Rhodia, Inc. v. United States

Slip Op. No. 06-118

UNITED STATES COURT OF INTERNATIONAL TRADE

RHODIA, INC.,

Plaintiff,
Before: Timothy C. Stanceu, Judge
v.
Court No. 00-00174
UNITED STATES,

Defendant.

OPINION

[Granting plaintiff’s motion for summary judgment on tariff classification of imported good
consisting in part of various rare earth carbonates and denying defendant’s cross-motion for
summary judgment]

Dated: July 28, 2006

Neville Peterson LLP (John M. Peterson and Curtis W. Knauss) for plaintiff.

Peter D. Keisler, Assistant Attorney General, Barbara S. Williams, Attorney-in-Charge,
International Trade Field Office, and Bruce N. Stratvert, Trial Attorney, Commercial Litigation
Branch, Civil Division, United States Department of Justice, for defendant.

Stanceu, Judge: Plaintiff Rhodia, Inc. (“Rhodia”) challenges the determination of tariff

classification that the United States Customs Service (“Customs”)1 applied in 1999 to two entries

of an imported product identified by plaintiff as “rare earth carbonate mixture” and moves for

summary judgment. Defendant United States cross-moves for summary judgment. The court,

exercising jurisdiction under 28 U.S.C. § 1581(a) (2000), grants summary judgment to plaintiff

1
The United States Customs Service since has been renamed as the United States Bureau
of Customs and Border Protection. See Homeland Security Act of 2002, Pub. L. 107-296,
§ 1502, 116 Stat. 2135, 2308-09 (2002); Reorganization Plan Modification for the Department of
Homeland Security, H.R. Doc. No. 108-32, at 4 (2003).
Court No. 00-00174 Page 2

because there are no genuine issues of fact material to the tariff classification issue presented by

this case and because the classification claimed by plaintiff before the court is correct.

I. BACKGROUND

Customs, upon liquidating the two entries, classified the imported product as a cerium

compound in subheading 2846.10.00 of the Harmonized Tariff Schedule of the United States

(“HTSUS”) (1999) (“Compounds, inorganic or organic, of rare-earth metals, of yttrium or of

scandium, or of mixtures of these metals: Cerium compounds”), subject to duty at 5.5 percent ad

valorem. In a separate protest filed on each of the two liquidations, plaintiff asserted that the

imported good is not described by the term “cerium compounds” as used in subheading

2846.10.00 and claimed classification in a “basket” subheading of heading 2846, subheading

2846.90.80, HTSUS (1999). Although Customs denied the protests, defendant United States

now claims in its cross-motion for summary judgment that subheading 2846.90.80, HTSUS is the

correct classification for the good. At the time of entry in 1999, that tariff provision read in

pertinent part as follows:

2846 Compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium,
or of mixtures of these metals:

* * *
2846.90.80 Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7%.

Before the court, Rhodia claims classification in subheading 3824.90.39, HTSUS (1999). In

pertinent part, that tariff provision, as of the date of entry, was as follows:

3824 . . . chemical products and preparations of the chemical or allied industries
(including those consisting of mixtures of natural products), not elsewhere
specified or included . . .

3824.90 Other:
Court No. 00-00174 Page 3

* * *
Mixtures of two or more inorganic compounds:

3824.90.39 Other: . . . . . . . . . . . . . . . . . . . . . . Free.

II. DISCUSSION

The court proceeds de novo in actions brought to contest the denial of a protest under

section 515 of the Tariff Act of 1930. See 28 U.S.C. § 2640(a)(1) (2000). Summary judgment is

appropriate when the parties’ submissions “show that there is no genuine issue as to any material

fact and that the moving party is entitled to a judgment as a matter of law.” USCIT R. 56(c).

Where tariff classification is at issue, “summary judgment is appropriate when there is no

genuine dispute as to the underlying factual issue of exactly what the merchandise is.” Bausch &

Lomb, Inc. v. United States, 148 F.3d 1363, 1365 (Fed. Cir. 1998).

