Orlando Food Corp. v. U.S.

• Decision Date: 06 April 1998
• Docket Number: No. 97-1335.,97-1335.
• Citation: 140 F.3d 1437
• Court: U.S. Court of Appeals — Federal Circuit
• Parties: ORLANDO FOOD CORP., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

140 F.3d 1437

ORLANDO FOOD CORP., Plaintiff-Appellee, v. UNITED STATES, Defendant-Appellant.

No. 97-1335.

United States Court of Appeals, Federal Circuit.

April 6, 1998.

Steven P. Florsheim, Grunfeld, Desiderio, Lebowitz & Silverman, LLP, New York City, argued for plaintiff-appellee. With him on the brief were Peter W. Klestadt, Robert B. Silverman, and Erik D. Smithweiss.

Mikki Graves Walser, Attorney, Civil Division, International Trade Field Office, Commercial Litigation Branch, U.S. Department of Justice, New York City, argued for defendant-appellant. With her on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Washington, DC, and Joseph I. Liebman, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Mark G. Nackman, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs Service, New York City.

Before CLEVENGER, Circuit Judge, SMITH, Senior Circuit Judge, and SCHALL, Circuit Judge.

CLEVENGER, Circuit Judge.

In this classification case, the government appeals from the decision of the Court of International Trade granting summary judgment for Orlando Food Corp. ("Orlando"). Orlando Food Corp. v. United States, No. 94-03-00140, 1997 WL 68245 (Ct. Int'l Trade Feb. 10, 1997).¹ The Court of International Trade determined that Orlando's imported product was classifiable under either: (1) the Harmonized Tariff Schedule of the United States ("HTSUS") heading 2103, "Sauces and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal and prepared mustard" ("Sauces and preparations therefor"), subheading 90, "Other," dutiable at the rate of seven and one-half percent ad valorem, or (2) HTSUS heading 2002, "Tomatoes prepared or preserved otherwise than by vinegar or acetic acid" ("Tomatoes prepared or preserved"), subheading 90, "Other," dutiable at the rate of one-hundred percent ad valorem. Because the product was classifiable under two headings, the court concluded that, under the rule of relative specificity, the product should be classified under HTSUS 2103.90, "Sauces and preparations therefor: other," because it was the more specific of the two headings. See Nestle, 18 Ct. Int'l Trade at 662. The government argues that the court erred in its analysis, and that the goods should be classified under HTSUS 2002, "Tomatoes prepared or preserved." Although we agree with the government that the court erred in its analysis, the court nevertheless reached the correct conclusion. We therefore affirm the decision of the Court of International Trade.

I

We review a grant of summary judgment for correctness as a matter of law. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed.Cir.1994). A classification decision requires two steps. The first step concerns the proper meaning of the tariff provisions, which we review without deference. See Universal Elecs. Inc. v. United States, 112 F.3d 488, 491 (Fed.Cir.1997). The second step concerns whether merchandise falls within a particular tariff provision, as properly interpreted, and this step is a question of fact that we will not disturb absent clear error. See id.

II

The product at issue in this case is a canned tomato product consisting of approximately sixty percent whole, peeled tomatoes and forty percent tomato puree by weight, as well as salt, citric acid, and basil leaf. Orlando sold the product to the Nestle Company, which used the product to produce finished tomato sauces including Contadina brand Marinara and Plum Tomato sauces.

The proper classification of merchandise entering the United States is directed by the General Rules of Interpretation ("GRIs") of the HTSUS and the Additional United States Rules of Interpretation. The HTSUS scheme is organized by headings, each of which has one or more subheadings; the headings set forth general categories of merchandise, and the subheadings provide a more particularized segregation of the goods within each category. At issue in this case are two headings of the HTSUS and their accompanying subheadings, which provide in relevant part:

                Chapter 20
                2002         Tomatoes prepared or preserved otherwise
                             than by vinegar or acetic acid
                2002.10.00   Tomatoes, whole or in pieces
                2002.90.00   Other
                                Paste
                                Puree
                

                Chapter 21
                2103          Sauces and preparations therefor; mixed
                              condiments and mixed seasonings; mustard
                              flour and meal and prepared mustard
                2103.10.00    Soy sauce
                2103.20         Tomato ketchup and other
                                 tomato sauces
                2103.20.20      Tomato ketchup
                2103.20.40      Other
                2103.30         Mustard flour and meal and
                                 prepared mustard
                2103.90       Other
                2103.90.20    Sauces derived or prepared from fish
                2103.90.40    Nonalcoholic preparations of yeast
                              extract (other than sauces)
                2103.90.60       Other
                

