Case Summary: Marubeni America Corp. v. United States

Facts: Nissan took its “Hardbody” truck line and used it as the basis for designing and building its “Path­finder” sport utility vehicle. The Pathfinder incorporated the Hardbody’s frame side rails, front cab, and front suspension. The tariff schedule gave the Customs Service two possible tariff classifications: motor vehicle for the transport of goods, or one for the transport of persons.

The “transport of persons” tariff was 2.5 percent, but the “transport of goods” duty was exactly 10 times higher. The Customs Service declared the car a “transport of goods” vehicle, and imposed the 25 percent duty, ruining Nissan’s hope for profits. The Court of International Trade (CIT) reversed, and the Customs Service appealed to the court of appeals.

Issue: Is the Pathfinder a vehicle for passengers or for the transport of goods?

Decision: The CIT’s decision is affirmed.

Reasoning: The Pathfinder is principally designed for the transport of passengers, and the lower tariff applies. The fact that the vehicle was derived from a truck design is not the end of the inquiry. Nissan made substantial structural changes to meet the design it wanted. All of the changes were made to make the vehicle more comfortable for passengers. The CIT was correct.

Question: What is a tariff?

Question: Who imposes tariffs on goods entering the United States?

Question: What steps does the Customs Service take in imposing tariffs?

Question: What action by the Service was at issue in this case?

Question: Who cares which it is?