Relevance of Prior Ruling Takes Center Stage in Polyurethane-Dipped Gloves Argument at CAFC
Importer Magid Glove & Safety Manufacturing and DOJ argued during oral arguments Sept. 7 whether a test established in a previous U.S. Court of Appeals for the Federal Circuit case meant that plastic-dipped knit gloves are correctly classified as articles of plastic rather than as gloves under the Harmonized Tariff Schedule (Magid Glove & Safety Manufacturing v. U.S., Fed. Cir. # 22-1793).
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The previous case, Kalle USA v. U.S., classified an item made from plastic-impregnated textiles as an article of textiles of HTS Chapter 61 based on a note in Chapter 59. The present case concerns whether the note should similarly result in the plastic-dipped knit gloves' classification in Chater 63.
The gloves at issue are knitted from man-made fibers that are then dipped in polyurethane, resulting in plastic that only covers the palm and fingers of each glove. Before the dipping process, the shell is in the shape of a complete glove and is knitted from yarn directly to a shape that covers the entire hand. The Court of International Trade upheld CBP's classification of the gloves under subheading 6116.10.55 as "Gloves, mittens and mitts ...," dutiable at 13.2%, and Magid appealed in March. The company argued for classification under the duty-free HTS subheading 3926.20.10 as “Other articles of plastics and articles of other materials ... Gloves, mittens and mitts: Seamless."
Note 2(a)(3) to Chapter 59 says goods are not classifiable in that chapter if "the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of color." Instead, such goods are classifiable in Chapter 39.
Magid argued that note, in combination with Note 1(h) to Section XI, which excludes "woven, knitted or crocheted fabrics, felt or nonwovens, impregnated, coated, covered or laminated with plastics, or articles thereof" from classification as textiles or apparel, means the gloves should be classified in Chapter 61. Magid cites Kalle for its argument that the Note in Chapter 59 applies.
The panel of judges pressed Magid on the applicability of the Kalle case. Judge Richard Taranto noted that in Kalle, the parties had agreed that the Chapter 59 note was the key to classification, but the court didn't explain what the statutory basis for that agreement was. Taranto was puzzled as to "Why is there a statutory basis for looking at a note in chapter 59" in spite of the note specifically excluding other chapters.
Magid agreed that there is no statutory link but argued that to determine for purposes of Note 1(h) of Section 11, which incorporates both Chapter 63 and Chapter 61, the court looked to the definition of "impregnated, coated, coved, or laminated," and because the phrase appeared in Chapter 59, it must have the same meaning.
In the present case involving Magid, the lower court didn't address the question of whether the merchandise was excluded as a result of the definition of "impregnated, coated, coved, or laminated" that is included in the note to Chapter 59, Magid said. Instead, the CIT looked at whether the fabric that makes up the glove was itself classifiable in headings 3921.
Judge Kimberly Moore asked what would happen if the Chapter 59 note only applied to that chapter rather than to all of Section XI. Magid responded that such an interpretation would be "potentially fatal" to its case.
The government argued that an analysis of Kalle overcomplicated the issue, and that it should instead involve a straightforward reading of competing headings, 6116 and 3926. Kalle was a different analysis because of the provisions involved, DOJ said. "We don't get to 6307. We don't get to 5903, Chapter 59," said Marcella Powell, trial attorney for DOJ. "We don't think Kalle applies at all."
"GRI 1 says that the headings are paramount and if you look at heading 6116, it covers gloves, mittens and mitts, knitted or crocheted," Powell said. The explanatory notes state that Heading 6116 covers "all gloves," Powell said, and because the plastic only partially covers the gloves, heading 6116 clearly wins out "in a head-to-head comparison."
Moore raised the issue of when the plastic is applied to the gloves, saying that Note 1(h) to Section XI "seems to make it clear" that it doesn't cover articles where the plastic or the coating is added after manufacturing. Magid countered that Section XI doesn't include a provision stating when that plastic coating must be added. "It only requires that at the time of importation ... the article must be of a woven, crocheted fabric that has been impregnated, coated, covered or laminated," Magid said. "We don't think that there is a temporal requirement or a requirement that there by a preexisting coated fabric that needs to be cut sewn into a glove."
Magid said that "if that is the correct interpretation, then no amount of plastic applied in any way to a knit-to-shape glove or any other knit-to-shape article would ever be subject to the exclusion from Note 1(h)."
The government responded that if "just putting plastic on the glove" is enough to qualify for Note 1(h), that interpretation would read out portions of Heading 6116. "Every time a glove showed up ... 1(h) would kick it out into maybe put it in Chapter 39. No Product would ever fit into 6116," Powell said.