United States Court of Appeals for the Federal Circuit
[End Page 2009-1113]
John M. Peterson, Neville Peterson LLP, of New York, New York, argued for
plaintiff-appellant. With him on the brief were Michael T. Cone, Maria E. Celis, and
Matthew G. Shaw.
Jeanne E. Davidson, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice, of Washington, DC, argued for defendant-
appellee. With her on the brief were Tony West, Assistant Attorney General,
Reginald T. Blades, Jr., Assistant Director, and Aimee Lee and David S. Silverbrand,
Trial Attorneys. Of counsel on the brief were Karen P. Binder, Assistant Chief Counsel,
and Yelena Slepak, Attorney, United States Customs and Border Protection, of New
York, New York, and Elizabeth Baltzan, Office of the General Counsel, United States
Trade Representative, of Washington, DC.
Curtis W. Knauss, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of
New York, New York, for amicus curiae Wolff Shoe.
Appealed from: United States Court of International Trade
Chief Judge Jane A. Restani, Judge Donald C. Pogue, and Judge Judith M. Barzilay
United States Court of Appeals for the Federal Circuit[End Page 2009-1113]
Appeal from the United States Court of International Trade in case no. 07-00001, Chief
Judge Jane A. Restani, Judge Donald C. Pogue, and Judge Judith M. Barzilay.
DECIDED: February 5, 2010
Before LOURIE, DYK, and PROST, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK. Opinion concurring in the result filed
by Circuit Judge PROST.
DYK, Circuit Judge.
Totes-Isotoner Corporation (?Totes?) appeals from a judgment of the United
States Court of International Trade dismissing its complaint against the United States
for failure to state a claim. Totes alleged that the Harmonized Tariff Schedule of the
United States (?HTSUS?) unconstitutionally denies the equal protection of the laws by
imposing different rates of duty on seamed leather gloves ?for men? and seamed leather
gloves ?for other persons.? See Totes-Isotoner Corp. v. United States, 569 F. Supp. 2d 1315
, 1319 (Ct. Int?l Trade 2008) (?Totes I?). We affirm.
Totes is a United States importer of men's seamed leather gloves. As an
importer of goods, Totes is required to pay import tariffs as set forth in the HTSUS.
Subheading 4203.29.30 of the HTSUS classifies ?[m]en?s? leather gloves and provides
for a duty rate of 14 percent ad valorem, whereas gloves ?[f]or other persons? are
classified under 4204.29.40 and 4203.29.50, HTSUS, which provide for a duty rate of
12.6 percent ad valorem. The relevant portions of the HTSUS are set forth below:
4203 Articles of apparel and clothing accessories, of leather or of
Gloves, mittens and mitts:
4203.29 Other [than those for sports]:
Other [than horsehide or cowhide (except calfskin)
4203.29.30 Men?s.................................................14%[End Page 10 Not lined ............... doz. prs.]
For other persons:
4203.29.40 00 Not lined ............... doz. prs. ........12.6%
4203.29.50 00 Lined .................... doz. prs. ........12.6%
Totes filed a complaint with the Court of International Trade, which has ?exclusive
jurisdiction of any civil action commenced against the United States, its agencies, or its
officers, that arises out of any law of the United States providing for . . . revenue from
imports or tonnage.? See 28 U.S.C. Â§ 1581(i)(1). In its complaint, Totes alleged that by
imposing different tariff rates for ?[m]en?s? gloves and ?other? gloves, the HTSUS
?unlawfully and unconstitutionally discriminate[s] on the basis of gender or age.? See
Complaint at 1, Totes I, 569 F.Supp.2d 1315 (No. 07-00001). Totes sought a refund of
duties ?unconstitutionally exacted in liquidation under HTSUS Subheading 4203.29.30.?
Id. at 7.
The government filed a motion to dismiss on various grounds. In a decision
dated July 3, 2008, the Court of International Trade concluded that Totes? equal
protection claims were justiciable and that Totes had standing to bring its claims. See
Totes I, 569 F. Supp. 2d at 1319. Nonetheless, the court dismissed Totes? complaint for
failure to plead facts sufficient to state a claim of unconstitutional discrimination. The
dismissal was without prejudice as to the filing of an amended complaint. Id. Both
Totes and the government sought reconsideration. On reconsideration, the government
also argued that the court lacked jurisdiction because Totes failed to exhaust its
administrative remedies, having failed to invoke the Court of International Trade?s
jurisdiction under 28 U.S.C. Â§ 1581(a) by filing a protest with the United States Customs
Service (?Customs?). On November 4, 2008, the court denied both parties? motions for
rehearing. See Totes-Isotoner Corp. v. United States, 580 F. Supp. 2d 1371
, 1374 (Ct.
