StarKist Co. v. United States
| Decision Date | 18 November 2020 |
| Docket Number | Slip Op. 20-164,Court No. 14-00068 |
| Citation | 485 F.Supp.3d 1362 |
| Parties | STARKIST CO., Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Michael E. Roll and Brett Ian Harris, Roll & Harris LLP, for plaintiff.
Alexander Vanderweide, Trial Attorney, Civil Division, Commercial Litigation Branch, U.S. Department of Justice, of Washington, D.C., for defendant United States. With him on the brief was Justin R. Miller, Attorney-in-Charge, Jeanne E. Davidson, Director, and Ethan P. Davis, Acting Assistant Attorney General. Of Counsel was Sheryl A. French, Office of the Assistant Chief Counsel, U.S. Customs and Border Protection.
Plaintiff StarKist Co. ("StarKist" or "plaintiff"), an importer of tuna fish products, challenges a decision by United States Customs and Border Protection ("Customs") to classify four tuna salad products under subheading 1604.14.10 of the Harmonized Tariff Schedule of the United States (HTSUS),1 which covers prepared or preserved fish, specifically and carries a 35% ad valorem duty.
Customs liquidated the entries in question on different dates from February through May 2013, and StarKist filed two separate protests to challenge the tariff classification at liquidation. On January 22, 2016, plaintiff filed a complaint regarding the appropriate classification of these products. Plaintiff argues that the products at issue are correctly classified under subheading 1604.20.05, which covers "prepared meals" that are not "minced," and carries a 10% ad valorem duty. Alternatively, plaintiff argues that the products are correctly classified under subheadings 1604.14.22 and 1604.14.30, which cover tuna that is not "minced" and not "in oil," and carry 6% and 12.5% ad valorem duties, respectively. The question presented is which of these subheadings properly covers the subject merchandise.
This dispute involves the classification of four StarKist tuna fish products. Pl.'s Statement of Material Facts Not in Issue ¶¶ 1, 3-4 ( ); Def.'s Resp. to Pl.'s Statement of Material Facts Not in Issue ¶¶ 1, 3-4 ( ). The four products at issue are: Tuna Salad Chunk Light (Lunch-to-Go pouches); Tuna Salad Albacore (Lunch-to-Go pouches); Tuna Salad Albacore (24 retail pouches); and Tuna Salad Albacore (60 retail pouches). The subject merchandise contains cooked tuna mixed with celery, water chestnuts and a starch-based dressing. Id. Tuna Salad Albacore contains albacore tuna and white meat mayo, while Tuna Salad Chunk Light contains non-albacore tuna and light meat mayo. Pl. Stmt. Facts ¶¶ 3-4; Def. Resp. Pl. Stmt. ¶¶ 3-4. The subject merchandise is exported to the United States in two different forms: as retail pouch packs, which contain individual pouches of tuna, or as Lunch-to-Go kits, which include a tuna pouch and a mint, spoon, napkin and crackers. Pl. Stmt. Facts ¶ 2; Def. Resp. Pl. Stmt. ¶ 2.
All four varieties of the subject merchandise undergo the same four steps in manufacturing: (1) garnish preparation, (2) the dressing phase, (3) the tuna phase, and, (4) the filling and finishing phase. Pl. Stmt. Facts ¶ 5; Def. Resp. Pl. Stmt. ¶ 5. During the garnish preparation phase, celery and water chestnuts are hand mixed. Id. During the dressing phase, a mayo base dressing and relish are hand mixed with the blended celery and water chestnuts. Id. The white meat mayo and the light meat mayo, which comprise the mayo base dressing for the Tuna Salad Albacore and the Tuna Salad Chunk Light, respectively, are purchased as finished products from an entity unrelated to StarKist. Pl. Stmt. Facts ¶¶ 27, 30; Def. Resp. Pl. Stmt. ¶¶ 27, 30. No additional oil is added to either mayo base beyond its ingredients. Pl. Stmt. Facts ¶ 30; Def. Resp. Pl. Stmt. ¶ 30. Both mayo base products contain approximately 12 to 13 percent soybean oil. Id. ¶¶ 28-29.2
During the tuna phase, tuna is chopped to a thickness of 0.8-1.0 inches for the Albacore, and 1.0-1.5 inches for the Chunk Light. Pl. Stmt. Facts ¶¶ 21-22, 25; Def. Resp. Pl. Stmt. ¶¶ 21-22, 25. The chopped tuna is then hand mixed with the mayo base dressing, relish, celery, and water chestnuts. Id. ¶¶ 5, 21, 24, 33. More than 82% of Tuna Salad Chunk Light contains fish meat with a surface area of less than 0.3 square centimeters, and more than 58% of the Tuna Salad Albacore contains fish meat with a surface area of less than 0.3 square centimeters. Id. ¶¶ 34-35. The mayo base containing oil is added to the tuna during the hand mixing process. Pl. Stmt. Facts ¶ 33; Def. Resp. Pl. Stmt. ¶ 33.
