R.T. Foods, Inc. v. United States, 2013–1188.

Citation757 F.3d 1349
Decision Date03 July 2014
Docket NumberNo. 2013–1188.,2013–1188.
PartiesR.T. FOODS, INC., Plaintiff–Appellant, v. UNITED STATES, Defendant–Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

OPINION TEXT STARTS HERE

Peter S. Herrick, Peter S. Herrick, P.A., of Miami, Florida, argued for plaintiff-appellant.

Beverly A. Farrell, Trial Attorney, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were Stuart F. Delery, Assistant Attorney General, Jeanne E. Davidson, Director, and Amy M. Rubin, Acting Assistant Director.

Before DYK, CLEVENGER, and WALLACH, Circuit Judges.

WALLACH, Circuit Judge.

R.T. Foods, Inc. (R.T.) appeals the decision of the United States Court of International Trade (CIT) denying its motion for summary judgment and granting the cross-motion for summary judgment of the United States (the Government). See R.T. Foods, Inc. v. United States, 887 F.Supp.2d 1351 (Ct. Int'l Trade 2012). Because the CIT properly classified R.T.'s products, this court affirms.

Background

Between October 2007 and August 2008, R.T. made twenty-four entries of “Tempura Vegetables” and “Vegetable Bird's Nests” from Thailand (“subject merchandise”), ten through the port of Boston and fourteen through the port of Long Beach. “The parties do not dispute the identity of the subject merchandise: frozen tempura-battered vegetable mixtures sold under the names of ‘Vegetable Bird's Nests' and ‘Tempura Vegetables.’ Id. at 1353. The “Vegetable Bird's Nests” product consists of julienne-cut carrots, onion, and kale, which are “mixed together, dipped in tempura batter, deep fried, flash frozen,” and packaged for retail. Id. The “Tempura Vegetables” medley consists of “three Bird's Nests, three pieces of sweet potato, three pieces of carrot, three pieces of wing bean, three pieces of long or green bean, and three pieces of eggplant”; the individual vegetables are dusted with tempura batter, deep fried, flash frozen, and packaged for retail. Id.

United States Customs and Border Protection (Customs) classified the ten Boston entries and three of the Long Beach entries under the Harmonized Tariff Schedule of the United States 1 (HTSUS) subheading 2004.90.85, 2 which carries a duty rate of 11.2%. The remaining eleven entries into the port of Long Beach were liquidated under R.T.'s proposed subheading, HTSUS 2106.90.99,3 which carries a duty-free preference for products from Thailand. According to Customs, the latter entries were accidentally entered duty-free under R.T.'s claimed subheading.

In March 2009, R.T. timely filed three protests challenging Customs' classification of all twenty-four entries. After the protests were denied, R.T. commenced this action at the CIT in October 2009. The parties filed motions for summary judgment. As an initial matter, the CIT held it only had jurisdiction over three of the twenty-four entries.4 On December 14, 2012, the CIT denied R.T.'s motion for summary judgment and granted the Government's cross-motion for summary judgment, thereby upholding Customs' classification of the subject merchandise under HTSUS 2004.90.85.

Appellant filed a timely appeal. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(5) (2012).

Discussion
I. Standard of Review

This court reviews the CIT's grant of summary judgment on tariff classifications de novo. Lemans Corp. v. United States, 660 F.3d 1311, 1315 (Fed.Cir.2011); Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed.Cir.2006). In assessing Customs' classification determinations, this court employs the two-step analysis used by the CIT: (1) ascertaining “the proper meaning of the tariff provisions, which is a question of law reviewed de novo”; and (2) determining “whether merchandise falls within a particular heading, which is a question of fact we review only for clear error.” Lemans, 660 F.3d at 1315 (citing Cummins, 454 F.3d at 1363). However, [w]here, as here, the nature of the merchandise is undisputed, the inquiry collapses into a question of law we review de novo.” Id.; see R.T. Foods, 887 F.Supp.2d at 1359 (“Since there is no dispute between the parties as to the nature of the merchandise involved in this case and the only issues to be resolved are legal, the case is ripe for disposal at the summary judgment stage.”). Accordingly, there are no genuine factual disputes precluding summary judgment. See Link Snacks, Inc. v. United States, 742 F.3d 962, 966 (Fed.Cir.2014).

