United States Court of Appeals for the Federal Circuit
2006-1387
BASF CORPORATION,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Frederic D. Van Arnam, Jr., Barnes, Richardson & Colburn, of New York, New
York, argued for plaintiff-appellant. Of counsel was James S. O’Kelly.
Bruce N. Stratvert, Attorney, International Trade Field Office, Commercial
Litigation Branch, Civil Division, United States Department of Justice, of New York, New
York, argued for defendant-appellee. With him on the brief were Peter D. Keisler,
Assistant Attorney General, and Barbara S. Williams, Attorney in Charge. Of counsel
on the brief was Michael W. Heydrich, Office of Assistant Chief Counsel, International
Trade Litigation, United States Customs and Border Protection, of New York, New York.
Appealed from: United States Court of International Trade
Judge Gregory W. Carman
United States Court of Appeals for the Federal Circuit
2006-1387
BASF CORPORATION,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
__________________________
DECIDED: August 10, 2007
__________________________
Before NEWMAN, LOURIE, and GAJARSA, Circuit Judges.
GAJARSA, Circuit Judge.
This is a tariff classification case. BASF Corporation (“BASF”) appeals from
judgment by the United States Court of International Trade (“trial court”), following a
bench trial. See BASF Corp. v. United States, 427 F. Supp. 2d 1200 (Ct. Int’l Trade
2006). BASF objects to the classification of its imported polyisobutylene amine (“PIBA”)
product in subheading 3811.90.00 of the Harmonized Tariff Schedule of the United
States (“HTSUS”). Because the imported product is prima facie classifiable in Heading
3811 of the HTSUS, and because Heading 3811 is more specific than the heading in
which BASF argues the product should be classified, we affirm the decision of the trial
court.
I. BACKGROUND
A. The Imported Product
The facts are largely undisputed and are set forth in greater detail in the trial
court’s opinion, BASF Corp. v. United States, 427 F. Supp. 2d 1200 (Ct. Int’l Trade
2006) (“BASF I”). The product at issue here is manufactured by BASF’s German
parent, BASF AG, and is identified by the brand name “PURADD® FD-100.” Id. at
1202. Its active ingredient is polyisobutylene amine (“PIBA”), which is a detergent
useful for removing and preventing the buildup of harmful deposits in gasoline engines
when mixed with fuel. Id. at 1203. The imported product is a liquid mixture of 53%
PIBA and 47% solvent used in manufacture. Id. at 1204. That product, however,
cannot practically be used in gasoline without the simultaneous addition of other
chemicals. Addition of PURADD® FD-100 alone to gasoline would violate
Environmental Protection Agency (“EPA”) regulations, id. at 1203, and tend to cause
undesirable sticking of engine valves, id. at 1204. After importing the product into the
United States, BASF blends it with a synthetic carrier oil and other ingredients to form a
finished “detergent control additive package,” or “DCA.” That DCA package is suitable
for blending with gasoline to be sold at retail, because the other chemicals mixed with
PURADD® FD-100 mitigate its harmful effects while still taking advantage of its
detergent properties. The PIBA from the imported product is the active detergent
ingredient in the finished DCA. Id. at 1203-04. The DCA package is EPA-approved for
introduction into gasoline and is sold to fuel vendors. Id. at 1204. Those vendors then
blend BASF’s DCA package into their gasoline.
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Nearly all of the PIBA product that BASF imports goes into these DCA packages.
Id. at 1203. Making the DCA package simply requires mixing the PIBA product with the
package’s other chemical components—no chemical reactions occur during this mixing
process, and the PIBA product maintains its chemical identity in the mixture. If it were
commercially practical to do so, the various components of the DCA could be added to
the gasoline separately to achieve the same effect.
B. Procedural History
The entries at issue in this case took place between January and July of 2000.