Plaintiff has the burden of establishing that the government’s classification of the product

was incorrect but does not bear the burden of establishing the correct tariff classification; instead,

the correct tariff classification is to be determined by the court. Jarvis Clark Co. v. United

States, 733 F.2d 873, 878 (Fed. Cir. 1984). In determining the correct tariff classification, the

court first must “ascertain[] the proper meaning of specific terms in the tariff provision.” David

W. Shenk & Co. v. United States, 21 CIT 284, 286, 960 F. Supp. 363, 365 (1997). That meaning

is a question of law. See Russell Stadelman & Co. v. United States, 23 CIT 1036, 1037-38, 83 F.

Supp. 2d 1356, 1358 (1999), aff’d, 242 F.3d 1044 (Fed. Cir. 2001). Second, the court is to

determine the tariff provision under which the subject merchandise is properly classified. See

Bausch & Lomb, 148 F.3d at 1365-66. This determination also is a question of law. Id. at 1366.

The statutory presumption of correctness given Customs classification decisions by 28 U.S.C.
Court No. 00-00174 Page 4

§ 2639(a)(1) does not apply if the court is presented with a question of law by a proper motion

for summary judgment. See Universal Elecs., Inc. v. United States, 112 F.3d 488, 492 (Fed. Cir.

1997).

The General Rules of Interpretation of the HTSUS govern the determination of tariff

classification. N. Am. Processing Co. v. United States, 236 F.3d 695, 698 (Fed. Cir. 2001).

General Rule of Interpretation (“GRI”) 1, HTSUS, initially requires that tariff classification “be

determined according to the terms of the headings and any relative section or chapter notes.”

GRI 1, HTSUS. GRIs 2 through 4 then apply “provided such headings or notes do not otherwise

require.” Id.

For guidance as to the scope and meaning of tariff terms, the court may resort to the

Explanatory Notes to the Harmonized Commodity Description and Coding System (“Explanatory

Notes”), which, although not part of U.S. law, are “indicative of proper interpretation” of the

tariff schedule. Lynteq, Inc. v. United States, 976 F.2d 693, 699 (Fed. Cir. 1992) (quoting H.R.

Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988), reprinted in 1988 U.S.C.C.A.N.

1547, 1582) (internal quotation marks omitted).

A. Absence of a Genuine Issue of Material Fact

The court finds that there is no genuine issue of fact material to the tariff classification of

the imported merchandise. The good, a product of the People’s Republic of China, is a mixture

that consists principally of various rare earth carbonates, which collectively comprise by weight

62 percent of the product. Pl.’s R. 56 Statement of Material Facts Not in Dispute ¶ 9. In

addition to the rare earth carbonates, the product contains rare earth ammonium double sulfates,
Court No. 00-00174 Page 5

bound water, and impurities.2 Id. According to plaintiff, the bound water assists in the transport

of the product by allowing it to flow and thereby be pumped. Tr. of Aug. 10, 2005 Oral

Argument at 11 (“Tr.”).

The parties agree that the imported merchandise was produced by subjecting bastnasite

ore to processing that includes crushing, grinding, treatment with sulfuric acid, and cracking in a

kiln, resulting in a product that Rhodia identified as “Rare Earth crude” in a submission to

Customs during the protest proceeding. Def.’s Resp. to Pl.’s Statement of Material Facts Not in

Issue ¶ 12 & Ex. A at 2. The Rare Earth crude is further processed into sulfate solution,

precipitated, and filtered to yield the imported good, to which Rhodia’s submission in the protest

proceeding referred as “mixed Rare Earth carbonate.” Id. ¶ 13 & Ex. A at 2. Following

importation, the product is further processed to extract rare earth carbonates.

