Automatic Plastic Molding, Inc. v. United States

                                         SLIP OP . 03-94

                       UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE : RICHARD K. EATON , JUDGE
____________________________________
                                    :
AUTOMATIC PLASTIC MOLDING , INC.,   :
                                    :
                  PLAINTIFF ,       :
                                    :
      v.                            :                       COURT NO . 99-00365
                                    :
UNITED STATES ,                     :
                                    :
                  DEFENDANT.        :
____________________________________:

[Application for attorney’s fees and expenses denied.]

                                                            Decided: July 28, 2003

Law Office of George R. Tuttle, A P.C. (George R. Tuttle III and Matthew K. Nakachi), and
Tonsing Law Offices (Michael J. Tonsing), for Automatic Plastic Molding, Inc.

Peter D. Keisler, Assistant Attorney General, United States Department of Justice; John J.
Mahon, Acting Attorney in Charge, International Trade Field Office, Commercial Litigation
Branch, Civil Division, United States Department of Justice (Mikki Graves Walser); Office of the
Assistant Chief Counsel, United States Bureau of Customs and Border Protection (Beth C.
Brotman), of counsel, for Defendant.


                                            OPINION

EATON, Judge: Before the court is the application of Automatic Plastic Molding, Inc. (“APM”),

for fees and expenses pursuant to USCIT Rule 68 and the Equal Access to Justice Act (“EAJA”),

28 U.S.C. § 2412 (2000). For the reasons set forth below, the court denies this application.
COURT NO . 99-00365                                                                            PAGE 2

                                           BACKGROUND

       In the underlying action APM challenged the United States Customs Service’s

(“Customs”)1 classification of certain glass containers. After a three-day trial the court held for

APM, and found that the merchandise was properly classifiable under subheading 7010.91.50 of

the Harmonized Tariff Schedule of the United States (“HTSUS”) as “Carboys, bottles, flasks,

jars, pots, vials, ampoules and other containers, of glass, of a kind used for the conveyance or

packing of goods.” See Automatic Plastic Molding, Inc. v. United States, 26 CIT __, Slip Op.

02-120 (Oct. 5, 2002). Final judgment was entered in this matter on October 5, 2002, and

Customs was ordered to “reliquidate the entries that are the subject of this action . . . and, as

provided by law, refund with any interest any excess duties paid.” See Judgment Order of Oct. 5,

2002. Following entry of final judgment, the United States (“Government”), on behalf of

Customs, did not pursue an appeal. Thereafter, on January 2, 2003, APM submitted an

“Application for Fees and Other Expenses Pursuant to the Equal Access to Justice Act” (the

“Application”). By this Application APM asks this court to award it costs and expenses for the

underlying action in the amount of $119,586.71. The Government actively opposes the

Application.



                                             DISCUSSION

       The rules of this court permit the awarding of costs and fees. Pursuant to USCIT Rule

68, “[t]he court may award attorney’s fees and expenses where authorized by law. Applications


       1
               Effective March 1, 2003, the United States Customs Service was renamed the
United States Bureau of Customs and Border Protection. See Reorganization Plan Modification
for the Department of Homeland Security, H.R. Doc. 108-32, at 4 (2003).
COURT NO . 99-00365                                                                          PAGE 3

must be filed within 30 days after the date of entry by the court of a final judgment.” USCIT R.

68(a).2 An application for fees and expenses “shall contain a citation to the authority which

authorizes an award, and shall indicate the manner in which the prerequisites for an award have

been fulfilled.” USCIT R. 68(b). Here, APM cites the EAJA as authority for such award.3 As


       2
                APM alleges that the 30 day period for filing the Application did not start to run
until the time for appeal expired. See Plaintiff’s Statement in Supp. Application for Fees and
Costs Under the Equal Access to Justice Act, 28 U.S.C. § 2412 (“APM’s Mem.”) at 2–3 (citing
Former Employees of Shaw Pipe, Inc. v. United States Sec’y of Labor, 22 CIT 430, 432, 9 F.
Supp. 2d 713, 716 (1998)); see Gavette v. Office of Pers. Mgmt., 808 F.2d 1456, 1459 (Fed. Cir.
1986) (“The party seeking an award under the EAJA must submit the application to the court
within 30 days of the date when the judgment becomes ‘final and not appealable.’ Although the
Federal Circuit decided Gavette’s appeal on the merits on February 1, 1985, the time for filing a
petition for certiorari did not expire until 90 days later. Gavette had an additional 30 days, or a
total of 120 days from February 1, to file his application for fees and expenses.” (footnotes
omitted)). Here, APM alleges that the Application was timely filed as the Judgment Order
“became final and not appealable, as a matter of law, . . . on December 3, 2002.” APM’s Mem.
at 3. The Government does not contest the timely filing of the Application.
       3
               The relevant language of the EAJA provides:

               (A) . . . [A] court shall award to a prevailing party . . . fees and
               other expenses . . . incurred by that party in any civil action . . .
               including proceedings for judicial review of agency action, brought
               by or against the United States in any court having jurisdiction of
               that action, unless the court finds that the position of the United
               States was substantially justified or that special circumstances
               make an award unjust.

