OT:RR:CTF:VS HQ H330926 UBB
Steve Zisser
Zisser Customs Law Group, Ste 1
9355 Airway Road
San Diego, CA 92154
RE: Articles for the handicapped; Subheading 9817.00.96; Transducer arrays
Dear Mr. Zisser,
This is in reference to one ruling letter issued to your law firm on behalf of your client, Providien Device Assembly, LLC, concerning the tariff classification of a transducer array under the Harmonized Tariff Schedule of the United States ("HTSUS"). Specifically, in New York Ruling Letter ("NY") N319324, dated May 25, 2021, the merchandise was determined to be eligible for subheading 9817.00.96, HTSUS, treatment as an article for the handicapped.
We have reviewed the ruling and find it to be in error regarding the applicability of subheading 9817.00.96, HTSUS, which provides for "articles for the handicapped." For the reasons set forth below, we are modifying the ruling with respect to the classification under 9817.00.96, HTSUS.
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. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on May 10, 2023, in Volume 57, Number 18, of the Customs Bulletin. One comment was received in response to this notice.
FACTS:
NY N319324 addresses the tariff classification of a transducer array used as a part of the Novocure Therapy Delivery System. The ruling describes the array as multiple interconnected electrical transducers designed to be adhered directly to the head or other area where an individual has been diagnosed with cancer. The ruling states that while connected to the electrical field generator within the system, the transducer arrays create an alternating field that attracts and repels charged proteins during cancer cell division. The transducers do not electrically stimulate nerves or muscles, and they do not heat tissue. The ruling further states that the Novocure system (within which the transducers are incorporated) is portable and allows the user to go about their day-to-day life while getting treatment for their disease. The introduction of the electrical field effectively inhibits tumor growth, potentially killing existing tumors. According to the ruling, in your ruling request you had noted that the arrays are specifically designed for use with the Novocure Therapy Delivery System, and that the system was intended for use by individuals who suffer from cancer, a disease that can cause chronic pain and substantial limitations to an individual's life.
NY N319324 classified the transducer arrays under subheading 8543.70.4500, HTSUS, which "Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Electric synchros and transducers; flight data recorders; defrosters and demisters with electric resistors for aircraft: Other."
NY N319324 also confirmed a secondary classification for the transducer arrays under subheading 9817.00.96, HTSUS, which applies to articles and parts specially designed or adapted for the use or benefit of the permanently or chronically physically or mentally handicapped. Chapter 98, Subchapter XVII, U.S. Note 4(a), HTSUS, defines the term "blind or other physically or mentally handicapped persons" as including "any person suffering from a permanent or chronic physical or mental impairment which substantially limits one or more major life activities, such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking breathing, learning, or working."
In the proposed modification of NY N319324, CBP discussed the issues pertaining to the eligibility of the transducer arrays under subheading 9817.00.96, HTSUS. In response to the proposed notice, CBP received one (1) comment disagreeing with the proposed modification (and the analysis of proposed HQ H330926). The commenter argues that U.S. Note 4(b)(i) (articles for acute or transient disability) and 4(b)(iii) (therapeutic and diagnostic articles) to Subchapter XVII, Chapter 98, HTSUS do not exclude the transducer arrays from classification under the subheading 9817.00.96, HTSUS. The commenter argues that cancer is not an acute or transient disability and that the transducer arrays are not a therapeutic or diagnostic article. We disagree.
ISSUE:
Whether the transducer arrays are eligible for duty-free treatment under subheading 9817.00.96, HTSUS, as "articles specially designed or adapted for the handicapped."
LAW AND ANALYSIS:
The Nairobi Protocol to the Agreement on the Importation of Educational, Scientific and Cultural Materials of 1982, Pub. L. No. 97-446, 96 Stat. 2329, 2346 (1983) established the duty-free treatment for certain articles for the handicapped. Presidential Proclamation 5978 and Section 1121 of the Omnibus Trade and Competitiveness Act of 1988, provided for the implementation of the Nairobi Protocol into subheadings 9817.00.92, 9817.00.94, and 9817.00.96, HTSUS.
Subheading 9817.00.96, HTSUS, covers: "Articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons; parts and accessories (except parts and accessories of braces and artificial limb prosthetics) that are specially designed or adapted for use in the foregoing articles . . . Other." In Sigvaris, Inc. v. United States, 227 F. Supp 3d 1327, 1336 (CIT 2017), aff'd, 899 F.3d 1308 (Fed. Cir. 2018), the U.S. Court of International Trade ("CIT") explained that:
The term "specially" is synonymous with "particularly," which is defined as "to an extent greater than in other cases or towards others." Webster's Third New International Dictionary 1647, 2186 (unabr. 2002). The dictionary definition for "designed" is something that is "done, performed, or made with purpose and intent often despite an appearance of being accidental, spontaneous, or natural." Webster's Third New International Dictionary 612 (unabr. 2002).
