CAFC Says Compression Hosiery Not 'Specially Designed' for Use by Handicapped, Not Duty Free
The Court of Appeals for the Federal Circuit on Aug. 16 upheld a ruling by the Court of International Trade that compression leg hosiery imported by Sigvaris does not qualify for duty-free treatment as articles specially designed for use by the handicapped, despite finding fault with the reasoning in the lower court’s decision.
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CIT had in May 2017 found the compression leg hosiery may be used in the treatment of chronic venous disorder, which can lead to a physical handicap in its most severe stages, but generally does not interfere with and impair life functions like walking (see 1705180037). As such, unlike separate arm hosiery imported by Sigvaris, the leg hosiery could not be classified in the special duty-free subheading 9817.00.96 for articles specially designed for use by the handicapped, the trade court said.
According to the Federal Circuit, the trade court focused too much on the condition, and not enough on the person. Articles classifiable in subheading 9817.00.96 must be specially designed for use by handicapped persons, not specially designed to treat a disorder that may lead to disabilities, it said. “We must ask first, ‘for whose, if anyone’s, use and benefit is the article specially designed,’ and then, ‘are those persons physically handicapped?’”
But more importantly in this case, “specially designed” means not only made with the purpose and intent of use by the handicapped rather than the general public, as noted by CIT, but also “designed for the use or benefit of a class of persons to an extent greater than for others,” CAFC said. The evidence shows Sigvaris’s compression hosiery is not specially designed for the use or benefit of any specific class of persons, but rather for use by a variety of persons.
For example, the hosiery only exerts a little more compression than a regular pair of socks, the Federal Circuit said. The importer’s advertising materials say the hosiery may also be used by people with tired legs or who stand or sit for long hours, and appeal to people with an active lifestyle. While the compression does alleviate some symptoms of chronic venous disorder, “such incidental benefits do not establish that a product is ‘specially designed’ under the definition that we adopt,” CAFC said.
“The subject merchandise is not specially designed for the use or benefit of a specific class of persons,” the Federal Circuit said. “We need not assess, therefore, if the persons who might use the subject merchandise are physically handicapped persons.”
(Sigvaris, Inc. v. U.S., CAFC # 2017-2237, dated 08/16/18, Judges Prost, Dyk and O’Malley)
(Attorneys: John Peterson for plaintiff-appellant Sigvaris, Inc.; Alexander Vanderweide for defendant U.S. government)