Int?l Trade 2008) (?Totes II?). Totes chose not to amend its complaint, and the court
accordingly dismissed the complaint with prejudice. We have jurisdiction pursuant to 28
U.S.C. Â§ 1295(a)(5).
I Jurisdiction and Related Questions
The government argues that the Court of International Trade did not have
jurisdiction to entertain this action, that Totes lacks standing, and that this controversy is
non-justiciable. These are questions of law which we review de novo. Int?l Custom
Prods., Inc. v. United States, 467 F.3d 1324
, 1326 (Fed. Cir. 2006).
A Jurisdiction Under 28 U.S.C. Â§ 1581(i)
In arguing that the Court of International Trade lacked jurisdiction under 28
U.S.C. Â§ 1581(i), the government points out that jurisdiction under section 1581(i) is not
available if jurisdiction is available under other subsections of 1581, and argues that
section 1581(a) would have been available if Totes had filed a protest. 1 We disagree.
It is 28 U.S.C. Â§ 1581(i), the residual jurisdiction provision, and not 28 U.S.C. Â§ 1581(a)
that provides the jurisdictional mechanism for a challenge to the constitutionality of a
tariff. In Thomson Consumer Electronics, Inc. v. United States, 247 F.3d 1210
(Fed. Cir. 2001), we held that filing a protest with Customs under section 1514(a), which
is a prerequisite to jurisdiction under section 1581(a), was not required where a plaintiff
challenged the constitutionality of a tariff pursuant to section 1581(i). This was so
because section 1581(a) did not provide a remedy. We reasoned that there is no
protest remedy available to one challenging an unconstitutional statute because
Customs lacks the power to declare a statute unconstitutional. See id.; see also
Orleans Int?l, Inc. v. United States, 334 F.3d 1375
, 1380 (Fed. Cir. 2003); U.S. Shoe
Under 28 U.S.C. Â§ 1581(i),
the Court of International Trade shall have exclusive jurisdiction of any civil
action commenced against the United States . . . that arises out of any law
of the United States providing for . . . revenue from imports or tonnage . . .
[and their] administration and enforcement . . . .
28 U.S.C. Â§ 1581(a) provides that
[t]he Court of International Trade shall have exclusive jurisdiction of any
civil action commenced to contest the denial of a protest, in whole or in
part, under section 515 of the Tariff Act of 1930.
Corp. v. United States, 114 F.3d 1564
, 1569-71 (Fed. Cir. 1997), aff?d, 523 U.S. 360
However, the government relies on United States v. Clintwood Elkhorn Mining
Co., 128 S. Ct. 1511
(2008), and suggests that Clintwood has effectively overruled
Thomson. In Clintwood, a taxpayer claimed that the government had unlawfully
imposed a tax on exports and sought a refund. 128 S. Ct. at 1515. The taxpayer had
not, however, filed a claim for refund with the IRS and the statute, 26 U.S.C. Â§ 7422,
provided that ?[n]o suit or proceeding shall be maintained in any court for the recovery of
any internal revenue tax alleged to have been erroneously or illegally assessed or
collected . . . until a claim for refund or credit has been duly filed with [the IRS].? See
Clintwood, 128 S. Ct. at 1516. In holding that the statute required initial resort to the
IRS, the Supreme Court did not address whether the IRS could in fact provide a refund
by declaring the tax unconstitutional. The Court held that exhaustion was required in all
circumstances. But the language of the exhaustion provision in Clintwood, as the
Supreme Court noted, was ?unusually emphatic.? Id. (?Five ?any?s? in one sentence and
it begins to seem that Congress meant the statute to have expansive reach.?). There is
no similar provision here unequivocally requiring resort to the protest procedures and
section 1581(a). We conclude that Clintwood does not alter our holding in Thomson,
and that the Court of International Trade properly exercised jurisdiction under section
The government also argues that Totes lacks standing to maintain this action.
Totes must demonstrate that its claim meets Article III of the Constitution's ?case or
controversy? requirements. See Lujan v. Defenders of Wildlife, 504 U.S. 555
(1992). To establish Article III standing, Totes must demonstrate (1) that it has suffered
an injury-in-fact; (2) that there is a causal connection between the government?s
conduct and its injury-in-fact; and (3) that its injury is redressable by the court. See id.
Totes alleges that it has suffered an injury-in-fact?the payment of customs duties at the
14 percent rate. Totes also alleges that this injury is caused by the government?s
allegedly discriminatory tariff rates, and seeks refund of any excess duty paid. These
allegations typically would satisfy constitutional standing requirements. See, e.g., U.S.
