S.C. Johnson & Son, Inc. v. United States
| Decision Date | 14 September 2018 |
| Docket Number | Slip Op. 18-119,Court No. 14-00184 |
| Parties | S.C. JOHNSON & SON, INC., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Michael E. Roll, Pisani & Roll, LLP, of Los Angeles, CA, and Brett I. Harris, Pisani & Roll, LLP, of Washington, D.C., argued for Plaintiff S.C. Johnson & Son, Inc.
Monica P. Triana, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., argued for Defendant United States. With her on the brief were Chad A. Readler, Acting Assistant Attorney General, and Amy M. Rubin, Assistant Director. Of counsel on the brief was Sheryl A. French, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, New York, N.Y. Jamie L. Shookman, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y., also appeared.
This case addresses whether Ziploc plastic bags marketed by S.C. Johnson & Son, Inc. ("Plaintiff" or "SCJ") are "other household articles" or "articles for the conveyance or packing of goods" under the Harmonized Tariff Schedule of the United States ("HTSUS") (2013). Pending before the court are cross-motions for summary judgment. See Pl.'s Mot. Summ. J., Nov. 1, 2017, ECF No. 66; Pl.'s Mem. Law Supp. Pl.'s Mot. Summ. J., Nov. 1, 2017, ECF No. 66-2 ("Pl. Br."); Def.'s Cross-Mot. Summ. J., Dec. 22, 2017, ECF No. 71; Def.'s Mem. Law Opp'n Pl.'s Mot. Summ. J. & Supp. Cross-Mot. Summ. J., Dec. 22, 2017, ECF No. 71 ("Def. Br.").
SCJ argues that U.S. Customs and Border Protection ("Customs") improperly denied its protests challenging the classification of its imported Ziploc plastic bags. See Pl. Br. 1–2. Plaintiff contends that its merchandise is classifiable under HTSUS Subheading 3924.90.56, which covers:
Subheading 3924.90.56, HTSUS. The tariff provision delineates a duty rate of 3.4% ad valorem , but Plaintiff seeks duty-free treatment because products classifiable under HTSUS Subheading 3924.90.56 are eligible for duty-free treatment under the Generalized System of Preferences ("GSP"). See Pl. Br. 2.
The United States ("Defendant" or "Government") maintains that Customs properly classified the imported Ziploc plastic bags under HTSUS Subheading 3923.21.00. See Def. Br. 10–11. The tariff provision reads as follows:
Subheading 3923.21.00, HTSUS. Products classified under this provision are dutiable at 3.0% ad valorem .
The court considers two issues:
For the reasons discussed below, the court concludes that the Parties have failed to proffer sufficient undisputed material facts for the court to determine whether Plaintiff's Ziploc plastic bags are prima facie classifiable under HTSUS Heading 3923. The case will proceed to trial. The court defers its analysis of whether Plaintiff's Ziploc plastic bags are prima facie classifiable under HTSUS Heading 3924 until trial.
The following facts are not in dispute.
This test case covers a single entry of Ziploc plastic bags from 2013. See Pl.'s Rule 56.3 Statement of Material Facts Not in Dispute ¶ 1, Nov. 1, 2017, ECF No. 66-1 ("Pl. Facts"); Def.'s Resps. to Pl. S.C. Johnson & Son, Inc.'s Rule 56.3 Statement of Material Facts ¶ 1, Dec. 22, 2018, ECF No. 71-1 ("Def. Facts Resp."). Plaintiff's plastic bags were entered and liquidated under HTSUS Subheading 3923.21.00 and assessed at a duty rate of 3.0% ad valorem . See Pl. Facts ¶¶ 2–3; Def. Facts Resp. ¶¶ 2–3; see also Compl. ¶ 8, Dec. 8, 2014, ECF No. 5; Answer ¶ 8, Aug. 7, 2015, ECF No. 15.
Plaintiff filed a timely protest, arguing that its plastic bags are classifiable under HTSUS Subheading 3924.90.56 and are entitled to duty-free treatment pursuant to GSP. See Pl. Facts ¶ 4–5; Def. Facts Resp. ¶ 4–5; see also Summons, Aug. 1, 2014, ECF No. 1. The protest was "not allowed or denied in whole or in part" within the statutory timeframe, and SCJ filed this action. See Pl. Facts ¶ 7; Def. Facts Resp. ¶ 7; see also Summons; Compl. The matter was subsequently designated a test case. See Order, Oct. 5, 2015, ECF No. 19. The court held oral argument on May 14, 2018. See Oral Argument, May 14, 2018, ECF No. 85.