The parties also agree that the rare earth carbonates in the mixture have commercial

value. The record made before the court, however, does not establish whether the rare earth

ammonium double sulfates in the mixture have commercial value. Plaintiff concedes that the

rare earth ammonium double sulfates “may have no separate commercial value.” Tr. at 18.

Because the effect of the presence of the rare earth ammonium double sulfates on the

determination of tariff classification would be the same whether or not the rare earth ammonium

double sulfates have commercial value, as discussed infra, the court concludes that the issue of

2
The various rare earth carbonates present are cerium carbonate (31 percent), lanthanum
carbonate (18 percent), neodymium carbonate (9 percent), praseodymium carbonate (3 percent),
and other rare earth carbonates (1 percent). The remaining 38 percent of the product consists of
rare earth ammonium double sulfates (4 percent), bound water (32 percent), and impurities
(2 percent). Defendant characterizes the impurities as including the rare earth ammonium double
sulfates (i.e., defendant characterizes the product as consisting of 6 percent total impurities).
Court No. 00-00174 Page 6

the commercial value of the rare earth ammonium double sulfates is not a genuine issue of

material fact for purposes of Rule 56.

The court concludes, similarly, that the issue of whether the rare earth ammonium double

sulfates are “by-products” or “impurities” is not an issue of material fact precluding summary

judgment. Defendant submitted in support of its cross-motion for summary judgment an

affidavit of Mr. Larry D. Fluty, Director of Scientific Services, U.S. Customs and Border

Protection, in which Mr. Fluty stated that “[t]he rare-earth ammonium double sulfates that make

up 4 percent of the imported merchandise are by-products (impurities).” Decl. of Larry D. Fluty

¶ 12 (“Fluty Aff.”). His affidavit further stated that the rare earth ammonium double sulfates “are

the result of the processing of the rare-earth crude into sulfate solution and then precipitation as

the mixed rare-earth carbonate. As such, they are allowed impurities pursuant to Note 1(a) to

Chapter 28.” Id.

Defendant, based in part on Mr. Fluty’s affidavit, maintained in its submissions in support

of summary judgment that the rare earth ammonium double sulfates, which comprise 4 percent of

the good by weight, should be considered an impurity or by-product for purposes of Note 1(a) to

Chapter 28, HTSUS, and, therefore, do not result in the exclusion of the product from

Chapter 28. Def.’s Mem. in Supp. of its Mot. for Summ. J. and in Opp’n to Pl.’s Mot. for Summ.

J. at 7. Plaintiff does not contest the point made in Mr. Fluty’s affidavit that the rare earth

ammonium double sulfates resulted from the processing of the rare earth crude into sulfate

solution and subsequent precipitation. Mr. Fluty’s further statement to the effect that the rare

earth ammonium double sulfates “are allowed impurities pursuant to Note 1(a) to Chapter 28,”

however, is not an assertion of fact but a conclusion of law that is based on Mr. Fluty’s own
Court No. 00-00174 Page 7

construction of that tariff provision. Fluty Aff. ¶ 12. The construction of Note 1(a) to Chapter 28

is an issue of law to be determined by the court. For reasons discussed infra, Mr. Fluty’s

construction of Note 1(a) to Chapter 28, HTSUS, which defendant adopts in its argument on

cross-motion for summary judgment, is an impermissible one.

Finally, defendant, at a late stage of the summary judgment proceedings, appears to have

attempted to raise an issue of fact pertaining to the composition of the imported good and,

specifically, to whether the good actually contains rare earth ammonium double sulfates. See

Def.’s Br. Addressing the Court’s Questions of Sept. 7, 2005 at 1. Here also, the court finds no

genuine issue of material fact for purposes of USCIT R. 56. Defendant, having previously taken

issue with plaintiff’s description of the good as a “rare earth carbonate mixture,” stated in its

submission in response to questions of the court following oral argument that defendant “is not

certain whether the merchandise imported in the entries in issue is indeed a mixture of

compounds because the merchandise is described on the commercial invoices as a ‘mixed rare

earth carbonate’ . . . .” Id. Defendant’s response further stated that

[t]his description appears to indicate that there is only one carbonate compound
consisting of a variety of rare earths. Without a laboratory report on the analysis
of the composition that make [sic] up the imported merchandise, defendant is
unable to ascertain whether the imported merchandise consists of a mixture of
different rare earth carbonates as well as, on an as-is basis, 4 percent by weight of
various rare earth ammonium double sulfates.

