Customs
Import
HTSUS Classification
General Rules of Interpretation
Most Specific Description
Requirements More Difficult to Satisfy and Description with a Greater Degree of Accuracy and Certainty (eo nomine HTSUS Headings)
Carborundum Factors
Two types of HTSUS headings, eo nomine (ARI 1(a) – “principal use” - does not apply) and use provisions
Ziploc® brand reclosable sandwich bags
Appeal from the United States Court of International Trade in No. 1:14-cv-00184-JCG, Judge Jennifer Choe-Groves
S.C. Johnson appeals the Court of International Trade’s (“Trade Court”) determination that Ziploc® brand reclosable sandwich bags are classified under Harmonized Tariff Schedule of the United States (“HTSUS”) heading 3923. We affirm.
(The Carborundum factors are used to determine whether merchandise is commercially fungible with the particular class or kind of merchandise that falls under a principal use provision. See Aromont USA, Inc. v. United States, 671 F.3d 1310, 1312–13 (Fed. Cir. 2012) (citing United States v. Carborundum, 536 F.2d 373, 377 (CCPA 1976)). Under Carborundum, courts look to (1) use in the same manner as merchandise which defines the class; (2) the general physical characteristics of the merchandise; (3) the economic practicality of so using the import; (4) the expectation of the ultimate purchasers; (5) the channels of trade in which the merchandise moves; (6) the environment of the sale, such as accompanying accessories and the manner in which the merchandise is advertised and displayed; and (7) the recognition in the trade of this use. Id. at 1313.)
On May 15, 2013, S.C. Johnson imported 1,512 cases of Ziploc® brand reclosable sandwich bags from Thailand. The bags have a single zipper closure and measure six and one-half inches by five and seven-eighths inches. They are manufactured from polyethylene resin pellets and are tested to ensure compatibility with food contact.
Upon entry, Customs classified the sandwich bags under HTSUS subheading 3923.21.00, covering “articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene.” On June 26, 2014, S.C. Johnson filed a protest, which was deemed denied.
S.C.Johnson then initiated this action before the Trade Court, contending that the sandwich bags should have been classified under HTSUS subheading 3924.90.56, covering “tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other: Other.” S.C. Johnson additionally argued that, because the merchandise should have been classified under subheading 3924.90.56 and was imported from Thailand, the bags were eligible for duty-free treatment under the Generalized System of Preferences.
The parties filed cross-motions for summary judgment before the Trade Court. The Trade Court determined “HTSUS Heading 3923 is a principal use provision and encompasses goods of plastic used to carry or transport other goods of any kind.” J.A. 34. The Trade Court also concluded that “HTSUS Heading 3924 is an eo nomine provision that encompasses plastic goods of or relating to the house or household.” Id. at 37. The Trade Court declined to determine on summary judgment whether the sandwich bags were prima facie classifiable under either heading.
After a bench trial on the papers, the Trade Court conducted a principal use analysis using the Carborundum factors to determine whether the sandwich bags were prima facie classifiable under HTSUS heading 3923. The court concluded that “the majority of the Carborundum factors supported classification under HTSUS Heading 3923” and that “the subject merchandise were prima facie classifiable under” that heading. J.A. 21.
The Trade Court also determined that the sandwich bags were prima facie classifiable under HTSUS heading 3924, noting that “the sandwich bags are designed in a manner consistent with household food storage” and that “S.C. Johnson’s internal study indicated that the sandwich bags can be found in a household.” J.A. 22.
Because the sandwich bags were prima facie classifiable under both headings at issue, the court applied General Rule of Interpretation (“GRI”) 3, which dictates that goods should be classified under the heading that provides the most specific description. The court concluded that the sandwich bags were properly classified under HTSUS heading 3923 because that heading “has requirements that are more difficult to satisfy and describe the article with a greater degree of accuracy and certainty.” J.A. 24. Because the products were classified under HTSUS heading 3923, the Trade Court did not reach whether the sandwich bags were eligible for duty-free treatment under the Generalized System of Preferences.
S.C. Johnson appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5).
The classification of merchandise “involves two underlying steps: (1) determining the proper meaning of the tariff provisions, which is a question of law; and (2) determining which heading the particular merchandise falls within, which is a question of fact.” Deckers Corp. v. United States, 532 F.3d 1312, 1314–15 (Fed. Cir. 2008).
The issues here are legal issues— the interpretation of HTSUS headings.
(…) The language of HTSUS heading 3923 differs from TSUS item 772.20 item in two material respects. First, HTSUS heading 3923 changed “merchandise” to “goods.” As the government correctly points out, the term “goods” is broader than “merchandise” and includes “both personal property as well as items of trade.” Appellee’s Br. 21; see also Good, Webster’s II New College Dictionary 480 (1999) (defining “goods” as “a. Commodities: wares . . . b. Portable personal property”).
(…) The Explanatory Notes for HTSUS Heading 3923 state that the heading covers containers such as boxes, cases, crates, sacks and bags (including cones and refuse sacks), casks, cans, carboys, bottles, and flasks. J.A. 14 (citing EN 39.23(a), (c) (2012).
(…) Next, S.C. Johnson contends that the Trade Court’s determination as to the scope of HTSUS heading 3923 is inconsistent with Customs rulings finding that heading 3923 should be limited to “articles used to package or convey bulk or commercial merchandise.” Appellant’s Br. 43–44 (emphasis omitted); see also HQ H026225 (June 4, 2009) (stating that HTSUS heading 3923 “provides for cases and containers used for shipping purposes” and therefore the heading “provides for cases and containers of bulk goods and commercial goods, not personal items”). These Customs rulings are not entitled to Chevron deference and are not persuasive. See United States v. Mead Corp., 533 U.S. 218, 221 (2001) (holding that a Customs classification ruling “has no claim to judicial deference under Chevron” but can “claim respect according to its persuasiveness”).