Subheading 9817.00.96, HTSUS, excludes "(i) articles for acute or transient disability; (ii) spectacles, dentures, and cosmetic articles for individuals not substantially disabled; (iii) therapeutic and diagnostic articles; or, (iv) medicine or drugs." U.S. Note 4(b), Subchapter XVII, Chapter 98, HTSUS. Thus, eligibility within subheading 9817.00.96, HTSUS, depends on whether the article is "specially designed or adapted for the use or benefit of the blind or physically and mentally handicapped persons," and whether it falls within any of the enumerated exclusions under U.S. Note 4(b), Subchapter XVII, Chapter 98, HTSUS.
The subject transducer arrays are specially designed for use with the Novocure Therapy Delivery System and are intended for use by individuals who suffer from cancer. While we recognize that cancer can cause chronic pain and substantial limitations to an individual's life activities, we do not agree that it constitutes a permanent or chronic physical or mental impairment, as described by Chapter 98, Subchapter XVII, U.S. Note 4(a), HTSUS. Rather, as a disease that is often treatable, disabilities resulting from the illness fit within the definition of "acute or transient disabilt[ies]," and as such, articles that are designed for acute or transient disability are specifically excluded from subheading 9817.00.96, HTSUS. U.S. Note 4(b)(i), Subchapter XVII, Chapter 98, HTSUS. Furthermore, materials submitted with the ruling request note that the Novocure Therapy Delivery System (also referred to as the Tumor Treating Field (TTF) Therapy Delivery System) is specially designed to treat and manage the cancerous tumors, and the description of the operation of the Novocure Therapy Delivery System indicates that it is used to treat the disease. As such, the transducer arrays are also excluded from classification under 9817.00.96 as "therapeutic or diagnostic articles." U.S. Note 4(b)(iii), Subchapter XVII, Chapter 98, HTSUS. Therefore, whether or not the transducer arrays are specially designed or adapted for the use or benefit of the blind or physically and mentally handicapped persons, they are specifically excluded from subheading 9817.00.96, HTSUS, by operation of U.S. Note 4(b)(i) and (iii), Subchapter XVII, Chapter 98, HTSUS.
As noted above, CBP received one comment in response to the notice of proposed modification. The commenter, who is the manufacturer of the transducer arrays and the party to whom NY N319324 was issued, argues that the transducer arrays are not excluded from classification by operation of U.S. Note 4(b)(i) and (iii) to Subchapter XVII, Chapter 98, HTSUS. We will address each argument in turn.
The commenter argues that cancer is not an acute or transient disability under Subchapter XVII, Chapter 98, U.S. Note 4(b)(i) and that the transducer arrays are specially designed to treat glioblastoma ("GBM"), which has a 5-year survival rate of 13%. In support of this argument, the comment states that cancer causes chronic pain, substantially limits the lives of its victims and is virtually impossible to overcome without treatment. The commenter states that cancer causes pain, extreme fatigue, weight and appetite disruptions, fevers, nausea, vomiting, diarrhea, and other symptoms, and that cancer treatment can lead to chronic and permanent side effects, including bone loss, cognition and memory problems, infertility, breathing problems, heart disease, and hearing loss. According to the commenter, "[t]he symptoms of cancer and side effects of cancer treatment regularly prevent cancer patients from performing basic daily tasks, including working, attending school, walking and exercising, eating normally, and sleeping." The commenter argues that the U.S. Court of International Trade in Sigvaris, Inc. v. United States, endorsed a definition of chronic as "suffering from a disease or ailment of long duration or frequent recurrence" or "marked by long duration, by frequent recurrence over a long time, and often by slowly progressing seriousness" and stated that for the purposes of tariff classification, it is sufficient for a condition to physically impair some persons to such a degree that their inability to care for themselves or perform manual tasks is substantially limited. 227 F. Supp. 1327, 1336 n. 12, 1341 (CIT 2017). The commenter noted that the Centers for Disease Control ("CDC") defines chronic diseases as conditions that last one year or more and require ongoing medical attention and/or limit activities of daily living, and that U.S. courts have recognized that cancer is a disability under the Americans with Disabilities Act ("ADA"). Finally, the commenter states that CBP itself has found that diseases which can be life threatening and for which there is no cure to be physical handicaps, citing to the example of sleep apnea (see NY N059778, dated May 29, 2009).
