S.C. Johnson & Son, Inc. v. United States, 121619 USCIT, 14-00184

Docket Nº:14-00184, Slip Op. 19-158
Opinion Judge:Jennifer Choe-Groves, Judge.
Party Name:S.C. JOHNSON & SON, INC., Plaintiff, v. UNITED STATES, Defendant.
Attorney:Michael E. Roll, Pisani & Roll, LLP, of Los Angeles, CA, argued for Plaintiff S.C. Johnson & Son, Inc. With him on the brief was Brett Ian Harris. Monica P. Triana, Trial Attorney, International Trade Field Office, U.S. Department of Justice, of New York, N.Y., argued for Defendant United States....
Judge Panel:Before: Jennifer Choe-Groves, Judge.
Case Date:December 16, 2019
Court:Court of International Trade
 
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S.C. JOHNSON & SON, INC., Plaintiff,

v.

UNITED STATES, Defendant.

No. 14-00184

Slip Op. 19-158

Court of Appeals of International Trade

December 16, 2019

[At the conclusion of a bench trial, holding that Ziploc® brand reclosable sandwich bags are classified under HTSUS Heading 3923.]

Michael E. Roll, Pisani & Roll, LLP, of Los Angeles, CA, argued for Plaintiff S.C. Johnson & Son, Inc. With him on the brief was Brett Ian Harris.

Monica P. Triana, Trial Attorney, International Trade Field Office, U.S. Department of Justice, of New York, N.Y., argued for Defendant United States. On the brief were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, Amy M. Rubin, Assistant Director, and Justin R. Miller, Attorney-In-Charge, International Trade Field Office. Of counsel was Sheryl A. French, Office of the Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, New York, N.Y. Jamie L. Shookman, U.S. Department of Justice, of New York, N.Y., also appeared.

Before: Jennifer Choe-Groves, Judge.

OPINION

Jennifer Choe-Groves, Judge.

The court held a bench trial to determine the classification under the Harmonized Tariff Schedule of the United States ("HTSUS") (2013) of "Ziploc®" brand reclosable plastic bags marketed by S.C. Johnson & Son, Inc. ("Plaintiff" or "S.C. Johnson"). The court denied summary judgment previously based on the existence of genuine issues of material fact. The parties requested that the court hold a bench trial "on the papers" after mutually agreeing to admit all documents, deposition transcripts, and reports into evidence. Pretrial Conference, 2:02:48-2:06:33, Nov. 30, 2018; ECF No. 98 ("Pretrial Conf."); see Pl.'s Post-Trial Mem. of Law, Mar. 8, 2019, ECF No. 111 ("Pl.'s Br."); Def.'s Written Closing Statement, Mar. 8, 2019, ECF No. 109 ("Def.'s Br."); USCIT R. 52(a)(1). Based on the following findings of fact and conclusions of law, the court concludes that the subject merchandise are properly classified under HTSUS Heading 3923.

BACKGROUND

S.C. Johnson entered 1, 512 cases of Ziploc® brand reclosable sandwich bags on May 15, 2013. Entry Summary, Entry No. 231-6143028-9, Packing List, Case File. At the time of entry, the subject merchandise were classified under HTSUS Heading 3923. See Pl.'s Rule 56.3 Statement of Material Facts Not in Dispute, Oct. 31, 2017, ECF No. 63-3 ("Pl.'s Facts") ¶¶ 1-2; Def.'s Resps. to Pl. S.C. Johnson's Rule 56.3 Statement of Material Facts, Dec. 23, 2017, ECF No. 73-3 ("Def. Facts Resp.") ¶¶ 1-2; Entry Summary, Entry No. 231-6143028-9, Packing List, Case File. Customs liquidated the entry on March 28, 2014. See Pl.'s Facts ¶ 3; Def. Facts Resp. ¶ 3; Summons, Aug. 1, 2014, ECF No. 1 ("Summons"). S.C. Johnson filed a protest and requested accelerated disposition on June 26, 2014. See Protest No. 2704-14.10192, Case File. The protest was deemed denied. 19 U.S.C. § 1515(b); see Protest No. 2704-14.10192, Case File; see also Summons 1.1

Plaintiff initiated this action on August 1, 2014. Summons 1; Compl. ¶ 1. Defendant answered on August 7, 2015. Answer, Aug. 7, 2015, ECF No. 15. The court granted test case designation on October 5, 2015. Order, Oct. 5, 2015, ECF No. 19; see USCIT R. 84 (2015); USCIT R. 83(e) (2019). This action was reassigned. Order of Reassignment, Jul. 19, 2016, ECF No. 33.

Plaintiff and Defendant filed cross-motions for summary judgment. Pl.'s Mot. for Summ. J., Nov. 11, 2017, ECF No. 63; Def.'s Cross-Mot. for Summary J., Dec. 22, 2017, ECF No. 71; S.C. Johnson & Son, Inc. v. United States, 42 CIT, 355 F.Supp.3d 1294 (2018) ("S.C. Johnson I"). In S.C. Johnson I, the court determined that HTSUS Heading 3923 was a principle use provision and HTSUS Heading 3924 was an eo nomine provision. Id. at 1300-01. Because there were genuine issues of material fact as to whether the subject merchandise fell within the terms of the HTSUS headings at issue, the court denied both motions for summary judgment and deferred classification of the subject merchandise until the conclusion of trial. Id. at 1301.

