Pillsbury Co. v. U.S.
| Decision Date | 12 July 2004 |
| Docket Number | No. Slip Op. 04-84.,Court No. 00-12-00570.,Slip Op. 04-84. |
| Citation | 341 F.Supp.2d 1290 |
| Parties | The PILLSBURY CO., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Neville Peterson, LLP, (John M. Peterson, New York City, Curtis W. Knauss, Westfield, NJ) for Plaintiffs.
Peter D. Keisler, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Department of Justice, Civil Division, Commercial Litigation Branch; Saul Davis, Department of Justice, Civil Division, Commercial Litigation Branch; Michael Heydrich, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, for Defendant, of counsel.
FINDINGS OF FACT & CONCLUSIONS OF LAW
This matter is before the court for decision following a bench trial on November 13, 2003, and November 14, 2003. Plaintiff, the Pillsbury Company, challenges the United States Customs Service's1 ("Customs") decision to classify certain entries of frozen dessert bars as dairy products under Harmonized Tariff Schedule of the United States ("HTSUS") subheading 2105.00.40 (1999). Plaintiff seeks an order directing reliquidation of these entries, classification of the subject merchandise under HTSUS Subheading 2105.00.50, or in the alternative under HTSUS Subheading 0403.10.90.00,2 and a refund of all duties paid, plus interest. This Court has exclusive jurisdiction pursuant to 28 U.S.C. § 1581(a) (1994), which provides for judicial review of denied protests filed in compliance with the provisions of 19 U.S.C. § 1514 (1999). Pursuant to the following findings of fact and conclusions of law, and in accordance with USCIT R. 52(a), the court enters a final judgment in favor of the Defendant and against Plaintiff.
Plaintiff entered certain Haagen-Dazs brand frozen dessert bars from Canada, through the Port of Detroit, Michigan, between March 30, 1999, and September 17, 1999. The subject merchandise is comprised of two flavors of Haagen-Dazs brand frozen dessert bars. One has chocolate sorbet on the outside and vanilla yogurt on the inside, one with raspberry sorbet on the outside and vanilla yogurt on the inside.3 Between February 11, 2000, and July 28, 2000, Customs classified the imported frozen dessert bars under HTSUS Subheading 2105.00.40,4 assessed duty thereon at the rate of 51.7¢ plus 17.5% ad valorem, and liquidated accordingly. Plaintiff paid all liquidated duties, fees and charges prior to the commencement of this action. Between May 10, 2000, and July 31, 2000, Plaintiff filed four timely protests with the Port Director at Detroit, Michigan, challenging Customs' classification. It claimed that the frozen dessert bars were properly classified under HTSUS Subheading 2105.00.50, and entitled to duty-free entry under NAFTA. Customs denied Plaintiff's protests between July 7, 2000, and October 26, 2000. On December 18, 2000, Plaintiff commenced the instant action by filing a Summons with the Clerk of the Court.
In its Complaint, Plaintiff claims that the subject merchandise is properly classified under HTSUS subheading 2105.00.50, or, in the alternative, under HTSUS Subheading 0403.10.90.00, and seeks a refund of all duties paid, plus interest. The basis of Plaintiff's claim is that the dessert bars are neither primarily characterized by their frozen yogurt component, nor is that component properly classified as a "product of milk" as defined in HTSUS.
Defendant claims that the dessert bars were properly classified and thus requests judgment in its favor, affirming its classification and assessment of duties. Defendant contends that the frozen dessert bars are properly classifiable as `articles of milk,' a term which they contend, under statutory interpretation and case law, is broader than `milk.' Defendant states that, based on industry standards for ice cream and frozen yogurt, as well as the primary ingredients of the subject product, the frozen yogurt is the basis of the product, it's essential nature, whereas the sorbet portion is correctly viewed as a flavoring or coating. Furthermore, according to Defendant, the yogurt core is not, in fact yogurt, but, based on limited portion of fermented ingredients, milk.
The parties' contentions center on classifying the subject desert bars under one of three possible HTSUS subheadings, 2105.00.40 (requiring a finding that the yogurt portion predominates and that said portion constitutes an article of milk or cream as defined in U.S. note 1 to chapter 4 of the HTSUS), 0403.10.90.00 (requiring a finding that the yogurt portion predominates and that said portion constitutes yogurt), or 2105.00.50 (requiring a finding that the sorbet portion predominates). Ultimately, which of the three categories these items fall into depends on whether essential character is the `yogurt' portion. If the essential character is the sorbet portion, HTSUS subheading 2105.00.50 is eliminated as a possibility. If the essential character is the `yogurt' portion, and this portion is properly characterized as an `article of milk', Customs initial finding is confirmed. If the `yogurt' portion is characterized as `yogurt', its proper classification lies under 0403.10.90.00.5
Plaintiff paid all liquidated duties and charges prior to the timely commencement of this action. Although Customs's decisions are entitled to a presumption of correctness under 28 U.S.C. § 2639(a)(1) (1994), the Court makes its determinations upon the basis of the record made before the Court, rather than that developed by Customs. See United States v. Mead Corp., 533 U.S. 218, 233 n. 16, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Accordingly, the Court makes the following findings of fact and conclusions of law as a result of the de novo trial. See 28 U.S.C. § 2640(a) (1994).
