[00:00:00] Speaker 03:
Good morning, Mr. Friedman.

[00:00:02] Speaker 03:
Are you able to hear me and see all three panelists?

[00:00:07] Speaker 02:
Yes, I can see all three panelists.

[00:00:10] Speaker 02:
Good morning.

[00:00:11] Speaker 03:
Thank you.

[00:00:15] Speaker 04:
All right.

[00:00:15] Speaker 04:
Our next case for argument is 22-1793, magic glove and safety manufacturing versus United States.

[00:00:24] Speaker 04:
Mr. Friedman, please proceed.

[00:00:27] Speaker 02:
Thank you, Your Honor.

[00:00:28] Speaker 02:
May I please the court?

[00:00:29] Speaker 02:
Um, I'm here on behalf of Magna Glow of the, of Helen and the Chase.

[00:00:35] Speaker 02:
The merchandise at issue is knit to shape.

[00:00:46] Speaker 02:
I'm sorry.

[00:00:46] Speaker 02:
I had feedback there due to the YouTube.

[00:00:49] Speaker 02:
I've turned that off.

[00:00:51] Speaker 02:
Uh, can you still hear me?

[00:00:52] Speaker 02:
Yeah.

[00:00:54] Speaker 02:
Okay.

[00:00:55] Speaker 02:
So the merchandise at issue is knit to shape gloves that have been dipped in polyurethane plastic.

[00:00:59] Speaker 02:
covering the palm and a portion of the fingers and thumb, including around to the fingertip.

[00:01:07] Speaker 02:
The court has received exhibits of the gloves for reference.

[00:01:13] Speaker 02:
CBP classified the gloves in section 11 of the harmonized pair schedule, and specifically in heading 6116, as gloves, mittens, mitts, knitted or crocheted, and then the subheading for impregnated coated coverter,

[00:01:29] Speaker 02:
are with plastic.

[00:01:31] Speaker 02:
Appellate contends that the correct classification is as articles of plastic in 3926, 2010.

[00:01:37] Speaker 02:
The trade court upheld customs classification, but erred when it failed to apply section 11, note 1H, consistent with this court's binding decision in Cali, 923, Fed 991, which determines the test for separating

[00:01:59] Speaker 02:
um, plastic dipped, um, in impregnated materials out of section, uh, sorry, out of chapter 59 and into chapter 39.

[00:02:10] Speaker 02:
Specifically, the note excludes fabrics from section 11, note 1H, excludes fabrics that have been impregnated, coated, covered, or laminated with plastics that are classifiable in chapter 39, or articles composed of those fabrics that are classifiable in chapter 39.

[00:02:27] Speaker 01:
Can I ask a question, something that puzzled me a little bit, maybe you can help me out.

[00:02:36] Speaker 01:
This court in Calais said the parties all agreed that the chapter 59 note

[00:02:46] Speaker 01:
was the key to determining what was at issue there, which was whether a Chapter 63 provision applied or not.

[00:02:54] Speaker 01:
Now, Chapter 63, but it didn't explain what the statutory basis for that agreement was.

[00:03:02] Speaker 01:
When I noodled around about it a little bit, what I came upon was the following, and I guess I'd like you to help me understand it.

[00:03:09] Speaker 01:
Chapter 63 itself has a note that says,

[00:03:16] Speaker 01:
portions of chapter three, including 6307, which was the provision at issue there, which was part of sub chapter one, don't apply to matter that's in, I don't know, 52 through, I don't know, 60 something, but included 59.

[00:03:32] Speaker 01:
And therefore, to figure out whether 6307

[00:03:36] Speaker 01:
Applied in Cali you had to look at the note and look at what chapter 59 said and hence the chapter 59 notes We don't have a chapter 63 case.

[00:03:46] Speaker 01:
We have a chapter 61 case So why is there a statutory basis for looking at a note in chapter 59?

[00:03:57] Speaker 02:
That that's my puzzle We have same question we asked with respect to

[00:04:05] Speaker 02:
to Cali that this court consider here in this case, en banc, because of that question.

