Dependable Packaging Solutions, Inc. v. United States, Slip. Op. 13-23

• Decision Date: 20 February 2013
• Docket Number: Slip. Op. 13-23,Court No. 10-00330
• Parties: DEPENDABLE PACKAGING SOLUTIONS, INC., Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

DEPENDABLE PACKAGING SOLUTIONS, INC., Plaintiff,
v.
UNITED STATES, Defendant.

Slip. Op. 13-23
Court No. 10-00330

UNITED STATES COURT OF INTERNATIONAL TRADE

Dated: February 20, 2013

Before: Richard K. Eaton, Judge
OPINION and ORDER

Defendant's motion for summary judgment is granted; plaintiff's cross-motion for summary judgment is denied; case dismissed.

Peter S. Herrick, of Miami, FL, for plaintiff.

Stuart F. Delery, Acting Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Karen V. Goff); Office of the Chief Counsel for Import Administration, United States Department of Commerce (Sheryl A. French), of counsel, for defendant.

Eaton, Judge: At issue is the proper classification of two articles of glass imported by plaintiff Dependable Packaging Solutions, Inc. ("Dependable" or "plaintiff"). Before the court are the cross-motions for summary judgment of plaintiff and of the United States ("defendant" or "the Government") on behalf of U.S. Customs and Border Protection ("Customs"). Def.'s Mot.

Page 2

for Summ. J. (ECF Dkt. No. 25); Pl.'s Cross Mot. for Summ. J. (ECF Dkt. No. 30) ("Pl's Mot."). The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2006).

For the reasons set forth below, defendant's motion for summary judgment is GRANTED, plaintiff's cross-motion for summary judgment is DENIED, and the court finds that plaintiff's merchandise is properly classified under Heading 7013 of the Harmonized Tariff Schedule of the United States ("HTSUS").

BACKGROUND

The facts described below have been taken from the parties' 2012 USCIT Rule 56(h) statements and the record. Where no citation is provided, the statement has been admitted.¹ Citation to the record is provided where a fact, although not admitted in the parties' papers, is uncontroverted by record evidence.

On May 29, 2010, Dependable, an importer and distributor of packing, janitorial, floral, and office supplies, imported the glass items, identifying them on their respective commercial invoices as "Generic Bud Vases" for the smaller type ("bud vases") and "Generic Trumpet Vases" ("trumpet vases") for the larger type (collectively, "the vases"). The vases are articles of

Page 3

glass imported empty from the People's Republic of China. Both vases have an inexpensive look and visible seams. At the time of importation, the bud vases were valued at no more than $0.30 and the trumpet vases at more than $0.30 but no greater than $3.00. Pictures of the vases, as advertised in Dependable's brochure, are appended to this opinion.

The bud vases are eight inches in height, with a quarter-inch lip that the parties agree is not designed for any sort of closure.² The lip surrounds an opening measuring one and one-half inches in diameter. The bud vases have a narrow neck extending downward five inches from the opening. The neck then widens into a bulbous shape, two and three-quarters inches in diameter at its widest point, and ends in a slightly concave bottom two inches in diameter. The bud vases also have deepening striations beginning one inch below the lip that continue to the bottom of the article.

The trumpet vases are nine and three-quarter inches in height with a quarter-inch lip that the parties agree is not designed for any sort of closure. The lip surrounds an opening measuring three and three-quarter inches in diameter. The diameter of the opening gradually narrows (as one moves two-thirds of the way down the vase) to a diameter of three inches, widening again thereafter to end in a bottom measuring four and one-quarter inches in diameter.

After importation, Dependable sells the vases to mass-market flower packing houses that fill them with flowers, water, and sometimes an additional nutrient solution from the grower. The packing houses then ship the flower-packed vases to retailers, typically supermarkets or similar stores, where the flowers and vases are displayed and sold as a unit. Dependable's vases are not sold empty at retail, but vases similar in design are sold empty at retail. Rozanski Decl.