The commenter argues that cancer, by virtue of causing a myriad of serious side effects (of disease and treatment) and of being a disease of often long duration or recurrence, qualifies as a permanent or chronic impairment and not as an acute or transient disability. We disagree. We note at the outset that categorizing cancer as an acute or transient disability in no way minimizes the amount of suffering that cancer or its treatment might cause. However, cancer, by itself is an extremely broad category. It is often treatable and affects individuals differently in the degree to which it impacts their ability to continue with daily functions. The commenter notes that according to the CIT decision in Sigvaris, for the purposes of tariff classification, it is sufficient for a condition to physically impair some persons to such a degree that their inability to care for themselves or perform manual tasks is substantially limited, but that not all individuals affected by a condition need to be so impaired. However, the Sigvaris decision by the CIT was appealed to the Federal Circuit, and the Federal Circuit specifically noted that this approach was too broad (and that it ignored the "specially designed" language of the heading). Sigvaris, Inc. v. United States, 899 F.3d 1308, 1314 (Fed. Cir. 2018). More recently, the CIT has again cautioned against adopting an overbroad construction of the terms of 9817.00.96, HTSUS. Nutricia North America, Inc. v. United States, Slip Op. 23-170 (Dec. 4, 2023) at 36-37. The Federal Circuit in Sigvaris clarified that the heading focuses the inquiry on the "persons" for whose use and benefit the articles are "specially designed" and not on any disorder that may incidentally afflict persons who use the subject merchandise and that is where we must focus our own inquiry. The question of whether the transducer arrays are specially designed to treat GBM is not in question. However, an article can be specially designed and yet not meet the eligibility requirements of 9817.00.96, HTSUS, either by virtue of failing the Sigvaris five-factor analysis or because, as is the case here, it is specifically excluded by operation of U.S. Note 4(b) to Subchapter XVII, Chapter 98, HTSUS.
The commenter argues that cancer is not excludable under U.S. Note 4 because it is a chronic disease. The commenter argues that the CDC has defined "chronic" diseases as conditions that last one year or more and require ongoing medical attention and/or limit activities of daily living. The commenter notes that U.S. courts have also recognized cancer as a disability under the ADA. We note that, while the CDC definition may be a useful consideration, it is not dispositive for the purposes of tariff classification. The same CDC web page that defines chronic disease as one lasting for one year or more also notes that six in ten adults in the U.S. have a chronic disease, and that four in ten have two or more. Once again, this creates an overbroad category. Similarly, the fact that the ADA may consider cancer as a disability does not automatically mean that it is a disability for tariff purposes. See Danze, Inc. v. United States, 319 F. Supp.3d 1312, 1325 (CIT 2018).[1] The purposes served by the CDC (public health) and the ADA (non-discrimination) are not identical to the purpose of tariff classification and the grant of duty-free entry to certain types of merchandise and are not at issue in this ruling. The commenter also cites to the CIT decision in Sigvaris to argue that "chronic" is understood as an ailment or disease long duration, frequent recurrence, and/or slowly progressing seriousness. However, the CIT in that case does not offer clear guidance on how terms such as "long duration" or "frequent recurrence" might be interpreted. In the context of cancer, these are relative terms. Some cancers may be treated relatively quickly and lead to permanent remission, or at the very least, remission of a very long period. Others may not. Therefore, any analysis of whether an impairment is chronic has to proceed on a case-by-case basis.
Finally, the plain language of U.S. Note 4 states that "the term 'blind or other physically or mentally handicapped persons' includes any person suffering from a permanent or chronic physical or mental impairment . . ." (emphasis added). The plain language of the text directs us to consider the actual impairment that is causing the disability in question, rather than the disease that may be the cause of the impairment. In the context of the arguments raised by the commenter, this means that in the event that the cancer or its treatment causes impairments, we need to consider the actual impairment itself (e.g. pain, nausea, specific impacts of surgery such as amputation, etc.), whether it is acute or transient, chronic or permanent, and we need to evaluate whether the merchandise in question is an article adapted to ameliorate the effects of that impairment. Any such analysis would proceed on a case-by-case basis, and we would apply the terms of the subheading, relevant notes and the five-factor test confirmed by the Sigvaris decisions.
