whole system of unit furniture here.

[00:25:30] Speaker 00:
Then there was a second part of the decision that it was actually said classification of the Starwall merchandise.

[00:25:36] Speaker 00:
That's where actually applied the law.

[00:25:38] Speaker 03:
But it also actually deals with at least one of the two provisions at issue here, where Honda doesn't deal with any of the provisions at issue.

[00:25:48] Speaker 00:
True.

[00:25:49] Speaker 00:
I agree.

[00:25:50] Speaker 00:
But Honda does deal with the concept of parts of general use.

[00:25:53] Speaker 00:
Parts of general use appears throughout the TAF, and that was just one instance to show how they work together for different provisions.

[00:26:04] Speaker 00:
And again, I'll direct the court's attention to the parts analysis in Storewall.

[00:26:10] Speaker 00:
All the court held was that the parts in that case are dedicated for use with the Storewall system.

[00:26:17] Speaker 00:
Therefore, they're parts of the Storewall system.

[00:26:19] Speaker 00:
Here, you have to deal with Note 1D.

[00:26:22] Speaker 00:
It's a legal note.

[00:26:23] Speaker 00:
It's a statute.

[00:26:25] Speaker 00:
And that wasn't at issue in Storewall.

[00:26:35] Speaker 00:
The other thing I wanted to address was the legislative history.

[00:26:38] Speaker 00:
The legislative history in Starwall was a bit different.

[00:26:41] Speaker 00:
It talked about the Brussels nomenclature, but there was also a committee report.

[00:26:46] Speaker 00:
And the committee report actually gave the court some context, some background as to the definition of unit furniture.

[00:26:53] Speaker 03:
So you agree that legislative history is one of the things we should be looking to?

[00:26:56] Speaker 00:
No.

[00:26:57] Speaker 03:
Regardless of how we read it?

[00:26:59] Speaker 00:
No.

[00:26:59] Speaker 00:
First, here, there's no legislative history.

[00:27:02] Speaker 00:
All they point to is the fact that the Brussels tariff nomenclature is somehow the same.

[00:27:07] Speaker 00:
That doesn't shed light on anything.

[00:27:08] Speaker 00:
There's no committee report.

[00:27:09] Speaker 00:
There's nothing.

[00:27:10] Speaker 00:
And in this court's decision in Tyco fire products, the court held that the Brussels tariff nomenclature is irrelevant to the HTSU.

[00:27:20] Speaker 03:
But we didn't say it was irrelevant in Storewell, did we?

[00:27:23] Speaker 00:
No.

[00:27:23] Speaker 00:
Because you looked at it.

[00:27:24] Speaker 00:
But you had legislative history to look at.

[00:27:27] Speaker 00:
You had a committee report.

[00:27:28] Speaker 00:
There's no committee report here to shed light on the scope of 8302.

[00:27:34] Speaker 00:
And another thing, it's the explanatory note that they're relying on.

[00:27:39] Speaker 00:
Explanatory notes aren't legislative history.

[00:27:41] Speaker 00:
So even if you look at the Brussels nomenclature explanatory note, the fact that it's the same here, that doesn't say anything.

[00:27:48] Speaker 00:
There's no committee report.

[00:27:49] Speaker 00:
There's nothing.

[00:27:50] Speaker 00:
There's no information.

[00:27:51] Speaker 00:
So I wouldn't even term it legislative history.

[00:27:56] Speaker 00:
So I do disagree.

[00:27:58] Speaker 00:
And in terms of whether it should be considered, no, because here the tariff term mounting is not ambiguous.

[00:28:05] Speaker 00:
It's actually base metal mountings and fittings suitable for furniture.

[00:28:12] Speaker 00:
So it doesn't encompass every single mounting.

[00:28:15] Speaker 00:
It specifically says what kind of mountings they are.

[00:28:21] Speaker 02:
Well, to round out what I asked you at the beginning,

[00:28:25] Speaker 02:
The government's position then is that when there is a change in classification, there is no obligation to point to error or clear error, no deference to the prior classification at all.

