CAFC Says Ugg Boots are 'Slip-Ons' for Tariff Classification Purposes

Deckers Contested CBP Classification on 'Uggs' Pull-on Boots

Deckers imported the Ugg Classic Crochet boots in 2006 and 2007. The boots have a rubber sole, and an upper knit portion extends above the ankle. They do not have laces, buckles, or other fasteners. They are meant to be pulled on with the hands. On liquidation, CBP had classified the boots in Harmonized Tariff Schedule subheading 6404.19.35 (“Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Footwear with open toes or open heels: footwear of a slip-on type, that is held to the foot without the use of laces or buckles or other fasteners …”), dutiable at 37.5%.

Deckers protested, arguing the boots should instead have been classified under subheading 6404.19.90, a basket provision covering “footwear with outer soles of rubber … and uppers of textile materials,” “valued at over $12/pair,” dutiable at 9%. After CBP denied its protest, Deckers challenged the classification before CIT, arguing that slip-on footwear only refers to shoes that don’t cover the ankle.

But CIT affirmed CBP’s classification on the boots as slip-on footwear. In support, CIT cited several definitions that referred to boots as slip-ons, and noted that CBP’s “Footwear Definitions” document includes pull-on boots under the slip-on definition. CIT also interpreted “that is” in the slip-on footwear subheading to mean “i.e.,” meaning that “held to the foot without the use of laces or buckles or other fasteners” defines the term “slip-on footwear.”

Deckers’ Definition Conflicts with ‘Footwear’ Meaning, CBP Footwear Guide

On appeal, CAFC also agreed with CBP’s interpretation of slip-on footwear including pull-on boots. The term “footwear” includes both shoes and boots, the court said. Many tariff provisions refer to either shoes or boots. If Congress had intended for “footwear of a slip-on type” to mean only shoes, it presumably would have said “shoes of a slip-on type,” CAFC said. “In arguing that Subheading 19.35 excludes boots, Deckers excises the word ‘footwear’ from the statutory text,” it said.

CBP’s 1993 “Footwear Definitions” document also undermines Deckers’ proposed classification, the appeals court said. In that document, CBP says “A ‘slip-on’ includes … a boot which must be pulled on.” While the “Footwear Definitions” document isn’t a ruling, and isn’t entitled to the deference a ruling would be, CBP has repeatedly classified boots without laces or other fasteners as footwear of the slip-on type in its rulings, the appeals court said. “The consistency of Customs’ interpretation of the term ‘slip-on’ serves to enhance the persuasive power of that interpretation,” it said.

The appeals court expressed sympathy for Deckers’ argument on the meaning of the term “that is” in subheading 6404.19.35. According to Deckers, if that term was to mean “i.e.,” as the lower court had decided, then Congress would have included a second comma following the phrase. “We agree with Deckers that the meaning of Subheading 19.35 would have been more pellucid had Congress added an additional comma after the phrase ‘that is,’” the appeals court said. But defining the term “slip-on footwear” as footwear that does not contain “laces or buckles or other fasteners” is consistent with dictionary definitions, CAFC said.

Judge Dyk Dissents, says Majority Ignored Commercial Definition

Judge Timothy Dyk dissented from the ruling, arguing that it was the majority that failed to give meaning to all terms of the subheading. “The majority interprets the subheading as covering any footwear ’that is held to the foot without the use of laces or buckles or other fasteners,” Dyk noted. “If 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.’”

According to Dyk, the court ignored the commercial meaning of the term slip-on footwear. To meet that definition, the article must be a shoe (not a high-cut boot), must be easy to slip on, and must have few or no fasteners, he said. Instead, Deckers’ product only met one of those criteria.

(Deckers Outdoor Corporation v. U.S., CAFC No. 12-1411, dated 05/08/13, Judges Mayer and Reyna, Judge Dyk dissenting)

(Attorneys: Patrick Gill of Rode & Qualey for plaintiff-appellant Deckers Outdoor Corporation; Beverly Farrell for defendant U.S. government)