Camelbak Prod.S LLC v. United States

• Decision Date: 10 May 2010
• Docket Number: Slip Op. 10-52.,Court No. 05-00249.
• Citation: 704 F.Supp.2d 1335
• Parties: CAMELBAK PRODUCTS, LLC, (successor-in-interest to CamelBak Products, Inc.), Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

704 F.Supp.2d 1335

CAMELBAK PRODUCTS, LLC, (successor-in-interest to CamelBak Products, Inc.), Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 10-52.

Court No. 05-00249.

United States Court of

International Trade.

May 10, 2010.

Sandler, Travis & Rosenberg, P.A., Miami, FL (Arthur K. Purcell and Larry T. Ordet); for Plaintiff.

Tony West, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Gardner B. Miller and Jason M. Kenner); Sheryl A. French, Office of the Assistant Chief Counsel, International Trade Litigation, Bureau of Customs and Border Protection, U.S. Department of Homeland Security, Of Counsel; for Defendant.

OPINION

RIDGWAY, Judge.

In this action, Plaintiff CamelBak Products, LLC challenges the Bureau of Customs and Border Protection's tariff classification of merchandise imported by CamelBak from the Republic of the Philippines in 2003.¹

The Government maintains that Customs properly classified the merchandise at issue as “travel, sports and similar bags” under subheading 4202.92.30 of the Harmonized Tariff Schedule of the United States (“HTSUS”), assessing duties at the rate of 17.8 % ad valorem. See generally Defendant's Memorandum in Support of Its Motion In Limine and For Summary Judgment (“Def.'s Brief”); Defendant's Memorandum in Reply to Plaintiff's Opposition to Defendant's Motion for Summary Judgment and in Opposition to Plaintiff's Motion for Summary Judgment (“Def.'s Reply Brief”).²

CamelBak claims that the merchandise is instead properly classified as “insulated food or beverage bags” under subheading 4202.92.04, or, alternatively, under subheading 4202.92.08, both dutiable at a rate of 7 % ad valorem. See Brief in Support of Plaintiff's Cross-Motion for Summary Judgment, and Response to Defendant's Motion for Summary Judgment (“Pl.'s Brief”); Reply Brief in Support of Plaintiff's Cross-Motion for Summary Judgment (“Pl.'s Reply Brief”).³

This action, which has been designated a test case, is before the Court on cross-motions for summary judgment. Also pending is the Government's Motion In Limine, challenging the admissibility of CamelBak's evidence proffered to establish that the subject merchandise is sufficiently insulated to maintain the temperature of beverages during transport or temporary storage. See generally Def.'s Brief; Brief in Opposition to Defendant's Motion In Limine (“Pl.'s In Limine Brief”). Jurisdiction lies under 28 U.S.C. § 1581(a) (2000).⁴

As discussed below, the merchandise at issue was properly classified as “travel, sports and similar bags” under subheading 4202.92.30 of the HTSUS. The Government's motion for summary judgment is therefore granted, and CamelBak's cross-motion for summary judgment is denied. In addition, the Government's Motion In Limine is denied as moot.

I. Background

At issue are ten models of merchandise which CamelBak refers to as “Hydration Packs” or “Hydration Systems.” See Pl.'s Brief at 1.⁵ Each model is a textile bag with padded, adjustable shoulder straps, designed to be worn on the back during a recreational activity, such as hiking, biking, snowboarding, or rock climbing. See Pl.'s Brief at 2; Def.'s Brief at 2. Each of the models features both a “cargo” compartment (designed to hold food, clothing, gear, and other supplies) and a “reservoir” (bladder) compartment, which is surrounded by closed-cell polyethylene foam and is designed to carry and maintain the temperature of water or some other beverage. See Pl.'s Brief at 2; Def.'s Reply Brief at 4-5. The cargo compartment of each model differs in capacity and configuration, depending on the activity for which the model is designed. See Pl.'s Brief at 2. Each “reservoir” (bladder) has a capacity of between 35 and 100 ounces of liquid, depending on the model. See id. A piece of 40-inch plastic tubing runs from the reservoir (bladder) to a silicone mouth-piece and bite valve, to allow the wearer to drink “hands-free.” See id.

The merchandise at issue was entered in four shipments during September and October 2003. See Def.'s Reply Brief, Exh. 3 (entry summaries). CamelBak entered the merchandise as “travel, sports and similar bags” under subheading 4202.92.30, in accordance with a prior Customs HQ Ruling. See Def.'s Reply Brief, Exh. 3 (entry summaries); HQ 96444 (Dec. 18, 2001) (ruling, at the request of CamelBak, on the classification of 11 models of CamelBak “Hands-Free Portable Hydration Systems”). CamelBak filed a timely protest, which Customs denied. This action followed.