Shoe, 523 U.S. at 365-66, 370.
The government argues that since all importers of ?[m]en?s? gloves, including
Totes, pay the same tariff rate, there is no discriminatory treatment and that Totes has
suffered no injury-in-fact. This argument is frivolous. Equal protection requirements still
apply even though everyone in the targeted group is targeted equally. See Loving v.
Virginia, 388 U.S. 1
, 9 (1967) (?[E]qual application [of Virginia's miscegenation statute]
does not immunize the statute from the very heavy burden of justification which the
Fourteenth Amendment has traditionally required of state statutes drawn according to
The government also argues that if there is any discrimination, it is against the
purchasers of gloves, and not the importers of gloves. However, the Supreme Court
has held that a vendor may indeed be the proper plaintiff where the vendor itself is
injured by the alleged discrimination, even though the vendor is not the object of the
In Craig v. Boren, the Supreme Court held that a beer vendor had third-party
2009-1113 6 standing to pursue the equal protection claims of 18-20-year-old males against an
allegedly discriminatory statute that permitted purchases of 3.2% beer by 18-20-year-
old females but denied 18-20-year-old males that same right. 429 U.S. 190
(1976). The Court noted that ?[t]he operation of [the statutes at issue] plainly has
inflicted ?injury in fact? upon appellant sufficient to . . . satisfy the constitutionally based
standing requirements imposed by Art. III.? Id. at 194. Here, the importer, like the
?vendor [in Craig, is] the obvious claimant.? See id. at 197. A third party, such as Totes,
can claim jus tertii standing only when (1) the jus tertii plaintiff and the party whose
rights it is asserting have a close relationship; (2) the jus tertii plaintiff has suffered an
injury in fact; and (3) there is some hindrance to the first party filing its own claim.
Powers v. Ohio, 499 U.S. 400
, 410-11 (1991). Here, those requirements are satisfied.
There is a close relationship between importers and purchasers. Importers suffer an
injury in fact as they are legally required to pay the allegedly discriminatory tariff. The
purchasers have no remedy to challenge the tariff classification. 2
In addition to Article III standing requirements, Totes must also meet prudential
standing requirements. To satisfy prudential standing requirements, the interests of the
affected parties must also arguably be within the zone of interests to be protected or
regulated by the statute or constitutional guarantee in question. See Clarke v. Sec.
Indus. Ass?n, 479 U.S. 388
, 396 (1986). The interests of the purchasers of gloves in
being free from unconstitutional sex discrimination are plainly within the zone of
Totes has stated that it did not and does not currently seek derivative or
third-party standing on behalf of adult male purchasers of gloves. See, e.g., Totes I,
569 F. Supp. 2d at 1324 n.10. However, in our view, Totes? standing is by its nature,
derivative, and this Court evaluates it as such.
interests to be protected by the Equal Protection Clause. Therefore, we conclude that
Totes has standing to pursue its equal protection claims.
C Political Question Doctrine
Finally, the government argues that Totes? complaint raises a non-justiciable
political question. The political question doctrine excludes certain disputes from judicial
determination where the subject matter of the dispute is exclusively assigned to the
political branches or where such branches are better-suited than the judicial branch to
resolve the matter. See Japan Whaling Ass?n v. Am. Cetacean Soc?y, 478 U.S. 221
230 (1986); Baker v. Carr, 369 U.S. 186
, 210-11 (1962). The government argues that
the subject matter of Totes? complaint?the constitutionality of the use of gender in tariff
classifications?is not appropriate for judicial resolution because the formation and
adoption of tariff provisions involve the negotiation of agreements with foreign
governments and that there are no judicially manageable standards for reviewing the
results of such international trade agreements. In other words, in the government?s
view, ?[t]he changes in the tariff rates that Totes requests the courts to impose would
intrude upon the foreign affairs powers of the political branches by undermining both the
specific bargain the President struck and the grounds upon which Congress approved
the overall [trade] agreement.? Def.-Appellee's Br. 14. We disagree.
As the Court of International Trade noted, though the challenged provisions of
the HTSUS originated in international negotiations, they have since been enacted by
Congress as statutes comprising the HTSUS. 3 The Supreme Court remarked in Japan
The specific provisions of the HTSUS constitute statutes enacted by
Congress pursuant to section 1204(c) of the Omnibus Trade and Competitiveness Act
Whaling that despite the political question doctrine, ?the courts have the authority to
construe treaties and executive agreements, and it goes without saying that interpreting
congressional legislation is a recurring and accepted task for the federal courts.? 478
U.S. at 230. The same is true about rulings on the constitutionality of statutes based on
the application of the Fifth Amendment's equal protection requirement.
