CAFC Rejects Lower Court Decision on Classification of Lockable Doorknobs
The U.S. Court of Appeals for the Federal Circuit on Feb. 15 sent back down a lower court decision on the tariff classification of lockable doorknobs, finding the Court of International Trade improperly found them only classifiable as locks when it should have considered them as composite goods with characteristics of both locks and doorknobs.
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Home Depot had appealed CIT’s decision (see 1709220036), which found “entry” doorknobs imported by the retailer, with a cylinder lock that can be opened or closed by key from the outside and by thumbturn from the inside, are classifiable in the tariff schedule under heading 8301 as “locks (key, combination or electrically operated).” Instead, CIT and CBP should have classified them alongside “passage” doorknobs with no lock, and “privacy” doorknobs with only a thumbturn lock, in heading 8302 as “door fittings.”
Home Depot argued that the mechanisms don’t fall within heading 8301 because they aren’t “key-operated locks.” According to Home Depot, that term is limited to locks where the key propels or withdraws a bolt. But that definition is “quite restrictive,” applying only to deadbolt locks. “The definition of a key-operated lock does not require that the key directly propel or withdraw a bolt; it merely requires that ‘a key produces an appropriate effect of locking or unlocking the device,’” CAFC said. “We hold that the subject articles consist in part of ‘key-operated locks.’ For that reason, the articles are prima facie classifiable under [tariff schedule] heading 8301,” it said.
But CAFC took issue with CIT’s holding that the imported assemblies are not classifiable in heading 8302 as door fittings. As pointed out by Home Depot, the Explanatory Notes say heading 8302 covers “handles and knobs for doors, including those for locks and latches.” That “makes clear that the knob portion of the item is included within heading 8302,” it said. Though it leaves some ambiguity as to whether the locking mechanism is included, it does not “exclude a knob fitted with a locking mechanism,” CAFC said.
Classifiable in both headings 8301 and 8302, the articles are composite goods consisting of both a lock and a doorknob and should have been classified according to General Rule of Interpretation 3(b) in the heading of the component that gives it its essential character, CAFC said. CAFC vacated the lower court ruling and remanded the case back to CIT, leaving it up to the trade court to answer that question.
(Home Depot U.S.A., Inc. v. U.S., Fed. Cir. 2018-1206, dated 02/15/19, Judges Dyk, Bryson and Chen)
(Attorney: William Rucker of Drinker Biddle for plaintiff-appellant Home Depot; Edward Kenny for defendant U.S. government)