Deckers Corporation v. United States
2014 U.S. App. LEXIS 8868
| Fed. Cir. | 2014Background
- Deckers imported Teva® Sports Sandals (rubber/plastic soles; textile straps; open toes/heels; not fully enclosing the foot) and Customs classified them under HTSUS subheading 6404.19.35 (a 37.5% ad valorem "basket" provision).
- Deckers protested and sought classification under HTSUS subheading 6404.11 ("sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like"), which carries lower duties.
- In a test case (Deckers I), the Federal Circuit held that the exemplars in 6404.11 share an essential characteristic — an enclosed upper — and that the Teva sandals lacked that design feature, so they were not classifiable under 6404.11.
- Deckers later reopened a suspended summons, presenting new evidence arguing the sandals are eo nomine "training shoes"; the Court of International Trade declined relief, invoking stare decisis based on Deckers I.
- On appeal, the Federal Circuit affirmed: (1) Deckers I construed subheading 6404.11 to require enclosed uppers; (2) panels are bound by prior panel precedent on tariff construction; only en banc court, Supreme Court, or Congress may change that construction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the sandals can be classified eo nomine as "training shoes" under 6404.11 | Deckers: the sandals are "training shoes" based on design, use, marketing; tariff eo nomine terms cover future improvements regardless of enclosure | Government: Deckers I already construed 6404.11 to require an enclosed upper; that precedent controls | Held: Deckers I controls; sandals lack enclosed uppers and therefore are not in 6404.11 |
| Whether Deckers I is binding despite new evidence and Deckers' claim of clear error | Deckers: new evidence shows Deckers I was clearly erroneous; Schott Optical allows reexamination | Government: precedent on stare decisis and panel-binding effect prevents relitigation absent en banc or Supreme Court change | Held: A later panel or trial court is bound by prior panel construction; new evidence may preserve issue for en banc but does not permit overruling by panel or trial court |
| Whether ejusdem generis analysis in Deckers I differs from an eo nomine inquiry now | Deckers: ejusdem generis (used earlier) is different from eo nomine, so this appeal raises a new legal issue | Government: ejusdem generis informs eo nomine meaning; same legal question was decided in Deckers I | Held: Both analyses were part of Deckers I; no new legal issue — stare decisis applies |
| Proper scope and availability of a "clear error" exception to stare decisis in tariff cases | Deckers: Schott Optical requires courts to hear new evidence of clear error | Government: Schott is limited; clear-error reexamination is for en banc court; trial courts/panels remain bound | Held: Clear-error review exists but only the en banc court (or Supreme Court/Congress) can overturn prior panel precedent; trial court/panel cannot disregard binding panel precedent |
Key Cases Cited
- Deckers Corp. v. United States, 532 F.3d 1312 (Fed. Cir. 2008) (prior panel construction of HTSUS 6404.11 — enclosed upper is essential)
- United States v. Stone & Downer Co., 274 U.S. 225 (U.S. 1927) (res judicata/issue-preclusion limits in customs classification; later importations generally may be relitigated)
- Schott Optical Glass, Inc. v. United States, 750 F.2d 62 (Fed. Cir. 1984) (trial court should permit introduction of evidence to preserve clear-error challenge to prior appellate tariff construction, but panels remain bound)
- Avenues in Leather, 423 F.3d 1326 (Fed. Cir. 2005) (prior heading construction binds future cases as to that legal determination; different subheading raises different legal issue)