United States Court of Appeals for the Federal Circuit
06-1093
PROCESSED PLASTIC COMPANY
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Elizabeth L. Barbour, Stack & Filpi, Chartered, of Chicago, Illinois, argued for
plaintiff-appellant. On the brief were Paul F. Stack and Robert A. Filpi.
James A. Curley, Attorney, Commercial Litigation Branch, Civil Division,
Department of Justice, of New York, New York, argued for defendant-appellee. With
him on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, of Washington, DC; and Barbara S. Williams, Attorney in Charge, of New York,
New York. Of counsel on the brief was Michael W. Heydrich, Attorney, 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 Delissa A. Ridgeway
United States Court of Appeals for the Federal Circuit
06-1093
PROCESSED PLASTICS COMPANY,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Cross-Appellee.
_______________________
DECIDED: December 21, 2006
_______________________
Before LOURIE, SCHALL, and DYK, Circuit Judges.
LOURIE, Circuit Judge.
Processed Plastics Company (“Processed”) appeals from the decision of the
United States Court of International Trade (“the trial court”) granting summary judgment
in favor of the United States and holding that United States Customs and Border Patrol
(“Customs”) properly classified two children’s backpacks and one children’s beach bag
under subheading 4202.92.45 of the Harmonized Tariff Schedule of the United States
(“HTSUS”). Because the trial court correctly granted summary judgment, we affirm.
BACKGROUND
The subject merchandise is a “Pooh backpack,” a “Barbie backpack,” and a
“Barbie beach bag.” The front, back, and side panels of the backpacks consist of
polyvinyl chloride plastic sheeting while the bottom consists of a plastic mesh. The
backpacks are about eleven inches high, nine inches wide, and three and a half inches
deep, and include imprints of the respective “Pooh” and “Barbie” characters. The beach
bag is a vertical cylinder with polyvinyl chloride plastic sheeting forming the vertical
surface. The bottom consists of a plastic mesh, and a woven cord serves as a
drawstring closure for the top of the bag and as the carry strap. The beach bag is
twelve inches high and nine inches in diameter. Processed placed an assortment of
sand toys manufactured in the United States in the backpacks and beach bag and then
placed them in additional external packaging for retail sale.
Processed entered the subject merchandise into the United States between
February and May 1999. Customs classified the backpacks and beach bag under
subheading 4202.92.45, “. . . traveling bags, . . . knapsacks and backpacks, . . . and
similar containers, . . . of sheeting of plastics . . . : Other: With outer surface of sheeting
of plastic or of textile materials: Travel, sports and similar bags: Other,” with a 20% ad
valorem duty. Processed filed a protest of the decision of Customs on October 29,
1999, and Customs denied the protest on March 28, 2000.
On December 13, 2001, Processed filed an action in the Court of International
Trade protesting the final decision of Customs, asserting that the backpacks and bag
are properly classifiable under subheading 9503.70.00, “Other toys; reduced-size
(‘scale’) models and similar recreational models, working or not; puzzles of all kinds;
parts and accessories thereof: Other toys, put up in sets or outfits, and parts and
accessories thereof,” and thus duty free. The government filed a motion for summary
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judgment claiming that the subject merchandise is properly classified under
subheading 4202.92.45 of the HTSUS.
The Court of International Trade determined that the conclusory statements
offered by Processed in support of its opposition to the motion for summary judgment
were insufficient to create genuine issues of material fact precluding summary
judgment. In particular, the trial court determined that because of Processed’s failure
to prove the “play value” of the merchandise at issue, the “sine qua non” of a “toy,”
Processed’s arguments as to more peripheral issues of fact were immaterial.
Having found no genuine issues of material fact, the Court of International Trade
determined that summary judgment in favor of the government was appropriate. With
respect to the backpacks, the court noted that heading 4202 specifically recites
backpacks and that Additional U.S. Note 1 to Chapter 42 defines “travel, sports and
similar bags,” a phrase used in the subheadings of 4202, to include backpacks. The
court then determined that the imported backpacks met the dictionary definition of
“backpack.” The court also noted that Processed’s entry papers identified the items as
“backpacks” and that Processed’s advertising materials describe the items as
“backpacks.” The court then determined that the backpacks met the test of Totes, Inc.
v. United States, 69 F.3d 495, 498 (Fed. Cir. 1995), for the essential characteristics of
items within heading 4202 (“organizing, storing, protecting, and carrying various
items”). The court determined that the beach bag is a “similar container” and “similar
bag” as recited in heading 4202 and under subheading 4202.92, respectively, and that
similar reasoning thus applied to the beach bag. The trial court concluded that the
backpacks and beach bag were properly classified under subheading 4202.92.45.
