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The Gerson Co. v. United States

United States Court of Appeals, Federal Circuit

August 6, 2018

THE GERSON COMPANY, Plaintiff-Appellant
v.
UNITED STATES, Defendant-Appellee

          Appeal from the United States Court of International Trade in No. 1:11-cv-00225-TCS, Chief Judge Timothy C. Stanceu.

          Ralph H. Sheppard, Meeks, Sheppard, Leo & Pills-bury, Fairfield, CT, argued for plaintiff-appellant.

          Hardeep Kaur Josan, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, New York, NY, argued for defendant-appellee. Also represented by Amy Rubin, Jeanne Davidson, Chad A. Readler.

          John Michael Peterson, Neville Peterson LLP, New York, NY, for amici curiae Target General Merchandise Inc., Accent-Fairchild Group Inc., All Season Imports, Inc., American Lighting Inc., The Gordon Companies, Inc., Illumination International LLC, Imagine Nation Books, Ltd., Lamrite West Inc., LED Power Inc., Precision Lighting & Transformer, Inc., RDA Lighting Inc., Service Lighting & Electrical Supplies, Inc., U.S. LED, Ltd. Also represented by Richard F. O'Neill, Russell Andrew Semmel.

          Before Lourie, O'Malley, and Chen, Circuit Judges.

          O'Malley, Circuit Judge.

         The Gerson Company appeals a decision of the United States Court of International Trade ("Trade Court") granting summary judgment in favor of the government. See Gerson Co. v. United States, 254 F.Supp.3d 1271 (Ct. Int'l Trade 2017). In that decision, the court classified Gerson's imported light-emitting diode ("LED") candles under subheading 9405.40.80 of the Harmonized Tariff Schedule of the United States ("HTSUS")-which covers certain "[l]amps . . . not elsewhere specified or included"- rather than under subheading 8543.70.70-which covers "[e]lectrical machines and apparatus," including "[e]lectric luminescent lamps." We agree with the Trade Court's classification, and, accordingly, affirm.

         I. Background

         A. The Subject Merchandise

         Gerson's imported merchandise consists of finished decorative candle and tea light lamps made of plastic and/or wax. The lamps are designed to resemble ordinary candles, such as votive, pillar, taper, or tea light candles. Unlike ordinary candles, however-which generate light by using a wick to vaporize wax-Gerson's candles use battery-operated LEDs. Gerson does not dispute that its candles serve both decorative and illuminative functions. See Oral Arg. at 1:10-25, Gerson Co. v. United States (No. 2018-1011), http://oralarguments.cafc.uscourts.gov/ default.aspx?fl=2018-1011.mp3.

         Between January and October 2009, Gerson imported twenty-seven entries of its candles through the Port of Kansas City, Missouri. U.S. Customs and Border Protection ("Customs") liquidated the merchandise under HTSUS subheading 9405.40.80, which imposes a duty rate of 3.9% ad valorem. That provision reads[1]:

9405 Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
40 Other electric lamps and lighting fittings:
80 Other………………………..……….3.9%

         Gerson objected to Customs' classification in four administrative protests, arguing that its candles should have been classified under subheading 8543.70.70, which imposes a duty rate of 2% ad valorem. That provision reads:

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
70 Other machines and apparatus:
70 Electric luminescent ...

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