[00:04:11] Speaker 02:
The requirement, general rule of interpretation, one, to interpret the headings consistent with the relative section notes and chapter notes.

[00:04:24] Speaker 02:
There is no relative.

[00:04:26] Speaker 02:
Chapter 59 is not a relative, in our view, chapter note for determining whether merchandise is classifiable

[00:04:35] Speaker 02:
Chapter 61 or Chapter 63 for that matter.

[00:04:40] Speaker 02:
However, the law is, as we understand it and we believe is correct, that in order to determine four purposes of Note 1H to Section 11, which incorporates both Chapter 63 and Chapter 61, the court has looked to the definition of impregnated, coded, covered, et cetera.

[00:05:05] Speaker 02:
Basically, I think on an empowering material basis, saying that phrase appears in Chapter 59, it must have the same meaning.

[00:05:13] Speaker 02:
But we don't see a statutory link either here.

[00:05:21] Speaker 02:
So the court below, in reaching its conclusion, did not address the decision in Cali, did not address the question of whether

[00:05:35] Speaker 02:
The merchandise was excluded as a result of the definition of impregnated coated carpet or laminated.

[00:05:42] Speaker 02:
That is included in Chapter 59, in the Chapter 59 note.

[00:05:49] Speaker 02:
Instead, the court moved to the question of whether the fabric that makes up the glove was itself classifiable in Heading 3921.

[00:06:03] Speaker 02:
and apply section, or sorry, chapter 39, note 10 in order to make that decision.

[00:06:11] Speaker 02:
That note only determines whether merchandise is properly classifiable as plates, sheets, strips, and other basic forms or rectangular forms of material, which is not a question that was raised.

[00:06:25] Speaker 02:
It's not a question in this case.

[00:06:27] Speaker 02:
The knit-to-shaped shells were, we admit,

[00:06:32] Speaker 02:
Never in basic sort of on the bolt as they say in fabric.

[00:06:39] Speaker 04:
Let's assume that for purposes of this argument that I don't agree that Cali really creates the problem that you think it does because let's just say I think note 2A3 under chapter 59 is limited to heading 5903 and doesn't apply to everything in section 11.

[00:07:01] Speaker 04:
So if we just look at section 11, put Kelly to the side for now, just look at section 11, why doesn't 1H prevent the interpretation that you would like?

[00:07:12] Speaker 04:
Because 1H seems to make it clear that the plastic or the coating has to be added after manufacturing, or doesn't cover articles where it's added after manufacturing.

[00:07:21] Speaker 04:
Sorry, I misspoke.

[00:07:23] Speaker 02:
OK, so if it does not cover those articles, then that is

[00:07:29] Speaker 02:
problematic and potentially fatal for our case.

[00:07:32] Speaker 02:
We do not see that in the note.

[00:07:35] Speaker 02:
The note refers to, the note excludes from section 11 the woven, knitted, et cetera fabrics that have been impregnated, coated, covered, laminated, or articles thereof.

[00:07:50] Speaker 02:
It does not include a provision that stating when that plastic coating must be added

[00:08:00] Speaker 02:
In fact, it only requires that at the time of importation, the normal means of classification is that the merchandise is classified in its condition as imported.

[00:08:12] Speaker 02:
When imported, the article must be of a woven knit crochet fabric that has been impregnated, coated, covered, or laminated.

[00:08:22] Speaker 02:
If at the time it's imported, the condition of, in our case, the glove,

[00:08:27] Speaker 02:
is such that the fabric making up the glove has been impregnated, coated, covered, or laminated, then it is excluded from section 11.

[00:08:40] Speaker 02:
So we don't think that there is a temporal requirement or a requirement that there be a pre-existing fabric, coated fabric, that needs to be cut, sewn into a glove, and I think

[00:08:56] Speaker 02:
that there's no evidence that this note would never apply or was intended to never apply to knit-to-shape products at any time.

[00:09:06] Speaker 02:
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 1H.

[00:09:21] Speaker 02:
And that's not even the position that customs appears to have been taken.

