Roche Vitamins Inc. v. United States

• Decision Date: 23 December 2010
• Docket Number: Slip Op. 10–140.Court No. 04–00175.
• Citation: 750 F.Supp.2d 1367
• Parties: ROCHE VITAMINS, INC., Plaintiff,v.UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

750 F.Supp.2d 1367

ROCHE VITAMINS, INC., Plaintiff,

v.UNITED STATES, Defendant.

Slip Op. 10–140.Court No. 04–00175.

United States Court of International Trade.

Dec. 23, 2010.

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, New York City (Erik D. Smithweiss, Robert B. Silverman, and Joseph M. Spraragen) for Plaintiff Roche Vitamins, Inc.Tony West, Assistant Attorney General; Barbara S. Williams, Attorney in Charge, International Trade Field Office, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Saul Davis); and Sheryl A. French, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, Of Counsel, for Defendant United States.

OPINION

WALLACH, Judge.

IINTRODUCTION

This matter comes before the court on the Motion for Summary Judgment filed by Plaintiff Roche Vitamins, Inc. (“Roche”) challenging the classification of merchandise by U.S. Customs and Border Protection (“Customs”). Jurisdiction exists pursuant to 28 U.S.C. § 1581(a). Because genuine issues of material fact affect the proper classification of Roche's imported merchandise, Roche's Motion for Summary Judgment is DENIED.

IIBACKGROUND

AThe Imported Merchandise

Beta-carotene is an organic colorant that has provitamin A activity. See Plaintiff's Statement of Material Facts Not In Dispute (“Roche's Facts”) ¶¶ 8, 10, 32, 33; Defendant's Response to Plaintiff's Statement of Material Facts Not in Dispute (“Defendant's Factual Response”) ¹ ¶¶ 8, 10, 32, 33. Beta-carotene must be combined with other ingredients to be used as a colorant or provitamin A. See Roche's Facts ¶ 14; Defendant's Factual Response ¶ 14. As explained by Roche's expert, the imported merchandise sold under the trade name “BetaTab 20%” is a reddish brown/orange powder that “consists of 20% by weight synthetic beta-carotene crystalline.” Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment (“Roche's Motion”) Att. 2: Declaration of Jean Claude Tritsch (“Tritsch Decl.”) ¶¶ 8, 9.

The individual particles of the powder contain a finely dispersed solution of beta carotene in a cornstarch-coated matrix of gelatin and sucrose. Antioxidants are also present in the particles.... BetaTab 20% is produced by dissolving beta carotene crystalline powder in a solvent along with [two additional, stabilizing antioxidants]. Separately, gelatin, sucrose, and [a third stabilizing antioxidant] are dissolved in the water. The two solutions are blended together to produce an emulsion after which the solvent is distilled from the emulsion. The emulsion is then sprayed as droplets into corn starch. The resulting particles are dried, freed from excess corn starch and filled into containers. The particles are in the shape of microspheres, and are referred to as beadlets.Id. ¶¶ 9, 10, 11.

“BetaTab 20% was developed, designed, and marketed as a source of beta-carotene for purposes of sale to makers of dietary supplements (tablets and capsules) who seek a high betacarotene/provitamin A content and antioxidant activity.” Plaintiff's Response to Defendant's Statement of Material Facts as to Which There Is No Genuine Dispute (“Roche's Factual Response”) ¶ 7; Defendant's Statement of Material Facts as to Which There Is No Genuine Dispute (“Defendant's Facts”) ¶ 7. “The Roche marketing materials for BetaTab 20% do not mention any intent or use ... as a food colorant.... Any colorant function in the actual use of BetaTab 20% is unintentional or ancillary.” Defendant's Facts ¶ 8; Roche's Factual Response ¶ 8.

BThe Classification By Customs And This Litigation

BetaTab 20% was imported into the United States by Roche in December 2002 alongside another Roche product, “B–Carotene 7% CWS.” Roche's Facts ¶¶ 1–3; Defendant's Factual Response ¶¶ 1–3. The CWS (“cold water soluble”) designation does not apply to BetaTab 20% because it will normally disperse only in a heated solution. See Tritsch Decl. ¶ 16; Defendant's Memorandum in Opposition to Plaintiff's Motion for Summary Judgment (“Defendant's Opposition”) at 7. Customs classified BetaTab 20% under subheading 2106.90.97 of the Harmonized Tariff Schedule of the United States (“HTSUS”) and assessed duties at the rate of 8.5% ad valorem plus 28.8 cents per kilogram. See Summons (April 23, 2004).