               (B) A party seeking an award of fees and other expenses shall,
               within thirty days of final judgment in the action, submit to the
               court an application for fees and other expenses which shows that
               the party is a prevailing party and is eligible to receive an award
               under this subsection, and the amount sought, including an
               itemized statement from any attorney or expert witness
               representing or appearing in behalf of the party stating the actual
               time expended and the rate at which fees and other expenses were
               computed. The party shall also allege that the position of the
               United States was not substantially justified. Whether or not the
                                                                                       (continued...)
COURT NO . 99-00365                                                                            PAGE 4

summarized by the Court of Appeals for the Federal Circuit “[t]he EAJA statute provides that a

trial court must award attorney’s fees where: (i) the claimant is a ‘prevailing party’; (ii) the

government’s position was not substantially justified; (iii) no ‘special circumstances make an

award unjust’; and (iv) the fee application is timely submitted and supported by an itemized

statement.” Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed. Cir. 2003) (citing 28 U.S.C.

§ 2412(d)(1)(A)–(B); INS v. Jean, 496 U.S. 154, 158 (1990)). By the Application, APM alleges

that: (1) APM was the “prevailing party” in the underlying action; (2) APM meets the net worth

requirement and submitted the appropriate supporting documentation; (3) no “special

circumstances” exist that would make awarding fees and expenses unjust; and (4) the

Government’s litigation position at both the administrative and trial level lacked “substantial

justification.” See APM’s Mem. at 4; id. at schedules A.1, A.2, B, D; id. at 9, 21.4 In response,

the Government concedes that APM “was the prevailing party in this litigation and has met the

net worth requirements and provide[d] an itemized statement of fees sought required by the

Rules of this Court . . . .” Def.’s Opp’n to Pl.’s Application for Attorney’s Fees and Costs

(“Def.’s Mem.”) at 5–6 (footnote omitted). In addition, the Government makes no argument that

“special circumstances” existed in the underlying action such that an award of fees and expenses


       3
           (...continued)
                   position of the United States was substantially justified shall be
                   determined on the basis of the record (including the record with
                   respect to the action or failure to act by the agency upon which the
                   civil action is based) which is made in the civil action for which
                   fees and other expenses are sought.

28 U.S.C. § 2412(d)(1)(A)–(B).
       4
                  Citing Traveler Trading Co. v. United States, 13 CIT 308, 382, 713 F. Supp. 409,
411 (1989).
COURT NO . 99-00365                                                                          PAGE 5

would be unjust.



       Thus, as the parties agree that APM was the prevailing party and provided the requisite

supporting documentation and, furthermore, there is no argument that “special circumstances”

existed in the underlying litigation, the remaining question for the court is whether the

Government’s position was “substantially justified.”



       A.      Substantially justified

       Pursuant to statute

               a court shall award to a prevailing party . . . fees and other
               expenses . . . incurred by that party in any civil action . . . including
               proceedings for judicial review of agency action . . . .

               The [applicant] shall . . . allege that the position of the United
               States was not substantially justified. Whether or not the position
               of the United States was substantially justified shall be determined
               on the basis of the record (including the record with respect to the
               action or failure to act by the agency upon which the civil action is
               based) which is made in the civil action for which fees and other
               expenses are sought.

28 U.S.C. § 2412(d)(1)(A), (B). Thus, the statute requires that the Government’s position be

substantially justified at both the administrative level and at trial. Am. Bayridge Corp. v. United

States, 24 CIT 9, 10, 86 F. Supp. 2d 1284, 1285 (2000) (citing Covington v. Dep’t of Health &

Human Servs., 818 F.2d 838, 839 (Fed. Cir. 1987); Traveler Trading, 13 CIT at 381, 713 F.

