The Mead Corporation v. United States
283 F.3d 1342, 2002 U.S. App. LEXIS 3899, 23 I.T.R.D. (BNA) 2153 (2002)
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Rule of Law:
An administrative agency's informal classification ruling is entitled to deference under Skidmore v. Swift & Co. proportional to its 'power to persuade,' which is assessed based on the thoroughness of its reasoning, its consistency, and other relevant factors. The common and commercial meaning of tariff terms, derived from dictionaries, industry usage, and statutory context, governs their interpretation.
Facts:
- Mead Corporation (Mead) imported five models of day planners into the United States.
- The contents of the day planners, including a calendar, sections for daily notes and telephone numbers, and a notepad, were held in a loose-leaf ringed binder.
- Larger models also contained additional items such as a plastic ruler, credit card holder, and computer diskette holder.
- In a January 1993 ruling, the U.S. Customs Service (Customs) classified these day planners as 'bound diaries' under subheading 4820.10.20 of the Harmonized Tariff Schedules of the United States (HTSUS).
- This classification subjected the imported day planners to a 4.0% tariff.
- Mead protested the classification, arguing the products were neither 'diaries' nor 'bound.'
- In October 1994, Customs issued a new, more detailed ruling that reaffirmed its classification of the day planners as 'bound diaries'.
Procedural Posture:
- Mead Corporation (Mead) protested the U.S. Customs Service's classification of its day planners.
- Mead filed suit against the United States in the Court of International Trade (the trial court), which granted summary judgment in favor of the government, affirming the classification.
- Mead, as appellant, appealed to the U.S. Court of Appeals for the Federal Circuit, which reversed the trial court, affording no deference to the Customs ruling.
- The United States, as petitioner, was granted a writ of certiorari by the Supreme Court of the United States.
- The Supreme Court held that the ruling was not entitled to Chevron deference but should be evaluated under the Skidmore standard, vacating the Federal Circuit's judgment and remanding the case for reconsideration.
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Issue:
Does the U.S. Customs Service's classification of Mead Corporation's day planners as 'bound diaries' under subheading 4820.10.20 of the Harmonized Tariff Schedules of the United States survive scrutiny under the deference standard established in Skidmore v. Swift & Co.?
Opinions:
Majority - Rader, Circuit Judge.
No, the classification does not survive scrutiny because it lacks the 'power to persuade' under the Skidmore standard. The court must afford the agency's ruling deference proportional to its persuasiveness, but it retains an independent responsibility to interpret the tariff statute. The court determined that the common meaning of 'diary' refers to a retrospective record of past events, observations, or thoughts with sufficient space for detailed notations, not a prospective scheduling tool like Mead's 'Day Planner' which offers very limited writing space. Furthermore, interpreting the term 'bound' in its proper context of book manufacturing, the court found it means pages are permanently secured by methods like sewing or gluing, not held by a loose-leaf ring binder. Because Mead's products are neither 'diaries' nor 'bound' under the proper definitions, Customs' contrary classification is unpersuasive and must be reversed.
Analysis:
This case is a significant application of the Supreme Court's decision in United States v. Mead Corp., which established that informal agency actions like tariff rulings receive Skidmore deference rather than the stronger Chevron deference. The Federal Circuit's decision on remand demonstrates that Skidmore deference is not a rubber stamp; it requires courts to conduct a rigorous and independent analysis of the agency's reasoning. This holding solidifies that an agency must provide a genuinely persuasive rationale for its interpretation, as courts will use traditional tools of statutory construction, like dictionaries and context, to test the validity of the agency's conclusions. The case serves as a guide for how courts should balance respect for agency expertise with their duty of statutory interpretation in the context of informal rulemaking.