The GRIs, along with the Additional U.S. Rules of Interpretation (“ARIs”), “govern the proper classification of all merchandise and are applied in numerical order.” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999). GRI 3 provides in relevant part that: When . . . goods are, prima facie, classifiable under two or more headings . . . the heading which provides the most specific description shall be preferred to headings providing a more general description. GRI 3(a).
Next, we address S.C. Johnson’s challenge to the Trade Court’s determination that HTSUS heading 3924 is an eo nomine provision rather than a use provision. If HTSUS heading 3924 is a use provision, then both HTSUS headings at issue would be use provisions, and under ARI 1(a), the “principal use” would govern classification of the sandwich bags. S.C. Johnson contends that the principal use of the bags is household food storage. We agree with the Trade Court that HTSUS heading 3924 is an eo nomine provision. As the Trade Court determined, the key inquiry under the terms of the heading is where the articles at issue are located, rather than how they are used. This heading provides in pertinent part for the classification of tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics.
HTSUS Heading 3924.
There are two types of HTSUS headings, eo nomine and use provisions. “An eo nomine provision ‘describes an article by a specific name,’ whereas a use provision describes articles according to their principal or actual use.” Schlumberger Tech. Corp. v. United States, 845 F.3d 1158, 1164 (Fed. Cir. 2017) (quoting Aromont, 671 F.3d at 1312). On its face heading 3924 does not define its coverage by reference to the “use” of the goods in question. While a use provision need not expressly use the words “used for,” see StoreWALL, LLC v. United States, 644 F.3d 1358, 1365 (Fed. Cir. 2011) (Dyk, J., concurring), “a use limitation should not be read into an eo nomine provision unless the name itself inherently suggests a type of use,” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999).
In determining whether a provision inherently suggests a type of use, we have previously looked to dictionary definitions of heading terms. In Minnetonka Brands, Inc. v. United States, the Trade Court concluded that HTSUS heading 9503, covering “Other toys,” was a principal use provision because dictionary definitions suggested that toys are “designed and used for amusement, diversion or play, rather than practicality.” 110 F. Supp. 2d 1020, 1026 (Ct. Int’l Trade 2000). The Trade Court’s reasoning in Minnetonka was adopted by this court in Processed Plastics Co. v. United States, 473 F.3d 1164, 1170 (Fed. Cir. 2006) (“We agree with the standard adopted in Minnetonka to determine whether merchandise should be classified as a toy.”).
Other cases have determined that generic terms preceded by an adjective suggesting a manner of use can constitute principal use provisions. See, e.g., Stewart-Warner Corp. v. United States, 748 F.2d 663, 667 (Fed. Cir. 1984) (explaining that the TSUS term encompassing “bicycle speedometers” was “a term ‘controlled by use’ . . . because the noun ‘bicycle’ acts as an adjective modifying ‘speedometer’ in a way that implies use of the speedometer on a bicycle”).
Here, the Trade Court noted that “‘household’ is defined as ‘the maintaining of a house,’ ‘household goods and chattels,’ ‘a domestic establishment,’ or ‘of or relating to a household.’” J.A. 36 (quoting Webster’s Third New International Dictionary 1096 (1993)); see also id. at 11. The court also determined that “‘article’ is defined as an ‘individual thing or element of a class; a particular object or item.’” Id. at 36 (quoting The American Heritage Dictionary of the English Language 101 (4th ed. 2000)); see also id. at 11. As the Trade Court concluded, these definitions do not suggest a specific type of use. Further, none of the terms in HTSUS heading 3924 acts as an adjective that suggests a type of use rather than a location where the objects can be found.
(…) Even if “household utensils” were a use provision, that does not change the outcome of this case. As the government points out, the term “utensil” is defined as “an implement, instrument, or vessel used in a household and especially a kitchen.” Appellee’s Br. 33 (quoting Utensil, Merriam-Webster, https://www.merriam-webster.com/dictionary/utensil (last visited May 10, 2021)). Thus, the term “utensil,” like the term “toy,” suggests a specific use and could be construed as a use provision. Processed Plastics, 473 F.3d at 1170 (discussing the tariff term “Other toys”). As we have noted, in contrast, the term “Article” does not suggest a type of use and should not be construed as creating a use provision.
We conclude that HTSUS heading 3924 encompasses goods of plastic commonly found in the home and affirm the Trade Court’s determination that the heading is an eo nomine provision. ARI 1(a) therefore does not apply. We also agree that the sandwich bags are prima facie classifiable under HTSUS heading 3924.
Because the Trade Court concluded that the sandwich bags were prima facie classifiable under both HTSUS headings, it applied GRI 3 to determine which heading provided the more specific description of the products. The Trade Court believed that HTSUS heading 3923 describes the bags more specifically than HTSUS heading 3924. Neither party challenges the Trade Court’s determination that HTSUS heading 3923 “has requirements that are more difficult to satisfy and describe the article with a greater degree of accuracy and certainty.” J.A. 24.
We therefore affirm the Trade Court’s determination that the sandwich bags are properly classified under HTSUS Heading 3923.
(U.S. Court of Appeals for the Federal Circuit, June 2, 2021, SC Johnson & Son Inc. v. United States, Docket No. 2020-1476, Circuit Judge Dyk)
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