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Processed timely appealed to this court. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(5).
DISCUSSION
We review the Court of International Trade’s grant of summary judgment on tariff
classifications de novo. Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed. Cir.
2006). A classification decision involves two underlying steps: (1) determining the
proper meaning of the tariff provisions, which is a question of law; and (2) then
determining which heading the particular merchandise falls within, which is a question of
fact. Id.
In its opening brief on appeal, Processed argues that the trial court erred by
granting summary judgment in favor of the government despite the existence of genuine
issues of material fact as to the nature and use, avenue of sale, and weight-capacity of
the merchandise. Processed argues that because the word “toy” is not defined by the
HTSUS, the trial court has determined that “toys” are “articles whose principal use is
amusement, diversion, or play, rather than practicality.” See Minnetonka Brands, Inc. v.
United States, 110 F. Supp. 2d 1020, 1027 (Ct. Int’l Trade 2000). Processed argues
that each of the disputed issues above is material to the determination of such principal
use under the multi-factor test for a “toy” laid out in Minnetonka. See id. Second,
Processed argues that the trial court erred in determining that the merchandise is
properly classified under subheading 4202.92.45 rather than heading 9503. Processed
further argues that any utilitarian aspects of the merchandise are incidental to its
amusement qualities and that the merchandise satisfies the multi-factor test of
Minnetonka. Finally, Processed argues that when a product is prima facie classifiable
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under two headings, General Rule of Interpretation (“GRI”) 3(a) of the HTSUS provides
that the more specific heading is preferred and that a “use provision” is generally more
specific than an eo nomine provision.
The government responds that the trial court applied the correct standard for
defining “toys” and properly granted summary judgment. The government argues that
Processed did not come forward with sufficient evidence to create triable issues on
matters for which it bore the burden of proof. The government also adopts the position
of the trial court that “play value” is the dominant factor in determining whether a product
should be classified as a toy. In addition, the government argues that the amusement
value of the merchandise cannot be incidental to the utilitarian aspects because
Processed failed to provide sufficient evidence to support a finding that play value even
exists in this merchandise. Furthermore, the government argues that Processed’s
advertising focuses on the utility of the backpacks and beach bag to transport the sand
toys sold with the backpacks and bag and to transport other small personal children’s
items. The government further argues that GRI 3(a) does not apply to this case
because Processed did not demonstrate that the products are prima facie classifiable
under heading 9503. Lastly, the government asserts that the heading “traveling bags . .
. backpacks . . . and similar containers” for 4202 is far more specific than the heading
“Other toys” for 9503.
We agree with the government that the Court of International Trade correctly
granted summary judgment affirming Customs’s classification of the merchandise. We
first set out the relevant portions of the HTSUS, as follows:
4202 Trunks, suitcases, vanity cases, attaché cases, briefcases,
school satchels, spectacle cases, binocular cases, camera
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cases, musical instrument cases, gun cases, holsters and
similar containers; traveling bags, toiletry bags, knapsacks
and backpacks, handbags, shopping bags, wallets, purses,
map cases, cigarette cases, tobacco pouches, tool bags,
sports bags, bottle cases, and similar containers, of leather
or of composition leather, of sheeting of plastics, of textile
materials, of vulcanized fiber or paperboard, or wholly or
mainly covered with such materials or with paper:
* * *
Other:
* * *
4202.92 With outer surface of sheeting of plastic or of
textile materials:
Travel, sports and similar bags:
With outer surface of textile
materials:
* * *
4202.92.45 Other
* * * * * * * * * * *
9503 Other toys; reduced-size (“scale”) models and similar
recreational models, working or not; puzzles of all kinds;
parts and accessories thereof:
* * *
9503.70.00 Other toys, put up in sets or outfits, and parts and
accessories thereof
The classification of imported items is determined by their condition at the time of
entry. Austin Chem. Co. v. United States, 835 F.2d 1423, 1426 (Fed. Cir. 1987).
