Reconsideration of NY N279073; Tariff Classification of footwear from China

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H285615 November 23, 2020 OT:RR:CTF:FTM H285615 TJS CATEGORY: Classification TARIFF NO.: 6404.11.90 Mr. Sean Connor Under Armour, Inc. 1020 Hull Street Baltimore, MD 21230 RE: Reconsideration of NY N279073; Tariff Classification of footwear from China Dear Mr. Connor: This letter is in response to your request of February 28, 2017, for reconsideration of New York Ruling Letter (“NY”) N279073, dated September 30, 2016, issued to Under Armour, Inc., as it pertains to the tariff classification of certain footwear under the Harmonized Tariff Schedule of the United States (“HTSUS”). In that ruling, U.S. Customs & Border Protection (“CBP”) classified the subject footwear in heading 6404, HTSUS, and subheading 6404.19.20, HTSUS, which provides for: “[f]ootwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Other: Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners, the foregoing except footwear of subheading 6404.19.20 and except footwear having a foxing or foxing-like band wholly or almost wholly of rubber or plastics applied or molded at the sole and overlapping the upper: Other: Other.” For the reasons stated below, we are revoking NY N279073. In reaching this decision, we have also considered arguments presented in a supplemental submission submitted by your legal counsel on August 16, 2017. This decision is also based on our inspection of samples included with your original ruling request and with your reconsideration request. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), a notice of the proposed action was published in the Customs Bulletin, Vol. 54, No. 41, on October 21, 2020. No comments were received in response to the notice. FACTS: In NY N279073, the merchandise was described as follows: [T]he submitted sample, identified as style number/name 1288065 UA W Drift RN Mineral, is a woman’s, light-weight, closed-toe/closed-heel, below-the-ankle shoe, with a flexible outer sole of rubber or plastics. The external surface area of the upper is predominantly textile material. It is a slip-on shoe that does not have a separately attached tongue. The mostly unsecured leather overlay, which incorporates the eye stays and threaded laces, is stitched to the upper with a few stitches on the medial and lateral sides. It is lasted at the sole, extends toward the heel of the shoe, and is stitched near the back of the heel. This semi-attached overlay constitutes an accessory or reinforcement and not considered in the external surface area measurements. The shoe features a rubber/plastic toe cap, a leather heel patch, and a pull tab. The shoe does not have a foxing-like band. The rubber or plastics outer sole accounts for more than 10 percent of the total weight of the shoe. You provided an F.O.B. value of $21.41 per pair. In addition to the features described above, the samples contain a cushioned collar and a midsole made of ethylene-vinyl acetate (EVA), a lightweight and soft foam. The outsole is made of durable rubber material and incorporates rubber pods and four rows of flex grooves. In your supplemental submission, you state that the shoes are designed and marketed as running shoes. ISSUE: What is the tariff classification of the subject footwear? LAW AND ANALYSIS: Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI).  GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes.  In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI 2 through 6 may then be applied in order.  The HTSUS provisions under consideration are as follows: 6404: Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: 6404.11: Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like: Other: 6404.11.90: Valued over $12/pair: For women: 6404.11.9050: Other. * * * * * 6404.19: Other: Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners, the foregoing except footwear of subheading 6404.19.20 and except footwear having a foxing or foxing-like band wholly or almost wholly of rubber or plastics applied or molded at the sole and overlapping the upper: Other: 6404.19.39: Other: Other: 6404.19.3960: For women. * * * * * Additional U.S. Note 2 to Chapter 64, HTSUS, provides as follows: For the purposes of this chapter, the term “tennis shoes, basketball shoes, gym shoes, training shoes and the like” covers athletic footwear other than sports footwear (as defined in subheading note 1 above), whether or not principally used for such athletic games or purposes. * * * * * Treasury Decision (“T.D.”) 93-88, which provides “Footwear Definitions,” states, in pertinent part, that “athletic” footwear includes: “Athletic” footwear (sports footwear included in this context) includes: 1. Shoes usable only in the serious pursuit of a particular sport, which have or have provision for attachment of spikes, cleats, clips or the like. 2. Ski, wrestling & boxing boots; cycling shoes; and skating boots w/o skates attached. 