Pretrial conferences were held on September 25, 2018, November 14, 2018, and November 30, 2018. Pre-Trial Telephone Conference, Sept. 25, 2018, ECF No. 88; Pre-Trial Teleconference, Nov. 14, 2018, ECF No. 94; Telephone Conference, Nov. 30, 2018; ECF No. 98. The parties agreed to hold a bench trial on the papers, stipulating to the admission of all documents, deposition transcripts, and reports into evidence. Pretrial Conf. at 2:02:48-2:06:33. The court directed the Parties to file written closing arguments and a joint appendix. Order, Nov. 30, 2018, ECF No. 98. The Parties filed a joint appendix. Confidential J.A., Jan. 11, 2019, ECF No. 100.

Defendant filed a consent motion to stay this case following the lapse in appropriations for the U.S. Department of Justice. Consent Mot. to Stay, Jan. 16, 2019, ECF No. 101. The court granted the motion to stay. Order, Jan. 18, 2019, ECF No. 102. The court entered a scheduling order following restoration of appropriations for the U.S. Department of Justice. Scheduling Order, Feb. 4, 2019, ECF No. 104. The Parties filed written closing arguments. Pl.'s Br.; Def.'s Br. The Parties filed supplemental briefing. Pl.'s Br. Regarding Effect of Ford Motor Co. v. United States, Ct. No. 2018-1018, 2019 WL 2399346 (Fed. Cir. June 7, 2019), Jun. 18, 2019, ECF No. 117 ("Pl.'s Suppl. Br."); Def.'s Resp. to the Ct.'s June 11, 2019 Ltr., Jun. 20, 2019, ECF No. 119.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2012). The court reviews classification cases on the basis of the record made before the court. 28 U.S.C. § 2640(a).

FINDINGS OF FACT

After holding a bench trial, the court makes the following findings of fact: 1. The subject merchandise are plastic bags that measure six and one-half inches by five and seven-eighths inches and are approximately one millimeter thick. Pl.'s Facts ¶ 10; Def.'s Facts Resp. ¶ 10; Product Specifications, Ex. 3, Dec. 23, 2017, ECF No. 73-1.

2. The subject merchandise have an interior space that can accommodate relatively small items. See Def.'s Facts ¶ 5; Pl.'s Facts ¶¶ 48-51; Price Dep. 56:9-58:10, Feb. 2, 2017, J.A. 4 ("Price Dep.").

3. Each bag has a single zipper closure. See Def.'s Facts ¶ 7; Price Dep. 56:9-58:10, 78:17-24; Horn Dep. 40:3-7, Feb. 2, 2017, J.A. 6 ("Horn Dep.").

4. The zipper closure seals the bag using the inner locking of the two profiles. See Def.'s Facts ¶ 8, Price Dep. 11:9-17.

5. S.C. Johnson refers to the reclosable plastic bags of the size, shape, and thickness in this action as "sandwich" bags. See Pl.'s Facts ¶ 1; Def.'s Facts ¶ 10; Entry Summary, Entry No. 231-6143028-9, Waybill, Case File.

6. The subject merchandise are manufactured from polyethylene resin pellets that are used in an extrusion process to form both the film and plastic "zipper" seals on the bags. Pl.'s Facts ¶¶ 10, 42; Def.'s Facts Resp. ¶¶, 10, 42; Price Dep. 15:21-16:2, 31:17-32:6.

7. The subject merchandise are manufactured in Thailand. See Pl.'s Facts ¶ 11; Def.'s Facts Resp. ¶ 11; Patvibul Dep. 26:5-11, Jul. 19, 2017, J.A. 1.

8. The subject merchandise are imported into the United States in bulk boxes, containing 40 individual groups of 125 bags secured with a rubber band. See Pl.'s Facts ¶ 11; Def.'s Facts Resp. ¶ 11.

9. The groups of 125 bags are packaged for retail sale in the United States following importation. See Pl.'s Facts ¶ 11; Def.'s Facts Resp. ¶ 11.

10. The rubber bands used to secure the bundles of bags are required to be tested and approved for food contact. See Pl.'s Facts ¶ 20; Def.'s Facts Resp. ¶ 20; Price Dep. 36:12-18.

11. The bags are tested to confirm the absence of the chemical Bisphenol A ("BPA"). See Pl.'s Facts ¶ 14; Def.'s Facts Resp. ¶ 14; Price Dep. 14:16-20; 59:21-60:9.

12. S.C. Johnson requires its manufacturers to obtain Kosher certification. See Pl. Facts ¶ 19; Def. Facts Resp. ¶ 19; Price Dep. 58:25-59:20.

13. S.C. Johnson tests Ziploc® sandwich bags to be compatible with food contact. Price Dep., Ex. 13, Appx001437, J.A. 68.

14. Ziploc® brand reclosable plastic bags are sold in retail outlets, including warehouse stores, grocery stores, drug stores, discount stores, and via e-commerce. See Def.'s Facts ¶ 11, Pl.'s Facts Resp. ¶ 11; Horn Dep. 18:20-19:12, 22:23-24:24.

15. Retailers determine the location in the store where Ziploc® bags are sold. See Horn Dep. 40:24-41:20.

16. Consumers use sandwich bags to pack and store food items. Bigna Dep. 10:2-12, Feb. 3, 2017, J.A. 15 ("Bigna Dep.").

17. Consumers use sandwich bags to take food items...

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