Plaintiff's merchandise at issue are Ziploc plastic bags. See Pl. Facts ¶ 9; Def. Facts Resp. ¶ 9. Plaintiff's plastic bags measure 6-1/2 inches by 5-7/8 inches and are manufactured from polyethylene resin pellets that are used in an extrusion process for both the film and plastic zipper seals featured on Plaintiff's plastic bags. See Pl. Facts ¶ 10; Def. Facts Resp. ¶ 10. Each Ziploc plastic bag has an interior space that can accommodate relatively small items. See Def.'s Statement of Undisputed Material Facts ¶ 5, Dec. 22, 2017, ECF No. 71-2 ("Def. Facts"); Pl.'s Resp. to Def.'s Statement of Undisputed Material Facts ¶ 5, Jan. 22, 2018, ECF No. 75-1 ("Pl. Facts Resp."). The Ziploc plastic bags are made to contain items. See Def. Facts ¶ 6; Pl. Facts Resp. ¶ 6. The Ziploc plastic bags covered by the entry were imported from Thailand to the United States through the Port of Los Angeles in May 2013. See Def. Facts ¶ 1; Pl. Facts Resp. ¶ 1.
The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2012) and 19 U.S.C. § 1515. The court will grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. USCIT R. 56(a). To raise a genuine issue of material fact, a party cannot rest upon mere allegations or denials and must point to sufficient supporting evidence for the claimed factual dispute to require resolution of the differing version of the truth at trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Processed Plastics Co. v. United States, 473 F.3d 1164, 1170 (Fed. Cir. 2006) ; Barmag Barmer Maschinenfabrik AG v. Murata Mach., Ltd., 731 F.2d 831, 835–36 (Fed. Cir. 1984).
A two-step process guides the court in determining the correct classification of merchandise. First, the court ascertains the proper meaning of the terms in the tariff provision. See Schlumberger Tech. Corp. v. United States, 845 F.3d 1158, 1162 (Fed. Cir. 2017) (citing Sigma-Tau HealthScience, Inc. v. United States, 838 F.3d 1272, 1276 (Fed. Cir. 2016) ). Second, the court determines whether the merchandise at issue falls within the parameters of the tariff provision. See id. The former is a question of law and the latter is a question of fact. See id."[W]hen there is no dispute as to the nature of the merchandise, then the two-step classification analysis ‘collapses entirely into a question of law.’ " Link Snacks, Inc. v. United States, 742 F.3d 962, 965–66 (Fed. Cir. 2014) (quoting Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed. Cir. 2006) ).
The court reviews classification cases de novo . See 28 U.S.C. § 2640(a)(1). Customs is afforded a statutory presumption of correctness in classifying merchandise under the HTSUS, see id. § 2639(a)(1), but this presumption does not apply to pure questions of law. See Universal Elecs. Inc. v. United States, 112 F.3d 488, 492 (Fed. Cir. 1997). The court has "an independent responsibility to decide the legal issue of the proper meaning and scope of HTSUS terms," Warner-Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed. Cir. 2005) (citing Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1358 (Fed. Cir. 2001) ), and therefore must determine "whether the government's classification is correct, both independently and in comparison with the importer's alternative." Jarvis Clark Co. v. United States, 733 F.2d 873, 878 (Fed. Cir. 1984).
The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation ("GRIs") and, if applicable, the Additional U.S. Rules of Interpretation ("ARIs"), which are both applied in numerical order. BenQ Am. Corp. v. United States, 646 F.3d 1371, 1376 (Fed. Cir. 2011) (citing N. Am. Processing Co. v. United States, 236 F.3d 695, 698 (Fed. Cir. 2001) ). GRI 1 instructs that, "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes." GRI 1. "Absent contrary legislative intent, HTSUS terms are to be ‘construed [according] to their common and popular meaning.’ " Baxter Healthcare Corp. of P.R. v. United States, 182 F.3d 1333, 1337 (Fed. Cir. 1999) (quoting Marubeni Am. Corp. v. United States, 35 F.3d 530, 534 (Fed. Cir. 1994) ).
In construing the terms of the headings, "[a] court may rely upon its own understanding of the terms used and may consult lexicographic and scientific authorities, dictionaries, and other reliable information sources." Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999) (citing Baxter Healthcare Corp. of P.R., 182 F.3d at 1337–38 ). The court may also consult the Harmonized Commodity Description and Coding System's Explanatory Notes ("Explanatory Notes"), which "are not legally binding or dispositive," Kahrs Intern., Inc. v. United States, 713 F.3d 640, 645 (Fed. Cir. 2013), but "provide a commentary on the scope of each heading of the Harmonized System" and are "generally indicative of proper interpretation of...
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