Roche filed a protest in March 2004 that was denied by Customs in April 2004. See id. Roche thereafter initiated this case. See Complaint (September 2, 2004). Roche alleged that both products should be classified under HTSUS subheading 3204.19.35 (normally dutiable at 3.1% ad valorem), id. ¶ 13, and eligible for duty-free entry pursuant to the HTSUS Pharmaceutical Appendix (“PA”), id. ¶ 16, or, alternatively, classified as duty-free under HTSUS Heading 2936, id. ¶ 19.² In 2009, Roche and Defendant United States (“Defendant”) stipulated that B–Carotene 7% CWS “is classifiable ... under subheading 3204.19.35, HTSUS (2002)” and “request[ed] that when final judgment in this action is entered, reliquidation be ordered ... according[ly].” November 13, 2009 Stipulation ¶¶ 3, 5.³

Roche now moves for summary judgment. See Roche's Motion. Defendant contends that the classification of BetaTab 20% under HTSUS subheading 2106.90.97 was proper, see Defendant's Opposition at 1–3, but if classification is found under Heading 3204, “then the merchandise is properly classifiable in subheading [3204.19.50], HTSUS, at a duty rate of [7.8%] ad valorem.” Answer (November 15, 2004) ¶ 22; see Defendant's Opposition at 9.

HTSUS Headings 2106, 2936, and 3204 and the relevant subheadings provide as follows:

+--------------------------------------------------------------+
                ¦2106   ¦Food preparations not elsewhere specified or included:¦
                +-------+------------------------------------------------------¦
                ¦....   ¦                                                      ¦
                +--------------------------------------------------------------+
                

2106.90        Other: 
                

2106.90.97             Other: 
                

                          Provitamins and vitamins, natural or reproduced by synthesis
                2936      (including natural concentrates), derivatives thereof used primarily
                          as vitamins, and intermixtures of the foregoing, whether or not in
                          any solvent
                

2936.10        Provitamins, unmixed
                

          Synthetic organic coloring matter, whether or not chemically defined;
                3204      preparations as specified in note 3 to this chapter based on
                          synthetic coloring matter; ....
                

3204.19           Other, including mixtures of coloring matter of two or more
                                  of the subheadings 3204.11 to 3204.19:
                

3204.19.35                  Beta-carotene and other carotenoid coloring matter
                ....
                                            Other:
                

3204.19.40                       Products described in additional U.S. note 3 to
                                                 section VI
                ....
                3204.19.50                       Other
                ....
                

Heading 2106, HTSUS (2002); Heading 2946, HTSUS (2002); Heading 3204, HTSUS (2002).

The HTSUS provides that certain imported products are eligible for duty-free entry pursuant to the PA. “Whenever a rate of duty of ‘Free’ followed by the symbol ‘K’ in parentheses appears in the ‘Special’ subcolumn for a heading or subheading, any product (by whatever name known) ... shall be entered free of duty, provided that such product is included in the [PA].” Gen. Note 13, HTSUS (2002) (emphasis in original). The PA identifies “BETACAROTENE,” [Chemical Abstracts Service Registry number] “7235–40–07.” Pharmaceutical Appendix, HTSUS (2002), Table 1. Subheading 3204.19.35 includes the following special rate of duty: “Free (... K ...).” Subheading 3204.19.35, HTSUS (2002).

IIISTANDARD OF DETERMINATION

In a classification case, “the court construes the relevant (competing) classification headings, a question of law; determines what the merchandise at issue is, a question of fact; and then” determines “the proper classification under which [the merchandise] falls, the ultimate question in every classification case and one that has always been treated as a question of law.” Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1366 (Fed.Cir.1998).

The court will grant a motion for summary judgment “if the pleadings, discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” USCIT R. 56(c); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). On a motion for summary judgment, this court “may not resolve or try factual issues.” Phone–Mate, Inc. v. United States, 690 F.Supp. 1048, 12 CIT 575, 577 (1988), aff'd, 867 F.2d 1404 (Fed.Cir.1989) (citation omitted). Accordingly, summary judgment in a classification case is appropriate only if “the material facts of what the merchandise is and what it does are not at issue.” Diachem Indus. Ltd. v. United States, 22 CIT 889, 892 (1998) (citation omitted).

The court determines the proper classification de novo by applying the HTSUS General Rules of Interpretation (“GRIs”) in numerical order, as well as the HTSUS Additional Rules of Interpretation (“ARI”). See Faus Group, Inc. v. United States, 581 F.3d 1369, 1372 (Fed.Cir.2009); Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed.Cir.1999); Rollerblade, Inc. v. United States, 112 F.3d 481, 483–84 (Fed.Cir.1997). The GRI 1 starting point provides in relevant part that, “for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes.” GRI 1, HTSUS (2002).

“Absent contrary legislative intent, HTSUS terms are to be construed according to their common and commercial meanings, which are presumed to be the same.” Carl Zeiss, 195 F.3d at 1379 (citing Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed.Cir.1989)). “To assist it in ascertaining the common meaning of a tariff term, the court may rely on its own...