[00:09:27] Speaker 00:
Councilor in your in your great in your reply brief the great brief of page two You you walk back a significant portion of your of your blue brief And it leaves me just wondering exactly what your position is because you appear to to move on to to rest entirely on Kelly and whether that is

[00:09:56] Speaker 00:
good law or not.

[00:09:59] Speaker 00:
Am I looking at this correctly?

[00:10:01] Speaker 02:
So while we're walking back, and what has been confusing throughout, Your Honor, is that Chapter 39, or sorry, Section 11 Note 1H does not, and we want to be clear about this, does not mandate Chapter 39 as the place where a woven knitted glove that is impregnated or coated

[00:10:26] Speaker ?:
would go.

[00:10:27] Speaker 02:
So we're not trying to say that as a result of this note, these gloves are necessarily in Chapter 39.

[00:10:36] Speaker 02:
We recognize and want to be clear that what is excluded as a result of Chapter of this note, Note 1H, are those fabrics and articles made, articles composed of those fabrics.

[00:10:52] Speaker 02:
I think it's a better way to put it, to be neutral with respect to the timing issue.

[00:10:56] Speaker 02:
So if, as imported, the articles are composed of fabric that has been impregnated, coated, et cetera, in a way that the fabric would be classifiable in Chapter 39, then the fabric is excluded, would be excluded, but also the glove is classifiable in Chapter 39, is excluded.

[00:11:22] Speaker ?:
So that's what we're trying to be clear about.

[00:11:25] Speaker ?:
We're not saying

[00:11:26] Speaker 02:
that the note requires chapter 39 if the glove for some reason is not classifiable there otherwise or the material is not classifiable there otherwise.

[00:11:37] Speaker 02:
That has to be the case because we know that 5903 includes impregnated, coated, laminated materials and I will say somewhat inexplicably chapter 61 also includes gloves and other materials that are impregnated, coated, covered, or laminated.

[00:11:56] Speaker 02:
The drafting here creates a section note that excludes impregnated, coated, covered, laminated fabrics and articles thereof and of chapter 39, if in chapter 39, but also explicitly includes at the subheading level, which is important, articles that are affirmatively stated as being impregnated, coated, covered, or laminated.

[00:12:21] Speaker ?:
So customs in its replication of earlier rulings

[00:12:26] Speaker 02:
And this court in Cali resolved that apparent conflict by saying, not all impregnated coated fabrics or articles are excluded.

[00:12:37] Speaker 02:
The way to divide that line is to look at the chapter 59 note and see that if the article is entirely coated, fixed in a mass of plastic, so that it's surrounded in a mass of plastic, then those are the ones that are excluded.

[00:12:56] Speaker 02:
as opposed to those that can remain in Chapter 61 or Section 11.

[00:13:02] Speaker 02:
The court below erred when it failed to address that distinction between impregnated, coated, covered fabrics and products thereof that can stay in Chapter 61 and those that must be moved elsewhere, potentially in Chapter 39.

[00:13:22] Speaker 02:
If not excluded by Chapter 39, Note 2P,

[00:13:26] Speaker 02:
So two notes point back to one another.

[00:13:32] Speaker 04:
Do you want to save your reading time for rebuttal?

[00:13:35] Speaker 02:
Yes, I would, Your Honor.

[00:13:52] Speaker 03:
Good morning.

[00:13:52] Speaker 03:
May I please the court?

[00:13:54] Speaker 03:
The key issue here is the statutory analysis.

[00:13:57] Speaker 03:
And the court had a question in terms of, how do we get to the classification via a statutory analysis?

[00:14:03] Speaker 03:
And here, if we follow the guiding principle of GI 1, just looking at the competing headings, that's how we get to the classification of the gloves at issue.

[00:14:13] Speaker 03:
GI 1 says that the headings are paramount.

[00:14:16] Speaker 03:
And if you look at heading 6116, it covers gloves, mittens,

[00:14:20] Speaker 03:
and mitts knitted or crocheted.

[00:14:22] Speaker 03:
It's very broad.

[00:14:23] Speaker 03:
It's not limited to any kind of material.

