Obscurity in the "Plain Language" Rule: Majority and Dissent in Deckers Outdoor Corp v. United States Classification Decision

On May 8, 2013, the Court of Appeals for the Federal Circuit (CAFC) released its decision in Deckers Outdoor Corp. v. United States. The decision stemmed from an appeal of a Court of International Trade (CIT) decision affirming U.S. Customs and Border Protection’s (CBP) classification of UGG® boots under Harmonized Tariff Schedule of the United States (HTSUS) subheading 6404.19.35 as “footwear of the slip-on type.” Deckers argued that the boots were properly classified under HTSUS subheading 6404.19.90 as “footwear with outer soles of rubber . . . and uppers of textile materials.” Unusually, the decision contained both a majority and a dissent. Even more surprisingly, both the majority and dissent relied upon the “plain language” rule to support their classification of the imported boots. [1]

Description of Product at Issue and Importer’s Arguments

The imported boots were made of a knit upper portion and a rubber sole. They did not have laces, buckles or other fasteners. However, as boots, they naturally extended past the ankle height of most shoes. Deckers relied upon these facts to argue that “footwear of the slip-on type” only covered footwear that did not extend past the ankle. Deckers also contended that, because the boots must be “pulled on” with hands, they did not “slip on.” Deckers cited to dictionary and industry definitions for “slip-on” which referred specifically to shoes and a Senate Finance Committee Report which stated that the U.S. position provided for separate categories for boots and slip-on footwear.

Majority’s Holding under the Plain Language Rule

The majority did not find Deckers’ arguments persuasive. Specifically, the majority held that the plain language of the HTSUS indicated that “footwear of the slip-on type” covered footwear extending past the ankles. The majority presumed that Congress intended to include the particular language of “footwear” in subheading 6404.19 because it omitted the language elsewhere, instead choosing “shoes” or “boots.”[2] Plus, CBP had consistently interpreted “slip-on” to include a “pull-on boot” as indicated in a Treasury Decision from 1993. The majority also dismissed Deckers’ argument that the meaning of slip-on in the footwear industry did not include boots by analyzing website descriptions of the boots at issue as “slip-ons.”

The language of HTSUS subheading 6404.19.35 states “footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners.” Deckers argued that if Congress had meant the clause “that is held to the foot without the use of laces or buckles or other fasteners” to explain what was meant by the phrase “footwear of the slip-on type,” Congress would have inserted an additional comma following “that is.” Although the majority agreed an additional comma would have made the plain language even more obvious, it was not necessary as the explanatory parenthetical was consistent with dictionary definitions indicating the lack of fasteners to be a character of slip-on items.

The majority also found that Deckers’ proffered interpretation of the term “slip-on footwear” would render other language providing for footwear with open heels in HTSUS subheading 6404.19.35 superfluous.[3] Footwear with open heels is “obviously” put on without using one’s hands, which would duplicate Deckers’ limitation of “slip-on footwear” to only footwear slipped on without pulling. In the end, the majority relied upon expansive dictionary definitions and the explanatory parenthetical after the phrase “footwear of the slip-on type” to conclude that the plain language of HTSUS subheading 6404.19.35 included all types of slip-on footwear, even boots.

Dissent’s Holding under the Plain Language Rule

The dissent also relied upon the “plain language” of HTSUS subheading 6404.19.35, but it did so to conclude that the subheading did not encompass boots that had to be “pulled on.” Specifically, the dissent found that “[i]f Congress had meant for this subheading to cover all such footwear, it could simply have written ‘footwear that is held to the foot without the use of laces or buckles or other fasteners,’ and omitted the words ‘of the slip-on type.’” The dissent analyzed industry references and dictionaries defining “slip-on” as shoes that are easily put on as well as dictionary definitions of “shoe” that exclude footwear extending over the ankle.

These definitions did not render the explanatory parenthetical following the phrase “footwear of the slip-on type” superfluous, since that language simply served to exclude shoes that are easily slipped on but have “few” as opposed to “no” fasteners. And, the definitions did not render the additional language of open-heel footwear superfluous, because some open-heel footwear could be “slip-on” while others could have straps or fasteners to hold the feet in place. The dissent ultimately agreed with Deckers that its boots were not “slip-on” footwear, due to the plain meaning of “slip-on.”

Conclusion

The majority and the dissent opinions in this decision, relying upon the same rules of statutory construction and similar dictionary definitions, illustrate just how malleable statutory construction can be. Canons of statutory construction rarely afford predictability to lawyers or judges. In the end, it is often the factual context of the imported merchandise that will define its classification. The ability to use canons of statutory construction to support those facts is an added bonus. Thus, this case also illustrates how important it is to consult with an experienced consultant on the application of the canons of statutory construction when classifying imported merchandise and how to properly support tariff classification positions when pursuing administrative protests and commencing litigation.

If your company has any questions about the Deckers case or tariff classification issues concerning footwear or other imported merchandise generally, please do not hesitate to contact Kathleen Murphy, Beata Spuhler, or any member of Drinker Biddle & Reath’s Customs and International Trade team.