Dolly, Inc. v. U.S.
| Decision Date | 22 October 2003 |
| Docket Number | SLIP OP. 03-137.,No. 98-04-00677.,98-04-00677. |
| Citation | 293 F.Supp.2d 1340 |
| Parties | DOLLY, INC., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. Court of International Trade |
Neville Peterson LLP (John M. Peterson, Curtis W. Knauss), Washington, D.C., for Plaintiff.
Peter D. Keisler, Assistant Attorney General; John J. Mahon, Acting Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice; James A. Curley, Attorney, Commercial Litigation Branch, Civil Division United States Department of Justice, for Defendant.
Pursuant to 28 U.S.C. § 2640(a)(1) (2000), this Court tried a classification dispute involving certain mini bags.1 Plaintiff, Dolly, Inc., challenges the United States Department of Customs', now the Bureau of Customs and Border Protection, ("Customs") classification of the mini bags under heading 4202 of the Harmonized Tariff Schedule of the United States ("HTSUS") (1997), 19 U.S.C. § 1202 (1994). The Court has exclusive jurisdiction pursuant to 28 U.S.C. § 1581(a). Based upon the findings of fact and conclusions of law set forth below, the Court enters final judgment in favor of Plaintiff.
The seven entries at issue in this case were imported in 1997 through the Port of Dayton, Ohio. (Pretrial Order, Schedule C, Uncontested Facts ¶ 1.) The mini bags were entered and liquidated under subheading 4202.92.45 HTSUS. (Id. ¶ 2.) Heading 4202 provides:
4202 Trunks, suitcases, vanity cases
attache cases, briefcases, school
satchels, spectacle cases, binocular
cases, camera cases, musical
instrument cases, gun cases
holsters and similar containers
traveling bags, toiletry bags
knapsacks and backpacks, handbags,
shopping bags, wallets,
purses, map cases, cigarette
cases, tobacco pouches, tool
bags, sports bags, bottle cases,
jewelry boxes, powder cases,
cutlery cases and similar containers,
of leather or of composition
leather, of sheeting of
plastics, of textile materials, of
vulcanized fiber, or of paper-board,
or wholly or mainly covered
with such materials or with
paper:
***
4202.92 With outer surface of sheeting
of plastic or of textile
materials:
Travel, sports and similar
bags:
With outer surface of
textile materials:
Of vegetable fibers
and not of pile or
tufted construction:
***
4202.92.45 Other ............ 20%
HTSUS (1997). Accordingly, Customs assessed a tariff of 20% ad valorem. Plaintiff protested Customs' classification of the subject merchandise, asserting that Customs should have classified the merchandise under subheading 3924.10.50, HTSUS, which provides:
3924 Tableware, kitchenware, other household
articles and toilet articles, of
plastics:
3924.10 Tableware and kitchenware:
3924.10.10 Salt, pepper, mustard
and ketchup dispensers
and similar dispensers
3924.10.20 Plates, cups, saucers,
soup bowls, cereal bowls,
sugar bowls, creamers,
gravy boats, serving
dishes and platters
3924.10.30 Trays
3924.10.50 Other .............. 3.4%
HTSUS (1997). The corresponding duty rate under HTSUS 3924.10.50 is 3.4% ad valorem.
Customs denied Plaintiffs protests. (Pretrial Order, Schedule C, Uncontested Facts ¶ 3.) All liquidated duties, charges, and exactions for the subject entries were paid prior to the commencement of this action. (Id.) Plaintiff seeks reliquidation of the subject entries and a full refund of duties paid together with interest as provided by law. (Complaint at 2-3.) In 2001, the parties filed cross-motions for summary judgment. In denying the parties' cross-motions for summary judgment, this Court held that there was a genuine issue of material fact as to the proper description of the subject merchandise. Dolly, Inc. v. United States, No. 98-04-00677, 2002 WL 1352440, *3, 2002 Ct. Int'l Trade LEXIS 58, at *9-*10 (Ct. Int'l Trade June 20, 2002).