Supp. at 411)) (“If the court determines that the applicant prevailed, the government must

demonstrate that its position, both at the agency level and throughout the litigation was

substantially justified, or that special circumstances make an award unjust.”). APM contends
COURT NO . 99-00365                                                                           PAGE 6

that “the Government needlessly continued this litigation after it knew or should have known that

its position regarding the classification of the glass containers in question was not substantially

justified.” APM’s Mem. at 6. In support of its position, APM states that “[a]dmittedly, the test

for attorney fees and costs under the EAJA is not whether [a party] succeeded on the merits, but

whether the government was clearly reasonable in asserting its position . . . in view of the law

and the facts.’” Id. at 13 (emphasis and ellipsis in original) (citing Luciano Pisoni Fabbrica

Accessori Instrumenti Musicali v. United States, 837 F.2d 465, 467 (Fed. Cir. 1988)).



       The Government concedes that it “must demonstrate that its position, both at the agency

level and throughout the litigation was substantially justified, or that special circumstances make

an award unjust . . . .” Def.’s Mem. at 6 (citing 28 U.S.C. § 2412 (d)(1)(A); Covington, 818 F.2d

at 839; Am. Bayridge, 24 CIT at 10, 86 F. Supp. 2d at 1285).



       The Court of Appeals for the Federal Circuit has held that the government bears the

burden of showing that its position was substantially justified under the EAJA. Libas, 314 F.3d

at 1365 (citing Neal & Co. v. United States, 121 F.3d 683, 686 (Fed. Cir. 1997)) (“[T]he

imperative language of [28 U.S.C.] § 2412(d)(1)(A), ‘a court shall award,’ requires that the

government bears the burden of proving its position was substantially justified.”); see Inner

Secrets/Secretly Yours, Inc. v. United States, 20 CIT 210, 213, 916 F. Supp. 1258, 1261–62

(1996) (quoting Traveler Trading, 13 CIT at 381, 713 F. Supp. at 411) (“In this matter, the

‘government bears the burden of establishing that its position was substantially justified or that

special circumstances should preclude an award under the EAJA.’”). In determining what
COURT NO . 99-00365                                                                             PAGE 7

constitutes substantial justification, the Supreme Court has defined the term to mean “‘justified

in substance or in the main’ — that is, justified to a degree that could satisfy a reasonable

person.” Pierce v. Underwood, 487 U.S. 552, 565 (1988); see Owen v. United States, 861 F.2d

1273, 1274 (Fed. Cir. 1988) (quoting Pierce, 487 U.S. at 565); Urbano v. United States, 15 CIT

639, 641, 779 F. Supp. 1398, 1401 (1991), aff’d, 985 F.2d 585 (1992) (citing Pierce, 487 U.S. at

565; Owen, 861 F.2d at 1274); see also Kerin v. United States Postal Service, 218 F.3d 185, 189

(2nd Cir. 2000) (Katzmann, J.) (citing Pierce, 487 U.S. at 563, 566) (“With respect to the second

prong of this test, the government’s position was ‘substantially justified’ if it had ‘a reasonable

basis both in law and in fact.’ ‘To be “substantially justified” means, of course, more than

merely undeserving of sanctions for frivolousness; that is assuredly not the standard for

Government litigation of which a reasonable person would approve.’” (citations omitted)). In

addition, “‘substantial justification’ requires that the Government show that it was clearly

reasonable in asserting its position, including its position at the agency level, in view of the law

and the facts. The Government must show that it has not ‘persisted in pressing a tenuous factual

or legal position, albeit one not wholly without foundation.’” Gavette, 808 F.2d at 1467

(emphasis in original) (citing Schuenemeyer v. United States, 776 F.2d 329, 330–33 (Fed. Cir.

1985); quoting Gava v. United States, 699 F.2d 1367, 1375) (Fed. Cir. 1983) (Baldwin, J.,

dissenting)). Thus, the court now turns to whether the Government has met its burden.



               1.      Customs’s position at the administrative level was clearly reasonable

       APM first takes issue with the Government’s position at the administrative level. APM

argues that
COURT NO . 99-00365                                                                           PAGE 8

               [d]uring the administrative proceeding below, Customs ignored
               critical evidence and gave selective and conclusory treatment to
               other evidence before it. As observed by this court in footnote 5 of
               its decision in the instant case, Customs failed to apply the relevant
               law in the administrative proceedings:

                       Here, Customs’ determination [HQRL 962378] that
                       the Merchandise is not classifiable under
                       subheading 7010.90.50 is both selective and
                       conclusory, and simply does not follow from the
                       criteria set out in T.D. 96-7, Carborundum, and
                       Kraft. . . .