3. Tennis shoes, basketball shoes, gym shoes (sneakers), training shoes (joggers) and the like whether or not principally used for such athletic games or purposes. It does not include: Shoes that resemble sport shoes but clearly could not be used at all in that sporting activity. Examples include sneakers with a sequined or extensively embroidered uppers. A “slip-on”, except gymnastic slippers. Skate boots with ice or roller skates attached. Footwear Definitions, Treas. Dec. 93-88, 27 Cust. B. & Dec. No. 46 (Oct. 25, 1993). T.D. 93-88 further provides that a “slip-on” includes: A boot which must be pulled on. Footwear with elastic gores which must be stretched to get it on or with elastic sewn into the top edge of the fabric of the upper. Footwear with a shoe lace around the top of the upper which is clearly not functional, i.e., the lace will not be tied and untied when putting it on or taking it off. It does not include any boot or shoe with any laces, buckles, straps, snaps, or other closure, which are probably closed, i.e. tied, buckled, snapped, etc., after the wearer puts it on. Id. * * * * * In your request for reconsideration, you state that while you agree with the majority of the assessment in NY N279073, you assert that the shoe is not a “slip-on.” You state that while the shoe is not designed with a separate tongue, the shoelaces are an essential element to the function of the shoe. You further state that the shoe is designed to be used as a running shoe and the shoelaces serve as a tightening mechanism, which are necessary to secure the foot and prevent the runner from injuring his or her ankle. You assert that the shoe is properly classified in subheading 6404.11.90, HTSUS, which provides for “[f]ootwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like: Other: Valued over $12/pair.” The dispute is at the six-digit level of classification. The footwear is described by the terms of heading 6404, HTSUS, which provides for “[f]ootwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials.” At issue here is whether the footwear under consideration is “athletic” footwear within the meaning of Additional U.S. Note 2 to Chapter 64, HTSUS, and classified in subheading 6404.11, HTSUS, as “tennis shoes, basketball shoes, gym shoes, training shoes and the like,” or whether the footwear is classified in subheading 6404.19, HTSUS, as “other” footwear. Subheading 6404.11, HTSUS, provides for “tennis shoes, basketball shoes, gym shoes, training shoes and the like.” The principle of ejusdem generis applies to provisions containing the phrase “and the like.” In an ejusdem generis analysis, “where an enumeration of specific things is followed by a general word or phrase, the general word or phrase is held to refer to things of the same kind as those specified.” Deckers Corp. v. United States, 752 F.3d 949, 952 n.3 (Fed. Cir. 2014) (“Deckers II”) (citing Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1392 (Fed. Cir. 1994)). In Deckers Corp. v. United States (“Deckers I”), 532 F.3d 1312 (Fed. Cir. 2008), aff’d, Deckers II, 752 F.3d 949, on the issue of whether Teva Sport Sandals were classified in subheading 6404.11 as “athletic footwear,” the Court of Appeals for the Federal Circuit stated that to determine the essential characteristic of the specified enumerated articles, “courts may consider attributes such as the purpose, character, material, design, and texture.” Deckers I, 532 F.3d at 1316. In regard to the particular exemplars of heading 6404.11, HTSUS, the court determined that “the fundamental feature that the exemplars share is the design, specifically the enclosed upper, which contains features that stabilize the foot, and protect against abrasion and impact.” Id. at 1317. Additional U.S. Note 2 to Chapter 64 states that athletic footwear is classified in subheading 6404.11, HTSUS, “whether or not principally used for such athletic games or purposes.” CBP has interpreted this Note to mean that shoes need not be used solely for athletic purposes, but also those shoes that share appearance, qualities, and character with the named exemplars are classified there. See Headquarters Ruling Letter (“HQ”) H236274 (Sept. 17, 2015) (classifying “athleisure” shoes as athletic); and HQ 953882 (Sept. 24, 1993) (holding that hiking boots were not “like” the exemplars). Still, it has been CBP’s position that in order for footwear to be classified as athletic footwear under subheading 6404.11, HTSUS, it must be constructed for an activity that requires fast footwork or extensive running. See HQ 964625 (Sept. 10, 2001) (“All the exemplars are used in sports which require fast footwork or extensive running.”); and NY N154085 (Apr. 4, 2011). Thus, when determining whether footwear is classified as athletic footwear under subheading 6404.11, HTSUS, CBP looks at various features and characteristics including, but not limited to, overall appearance, materials, and construction of the upper and outer sole. Some of the features or characteristics of athletic footwear CBP has consistently included are: a lightweight upper, a lightweight, flexible outer sole that provides traction, lace-up, or some other type of secure closure, underfoot cushioning, collar (padded or not), tongue (padded or not), toe bumpers, heel counters/stabilizers, and ventilation holes. See HQ H265479 (Mar. 28, 2016); NY N310350 (Mar. 26, 2020); NY N020906 (Jan. 9, 2008); and NY M82301 (May 26, 2006). However, athletic footwear need not exhibit all of these features. See NY N218203 (June 6, 2012); and NY N154085 (Apr. 4, 2011). T.D. 93-88 excludes “slip-ons” from the definition of athletic footwear. It also states that shoes with laces, which are probably tied after the wearer puts them on, are not considered “slip-ons.” In Deckers Outdoor Corp. v. United States, 844 F. Supp. 2d 1324 (CIT 2012), concerning the classification of UGG boots, the Court of International Trade (“CIT”) determined that “[t]he lack of laces or fasteners is the essential characteristic uniting each dictionary definition for “slip-on” and “[t]he definitions, as a whole, indicate