We agree with the standard adopted in Minnetonka to determine whether
merchandise should be classified as a toy. In considering the proper classification
under the HTSUS of hollow plastic containers in the shape of cartoon characters used
to sell bubble bath, the Minnetonka court determined that the principal use of a “toy” is
amusement, diversion, or play (or as the trial court termed it, “play value”) rather than
practicality. 110 F. Supp. 2d at 1021, 1026. However, we do not agree with
Processed’s characterization of the seven factors recited in Minnetonka (to help
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determine if subject merchandise is of the same class or kind as more specifically
recited merchandise) as definitive or even as carrying weight equal to principal use in
defining “toys.” Instead, it is clear that those factors are simply areas of inquiry that may
prove useful in determining what is the principal use of merchandise alleged to be a
“toy.” In this case, in particular, the imported backpacks and beach bags are sold in
sets with sand toys, so the significance of certain factors, such as the channel of sale, is
greatly reduced in determining the proper classification of the backpacks and beach
bags as imported—alone and empty.
The trial court found that Processed failed to allege facts sufficient to support a
conclusion that the primary use of the backpacks and beach bag is as a toy (i.e., for
play). We discern no error in that finding. As noted by the trial court, “It is well settled
that a conclusory statement on the ultimate issue does not create a genuine issue of
fact.” Applied Cos. v. United States, 144 F.3d 1470, 1475 (Fed. Cir. 1998) (internal
quotations and citation omitted). Also, as noted by the trial court, the nonmovant “must
point to an evidentiary conflict created on the record at least by a counter statement of
fact or facts set forth in detail.” Barmag Barmer Maschinenfabrik AG. v. Murata
Machinery, Ltd., 731 F.2d 831, 836 (Fed. Cir. 1984).
In its brief, Processed supports its primary use argument with several statements
from the record, but each one was fully considered by the trial court in its decision. The
statement of professional toy buyer Jay Byrd referenced for support by Processed in its
brief is wholly conclusory. Furthermore, the statement does not support a conclusion
that there is separate play use for the backpacks and beach bag, as it merely states that
the use of the “vinyl beach bag and beach toys” is for play. Processed’s reference to an
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advertisement for the merchandise stating that “[i]t’s a beachy day, and a great way to
begin your adventure” is even less pertinent. Finally, the statement of Processed’s Vice
President of Engineering, David Bergman, suffers from a similar defect. Although it is
slightly less conclusory, it is also insufficient to raise a genuine issue of material fact.
The affidavit states, “The merchandise was primarily designed to provide amusement
and diversion for children by giving them a clear plastic beach toy which they could use
as a sand and water sieve and in which they can insert and remove small, lightweight
objects.” However, this statement is not supported by any study as to the actual use of
the bags or any showing that the bags themselves were marketed primarily as play
items. Bergman’s conclusory statement as to the company’s supposed intent as to how
the bags should be used provides no evidence of their play value. Even if credited, both
identified play uses appear incidental to the merchandise’s utilitarian functions of
transporting the included sand toys and helping to drain them of sand and water (rather
than the functional use being incidental to the play value). We therefore agree with the
trial court that Processed has failed to meet even the minimum threshold necessary to
overcome summary judgment that the imported backpacks and beach bag are not
classifiable as toys under heading 9503.
Similarly, we agree with the government and the trial court that there are no
genuine issues of material fact preventing a determination that the backpacks and
beach bag are properly classified under subheading 4202.92.45. Other than arguing
that the merchandise is more properly classified as a toy, Processed argues that the
merchandise cannot be classified as a “backpack” under heading 4202 because it can
only carry a weight of three pounds without being deformed. As noted by the trial court
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and the government, there is no weight or structural integrity requirement specified for
heading 4202. Viewing the facts in the light most favorable to Processed, the
merchandise is at least suitable for a child to transport the sand toys sold therewith and
other objects weighing up to three pounds.
Processed also challenges the trial court’s determination that the merchandise
satisfies what it refers to as the Totes characteristics for classification in heading 4202.
However, we did not recite a controlling test in Totes. Instead, we merely agreed with
the Court of International Trade’s determination that a car trunk organizer not
specifically recited under 4202 shared the characteristics of organizing, storing,
protecting, and carrying various items with those products that are specifically recited
under heading 4202. Totes, 69 F.3d at 498. In any case, Processed does not dispute
that the backpacks and beach bag store and carry various items. We do not find
persuasive Processed’s argument that the products cannot be used for organizational
purposes because they consist of a single compartment, or that the products cannot
help protect their contents because they include mesh bottoms. They may not provide
the same amount of organization and protection as other possible designs, but they
clearly provide some level of organization and protection. Thus, there is no reason that
the backpacks and the beach bag of a highly similar function should not be classified
under the eo nomine heading 4202 that describes them.
