from the United States Court of International Trade in No.
1:11-cv-00266-TCS, Chief Judge Timothy C. Stanceu.
ALEXANDER SCHAEFER, Crowell & Moring, LLP, Washington,
DC, argued for plaintiff-appellee. Also represented by JOHN
BOWERS BREW, DAVID COOPER WOLFF; FRANCES PIERSON HADFIELD,
New York, NY.
LEE, Appellate Section, International Trade Litigation,
United States Department of Justice, New York, NY, argued for
defendant-appellant. Also represented by AMY M. RUBIN,
Commercial Litigation Branch, Civil Division, United States
Department of Justice, New York, NY; JEANNE E. DAVIDSON,
BENJAMIN C. MIZER, Washington, DC; MICHAEL W. HEYDRICH,
EDWARD N. MAURER, Office of Assistant Chief Counsel, United
States Customs and Border Protection, New York, NY.
O'MALLEY, WALLACH, and TARANTO, Circuit Judges.
WALLACH, Circuit Judge.
instant appeal concerns the proper classification of bauxite
proppants imported by Appellee Schlumberger Technology
Corporation ("Schlumberger") in 2010. U.S. Customs
& Border Protection ("Customs") classified the
subject merchandise under Subheading 6909.19.50 of the
Harmonized Tariff Schedule of the United States
("HTSUS"). Schlumberger appealed Customs's
classification to the U.S. Court of International Trade
("CIT"). The CIT rejected Customs's
classification and, instead, entered summary judgment that
the subject merchandise should enter under HTSUS 2606.00.00.
Schlumberger Tech. Corp. v. United States, 91
F.Supp.3d 1304, 1324 (Ct. Int'l Trade 2015).
the United States ("Government"), appeals. We
possess subject matter jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(5) (2012). We affirm the CIT.
parties do not dispute the facts material to the resolution
of the classification question before us. We discuss in turn
the facts relevant to the subject merchandise, Customs's
classification, and the CIT's decision before turning to
an oil well services provider, J.A. 119, imported the subject
bauxite proppants from the People's Republic of China,
J.A. 1729. Schlumberger used the subject merchandise in
hydraulic fracturing services that it provided to customers
in the United States. J.A. 126. The subject merchandise, when
combined with other materials after importation, increased
oil well productivity by preventing fractures in rock
formations from closing. J.A. 126, 129, 281.
subject bauxite proppants consisted of two models:
"S580-2040 Ceramic Proppant[s]" ("2040
Proppants") and "S580-4070 Ceramic
Proppant[s]" ("4070 Proppants"). J.A. 119-20.
"S580" referred to the designation used by
Schlumberger for bauxite proppants produced by a specific
third-party supplier, J.A. 125, and "2040" and
"4070" referred to the "size of sieves through
which the proppants can fit, " J.A. 123. Each model
primarily consisted of "non-metallurgical bauxite,
" but the precise chemical composition of
the merchandise is unknown because neither party retained a
sample of the merchandise. J.A. 1729; see J.A.
498-510. Each model measured less than a millimeter in
diameter and possessed specific physical characteristics with
associated values for crush resistance (i.e., strength),
specific density, roundness, and sphericity. J.A. 122-23.
production of the subject merchandise involved the following
steps. First, "[t]he raw materials of the subject
proppants were milled or ground to a fine powder." J.A.
126. Second, the resulting powder underwent a granulation
process in a pan granulator, which resulted in "larger
sized particles from the milled particles." J.A. 124.
Third, "the particles [were] sorted" to determine
whether they met the required size specifications and, if so,
the particles were dried. J.A. 124-25. Fourth, the particles
that fell within the required size specifications were kiln
fired. J.A. 125. Fifth, after firing, the particles were
sorted anew to ensure that ninety percent of them fell within
the required size specifications. J.A. 125. Finally, the
particles that met the previous steps were packed in bulk in
3, 200 pound bags and exported to the United States as the
subject bauxite proppants. J.A. 125.
classified the subject bauxite proppants under HTSUS
6909.19.50 at a duty rate of four percent ad
valorem. J.A. 120-21. The subheading selected by Customs
covers "Ceramic wares for laboratory, chemical, or other
technical uses; ceramic troughs, tubs and similar receptacles
of a kind used in agriculture; ceramic pots, jars and similar
articles of a kind used for the conveyance or packing of
goods: Other: Other." HTSUS 6909.19.50. Schlumberger
contested the classification in separate protests,
arguing that the subject merchandise should enter duty free
under HTSUS 2606.00.0060 as "Aluminum ores and
concentrates: Bauxite, calcined: Other." J.A. 109-10;
see J.A. 162, 194. Customs denied the protests, and
Schlumberger appealed to the CIT. J.A. 107-12.
cross-motions for summary judgment, the CIT rejected
Customs's classification and entered summary judgment
that the subject bauxite proppants should enter under HTSUS
2606.00.00. See Schlumberger, 91 F.Supp.3d at
1323-24. In relevant part, the CIT reasoned that the
applicable interpretive rules "preclude [d]"
classifying the subject merchandise under HTSUS 6909.19.50
"because the proppants are not 'ceramic wares'
within the intended meaning of that term as used in [H]eading
6909." Id. at 1323. The CIT also found that the
Government's "alternate classification" under
Subheading 6914.90.80 "is incorrect because [H]eading
6914... is confined to 'ceramic articles' rather than
substances such as the proppants at issue." Id.
at 1323-24; see HTSUS 6914.90.80 (covering
"Other ceramic articles: Other: Other"). Having
found these provisions inapplicable, the CIT concluded that
the subject merchandise should enter under HTSUS 2606.00.00
based on Heading 2606's terms, guidance provided in the
notes accompanying HTSUS Chapter 26 and in other sources, and
the undisputed material facts. See Schlumberger, 91
F.Supp.3d at 1316-22.