According to GRI 1, the HTSUS headings, as well as relative section or chapter notes, govern the classification of a product. In other words, a court first construes the language of the heading, and any section or chapter notes in question, to determine whether the product at issue is classifiable under the heading. Only after determining that a product is classifiable under the heading should the court look to the subheadings to find the correct classification for the merchandise. See GRI 1, 6. Furthermore, when determining which heading is the more specific, and hence the more appropriate for classification, a court should compare only the language of the headings and not the language of the subheadings. See GRI 1, 3.

The Court of International Trade's analysis contradicted GRI 1 twice: first, it construed only the language of the subheadings rather than the language of the headings in classifying the product; and second, in attempting to classify the merchandise under the more specific provision, it compared two subheadings under disparate headings for specificity, rather than the relevant headings. In conducting its analysis, the court first examined subheading 2002.10.00, "Tomatoes in pieces," which is a subheading of heading 2002, "Tomatoes prepared or preserved," and concluded that the presence of the tomato puree and seasonings rendered the product more than tomatoes in pieces. See Nestle, 18 Ct. Int'l Trade at 667. Therefore, it deemed this subheading inapposite. See id. However, the court found the "Other" subheading under the same heading for prepared or preserved tomatoes, HTSUS 2002.90.00, to be an adequate description of the product for classification purposes. See id. at 676. In addition, the court found that the product was classifiable under subheading 2103.90.60, "Other," which appears under heading 2103, "Sauces and preparations therefor." See id. The court then compared the two subheadings and determined that subheading 2103.90.60, "Sauces and preparations therefor: other," was more specific and hence should govern. See id. at 677.

III

Because the court erred by failing to adhere to GRI 1, which requires that goods be classified according to the language of the headings, we undertake the analysis anew. A classification analysis begins, as it must, with the language of the headings. See GRI 1. The parties present us with two potential headings: HTSUS 2002, "Tomatoes prepared or preserved," and 2103, "Sauces and preparations therefor."

The United States urges that the product at issue is classifiable under the heading for prepared or preserved tomatoes, despite the presence of basil, salt and citric acid. In support of this assertion, the government points to decisions of our predecessor court that construed the term "prepared" to encompass additional ingredients. See B. Westergaard & Co. v. United States, 19 C.C.P.A. 299, 300-04, 1932 WL 2218 (1932) (concluding that meat balls and fish balls containing vegetable binder were classifiable as prepared meat and prepared fish); United States v. A Sahadi & Co. Inc., 23 C.C.P.A. 293, 294, 299-300, 1936 WL 2982 (1936) (classifying sheets of dried apricot pulp smeared with olive oil as apricots prepared or preserved rather than fruit paste or pulp). We agree that the heading for prepared or preserved tomatoes encompasses Orlando's product, despite the presence of incidental spices. The term "prepared" suggests, but does not require, the addition of incidental ingredients that do not affect the essential character of the product. Although the addition of the seasonings sets the product apart from unseasoned canned tomatoes, it hardly changes the essential tomato character of the product. Therefore, the product may be classified under HTSUS 2002, "Tomatoes prepared or preserved."

Next, we turn to the provision that Orlando promotes, HTSUS 2103, "Sauces and preparations therefor." The Orlando product is used solely as an advanced base or preparation for sauces. See Nestle, 18 Ct. Int'l Trade at 675. The United States has pointed to no other possible use for a product comprised of whole tomatoes, tomato puree, basil, salt, and citric acid, and certainly none spring immediately to mind. Therefore, the product is also classifiable under HTSUS 2103, "Sauces and preparations therefor."

According to GRI 3(a), when a product is prima facie classifiable under two or more headings, "[t]he heading which provides the most specific description shall be preferred to headings providing a more general description." GRI 3(a). Therefore, classification of the product turns on which of these two provisions is the more specific. Under this so-called rule of relative specificity, we look to the provision with requirements that are more difficult to satisfy and that describe the article with the greatest degree of accuracy and certainty. See United States v. Siemens Am., Inc., 68 C.C.P.A. 62, 653 F.2d 471, 477 (CCPA 1981); United States v. J. Gerber & Co., 58 C.C.P.A. 110, 436 F.2d 1390, 1392 (CCPA 1971). Our...