None of the cases cited by the government remotely holds or even implies that
the federal courts are barred by the political question doctrine from reviewing federal
statutes for compliance with equal protection guarantees. To the extent that the cases
address the ability of courts to review federal statutes for compliance with established
constitutional standards, they recognize the authority and duty of the federal courts to
conduct that review. For example, in Made in the USA Foundation v. United States,
242 F.3d 1300
(11th Cir. 2001), the Eleventh Circuit specifically recognized that, even
with respect to international agreements,
?foreign commitments? cannot relieve the government of the obligation to
?operate within the bounds laid down by the Constitution,? and that ?the
prohibitions of the Constitution . . . cannot be nullified by the Executive or
by the Executive and Senate combined.? Reid v. Covert, 354 U.S. 1
17 (1957). We therefore have little doubt that courts have the authority?
indeed, the duty?to invalidate international agreements which violate the
express terms of the Constitution.
Id. at 1314.
Therefore, we agree with the Court of International Trade that the political
question doctrine is inapplicable. The review of statutory provisions, such as the
HTSUS, using constitutional standards, is properly within the realm of the
of 1988, Pub. L. No. 100-418, Â§ 1204(c), 102 Stat. 1107, 1149 (codified at 19 U.S.C. Â§
judiciary. ?[W]e cannot shirk this responsibility merely because our decision may
have significant political overtones.? Japan Whaling, 478 U.S. at 229-30.
II Failure to State a Claim
We now turn to the merits. We review the Court of International Trade's decision
dismissing the complaint de novo. Cambridge v. United States, 558 F.3d 1331
(Fed. Cir. 2009).
Totes? complaint alleges that the government has assessed, and Totes has paid,
customs duties at a rate of 14 percent ad valorem on its men's seamed leather gloves.
Totes seeks a refund of these customs duties because the provisions of the HTSUS
requiring payment of these duties ?unlawfully and unconstitutionally discriminate on the
basis or gender or age.? Complaint at 1, Totes I, 569 F.Supp.2d 1315 (No. 07-00001).
The Court of International Trade found that Totes? complaint failed to state a claim. We
agree, but for somewhat different reasons than those articulated by the Court of
Before addressing Totes? primary argument on appeal, it is necessary to clear
away the underbrush created by two bad arguments?one made by each side in this
case. The government argues that Totes cannot allege a constitutional claim because it
?is not entitled to a particular [tariff] classification or rate of duty or preference.? Def.-
Appellee's Br. 32 (citing Norwegian Nitrogen Prods. Co. v. United States, 288 U.S. 294
318 (1933); N. Am. Foreign Trading Corp. v. United States, 783 F.2d 1031
, 1032 (Fed.
Cir. 1986)). But that hardly precludes a claim of unconstitutional discrimination. Totes
is not ?effectively claiming entitlement to a specific classification and rate of duty.? See
id. Totes is complaining about unequal treatment. 4
Totes argues that the tariff classification is unconstitutional because it
discriminates between similar property?men's gloves and women's gloves. While the
Supreme Court in Allegheny Coal and other cases has held that taxation of property
cannot discriminate between items of property of the ?same class,? allegations of such
discrimination are judged under the rational basis test. See Allegheny Pittsburgh Coal
Co. v. County Comm?n of Webster County, 488 U.S. 336
, 341-44 (1989); Charleston
Fed. Sav. & Loan Ass?n v. Alderson, 324 U.S. 182
, 190-92 (1945). The rational basis
test is relatively easy to satisfy, and Totes has failed to allege facts sufficient to show
that men's and women's gloves are property of the same class. Men's and women?s
gloves are separate commodities, moving in different channels of trade and presenting
different commercial issues with respect to domestic manufacturers. 5
We turn then to Totes? primary argument?that the tariff provisions at issue
unconstitutionally discriminate based on the sex of users of gloves. To properly state a
claim for unequal treatment, as with any other claim, a plaintiff must provide ??a short
and plain statement of the claim showing that the pleader is entitled to relief,? in order to
The government also appears to suggest that Totes has no right to a
refund because the government here could have raised the tariff rate on the gloves for
?other persons.? The Supreme Court has rejected this as a basis for denying judicial
relief. See, e.g., McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, Dep?t of
Bus. Regulation of Fla., 496 U.S. 18
, 35-36 (1990).
The government observes that historically, ?[t]he record particularly
reflects sourcing differences; domestic production of men's gloves was higher than for
women's gloves, and women's gloves tended to be imported. See Dictionary of Tariff
Information, Government Printing Office 379 (1924); Summary of Tariff Information,
Government Printing Office, 2058 (1929).? Def.-Appellee's Br. 59.
