Meyer Corp., U.S. v. United States
2017 CIT 110
| Ct. Intl. Trade | 2017Background
- Meyer Corporation imported stainless-steel cookware sets from Thailand (a GSP beneficiary developing country) that included glass lids manufactured in the People’s Republic of China (a non‑BDC).
- Customs denied GSP preferential duty treatment for the sets in part because the lids were non‑BDC components, and Meyer protested; this litigation is a test case challenging those denials and Customs’ valuation determination.
- The parties cross‑moved for partial summary judgment on (1) whether the presence of non‑BDC detachable components disqualifies the BDC components of a set from GSP and (2) whether the sets should be appraised using a related‑party “first sale” transaction value.
- Customs relied on Treasury Decision 91‑7 treating sets under GRI 3(b) but applying the GSP “product of” requirement rigidly to components; Meyer relied on Uniden and statutory text to argue the tests apply to the article as a whole.
- The court held Customs’ blanket rule (denying GSP to BDC components solely because a set includes non‑BDC detachable components) was legally invalid, but left open (1) whether the BDC components actually satisfy GSP requirements on the facts and (2) the appropriate duty treatment and reliquidation method for the non‑BDC components.
- On valuation, the court found disputed material facts about whether the Thai producer’s sale to a related middleman was an arm’s‑length first sale; Customs reasonably sought additional financial information to test for non‑market influences, so Customs’ denial of first‑sale treatment was upheld on the administrative record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a set containing non‑BDC detachable components is automatically disqualified from GSP because not all components are “product of” the BDC | Meyer: GSP “product of” and 35% tests govern the article as a whole; a non‑BDC detachable component does not automatically deny GSP to BDC components | U.S.: T.D. 91‑7 requires substantial transformation/product‑of for all integral non‑de minimis components; defer to Customs’ published guidance | Court: Customs’ categorical application of T.D. 91‑7 is legally invalid; GSP analysis must consider the article/content (and 35% test) rather than mechanically denying GSP because a set includes non‑BDC detachable parts; BDC components’ eligibility left to factual determination |
| Whether non‑BDC components should receive the set’s GSP rate or be dutiable separately | Meyer: The set classification should govern and could yield duty‑free treatment for the set | U.S.: Non‑BDC components are not entitled to GSP; may be dutiable under their own headings | Court: Non‑BDC components are not entitled to GSP on reliquidation; whether they should be appraised/classified and dutiable under the set or under individual headings requires further briefing/fact work |
| Whether the importer may use the related‑party Thai manufacturer→middleman “first sale” as transaction value | Meyer: The first sale is viable; the manufacturer’s profit evidence supports arm’s‑length first‑sale valuation | U.S.: Customs reasonably required more evidence (including parent financials) to test for non‑market influences; Meyer bore the burden to establish arm’s‑length first sale | Court: Material factual disputes exist; Customs did not err as a matter of law in denying first‑sale treatment on the administrative record; first‑sale viability remains unresolved pending further factual development |
| Whether Entry No. 304‑0214721‑6 should be dismissed because it lists a different port | Meyer: Port discrepancy is immaterial; seeks to amend complaint | U.S.: Plaintiff should be held to its complaint; entry may be in another pending action | Court: Denied dismissal; jurisdiction attached with filing and the complaint will be construed to encompass the entry |
Key Cases Cited
- Uniden Corp. v. United States, 120 F. Supp. 2d 1091 (CIT 2000) (addressed GSP eligibility for an article with a detachable non‑originating component)
- Nissho Iwai America Corp. v. United States, 982 F.2d 505 (Fed. Cir. 1992) (articulates arm’s‑length/first sale viability standard)
- Luigi Bormioli Corp. v. United States, 304 F.3d 1362 (Fed. Cir. 2002) (transaction value preferred appraisal method)
- United States v. Mead Corp., 533 U.S. 218 (2001) (administrative deference principles)
- Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (agency interpretive deference framework)
- Worthington v. Robbins, 139 U.S. 337 (1891) (merchandise evaluated in condition as imported)