               In short, this was not a “clearly reasonable” analysis, it was a
               selective and conclusory analysis.

APM’s Mem. at 14 (bracketed material in text; emphases removed) (citing Automatic Plastic

Molding, 26 CIT at __, Slip Op. 02-120 at 9 n.5); see T.D. 96-7; Tariff Classification of Imported

Glassware, 61 Fed. Reg. 223 (Dep’t Treasury Jan. 3. 1996) (change of practice); Kraft, Inc. v.

United States, 16 CIT 483 (1992); United States v. Carborundum Co., 536 F.2d 373 (C.C.P.A.

1976).5 In support of its position, APM highlights several of the court’s findings claiming that

they demonstrate Customs “ignored important evidence regarding the lugs,” “failed to account

for other evidence as to the glass,” and made “conclusory findings at the administrative level

[that] lacked any explanation and were ‘simply unconvincing.’” APM’s Mem. at 14, 15. APM

concludes that “[i]n short, Customs . . . followed the same pattern administratively as was

observed in court. Its unsupported assertion was not only not a ‘clearly reasonable’ analysis, it



       5
                 The court notes that footnote five deals with the application of Skidmore v. Swift
& Co., 323 U.S. 134 (1944). See Automatic Plastic Molding, 26 CIT at __ n.5, Slip Op. 02-120
at 9 n.5 (citing Skidmore v. Swift & Co., 323 U.S. 134 (1944); Rocknel Fastener, Inc. v. United
States, 267 F.3d 1354 (Fed. Cir. 2001)). The court found that HQRL 962378 was not sufficiently
thorough to rate Skidmore deference. Rocknell, 267 F.3d 1357 (holding Skidmore deference is
appropriate where Customs’s classification decision revealed its thorough analysis).
COURT NO . 99-00365                                                                           PAGE 9

was a conclusion supported by no analysis. As such, it was clearly unreasonable and arbitrary.”

Id. at 16 (emphasis in original).



       In response, the Government argues that “based upon the evidence before it, Customs’

position was ‘clearly reasonable’ and, therefore, substantially justified during its consideration of

APM’s protest.” Def.’s Mem. at 6–7. In support, the Government contends that “[f]rom the

outset in its decision, this Court recognized that not all of the evidence presented to the Court

was raised before or considered by Customs.” Id. at 7 (citing Automatic Plastic Molding, 26 CIT

at __, Slip Op. 02-120 at 3–4). The Government continues that

               [i]n addition to the testimony of APM’s four witnesses, the Court
               had two samples of the imported jar and various other exhibits
               presented by APM from which the Court could ascertain the facts
               necessary to render its decision. On the other hand, Customs had
               only pictorial representations of the imported jar and limited
               factual information presented by APM with which it could
               ascertain the facts necessary to render its decision.

Id. (citing APM’s Protest, HQRL 962378, April 8, 1999). The Government further states that

               [a]s clearly set forth in HQ 962378, in determining the proper
               classification of imported merchandise, Customs considered the
               terms of the competing headings, reviewed and applied the General
               Rules of Interpretation (“GRIs”), Additional U.S. Rules of
               Interpretation (“ARIs”), the Explanatory Notes to the competing
               provisions, lexicographic reference sources, prior judicial
               decisions, prior HQ rulings, and T.D. 96-7. Indeed, although
               additionally considering the Explanatory Notes to the competing
               provisions and prior HQ ruling letters, Customs considered the
               very same sources as the Court.

Id. at 7–8 (footnote omitted). The Government concludes that

               [i]nasmuch as Customs’ position in HQ 962378 was based upon
               limited information provided by APM, a correct construction
COURT NO . 99-00365                                                                          PAGE 10

               and/or interpretation of the terms of the competing headings, the
               Explanatory Notes, the GRIs, ARIs, and judicial decisions, and the
               correct application of the law to the facts before it at that time, it
               follows that Customs’ position regarding APM’s protest was
               clearly reasonable.

Id. at 9.