?give the defendant fair notice of what the . . . claim is and the grounds upon which it
rests.?? Bell Atl. Corp. v. Twombly, 550 U.S. 544
, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41
, 47 (1957)); see Ashcroft v. Iqbal, 129 S. Ct. 1937
, 1949-50 (2009).
While a complaint . . . does not need detailed factual allegations, a
plaintiff's obligation to provide the ?grounds? of his ?entitle[ment] to relief?
requires more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative level . . . .
. . .[S]uch a claim requires a complaint with enough factual matter (taken
as true) to suggest that [a claim is plausible].
Bell Atl., 550 U.S. at 555-56 (citations and footnote omitted).
Applying Bell Atlantic's pleading requirement to Totes? equal protection claim, the
Court of International Trade held that the provisions at issue were not facially
discriminatory, and therefore, Totes? complaint ?must include a factual allegation that
demonstrates a governmental purpose to discriminate.? Totes I, 569 F. Supp. 2d at
1326, 1328. The court reasoned that Totes ?must at least include an allegation that the
challenged tariff classifications distribute the burdens of the tax rate imposed in a way
that disadvantages one sex as a whole, or has a disproportionate impact based on sex.?
Id. at 1328.
It may be, as the Court of International Trade suggested, that the tariff does not
discriminate between male and female purchasers of gloves because women buy men?s
gloves for men and men buy women's gloves for women. But this comparison entirely
misses the point. The claimed discrimination is based on the sex of the glove users, not
the sex of the glove purchasers. There is no serious dispute that men's gloves are
typically purchased for use by men, and women's gloves, for women. Indeed the
government admits that ?the subheadings at issue require Customs to differentiate
between gloves because they are targeted for use by specific genders.? Def.-Appellee's
Br. 63 (quotation mark omitted). Under the theory of purchaser equality, generally
imposing a higher tax on vehicles purchased for female users would raise no
constitutional questions if both men and women equally purchased the vehicles in
question. Any such theory is untenable. For example, in Califano v. Westcott, the
Supreme Court rejected the government's argument that unlawful sex discrimination did
not exist because the benefits law did not distinguish between male and female benefits
recipients even though the calculation of the benefits was affected by sex-based
criteria. 443 U.S. 76
, 83-84 (1979). So here, the claimed absence of differential
treatment of male and female glove purchasers does not eliminate constitutional
concerns concerning sex discrimination. We must accordingly address whether the
allegation of disparate impact of the tariff provisions with respect to male glove users is
sufficient to create a prima facie case of sex discrimination. 6
The concurrence suggests that this disparate impact claim is not raised,
stating that ?Totes's brief to this court focuses entirely on whether the tariff classification
is facially discriminatory.? Concurring Op. at 2. While the concurrence is correct that
Totes primarily argues that the use provisions are facially discriminatory, at places in its
brief Totes argues discriminatory ?impact.? See Pl.-Appellant's Br. 27 (noting that the
HTSUS ?causes disparate impact based on gender?).
In any event, the label that Totes has chosen to describe its claim is not
determinative. With respect to pleadings, it is understood that a court looks to ?the
quality of its substance rather than according to its form or label.? 5 Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure Â§ 1286 (3d ed. 2004). The same
approach applies to briefs. See, e.g., Goeke v. Branch, 514 U.S. 115
, 118 (1995) (brief
adequately raised issue because it provided the ?court with ample opportunity to make a
reasoned judgment on the issue?); see also Smith v. Texas, 550 U.S. 297
, 314 (2007)
(?Smith's labeling of the claim in his supplemental brief, however, did not change its substance.?).
It is well established that disparate impact standing alone does not establish a
violation of equal protection. In Village of Arlington Heights v. Metropolitan Housing
Development Corp., 429 U.S. 252
(1977), the Supreme Court reaffirmed that ?official
action will not be held unconstitutional solely because it results in a racially
disproportionate impact. ?Disproportionate impact is not irrelevant, but it is not the sole
touchstone of an invidious racial discrimination.?? Id. at 264-65 (quoting Washington v.
Davis, 426 U.S. 229
, 242 (1976)). Similarly, as we noted in Yant v. United States, 588 F.3d 1369
, 1373-74 (Fed. Cir. 2009), ?[m]ere reliance on gender ratios of two groups [to
show disparate impact] does not establish discrimination based on sex.? To be sure,
the Supreme Court has noted that disparate impact, while not inherently unlawful,
supports a finding of purposeful discrimination. See, e.g., Washington, 426 U.S. at 242
(?[A]n invidious discriminatory purpose may often be inferred from the totality of the
relevant facts, including the fact, if it is true, that the law bears more heavily on one race
than another.?). In contexts such as jury selection, employment, or fair housing, an
allegation of disparate impact may in fact be sufficient to make out a prima facie case of
discrimination. See Batson v. Kentucky, 476 U.S. 79
, 96-97 (1986); Arlington Heights,
429 U.S. at 266; Washington, 426 U.S. at 241-42. However, we think a different
approach is required in the tariff context.
