Schlumberger Technology Corp. v. United States
91 F. Supp. 3d 1304
Ct. Intl. Trade2015Background
- Schlumberger Technology Corp. imports two 2010 shipments of bauxite proppants from China used in hydraulic fracturing.
- CBP liquidated and protested these entries, classifying them under HTSUS 6909.19.50 (ceramic wares for lab/technical uses) at 4% duty.
- Schlumberger seeks classification under 2606.00.00 (aluminum ores and concentrates: bauxite, calcined) with free duty, among other alternatives.
- The court conducted de novo review of tariff classification under GRI/ARIs and examined the proper meaning of headings and notes.
- The court concluded the proppants are described by 2606 and not 6909 or the other proposed headings, granting summary judgment for Schlumberger.
- The court denied defendant’s motion and deferred other discovery/confidentiality motions as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proppants fall under heading 2606 as bauxite ore. | Schlumberger argues proppants are described by 2606 (aluminum ores). | CBP classified under 6909 as ceramic wares for technical uses. | Yes; proppants described by heading 2606. |
| Whether heading 6909 properly covers the merchandise. | Not described as ceramic wares; granulated bulk product not an article. | Proppants are ceramic wares shaped for technical use. | No; 6909 is incorrect. |
| Whether alternative headings (3824, 6914, 6815) apply. | Alternative classifications are not appropriate if 2606 applies. | Proppants could fit 3824.90.92 or 6914.90.80 if not 2606; 6815 also claimed. | Rejected; 2606 governs; other headings not applicable. |
| Whether dopants or processing remove the product from 2606. | Dopants are minor and do not alter natural bauxite; processing remains metallurgical. | Dopants are not normal to metallurgy and could remove eligibility. | No; dopants do not take it outside 2606. |
| Whether the facts about composition justify summary judgment. | There is no genuine dispute on material facts regarding classification. | Disputes exist about composition; samples not from entries. | No genuine material-fact issues preclude summary judgment; classification proper. |
Key Cases Cited
- Jarvis Clark Co. v. United States, 733 F.2d 873 (Fed. Cir. 1984) (two-step approach to tariff classification; government’s classification tested against importer’s)
- Faus Group, Inc. v. United States, 581 F.3d 1369 (Fed. Cir. 2009) (meaning of GRI steps; law/fact demarcation in classification)
- La Crosse Tech., Ltd. v. United States, 723 F.3d 1353 (Fed. Cir. 2013) (common/commercial meaning of HTSUS terms absent contrary intent)
- Degussa Corp. v. United States, 508 F.3d 1044 (Fed. Cir. 2007) (use of Explanatory Notes for guidance in HS interpretation)
- Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir. 1998) (structure of GRI/heading interpretation in classification)
- Bausch & Lomb, Inc. v. United States, 148 F.3d 1363 (Fed. Cir. 1998) (summary judgment standard in tariff classification cases)
- United States v. Mead Corp., 533 U.S. 218 (2001) (CBP rulings not controlling authority; persuasiveness depends on factors)
- Dependable Packaging Solutions, Inc. v. United States, 757 F.3d 1374 (Fed. Cir. 2014) (summary judgment possible even with ongoing factual disputes on use)
- Baxter Healthcare Corp. v. United States, 182 F.3d 1333 (Fed. Cir. 1999) (cited for interpretation of tariff headings and GRIs)