[00:14:25] Speaker 03:
The explanatory notes to that heading state that the heading covers all gloves.

[00:14:31] Speaker 03:
And so

[00:14:32] Speaker 03:
If we do a head-to-head comparison and you look at 3926, where our plaintiff wants there, wants to classify the gloves, it only covers partial part of the glove of plastics.

[00:14:44] Speaker 03:
So if we're doing a head-to-head analysis under GI 1, 6116 is the proper classification heading for that merchandise.

[00:14:54] Speaker 03:
And with respect to note 1H, the court

[00:15:00] Speaker 03:
correctly recognize that there is actually a temporal element built into the statute.

[00:15:05] Speaker 03:
The statute uses the term thereof, which sort of indicates that you look back and say thereof meaning made of

[00:15:12] Speaker 03:
came from, that's how we interpret it.

[00:15:15] Speaker 03:
So that heading, note 1H, covers the two categories, fabrics and articles of those fabrics.

[00:15:23] Speaker 03:
So that's how.

[00:15:24] Speaker 01:
Mr. Friedman says that the better reading of articles thereof is not made of, but composed of, in particular composed of at the time of importation, which is the time at which these tariffs have effect.

[00:15:42] Speaker 03:
So that I think that's that's a sort of a mixture of two different concepts one is the legal interpretation of the note and one is actually when the merchandise comes in how do we apply that note to the merchandise so if we're just looking at the merchandise that I mean the statutory note the note has a temporal element it says there are made of cause cause to have

[00:16:06] Speaker 03:
They link together.

[00:16:07] Speaker 03:
In terms of when the merchandise hits the border and customs has to classify, there are many times that customs will ask the importer for more information.

[00:16:16] Speaker 03:
It's not always a visual.

[00:16:18] Speaker 03:
It's not always paper.

[00:16:20] Speaker 03:
Sometimes the customs attorneys, I mean, customs will say at the border, we need more information.

[00:16:25] Speaker 03:
They say it a lot of times, especially with chemicals.

[00:16:28] Speaker 03:
I've seen it testing with clothes.

[00:16:30] Speaker 03:
So I wouldn't use the fact that customs has to do extra work at the border to interpret the note.

[00:16:39] Speaker 03:
The note is the note.

[00:16:40] Speaker 03:
It has a temporal element built into it.

[00:16:42] Speaker 03:
And how it's administered at the border is another issue.

[00:16:50] Speaker 01:
I'm not, I guess, quite sure that gets to Mr. Friedman's main point, which is

[00:16:59] Speaker 01:
composed of, he thinks is a better reading than made of, so that the fabric pre-glove construction, pre-article construction, needn't have this coating, to simplify, as long as the article, once constructed, does have this coating.

[00:17:29] Speaker 01:
of whether it's in the ocean or on the floor.

[00:17:33] Speaker 03:
Understood.

[00:17:34] Speaker 03:
So our response to that is when we're interpreting statutes, we want to make sure that everything is interpreted consistently and in harmony.

[00:17:44] Speaker 03:
If that's the case if this the glove just putting plastic on the glove no matter when it when it applied comes in then it would actually read out portions of 61 16 61 16 clearly provides for gloves mittens and mix knitted or crochet Impregnated coated or covered with plastics or rubber so that means every time a glove showed up it wouldn't go you know we would have to look at 1h and note 1h would kick it out into and maybe put it in 39 and

[00:18:11] Speaker 03:
no product would ever fit into 6116.

[00:18:15] Speaker 03:
So we somehow have to interpret that note so that it all works together.

[00:18:18] Speaker 01:
So you use the subheading to drive the proper interpretation of this era of traits?

[00:18:25] Speaker 03:
I don't want to say we're using the subheading to interpret, but just to make sure that all the statutes work together and you're not interpreting one statute to read out the other.

[00:18:37] Speaker 03:
They all have to coexist to work together.

[00:18:41] Speaker 00:
How do you see the Cali case fitting here in your argument?

[00:18:47] Speaker 03:
I don't see the Cali case applying at all.