The substance of Totes? argument is that the tariff discriminates against male
glove users both in theory and in fact and that the occasional use of men's or women?s
gloves by the other sex (what Totes calls ?fugitive? use) does not save the
discrimination. See Pl.-Appellant's Br. 13 (?[A] higher duty on gloves imported for men
is a discriminatory duty on men for the purposes of equal protection.?), 51 (?Even if this
Court were to hold that a gender discrimination claim must assert distinctions among
people, the tariff provisions at issue do create distinctions among people for purposes of
This is so for two reasons. First, apart from a desire to raise revenue, Congress,
in classifying goods for the imposition of tariffs, as a general matter is not concerned
with the characteristics of the ultimate retail users of goods, but rather such
classifications are designed to promote particular trade policy objectives negotiated with
other countries. The current tariff classification system, the HTSUS, which has been in
effect since January 1, 1989, is the result of the United States? implementation of a
standardized international product nomenclature system based upon the international
Harmonized Commodity Description and Coding System (?HS?). See Omnibus Trade
and Competitiveness Act of 1988, Pub. L. No. 100-418, Â§Â§ 1201-17, 102 Stat. 1107.
1147-63 (codified at 19 U.S.C. Â§ 3001 et seq.; Generalized System of Preferences
(GSP); Publication of the Proposed Conversion of the GSP Program to the Harmonized
System Tariff Nomenclature, 51 Fed. Reg. 44,163 (Dec. 8, 1986). The HS, which is
administered by the World Customs Organization, and was the result of a ten-year
international effort, was developed in order to provide a single modern structure for
product classification to be used on an international basis in the classification,
description, and coding of goods for customs purposes; for the collection of statistical
data on imports and exports; and also for the uniform documentation of transactions in
international trade. See U.S. Int?l Trade Comm?n, Conversion of the Tariff Schedules of
the United States Annotated into the Nomenclature Structure of the Harmonized
System: Report on Investigation No. 332-131 Under Section 332 of the Tariff Act of
1930, at 15 (?Conversion Report?). The HS is a detailed system, providing for
equal protection analysis. . . . [A] higher duty on gloves imported for men is a
discriminatory duty on men for purposes of equal protection.?).
thousands of different tariff classifications, and contains many subdivisions created in
order to reflect changes in technology, trade patterns, and user requirements. Id. The
adoption by the United States of such a comprehensive classification system was the
result of extensive multilateral international negotiations and considerable domestic
study and comment. See 19 U.S.C. Â§ 3001 et seq. See generally Conversion Report.
The rates of duty applicable to different product classifications are the result of
multilateral international trade negotiations and reflect reciprocal trade concessions and
particularized trade preferences. 7 The reasons behind different duty rates vary widely
based on country of origin, the type of product, the circumstances under which the
product is imported, and the state of the domestic manufacturing industry. Under such
circumstances it is quite possible, even likely, that the different tariff rates for men's and
other gloves reflect the fact that such gloves are in fact different products, manufactured
by different entities in different countries with differing impacts on domestic industry.
Further, differential rates may be the result of trade concessions made by the United
States in return for unrelated trade advantages. 8 Absent a showing that Congress
intended to discriminate against men in the tariff schedule, we cannot simply assume
the existence of such an unusual purpose from the mere fact of disparate impact.
See Def.-Appellee's Br. 24 (?The challenged rates reflected in the HTSUS
are the result of a complex series of multilateral negotiations with the GATT participants.
In prepping for the negotiations, the President . . . developed the United States
negotiating positions through input from a wide variety of governmental, public, and
private sources . . . .?).
Congress and the President collaborated in the Uruguay Round to
negotiate tariff commitments with well over one hundred other ?contracting parties?
under the General Agreement on Tariffs and Trade (GATT), Oct. 30, 1947, 61 Stat, A5,
55 U.N.T.S. 187.
Second, even if we were to regard the HTSUS schedule as simply designed to
raise revenue, we again cannot assume that this differential treatment of different goods
is invidious. It is well established that the federal government and the states have broad
leeway in establishing classifications for purposes of taxation. The Supreme Court has
long held that ?[i]nherent in the power to tax is the power to discriminate in taxation.
?Legislatures have especially broad latitude in creating classifications and distinctions in
tax statutes.?? Leathers v. Medlock, 499 U.S. 439
, 451 (1991) (quoting Regan v.
