Deckers Asks for Supreme Court Review on 'Slip-On' Tariff Classification of Ugg Boots
Deckers Outdoor Corp. on Jan. 7 asked the Supreme Court to hear an appeal on the tariff classification of its “Uggs” boots. According to Deckers, the Court of Appeals for the Federal Circuit’s decision that the boots are “slip on” footwear improperly relied on an internal agency definition of slip-on footwear from CBP’s 1993 “Footwear Definitions” document. If allowed to stand, such reliance on unsupported administrative “fiat” statements would put importers in a difficult position by curtailing their ability to get courts to review tariff classification disputes, says Deckers.
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The tariff classification dispute revolves around the correct interpretation of the term “slip on” footwear (see 13050901). CAFC in May 2013 found the pull-on Ugg boots to be correctly classified under Harmonized Tariff Schedule subheading 6404.19.35 as “footwear of a slip-on type, that is held to the foot without the use of laces or buckles or other fasteners.” That subheading carries a 37.5% duty. Deckers contended that the Ugg boots should instead have been classified by CBP under subheading 6404.19.90 for other footwear with soles of rubber and uppers of textiles valued over $12/pair, which carries a 9% duty rate. The commercial meaning of “slip-ons” refers only to shoes that don’t extend above the ankles, Deckers had argued.
One of the sources CAFC (and the Court of International Trade, see 12042510) had relied on was CBP’s 1993 Footwear Definitions document, which says boots that must be pulled on are classified as slip-on footwear. The internal agency definition was not made available for public comment, and was unsupported by other statements or evidence, says Deckers. That means it doesn’t meet the threshold set in U.S. v. Mead, where the Supreme Court found a CBP ruling to be entitled to deference “according to its persuasiveness” (“Skidmore deference”). In Mead, the Supreme Court predicated that deference on several factors, including the agency’s thoroughness of consideration, validity of reasoning, and consistency with other pronouncements. None of those requirements were met by CBP’s “Footwear Definitions” document, says Deckers.
“That holding warrants this Court’s review," said Deckers. If left standing, it will have a fundamental, adverse impact on the interpretation and the administration of the Customs laws.” Allowing courts to rely on unsupported internal definitions in tariff classification disputes would unfairly tilt the balance in favor of CBP, says Deckers. “If this decision stands, CBP will be at liberty to redefine the entire Harmonized Tariff Schedule of the United States, at its pleasure, without notice and comment,” it said.
Email ITTNews@warren-news.com for a copy of the petition.