[00:18:50] Speaker 03:
The Cali case had a lot of moving pieces, but the driving force of those moving pieces were the actual provisions, GR1, the actual provisions at issue.

[00:18:59] Speaker 03:
And that's what drove the analysis in terms of the notes, looking at the notes, and then looking at note two to 59, and then looking at

[00:19:07] Speaker 03:
Pregnated, coated, or covered, or embedded in plastic.

[00:19:10] Speaker 03:
So here, none of that exists here.

[00:19:13] Speaker 03:
Our notes, GR1s, that drive the analysis are 6116, which we just discussed, and note 1H, and 3926.

[00:19:22] Speaker 03:
We don't get to 6307.

[00:19:24] Speaker 03:
We don't get to 5903, chapter 59.

[00:19:28] Speaker 03:
We don't think Cali applies at all.

[00:19:32] Speaker 01:
I, maybe I just missed it, but I did not see any discussion in Cali either in this court or in the trade court's opinion of this note to Chapter 63 that at least made me think, oh, now I understand why they were looking at Chapter 15.

[00:19:50] Speaker 01:
Have I just misunderstood the relevance?

[00:19:52] Speaker 01:
It seems to me to provide the explanation, so it troubles me that nobody said that before.

[00:20:00] Speaker 03:
No, I think you're right.

[00:20:01] Speaker 03:
The trial court did not mention that note.

[00:20:04] Speaker 03:
And I think you do have to go back through, I think, the CIT decision to sort out where these notes arrived and how the court came to the issue that the only issue here is whether the merchandise is embedded or completely embedded in plastic.

[00:20:22] Speaker 03:
So there was some sort of trail that you have to go back and follow.

[00:20:27] Speaker 03:
Here, the trial court didn't

[00:20:29] Speaker 03:
follow that trail.

[00:20:30] Speaker 03:
It's not in the opinion, so I don't think the court even thought Calley applied.

[00:20:35] Speaker 03:
It dropped a footnote in its decision mentioning the note, note two, but that's the extent of it.

[00:20:53] Speaker 03:
If there are no further questions,

[00:20:58] Speaker 03:
Thank you.

[00:21:00] Speaker 03:
The trial court decision should be affirmed.

[00:21:02] Speaker 03:
Thank you.

[00:21:03] Speaker 03:
Thank you, Ms.

[00:21:03] Speaker 04:
Powell.

[00:21:17] Speaker 04:
Mr. Friedman, please proceed.

[00:21:19] Speaker 02:
Thank you, Eric.

[00:21:20] Speaker 02:
First of all, with respect to whether Cali applies, the court in Cali said explicitly

[00:21:29] Speaker 02:
Where an article is composed of both textile and plastic, we must look to chapter 59 to determine whether the article should be classified as a textile under section 11.

[00:21:43] Speaker 02:
It is clearly there as a we must.

[00:21:48] Speaker 02:
The court below should have done the same.

[00:21:51] Speaker 02:
This court has previously stated that when an opinion of the Supreme Court

[00:21:58] Speaker 02:
It issues the opinion.

[00:22:01] Speaker 02:
It's not just the results, but also the portion of the opinion necessary to the results by which this court is bound.

[00:22:07] Speaker 02:
That same rule applies to the Court of International Trade.

[00:22:11] Speaker 02:
The Court of International Trade should have reviewed Calley, should have applied that rule of that case, and made a determination as to whether the glove shell is completely and entirely fixed in the surrounding mass of plastic.

[00:22:26] Speaker 02:
That is the legal test.

[00:22:28] Speaker 02:
The difference between chapter 63 and chapter 61 is not relevant when the issue is the application of a section note.

[00:22:39] Speaker 02:
The section 11 note applies equally to both.

[00:22:42] Speaker 02:
And therefore, that is not a sufficient distinction.

[00:22:52] Speaker 02:
That's all I have, Your Honors.

[00:22:53] Speaker 02:
Unless you have questions, I am happy to be complete.

[00:22:57] Speaker 04:
Thank both counsels, this case is taken under submission.