Page 4

¶¶ 14-15 (ECF Dkt. No. 25-9).³ The vases can be reused. Grandio Dep. 41:7-41:10 (ECF Dkt. No. 25-2)⁴; Rozanski Decl. ¶ 14.

At the time of entry, Dependable classified the vases under HTSUS 7018.90.50.⁵ At liquidation, Customs classified the bud vases under HTSUS 7013.99.40⁶ and the trumpet vases under HTSUS 7013.99.50.⁷ After its timely filed protest was deemed denied⁸ and the assessed duties were paid, Dependable commenced this action, abandoning its entered classification under HTSUS 7018.90.50 by arguing that both vases are properly classified under HTSUS 7010.90.30.⁹ In its motion for summary judgment, the Government maintains that Customs'

Page 5

classifications were correct and Dependable continues to argue for classification under HTSUS 7010.90.30 in its cross-motion.

STANDARD OF REVIEW

Summary judgment shall be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to a judgment as a matter of law." USCIT R. 56(a); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In the context of a classification action, "summary judgment is appropriate when there is no genuine dispute as to the underlying factual issue of exactly what the merchandise is." Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed. Cir. 1998) (citations omitted).

The court reviews Customs' classification decisions de novo, applying the HTSUS General Rules of Interpretation ("GRIs") and the HTSUS Additional U.S. Rules of Interpretation ("ARIs").¹⁰ Camel Bak Prods., LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 2011). GRI 1 provides, in relevant part, that "classification shall be determined according to the terms of the

Page 6

[HTSUS] headings and any relative section or chapter notes." GRI 1 (2009-2010). "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)). The court "is required to decide the correctness not only of the importer's proposed classification but of the Government's classification as well." See Jarvis Clark Co. v. United States, 733 F.2d 873, 874 (Fed. Cir. 1984).

Here, there is no genuine dispute as to "exactly what the merchandise is" or as to its actual use. Bausch & Lomb, 148 F.3d at 1365. The only factual disagreement between the parties is to the "principal use" of the vases, and, as discussed below, this quarrel is not a material dispute precluding summary judgment. See Aromont USA, Inc. v. United States, 671 F.3d 1310 (Fed. Cir. 2012) (making a principal use determination at summary judgment); ENI Tech. Inc. v. United States, 33 CIT _, 641 F. Supp. 2d 1337 (2009) (granting summary judgment on the issue of principal use); Essex Mfg., Inc. v. United States, 30 CIT 1 (2006) (resolving a principal use issue on the record facts and the court's examination of the article at summary judgment).

DISCUSSION

I. Legal Framework

Classification determinations are a two-step process by which "the court first ascertains the correct meaning of the relevant tariff provisions and then determines the proper classification for the merchandise at issue." Pomeroy Collection, Ltd. v. United States, 35 CIT _, _, 783 F.

Page 7

Supp. 2d. 1257, 1259 (2011) (citation omitted). The first step is a question of law; the second is a question of fact. Id. (citations omitted).

GRI 1 mandates that tariff classification initially "be determined according to the terms of the headings and any relative section or chapter notes." "[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. Only after determining that a product is classifiable under the heading should the court look to the subheadings." Orlando Food Corp. v. United States, 140 F.3d 1437,1440 (Fed. Cir. 1998). In other words, tariff headings are construed without reference to their subheadings. See id. Accordingly, a court should not look to subheadings to either limit or broaden the scope of a heading.

II. The Construction of Headings 7010 and 7013

The court finds, and the parties agree, that the vases should be classified under HTSUS chapter 70 ("Glass and glassware"). The parties disagree, however, as to the appropriate heading. The parties agree—correctly—that the competing headings, 7010 and 7013, are principal use provisions. See Automatic Plastic Molding, Inc. v. United States, 26 CIT 1201, 1205 n.4 (2002) (noting that the applicable regulation from Customs "concluded headings 7010 and 7013 are 'principal use' tariff provisions") (citation omitted); Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1313 n.7 (Fed. Cir. 2003) (observing that principal use provisions "employ[] the...