The commenter also argues that the transducer arrays are not a therapeutic article under U.S. Note 4(b)(iii) to Subchapter XVII, Chapter 98, HTSUS. The commenter states that the electric fields produced by the transducer arrays (the "TTFields treatment") can destroy cancer cells, but they are not expected to cure or eliminate the underlying disease as they cannot remedy the genetic or environmental sources that may have caused the cancers to develop. They provide that the TTFields treatment has been approved for use by the Food and Drug Administration ("FDA") for use in treatment of GBM and that the treatments slow disease progression and add months of survival. The treatments slow down or stop cancer cell division, inhibit tumor growth and potentially destroy existing cancerous cells. The commenter states that CBP has construed the term "therapeutic" narrowly and that treatments capable of eliminating the symptoms or consequences of a condition have not been considered therapeutic. In support, commenter cites to a number of examples of such treatments, including prosthetic hip implants, dental implants, sacral simulator implants, and articles that correct deformities of and/or treat trauma to the spine. As such, commenter argues that only treatments that are expected to heal or cure an underlying condition are considered therapeutic and that articles that merely control or help individuals adapt to a handicap are not therapeutic. The commentator states that in light of the high recurrence and poor survival outlook for patients of GBM, the TTFields treatment (which is delivered using the transducer arrays) does not heal or cure it.
CBP has previously held that therapeutic articles are articles whose purpose is the complete or partial elimination of disease. HQ H275827 (August 6, 2018), HQ H285358 (August 6, 2018) (emphasis added). The commenter argues that in order to be considered "therapeutic" under 9817.00.96, HTSUS, the treatment must result in a complete and permanent cure, including a cure of the underlying causes of the disease. According to the commenter, in the context of cancer this means that the treatment must remedy the genetic or environmental sources that may have caused the cancer to develop. We disagree that complete and permanent eradication of disease, including the underlying causes of disease, is the standard that a treatment must reach in order to be considered therapeutic. By that standard and under the commenter's own characterization of the disease of cancer (setting aside, arguendo, our position that cancer as a whole is not properly categorized as a disability, although the type and degree of disease and/or its treatment may result in impairments that meet the requirements of disability under the tariff provision), practically no treatment currently available would qualify as therapeutic. By the commenter's own descriptions, the TTFields delivered using the transducer arrays slow down and/or stop cancer cell division, thereby inhibiting tumor growth and potentially destroying cancer cells. This is an example of therapy, even if it is not completely and permanently curative. The commenter states that the TTFields behave in analogous ways to permanent hip implants or dental implants (for example) in that they eliminate the symptoms of certain conditions. However, the commenter's own description of the operation of the TTFields is the destruction of cancer cells and/or slowing down of cancer cell division. In the example of severe hip arthritis that necessitates a hip replacement, the proper analogy would be to a therapy that slows down the progression of or reverses arthritis, not the prosthetic implant that is used to accommodate for a damaged hip joint as a result of the arthritis.[2] Given the commenter's own description of how the transducer arrays impact the brain tumor of a GBM patient, it is our opinion that the merchandise meets the definition of a therapeutic article.
Given the foregoing, we find that the transducer arrays do not meet the requirements of 9817.00.96, HTSUS.
HOLDING:
The transducer arrays identified in NY N319324 are ineligible for subheading 9817.00.96, HTSUS, which provides for "articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons . . . other."
EFFECT ON OTHER RULINGS:
NY N319324, dated May 25, 2021, is hereby MODIFIED in accordance with the above analysis.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Yuliya A. Gulis, Director
Commercial Trade and Facilitation
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[1] Speaking to the question of whether compliance with ADA standards was sufficient to demonstrate eligibility for classification under subheading 9817.00.96, HTSUS, the Court noted that
Congress passed the ADA to "provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities." 42 U.S.C. 12101(b)(1). The ADA prohibits discrimination against individuals with disabilities in the sectors of employment, public services, public accommodations, and other sectors of society. See generally ADA. Congress intended that the ADA be construed broadly. While the court is mindful that the ADA is to be construed broadly in favor of individuals seeking protection under that law, this is not the issue before the court. The issue before the court is whether the subject merchandise is entitled to duty-free treatment simply because it is ADA compliant.
[2] The commenter pointed to a number of CBP rulings and court cases which, it claims, provides analogies that are instructive to the resolution of this case, namely: prosthetic hip implants (discussed in Richards Medical Co. v. United States, 720 F. Supp. 998 (CIT, 1989)), dental implants (discussed in Nobelpharma U.S.A. v. United States, 955 F. Supp. 1491 (CIT, 1997)), sacral simulator implants (NY N226995, dated Jul. 27, 2012), articles to correct deformities of and/or treat trauma to the spine (NY N201418, dated Feb. 17, 2012), certain microscopes used in surgery (HQ H561940, dated Feb. 28, 2002). With respect to HQ H561940, we will note that HQ H275827 revoked that ruling in entirety. The remaining examples are, as explained in the body of this ruling, distinguishable from the merchandise at issue in this ruling.