Len-Ron Mfg. Co., Inc. v. U.S., Slip Op. 00-116.

• Decision Date: 01 September 2000
• Docket Number: Slip Op. 00-116.,Court Nos. 94-08-00488.
• Parties: LEN-RON MANUFACTURING CO., INC., et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

118 F.Supp.2d 1266

LEN-RON MANUFACTURING CO., INC., et al., Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 00-116.

Court Nos. 94-08-00488.

United States Court of International Trade.

September 1, 2000.

Soller, Shayne & Horn (William C. Shayne and Margaret Hardy Sachter), New York, New York, for plaintiffs, of counsel.

David W. Ogden, Assistant Attorney General of the United States; Joseph I Liebman, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice (Mikki Graves Walser); Chi S. Choy, Office of the Assistant Chief Counsel, International Trade Litigation, United States Customs Service, for defendant, of counsel.

OPINION

CARMAN, Chief Judge.

Plaintiffs, Len-Ron Manufacturing Co., Inc., et al., (Len-Ron) move for partial summary judgment pursuant to U.S. CIT R. 56(a), contending they are entitled to judgment as a matter of law because the United States Customs Service (Customs) improperly classified the merchandise at issue under subheading 4202.92.45, Harmonized Tariff Schedule of the United States (HTSUS), as "Other ... With outer surface of sheeting of plastic ... Travel, sports and similar bags ... Other," dutiable at a rate of 20% ad valorem. Plaintiffs argue the imported merchandise is classified properly under subheading 4202.32.10, HTSUS, as "Articles of a kind normally carried in the pocket or in the handbag ... With outer surface of sheeting of plastic ... Of reinforced or laminated plastics," dutiable at a rate of 12.1¢/kg + 4.6% ad valorem.

Defendant, United States, opposes plaintiffs' motion. Pursuant to U.S. CIT R. 12(b)(1), defendant moves to dismiss for lack of jurisdiction under 28 U.S.C. § 1581(a)(1994) those entries included in the summons and complaint whose classification was not protested by plaintiffs pursuant to 19 U.S.C. § 1514(1994). Defendant, also, cross-moves for partial summary judgment pursuant to U.S. CIT R. 56(b), contending it is entitled to judgment as a matter of law because the merchandise is classifiable under subheading 4202.12.20, HTSUS, as "[V]anity cases ... With outer surface of plastics," dutiable at a rate of 20% ad valorem¹ and, in the alternative, affirm Customs's classification under subheading 4202.92.45, HTSUS. Plaintiffs oppose defendant's motions.

Held: The Court finds there are no genuine issues of material fact and partial summary judgment is appropriate. The Court holds the merchandise at issue is classifiable under subheading 4202.12.20, HTSUS. Accordingly, plaintiffs' Motion for Partial Summary Judgment is denied, and defendant's Cross-Motion for Partial Summary Judgment is granted. The Court grants defendant's Motion to Dismiss in Part for Lack of Jurisdiction with respect to those entries subject to defendant's motion and to the classification cause of action only.

Plaintiffs, Len-Ron Manufacturing Co., Inc., et al., (Len-Ron) move for partial summary judgment pursuant to U.S. CIT R. 56(a), contending they are entitled to judgment as a matter of law because the United States Customs Service (Customs) improperly classified the merchandise at issue under subheading 4202.92.45, Harmonized Tariff Schedule of the United States (HTSUS), as "Other ... With outer surface of sheeting of plastic ... Travel, sports and similar bags ... Other," dutiable at a rate of 20% ad valorem.² Plaintiffs argue³ the imported merchandise is classified properly under subheading 4202.32.10, HTSUS, as "Articles of a kind normally carried in the pocket or in the handbag ... With outer surface of sheeting of plastic ... Of reinforced or laminated plastics," dutiable at a rate of 12.1¢/kg + 4.6% ad valorem.⁴

Defendant, United States, opposes plaintiffs' motion. Pursuant to U.S. CIT R. 12(b)(1), defendant moves to dismiss in part for lack of jurisdiction under 28 U.S.C. § 1581(a)(1994) those entries included in the Summons and Complaint whose classification was not protested by plaintiffs pursuant to 19 U.S.C. § 1514 (1994).⁵ Defendant, also, cross-moves for partial summary judgment pursuant to U.S. CIT R. 56(b),⁶ contending it is entitled to judgment as a matter of law because the merchandise is classifiable properly under subheading 4202.12.20, HTSUS, as "[V]anity cases ... With outer surface of plastics," dutiable at a rate of 20% ad valorem⁷ and, in the alternative, under subheading 4202.92.45, HTSUS. Plaintiffs oppose defendant's motions. This Court has jurisdiction pursuant to 28 U.S.C. § 1581(a)(1994).

