In an action brought in the United States Court of International Trade, Judge Gregory Carman recently dismissed a claim brought by Deckers Outdoor Corporation, the manufacturers of Ugg boots. Deckers had challenged the assessment of a 37.5 percent tariff by the customs officials on their Classic Crochet boots. Customs officials had classified the popular boots as “slip-ons,” as opposed to footwear that contained outer rubber or plastic soles and was valued at more than $12 a pair. This classification would have meant a 9 percent tariff.
The court found that the “lacking of any kind of fasteners” was the key characteristic of slip-on shoes. Judge Carman found that the boots should be classified within the subheading for “footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners.”
The court was not persuaded by Deckers’ argument that the “slip-on” classification was limited to low-cut footwear and did not include high-cut footwear such as the Classic Crochet boots. The court held that had Congress intended to limit the scope of the classification to exclude a particular type of footwear, it would have done so explicitly.
This case highlights the pitfalls companies may encounter with respect to the classifications of goods by U.S. Customs and Border Protection. The general public may have a certain understanding as to what a good is and to what class it belongs. However, companies must be mindful that colloquial classifications of certain goods and products do not necessarily comport with Customs classification of those products.