News
International
Apr. 23, 1999
Justices Decide A Pressing Issue
WASHINGTON - Handing the federal government a limited victory, the Supreme Court ruled unanimously Wednesday that the federal courts must give broad deference to customs regulations relating to the classification of various imported goods.
But the court stopped short of upholding a regulation, challenged in a refund suit by the Haggar Apparel Co., that required the company to pay duties on men's trousers that are "permapressed" in Mexico before being shipped to this country for sale. Customs officials determined under the regulation that the permapressing was an additional step in the manufacture of the trousers and therefore subject to duties.
Writing for the court, Justice Anthony M. Kennedy said both the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit had erred by failing to give the regulations, interpreting 19 U.S.C. Section 1202, the deference required by the justices' decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837 (1984).
"Particularly in light of the fact that the [U.S. Customs Service] utilized the notice-and-comment rulemaking process before issuing the regulations, the argument that they were not intended to be entitled to judicial deference implies a sufficient departure from conventional contemporary administrative practice that we ought not to adopt it absent a different statutory structure and more express language to this effect in the regulations themselves," Kennedy said in United States v. Haggar Apparel Co., 1999 Daily Journal D.A.R. 3721.
The justices remanded the case to the lower courts for reconsideration under the deferential Chevron standard.
Although they joined the court in reversing the lower courts on the review standard, Justice John Paul Stevens, joined by Justice Ruth Bader Ginsburg, said the court also should have decided the merits of the case.
"In my view, the regulation before us is a reasonable elaboration of the statute, and the Customs Service's denial of a duty allowance in this case was consistent with its regulation and well within the scope of its congressionally delegated authority," Stevens wrote. "I would simply reverse the judgment of the Court of Appeals."
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David Pike
Daily Journal Staff Writer
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