[00:28:42] Speaker 02:
It just starts afresh and is presented here on appeal on the merits when it's appealed of the current classification to which the importer is objecting.

[00:28:55] Speaker 00:
As long as this court has not issued a binding pronouncement in a case, there's no stare decisis.

[00:29:07] Speaker 02:
You say this court, or how about the Court of International Trade?

[00:29:11] Speaker 00:
There's no binding stare decisis among the judges there.

[00:29:15] Speaker 00:
I think if they want to give each other their decisions persuasive weight, they can, but it's not binding.

[00:29:22] Speaker 00:
I'd like to point this court to the decisions in Decker's.

[00:29:25] Speaker 00:
We've had Deckers 1, we've had Deckers 2, and there might be a Deckers 3.

[00:29:32] Speaker 00:
It's the same thing.

[00:29:33] Speaker 00:
In that case, the importer keeps bringing the cases over and over again.

[00:29:38] Speaker 00:
But in Deckers 2, this court said, we held in Deckers 1 what the statute was, how to construe that statute.

[00:29:46] Speaker 00:
Therefore, you're stuck with that part of it.

[00:29:48] Speaker 00:
You can litigate and litigate and litigate, but that part of the decision you're stuck with.

[00:29:52] Speaker 00:
And so we had Deckers 2.

[00:29:54] Speaker 00:
And we probably will have Decker's threat.

[00:29:56] Speaker 00:
So until this court makes a pronouncement, that's the state, whether it's plaintiffs, whether it's the government.

[00:30:04] Speaker 00:
And we don't do it lightly.

[00:30:05] Speaker 00:
We don't do this lightly.

[00:30:08] Speaker 00:
It was because of the strange circumstance that we had here with Stonewall coming down and us not having a chance to brief the court.

[00:30:17] Speaker 00:
We could not appeal, because it would seem like a brand new case if we brought it on appeal, because there were so many issues.

[00:30:23] Speaker 00:
new arguments that the court wouldn't have seen below.

[00:30:29] Speaker 02:
Any more questions?

[00:30:31] Speaker 02:
Thank you.

[00:30:31] Speaker 02:
Thank you.

[00:30:40] Speaker 04:
A few points.

[00:30:41] Speaker 04:
Yes, Your Honor.

[00:30:44] Speaker 04:
Thank you.

[00:30:46] Speaker 04:
I think Decker supports our position, because I think Storewall, the term in the scope of 9403,

[00:30:53] Speaker 04:
and the notes to chapter 94.

[00:30:55] Speaker 04:
And I think that squarely resolves this case.

[00:30:58] Speaker 04:
So counsel for the government talked about chapter note 1D.

[00:31:04] Speaker 04:
It says, this chapter does not cover parts of general use as defined in note 2 to section 15 of base metal or similar articles of plastic, chapter 39, or safes.

[00:31:19] Speaker 04:
I mean, that note was in play in Storewall

[00:31:22] Speaker 04:
And it was decided there, and I think it's binding here, or we need some consistency.

[00:31:29] Speaker 04:
After store wall was decided, my recollection is, and I don't think this is critical either way, but my recollection is the judge asked us for additional briefing on it on our case, which was pending and suspended.

[00:31:43] Speaker 04:
And I think we gave him information on it.

[00:31:46] Speaker 04:
This is container store one.

[00:31:48] Speaker 04:
Also, all the notes that we're talking about today, the cross notes.

[00:31:53] Speaker 03:
attention that they were never given a chance to... That's what the government was saying.

[00:31:57] Speaker 04:
They never bring it.

[00:31:58] Speaker 04:
And you're saying that's not your... My recollection is we did brief it and then the judge issued the decision.

[00:32:04] Speaker 04:
In addition to that, these notes, which move things from one chapter to another and vice versa, those were all before the court in Container Store 1.