Throughout the administrative process and this litigation, Plaintiff has continued to assert that the mini bags were "designed[,] manufactured, marketed and sold to provide the insulated transport and storage of infant and toddler's food and beverages." (Pretrial Order, Schedule D-1, Pl.'s Claims and Defenses ¶ 1.) As such, Plaintiff contends that the mini bags are correctly classified under 3924.10.50, HTSUS covering other household articles of plastic. (Id. ¶ 2.)
Defendant maintains that the bags at issue were properly classified by Customs as entered under heading 4202, HTSUS, covering travel bags and similar containers because the subject merchandise is "designed to hold during transport a variety of items used in caring for an infant or young child." (Pretrial Order, Schedule D-2, Def.'s Liability Claims and Defenses ¶ 1.) Defendant contends that the mini bags "are not principally used to prepare, serve or store food or beverages," as required under heading 3924; rather, the mini bags "are used to organize, store, protect and carry various items." (Id. ¶ 1-2.)
The Court held a bench trial on September 16, 2003, to resolve factual disputes surrounding the proper description of mini bags at issue and to determine the correct classification of the subject merchandise under the HTSUS.
The Court makes its determination de novo based upon the record before the Court, not upon the record developed by Customs. 28 U.S.C. § 2640. Customs classification rulings are usually accorded deference in proportion to their "power to persuade" following United States v. Mead Corp. and Skidmore v. Swift & Co. See Rubie's Costume Co. v. United States, 337 F.3d 1350, 1355 (Fed.Cir.2003) (citing United States v. Mead Corp., 533 U.S. 218, 235, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001), in turn quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944)). The Federal Circuit has noted that the Supreme Court's decision in Mead Rubie's Costume Co. v. United States, 337 F.3d 1350, 1355-1356 (Fed.Cir.2003) (). However, in this case, Customs summarily denied Plaintiff's protests of the classification without issuing an official ruling, therefore the Court will consider the parties arguments without deference. Hartog Foods v. United States, 291 F.3d 789, 791 (Fed.Cir.2002) ( ); see also Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1307-1308 (Fed.Cir.2003) ().
"Although Customs's decision `is presumed to be correct' on review, 28 U.S.C. § 2639(a)(1), the CIT `may consider any new ground' even if not raised below, § 2638, and `shall make its determinations upon the basis of the record made before the court,' rather than that developed by Customs, § 2640(a)." Mead, 533 U.S. at 233 n. 16, 121 S.Ct. 2164; see also G & R Produce Co. v. United States, 281 F.Supp.2d 1323, 1326 (CIT 2003); Int'l Home Textiles, Inc. v. United States, No. 99-10-00627, 2001 WL 910778, *2, n. 5, 2001 Ct. Int'l Trade LEXIS 110, at *6 n. 5 (CIT 2001). Under § 2639(a)(1), the presumption of correctness allocates the burden of proof to Plaintiff in presenting evidence that Customs' classification of the subject merchandise was incorrect. See Universal Electronics, Inc. v. United States, 112 F.3d 488, 493 (Fed.Cir.1997).
The General Rules of Interpretation (GRI) of the HTSUS and the Additional United States Rules of Interpretation direct the classification of merchandise entering the United States. See Len-Ron, 334 F.3d at 1308; Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed. Cir.1998). The HTSUS is organized by headings, followed by one or more subheadings which provide a more detailed segregation of the heading. Orlando Food, 140 F.3d at 1439. Under GRI 1, the Court must first construe the language of the heading and any section or chapter notes in question to determine whether the product at issue is classifiable under that heading. GRI 1, 6. After determining whether the merchandise is classifiable under the heading, the Court may look to the subheadings to find the correct classification for the merchandise at issue. Orlando Food, 140 F.3d at 1440; GRI 1, 6.
Determining the proper classification of the mini bags involves a two-step analysis: "(1) ascertaining the proper meaning of specific terms in the tariff provision; and (2) determining whether the merchandise at issues comes within the description of such terms as properly construed." Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391; see also Universal...
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