The United States Customs Service (“Customs,” now known as the United States
Bureau of Customs and Border Protection 1 ) classified the imported PIBA product in
subheading 3811.19.00 of the HTSUS. Neither party contends that was the correct
classification. After the product entries, Customs revoked its ruling HQ 956585, which
had established a policy of classifying chemical products of this type in subheading
3811.19.00, and issued a new ruling HQ 964310. That ruling concluded that the correct
classification of the imported product is subheading 3811.90.00. At all relevant times,
that subheading read:
Antiknock preparations, oxidation inhibitors, gum inhibitors, viscosity
improvers, anti-corrosive preparations and other prepared additives, for
mineral oils (including gasoline) or for other liquids used for the same
purposes as mineral oils: . . . Other.
Dissatisfied with this classification, BASF protested to Customs. That protest was
denied, and BASF appealed to the Court of International Trade. BASF argued to the
1
The United States Customs Service was renamed the United States
Bureau of Customs and Border Protection effective March 1, 2003. See Homeland
Security Act of 2002, Pub. L. No. 107-296, § 1502, 116 Stat. 2135, 2308-09 (2002);
Reorganization Plan Modification for the Department of Homeland Security, H.R. Doc.
No. 108-32 (2003).
2006-1387 3
trial court that the correct classification for the imported product was subheading
3902.20.50: “Polymers of propylene or of other olefins, in primary forms: . . .
Polyisobutylene: . . . other [than elastomeric, 3902.20.10].” BASF based this argument
on two grounds. First, it argued that the imported product was not prima facie
classifiable in Heading 3811 at all. Heading 3811 covers “prepared additives[] for
mineral oils (including gasoline),” and BASF suggested that because PURADD®
FD-100 underwent mixing with other chemicals before being added to gasoline, it was
not itself a “prepared additive” for gasoline. Second, BASF argued that even if the
imported product were prima facie classifiable in Heading 3811, Heading 3902 was
more specific and thus the correct classification. See HTSUS, General Rule of
Interpretation 3(a) (“The heading which provides the most specific description shall be
preferred to headings providing a more general description.”).
The trial court found that the imported product was a polymer of an olefin, and
that it was in “primary form,” since HTSUS Chapter 39 note 6 states that liquid is a
primary form. BASF I, 427 F. Supp. 2d at 1211-12. Therefore, the trial court concluded
that the imported product was prima facie classifiable in Heading 3902, id. at 1214, a
determination neither party challenges on appeal. With respect to Heading 3811
(“prepared additives[] for mineral oils (including gasoline)”), the trial court found that the
imported product was “prepared” because it had undergone “rigorous chemical
transformations” during manufacture. Id. at 1215. The trial court found the imported
product to be an “additive,” as it was manufactured and marketed for addition to
gasoline. Id. at 1216. Finally, the trial court found that the imported product was “for
. . . gasoline,” rejecting BASF’s argument that only a DCA mixture as a whole, but not
2006-1387 4
the PURADD® FD-100 mixed into it, was an additive for gasoline. Id. at 1216. It noted
that the imported product, while not certified by the EPA for introduction alone, “is
registered with the EPA as a gasoline additive, is designed to impart gasoline
detergency, has detergent properties, is part of the class or kind of articles that impart
detergency when added to gasoline, retains its chemical properties when blended in a
DCA package, and is dedicated for use as a gasoline detergent.” Id. Accordingly, the
trial court found that the imported product was prima facie classifiable in Heading 3811.
Id. at 1222.
Having identified two headings into which the imported product was prima facie
classifiable, the trial court next considered which was the more specific. Id. at 1222-23.
It noted that in general, use provisions like Heading 3811 (which covers any product
used as an additive for gasoline) are considered more specific than eo nomine
provisions such as Heading 3902 (which identifies a class of chemicals by their
structure). Id. at 1222. Agreeing with the government that “the requirements of heading
3811 are the more difficult to satisfy,” the trial court determined that Heading 3811 was
the more specific and therefore the correct heading in which to classify the imported
product. Id. at 1223. The trial court accordingly entered judgment for the government,
ordering that the imported PIBA product be classified in subheading 3811.90.00. Id. at
1224.
BASF timely appeals to this court. We have jurisdiction under 28 U.S.C.
§ 1295(a)(5).