Taxation with Representation of Wash., 461 U.S. 540
, 547 (1983)) (citing Madden v.
Kentucky, 309 U.S. 83
, 87-88 (1940); N.Y. Rapid Transit Corp. v. City of New York, 303 U.S. 573
, 578 (1938); Magoun v. Ill. Trust & Sav. Bank, 170 U.S. 283
, 294 (1898)). The
same is necessarily true with respect to the closely-related area of customs duties. 9
Thus, although disparate impact can be relevant to the determination of a
purpose to discriminate, we think that in the area of taxation and tariffs, something more
than disparate impact is required to establish a purpose to discriminate for the purposes
of pleading an equal protection violation. As the Supreme Court noted in San Antonio
Independent School District v. Rodriguez, 411 U.S. 1
, 41 (1973), ?[n]o scheme of
taxation, whether the tax is imposed on property, income, or purchases of goods and
services, has yet been devised which is free of all discriminatory impact.? A contrary
ruling would call into question all taxes on items which are disproportionately consumed
See Bd. of Trs. of Univ. of Ill. v. United States, 289 U.S. 48, 57 (1933)
(?The Congress may determine what articles may be imported into this country and the
terms upon which importation is permitted. No one can be said to have a vested right to
carry on foreign commerce with the United States. If the Congress saw fit to lay an
embargo or to prohibit altogether the importation of specified articles, . . . the Congress
may . . . .? (citations omitted)).
by any identifiable group. We note that the Supreme Court even in the First
Amendment context has held that distinctions in taxation between media (newspapers
and cable systems) are in and of themselves insufficient to establish a purpose to
discriminate between the two based on content. Leathers, 499 U.S. at 453. So here
the mere existence of disparate impact does not establish impermissible discrimination.
In the area of customs duties, even more than in the area of taxation, it is hazardous to
infer discriminatory purpose from discriminatory impact.
Totes cites Bray v. Alexandria Women's Health Clinic, 506 U.S. 263
, 270 (1993),
for the proposition that ?an intent to disfavor a certain class can be inferred if taxes
target objects favored by a particular class of people.? Pl.-Appellant's Br. 51. Bray,
however, offers no support for Totes? position. In Bray, the Supreme Court, in
discussing whether the goal of preventing abortion qualifies as an invidiously
discriminatory animus directed at women in general, remarked that ?[s]ome activities
may be such an irrational object of disfavor that, if they are targeted, and if they also
happen to be engaged in exclusively or predominantly by a particular class of people,
an intent to disfavor that class can readily be presumed. A tax on wearing yarmulkes is
a tax on Jews.? 506 U.S. at 270. Men's gloves are hardly an irrational object of
disfavor, and a tax on them creates no compelling inference that Congress intended to
discriminate against men.
For the above reasons, we hold that because the challenged provisions of the
HTSUS are not facially discriminatory, Totes is required to allege facts sufficient to
establish a governmental purpose to discriminate between male and female users.
Here, an allegation of mere disparate impact is not sufficient to satisfy this pleading
requirement. Because Totes does not meet its burden to allege facts sufficient to infer a
governmental purpose to discriminate, we hold that Totes? complaint fails to state an
equal protection claim. The same necessarily is true with respect to Totes? allegation of
discrimination based on age, which is subject only to rational basis review.
We affirm the Court of International Trade's judgment concluding that it had
jurisdiction under section 1581(i), that Totes has standing to bring its claims, and that
Totes? equal protection claims are justiciable. We also affirm its judgment that Totes
has failed to state an equal protection claim due to its failure to plead facts sufficient to
allege a claim of unconstitutional discrimination.
United States Court of Appeals for the Federal Circuit[End Page 2009-1113]
Appeal from the United States Court of International Trade in case no. 07-00001, Chief
Judge Jane A. Restani, Judge Donald C. Pogue, and Judge Judith M. Barzilay.
PROST, Circuit Judge, concurring in the result.
While I concur with the result in this case, I do not accept the majority's treatment
of trade law as an exception to this country's equal protection jurisprudence and
implication that a heightened legal standard applies only in the context of tariff
schedules. I find the majority's position on this issue particularly difficult because it was
never advocated by the Government, and is not responsive to Totes-Isotoner
Corporation's (?Totes?s?) arguments on appeal. The present case can be readily
dismissed under current Supreme Court precedent because the disputed tariff
classification is not facially discriminatory.
Totes's complaint states, ?the rate of duty imposed on seamed leather gloves
imported for men is higher than the rate of seamed leather gloves imported for women,
and there is no exceedingly persuasive justification for this discrimination. Defendant
has thereby discriminated against [Totes] . . . .? A similar allegation is made for age
discrimination based on the distinction between men's and children's gloves.
