Warner-Lambert Co. v. U.S.

• Decision Date: 03 March 2008
• Docket Number: Slip Op. 08-25. Nos. 06-00104.
• Citation: 545 F.Supp.2d 1345
• Parties: WARNER-LAMBERT COMPANY, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

545 F.Supp.2d 1345

WARNER-LAMBERT COMPANY, Plaintiff, v. UNITED STATES, Defendant.

Slip Op. 08-25. Nos. 06-00104.

United States Court of International Trade.

March 3, 2008.

Rode & Qualey, (Patrick D. Gill), New York City, for Warner-Lambert Company, Plaintiff.

Jeffrey S. Bucholtz, Acting Assistant Attorney General; Barbara S Williams, Attorney-in-Charge, International Trade Field Office, Bruce N. Stratvert, Civil Division, Commercial Litigation Branch, United States Department of Justice, Defendant.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff Warner-Lambert Company ("Plaintiff or "WLC"). challenges the classification of Certs® Cool Mint Drops by the United States Bureau of Customs and Border Protection¹ ("Defendant" or "Customs") under Heading 1704 of the Harmonized Tariff Schedule of the United States ("HTSUS") covering sugar confectionery.² Plaintiff maintains that the merchandise at issue is properly classified under Heading 3306, HTSUS, as "preparation for oral or dental hygiene." This matter is before the Court on cross-motions for summary judgment pursuant to USCIT R. 56.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581 (2000).

STANDARD OF REVIEW

On a motion for summary judgment, the Court must determine whether there are any genuine issues of fact that are material to the resolution of the action. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A factual dispute is genuine if it might affect the outcome of the suit under the governing law. See id. Accordingly, the Court may not decide or try factual issues upon a motion for summary judgment. See Phone-Mate, Inc. v. United States, 12 CIT 575, 577, 690 F.Supp. 1048, 1050 (1988). When genuine issues of material fact are, not in dispute, summary judgment is appropriate if a moving party is entitled to judgment as a matter of law. See USCIT R. 56; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

DISCUSSION

I. Background

Plaintiff WLC imported Certs® Cool Mint Drops and Certs® Powerful Mints. See Complaint ¶ 2; Def.'s Resp. Amended Complaint ¶ 2. The active ingredient of both Certs® Cool Mint Drops and Certs® Powerful Mints is Retsyn®, which consists of partially hydrogenated cottonseed oil and copper gluconate. See Complaint ¶¶ 9, 10, 26; Def.'s Resp. Amended Complaint ¶¶ 9, 10, 26. The main difference between Certs® Cool Mint Drops and Certs® Powerful Mints is that the former contains sugar and the latter is sugar-free. See Complaint ¶ 23; Def.'s Resp. Amended Complaint ¶ 23.

Customs liquidated Certs® Powerful Mints and Certs® Cool Mint Drops under subheading 1704.90.35.90 as a sugar confectionery. See Pl.'s Statement Material Facts Not Dispute ("WLC's Facts") ¶ 29; Def.'s Resp. Pl.'s Statement Material Facts Not Dispute ("Customs' Resp.") ¶ 29. WLC timely protested pursuant to 19 U.S.C. § 1514 challenging classification of its merchandise. See Complaint, ¶¶ 3, 4; Def.'s Resp. Amended Complaint ¶¶ 3, 4.

The sugar-free Powerful Mints were considered in Warner-Lambert Co. v. United States, 28 CIT 788, 343 F.Supp.2d 1315 (2004), reversed by, 407 F.3d 1207 (Fed.Cir.2005) (hereinafter "test case"). Before the Court of International Trade ("CIT"), WLC argued that Powerful Mints were a sugar-free product that should be classified under HTSUS subheading 3306.90.00 as preparations for oral or dental hygiene that are free of duty. See Warner-Lambert Co., 28 CIT at 788, 343 F.Supp.2d at 1316. Customs countered that if the Court finds that the merchandise at issue is indeed sugar-free, then the merchandise should be classified under HTSUS subheading 2106.90.99 as food preparations not elsewhere specified or included, dutiable at the rate of 6.4 percent ad valorem. See Warner-Lambert Co., 28 CIT at 788-89, 343 F.Supp.2d at 1316-17.

Following a bench trial, the CIT determined, inter alia, that "Certs® Powerful Mints are marketed, advertised and primarily purchased by consumers as breath mints. Plaintiffs expert testified that the Retsyn®, contained in the subject merchandise, combats bad breath since copper gluconate, cottonseed oil and natural flavoring neutralize and mask bacteria in the mouth which commonly cause bad breath. Moreover, consumption of the product results in an increase in salivation which causes a physical rinse-out or dislodgement (purging) of accumulated volatile sulfur compounds or a reduction of the number of bacteria in the mouth (specifically, a result of swallowing)." Warner-Lambert Co., 28 CIT at 793, 343 F.Supp.2d at 1320. However, relying on a monogram issued by the FDA, the CIT determined that "[o]nly antimicrobial measures, such as using a germ killing mouthwash 'intended to treat or prevent disease,' aide in the preservation of oral health." Warner-Lambert Co., 28 CIT. at 793, 343 F.Supp.2d at 1320. The CIT accordingly held that the subject product cannot be considered a preparation for oral hygiene. Warner-Lambert Co., 28 CIT at 794, 343 F.Supp.2d at 1321. On appeal, the United States Court of Appeals for the Federal Circuit ("CAFC") reversed the CIT and held that Certs® Powerful Mints are properly classifiable under Heading 3306, HTSUS. See Warner-Lambert Co. v. U.S., 407 F.3d 1207, 1211 (Fed.Cir.2005).

