Franklin v. U.S.

• Decision Date: 28 March 2001
• Docket Number: Slip Op. 01-32.,No. 99-05-00283.,99-05-00283.
• Parties: Arthur L. FRANKLIN d/b/a Health Technologies Network, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

135 F.Supp.2d 1336

Arthur L. FRANKLIN d/b/a Health Technologies Network, Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 01-32.

No. 99-05-00283.

United States Court of International Trade.

March 28, 2001.

Vandeventer Black LLP, Norfolk, VA (Mark T. Coberly), for Plaintiff.

Stuart E. Shiffer, Acting Assistant Attorney General, Joseph I. Liebman, Attorney in Charge, International Trade Field Office, Aimee Lee, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice; Beth C. Brotman, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs Service, Washington, DC, for Defendant, of counsel.

OPINION

POGUE, Judge.

Plaintiff, Arthur L. Franklin d/b/a/ Health Technologies Network ("Arthur Franklin"), challenges a decision of the United States Customs Service ("Customs") denying Arthur Franklin's protests filed in accordance with section 514 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1514 (1994). At issue is the proper tariff classification under 19 U.S.C. § 1202, Harmonized Tariff Schedule of the United States ("HTSUS"), of Arthur Franklin's imports of coral sand packets marketed under the names "Ericssons Alka-Mine Coral Calcium" and "Alka-Line Coral Calcium," and identified as, respectively, "GRANULES OF NATURAL CORAL, Additive for Healthy Water," see Def.'s Ex. D, and "NATURAL MINERAL FOOD SUPPLEMENT, Additive for Healthy Water," see Def.'s Ex. J.

Arthur Franklin claims that the subject merchandise is classifiable under subheading 8421.21.00, HTSUS, covering "Filtering or purifying machinery and apparatus for liquids: For filtering or purifying water." Goods classifiable under subheading 8421.21.00 were subject to duty rates of 3.1% (1995), 2.3% (1996) and 1.6% (1997), ad valorem, for the years in which the subject merchandise was entered at the port of Norfolk, Virginia. Alternatively, Arthur Franklin claims classification under subheading 0508.00.00, HTSUS, as "Coral and similar materials, unworked or simply prepared but not otherwise worked...." Goods classifiable under 0508.00.00 were allowed to be entered duty free from 1995 to 1997.¹

Customs classified the merchandise under a residual or "basket" provision, subheading 2106.90.99, HTSUS, covering "Food preparations not elsewhere specified or included: Other...." Goods classifiable under subheading 2106.90.99 were subject to duty rates of 9.4% (1995), 8.8% (1996) and 8.2% (1997), ad valorem. Arthur Franklin protested Customs' classification and, in response, Customs issued Headquarters Ruling 962059 (Oct. 21, 1998). Arthur Franklin asks the Court to overturn Customs' Ruling and classify its merchandise under subheading 8421.21.00, or, in the alternative, subheading 0508.00.00.

Standard of Review

Jurisdiction is predicated on 28 U.S.C. § 1581(a); therefore, Customs' classification is subject to de novo review pursuant to 28 U.S.C. § 2640. Following the Federal Circuit's holding in Mead Corp. v. United States, 185 F.3d 1304, 1306-07 (Fed.Cir. 1999), cert. granted, 530 U.S. 1202, 120 S.Ct. 2193, 147 L.Ed.2d 231 (2000), the Court does not afford the deference articulated in Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), to Customs' standard classification rulings. Moreover, although there is a statutory presumption of correctness that attaches to Customs' classification decisions, see 28 U.S.C. § 2639(a)(1), that presumption is not relevant where the Court is presented with a question of law in a proper motion for summary judgment, see Universal Elecs. v. United States, 112 F.3d 488, 492 (Fed.Cir.1997).

This action is before the Court on summary judgment motions made by Arthur Franklin and Defendant, the United States, pursuant to USCIT Rule 56. Summary judgment is appropriate when the "pleadings depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." USCIT R. 56(c). A dispute is genuine "if the evidence is such that [the trier of fact] could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The court resolves any doubt over material factual issues in favor of the nonmoving party, and draws all reasonable inferences in its favor. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505; Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1390-91 (Fed.Cir.1987). Nevertheless, "[w]hen a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." USCIT R. 56(e).

