Infantino, LLC v. United States, Slip Op. 14-155
| Decision Date | 24 December 2014 |
| Docket Number | Court No. 11-00497,Slip Op. 14-155 |
| Parties | INFANTINO, LLC, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Before: Richard W. Goldberg, Senior Judge
OPINION[Plaintiff's motion for summary judgment is granted; defendant's cross-motion for summary judgment is denied.]
Mandy A. Edwards and S. Richard Shostak, Stein Shostak Shostak Pollack & O'Hara, LLP, of Los Angeles, CA, for plaintiff.
Beverly A. Farrell, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were Stuart F. Delery, Assistant Attorney General, and Amy M. Rubin, Acting Assistant Director, International Trade Field Office. Of counsel on the brief was Sheryl A. French, Attorney, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of New York, NY.
Goldberg, Senior Judge: At issue is the proper classification of merchandise sold under the name Shop & Play® Funny Farmer ("Funny Farmer" or "merchandise")1 and imported by Plaintiff Infantino, LLC ("Infantino"). Infantino and the United States (the "Government") have cross-moved for summary judgment. The Government argues that U.S. Customs and Border Protection ("Customs" or "CBP") correctly classified the merchandise under U.S. Harmonized Tariff Schedule ("HTSUS") subheading 9404.90.20. Infantino claims that the merchandise isproperly classifiable under HTSUS subheading 9503.00.00. Merchandise under HTSUS subheading 9503.00.00 enters duty free, while merchandise under HTSUS 9404.90.20 carries a six percent ad valorem duty. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2012). As set forth below, the court grants Infantino's motion for summary judgment and denies the Government's cross-motion for summary judgment.
The Funny Farmer is sold under the Shop & Play® brand as a "2-in-1 play mat" specially designed for use both as a normal play mat and inside of a shopping cart. See Pl.'s Mot. for Summ. J. ("Pl.'s Br.") at Ex. 1, ECF No. 39; Def.'s Opp'n to Pl.'s Mot. for Summ. J. & Cross-Mot. for Summ. J. ("Def.'s Br.") at Ex. E at 2, ECF No. 45. It measures approximately nineteen to twenty inches wide and forty-five inches long and is stuffed with a uniform, light polyester-fiber batting. See Pl.'s Br. at Decl. of Wendy McLean ¶ 4 & Ex. 1. One side of the Funny Farmer is a solid blue color, while the activity side depicts a farm theme and contains brightly colored graphics, five removable activity toys, and one sewn-in activity toy. Id. Some of the merchandise's features enable its shopping-cart use, such as a detachable waist belt, leg flaps, a crescent-shaped detachable bolster pillow decorated like a pea pod, small pockets designed as a "convenience add-on" for parents to store items, and Velcro that secures the mat to the shopping-cart seat. Def.'s Br. at Ex. C ("Cosky Dep.") at 49:8; see Pl.'s Br. at Decl. of Wendy McLean ¶¶ 4-6 & Ex. 1. The packaging for the Funny Farmer advertises the Funny Farmer's dual use as both the "perfect mat for tummy time play" and an in-cart mat that "turns any shopping cart into a clean, comfy activity center." Pl.'s Br. at Ex. 1.
See Compl. ¶¶ 3, 6, ECF No. 5; Pl.'s Br. 3. Customs denied that protest, apparently without extensive analysis, on August 5, 2011. See Compl. ¶ 3. The propriety of Customs' protest denial is the subject of the instant action. Infantino claims that the denial is in error, reasserting that the Funny Farmer must be classified under subheading 9503.00.00. The Government claims that the protest was properly denied, because the original 9404.90.20 subheading was correct.
Although the protest denial in this case was executed summarily, Customs earlier issued a more detailed ruling that classified identical or nearly identical merchandise imported by Infantino. See Def.'s Br. at Ex. F ("HQ H031397"). The issue in HQ H031397 was the same: whether the merchandise had been properly classified under HTSUS heading 9404 or should have been classified, per Infantino's protest, under 9503. Id. at 2. In order to decide whether 9503 was the proper heading, Customs analyzed whether the primary purpose of the merchandisewas "to amuse or to provide a utilitarian/functional quality." Id. at 3. To that end, Customs considered several of the analytical factors set forth in United States v. Carborundum Co., 63 CCPA 98, 102, 536 F.2d 373, 377 (1976). Specifically, Customs considered "(1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels, class or kind of trade in which the merchandise moves; (4) the environment of the sale . . . ; [and] (5) usage, if any, in the same manner as merchandise" principally designed for amusement. HQ H031397 at 3. Customs ultimately determined that, though the Funny Farmer "has some amusing features incorporated into the design, this is outweighed by the utilitarian design and purpose of the article which is intended to provide for the safety and comfort of infants while in a shopping cart." Id. at 4. Thus, Customs denied Infantino's protest and upheld the Funny Farmer's classification under heading 9404. Id. at 5.
In the context of a protest denial, the court reviews CBP's findings of fact and conclusions of law de novo. See 28 U.S.C. §§ 2639(a)(1), 2640(a); Tyco Fire Prods. L.P. v. United States, 37 CIT ___, ___, 918 F. Supp. 2d 1334, 1339 (2013). The court arrives at the proper classification by first determining the meaning of the relevant tariff provisions (a question of law) and then deciding under which of the properly construed tariff provisions the merchandise at issue falls (a question of fact). See Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1365-66 (Fed. Cir. 1998). Though the court accords "respect" to CBP's classification rulings "proportional to [their] 'power to persuade,'" United States v. Mead Corp., 533 U.S. 218, 235 (2001) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (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).
Summary judgment is appropriate if, viewing the evidence in a light most favorable to the nonmoving party, "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." USCIT R. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). In a classification case, this means that summary judgment is appropriate when "there is no genuine dispute as to the underlying factual issue of exactly what the merchandise is." Bausch & Lomb, 148 F.3d at 1365.
The court now considers Infantino's and the Government's claims and holds that the Funny Farmer is properly classified as a toy under subheading 9503.00.00. The rationale for this holding must be prefaced with a brief explanation of the import-classification process.
Import classifications are governed by the General Rules of Interpretation ("GRIs") of the HTSUS and any applicable Additional United States Rules of Interpretation. See Dependable Packaging Solutions, Inc. v. United States, 757 F.3d 1374, 1377 (Fed. Cir. 2014). The GRIs are applied in numerical order. Id. Accordingly, the court's analysis begins with GRI 1, which provides that "classification shall be determined according to the terms of the [HTSUS chapter] headings and any relative section or chapter notes." Id. at 1377-78.2 In evaluating whether subject merchandise fits within a particular heading, the court generally construes HTSUS terms "'according to their common and commercial meanings, which are presumed to be the same.'" Id. at 1378 (quoting Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999)). In its analysis, the court may also consult the World Customs Organization's "Explanatory Notes,"which, though not legally binding, are "generally indicative of the proper interpretation of the various HTSUS provisions." Kahrs Int'l, Inc. v. United States, 713 F.3d 640, 644-45 (Fed. Cir. 2013). If, consulting these sources, "the proper heading can be determined under GRI 1, the court is not to look to the subsequent GRIs." Dependable Packaging, 757 F.3d at 1378.
If, however, the proper heading cannot be determined under GRI 1 because the merchandise is prima facie classifiable under two or more headings, the court moves to GRI 3. GRI 3(a) provides that, in such a case, "[t]he heading which provides the most specific description shall be preferred to headings providing a more general description." In cases when GRI 3(a) is unavailing, GRI 3(b) offers guidance for composite goods. Under GRI 3(b), composite goods "shall be classified as if they consisted of the material or component which gives them their...
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