Given their construction, the backpacks and beach bag clearly fall within
subheading 4202.92 for 4202 items “[w]ith outer surface of sheeting of plastic or of
textile materials.” The next subheading under 4202.92 recites, “Travel, sports and
similar bags.” Additional U.S. Note 1 to Chapter 42 states, “For the purposes of
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heading 4202, the expression ‘travel, sports and similar bags’ means goods . . . of a
kind designed for carrying clothing and other personal effects during travel, including
backpacks and shopping bags of this heading . . . .” Thus, the merchandise qualifies as
“Travel, sports and similar bags” under Note 1. Subheadings 4202.92.15 through
4202.92.30 are for such “Travel, sports and similar bags” “[w]ith outer surface of textile
materials,” and thus “Travel, sports and similar bags” with “outer surface of sheeting of
plastic” fall into subheading 4202.92.45 for “Other.” The trial court did not err in
determining that, given the undisputed material facts, the imported backpacks and
beach bag should be classified under subheading 4202.92.45.
Additionally, we reject Processed’s argument that the rule of relative specificity in
GRI 3(a) supports classification of the merchandise under heading 9503. First, as
explained above, Processed failed to make a prima facie showing that the backpacks
and beach bag could be classified under heading 9503. Therefore, a necessary
predicate to the application of GRI 3(a), merchandise that is prima facie classifiable
under two headings, is not present here. In addition, assuming that the merchandise
was prima facie classifiable under 9503, we agree with the government that heading
4202 for backpacks and similar containers is more specific than 9503 for “other” toys.
Finally, Processed raises a new argument in its reply brief, one not raised before
the trial court or in its opening brief to this court. Noting that subheading 9503.70.00
recites “Other toys, put up in sets or outfits, and parts and accessories thereof,”
Processed argues that the backpacks and beach bag are “accessories” to the sand toy
“sets” with which they are sold. While we usually do not consider arguments first raised
in a reply brief, we do so here because it relates to additional wording within the same
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subheading under which Processed previously argued classification of its merchandise
and in the interest of ascertaining that the goods have been correctly classified. See
Rollerblade, Inc. v. United States, 282 F.3d 1349, 1353 (Fed. Cir. 2002).
We conclude that the subject merchandise is not “accessories thereof.” In
Rollerblade, we found that under its dictionary or common meaning, an “accessory”
“must bear a direct relationship to the primary article that it accessorizes.” 282 F.2d at
1352. More specifically, we determined that the protective gear at issue, such as knee
pads and elbow guards, did not “directly act” upon the in-line skates that they allegedly
accessorized. Similarly, the backpacks and beach bag at issue here may be suitable
for transport of the sand toys, but the bags do not directly affect or enhance use of the
sand toys in the way required in order to be classified as “accessories.” Thus, there is
no “direct” relationship between the items, and the backpacks and beach bag are thus
not accessories to the sand toys.
Processed’s attempt to support its argument by reference to Additional U.S. GRI
1 and Note 3 to Chapter 95 is not persuasive. Additional U.S. GRI 1(c) states, “In the
absence of special language or context which otherwise requires – (c) . . . a provision
for ‘parts’ or ‘parts and accessories’ shall not prevail over a specific provision for such
part or accessory.” Thus, Additional U.S. GRI 1(c) states that absent “special
language,” the backpacks and beach bag should be classified under heading 4202,
which specifically names backpacks and similar bags, rather than as an accessory
under heading 9503. Processed attempts to argue that Note 3 to Chapter 95
constitutes such “special language.” Note 3 states, “Subject to note 1 above, parts and
accessories which are suitable for use solely or principally with articles of this chapter
06-1093 -11-
are to be classified with those articles.” (emphasis added). Note 3 is of no help to
Processed. The backpacks and beach bag are general use articles that can be used to
carry any number of different items weighing up to at least three pounds, and thus they
are not “suitable for use solely or principally” with sand toys.
Processed’s alternative argument that the imported products should be classified
as accessories to the sand toys with which they are sold therefore does not alter our
conclusion that they are properly classified under subheading 4202.92.45 and that
summary judgment was thus appropriate.
CONCLUSION
We affirm the Court of International Trade’s decision granting summary judgment
in favor of the government and confirming Custom’s classification of the imported
“Pooh” and “Barbie” backpacks and “Barbie” beach bag under heading 4202.92.45 of
the HTSUS.
AFFIRMED
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