Drygel, Inc. v. U.S.

• Decision Date: 09 September 2008
• Docket Number: No. 2008-1101.,2008-1101.
• Citation: 541 F.3d 1129
• Parties: DRYGEL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

541 F.3d 1129

DRYGEL, INC., Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 2008-1101.

United States Court of Appeals, Federal Circuit.

September 9, 2008.

Casey K. Richter, Neville Peterson LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were John M. Peterson and George W. Thompson.

Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With him on the brief were Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeanne E. Davidson, Director. Of counsel on the brief was Chi S. Choy, Attorney, Office of Assistant Chief Counsel, International Trade Litigation, United States Customs and Border Protection, of New York, New York.

Before RADER and SCHALL, Circuit Judges, and ILLSTON, District Judge.^*

SCHALL, Circuit Judge.

This case involves the tariff classification of Gel-A-Mint MagikStrips®, a breath-freshening product imported into the United States by Drygel, Inc. ("Drygel"). Drygel appeals the decision of the United States Court of International Trade granting the United States' ("the government's") cross-motion for summary judgment that the United States Bureau of Customs and Border Protection ("Customs") correctly classified the MagikStrips at a 6.4% duty rate under subheading 2106.90.99 of the Harmonized Tariff Schedule of the United States ("HTSUS"), a catchall provision that provides for "Food preparations not elsewhere specified or included: ... Other." Drygel, Inc. v. United States, 507 F.Supp.2d 1371, 1380 (Ct. Int'l Trade 2007). The court denied Drygel's cross-motion for summary judgment that the MagikStrips are more specifically provided for under HTSUS subheading 3306.90.00, a duty-free provision that encompasses "Preparations for oral or dental hygiene ... Other." Id. Because the court erred in denying Drygel's cross-motion for summary judgment, we reverse.

BACKGROUND

I.

Drygel's MagikStrips are thin, sugar-free, flavored strips of consumable material that dissolve when placed on the tongue. The MagikStrips are manufactured in Japan, and are packaged in small plastic containers for sale at retail stores. Id. at 1373. Customs liquidated the imported MagikStrips under subheading 2106.90.99, a catchall provision applicable to "Food preparations not elsewhere specified or included: ... Other." Drygel challenged that classification in the Court of International Trade, arguing that the MagikStrips should be classified as "Preparations for oral or dental hygiene ... Other" under subheading 3306.90.00.

II.

We previously addressed the scope of subheading 3306.90.00 in Warner-Lambert Co. v. United States, 407 F.3d 1207 (Fed. Cir.2005). There, the Court of International Trade affirmed the determination by Customs to Classify Warner-Lambert's imported Certs® "Powerful Mints" under subheading 2106.90.99. Warner-Lambert Co. v. United States, 343 F.Supp.2d 1315, 1322 (Ct. Int'l Trade 2004). The court rejected Warner-Lambert's argument that the Certs Powerful Mints were classifiable under subheading 3306.90.00 as "preparations for oral or dental hygiene." In doing so, the court first determined that the term "hygiene" related to "the preservation of health." Id. at 1320. Next, relying on a Food and Drug Administration ("FDA") monograph entitled "Over-the-Counter Oral Health Care and Discomfort Drugs: Establishment of a Monograph," 47 Fed.Reg. 22,760 (May 25, 1982) ("FDA monograph"), the court determined that only products achieving an antimicrobial effect contributed to oral health, Warner-Lambert, 343 F.Supp.2d at 1320. The court focused in particular on the statement in the FDA monograph that "[b]ecause oral malodor is caused mainly by gram-negative anaerobes, only antimicrobial ingredients known to be effective against the causative organisms are effective in suppressing the malodor." Id. (quoting FDA monograph at 22,844). Because it was undisputed that the Certs Powerful Mints did not contain any antimicrobial agents, the court concluded that they could not be classified under subheading 3306.90.00. Id.

On appeal, we concluded that the Court of International Trade's interpretation of subheading 3306.90.00 was too restrictive. Warner-Lambert, 407 F.3d at 1210. Specifically, we determined that nothing in the FDA monograph, or in the dictionaries consulted by the court, required the connection of "hygiene" with "health." We also observed that the court's interpretation was contradicted by two relevant explanatory notes. First, the explanatory note to chapter 33 provides that the products of heading 3306 need not "contain subsidiary pharmaceutical or disinfectant constituents," nor be held out "as having therapeutic or prophylactic value." Id. Second, the explanatory note to heading 3306 provides that the heading encompasses "[m]outh washes and oral perfumes." Id. Thus, we concluded that "the Court of International Trade went too far in requiring that a product under Heading [3306] include an antimicrobial agent." Id.