        The court finds that the Government has adequately sustained its burden that Customs’s

position at the administrative level was substantially justified. While APM notes that several of

Customs’s arguments at the administrative level were found by this court to be insufficient at

trial, Customs nonetheless examined the evidence before it, applied what it considered to be the

appropriate legal standard, and provided an analysis based on the facts and law as it understood

them.6 In addition, certain evidence that was before the court was not presented to Customs. For


        6
               A review of the Headquarters Ruling Letter issued in response to protest number
2809-98-100508 shows that, contrary to APM’s assertion that Customs’s conclusion that the
subject merchandise was properly classifiable under HTSUS subheading 7013 was supported by
no analysis, Customs did, indeed, acknowledge the factors set out in T.D. 96-7, Kraft, and
Carbonundum and applied those factors to the limited facts before it. See HQRL 962378.
Customs stated:

               The article appears to be manufactured by automatic machines
               from ordinary glass. It is similar in shape to an urn. It has a wide
               opening, moderate length neck, and is configured to hold a rubber
               lined, wooden lid. Because of the unusual and attractive shape, an
               ultimate purchaser’s primary expectation would be to reuse the
               article after the conveyed or packed goods are used (note also that
               the article is configured for a wooden lid which allows for
               repetitive, extremely easy, opening and closing). We note that
               although the protestant states that the container is sold from the
               importer to a customer who fills it with Italian cookies, packing
               cookies for sale in glassware is relatively rare; cookie jars are
               principally used as storage articles in the home. There is evidence
               that container is emphasized over the goods packed in it, i.e.,
                                                                                        (continued...)
COURT NO . 99-00365                                                                           PAGE 11

instance, the Government insists that “[n]o evidence that the jar was capable of being used in the

hot packing process was submitted to Customs by APM.” Def.’s Mem. at 7 (emphasis removed)

(citing APM’s Protest; HQRL 962378). Further, the Government maintains “[n]o evidence

regarding the principal use of the jar was provided by APM to Customs for its use in determining

the proper classification of the merchandise.” Id. (emphasis removed). Thus, Customs reached

its position at the administrative level with only pictorial representations of the subject

merchandise and a limited factual record. As a result, Customs was in the position of applying

the criteria found in T.D. 96-7, Kraft, and Carborundum,7 without the benefit of the evidence the

court would later have before it. Nothing has been presented to the court that would indicate that

Customs’s application of the law to these limited facts was not “justified to a degree that would

satisfy a reasonable person.” Pierce, 487 U.S. at 565. Indeed, an examination of the evidence



       6
           (...continued)
                   molded glass handles and a unique, decorative shape, and the
                   physical form of the article (see above) indicates that this is so.
                   The cost of the cookie filled article ($16.00) supports the
                   conclusion that the glass jar is the primary focus of the purchaser
                   with the contents simply emphasizing a suggested use of the
                   reusable jar. The criterion of commercial use to convey foodstuffs,
                   etc., is addressed by the other criteria (see above and below).
                   There is no evidence that the container is capable of being used in
                   the hot packing process. The physical form of the articles (see
                   above) indicates that rather than using the containers to pack and
                   convey goods to a consumer who discards them after their initial
                   use, the containers, and not their contents, are emphasized to
                   customers. On the basis of these criteria, we conclude that these
                   articles are not principally used for the conveyance or packing of
                   goods.

Id.
       7
                 See Automatic Plastic Molding, 26 CIT at __, Slip Op. 02-120 at 9 n.5
COURT NO . 99-00365                                                                           PAGE 12

that was before Customs shows that it was susceptible to different interpretations by reasonable

people. As such, Customs was clearly reasonable in maintaining its position at the administrative

level and that it did not “press[] a tenuous position without factual or legal foundation.” Gavette,

808 F.2d at 1467. Using this standard, the court finds that the Government has satisfied its

burden of proof that Customs’s position at the administrative level was substantially justified.



        2.      Customs’s position at trial was clearly reasonable

        In addition to its arguments concerning Customs’s actions at the administrative level,

APM insists that the Government’s litigation position was not substantially justified. APM

claims that “the Government presented no evidence that seriously refuted any of the facts and

supporting evidence made known to it by APM during the discovery process.” APM’s Mem. at

19 (emphasis in original). Furthermore, APM restates this court’s finding that “[a]t trial, the

Government made only a limited attempt to justify its classification of the Merchandise as

‘Glassware of a kind used for table, kitchen . . . indoor decoration, or similar purposes’ under

subheading 7013.39.20. Rather, the Government focused its efforts on refuting Plaintiff’s

asserted classification.” Id. at 18 (quoting Automatic Plastic Molding, 26 CIT at __, Slip Op. 02-

120 at 11) (ellipsis in original).



        The Government strongly contests APM’s claim that its litigation position was not

substantially justified and insists that its position at trial “was founded on a wide variety of legal

and factual bases.” Def.’s Mem. at 10. The Government maintains that its litigation position

was “based upon a consideration of the class or kind of goods to which the imported articles
COURT NO . 99-00365                                                                         PAGE 13

belong, the physical characteristics of these goods, and the subsequent uses to which the

imported jars could be put.” Id. at 11 n.3.



