W.R. Filbin & Co., Inc. v. U.S.

• Citation: 945 F.2d 390
• Decision Date: 25 September 1991
• Docket Number: No. 91-1049,91-1049
• Parties: , 9 Fed. Cir. (T) 155 W.R. FILBIN & CO., INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Page 390

945 F.2d 390

13 ITRD 1681, 9 Fed. Cir. (T) 155

W.R. FILBIN & CO., INC., Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 91-1049.

United States Court of Appeals, Federal Circuit.

Sept. 25, 1991.

Sandra Liss Friedman, Barnes, Richardson & Colburn, New York City, argued, for plaintiff-appellant. With her on the brief was, James S. O'Kelly.

Nancy M. Frieden, Commercial Litigation Branch, Dept. of Justice, New York City, argued for defendant-appellee. With her on the brief were, Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director and Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office. Also on the brief was, Stephen Berke, U.S. Customs Service, of counsel.

Before NIES, Chief Judge, FRIEDMAN, Senior Circuit Judge, and MICHEL, Circuit Judge.

MICHEL, Circuit Judge.

W.R. Filbin & Co., Inc. ("Filbin") appeals the August 31, 1990 judgment of the United States Court of International Trade ("trade court") holding that the imported merchandise was properly classified under 183.05, Tariff Schedules of the United States ("TSUS"). W.R. Filbin & Co. v. United States, 744 F.Supp. 289 (Ct. Int'l Trade 1990). Because the trade court applied the correct legal test and its findings of fact were not clearly erroneous, it properly upheld the Customs Service's classification of the imported merchandise as an edible preparation rather than as a beverage. Accordingly, we affirm.

BACKGROUND

Filbin imports what are later sold as frozen ice pops--the merchandise in dispute--which are made by Kisko Products Corporation ("Kisko"). Kisko appeared as the real party-in-interest because it was responsible for the payment of duties on the merchandise.

The products involved are: Kisko Super Pops, Kisko Giant Freezies and Kisko Freezies 36 Pack. All are packaged in plastic sleeves, containing a liquid composed mainly of water, corn syrup and other sweeteners. The products can be eaten by horizontally cutting off one end of the plastic sleeve and squeezing the contents up from the other end. The three products vary primarily in size and weight. The packaging of each product bears a picture of a dinosaur or dragon licking its lips and holding a likeness of the product in its frozen state. The Kisko Freezies 36 Pack also includes the instruction "FREEZE THEM AND EAT THEM."

Kisko also manufactures a product called Kisko Drinks--not in issue here--which is also packaged in a plastic sleeve, but with two connecting compartments. The smaller compartment contains a straw and some of the liquid. Directions printed on this compartment state, "TEAR TOP AND PUSH UP STRAW TO DRINK" and "FREEZE IT/SLUSH IT" or "SLUSH IT!" The larger compartment contains the rest of the liquid which is composed of the same ingredients as the liquid in the three products at issue plus sodium citrate. The package bears a picture of the dinosaur or dragon holding a replica of the product and drinking from the straw. Kisko Drinks have been classified as a beverage under TSUS item 166.40, subject to a tariff of one cent per gallon.

Timely protests were filed pursuant to 19 U.S.C. § 1514(a) (1988) contesting the classification of the merchandise in question under TSUS item 183.05, "Edible preparations not specially provided for ...," dutiable at a rate of 10 percent ad valorem.

After the protests were denied pursuant to 19 U.S.C. § 1515 (1988), plaintiff filed a timely summons and complaint in the trade court, which, following a trial, held that the merchandise is properly classified under 183.05 TSUS.

Pursuant to 28 U.S.C. § 1295(a)(5) (1988), we have jurisdiction over the appeal.

DISCUSSION

I

A

Kisko argues that the trade court erred in holding that its merchandise was properly classified as an edible preparation under 183.05 TSUS, instead of as a beverage under 166.40 TSUS. Kisko first contends that the trade court misconstrued the determinative term "fit for use as beverages" and thus applied the wrong legal standard.

The meaning of a specific tariff term is a question of law, and therefore subject to de novo review. E.g., Daw Indus. v. United States, 714 F.2d 1140, 1142, 1 Fed.Cir. (T) 146, 148 (1983). The provision at issue, Headnote 1 of Schedule 1, Part 12, Subpart B, states in pertinent part: "The provisions of this subpart cover only products fit for use as beverages ...." Here, the trade court, relying on Wah Shang Co. v. United States, 44 CCPA 155, 159 (1957), did apply the correct legal standard for determining whether merchandise is "fit for use as beverages": substantial actual use. Filbin, 744 F.Supp. at 292. In Wah Shang, the Court of Customs and Patent Appeals stated that "the term 'fit for beverage use' is not satisfied by a mere possibility of such use, and requires a substantial actual use as a beverage." 44 CCPA at 159 (emphasis added).

Neither party disputes that the term "fit for use" requires a "substantial actual use" and that that term means more than incidental use but not chief use. Kisko contends, however, that "[t]he trial court seems to be equating substantial use with chief use." Brief for Appellant at 11. But it is clear that the trade court did just the opposite, citing Wah Shang for the proposition that "the term 'fit for beverage use' ... does not in our opinion require that the chief use of the merchandise shall be as a beverage." Filbin, 744 F.Supp. at 291 (emphasis added). Indeed, the trade court emphasized that "substantial actual use," not chief use, is all that is required for merchandise to be "fit for use" as a beverage. Id. at 292. Therefore, the trade court committed no error in applying Wah Shang and defining "fit for use as beverages."

B

Kisko also argues that, even assuming a proper definition, the trade court erred in its application of the "fit for use" test, i.e., "substantial actual use," to the facts of this case.

The ultimate issue of whether particular merchandise has been classified under the appropriate provision is a question of law. See Amersham Corp. v. United States, 728 F.2d 1453, 1455, 2 Fed.Cir. (T) 33, 34 (1984). However, whether a particular product fits a properly defined tariff term is a question of fact reversible only for clear error. Daw Indus., 714 F.2d at 1142. Generally, the "clearly erroneous" standard of review applies even when "findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or inferences from other facts." Anderson v. City of Bessemer City, 470 U.S. 564, 574, 105 S.Ct. 1504, 1511-12, 84 L.Ed.2d 518 (1985). However, "[w]hen findings are based on determinations regarding the credibility of witnesses, Rule 52(a) ¹ demands...