CIT, Considering Use, Again Finds GRK Canada Screws 'Self-Tapping,' not 'Wood Screws'

The case involves two models of GRK screws, both made of case-hardened steel that meets minimum torsional strength requirements, with gimlet points, and the ability to “self-tap” by cutting a thread in non-fibrous (i.e., non-wood) materials such as sheet metal, plastics, cement and composites, while also being marketed for use in wood. CBP had classified GRK’s screws under the Harmonized Tariff Schedule (HTS) subheading 7318.12.00 as “other wood screws,” dutiable at 12.5 percent. GRK protested, arguing its screws were instead correctly classified under HTS subheading 7318.14.10 as “self-tapping screws,” dutiable at 6.2 percent.

CIT ruled in favor of GRK in 2013, over CBP’s arguments that the screws are “wood screws” because they can be used in wood. Rather, the subheading for “other wood screws” is an “eo nomine” provision, referring to products with certain specified characteristics, not a particular use (see 13011528). However, the U.S. Court of Appeals for the Federal Circuit vacated the lower court’s decision in 2014, ruling the term “wood screws” means screws for use in wood, so the CIT should have considered the screws’ use. Notably, the two Federal Circuit judges with a background in trade law dissented, arguing that the CAFC decision blurred the lines between “eo nomine” and use provisions in the HTS, which have different classification rules (see 14080420).

On remand, CIT first considered how it would consider use in an “eo nomine” classification case. The tariff provisions for wood screws, including relevant notes, do not include language compelling classification according to the Additional Rules of Interpretation (ARIs), such as the words “used” or “designed for.” As such, use would be one consideration in CIT’s analysis, but not the controlling factor. “Although neither provision is controlled by use, use may still be implicated in the court’s interpretive analysis because, in limited circumstances, the intended use of the product may be implicated by the tariff terms,” CIT said.

This time, CIT considered not only the characteristics of wood and self-tapping screws, as defined in the tariff schedule and industry standards, but also the materials for which the screws are suitable for use. If defined the wood screw as “a screw that forms its own thread by compressing surrounding material designed to fasten wood to wood or other fibrous material. A self-tapping screw “is a specially hardened screw, that meets minimum torsional strength requirements, that can cut away material to form a mating thread in non-fibrous material, and is designed to fasten non-fibrous materials, such as metal, to either fibrous or non-fibrous materials,” it said.

The extra capabilities of GRK’s screws means that they are classifiable self-tapping screws, not wood screws, CIT said. Even though the screws can be used in wood, they are hardened so they meet minimum strength requirements and can cut a tap, the court said. GRK’s screws also have characteristics that make them suitable for use in non-wood materials. They are coated with a friction-reducing coating and specially threaded to allow them to penetrate dense materials. Some of the screws also have features to prevent “mushrooming,” a problem that does not occur in wood, the court said. Neither of these features is required for self-tapping screws, but “these features better enable the screws at issue to be used in materials such as ‘sheet metal, plastics, medium-density fiberboard, polyvinyl chloride (PVC) board, cement fiberboard, melamine, arborite, and other man-made composite materials, and thus the intended uses of GRK’s screws support that they are self-tapping screws,’” CIT said.

(GRK Canada, Ltd. v. U.S., Slip Op. 16-70, CIT # 09-00390, dated 07/15/16, Judge Kelly)

(Attorneys: Craig Ziegler of Montgomery McCracken for plaintiff GRK Canada; Jason Kenner for defendant U.S. government)