OT:RR:CTF:VS H312742 CMR
C.J. Erikson, Esq.
Cowan, Liebowitz & Latman, P.C.
114 West 47th Street
New York, NY 10036
RE: Applicability of Subheading 9817.00.96, HTSUS to E-Z Out Bed; Nairobi Protocol; Articles for the Handicapped
Dear Mr. Erikson:
This is in response to your request, dated February 18, 2020, on behalf of your client, Lifestyle Comfort, LLC, regarding the applicability of subheading 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS), to the E-Z Out Bed. You describe the product as a combination bed/chair designed for use by the handicapped.
A teleconference was held on October 22, 2020, with counsel to discuss this matter. We have taken into consideration that discussion and the information submitted by counsel to this office in a supplemental submission, dated November 18, 2020, in reaching our decision.
FACTS:
You describe the E-Z Out Bed, in its condition as imported into the United States, as a metal frame with a fabric cover. The metal frame measures 80" (L) x 38" (W) x 12" (H) and is designed to function alternatively as a bed or a chair by means of a wired remote control. The heavy duty metal frame is constructed of steel with rounded permanent guardrails which function to prevent the user from falling out of bed and assist the user in exiting the chair. After importation and prior to sale, a mattress is added to the frame. With regard to the imported product, you state:
In its horizontal position the frame serves as a single person bed. It is electronically operated through a wired remote to incline at the rear and decline at the base placing the prone user into a sitting position. The chair is then remotely operated to tilt forward assisting the user in exiting the chair. Total operating time takes between 3-34 seconds from flat to fully tilted.
You submit that the imported product is “specially designed, built, marketed and sold for use exclusively by handicapped persons.” You state that the unique features of this product are “solely designed for the use and comfort of permanently or chronically disabled individuals.” You further submit that individuals suffering from acute injuries would not purchase this product as “it is constructed and designed for long term use with features geared solely for ease of use by the handicapped.”
With regard to the marketing of this product, you indicate that it is sold through Durable Medical Equipment (“DME”) and Home Medical Equipment (“HME”) stores and dealers. In addition, you state that it is marketed at hospice and long term care trade shows for customers within the home health care industry.
ISSUE:
Whether the E-Z Out Bed, as imported, is eligible for duty-free treatment under subheading 9817.00.96, HTSUS, as an article specially designed or adapted for the handicapped.
LAW AND ANALYSIS:
Subheading 9817.00.96, HTSUS, provides for:
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.
Subheading 9817.00.96 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.
Accordingly, eligibility within subheading 9817.00.96, HTSUS, depends on whether the article in question 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. See subheading 9817.00.96, HTSUS; U.S. Note 4(b), Subchapter XVII, Chapter 98, HTSUS. Note 4(a) to Chapter 98, HTSUS, provides:
(a) For purposes of subheadings 9817.00.92, 9817.00.94 and 9817.00.96, the
term “blind or other physically or mentally handicapped persons” includes 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.
U.S. Note 4(a), Subchapter XVII, Chapter 98, HTSUS. This list of exemplar activities indicates that the term “handicapped persons” is to be liberally construed so as to encompass a wide range of conditions, provided the condition substantially interferes with a person’s ability to perform an essential daily task. While the HTSUS and subchapter notes do not provide a proper definition of “substantial” limitation, the inclusion of the word “substantially” denotes that the limitation must be “considerable in amount” or “to a large degree.”
In the Court of Appeals for the Federal Circuit’s decision in Sigvaris, Inc. v. United States, 899 F.3d 1308 (Fed. Cir. 2018), the court found that the Court of International Trade reached the correct conclusion in finding the merchandise at issue therein, compression stockings, not eligible for subheading 9817.00.96, HTSUS, but the court disagreed with the lower court’s analysis. The court found that the Court of International Trade looked to the condition or disorder and whether it is a handicap. The court stated:
The plain language of 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.
* * *
. . . we must ask first, “for whose, if anyone’s, use and benefit is the article specially designed,” and then, “are those persons physically handicapped?”
Id.