2006-1387 5
II. DISCUSSION
We review questions of law de novo, including the interpretation of terms in the
HTSUS. Home Depot U.S.A., Inc. v. United States, No. 2006-1459, slip op. at 2 (Fed.
Cir. 2007), available at http://www.fedcir.gov/opinions/06-1459.pdf (citing Rollerblade,
Inc. v. United States, 282 F.3d 1349, 1352 (Fed. Cir. 2002); Better Home Plastics Corp.
v. United States, 119 F.3d 969, 971 (Fed. Cir. 1997)). Here, the Court of International
Trade’s legal construction of tariff provisions’ meaning is reviewed without deference,
while its factual findings are reviewed for clear error. Id. We afford deference under the
principles of Skidmore v. Swift & Co., 323 U.S. 134 (1944), to Customs’ classification
decisions. Warner-Lambert Co. v. United States, 407 F.3d 1207, 1209 (Fed. Cir. 2005)
(citing Mead Corp. v. United States, 533 U.S. 218, 219-20 (2001)).
Under Skidmore, the degree of deference depends on the thoroughness
evident in the classification ruling; the validity of the reasoning that led to
the classification; consistency of the classification with earlier and later
pronouncements; the formality with which the particular ruling was
established; and other factors that supply a “power to persuade.”
Warner-Lambert, 407 F.3d at 1209 (quoting Skidmore, 323 U.S. at 140). Customs’
conclusions are “not controlling upon the courts by reason of their authority,” Skidmore,
323 U.S. at 140, and “this court has an independent responsibility to decide the legal
issue of the proper meaning and scope of HTSUS terms,” Warner-Lambert, 407 F.3d at
1209 (citing Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1358 (Fed. Cir.
2001)).
A. Prima Facie Classifiability in Heading 3811
Invoking the longstanding rule of tariff law that goods are to be classified
according to their condition when imported, see United States v. Citroen, 223 U.S. 407,
414-15 (1911), BASF argues that the imported product is not a gasoline additive when
2006-1387 6
imported, because it is unsuitable for addition to gasoline by itself. As a result, BASF
suggests that classification in Heading 3811 is improper.
It is true that the imported PIBA product is not directly mixed into gasoline by
itself and that other ingredients in the DCA package are blended in to mitigate its valve-
sticking effects and to comply with EPA regulations. However, the imported product is
nevertheless added to gasoline. The process of mixing PURADD® FD-100 with the
other DCA ingredients does not change its chemical structure, nor its character as a
detergent specially formulated for mixture with gasoline to clean engine deposits. When
PURADD® FD-100 is introduced into gasoline, it is in essentially the same condition
that it was when imported. It is therefore appropriate to characterize it as a “prepared
additive[] for . . . gasoline.”
The case here is analogous to the issue raised and decided in United States v.
P. John Hanrahan, Inc., 45 C.C.P.A. 120 (1958). There, the tariff provision at issue was
“edible preparations for human consumption.” Id. at 121. The imported product was
wheat gum gluten, which “cannot, as a practical matter, be eaten by itself but it is
commonly added to wheat flour to produce a high protein mixture which is used in
making bread and other foods for dietary purposes.” Id. 2 Despite the fact that the
imported wheat gluten was not eaten alone, it was nevertheless consumed by humans
following a mixing step (and also after a cooking step absent from BASF’s preparation
2
The dissent in Hanrahan makes clear how inedible the imported product
was without being first baked into bread. Id. at 125 (Worley, J., dissenting) (“[I]t is not
only never eaten as a food, but is insoluble in the juices of the mouth, is unpalatable
and, if chewed, becomes a spongy mass which is virtually impossible to swallow—and
even should it be swallowed, is indigestable.”)
2006-1387 7
of the DCA). As a result, our predecessor court held it to be within the “edible
preparations” tariff provision.
The logic used in Hanrahan can be followed here. While unmixed PURADD®
FD-100 may be unpalatable to a gasoline engine, its detergent properties render it
useful as a gasoline additive so long as other materials are added at the same time, just
as wheat gum gluten can be consumed by humans so long as it is baked into bread.
