UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 24-108

Before the Court in Keystone Automotive Operations, Inc. v. United States, Court No. 21-002157, Slip Op. 24-108 (October 7, 2024) were cross motions for judgment. The Court analyzed whether various side bars, nerf bars, and bars (collectively “subject merchandise”) attached to motor vehicles are considered “side protective attachments” as described in U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the Harmonized Tariff Schedule of the United States (“HTSUS”) and are therefore excluded from a 25% ad valorem rate of duty applied to various products imported from the People’s Republic of China.

Plaintiff, Keystone Automotive Operations, Inc, argued that the subject merchandise met the description of “side protective attachments” that are made of steel, were entered into the United States for consumption within the timeframe provided in the exclusion notice, and were properly classified under ten digit HTSUS subheading 8708.29.5060. Plaintiff argued that the subject merchandise was subject to exclusion from 25% ad valorem duty rate. The Government, on the other hand, argued that the subject merchandise do not meet the exclusion’s description of “side protective attachments” made of steel because all products imported by Keystone Automotive consisted of rubberized plastic steps mounted on steel bars that attach to the sides of vehicles and whose primary function and use is assisting an individual in entering and exiting a high road clearance vehicle by using the step pads.

The Court analyzed the case pursuant to the jurisdictional statute 28 U.S.C. § 1581(a) and reviewed the case de novo given it concerned the classification of the products. Defendant contended that U.S. Note 20(iii) is a principal use provision and asserted that “side protective attachments” should be understood as a principal use provision because the phrase “side protective attachments” does not describe a product by a specific name that is common in commerce, which Defendant argued would indicate an eo nomine provision. Plaintiff argues, on the contrary, that U.S. Note 20(iii) is not a principal use provision because “conditioning an exclusion on some additional characteristic or criterion that is not part of the exclusion’s description—such as principal use—will result in a limitation that is not provided for and not intended by the drafters of the exclusion language.” Plaintiff asserted that U.S. Note 20(iii) should be treated as an eo nomine provision and that the subject merchandise is classifiable as “side protective attachments” because the products are made of steel, attach to motor vehicles, and protect the sides of the vehicle. On this point, the Court agreed with Defendant that “something that is ‘protective’ is something whose use or function is to provide protection, i.e., covering or shielding something from exposure, injury, damage, or destruction.” The Court concluded that the term “side protective attachments” in U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS is a principal use provision and construed the tariff provision “side protective attachments” under ARI 1 to mean steel products that are attached to the side of a vehicle and are used to protect the vehicle.

On the issue of whether the “side protective attachments” was an eo nomine provision, the Court held that “side protective attachments” is not an eo nomine provision because of insufficient evidence on the record establishing that the term “side protective attachments” identifies an article or a product by a specific name, or a product common in commerce. Lastly, on the issue of whether plaintiff’s products are “side protective attachments” under a principal use analysis, the Court held relevant material facts remain in dispute and it could not grant the parties motions for summary judgment since principal use provisions require the Court to determine whether the group of goods are “commercially fungible with the imported goods” in order to identify the use “which exceeds any other single use.” Here, the undisputed facts do not adequately address key factors needed to render a determination such as factors regarding the use of the subject merchandise in the same manner as the side protective attachments, the economic practicality of so using the import, the expectation of the ultimate purchasers, and the recognition in the trade of the use of the subject merchandise. The Court held that the undisputed facts are not sufficient for the Court to fully analyze whether the subject merchandise are commercially fungible with the side protective attachments described in U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS.

The Court stated that it will hold a bench trial to make a preliminary determination as to the principal use of the subject merchandise and a subsequent determination “as to the group of goods that are commercially fungible with the imported goods.” After making these determinations at trial, the Court will decide whether the subject merchandise are commercially fungible with the side protective attachments described in U.S. Note 20(iii)(213) to Subchapter III of Chapter 99 of the HTSUS, and are therefore excluded from the 25% ad valorem rate of duty as provided for under HTSUS heading 9903.88.56.