[00:32:11] Speaker 04:
The Container Store 1 judge did not address the issue about whether or not these articles were specifically within the common meaning of 8302.

[00:32:23] Speaker 04:
And the courts don't have to address every argument that's before them.

[00:32:26] Speaker 04:
But that argument was before them.

[00:32:30] Speaker 04:
The store wall merchandise.

[00:32:35] Speaker 04:
The government talked about these big panels, but there were also locator tabs.

[00:32:38] Speaker 04:
And this court also said both of those things go into Chapter 9403.

[00:32:43] Speaker 04:
The CIT in Container Store 2 has said they are functionally equivalent to our articles.

[00:32:49] Speaker 04:
I don't think that's worth anything.

[00:32:51] Speaker 03:
Do you think that the fact that in Starwall they were bigger and mold proof and more dramatic that those make a difference?

[00:33:01] Speaker 04:
No, I don't.

[00:33:02] Speaker 04:
Because one thing I agree with my opponent about is it's a process.

[00:33:06] Speaker 04:
You have to identify the tariff headings and then you look at the notes and you see, are you prima facie classified under both heading or one heading?

[00:33:16] Speaker 04:
And doing that, you're looking at common meaning, you're looking at explanatory notes.

[00:33:21] Speaker 03:
But do you walk into Container Store and buy a system, or do you walk into Container Store and just put pieces and parts together?

[00:33:28] Speaker 04:
What you do is, I think you sit down with a sales representative, and they tend to sell you systems.

[00:33:35] Speaker 04:
So there's a half a dozen different packages.

[00:33:38] Speaker 04:
You can buy individual items, but usually I want the boy's closet or the boy's room, and they give you

[00:33:45] Speaker 04:
30 pieces or whatever that makes it up, you take it home and put it together.

[00:33:48] Speaker 04:
That's generally how it's sold.

[00:33:50] Speaker 04:
The evidence in our cases is like 97% of these top tracks and hanging stands are sold with other items in the system at that time, shelves and so on.

[00:34:01] Speaker 04:
I don't think this is a use case anymore because the government has conceded that 9403 covers these articles.

[00:34:10] Speaker 04:
Once we're there, it's really not a use case at all.

[00:34:13] Speaker 04:
There's no doubt about the use of these items.

[00:34:17] Speaker 04:
The most important thing we do in this exercise, as in to say because you're sitting here a long time and you know your job is to try to implement the intent of the drafters of the statute.

[00:34:30] Speaker 04:
And I think it's not right to say, toss out the explanatory notes,

[00:34:36] Speaker 04:
and toss out the Brussels.

[00:34:37] Speaker 04:
We're not just dealing with the provision of Brussels, but also the notes to the Brussels nomenclature.

[00:34:43] Speaker 04:
The only reason they don't consider the explanatory notes to be legislative history for the harmonized tariff schedules is because they were published at the same time as the harmonized tariff schedules.

[00:34:54] Speaker 04:
But they clearly show the intent of the drafters of the statute.

[00:34:58] Speaker 04:
And the fact that this is going back over 50 years, 60 years, means

[00:35:05] Speaker 04:
They don't want to put functional items in 8302.

[00:35:09] Speaker 04:
The other thing I will mention is this note that talks about parts of general use.

[00:35:19] Speaker 04:
But all it is is just a list.

[00:35:21] Speaker 04:
It says, where the words parts of general use appear in the tariff, it means items classified under these provisions, A through J. And one of them is 8302.

[00:35:30] Speaker 04:
We're not in 8302.

[00:35:32] Speaker 04:
We're not a part of general use.

[00:35:34] Speaker 04:
We're not excluded from chapter 94.

[00:35:36] Speaker 04:
I mean, that's how I get to where we want to be.

[00:35:41] Speaker 04:
And I think that's all I have, unless you have any more questions.

[00:35:45] Speaker 02:
Thank you.

[00:35:47] Speaker 02:
Thank you very much.

[00:35:49] Speaker 02:
The case is taken under submission.