United States v. Endicott Johnson Corp.

Rich, Judge. This appeal is from the judgment of the U.S. Customs Court, 82 Cust. Ct. 49, C.D. 4787 (1979), sustaining appellee’s claim that the imported merchandise, stitched cotton shoe uppers, is properly [48] classifiable as unomamented rather than, as ornamented textile articles. We affirm. The Imported Merchandise The involved merchandise comprises cotton canvas shoe uppers imported by appellee from Japan in 1972. The uppers were of both low-cut (oxford) and high-top construction. Two parallel rows of stitching extend across the eyelets nearest the user’s ankle to the midpoint of the arch area. (See illustration in opinion below.) In the footwear trade these stitches are referred to as “arch stitching.” These goods; when used, were stitched to soles in the domestic manufacture of sneakers. Statutory Provisions The merchandise was classified by Customs under item 380.00 of the Tariff Schedules of the United States (TSUS). At trial, however, appellant abandoned that classification and asserted that the proper classification was under item 386.04. Appellee’s contention that the goods are properly classifiable under item 386.50 was sustained by the Customs Court. The relevant tariff provisions read as follows: Schedule 3 headnotes: «^* ^ ^|* <|* *|* *j* 3. For the purposes of the tariff schedules— (a) the term “ornamented,” as used with reference to textile fabrics and other articles of textile materials, means fabrics and other articles of textile materials which are ornamented with— (i) fibers, filaments (including tinsel wire and lame), yarns, or cordage, any of the foregoing introduced as needlework or otherwise, including— (B) other types of ornamentation, but not including functional stitching or one row of straight hemstitching adjoining a hem [Italic ours]; Schedule 3, part 7, subpart B: Subpart B headnote: 1. This subpart covers articles, of textile materials, not covered elsewhere in the tariff-schedules. [49] Articles not specially provided for, of textile materials: Lace or net articles, whether or not ornamented, and other articles ornamented: 386.04 Of cotton_ 40% ad val. * * * * * * * Other articles, not ornamented: Of cotton: ******* 386.50 Other- 14% ad val. Customs Court The Customs Court, after receiving the testimony and evidence on whether the arch stitching is ornamental, concluded that appellee had proved the stitches were primarily functional, not ornamental, by a preponderance of the credible evidence. The primary purpose of the stitches was considered determinative of ornamentation in light of the definition set forth in The Baylis Brothers Inc. v. United States, 60 Cust. Ct. 336, 341, C.D. 3383, 282 F. Supp. 791, 796 (1968), affirmed, 56 CCPA 115, C.A.D. 964, 416 F. 2d 1383 (1969). Both the claimed motivation and the resultant effect were said to converge to form footwear with strengthened uppers. The testimony of appellee’s employee responsible for the imported goods and the evidence of advertising employed by subsequent purchasers were held to he persuasive of the convergence. Appellant asserted below that the test for ornamentation is necessity rather than functionality. The stitches were said to be functional only if necessary for the functionality of the uppers alone. The court rejected this test as too narrowly constricting the term “functional.” The proper question was held to be simply whether stitching is functional. Furthermore, the court concluded that any ornamentation provided by the arch stitches is not encompassed by the term “ornamented” in TSUS. Incidental ornamentation not having a primary adorning effect was held to be removed from the class of ornamented articles, Blairmoor Knitwear Corp. v. U.S., 60 Cust. Ct. 388, C.D. 3396, 284 F. Supp. 315 (1968). Particularly noted were the questionable visibility of white stitches on white sneakers, as in 80 percent of the articles in issue, and the minimal distinction of a contrasting arch stitch versus a similarly colored stitch which is undoubtedly functional. The court cited Colonial Corp. of America v. United States, 62 Cust. Ct. 502, C.D. 3815 (1969), where a double row of nonfunctional, reddish stitching disposed on the back of girls’ blue denim shorts was [50] found to be ornamental, no primary function having been established for stitches which were held to be eye-catching and notably conspicuous. OPINION The dispute here focuses on the meaning of “ornamented” in schedule 3 of the TSUS. We agree with the Customs Court’s analysis. The first question is: Does the addition of arch stitches impart no more than an incidental, decorative effect? The next question is: Do the stitches have a functionality which is primary to any ornamentative nature? 2 An affirmative answer to either results in a nonomamental classification. If the former is resolved first, however, the latter may no longer be critical to a determination. The ornamental effect of the arch stitches is a question of fact determined by the Customs Court. Its determination stands unless it is shown that' it is either without supporting evidence or is clearly contrary to the weight of the evidence. Pistorino & Co. v. United States, 66 CCPA 95, C.A.D. 1234, 607 F. 2d 989 (1979). We adopt both the reasoning and finding of the Customs Court regarding the nonomamental nature of the stitched goods. Appellant argues that “Congress did not intend that an importer could defeat classification as ‘ornamented’ merely by proving that stitching provides additional strength.” But neither did Congress intend that all forms of stitching be per se ornamental unless proved to have a function. If the importer, by a preponderance of the evidence, proves any omamentive aspects to be incidental, added proof of functionality is not mandated. Since the Customs Court addressed functionality, we will briefly discuss this issue. The court was correct in its finding that the stitches were primarily functional. The purpose of the stitching is evidenced by the resultant effect, The Baylis Brothers Inc. v. United States, supra. As set forth in the testimony, the instant stitching was an economic expedient. The alternative was to employ a heavier and more expensive army duck material to achieve at least equal strength. At oral argument appellant urged that since the usual function of stitching is to attach, connect, or join, stitching is “functional” only if it serves one of those purposes. There is no indication, however, that Congress intended the term “functional” to have that narrow a [51] meaning. The distinction Congress drew was between stitching that is ornamental and stitching that is “functional,” and not among the different functions that stitching may perform. Stitching that serves a significant purpose with respect to the character, construction, or manufacture of an article — such as strengthening the material, enabling the manufacture to produce the product more efficiently or cheaper, or producing a better product — is “functional” and not merely ornamental. Appellant contends that the proof of functionality is based upon an invalid procedure. Again, we look to the record. Mr. Chase, one of appellant’s witnesses, absolutely agreed that the imported merchandise may be effectively tested without using either a Federal test or standard.3 No clear rebuttal of the validity of the test procedure has been presented to this court. Having affirmatively answered both of the introductory questions, the Customs Court was correct in holding TSUS 386.50, “not ornamented,” to be the proper classification. Its judgment is affirmed. Footnotes [2] The rationale for finding the primary nature of the stitching, i.e., adornment versus function, is manifested in the explanatory notes of schedule 3 in the “Tariff Classification Study” compiled for Congress by the U.S. Tariff Commission. The provisions for ornamented articles arc derived from par. 1529(a) of the Tariff Act of 1930. More particularly: Under the proposed definition of “ornamented,” textile articles would no longer be assessed with rates of duty derived from paragraph 1529(a) on the basis of concealed, functionless pieces of braid, netting, etc. The rates derived from paragraph 1529(a) would apply only if such materials were used primarily for ornamentation. [Italic ours.] [Tariff Classification Study, schedule 3, p. 7 (1960).] [3] Mr. Chase was division manager of quality assurance for the footwear division of Uniroyal Inc. He testified that the Uniroyal lab performs hundreds of different types of tests on canvas footwear.