Id.

Earlier, in its response to plaintiff’s statement of material facts not in dispute that it filed

under USCIT R. 56(h), defendant admitted that the imported good contains various rare earth

carbonate compounds and also contains rare earth ammonium double sulfates, further admitting
Court No. 00-00174 Page 8

that the rare earth ammonium double sulfates comprise 4 percent of the product on an “as is”

basis. See Def.’s Resp. to Pl.’s Statement of Material Facts Not in Issue ¶ 9, 16 & Ex. A at 2. At

oral argument, defendant again conceded that rare earth ammonium double sulfates are present in

the product and constitute 4 percent of the product. Tr. at 32. If defendant is raising, or

attempting to raise, following that oral argument an issue of material fact as to whether the

imported merchandise contains various rare earth carbonates and rare earth ammonium double

sulfates, defendant is contradicting its own Rule 56(h) response to plaintiff’s statement of

uncontested facts.

It is not clear that defendant intended its response to the court’s questions as an

opposition to summary judgment. But if so, defendant did not satisfy Rule 56(e), under which a

party opposing summary judgment “must set forth specific facts showing that there is a genuine

issue for trial.” USCIT R. 56(e). Plaintiff’s description of the imported good on the invoices as

“mixed rare earth carbonate,” although indicating a name under which the imported merchandise

was sold in commerce, does not establish as a fact that the imported good is a carbonate

compound instead of a mixture containing various rare earth carbonates, nor does it establish as a

fact that rare earth ammonium double sulfates are lacking in the imported product. Defendant’s

own admissions, made in its statement under Rule 56(h), also defeat its subsequent attempt to

raise an issue of material fact. As required by Rule 56(c), the court will enter summary judgment

because the pleadings and admissions on file show that there is no genuine issue as to any

material facts, including the facts to which defendant alluded in its written response to the court’s

questions following oral argument.
Court No. 00-00174 Page 9

B. The Classification Determined by Customs upon Liquidation Was Incorrect

In denying the two protests, Customs affirmed the tariff classification determination that

it had made in liquidating the two entries, i.e., classification as “cerium compounds” in

subheading 2846.10.00, HTSUS (1999) (“Cerium compounds”). This classification

determination, which defendant does not advocate before the court, was plainly incorrect. The

merchandise under consideration cannot be described as a “cerium compound.” As discussed

infra, the merchandise is not a single compound but instead is a mixture consisting principally of

several compounds of various rare earth metals. A cerium compound, cerium carbonate, is

present only as a component of the mixture, comprising 31 percent of the whole. Moreover, as

also discussed infra, the good is properly classified under another heading and not under heading

2846.

C. By Application of General Rule of Interpretation 1, Heading 2846 Is Precluded, and
Heading 3824 Is the Correct Heading for Classification of the Good

The parties have identified two headings as relevant to the classification issue presented

by this case. They are heading 2846, HTSUS (“Compounds, inorganic or organic, of rare-earth

metals, of yttrium or of scandium, or of mixtures of these metals”) and heading 3824, HTSUS

(“. . . chemical products and preparations of the chemical or allied industries . . . not elsewhere

specified or included . . .”). The court’s examination of the various headings, section notes, and

chapter notes causes it to conclude that no other headings merit consideration.
Court No. 00-00174 Page 10

The imported good does not conform to the usual definitions of the term “compound,” as

that term is generally used in referring to chemical substances.3 According to the uncontested

facts as established for purposes of summary judgment, the product is, instead, a “mixture” of

various rare earth compounds, i.e., rare earth carbonates and rare earth ammonium double

sulfates with additional substances present.4 Heading 2846, HTSUS, however, is not confined to

separate chemically defined compounds, and, because it contains the heading term “compounds

. . . of mixtures of these metals,” heading 2846 includes within its scope certain substances that

can be described as “mixtures.” See USR Optonix, Inc. v. United States, 29 CIT ___, ___, 362 F.