II. Legal Framework
A. Classification Pursuant to the HTSUS

The HTSUS is composed of classification headings, each of which has one or more subheadings. Deckers Outdoor Corp. v. United States, 714 F.3d 1363, 1366 (Fed.Cir.2013). “The headings contain ‘general categories of merchandise,’ whereas ‘the subheadings provide a more particularized segregation of the goods within each category.’ Id. (quoting Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998)). Along with the headings and subheadings, which are enumerated in chapters 1 through 99 of the HTSUS (each of which has its own section and chapter notes), the HTSUS statute also contains the “General Notes,” the “General Rules of Interpretation” (“GRI”), the “Additional United States Rules of Interpretation” (“ARI”), and various appendices for particular categories of goods.5See Baxter Healthcare Corp. of P.R. v. United States, 182 F.3d 1333, 1337 (Fed.Cir.1999) (citing 19 U.S.C. § 3004(a) (1994)). The classification of merchandise is governed by the GRIs and the ARIs, which are applied in numerical order. BenQ Am. Corp. v. United States, 646 F.3d 1371, 1376 (Fed.Cir.2011).

The classification analysis always begins with GRI 1, which directs that “classification shall be determined according to the terms of the headings and any relative section or chapter notes.” HTSUS GRI 1 (emphasis added); see Orlando Food, 140 F.3d at 1440 ([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.”). “Absent contrary legislative intent, HTSUS terms are to be construed according to their common and commercial meanings, which are presumed to be the same.” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed.Cir.1999) (citing Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed.Cir.1989)). Pursuant to GRI 1, the possible headings are to be evaluated without reference to their subheadings, which cannot be used to expand the scope of their respective headings. Orlando Food, 140 F.3d at 1440 (“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.... [W]hen determining which heading is ... more appropriate for classification, a court should compare only the language of the headings and not the language of the subheadings.”); EOS of N. Am., Inc. v. United States, 911 F.Supp.2d 1311, 1327–28 (Ct. Int'l Trade 2013); BASF Corp. v. United States, 798 F.Supp.2d 1353, 1362 (Ct. Int'l Trade 2011). Finally, if the proper heading can be determined under GRI 1, the court is not to look to the subsequent GRIs. See CamelBak Prods., LLC v. United States, 649 F.3d 1361, 1364 (Fed.Cir.2011) (citing Mita Copystar Am. v. United States, 160 F.3d 710, 712 (Fed.Cir.1998)) (We apply GRI 1 as a substantive rule of interpretation, such that when an imported article is described in whole by a single classification heading or subheading, then that single classification applies, and the succeeding GRIs are inoperative.”).

B. The Competing Headings

Customs classified the subject merchandise under HTSUS 2004, which provides for “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products of heading 2006.” 6 This heading is an eo nomine provision, or one that “describes an article by a specific name.” CamelBak Prods., 649 F.3d at 1364 (citing Carl Zeiss, 195 F.3d at 1379). [A]n eo nomine provision includes all forms of the named article, including improved forms.” Kahrs Int'l, Inc. v. United States, 713 F.3d 640, 646 (Fed.Cir.2013) (citing CamelBak Prods., 649 F.3d at 1364–65). However, “when an article ‘is in character or function something other than as described by a specific statutory provision—either more limited or more diversified—and the difference is significant, it is not properly classified within an eo nomine provision.” CamelBak Prods., 649 F.3d at 1365 (emphasis added) (quoting Casio, Inc. v. United States, 73 F.3d 1095, 1097 (Fed.Cir.1996)). To determine whether such a difference is significant enough to remove an article from an eo nomine provision, this court has looked to ‘whether the item possess[es] features substantially in excess of those within the common meaning of the term,’ or whether the subject article is “a change in identity of the article described by the statute.” Id. (alteration in original) (citations omitted).

R.T.'s proposed heading is HTSUS 2106, which provides for “Food preparations not elsewhere specified or included.” This heading is a “basket provision” as indicated by the terms “not elsewhere specified or included.” Int'l Bus. Machs. Corp. v. United States, 152 F.3d 1332, 1338 (Fed.Cir.1998); HTSUS 2106. “A basket provision is not a specific provision.” Int'l Bus. Machs., 152 F.3d at 1338. Therefore, [c]lassification of imported merchandise in a basket provision is only appropriate if there is no tariff category that covers the merchandise more specifically.” Rollerblade, Inc. v. United States, 116 F.Supp.2d 1247, 1251 (Ct. Int'l Trade 2000), aff'd,282 F.3d 1349 (Fed.Cir.2002). In other words, because HTSUS 2106 is a basket provision, any products that are “specified or included” in another tariff heading cannot be classified in HTSUS 2106.

III. The Subject Merchandise Was Properly Classified in HTSUS...

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