FINDINGS OF FACT
1. The merchandise which is the subject of this case (the "subject merchandise") consists of frozen dessert bars. Two varieties of the subject merchandise are included in this case: (A) one bar consists of an outer shell of raspberry flavored sorbet and an inner filling of vanilla-flavored frozen yogurt, and (B) the second bar consists of an outer shell of chocolate-flavored sorbet and an inner filling of vanilla-flavored frozen yogurt.
2. In their condition as imported, the dessert bars are frozen, and are packaged for retail sale. Each of the frozen dessert bars features a wooden stick which is used to hold the bars while they are being eaten.
3. Between March 30, 1999, and September 17, 1999, Plaintiff entered at the Port of Detroit, Michigan, under cover of consumption entries listed in the Summons, shipments containing the subject merchandise; frozen dessert bars.
4. Between February 11, 2000, and July 28, 2000, the Post Director of Customs at the Port of Detroit, Michigan liquidated the subject entries, classifying the imported frozen dessert bars in liquidation under HTSUS Subheading 2105.00.40, as "Ice cream and other edible ice, whether or not containing cocoa: Other: Dairy products described in additional U.S. note 1 to chapter 4: Other" and assessing duty thereon at the rate of 51.7¢ plus 17.5% ad valorem. Plaintiff paid all liquidated duties, fees and charges prior to the commencement of this action.
5. Between May 10, 2000, and July 31, 2000, Plaintiff caused to be filed with the Port Director of Customs at Detroit, Michigan, timely protests, challenging the classification in liquidation of the imported merchandise, and asserting that the frozen dessert bars are properly classified under HTSUS Subheading 2105.00.50, as "Ice cream and other edible ice, whether or not containing cocoa: Other: Other" and entitled to duty-free entry under NAFTA.
6. The Port Director of Customs denied Plaintiff's protests between July 7, 2000, and October 26, 2000.
7. On December 18, 2000, Plaintiff timely commenced the instant action by filing a Summons with the Clerk of the Court.
8. Neither the imported frozen dessert bars, nor any component thereof, constitute or consists of "ice cream," as that term is commonly or commercially known. The imported frozen dessert bars are not classifiable under HTSUS subheadings 2105.00.05 through 2105.00.20.
9. The merchandise which is the subject of this action was also the subject of New York Customs Ruling Letter No. D84417 (Dec. 3, 1998), in which the Bureau of Customs and Border Protection (then the United States Customs Service) classified the subject merchandise under HTSUS subheading 2105.00.40.
10. Plaintiff's current packaging, entered into evidence as Plaintiff's exhibit 2, differs from the subject merchandise as imported. However, although the box has been updated, the subject frozen dessert bars inside remain unchanged.
11. The current packaging states that the box contains "FAT FREE VANILLA FROZEN YOGURT COATED WITH RASPBERRY SORBET." The packaging also specifies that "[w]e take rich, creamy Haagen-Dazs yogurt and dip it in incredibly smooth Haagen-Dazs sorbet ..."
12. Although the packaging specifies that the yogurt is dipped in sorbet, in manufacturing the subject merchandise, the sorbet is, in fact, poured into a mold and chilled. When it reaches a certain temperature a portion of the unfrozen center is "sucked back" and saved for future use. The frozen yogurt portion is then injected into the void to create the frozen yogurt center.
13. Haagen-Dazs' development and marketing documentation demonstrates that the yogurt portion of the dessert bars was tested with a variety of flavorings. The documentation indicates that the subject merchandise was consistently identified by the yogurt component. ("Pl.Ex.") 11-14.
14. The yogurt portion of the subject merchandise weighs 32 grams. The raspberry portion of that flavor of dessert bar weighs 36 grams. The chocolate...
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The Pillsbury Co. v. U.S.
...Haagen-Dazs dessert bars by the United States Bureau of Customs and Border Protection ("Customs").1 Pillsbury Co. v. United States, 341 F.Supp.2d 1290 (Ct. Int'l Trade 2004). Because the finding that the Haagen-Dazs dessert bars are not predominantly sorbet, but frozen ice milk intermixed w......