       With respect to the Government’s litigation position, APM’s claim fails under all of the

cited authority. Despite APM having prevailed at trial, and its arguments to the contrary

notwithstanding, the Government was clearly reasonable in asserting its position with respect to

the criteria found in T.D. 96-7. A reading of the opinion reveals that the court was required to

weigh the evidence and make determinations about which reasonable persons might disagree.

APM correctly states that the court relied on the factors found in T.D. 96-7 for a portion of its

opinion and that in analyzing these factors it found that five of the seven factors supported

APM’s classification. For its part, though, the Government marshaled evidence to support its

position. First, the Government presented witness testimony at trial. The Government’s expert

witness, Dr. Sher Paul Singh, a professor of packaging design and materials, testified that the

subject merchandise “[did] not have the similarities of the of the types of jars that are used to

commercially convey foodstuffs.” Trial Tr. at 595:7–9. In addition, the National Import

Specialist Associate and the Import Specialist of the Port of San Francisco testified that they

examined jars similar to the subject merchandise that could be purchased from Pier 1, Target,

JCPenney, Lechter’s, and Cost Plus World Market and were sold empty as “storage jars.” See id.

at 483:15–490:4; id. at 517:12–527:20. While the court found Plaintiff’s position to be more

convincing based on the testimony of other witnesses, nothing presented by the Government in

the way of testimony would lead to the conclusion that it was “pressing a tenuous factual or legal

position, albeit one not wholly without foundation.” Gavette, 808 F.2d at 1467. Indeed, the
COURT NO . 99-00365                                                                           PAGE 14

witnesses testified with respect to matters about which reasonable people might disagree.

Second, at trial the Government submitted storage containers into evidence—Trial Exhibits P

and G—and noted their similarity to the subject merchandise in an effort to persuade the court

that the subject merchandise was properly classified under heading 7013 of the HTSUS.

Although the court distinguished the subject merchandise from Trial Exhibits P and G based on

their respective shapes and the quality of the glass used, see Automatic Plastic Molding, 26 CIT

at __, Slip Op. 02-120 at 6–7, the Government nevertheless presented a clearly reasonable—if

ultimately unconvincing—basis for Customs’s position. The Government also presented some

evidence that the subject merchandise: (1) did not come with a closure that would “provide the

seal integrity level required in conveying jars for food packaging,” Trial Tr. at 596:5–6; (2) was

“significantly of a higher glass distribution and wall thickness than typical jars used for

conveying goods in the same volume,” id. at 595:21–24; (3) was fifteen to twenty percent heavier

than jars commonly used for packaging, id. at 182:24–183:4; and (4) had handles which were “in

a shape and in a region which consumers normally do not use to pick [up] these type of

products,” id. at 600:3–5. Although APM demonstrated to the court that the subject merchandise

shared many of the characteristics of merchandise properly classified under heading 7010 of the

HTSUS, there was nothing about the Government’s evidence with respect to these matters that

would suggest its position was not substantially justified, or that it was pressing a tenuous

position. Gavette, 808 F.2d at 1467. In addition, the court made findings relating to the

expectations of the ultimate purchaser based on secondary evidence rather than on direct

evidence. Automatic Plastic Molding, 26 CIT at __, Slip Op. 02-120 at 13–14. Finally, the

court’s own observation of the merchandise weighed heavily it its decision. For instance, in
COURT NO . 99-00365                                                                           PAGE 15

reaching its decision the court was required to make findings with respect to what constituted a

“large opening” and a “short neck.” Id., 26 CIT at __, Slip Op. 02-120 at 13. While APM did

present credible evidence that successfully convinced the court that Customs erred in its

classification, it cannot be said that the Government, on behalf of Customs, did not make out a

substantial case or that its insistence on its position was not clearly reasonable.



                                            CONCLUSION

       As the Government’s position in this action was clearly reasonable with respect both to

the law and facts it relied on at both the administrative and trial levels, the court is persuaded that

the Government was substantially justified in claiming that the subject merchandise was properly

classified as “Glassware of a kind used for table, kitchen, . . . indoor decoration or similar

purposes” under HTSUS subheading 7013.39.20. Therefore, APM’s Application for attorney’s

fees and expenses is denied.


                                                               ____________________________
                                                                   Richard K. Eaton, Judge

Decided:       July 28, 2003
               New York, New York