We therefore agree with the Court of International Trade that the imported product is
prima facie classifiable in HTSUS Heading 3811.
B. Relative specificity
In the alternative, BASF suggests that Heading 3902 is more specific than
Heading 3811. See HTSUS, General Rule of Interpretation 3(a) (“The heading which
provides the most specific description shall be preferred to headings providing a more
general description.”). “Under this so-called rule of relative specificity, we look to the
provision with requirements that are more difficult to satisfy and that describe the article
with the greatest degree of accuracy and certainty.” Orlando Food Corp. v. United
States, 140 F.3d 1437, 1441 (Fed. Cir. 1998). Accordingly, if BASF is correct that
Heading 3902 is the more specific, the imported product must be classified in that
heading regardless of whether it is also prima facie classifiable in Heading 3811.
Heading 3811, covering “prepared additives, for mineral oils (including gasoline)”
is a use provision, while Heading 3902 (“Polymers of propylene or of other olefins, in
primary forms”) is an eo nomine provision, “as it describes the merchandise by name,
not by use.” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999).
When a product is designated both by a use provision and an eo nomine provision, “the
2006-1387 8
general rule [is] that . . . [the] product . . . is generally more specifically provided for
under the use provision.” Id. at 1380 (quoting Sports Graphics, Inc. v. United States, 24
F.3d 1390, 1394 (Fed. Cir. 1994)). This is, however, not a hard-and-fast rule, merely a
“convenient rule of thumb” which is “not obligatory.” Id. (quoting United States v.
Siemens Am., Inc., 653 F.2d 471, 478 n.6 (CCPA 1981)).
We see no reason to deviate here from the general rule that use provisions are
more specific. The Explanatory Notes corresponding to Chapter 39 of the HTSUS
reveal a “very wide range of applications” for goods in Heading 3902: “for example,
packaging film, moulded parts for automobiles, appliances, housewares, etc., wire and
cable coating, food container closures, coated and laminated products, bottles, trays
and containers for storing precision equipment, ducting, tank linings, piping for chemical
plant, [and] tufted chemical backing.” World Customs Organization, Harmonized
Commodity Description and Coding System Explanatory Notes 725 (3d ed. 2002). 3
Furthermore, the Explanatory Notes explicitly state that “[w]hen as a result of the
addition of certain substances, the resultant products answer to the description in a
more specific heading elsewhere . . . they are excluded from Chapter 39; this is, for
example, the case with . . . [p]repared additives for mineral oils (heading 38.11).” Id. at
718. 4 The Court of International Trade found that substances had been added to
polyisobutylene to render the final product suitable as a fuel additive: the hydrocarbon
3
The uses enumerated here are for polypropylene classified in subheading
3902.10, which is separate from the subheading at issue in this case. Nevertheless,
those uses are germane to the relative specificity analysis because “when determining
which heading is the more specific, and hence the more appropriate for classification, a
court should compare only the language of the headings and not the language of the
subheadings.” Orlando Food, 140 F.3d at 1440.
4
The same statement appears in editions of the Explanatory Notes which
predate the entries at issue here.
2006-1387 9
solvent in which the detergent is dissolved when imported, and the amine tail added to
the polyisobutylene molecules. While this statement in the Explanatory Notes does not
bind this court, there is no persuasive reason not to follow it here. Accordingly, we
agree with the trial court that Heading 3811 is more specific than Heading 3902 and
therefore that the imported product was properly classified in Heading 3811.
III. CONCLUSION
Because BASF’s imported PIBA product is prima facie classifiable in Heading
3811 of the HTSUS, and because that heading is more specific than Heading 3902, we
agree with the trial court that the imported product should be classified in Heading 3811.
BASF does not dispute that if Heading 3811 is chosen, subheading 3811.90.00 is the
correct sub-classification. Therefore, we affirm the judgment of the Court of
International Trade classifying that product within HTSUS Subheading 3811.90.00.
AFFIRMED
Each party shall bear its own costs.
2006-1387 10