I. BACKGROUND

Plaintiffs are manufacturers and distributors of cosmetics. The complaints in this consolidated action⁸ raise two independent causes of action. The first cause of action contests Customs's classification of the merchandise at issue under subheading 4202.92.45, HTSUS, as "Other ... With outer surface of sheeting of plastic ... Travel, sports and similar bags ... Other," dutiable at a rate of 20% ad valorem. The second cause of action contests Customs's appraisement decisions with regard to certain entries. Of the entries at issue in this action, plaintiffs contest the classification of thirty-nine entries. However, there are twenty-three other entries in which plaintiffs only contest the appraisement decisions made by Customs.⁹ Those twenty-three entries are not reached by this opinion.

The merchandise at issue consists of variously shaped cosmetics bags,¹⁰ articles of which have been invoiced by plaintiffs as "rectangular bag, halfmoon bag, fabric bag, travel bag, PVC sponge bag, reusable bag, cosmetic case, cosmetic bag, GWP sunnysider, hatbox U.S.A. bag, new stone open bag, horizontal tote, fabric mirror pouch, nylon cosmetic bag, generic bag, nylon drawstring bag, and cosmetic pouch." (Memorandum in Support of Defendant's Motion to Dismiss in Part and Defendant's Cross-Motion for Partial Summary Judgment (Defendant's Motion) at 1-2.) Made with an outer surface of polyvinyl chloride (PVC) and an inner lining of polyvinyl sheathing,¹¹ the cosmetics bags are supple, non-rigid and not supported by frames.

Plaintiffs import the merchandise at issue for use as promotional items to be presented to customers upon the purchase of a certain amount of plaintiffs' cosmetic and toiletry products, either as a free premium or at a nominal additional cost. Articles of merchandise are used to contain, organize and segregate cosmetic and toiletry products and some are small enough to be housed¹² within a handbag.¹³

II. CONTENTIONS OF THE PARTIES

A. Plaintiffs

1. Plaintiffs' Opposition to Defendant's Motion to Dismiss in Part

Plaintiffs oppose defendant's motion to dismiss for lack of jurisdiction certain entries for which plaintiffs did not protest classification. Plaintiffs argue defendant's motion is premature, irrelevant to the cross-motions for summary judgment before the Court, and the Court should deny the motion with leave for defendant to renew.

Even though plaintiffs admit no protests regarding classification were filed for the twenty-three entries for which defendant seeks dismissal, plaintiffs contend the Court should proceed to determine the proper classification of the merchandise without dismissing the classification claims with respect to those twenty-three entries. Plaintiffs argue the cross-motions for partial summary judgment before the Court involve a legal question concerning the scope and meaning of three tariff provisions, and the Court's judgment in no way depends upon how many or which entries will be affected. Plaintiffs maintain determination of the entries affected by the Court's judgment is largely a clerical task to be undertaken when the Court's judgment is executed. At that point, plaintiffs propose, defendant should be allowed to renew its motion to dismiss certain entries, or the parties may stipulate to a list of entries to which the judgment applies.

2. Plaintiffs' Motion for Partial Summary Judgment

Plaintiffs contend no genuine issues of material fact exist, and they are entitled to judgment as a matter of law. Len-Ron argues Customs improperly classified the cosmetics bags under subheading 4202.92.45, HTSUS, as "Other ... Travel, sports and similar bags ... Other," dutiable at a rate of 20% ad valorem. Plaintiffs also assert defendant's proposed alternative classification for the merchandise at issue under subheading 4202.12.20, HTSUS, as "[V]anity cases," dutiable at a rate of 20% ad valorem, is incorrect. Len-Ron contends the merchandise at issue is classified properly under subheading 4202.32.10, HTSUS, as "Articles of a kind normally carried in the pocket or in the handbag," dutiable at a rate of 12.1¢/kg + 4.6% ad valorem.

a. Proper Classification of the Merchandise at Issue under Subheading 4202.32, HTSUS, as "Articles of a kind normally carried in the pocket or in the handbag."

Plaintiffs argue the cosmetics bags at issue are normally carried by women in a handbag to hold, segregate and protect cosmetics. A cosmetics bag, plaintiffs argue, is similar to other personal articles, e.g., wallet, change purse, organizer, women normally carry in their handbags for daily use. Plaintiffs maintain the cosmetics bags at issue are not carried normally as a separate bag or container. Therefore, plaintiffs argue subheading 4202.32, HTSUS, "Articles of a kind normally carried in the pocket or in the handbag" encompasses the merchandise at issue.

Plaintiffs also argue legislative history supports classification of the cosmetics bags under subheading 4202.32, HTSUS. Len-Ron contends analysis of the statute establishes subheading 4202.32, HTSUS, as a use provision. Plaintiffs maintain legislative history supports a use-based interpretation of the statute rather than one based solely on the exemplars listed in the statute and Explanatory Notes for Chapter 42.02, HTSUS.¹⁴ According to plaintiffs, the Harmonized System Committee (HSC) of the Customs Cooperation Council's use of the phrase "Articles of a kind normally carried in the pocket or...