Benq America Corp. v. United States
646 F.3d 1371
| Fed. Cir. | 2011Background
- BenQ imported 20.1-inch flat-panel LCD monitors from China in 2004 (Dell 2001FP), with multiple data connectors and desktop stand; imported as components intended for display use.
- BenQ initially classified the monitors under HTSUS heading 8471.60.45 (ADP display units); Customs liquidated them under HTSUS 8528.21.70 (video monitors) with duties (5%).
- BenQ protested Customs’ reclassification; protest deemed denied after no action by Customs.
- The Court of International Trade denied BenQ’s motion for summary judgment and granted the government’s cross-motion, relying on Note 5(E) and Explanatory Notes to 8471 to exclude 8471 classification.
- BenQ argued for a principal function/Note 3 analysis (Section XVI) to classify as 8471; the government urged a principal use ARI 1(a) analysis under Note 5(B).
- This court vacated and remanded to perform a principal use analysis under Note 5(B) and ARI 1(a), noting Note 3 should not override the Chapter 84 Note 5(B) framework and that the Court did not properly apply those statutory requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Note 5(E) dictates exclusion from 8471. | BenQ argues Note 5(E) applies only in limited contexts and should not bar 8471 here. | Government contends Note 5(E) and Explanatory Notes support excluding 8471 classification. | Note 5(E) misapplied; remand required for proper analysis under Note 5(B). |
| Whether ARI 1(a) principal use governs classification under 8471. | BenQ seeks principal use analysis (Carborundum factors) to classify as 8471. | Government asserts ARI 1(a) requires class/kind and principal use; BenQ failed to define class/kind. | Remand to perform principal use analysis under Note 5(B). |
| Whether Section XVI, Note 3 principal function analysis overrides Note 5(B). | BenQ argues Note 3 should govern as Section XVI Note 3 applies generally. | Note 5(B) is specific to 8471; Note 3 should not override it. | Section XVI Note 3 not controlling here; context requires Note 5(B) analysis; remand. |
| Whether remand is necessary to determine correct classification. | Remand to perform a proper principal use analysis. | Remand unnecessary if 8528 classification affirmed. | Remand required for principal use analysis; vacate and remand to CTI. |
Key Cases Cited
- Intel Corp. v. United States, 83 F.3d 1416 (Fed.Cir.1996) (two-step tariff classification framework (meaning and scope))
- N. Am. Processing Co. v. United States, 236 F.3d 695 (Fed.Cir.2001) (GRIs/ARIs guide classification; language and notes authoritative)
- Millenium Lumber Distribution Ltd. v. United States, 558 F.3d 1326 (Fed.Cir.2009) (common meanings; notes binding)
- Honda of Am. Mfg., Inc. v. United States, 607 F.3d 771 (Fed.Cir.2010) (statutory notes bind interpretation; Explanatory Notes guidance)
- Primal Lite, Inc. v. United States, 182 F.3d 1362 (Fed.Cir.1999) (principal use analysis; Carborundum factors as tool)
- Grp. Italglass U.S.A., Inc. v. United States, 17 Ct. Int'l Trade 226 (1993 WL 97624) (note on classification under 8471; ARI framework)
- Carborundum Co., Supreme Court, 63 CCPA 98, 536 F.2d 373 (1976) (Carborundum factors for determining class/kind; principal use)