Following the test case, Customs denied protests that are the subject of the instant action on the ground that the test case "applied to sugar free mints only." See WLC's Facts ¶ 29; Customs' Resp. ¶ 29. The instant action concerns proper classification of WLC's entries, which Plaintiff purports to be Certs® Cool Mint Drops. See Complaint ¶ 2; Def.'s Resp. Amended Complaint ¶ 2. Plaintiff filed a Complaint in this action on April 18, 2007 and filed an Amended Complaint on May 10, 2007. See WLC's Facts ¶¶ 6, 7; Customs' Resp. ¶¶ 6, 7. Defendant filed an Answer to the Amended Complaint on July 6, 2007. See WLC's Facts ¶ 8; Customs' Resp. ¶ 8. All liquidated duties with respect to the subject entries were paid prior to the commencement of this action. See Complaint ¶ 5; Def.'s Resp. Amended Complaint ¶ 6. On August 14, 2007, the record of the test case was incorporated in the record of this case.

II. Applicability Of The Principle Of Stare Decisis

Plaintiff contends that the merchandise at issue, Certs® Cool Mint Drops, was the subject of the test case and therefore is classifiable under Heading 3306 as a matter of law. See Mem. Supp. Pl.'s Mot. Sum. J. ("WLC's Brief) at 1. According to Plaintiff, the test case reviewed Headquarters Ruling 963764, which involved both Certs® Powerful Mints containing artificial sweetner and Certs® Cool Mint Drops containing sugar. See id. at 2-3. Plaintiff states that in the Headquarters Ruling Customs treated both Certs® Powerful Mints and Certs® Cool Mint Drops as the same in concluding that they are not classifiable under Heading 3306, HTSUS. See id. at 6.

Plaintiff goes on to argue that the CAFC similarly treated both products as one in rejecting Customs' analysis. See id. Citing to the language of the CAFC's opinion in the test case, Plaintiff states that the CAFC rejected Customs' classification of both Certs® Powerful Mints and Certs® Cool Mint Drops.³ See id. at 4-5. Plaintiff claims that Customs erroneously denied the protests in this action on the ground that only Certs® Powerful Mints were the subject of the test case. See id. at 5-6. In addition, Plaintiff argues that the principle of stare decisis should be invoked in granting summary judgment in its favor because this action involves the same parties, same merchandise and same legal issue. See id. at 7-8.

Customs disagrees with Plaintiffs contentions and argues that the test case involved only Certs® Powerful Mints based on the entry papers, pleadings and decision of this Court. See Def.'s Mem. Supp. Mot. Sum. J. Opp'n Pl.'s Mot. Sum. J. ("Def.'s Brief) at 17. Because Cool Mint Drops were not at issue in the test case, Customs argues that neither this Court nor the CAFC had subject matter jurisdiction over classification of the subject merchandise. See Def.'s Brief at 17. Customs suggests that the CAFC mentioned Certs® Cool Mint Drops in its decision only for the limited purpose of illustrating the weakness of the Headquarters Ruling. See id. at 18. Customs thus contends that the CAFC's decision in the test case should not be read as the same as a decision on Certs® Cool Mint Drops since they were not reviewed in the test case and the two products are not interchangeable. See id.

Moreover, Customs argues that courts have permitted relitigation of classification cases. See id. at 19. Customs further argues that the decision of the test case is not stare decisis because the subject merchandise is materially different than the sugar-free Certs® Powerful Mints reviewed in the test case, and the two cases involve different legal issues. See id. at 21-22.

The Court finds no merit to Plaintiffs argument that the test case ruled on the classification of Certs® Cool Mint Drops. "A pleading which sets forth a claim for relief ... shall contain ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks." USCIT R. 8(a). Plaintiff in the test case did not set forth a claim for relief with respect to Certs® Cool Mint Drops and thus it failed to satisfy the pleading requirements with respect to Certs® Cool Mint Drops. Indeed, WLC alleged in paragraph nine of the complaint filed in the test case that "[t]he imported merchandise in issue is a sugar-free product which cannot be classified with the sugar-based products of Chapter 17 and specifically those provided for under subheading 1704.90.35." Complaint at 2, Warner-Lambert Co. v. United States, 343 F.Supp.2d 1315 (2004)(Court No. 02-00254). Although it is true that the Headquarters Ruling reviewed both Certs® Powerful Mints and Certs® Cool Mint Drops, Plain...