Supp. 2d 1365, 1374-75 (2005). The Explanatory Note to heading 28.46 addresses in the first

paragraph the question of which mixtures of rare earth compounds fall within the heading and

which do not. The Explanatory Note provides as follows:

This heading [i.e., heading 28.46] covers the inorganic or organic
compounds of yttrium, of scandium or of the rare-earth metals of heading 28.05
(lanthanum, cerium, praseodymium, neodymium, samarium, europium,
gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium,
lutetium). The heading also covers compounds derived directly by chemical
treatment from mixtures of the elements. This means that the heading will
include mixtures of oxides or hydroxides of these elements or mixtures of salts
having the same anion (e.g., rare-earth metal chlorides), but not mixtures of salts
having different anions, whether or not the cation is the same. The heading will
not therefore, for example, cover a mixture of europium and samarium nitrates
with the oxalates nor a mixture of cerium chloride and cerium sulphate since these
examples are not compounds derived directly from mixtures of elements, but are

3
The term “chemical compound” is generally used to refer to “a substance composed
chemically of two or more elements in definite proportions (as opposed to a mixture).” 3 The
Oxford English Dictionary 629 (2d ed. 1989) (emphasis in original).
4
The term “mixture” is defined as “[a]n aggregate composed of two or more distinct
chemical components which retain their identities regardless of the degree to which they have
become mingled.” McGraw-Hill Encyclopedia of Chemistry 607 (5th ed. 1983).
Court No. 00-00174 Page 11

mixtures of compounds which could be conceived as having been made
intentionally for special purposes and which, accordingly, fall in heading 38.24.

Explanatory Note 28.46 (emphasis in original). In the text beyond the first sentence, the

paragraph is directed, at least in part, to explaining the intended meaning of the heading term

“compounds . . . of mixtures of these metals.” Id. The second sentence describes this heading

term as including “compounds derived directly by chemical treatment from mixtures of the

elements.” Id. The note as a whole clarifies that the term “compounds derived directly by

chemical treatment from mixtures of the elements” includes certain mixtures as well as

chemically defined compounds. See id. Concerning the particular question of mixtures of salts

of rare earth metals, the note draws a distinction between mixtures in which all the salts present

contain the same anion (regardless of whether they have different rare earth metal cations) and

those mixtures in which the salts contain different anions.5

Rare earth carbonates and rare earth ammonium double sulfates conform to technical

definitions of the term “salts.” A “salt” is defined as a “substance produced by the reaction of an

acid with a base. A salt consists of the positive ion of a base and the negative ion of an acid.”

10 The New Encyclopædia Britannica (Micropædia) 363 (15th ed. 1986). A “carbonate” is “any

member of two classes of chemical compounds derived from carbonic acid or carbon dioxide

. . . . The inorganic carbonates are salts of carbonic acid (H2CO3), containing the carbonate ion,

CO32-, and ions of metals such as sodium or calcium.” 2 The New Encyclopædia Britannica

(Micropædia) 851 (15th ed. 1986). A “sulfate” is “any of numerous chemical compounds related

5
A “cation” is “[a]n ion carrying a positive charge which moves toward the cathode
(negative electrode) during electrolysis.” 3 The Oxford English Dictionary 990 (2d ed. 1989).
An “anion” carries “a negative charge which moves towards the anode (positive electrode) during
electrolysis.” 1 The Oxford English Dictionary 478 (2d ed. 1989).
Court No. 00-00174 Page 12

to sulfuric acid, H2SO4. One group of these derivatives is composed of salts containing the

sulfate ion, SO42-, and positively charged ions such as those of sodium, magnesium, or

ammonium . . . .” 11 The New Encyclopædia Britannica (Micropædia) 366 (15th ed. 1986).