The case, in my view, is properly dismissed under current controlling equal
protection and pleading law. The fact that the tariff scheme is designed to protect
domestic industry and harmonize international markets is not a reason to create an
exception to discrimination law, but rather, it provides the very persuasive justification
under the law that Totes alleges is lacking. The Government's brief correctly
characterizes the objectives of tariff laws as justifying the disputed classification, rather
than necessitating an exception to traditional equal protection analysis.
Stating an equal protection claim requires alleging either (a) that a law is facially
discriminatory against natural persons, or (b) that the law has a disparate impact on
natural persons resulting from a discriminatory purpose. Raytheon v. Hernandez, 540 U.S. 44
, 52-53 (2003); Vill. of Arlington Heights v. Metro. Housing Dev. Corp., 429 U.S. 252
, 264-65 (1977). Although the majority opinion focuses on dismissing a claim of
disparate impact, Totes's brief to this court focuses entirely on whether the tariff
classification is facially discriminatory.
The majority opinion declares that imposing the disputed tariff results in a
disparate impact on adult male glove wearers. The opinion then goes on to hold that in
the unique context of tariff law, showing disparate impact is never enough, and the
complainant must allege additional facts demonstrating a discriminatory purpose. Such
a position is unnecessary, however, because Totes does not argue on appeal that the
tariff results in a disparate impact, and the complaint does not allege any disparate
In my view, the more straightforward answer to Totes's arguments on appeal is
that the tariff classification here is not facially discriminatory. It imposes a burden on
importers, not gender- or age-based classes of people. 2 It distinguishes on the basis of
products, not natural people. Cf. Berkley v. United States, 287 F.3d 1076
, 1084 (Fed.
Cir. 2002) (holding that a law is facially discriminatory if it classifies persons for unequal
treatment on the basis of race or gender). The fact that the products are designed for
use by men rather than women and children does not constitute disparate treatment of
actual men. Much like tuxedos and evening gowns are different products, men's and
women's gloves are different products. The happenstance that the English language
does not have separate names for these particular products, thus requiring reference to
the gender of the intended wearer, does not transform the distinction into facial
Bridging the analytical gap between classifying clothing by reference to the
gender or age of the intended wearer and engaging in prohibited discrimination thus
The majority's analysis with respect to standing is similarly flawed. The
majority finds that Totes has standing as a third party on behalf of the men against
whom the tariff discriminates. Totes did not allege, however, that the male consumers
for whom its gloves were imported are the target of discrimination. Totes alleges that
the Government has discriminated against Totes. Totes identifies the harm caused as
the higher tariff rate for Totes, and not any harm that may or may not be passed on to
consumers. Totes's complaint thus does not state a claim for which third party standing
is necessary or appropriate.
Totes cites Church of Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520
(1993), for the proposition that whether a statute is facially discriminatory turns on the
object or purpose of the statute. Lukumi, however, actually cuts against Totes?s
position. Totes failed to allege a discriminatory purpose of the tariff classification. Here,
the undisputed object of the statute is to protect domestic industry and harmonize
international markets, rather than to infringe upon or restrict men's access to gloves. 2009-1113 3
requires factual allegations sufficient to establish that imposition of the tariff results in a
greater burden to one gender or age group over another. Such allegations would speak
to the disparate impact test, rather than the facially discriminatory test. 3
Totes's complaint alleges discrimination against Totes, not against men. The
complaint makes no connection between the impact of the tariff on importers and the
impact on consumers. Totes does not allege, for example, that the tariff results in men
paying higher prices for gloves, having a more limited selection of colors and styles of
gloves, or having a more limited selection of merchants for gloves than women and
children. In fact, Totes confirmed at oral argument before this court that it does not
allege that the cost of the higher tariff is passed on to consumers. See Oral Argument
available at http://oralarguments.cafc.uscourts.gov/mp3/2009-1113.mp3.
Because the tariff classification is not facially discriminatory and Totes has not
alleged a disparate impact, Totes has failed to state an equal protection claim on which
relief can be granted. I would resolve this case on that basis, rather than on the novel
disparate impact analysis of the majority, and thus concur only in the result.
Any claim of disparate impact in the present case, however, would also fail
under the Supreme Court's test in Arlington Heights, because Totes has not alleged sufficient facts to connect any disparate impact to a discriminatory purpose underlying
the classification. This case thus provides no reason to treat tax and tariff law any
differently than any other area of law for purposes of inferring discriminatory purpose
from a showing of disparate impact. 2009-1113 4
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