Finally, we pointed out some of the characteristics of Certs Powerful Mints that made classification within heading 3306 appropriate. Specifically, we noted that the mints contained (1) certain flavors that masked malodor, (2) copper gluconate that breaks down odor-producing volatile compounds, and (3) cottonseed oil that absorbs odor-producing volatile compounds. Id. at 1208, 1210. In addition, we noted that consumption of the mints increased salivation, thereby purging bacteria located in the oral cavity. Id. Based upon our analysis, we held that Certs Powerful Mints "properly fall under heading [3306] of the HTSUS." Id. at 1211. We therefore reversed the decision of the Court of International Trade granting summary judgment in favor of the United States. Id.

III.

In this case, the Court of International Trade was presented with cross-motions for summary judgment. The government moved for summary judgment that the MagikStrips are not prima facie classifiable under HTSUS subheading 3306.90.00 and, thus, that they properly fall within the catchall subheading 2106.90.99 that was applied by Customs. The government argued that our decision in Warner-Lambert stood for the proposition that in order for products to be classified as "preparations for oral or dental hygiene," the products "must be able to achieve the breakdown and absorption of unwanted substances in the mouth and provide a cleansing effect by purging activity." Drygel, 507 F.Supp.2d at 1376. In other words, the government argued that only products with all of the same cleansing characteristics as the Certs Powerful Mints in Warner-Lambert can be classified as "preparations for oral or dental hygiene" under subheading 3306.90.00. The government contended that summary judgment was appropriate because Drygel failed to adduce sufficient evidence with respect to the breakdown, absorption, and purging activity — if any — of its imported MagikStrips.

Drygel responded that summary judgment for the government was not proper, contending that its evidence raised genuine issues of material fact with respect to (1) whether the MagikStrips contain antimicrobial ingredients and (2) whether the Magikstrips contain ingredients that achieve breakdown, absorption, and purging effects discussed in Warner-Lambert. In addition, however, Drygel argued that the government misinterpreted the holding of Warner-Lambert. According to Drygel, we merely held in Warner-Lambert that the breakdown, absorption, and purging effects of Certs Powerful Mints were sufficient to bring their classification within subheading 3306.90.00; we did not hold that they are necessary conditions for classification within that subheading.

Finally, Drygel affirmatively moved for summary judgment that the imported MagikStrips are classifiable within subheading 3306.90.00 because they are "oral perfumes." Drygel argued that summary judgment in its favor was appropriate because (1) as a matter of law, subheading 3306.90.00 encompasses "oral perfumes" and (2) there was no genuine issue of material fact with respect to whether the MagikStrips are, at a minimum, "oral perfumes."

The Court of International Trade denied Drygel's cross-motion for summary judgment and granted the government's. The court rejected Drygel's argument that HTSUS heading 3306 encompasses "oral perfumes." According to the court, although our Warner-Lambert decision noted the reference to "[m]outh washes and oral perfumes" in the explanatory note to heading 3306, our holding ultimately relied upon the cleansing properties of Certs Powerful Mints. Id. at 1379. Further, the court observed that the explanatory notes are merely a "non-binding interpretive guide." Id. Thus, the court concluded that Warner-Lambert "instructs that the term `hygiene' requires a cleansing action such as the `breakdown and absorption function' and `cleansing effect of the purging activity' of Certs® Powerful Mints." Id. The court determined that Drygel had not established a genuine issue of material fact with respect to whether the MagikStrips accomplish the requisite cleansing action — i.e., whether the MagikStrips are antimicrobial or achieve a breakdown, absorption, and purging effect. Id. The court discounted Drygel's evidence in that regard as either self-serving, irrelevant, or conclusory. Id. Accordingly, the court entered summary judgment in favor of the government that the MagikStrips were properly classified by Customs in HTSUS subheading 2106.90.99.

DISCUSSION

I.

We have jurisdiction over Drygel's appeal pursuant to 28 U.S.C. § 1295(a)(5). We review de novo the Court of International Trade's rulings on summary judgment. Airflow Tech., Inc. v. United States, 524 F.3d 1287, 1290 (Fed.Cir.2008); Russell Stadelman & Co. v. United States, 242 F.3d 1044, 1048 (Fed.Cir.2001). The interpretation of the headings and...