Because the product under consideration contains rare earth carbonates but also contains

rare earth ammonium double sulfates, the individual salts within the mixture cannot be described

as differing in structure from one another only in having different rare earth cations. Although

the rare earth carbonates and the rare earth ammonium double sulfates in the mixture all contain

rare earth cations, they do not all contain the same anion. See Explanatory Note 28.46 (stating

that this heading will not include “mixtures of salts having different anions, whether or not the

cation is the same”). Thus, the mixture under consideration is outside the scope of the heading as

interpreted consistently with Explanatory Note 28.46, which clarifies the meaning of the heading

term “compounds . . . of mixtures of these metals” such that the mixture under consideration is

not described by this term. Because no term of heading 2846 describes the good, classification

thereunder is precluded by application of GRI 1, HTSUS.

Defendant characterizes the rare earth ammonium double sulfates as “impurities” or “by-

products” and directs the court’s attention to Note 1(a) to Chapter 28, HTSUS, under which,

defendant argues, the court should disregard the presence of the rare earth ammonium double

sulfates for classification purposes. The court finds no merit in this argument. Note 1(a) to

Chapter 28 provides that “[e]xcept where the context otherwise requires, the headings of this

chapter apply only to: (a) Separate chemical elements and separate chemically defined

compounds, whether or not containing impurities . . . .” Note 1(a) to Ch. 28, HTSUS (1999).

This chapter note does not address, let alone resolve, the issue of whether the rare earth
Court No. 00-00174 Page 13

ammonium double sulfates should be disregarded as impurities for purposes of determining

whether the imported good is described by the term “compounds . . . of mixtures of these metals”

as used in heading 2846. Instead, the chapter note establishes the principle that a separate

chemical element or a separate chemically defined compound that contains impurities will not be

excluded, solely on the basis of those impurities, from a heading within Chapter 28 that is

confined (as are most of the headings of the chapter) to separate chemical elements or separate

chemically defined compounds. Heading 2846, however, is not confined to separate chemical

elements and separate chemically defined compounds, as is made clear by Explanatory Note

28.46 and also by the General Explanatory Note to Chapter 28, which lists heading 2846 as one

of the specified “exceptions to the rule that this Chapter is limited to separate chemical elements

and separate chemically defined compounds.”

Thus, any valid argument that the imported good is classified under heading 2846 cannot

rely on Note 1(a) to Chapter 28, HTSUS. Defendant, however, also advances an argument to the

effect that the rare earth ammonium double sulfates, even when considered apart from Note 1(a)

to Chapter 28, must be treated as an impurity and disregarded because plaintiff has not

demonstrated that the rare earth ammonium double sulfates have a commercial use. A flaw in

this argument is apparent from an examination of the scope of heading 2846, the article

description for which explicitly identifies “compounds . . . of rare earth metals.” The rare earth

ammonium double sulfates that defendants would have the court characterize as “impurities” are

actually salts of rare earth metals. Salts of rare earth metals are, indisputably, rare earth

compounds within the scope of heading 2846; indeed, Explanatory Note 28.46 suggests that salts

of rare earth metals are among the principal groups of rare earth compounds that are classified
Court No. 00-00174 Page 14

within heading 2846. Because rare earth compounds, including salts of rare earth metals, are the

very subject of heading 2846, the court concludes that it is impermissible to treat particular salts

of rare earth metals that are present within the imported mixture as “impurities” for purposes of

determining whether the good under consideration – a mixture consisting principally of rare earth

compounds – falls within the scope of heading 2846.

