United States v. Haggar Apparel Co.

Haggar Apparel Company (Haggar) (plaintiff) was an apparel manufacturer. Haggar purchased resin-treated fabric in the United States, cut it, and sent it to Mexico, where the fabric was assembled into men’s trousers. After assemblage, Haggar’s Mexican plant permapressed the trousers, activating the resin in the fabric to prevent wrinkles. Upon reimporting the garments, Haggar sought a duty exemption under Harmonized Tariff Schedule of the United States (HTSUS) subheading 9802.00.80, which granted duty-free treatment to goods assembled abroad out of United States components if the goods received no further processing other than assemblage and incidental processes such as cleaning, painting, and lubricating. The United States Customs Service (customs) (defendant) denied the claim, stating that according to one of its regulations, permapressing was an additional process not incidental to assemblage. Haggar challenged the denial, arguing that customs’ regulation was unreasonable because while customs denied duty-free status to permapressed garments made out of resin-treated fabrics, customs granted duty-free status to garments that were simply pressed to avoid wrinkles. The Court of International Trade did not treat customs’ regulation as controlling and ruled in favor of Haggar. The United States Court of Appeals for the Federal Circuit affirmed. Customs sought a writ of certiorari from the United States Supreme Court.