that it is this lack of any kind of fasteners that allows for the characteristic ease with which slip-ons can be put on and taken off.” Deckers Outdoor Corp. v. United States, 844 F. Supp. 2d 1324, 1332 (CIT 2012), aff’d, 714 F.3d 1363 (2013). The CIT further found that the definition of “slip-on” in T.D. 93-88 is persuasive and warrants deference, and is “centered around the characterization of slip-ons as footwear that lacks functional fasteners.” Id. Therefore, whether the shoes under consideration are “slip-ons” depends on the functionality of the shoelaces such that the shoes can be put on and taken off with ease regardless of whether the shoelaces are tied. Pursuant to T.D. 93-88, CBP considers shoelaces that do not need to be tied or untied in order to put on or remove the shoe as non-functional. See NY N285586 (May 30, 2017); NY N284080 (Apr. 4, 2017); and NY N283616 (Mar. 15, 2017) (determining that laces were non-functional because the wearer needed only to spread apart the upper to put on or remove the shoe). However, shoelaces that are tied after the shoe is put on are considered functional, as they impede the wearer’s ability to easily slip-on and off the shoe. While the absence of a separately attached tongue is often a feature of a slip-on shoe, it does not preclude classification as “athletic” footwear. For example, in NY N281527, dated January 20, 2017, CBP classified a man’s shoe, identified as style # 54358, and a women’s shoe, identified as style # 14811, in subheading 6404.11.90, HTSUS. Style # 54358 was a man’s closed toe/closed heel, below-the-ankle shoe with a foxing-like band and an outer sole of rubber/plastics. The style had a general athletic appearance. The external surface area of the upper was predominantly textile (approximately 72%) and had a lace-up closure with five pairs of textile eyelet stays. The shoe had no separately defined tongue, rather, the extra material under the functional laces formed a type of gusseted tongue when tied. CBP determined that the extra material forming the gusseted tongue rendered a loose fit if worn without tightening the laces. Style #14811 was a woman’s, closed toe/closed heel, below-the-ankle, athletic shoe with a foxing-like band and an outer sole of rubber or plastics. This shoe also featured a gusseted tongue under a functional lace-up closure. Because the laces needed tightened for both styles to be used properly, the shoes were not considered slip-ons. Like the shoes in NY N281527, the subject footwear can be slipped on and off while the laces remain untied. Although a gusseted tongue does not form when the shoelaces of the subject footwear are tied, we find that the shoelaces are functional because they are tightened after the wearer puts on the shoe. The shoelaces must be untied to put the shoe on the foot because the shoe does not easily slip on and off while the shoelaces are tightened. This is due to the leather overlay, which incorporates the eye stays and threaded laces, and is stitched to the upper on the medial and lateral sides. Importantly, the leather overlays do not stretch such that when the laces are tied, the overlays are taut and secure. Furthermore, the shoelaces are not futile. When tightened, they provide functionality by further securing the shoe to the wearer’s foot so that the user has sufficient support and can engage in activities requiring extensive running or fast footwork without worrying about the shoe slipping off the foot. In light of the forgoing, we do not consider these shoes “slip-ons” and, as such, they are not precluded from classification as athletic footwear. Upon review and examination of the footwear at issue in NY N279073, we conclude that it has the general appearance and many of the construction features present in athletic footwear. In particular, the shoe has a breathable textile upper and a lightweight, flexible outer sole that is treaded to provide traction. It also has foot cushioning with the EVA midsole, padding at the collar, a rubber/plastic toe cap, and a plastic heel counter. In addition to the lace closure system that secures the footwear to the foot, the upper with the leather overlays help keep the foot in place when the shoelaces are tightened to enable the wearer to engage in athletic activity. The footwear is also marketed as running shoes. We find that the footwear at issue is indeed ejusdem generis with the named exemplars in subheading 6404.11, HTSUS. In view of the foregoing, we find that the subject footwear, 1288065 UA W Drift RN Mineral, is athletic footwear of subheading 6404.11, HTSUS. Specifically, the subject footwear is classified under subheading 6404.11.9050, HTSUS, which provides for “[f]ootwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like: Other: Valued over $12/pair: For women: Other.” Therefore, we revoke NY N279073. HOLDING: By application of GRI 1 and Additional U.S. Note 2 to Chapter 64, HTSUS, we find that the subject footwear is classified under subheading 6404.11.9050, HTSUS, which provides for “[f]ootwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: Footwear with outer soles of rubber or plastics: Sports footwear; tennis shoes, basketball shoes, gym shoes, training shoes and the like: Other: Valued over $12/pair: For women: Other.” The column one, general rate of duty is 20% ad valorem. EFFECT ON OTHER RULINGS: NY N279073, dated September 30, 2016, is hereby REVOKED. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, For Craig T. Clark, Director Commercial Trade Facilitation Division