The difficulty with defendant’s argument is even more apparent when the scope of the

heading is analyzed according to Explanatory Note 28.46, which in the context of defining the

heading term “compounds . . . of mixtures of these metals” confirms that certain mixtures of rare

earth compounds are within the scope of the heading and also provides the above-described test

for mixtures of salts of rare earth metals, under which only certain mixtures of rare earth salts

(i.e., those in which all salts present have the same anion) fall within the scope. In setting forth

the test, the Explanatory Note does not provide an exception for rare earth salts present within a

mixture that do not have, or may not have, a commercial use after isolation resulting from further

processing of the mixture that occurs following importation. The Explanatory Note, rather, is

concerned with the identity of the particular salts included in the mixture and in no way addresses

the commercial uses, or absence of commercial uses, to which components of the mixture may be

susceptible following post-importation processing. Thus, the note sets forth a specific test to

define a critical term of the heading, “compounds . . . of mixtures of these metals,” which

defendant’s classification argument essentially would require this court to disregard.

Defendant’s argument, in this respect, would have the court resolve the issue posed by the

presence of the rare earth ammonium double sulfates by resort to a use-related principle that is at

odds with the Explanatory Note and that appears nowhere in the language of the article
Court No. 00-00174 Page 15

description for heading 2846 or in any related section or chapter note of the HTSUS. For these

reasons, the court is unable to accept defendant’s overly broad construction of the scope of

heading 2846.

In responding to a question by the court as to what rule or tariff classification principle

other than Note 1(a) to Chapter 28 would require the court to disregard the presence of the rare

earth ammonium double sulfates, defendant points the court to the principle of de minimis non

curat lex. Defendant cites as instructive the decisions in United States v. Cavalier Shipping Co.,

60 CCPA 152, C.A.D. 1103, 478 F.2d 1256 (1973), and Ginger Dry Ginger Ale, Inc. v. United

States, 43 Cust. Ct. 1, C.D. 2094 (1959). However, neither Cavalier Shipping nor Ginger Dry

Ginger Ale establishes a rule or principle applicable to the tariff classification issue presented by

this case.

Cavalier Shipping involved the classification under the previous Tariff Schedule of the

United States (“TSUS”) of two formulations of a liquid pesticide product in which methyl

bromide was the sole active ingredient. Cavalier Shipping, 478 F.2d at 1257. One formulation

consisted of 98 percent methyl bromide and 2 percent chloropicrin; the other was comprised of

68.6 percent methyl bromide, 30 percent petroleum hydrocarbons (an inactive ingredient

included as a diluent or propellant), and 1.4 percent chloropicrin. Id. In both formulations, the

chloropicrin, which in the low levels present had no pesticidal properties, was included to

provide a unpleasant aroma that would serve as a warning of the hazardous presence of the

methyl bromide in the event of leakage of the product. Id. The U.S. Court of Customs and

Patent Appeals (“CCPA”), affirming the judgment of the U.S. Customs Court, rejected the claim

that the product was classifiable under item 405.15, TSUS as a pesticide obtained, derived, or
Court No. 00-00174 Page 16

manufactured in part from a benzenoid product, even though appellant had established that the

chloropicrin was of benzenoid origin. Id. at 1259. The CCPA adopted the reasoning of the

Customs Court, which applied a quantitative-functional test under which the TSUS provision for

pesticides in part of benzenoid origin will describe an article containing any amount of a

benzenoid ingredient that plays a part in the article’s principal function or an article containing a

benzenoid ingredient that does not play a part in the article’s principal function, but is

nevertheless present in commercially meaningful quantities. Id. at 1257-59. By the same

reasoning, the CCPA rejected appellant’s alternative classification in item 409.00, TSUS, as a

mixture in part of a benzenoid pesticide product and affirmed classification in item 429.48,

TSUS, which applied to other halogenated hydrocarbons. Id. at 1259.