Here, the parties agree that the imported merchandise is coral sand, to which a small amount of L-ascorbic acid has been added, and which has been packaged in one gram fiber bags. See Pl.'s Stmt. Undisputed Material Facts and Addition to Def.'s Stmt. Undisputed Material Facts at ("Pl.'s Stmt.") ¶¶ 2-4; Def.'s Stmt. Undisputed Material Facts ("Def.'s Stmt.") at ¶¶ 2-4; Def.'s Resp. Pl.'s Stmt. ("Def.'s Resp. Stmt.") at ¶ 4. Moreover, the parties agree that the effect of the merchandise is to increase the hardness and alkalinity of water, as well as to reduce bacteria and chlorine present in water.² See Pl.'s Stmt. at ¶¶ 7-11; Def.'s Stmt. at ¶¶ 7-11; Def.'s Resp. Stmt. at ¶¶ 7-11. Although the parties disagree as to the "principal use" of the merchandise, see Pl.'s Mem. at 12, Def.'s Mem. Supp. Mot. Summ. J. ("Def.'s Mem.") at 5, Pl.'s Reply Mem. Supp. Pl.'s Mot. Summ. J. ("Pl.'s Reply") at 5, Arthur Franklin has failed to set forth specific facts showing that this is a genuine issue for trial. See discussion infra Part I. Summary judgment is therefore appropriate.

The Court's analysis of a Customs classification issue proceeds in two steps: "first, [it] construe[s] the relevant classification headings; and second, [it] determine[s] under which of the properly construed tariff terms the merchandise at issue falls." Bausch & Lomb, 148 F.3d at 1365 (citing Universal Electronics, 112 F.3d at 491). While the first step is a question of law and the second step is a question of fact, see Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.Cir.1998), whether the imported merchandise is properly classified is ultimately a question of law. See Bausch & Lomb, 148 F.3d at 1365.

The Parties' Positions

Arthur Franklin argues that the imported merchandise is an apparatus for filtering or purifying liquids, and therefore classifiable under subheading 8421.21.00. See Pl.'s Mem. at 8-12. Upon placing the merchandise in a specified amount of water, the calcium carbonate in the coral increases the hardness (i.e., the amount of calcium carbonate), and thereby raises the alkalinity (i.e., the pH level) of the water. See id. at 9. The increase in alkalinity has the effect of killing bacteria present in the water. See id. Further, L-ascorbic acid, which is added to the coral sand, reacts with and neutralizes chlorine in the water. See id. at 2. Alternatively, Arthur Franklin claims that the addition of L-ascorbic acid does not take the merchandise outside of subheading 0508.00.00, which covers "unworked" or "simply prepared" coral. See id. at 12-13.

The United States responds that the merchandise adds rather than removes elements from water; as such, the merchandise does not function as a device for filtering or purifying for classification purposes. See Def.'s Mem. at 5. In any event, argues the United States, "the primary purpose of the imported substance is to increase the mineral content (hardness) and alkalinity (pH) of water through the addition of elements, and not to purify water." Id. Furthermore, the United States asserts that the merchandise is not classifiable under subheading 0508.00.00 because of the addition of L-ascorbic acid, and because the Chapter Notes preclude classification under chapter 0508 of goods that are ingested. See id. at 5-6. From its contention that the merchandise is similar to other products classified under subheading 2160.90.00, the United States concludes that Customs' classification of the merchandise as "other" food preparations under the basket provision of subheading 2106.90.99 was correct. See id. at 4-5.

Discussion

Orlando Food requires us first "to determine whether the product at issue is classifiable under the heading."³ Orlando Food, 140 F.3d at 1440. If the merchandise is classifiable under more than one heading, "The heading which provides the most specific description shall be preferred to headings providing a more general description." GRI 3(a), HTSUS; see also Orlando Food, 140 F.3d at 1440. The precise issue before the Court, then, is whether the subject merchandise is properly classified under any of the headings suggested by the parties. Because we find that the merchandise is classifiable under only one of the suggested headings, there is no relative specificity issue.

I. Whether the subject merchandise is a filtering or purifying device

This court has previously construed the tariff terms "filter" and "purify." In Noss Co. v. United States, 7 CIT 111, 588 F.Supp. 1408 (1984), aff'd 753 F.2d 1052 (Fed.Cir.1985), the court cited several lexicographic definitions of "purify" in analyzing heading 661, TSUS, which was replaced without any relevant change by heading 8421 in the HTSUS:

[T]o make pure: as to clear from material defilement or imperfection; free from impurities or noxious matter * * *. Webster's Third New International Dictionary (1981).

To free from admixture with foreign or vitiating elements; make clear or pure * * *. Funk & Wagnalls New Standard Dictionary of the English Language (1941)

[T]o remove unwanted constituents from a substance. McGraw-Hill Dictionary of...