Finally, in the filling and finishing phase, metal funnels are used to fill each pouch with the mixture of tuna, celery, water chestnuts and dressing that is created from the prior steps. Id. ¶ 5. No additional oil is added to the final phase of packaging or to any stage of production. Id. ¶¶ 5, 30, 33. The parties generally agree on the total percentage of oil by weight in each finished tuna product. As a result of the addition of the mayo base during the tuna phase, that is 4% for the Tuna Salad Albacore and approximately 5% for the Tuna Salad Chunk Light. Id. ¶¶ 32-33.3
Customs' protests are reviewed de novo by the court. 28 U.S.C. § 2640(a)(1) (2018).
This court has jurisdiction under 28 U.S.C. § 2640(a)(1) because plaintiff contests Customs' denial of plaintiff's protest over the proper classification of the merchandise at issue.
Summary judgment is permitted when "there is no genuine dispute as to any material fact ...." USCIT R. 56(a). The court must decide materiality by determining whether any factual disputes are material to the resolution of the action. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In making this determination, "all evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable factual inferences should be drawn in favor of the nonmoving party." Dairyland Power Coop. v. United States , 16 F.3d 1197, 1202 (Fed. Cir. 1994) (citations omitted). Here, the court does not find any disputes as to material issues of fact, so summary judgment is appropriate to resolve the dispute over the classification.
The court's review of classification cases is limited to the record before the court. 28 U.S.C. § 2640(a). "The plaintiff has the burden of establishing that the government's classification of the subject merchandise was incorrect ...." Lerner New York, Inc. v. United States , 908 F. Supp. 2d 1313, 1317-18 (CIT 2013). But, "plaintiff does not bear the burden of establishing the correct classification; instead, it is the court's independent duty to arrive at the ‘correct result’ ...." Id. (quotations in original) (citations omitted).
The determination of whether an imported item has been properly classified involves a two-step analysis. Sports Graphics, Inc. v. United States , 24 F.3d 1390, 1391 (Fed. Cir. 1994). First, the court must "ascertain[ ] the proper meaning of specific terms within the tariff provision," and, second, "determin[e] whether the merchandise at issue comes within the description of such terms as properly construed." BenQ Am. Corp. v. United States , 646 F.3d 1371, 1376 (Fed. Cir. 2011). The first step is a question of law, while the second is a question of fact. Pillowtex Corp. v. United States , 171 F.3d 1370, 1373 (Fed. Cir. 1999).
The General Rules of Interpretation ("GRIs") of the HTSUS govern the proper classification of merchandise entering the United States. The GRIs "are applied in numerical order." ABB, Inc. v. United States , 421 F.3d 1274, 1276 n. 4 (Fed. Cir. 2005). GRI 1 states that "classification shall be determined according to the terms of the headings and any relative section or chapter notes." GRI 3(a) applies specifically to items in a set put up for retail sale (such as the lunch-to-go pouches). It states that "when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods." According to GRI 3(b), "goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character."
Finally, GRI 6 states, "the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis , to the above rules, on the understanding that only subheadings at the same level are comparable." Further, "the relative section, chapter and subchapter notes also apply, unless the context otherwise requires."
The HTSUS has the force of statutory law. Aves. In Leather, Inc. v. United States , 423 F.3d 1326, 1333 (Fed. Cir. 2005). Absent contrary legislative intent, tariff terms are to be understood according to their common and commercial meanings. Len–Ron Mfg. Co. v. United States , 334 F.3d 1304, 1309 (Fed. Cir. 2003). When interpreting a tariff term, the court may rely on its own understanding of the term and on secondary sources such as scientific authorities and dictionaries. North Am. Processing Co. v. United States , 236 F.3d 695, 698 (Fed. Cir. 2001).
Additional U.S. Notes to the HTSUS are also "considered to be statutory provisions of law for all purposes." Del Monte Corp. v. United States , 730 F.3d 1352, 1355 (Fed. Cir. 2013) (internal quotations omitted) (citations omitted). These are "legal notes that provide definitions or information on the scope of the pertinent provisions or set additional requirements for classification purposes ...." Id.
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