The CCPA in Cavalier Shipping reached its determination of classification by construing

various TSUS provisions that are not analogous to the HTSUS provisions at issue in this case,

including a headnote that defined “in part of” as containing “a significant quantity of the named

material” and to which a de minimis rule was applicable, and a TSUS principle assessing

mixtures at the highest rate applicable to any component material. 478 F.2d at 1257-59.

Accordingly, Cavalier Shipping does not establish a rule or principle under which the court may

disregard the presence of the rare earth ammonium double sulfates.

Ginger Dry Ginger Ale, which also arose under the previous TSUS, involved the issue of

the tariff classification of an imported flavoring extract used in manufacturing ginger ale.

43 Cust. Ct. at 1. The extract contained an amount of ethyl alcohol found upon testing to

comprise 0.49 percent of the product by weight. Id. at 2. The alcohol performed no function in

the imported flavoring extract and was present in a trace amount as a result of the process by
Court No. 00-00174 Page 17

which ginger extract, an ingredient in the imported flavoring extract, had been obtained from

ginger root using alcohol as a solvent. Id. The Customs Court, rejecting the government’s

classification of the product as “a flavoring extract containing not over 20 per centum of

alcohol,” determined the proper classification to be as “a flavoring extract ‘not containing

alcohol, and not specially provided for.’” Id. at 1-2, 9. The Customs Court reasoned that “the

maxim de minimis non curat lex is applicable to the imported merchandise.” Id. at 9. After

analyzing other cases in which the de minimis principle was either applied or rejected, the

Customs Court applied the principle, finding significant that the alcohol was present only in a

trace amount, had not been deliberately added, and performed no function. Id. at 3-9.

The de minimis principle applied in Ginger Dry Ginger Ale does not allow the court to

disregard the presence of the rare earth ammonium double sulfates for purposes of determining

the scope of heading 2846, HTSUS. The alcohol in the imported flavoring extract was present in

a trace amount (0.49 percent). That cannot be said of the rare earth ammonium double sulfates,

which are present at a level of 4 percent (6 percent on a dry weight basis) and which, as discussed

above, consist of rare earth salts rather than a substance outside the scope of the heading under

consideration.

D. The Imported Merchandise Properly Is Classified in Subheading 3824.90.39, HTSUS
(“Mixtures of Two or More Inorganic Compounds”)

Heading 3824, HTSUS, broadly includes within its scope “. . . chemical products and

preparations of the chemical or allied industries . . . not elsewhere specified or included . . . .” As

indicated by Explanatory Note 38.24, the heading includes numerous products and preparations

for which the composition is not chemically defined. The terms of the heading are sufficiently
Court No. 00-00174 Page 18

broad to include the imported good. Within the heading, subheading 3824.90.39, HTSUS

pertains generally to “[m]ixtures of two or more inorganic compounds” that do not fall within the

specific mixtures of inorganic compounds described in subheadings 3824.90.31 through

3824.90.36, HTSUS. All compounds in the imported mixture indisputably are inorganic

compounds, including the carbonates, which, although containing the carbon atom, are

considered to be inorganic. 6 The New Encyclopædia Britannica (Micropædia) 327 (15th ed.

1986) (stating that an “inorganic compound” is “any substance in which two or more chemical

elements other than carbon are combined, nearly always in definite proportions” and that

“[c]ompounds of carbon are classified as organic except for carbides, carbonates, cyanides, and a

few others”).

Defendant argues that the imported product is excluded from heading 3824 because of the

heading term “not elsewhere specified or included,” based on its contention that the product is

described by the terms of heading 2846. The court rejects this contention for the reasons

previously discussed. Defendant offers no other reason why the imported product would not fall

within heading 3824 and be described by subheading 3824.90.39, HTSUS.

III. CONCLUSION

The imported product is properly classified in subheading 3824.90.39, HTSUS (1999),

free of duty. Judgment will be entered accordingly.

/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge

Dated: July 28, 2006
New York, New York