II. Standard of Review

Customs classification decisions are reviewed de novo, through a two-step analysis. See 28 U.S.C. § 2640; Faus Group, Inc. v. United States, 581 F.3d 1369, 1371-72 (Fed.Cir.2009). The first step of the analysis addresses the proper meaning of the relevant tariff provisions, which is a question of law. The second step involves determining whether the merchandise at issue falls within a particular tariff provision as construed. See Faus Group, 581 F.3d at 1371-72 ( citing Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998)).

Under USCIT Rule 56, summary judgment is appropriate where “there is no genuine issue as to any material fact” and the moving party is entitled to judgment as a matter of law. See USCIT R. 56(c). Summary judgment is thus appropriate in a customs classification case if there is no genuine dispute of material fact (because the nature of the merchandise at issue is not in question), such that the decision on the classification of the merchandise turns solely on the proper meaning and scope of the relevant tariff provisions. See Faus Group, 581 F.3d at 1371-72.

In the present case, the parties disagree as to the meaning and scope of the tariff provisions at issue. They are, however, in agreement as to the nature of the imported merchandise (except to the extent that the Government challenges CamelBak's evidence on insulation, an issue which is rendered moot by the disposition below). This matter is therefore ripe for summary judgment.

III. Analysis

The tariff classification of all merchandise imported into the United States is governed by the General Rules of Interpretation (“GRIs”) and the Additional U.S. Rules of Interpretation (“ARIs”), which provide a framework for classification under the HTSUS, and are to be applied in numerical order. See BASF Corp. v. United States, 482 F.3d 1324, 1325-26 (Fed.Cir.2007); 19 U.S.C. § 1202.⁶ Most merchandise is classified pursuant to GRI 1, which provides for classification “according to the terms of the headings and any relative section or chapter notes.” See GRI 1, HTSUS.

The Government maintains that each of the ten models of CamelBak merchandise at issue is properly classified as a whole as a “travel, sports [or] similar bag[ ]” under HTSUS subheading 4202.92.30, through the application of GRI 1 (as applied by GRI 6, which controls classification at the subheading level). ⁷ According to the Government, the classification analysis therefore cannot proceed beyond GRI 1, because a single tariff provision-subheading 4202.92.30-covers each of the items in its entirety. See Def.'s Brief at 6, 17-22; Def.'s Reply Brief at 1-10.

In contrast, CamelBak contends that subheading 4202.92.30 (covering “travel, sports and similar bags”) “does not completely embrace specially designed ... [articles] that include a fully-integrated, insulated component ... designed to efficiently carry and maintain the temperature of a beverage.” See Pl.'s Brief at 16. According to CamelBak, the items at issue constitute “composite goods” consisting of two components-a “cargo component” (which, according to CamelBak, is prima facie classifiable as a “travel, sports [or] similar bag[ ]”), and an “insulated beverage bag component” (which CamelBak asserts is prima facie classifiable as an “insulated beverage bag”). See Pl.'s Brief at 14-17; see also id. at 8; Pl.'s Reply Brief at 1-2. CamelBak argues further that, “[b]ecause the[ ] two subheadings ‘each refer to part only of the materials' contained in the [subject merchandise],” the merchandise cannot be classified pursuant to GRI 3(a) (which generally provides for classification under the most specific heading and is known as the “rule of relative specificity”). See Pl.'s Reply Brief at 2; GRI 3(a), HTSUS. CamelBak therefore concludes that each of the models at issue must be classified as an “insulated food or beverage bag” pursuant to GRI 3(b), because-according to CamelBak-it is the special “hydration” feature ( i.e., the so-called “insulated beverage bag component”) that gives the subject merchandise its “essential character.” See Pl.'s Brief at 8-9, 17-28; Pl's Reply Brief at 2; GRI 3(b), HTSUS.⁸

As detailed below, the items here in dispute are properly classified as “travel, sports and similar bags” under HTSUS subheading 4202.92.30, through the straightforward application of GRI 1 (as applied by GRI 6). Contrary to CamelBak's assertions, the special “hydration” feature of its merchandise does not preclude the items from being prima facie classifiable as “travel, sports and similar bags.” Notwithstanding that special feature, the items are described in their entirety by the subheading “travel, sports and similar bags.” Further, while the subheading “travel, sports and similar bags” describes the items at issue as a whole, the subheading “insulated food or beverage bags” does not.

GRI 3 thus has no application here, because each of the subject items is not prima facie classifiable under two or more subheadings. See GRI 3, HTSUS. Because the merchandise at issue is classifiable pursuant to GRI 1, resort to subsequent GRIs-including GRI 3(b) and its “essential character” analysis-is therefore unnecessary. See, e.g., Mita Copystar America v. United States, 160...