The language of subheading 9817.00.96, HTSUS, states that the provision provides for “articles specially designed or adapted” for the use or benefit of the physically handicapped. The design and construction of an article may be indicative of whether it is specially designed or adapted for the use or benefit of the handicapped. The HTSUS does not establish a clear definition of what constitutes “specially designed or adapted for the use or benefit” of handicapped persons. In the absence of a clear definition, the Court of the International Trade stated that it may rely upon its own understanding of the terms or consult dictionaries and other reliable information. See Danze, Inc. v. United States, Slip Op. 18-69 (Ct. Int’l Trade 2018). Moreover, in analyzing this same provision in Sigvaris v. United States, the Court of International Trade construed these operative words as follows:
The term “specially” is synonymous with “particularly,” which is defined as “to an extent greater than in other cases or towards others.” [Webster’s] at 1647, 2186
. . . 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] at 612 . . . .
See Sigvaris, 227 F. Supp. 3d 1327 at 1336, Slip-Op 2017-60 (Ct. Int’l Trade 2017). See also, Sigvaris, Inc. v. United States, 899 F.3d 1308 (Fed. Cir. 2018), wherein the court cited the definitions relied upon by the Court of International Trade in Sigvaris, in concluding that “articles specially designed for handicapped persons must be made with the specific purpose and intent to be used by or benefit handicapped persons rather than the general public.” The Court of Appeals for the Federal Circuit refined this requirement which it found to be incomplete. The court concluded that:
to be “specially designed,” the subject merchandise must be intended for the use or benefit of a specific class of persons to an extent greater than for the use or benefit of others.
Id.
Finally, the legislative history further aids our analysis of these terms as used in subheading 9817.00.96, HTSUS. The Senate stated in its Report that one of the goals of this law was to benefit the handicapped and show U.S. support for the rights of the handicapped. The Senate stated, in relevant part:
By providing for duty-free treatment of articles specially adapted for the blind or other physically or mentally handicapped persons, the committee does not intend that an insignificant adaptation would result in duty-free treatment for an entire relatively expensive article. Otherwise, the special tariff category will create incentives for commercially motivated tariff-avoidance schemes and pre-import and post-entry manipulation. Rather, the committee intends that, in order for an entire modified article to be accorded duty-free treatment, the modification or adaptation must be significant, so as clearly to render the article for use by handicapped persons.
S. Rep. No. 97 564, 97th Cong. 2nd Sess. (1982). The Senate was concerned that persons would misuse this tariff provision to avoid paying duties on expensive products. Similarly, in Danze, surpa, the court looked to the legislative history and noted that its interpretation of the terms “specially” and “designed” in Sigvaris comported with the legislative intent behind subheading 9817.00.96, HTSUS, that any modification or adaptation be “significant.”
CBP has recognized several factors to be utilized and weighed against each other on a case-by-case basis when determining whether a particular product is “specially designed or adapted” for the benefit or use of handicapped persons. See
U.S. Customs Serv. Implementation of the Duty-Free Provisions of the Nairobi Protocol, Annex E, to the Florence Agreement, T.D. 92-77, 26 Cust. B. & Dec. 240, 241 (1992) (“Implementation of the Nairobi Protocol”) at 243-244. These factors include: (1) the physical properties of the article itself (i.e., whether the article is easily distinguishable by properties of the design, form, and the corresponding use specific to this unique design, from articles useful to non-handicapped persons); (2) whether any characteristics are present that create a substantial probability of use by the chronically handicapped so that the article is easily distinguishable from articles useful to the general public and any use thereof by the general public is so improbable that it would be fugitive; (3) whether articles are imported by manufacturers or distributors recognized or proven to be involved in this class or kind of articles for the handicapped; (4) whether the articles are sold in specialty stores which serve handicapped individuals; and, (5) whether the condition of the articles at the time of importation indicates that these articles are for the handicapped. See also, Danze, supra; Sigvaris, 227 F.Supp.3d 1327, aff’d, 899 F.3d 1308. The court in Sigvaris, 899 F.3d. 1308, found that “[t]hese factors aid in assessing whether the subject merchandise is intended for the use or benefit of a specific class of persons to a greater extent than for the use or benefit of others.” The court adopted these factors into its analysis.
