Duties on U.S. goods tested Justices accept case on items brought back after handling abroad

Supreme Court

September 30, 1998|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON THE ASSOCIATED PRESS CONTRIBUTED TO THIS ARTICLE. — WASHINGTON -- Taking on a case with wide consequences for U.S. companies that send goods overseas for assembly, the Supreme Court said yesterday that it will rule on the government's power to impose import fees when those goods are brought back to the United States for sale.

The court, accepting new cases it will decide in the term that begins Monday, agreed to hear a Treasury Department appeal in a dispute with Haggar Clothing Co. The dispute involves trousers that are made of U.S. goods but are assembled in Mexico and treated during the assembly process to make them into wrinkle-free, wash-and-wear garments.

Under federal law, an importer is entitled to a partial waiver of import duties on articles assembled abroad from U.S.-made components, so long as the products have not been enhanced in value while abroad.

The Treasury contended that the "permapressing" of Haggar slacks during assembly in Mexico added something to their value and quality. As a result, the Treasury said, Haggar had to pay the duties once it returned the slacks to this country.

However, the Court of International Trade said it had no obligation to follow Treasury's regulations, and it ruled that Haggar's overseas assembly process did not justify the duties. The Supreme Court ruling is expected sometime next year.

In another major dispute, the Supreme Court agreed to decide whether the Federal Trade Commission has authority to oversee the use of professional ethics codes to restrict advertising by dentists, doctors and other professionals.

The commission argues that such ad restrictions imposed by various nonprofit groups reduce the amount of commercial information that reaches consumers.

The FTC found that the California Dental Association engaged in antitrust violations by restricting its member dentists' price ads. But the association contended that the commission has no authority over groups that do not themselves make a profit.

In other cases, the court agreed to decide whether pension funds may sue Archer Daniels Midland Co. for illegal price-fixing acts that lowered the value of stock the funds own; took on the issue of the states' power to impose franchise taxes on out-of-state businesses; said it would rule on workers' right to sue insurers for workers' compensation systems for cutting off health-care benefits; and agreed to decide whether a worker who is hurt on a sea wall is eligible for disability benefits afforded dockworkers.

Pub Date: 9/30/98

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