Alcan Food Packaging (Shelbyville) v. United States

• Citation: 929 F.Supp.2d 1338
• Decision Date: 25 July 2013
• Docket Number: Court No. 09–00095.,Slip Op. 13–94.
• Parties: ALCAN FOOD PACKAGING (SHELBYVILLE), Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

929 F.Supp.2d 1338

ALCAN FOOD PACKAGING (SHELBYVILLE), Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 13–94.

Court No. 09–00095.

United States Court of

International Trade.

July 25, 2013.

William Randolph Rucker and Kathleen M. Murphy, Drinker Biddle & Reath, LLP, Chicago, IL, for Plaintiff Alcan Food Packaging (Shelbyville).

Aimee Lee, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for Defendant United States. With her on the brief were Stuart F. Delery, Acting Assistant Attorney General, Washington, DC, and Barbara S. Williams, Attorney in Charge, International Trade Field Office. Of counsel on the brief was Paula Smith, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection.

OPINION

BARZILAY, Senior Judge:

This case is before the court on cross-motions for summary judgment. Plaintiff Alcan Food Packaging (Shelbyville) (“Alcan”), challenges the decision of Defendant U.S. Customs and Border Protection (“Customs”) denying Alcan's protests of Custom's classification of its “Flexalcon” (short for Flexible Aluminum Conserve) packaging material within the Harmonized Tariff Schedule of the United States (“HTSUS”). Customs classified the subject merchandise under the provision for “plastics” and rejected Alcan's proposed classification of the merchandise under the provision for “aluminum foil.” More specifically, Customs classified the subject merchandise under HTSUS subheading 3921.90.40, which carries a 4.2% ad valorem duty. Alcan, however, contends that the subject merchandise is properly classified under HTSUS subheading 7607.20.50, which is duty free. Alcan filed an application for further review, which Customs denied in a Ruling Letter. See HQ Ruling H008142 (Nov. 26, 2008). This matter involves imported merchandise from Germany, entered through the Ports of Louisville, Blaine, and Detroit between October 2005 and September 2006. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a). For the reasons set forth below, Plaintiff's motion for summary judgment is denied and Defendant's motion is granted.

I. STANDARD OF REVIEW

The court reviews Customs' protest decisions de novo.28 U.S.C. § 2640(a)(1). USCIT Rule 56 permits summary judgment when “there is no genuine dispute as to any material fact....” USCIT R. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In considering whether material facts are in dispute, the evidence must be considered in a light most favorable to the non-moving party, drawing all reasonable inferences in its favor, as well as all doubts over factual issues. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Anderson, 477 U.S. at 253–54, 106 S.Ct. 2505.

A classification decision involves two steps. The first addresses the proper meaning of the relevant tariff provisions, a question of law. See Faus Group, Inc. v. United States, 581 F.3d 1369, 1371–72 (Fed.Cir.2009) (citing Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998)). The second step determines the nature of the imported merchandise and is a question of fact. See id. When there is no factual dispute regarding the merchandise, as is the case here, the resolution of the classification issue turns on the first step, determining the proper meaning and scope of the relevant tariff provisions. See Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1378 (Fed.Cir.1999); Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365–66 (Fed.Cir.1998).

While the court accords deference to Customs' classification rulings relative to their “power to persuade,” United States v. Mead Corp., 533 U.S. 218, 235, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (citing Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)), 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)).

II. UNDISPUTED FACTS

The following facts are not in dispute. The subject merchandise is known commercially as Flexalcon. It consists of plastic film and aluminum foil. Flexalcon is produced by laminating aluminum foil with multiple layers of plastic film. [[Redacted]]. Flexalcon is imported on reels as two separate products (base and lid material). The base material is formed into a pouch and the lid material covers the base. The base and lid materials are designed to form a package that holds food. Flexalcon packages store and extend the shelf-life of food in the form of ready-to-eat meals. They are a substitute for conventional preserve packaging such as aluminum cans, steel cans, or glass jars.

[[Redacted]] Flexalcon is used by the United States military to package ready-to-eat meals for soldiers (called “Meals, Ready–to–Eat” or “MREs”). The remaining imported Flexalcon material is used for packaging the same type of meals for allied forces. From World War II until 1980, U.S. Army field rations were supplied as shelf stable processed foods in metal cans, called “C-rations.” In 1980, the first retort pouch rations (MREs) were procured by the military and have subsequently been deployed in ground operations around the world. See Def. Ex. G at 4 n. 2 (Dunn Declaration).

Flexalcon has the following components: (1) Polyethylene Terephthalate (PET) film: provides tensile strength during production, processing, and in the final product. It also has the heat resistance properties necessary to withstand the retort and sealing processes. PET film is a print carrier film and therefore can accommodate printing;(2) Aluminum Foil: provides the barrier properties for Flexalcon. Specifically, it provides an absolute barrier against gas, moisture, and light. Aluminum foil enhances the packaging stiffness, provides support, and is able to withstand the deep drawing process; (3) Polypropylene (PP) film: provides the layer of film that is used to seal the Flexalcon base and lid materials and form a package. It has high heat resistance for the retorting process. It is the layer of film that comes in direct contact with the food. PP film also provides support to the aluminum foil, prevents corrosion of the foil, and enhances the finished package's stiffness; (4) Oriented Polyamide (OPA) film: provides durability for the entire laminate structure by increasing the burst strength and improving piercing and flex-crack/pinhole resistance. It improves the overall durability and reliability of the package and therefore reduces production and inspection related costs. Is also contributes to the flatness of the laminate by reducing curling; and (5) Oriented Polypropylene (OPP) film: protects the aluminum foil layer of the base material (pouch) from external abuse and stiffens the filled pouch. The materials are laminated [[redacted]].

Flexalcon base material has [[redacted]] layers: [[redacted]] layers of plastic film and [[redacted]] layer of aluminum foil. From outside to inside, the base material is composed of (1) [[redacted]] microns of oriented polypropylene (plastic), (2) [[redacted]] microns of aluminum strip (aluminum foil), (3) [[redacted]] microns of oriented polyamide film (plastic), and (4) [[redacted]] microns of polypropylene film (plastic). The plastic layers account for [[redacted]] of the thickness, [[redacted]] of the weight, and [[redacted]] of the value of the material. The foil layer accounts for [[redacted]] of the thickness, [[redacted]] of the weight, and [[redacted]] of the value. Adhesive accounts for the balance. Some of the base material is made in colored styles ( i.e., olive green or sand beige). [[redacted]].

Flexalcon lid material has [[redacted]] layers: [[redacted]] layers of plastic film and [[redacted]] layer of aluminum foil. From outside to inside, the lid material is composed of (1) [[redacted]] microns of polyethylene terephthalate film (plastic), (2) [[redacted]] microns of aluminum strip (aluminum foil), and (3) [[redacted]] microns of polypropylene film (plastic). The plastic layers account for [[redacted]] of the thickness, [[redacted]] of the weight, and [[redacted]] of the value of the material. The foil layer accounts for [[redacted]] of the thickness, [[redacted]] of the weight, and [[redacted]] of the value of the lid. Some of the lid material is made in the same colored styles. [[redacted]].

After the food is placed inside the base material, the base and lid material are hermetically ¹ sealed to form a package. The seal is formed by applying pressure with heated bars to melt the PP layers together. The sealed package then undergoes a retorting process, which is a method of heat sterilization (250 degrees for approximately 45–60 minutes). It destroys any impurities that may exist in the food. The sealed package prevents light, water vapor, oxygen, microorganisms, mold, yeast, odor, and insects from reaching the food contents. It also prevents the loss of aroma, vitamins, liquid, fat, and carbon dioxide/nitrogen. It therefore protects and preserves the contents inside the package safely over a long shelf-life (three years) with no refrigeration. The aluminum foil provides barrier properties that give MREs a three-year shelf-life. Although the plastic layersprovide some barrier properties, they allow oxygen migration and therefore cannot provide the same barrier properties as aluminum foil. The plastic layers, however, do provide specific support functions for the aluminum foil by (1) improving deep drawing formability, which refers to the extent to which the material can be drawn or stretched to form a pocket in the base material; (2) improving piercing and pinhole strength; (3) improving flex-crack resistance; (4) protecting the foil from environmental influences; (5) improving...