In its condition as imported, the E-Z Out Bed does not include a mattress. However, it is sold with a mattress and we will consider its use after sale to consumers to determine whether it is “specially designed or adapted” for the benefit or use of handicapped persons. With regard to the first two factors considered by CBP to determine whether an article is “specially designed or adapted” for the benefit or use of handicapped persons, i.e., the physical properties of the article and whether any characteristic of the article creates a substantial probability of use by the chronically handicapped, the article at issue is basically an adjustable bed. The difference between the E-Z Out Bed and other adjustable beds is that the E-Z Out Bed adjusts to move an individual from a prone position to a sitting position and then, much like a lift chair, lift the individual up to assist the individual in standing. In addition, the bed has side rails on each side which swing up and out from the bed. This allows for entering and exiting the bed from the side. The rails also function to assist the user when standing up or sitting down, and prevent a user from rolling out of bed when the product is so used. The lift function of the bed is what makes it different from most adjustable beds. The question is whether this difference is a significant adaptation and whether it distinguishes this product from articles useful to the general public. In other words, we must determine whether this article is “intended for the use or benefit of a specific class of persons to an extent greater than for the use or benefit of others.” We must also consider whether the individuals for whom this product has been designed and to whom this product is targeted are “handicapped.”
It appears from the limited marketing information that has been submitted, and found on the internet, that this product is marketed to individuals who have difficulty standing on their own. While it is claimed that this product is designed, built, marketed and sold for use exclusively by handicapped persons, we recognize that there are varying degrees of difficulty individuals may experience in standing from a seated position and those difficulties may be the result of various causes. Not all individuals who have difficulty standing from a seated position are considered to be handicapped. The question is whether the individuals principally or primarily intended to benefit from this product are handicapped.
In looking at the sellers of this product and the marketing, other than the website for the E-Z Out Bed, at easyoutbed.com, we found the product being sold on the Bailey’s Furniture website at baileysfurniture.com. The E-Z Out Bed website provides the following information regarding this product:
EZ Out Bed will go beyond the known benefits one might receive with a power lift chair. You might be looking to ease the burden of care for yourself or a loved one due to:
Severe arthritis
Coronary Vascular Disease or recent cardiovascular surgery
Hip, back, or knee surgery
Any event or injury that makes sitting or standing from challenging to impossible.
Or you may be looking for ways to increase yours or a loved one’s safety during self-transfers from bed to standing in independent living arrangements.
EZ Out Bed provides the functionality of a lift chair, lounger and bed while retaining the comfort and restfulness of a traditional bed. The fully adjustable base features a firm 6-inch, high-density, supportive mattress with a gel-infused memory foam top layer. The mattress is securely attached to the base in a zippered cover as it moves through all positions.
A wired remote clips to the padded armrest so it is always within reach. The remote allows the bed occupant to start from a standing position and be gently moved to a sitting or fully prone position for sleeping.
The remote includes head-up and head-down buttons to facilitate reading or viewing television. It also may help with snoring or trouble breathing due to a allergies or a cold. The flat button will lay the mattress flat for sleeping. To return to a vertical position just push the lift-up button for the bed to gently and smoothly bring you back up to a standing position.
Lastly and most importantly, we designed the EZ Out Bed to allow people who had been confined to a power lift chair in their living room to now sleep in the bedroom again.
The Bailey’s Furniture website provides the following about the EZ Out Bed:
This sleek Independence Twin XL adjustable bed with lift chair lift will be greatly appreciated by those who need some assistance getting in and out of bed. The fully adjustable base features a supportive memory foam mattress, and a hard-wired remote with head up/down, knee/up/down, and easy in/out buttons. Using our handy hard-wired remote, you can sleep, sit and stand with just the touch of a button, and easily elevate your head and feet. Side arms can be lifted up or lowered down for easier access to the bed.
Counsel submits that the non-disabled would not purchase and use this product because of the time-consuming process of being transitioned from a prone to standing position. Counsel also submits that any purchase and use by a recovering surgery patient would be likely remote and would constitute a fugitive use. Further, counsel also believes the EZ Out Bed is distinguishable from general use lift chairs.
However, based upon our review of the available information, we do not believe the lift function of this bed distinguishes this bed to such an extent as to be intended for the use of handicapped individuals to an extent greater than for the use or benefit of others, especially individuals recovering from surgery. The importer’s own website makes clear that this product may be of benefit to individuals recovering from surgeries or injuries, i.e., acute or transient conditions. The lift function is not such a significant adaptation in light of the other adjustable features of the bed. Of the sellers we could find, they include the importer and a furniture store. No specialty stores which market products to the handicapped were found to carry this product. While counsel submits the target market is long term care facilities, no information regarding any sales to such facilities was submitted. We do not find this product eligible as an article specially designed or adapted for the use or benefit of the handicapped.
HOLDING:
The E-Z Out Bed is not eligible for duty-free treatment under subheading 9817.00.96, HTSUS, which provides “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.”
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy of this ruling, it should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch