Conair Corp. v. United States

Slip Op. 05-95

United States Court of International Trade
______________________________
:
CONAIR CORPORATION, :
: Before: Richard K. Eaton,
PLAINTIFF, : Judge
:
v. : Court No. 02-00383
:
UNITED STATES, :
:
DEFENDANT :
______________________________:

OPINION

[Plaintiff’s motion for summary judgment granted; Defendant’s
cross-motion for summary judgment denied]

August 12, 2005

Neville Peterson LLP (Michael K. Tomenga, Catherine Chess
Chen, George W. Thompson and Lawrence J. Bogard) for Plaintiff
Conair Corporation.

Peter D. Keisler, Assistant Attorney General; Barbara S.
Williams, Attorney in Charge, International Trade Field Office
(James A. Curley); Yelena Slepak, of counsel, Office of Assistant
Chief Counsel for United States Bureau of Customs and Border
Protection, for Defendant United States.

Eaton, Judge: Before the court are cross-motions for

summary judgment pursuant to USCIT R. 56. By its motion,

plaintiff Conair Corporation (“Conair”) challenges the

classification of its tabletop fountains by the United States

Customs Service (“Customs”)1 under the Harmonized Tariff Schedule

1
Effective March 1, 2003, the United States Customs
Service was renamed the United States Bureau of Customs and
Border Protection. See Reorganization Plan Modification for the
Dep’t of Homeland Security, H.R. Doc. 108-32 at 4 (2003).
COURT NO. 02-00383 Page 2

of the United States (2000) (“HTSUS”). Customs classified the

tabletop fountains (“Serenity Ponds”) under HTSUS subheading

3926.40.00 as “Other articles of plastics and articles of other

materials of headings 3901 to 3914 . . . Statuettes and other

ornamental articles,” subject to a tariff rate of 5.3 percent ad

valorem. Conair argues that the merchandise is properly

classifiable under HTSUS subheading 8413.70.20042 as “Pumps for

liquids, whether or not fitted with a measuring device; liquid

elevators; part thereof; . . . Other centrifugal pumps . . .

Other . . . Submersible pumps,” subject to no tariff. By its

cross-motion, defendant, the United States (“Government”), on

behalf of Customs, maintains that the merchandise is properly

classified pursuant to HTSUS subheading 3926.40.00 and asks the

court to deny Conair’s motion and dismiss this action. The court

has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2000). For the

reasons set forth below, the court grants Conair’s motion for

summary judgment and denies that of the United States.

2
Conair, in its briefs, claims the Serenity Ponds are
properly classified under HTSUS subheading 8413.70.2040. The
court, however, believes that Conair intended to cite to
subheading 8413.70.2004, which encompasses “[s]ubmersible pumps.”
See Conair Corp. v. United States, Court No. 02-00383 at 2 (May
27, 2002) (summons identifying “protest claim” as
“8413.70.2004.”); Conair Corp. v. United States, Court No. 02-
00383 at 7–8 (Aug. 12, 2002) (complaint stating “Plaintiff
requests [that] . . . the U.S. Customs Service . . . reliquidate
the subject entries under subheading 8413.70.2004 of the
HTSUS . . . .”).
COURT NO. 02-00383 Page 3

BACKGROUND

Plaintiff is an importer of seven different models of

Serenity Ponds. On November 4, 1999, it submitted a letter to

the Customs National Commodity Specialist Division (“NCSD”) in

New York requesting a tariff classification ruling for a specific

model of these tabletop fountains. Ultimately the NCSD

classified the merchandise under HTSUS subheading 3926.40.00.

See generally New York Letter NY F83276 (March 15, 2000).

On July 10, 2000, Conair filed a Request for Reconsideration

of Customs’ classification, asserting that the Serenity Ponds

were properly classifiable under HTSUS subheading 8413.70.20.

Customs denied this request. See Headquarters Ruling Letter HQ

964361 (August 6, 2001) (“HQ 964361”); see also id. at 5 (“After

a careful consideration of this issue, we determine that the

calming pond is essentially a plastic decorative article.

Accordingly, based upon our determination that the essential

character of the calming pond is as a [sic] article of plastic,

we find that it is provided for in heading 3926 . . . .”).

Thereafter, Conair timely filed protests challenging Customs’

classification of the subject merchandise. Customs denied each

of the protests and Conair commenced the present action.
COURT NO. 02-00383 Page 4

STANDARD OF REVIEW

This court may resolve a classification issue by means of

summary judgment. See Bausch & Lomb, Inc. v. United States, 148

F.3d 1363, 1365 (Fed. Cir. 1998). Summary judgment is

appropriate “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact . . . .” USCIT R. 56(c). Summary judgment of a

classification issue “is appropriate when there is no genuine

dispute as to the underlying factual issue of exactly what the

merchandise is.” Bausch & Lomb, 148 F.3d at 1365 (citing Nissho

Iwai Am. Corp. v. United States, 143 F.3d 1470, 1472 (Fed. Cir.

1998); IKO Indus., Ltd. v. United States, 105 F.3d 624, 626–27

(Fed. Cir. 1997); Rollerblade, Inc. v. United States, 112 F.3d

481, 483 (Fed. Cir. 1997); Sports Graphics, Inc. v. United

States, 24 F.3d 1390, 1391 (Fed. Cir. 1994)). Where jurisdiction

is predicated on 28 U.S.C. § 1581(a), Customs’ interpretation of

an HTSUS tariff term, a question of law, is subject to de novo

review. See 28 U.S.C. § 2640(a); see also E.T. Horn Co. v.

United States, 27 CIT __, __, Slip Op. 03-20 at 4 (Feb. 27, 2003)

(quoting Clarendon Mktg., Inc. v. United States, 144 F.3d 1464,

1466–67 (Fed. Cir. 1998)). The court employs a two-step process

when analyzing a classification issue: “first, construe the

relevant classification headings; and second, determine under
COURT NO. 02-00383 Page 5

which of the properly construed tariff terms the merchandise at

issue falls.” Bausch & Lomb, 148 F.3d at 1365 (citing Universal

Elecs. Inc. v. United States, 112 F.3d 488, 491 (Fed. Cir.

1997)).

DISCUSSION

Here, “there is no genuine dispute as to the underlying

factual issue of exactly what the merchandise is.” Bausch &

Lomb, 148 F.3d at 1365. The parties agree that the Serenity

Ponds: (A) “are designed to ‘create a tranquil atmosphere at home

or in the office,’” Def.’s Resp. to Pl.’s Statement of Material

Facts (“Def.’s Resp. Facts”) para. 1; (B) are intended to appeal

to the consumer’s visual and auditory senses, Def.’s Statement of

Material Facts Not in Dispute (“Def.’s Mat. Facts”) para. 2;

Pl.’s Resp. to Def.’s Statement of Material Facts Not in Dispute

(“Pl.’s Resp. Facts”) para. 2; and (C) are “comprised of: (1) a

water reservoir or base; (2) an electric, submersible,

centrifugal pump that sits in the base; (3) plastic tubing; (4) a

power cord; and (5) various objects, such as simulated rocks,

simulated bamboo, natural polished stones, through which and/or

over which pumped water flows.”3 Statement of Material Facts Not

3
The parties also agree that the “bowl-shaped base” for
each of the fountains is made out of plastic. See Statement of
Material Facts Not in Dispute (“Pl.’s Mat. Facts”) para. 2;
Def.’s Resp. Facts para. 2 (stating that the Government “[a]dmits
(continued...)
COURT NO. 02-00383 Page 6

in Dispute (“Pl.’s Mat. Facts”) para. 1; Def.’s Resp. Facts para.

1.

Merchandise entering the United States is classified under

the HTSUS by Customs. “The legal text of the [HTSUS] consists of

the General Rules of Interpretation; the Additional U.S. Rules of

Interpretation; the General Notes; Sections I through XXII,

inclusive (encompassing chapters 1–99, through the 8-digit level,

article descriptions and tariff and other treatment accorded

thereto); the Chemical Appendix; the Pharmaceutical Appendix; and

the Intermediate Chemicals for Dyes Appendix.” United States

International Trade Commission, Preface to the 12th Edition

HTSUS, 2 (2000). Classification under the HTSUS is governed by

the General Rules of Interpretation (“GRI”). See Carl Zeiss,

Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999);

Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.

Cir. 1998).

3
(...continued)
the remaining allegations of this paragraph to the extent
supported by the product literature in Plaintiff’s Exhibit 1.”);
see also Memo of Points and Authorities in Supp. of Pl.’s Rule 56
Mot. For Summ. J. (“Pl.’s Memo.”), Ex. 1 (containing Serenity
Pond Advertising Literature and Instruction Booklet). The
parties further agree that, with the exception of the wind chime
assembly, the various sculptures—such as the simulated rocks and
the simulated bamboo—are made of plastic. See Pl.’s Mat. Facts;
Pl.’s Memo., Ex. 1; Def.’s Resp. Facts.
COURT NO. 02-00383 Page 7

In a classification dispute, the court begins its analysis

with GRI 1.4 If the proper classification cannot be determined

by reference to GRI 1, it becomes necessary to refer to the

succeeding GRIs in numerical order. See N. Am. Processing Co. v.

United States, 236 F.3d 695, 698 (Fed. Cir. 2001) (citation

omitted); Carl Zeiss, 195 F.3d at 1379 (citing Baxter Healthcare

Corp. of P.R. v. United States, 182 F.3d 1333, 1337 (Fed. Cir.

1999)). If, however, the proper classification is determined by

reference to GRI 1, the court may not consider any subsequent

GRI. Mita Copystar Am. v. United States, 160 F.3d 710, 712 (Fed.

Cir. 1998).

In determining the proper classification, “[t]he Court may

also refer to the Explanatory Notes, which constitute the World

Customs Organization’s official interpretation of the HTSUS.”

Bauer Nike Hockey USA, Inc. v. United States, 27 CIT __, __, 305

F. Supp. 2d 1345, 1351 (2003) (citing Baxter Healthcare Corp. of

P.R. v. United States, 22 CIT 82, 89 n.4, 998 F. Supp. 1133, 1140

n.4 (1998)). The Explanatory Notes, although not legally

binding, are “intended to clarify the scope of HTSUS subheadings

and to offer guidance in interpreting [the] subheadings.”

4
GRI 1 states: “The table of contents, alphabetical
index, and titles of sections, chapters and sub-chapters are
provided for ease of reference only; for legal purposes,
classification shall be determined according to the terms of the
headings and any relative section or chapter notes . . . .” Id.
COURT NO. 02-00383 Page 8

Rollerblade, Inc., 112 F.3d at 486 n.3 (citation omitted).

Therefore, “close textual analysis of the language of the

headings and the accompanying explanatory notes” is required in

order to determine the proper classification of merchandise.

Bauer Nike Hockey, 27 CIT at __, 305 F. Supp. 2d at 1351.

A. Application of the General Rules of Interpretation

1. General Rule of Interpretation 1

Conair argues that the “subject tabletop fountains operate

by pumping liquid water, which produces the sound of flowing

water.” Memo. of Points and Authorities in Supp. of Pl.’s Rule

56 Mot. for Summ. J. (“Pl.’s Memo.”) at 16. This movement of

water is made possible “solely by means of a pump for liquids.”

Id. at 17. Based on these statements, Conair contends that the

Serenity Ponds are “prima facie classifiable within HTSUS Heading

8413 by application of GRI 1 . . . .” Id. at 16. Heading 8413

encompasses “Pumps for liquids, whether or not fitted with a

measuring device; liquid elevators; part thereof.” In making its

claim, Conair insists that HTSUS Heading 8413 is an eo nomine5

5
An eo nomine designation is “one which describes [a]
commodity by a specific name, usually one well known to
commerce.” Casio, Inc. v United States, 73 F.3d 1095, 1097 (Fed.
Cir. 1996) (alteration in original) (quoting Black’s Law
Dictionary 535 (6th ed. 1990)); see also Chevron Chem. Co. v.
United States, 23 CIT 500, 505, 59 F. Supp. 2d 1361, 1367 (1999)
(stating that “[a]n eo nomine provision that names an article
without terms of limitation, absent evidence of a contrary
(continued...)
COURT NO. 02-00383 Page 9

provision that “covers an article in all its forms.” Pl.’s Memo.

at 17 (citations omitted). Thus, for Conair, even though the

Serenity Ponds consist of more parts than merely the pump, “the

subject merchandise answers only to the terms of Heading 8413 and

is prima facie, described therein.” Id. at 18.

Conair further maintains that since the Serenity Ponds are

prima facie classifiable under HTSUS Heading 8413, the Chapter

Notes preclude them from being classified under Customs’ chosen

Heading 3926. This is because note 2(p) to Chapter 39 HTSUS

states that Chapter 39 “does not cover: . . . Articles of Section

XVI (machines and mechanical or electrical appliances).” Id.

Section XVI includes Chapter 84. Therefore, Conair urges the

conclusion that, since the Serenity Ponds are prima facie

classifiable under Chapter 84, the Chapter Notes provide that the

Serenity Ponds may not be classified under Chapter 39.

The Government faults Conair’s assertion that classification

of the Serenity Ponds is possible under GRI 1. “The pump, which

is a component of the tabletop fountain, is prima facie

classifiable under heading 8413. . . . The plastic articles

(i.e., simulated plastic rock) and polished stones, which also

5
(...continued)
legislative intent, is deemed to include all forms of the
article.”) (citation omitted).
COURT NO. 02-00383 Page 10

are components of the fountain, are not ‘pumps for

liquids . . . ,’ do not function as pumps for liquids, and thus

are not described in heading 8413.” Def.’s Br. in Rep. to Pl.’s

Opp’n to Def.’s Mot. for Summ. J. (“Def.’s Rep.”) at 2.

Therefore, according to the Government, because each of the

components is not prima facie classifiable under Heading 8413,

classification cannot be determined pursuant to GRI 1. See id.

at 2–3.

The court finds that, although Conair is correct in its

assertion that the pumps are prima facie classifiable under HTSUS

Heading 8413, it is incorrect in claiming that classification may

be resolved by reliance upon GRI 1. Each Serenity Pond consists

of a pump, a decorative sculpture made of plastic (e.g. simulated

rocks or bamboo),6 and natural stones.7 While the pumps

themselves are properly classified under Heading 8413, the

6
It should be noted that one of the Serenity Pond models
features a wind chime display made of metal and plastic parts.
7
The parties, in their briefs, assert contradictory
characterizations of the stones included with the Serenity Ponds.
The plaintiff characterizes the stones as accessories that are
not necessary to the operation of the pond. The Government,
however, asserts that the stones are adapted to the ponds and
are, therefore, not accessories, but rather additional components
of the fountains. In the alternative, the Government asserts
that the stones are put up for sale as a “set” as that term is
provided for in GRI 3(a) and (b). Because the court finds that
the Serenity Ponds are composite articles whose essential
character is established by their pumps, a discussion of the
parties’ characterizations of the stones is not warranted.
COURT NO. 02-00383 Page 11

remaining parts of the Serenity Ponds are appropriately

classified elsewhere. Because each component, when considered

individually, is prima facie classifiable under a different HTSUS

heading, reliance on GRI 1 is inappropriate. Therefore, it

becomes necessary to refer to the succeeding GRIs in numerical

order. See Pillowtex Corp. v. United States, 171 F.3d 1370, 1375

(1999) (“Having exhausted the headings and the notes, pursuant to

GRI 1, we may now consider the next GRI provision, GRI 2.”).8

2. General Rules of Interpretation 2 and 3

The Government argues that, upon reference to the GRIs in

numerical order, the court should conclude that the Serenity

Ponds must be classified under GRI 3. The Government further

contends that “[s]ince [the] fountains therefore are composite

8
Plaintiff’s reliance on JVC Co. of America, Division of
U.S. JVC Corp v. United States, 23 CIT 523, 62 F. Supp. 2d 1132
(1999), aff’d 234 F.3d 1348 (Fed. Cir. 2000) as support for its
contention that GRI 1 may be used to classify composite goods is
misplaced. In JVC, the Court of Appeals for the Federal Circuit
held that the term “television cameras” was broad enough to allow
for classification of camcorders, which consisted of a camera and
a video cassette recorder. The situation in JVC is
distinguishable from the present case because the definition of
television cameras referenced by the Court stated that “[t]he
units often have built-in . . . video cassette recorders . . .
for completely self-contained operation . . . .” JVC Co. of Am.,
Div. of U.S. JVC Corp., v. United States, 234 F.3d 1348, 1353
(Fed. Cir. 2000) (citing 18 McGraw-Hill Encyclopedia of Science
and Technology 216 (8th Ed. 1997)). The Court also noted that
the Explanatory Notes included cameras with built in video
recorders. Id. at 1352. The plaintiff in the present case has
not produced a definition of a pump that includes sculptural
plastic components.
COURT NO. 02-00383 Page 12

goods, and each component is classifiable under a different

heading, the imported fountains cannot be classified according to

GRI 1, and it is necessary to look to GRI 2 and 3 to determine

classification.” Def.’s Br. in Opp’n to Pl.’s Mot. for Summ. J.

and in Supp. of Its Cross-Mot. for Summ. J. (“Def.’s Memo.”) at

4–5; see GRI 2,9 3.10 Finally, the Government states that “GRI 2,

9
GRI 2 provides that:

(a) Any reference in a heading to an article shall be
taken to include a reference to that article incomplete
or unfinished provided that, as entered, the incomplete
or unfinished article has the essential character of
the complete or finished article. It shall also
include a reference to that article complete or
finished (or falling to be classified as complete or
finished by virtue of this rule), entered unassembled
or disassembled [; and] (b) Any reference in a heading
to a material or substance shall be taken to include a
reference to mixtures or combinations of that material
or substance with other materials or substances. Any
reference to goods of a given material or substance
shall be taken to include a reference to goods
consisting wholly or partly of such material or
substance. The classification of goods consisting of
more than one material or substance shall be according
to the principles of rule 3.
10
GRI 3 provides that:

When, by application of rule 2(b) or for any other
reason, goods are, prima facie, classifiable under two
or more headings, classification shall be effected as
follows: (a) The heading which provides the most
specific description shall be preferred to headings
providing a more general description. However, when
two or more headings each refer to part only of the
materials or substances contained in mixed or composite
goods or to part only of the items in a set put up for
retail sale, those headings are to be regarded as
equally specific in relation to those goods, even if
(continued...)
COURT NO. 02-00383 Page 13

insofar as relevant here, provides in subsection (b) that

classification of goods consisting of more than one material or

substance must be determined according to the principles of GRI

3.” Id. at 5. The court agrees with this analysis.

The Government is also correct in its contention that,

contrary to one of Conair’s alternative arguments, reference to

the first sentence of GRI 3(a) does not end the inquiry. That

sentence, incorporating the concept of “relative specificity,” is

inapplicable in the present case because it comes into play when

a good, as a whole, is prima facie classifiable under two or more

headings. Bauer Nike Hockey USA, Inc. v. United States, 393 F.3d

1246, 1252 (Fed. Cir. 2004). Here, the Serenity Ponds are made

up of parts or components each of which is prima facie

classifiable under a different heading. The second sentence of

GRI 3(a) provides that where “two or more headings each refer to

part only of the materials or substances contained in mixed or

10
(...continued)
one of them gives a more complete or precise
description of the goods[;] (b) Mixtures, composite
goods consisting of different materials or made up of
different components, and goods put up in sets for
retail sale, which cannot be classified by reference to
3(a), shall be classified as if they consisted of the
material or component which gives them their essential
character, insofar as this criterion is applicable[;
and] (c) When goods cannot be classified by reference
to 3(a) or 3(b), they shall be classified under the
heading which occurs last in numerical order among
those which equally merit consideration.
COURT NO. 02-00383 Page 14

composite goods . . . those headings are to be regarded as

equally specific in relation to those goods, even if one of them

gives a more complete or precise description of the goods.”

Thus, the second sentence of GRI 3(a) leads to GRI 3(b).

In cases such as the present one, where classification

pursuant to GRI 3(a) is not possible, the concept of “essential

character” found in GRI 3(b) may direct the court to the proper

resolution. See Better Home Plastics Corp. v. United States, 119

F.3d 969, 970–71 (Fed. Cir. 1997) (stating that “[p]ursuant to

GRI 3(b), goods not classifiable under GRI 3(a) are classified by

the ‘component which gives them their essential character.’”).

As there remain few cases addressing the meaning of essential

character under the HTSUS, this Court continues to rely on cases

decided under its predecessor, the Tariff Schedule of the United

States (“TSUS”). See Better Home Plastics Corp. v. United

States, 20 CIT 221, 224, 916 F. Supp. 1265, 1267 (1996) (stating

that the TSUS “did utilize” the concept of essential character.

Furthermore, in light of the absence of reported cases defining

essential character under the HTSUS, courts may “look to case law

under the TSUS for guidance.”); see also Structural Indus., Inc.

v. United States, 29 CIT __, __ , n.6, 360 F. Supp. 2d 1330,

1336, n.6 (2005) (stating that the definition of essential

character under the TSUS has provided guidance to courts
COURT NO. 02-00383 Page 15

interpreting tariff terms under the HTSUS.). Thus, in order to

determine the essential character of composite merchandise under

the TSUS, this Court has sought to determine which component is

indispensable to the merchandise. See Oak Laminates Div. of Oak

Materials Group v. United States, 8 CIT 175, 180, 628 F. Supp.

1577, 1581 (1984) (stating that “[i]ts essential character is

that which is indispensable to the structure, core or condition

of the article, i.e., what it is.” (citation omitted)). This

inquiry is “factual in nature” and therefore will depend

significantly on the circumstances of each individual case. See

Structural Indus., Inc. v. United States, 356 F.3d 1366, 1370

(Fed. Cir. 2004); see also Can. Vinyl Indus., Inc. v. United

States, 76 Cust. Ct. 1, 2, 408 F. Supp. 1377, 1378 (1976)

(stating that determination of essential character is not an

“exact science.”), aff’d 64 C.C.P.A. 97, 555 F.2d 806 (1977). In

weighing the multiple factors that may be present in any one

case, the court must also be cognizant that

[t]he factor which determines essential character will
vary as between different kinds of goods. It may, for
example, be determined by the nature of the material or
component, its bulk, quantity, weight or value, or by
the role of a constituent material in relation to the
use of the goods.

World Customs Organization, Harmonized Commodity Description and

Coding System 4, Explanatory Note, Rule 3(b) (VIII) (2d ed. 1996)

(emphasis added) (“Explanatory Note”).
COURT NO. 02-00383 Page 16

The parties disagree as to which component imparts the

essential character of the Serenity Ponds. The Government

contends that the plastic decorative sculpture, i.e., the

simulated rocks or the plastic bamboo, is the component which

imparts the essential character. In support of this conclusion,

the Government observes that “[e]ach style of fountain is named

separately and can be distinguished from the others based on

differences in the design of the plastic components.” Def.’s

Resp. at 14. In other words, for the Government, the essential

nature of each Serenity Pond results from the individual plastic

sculpture that differentiates each style of the merchandise from

the other models. Next, the Government points out that the pump

is not visible to the consumer and, therefore, plays no

significant part in creating the “visual or decorative value of

the article.” Def.’s Memo. at 9. Instead, “it is the plastic

components of the article that are visible and aesthetically

appealing to a consumer.” Id. at 7. Finally the Government

states that, “[a] view of the imported fountain can be enjoyed by

an observer even when the pump is not in operation.” Id. at 8.

Thus, in making its arguments, the Government relies on the

visual aspect of the merchandise to make its case.

Conair disputes the Government’s contention and asserts that

the essential character of the Serenity Ponds is imparted by the
COURT NO. 02-00383 Page 17

pump:

While the appearance of the fountain’s contoured
plastic may be one factor in a consumer’s determination
as to which model of Serenity Pond to buy, the decision
to buy a Serenity Pond in the first place is based
entirely on the presence of the submersible pump and
its ability to generate the sound of flowing water.
Indeed, it is difficult to imagine that a consumer
would buy an article advertised as a “fountain,” . . .
if the article could not produce flowing water.

Pl.’s Opp’n to Def.’s Cross-Mot. for Summ. J. and Resp. to Def.’s

Opp’n to Pl.’s Mot. for Summ. J. at 20.

As previously noted, here “there is no genuine dispute as to

the underlying factual issue of exactly what the merchandise is.”

Bausch & Lomb, 148 F.3d at 1365. “[I]f there is no genuine

dispute over the nature of the merchandise, [the Court] adjudges

on summary judgment the proper classification under which it

falls, the ultimate question in every classification case and one

that has always been treated as a question of law.” Id. at 1366.

That being the case, the court turns to the proper

classification of the Serenity Ponds. In reaching the ultimate

question, the court finds that the Serenity Ponds’ essential

character is imparted by the pump. The parties agree that the

Serenity Ponds are “designed to ‘create a tranquil atmosphere at

home or in the office,’” Pl.’s Mat. Facts para. 1; Def.’s Resp.

Facts para. 1, and that they are “intended to appeal to the
COURT NO. 02-00383 Page 18

visual and auditory senses” of the consumer. Def.’s Mat. Facts

para. 2; Pl.’s Resp. Facts para. 2. To the extent that the

Serenity Ponds succeed in creating this tranquil atmosphere, it

is necessarily the water flowing over the simulated landscape

that stimulates the visual and auditory senses. Indeed, any

appeal to the auditory senses is present only when the pump is

transporting water to the top of the Serenity Pond, thus allowing

it to flow over the simulated rocks.

This conclusion is borne out by an examination of the

Serenity Ponds themselves.11 In Customs classification cases,

“the merchandise itself is often a potent witness.” Simod Am.

Corp. v. United States, 872 F.2d 1572, 1578 (Fed. Cir. 1989)

(citing Marshall Field & Co. v. United States, 45 C.C.P.A. 72, 81

(1958)). This examination leads to the conclusion that consumers

would not purchase the Serenity Ponds for the purpose of enjoying

the visual aspects of the plastic sculpture. It is only when the

pump is running and the water is flowing that the Serenity Ponds

could be said to have any “visual or auditory” appeal or create

anything approaching “a tranquil atmosphere.” That is, the water

flowing over the sculptured plastic rocks gives them a more

11
The court has also engaged in an examination of the
Serenity Pond samples provided by Conair. Included among these
samples are six models of the Serenity Ponds. The models
provided as samples are: (1) CP1, (2) CP1R, (3) CP2, (4) CP4, (5)
CP5, and (6) CP7.
COURT NO. 02-00383 Page 19

attractive look and also produces the sound of flowing water.

Although the pump may not be visible, it is nonetheless

indispensable to making the merchandise “what it is.” Oak

Laminates, 8 CIT at 180, 628 F. Supp. at 1581.

The direction given in the Explanatory Note to GRI 3(b)

favors the court’s conclusion. “The factor which determines

essential character will vary as between different kinds of

goods. It may, for example, be determined by . . . the role of a

constituent material in relation to the use of the goods.”

Explanatory Note, Rule 3(b) (VIII) (emphasis added). The pump’s

role in relation to the use of the Serenity Ponds is essential.12

While the plastic component contributes to the manner in which

12
In response to the court’s request, each party has made
a submission with respect to the value of the various components
that make up the Serenity Ponds. Conair Corporation v. United
States, Court No. 02-00383 (May 2, 2005), (order requesting
additional information about the value of the pumps in relation
to the goods); Plaintiffs Declaration on the Cost of Components
of Serenity Pond Models (“Cost Declaration”) at 1–4; Defendant’s
Submission in Accordance With the Court’s Order of May 2, 2005
(“Def.’s Submission”). The essential character of goods may “be
determined by the nature of the material or component, its bulk,
quantity, weight or value, or by the role of a constituent
material in relation to the use of the goods.” Explanatory Note,
Rule 3(b) (VIII) (emphasis added). While there may be some doubt
as to the accuracy of the plaintiff’s submission, see Def.’s
Submission at 2, it appears that with respect to each fountain
model, the pump is the most valuable single component, and in
each case the value of the pump exceeded the value of the plastic
simulated rocks or similar decorative feature. Cost Declaration
paras. 3 & 4. Thus, the value of the pump would tend to confirm
it as the component giving the Serenity Ponds their essential
character.
COURT NO. 02-00383 Page 20

the water flows, and thus to the Serenity Ponds’ auditory and

visual appeal, without the pump the water doesn’t flow at all.

Therefore, it is the pump that is essential to the use of the

goods. Thus, as it is the pump that imparts each Serenity Pond

its essential character, in accordance with GRI 3(b) the Serenity

Ponds are properly classified as if they consisted of that

component.

B. HQ 964361 Entitled to No Deference

The Government contends that HQ 964361, denying the

plaintiff’s request for reconsideration, is entitled to judicial

deference because of its power to persuade in accordance with

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (“The weight of

such a judgment in a particular case will depend upon the

thoroughness evident in its consideration, the validity of its

reasoning, its consistency with earlier and later pronouncements,

and all those factors which give it power to persuade, if lacking

power to control.”). Specifically, the Government states that

[i]n HQ 964361, Customs considered the competing claims
to classification of the plaintiff’s calming pond and
serenity pond, and the applicable GRIs, tariff
provisions, chapter notes and Explanatory Notes.
Customs found that the imported ponds could not be
classified under GRI 1 because the tariff provisions
covering the various parts of the pond were “equally
specific in relation to the good.” Customs then
considered the essential character of the ponds in
light of the plaintiff’s arguments that the ponds
should be classified as pumps. Customs determined that
the essential character of the ponds was not
COURT NO. 02-00383 Page 21

attributable to the pump but to the plastic articles.

Def.’s Opp’n at 15 (citations omitted).

In order to determine whether a particular ruling qualifies

for Skidmore deference, the court engages in a four-factor

analysis that weighs the “thoroughness evident in [the ruling’s]

consideration, the validity of [the ruling’s] reasoning, [the

ruling’s] consistency with earlier and later pronouncements, and

all those factors which give [the ruling] power to

persuade . . . .” Skidmore, 323 U.S. at 140; see also United

States v. Mead Corp., 533 U.S. 218, 235 (2001) (restating the

Skidmore factors as “its writer’s thoroughness, logic, and

expertness, its fit with prior interpretations, and any other

sources of weight.”).

The court finds that the HQ 964361 is not entitled to

deference because it lacks those qualities that would give it the

power to persuade. First, HQ 964361, although presenting a

thorough analysis of the relevant law, fails to demonstrate how

that law applies to the facts of the present case. Instead,

Customs relies on conclusory statements. For example, Customs

states that “[e]ssential character has frequently been construed

to mean the attribute which strongly marks or serves to

distinguish what an article is. After a careful consideration of
COURT NO. 02-00383 Page 22

this issue, we determine that the calming pond is essentially a

plastic decorative article.” HQ 964361 at 5. Lacking from this

conclusion, however, is any mention of the factors relied upon

during the “careful consideration” in which Customs purportedly

engaged. Customs later reiterates its conclusion with no further

analysis: “As stated above, it is our position that the calming

pond is essentially a plastic decorative article.” Id. Finally,

in reaching its ultimate conclusion, Customs provides no analysis

whatsoever: “The calming pond serves a decorative function

without the pump, e.g., when the pump is not on.” Id. At no

point does Customs offer reasons for arriving at this conclusion.

Thus, a review based on the four part test does not support the

conclusion that the HQ 964361 deserves Skidmore deference.

First, Customs’ brief and conclusory statements demonstrate

little showing of thoroughness in the ruling’s consideration.

Second, while the ruling contains a valid consideration of the

proper law, rules and Explanatory Notes, it is lacking in any

valid application of those matters to the facts. Third, although

an attempt is made to demonstrate consistency with earlier

rulings, there is nothing to indicate that those rulings were the

result of analyses any more thorough than the one at issue here.

Finally, HQ 964361 offers no further factors that would lend any

additional power to persuade to the ruling. Thus, the

Headquarters Ruling Letter is akin to the “dismissive analysis”
COURT NO. 02-00383 Page 23

found wanting in Warner-Lambert Co. v. United States, 407 F.3d

1207, 1210 (Fed. Cir. 2005). In light of Customs’ failure to

engage in a thorough and well reasoned analysis, the court finds

that HQ 964361 is not entitled to deference under Skidmore.

CONCLUSION

The court finds that because the essential character of the

Serenity Ponds is imparted by the pump component, they are

properly classified under subheading 8413.70.2004 of the HTSUS as

“Pumps for liquids, whether or not fitted with a measuring

device; liquid elevators; part thereof; . . . Other centrifugal

pumps . . . Other . . . Submersible pumps.” Therefore, the court

grants Conair’s motion for summary judgment and denies that of

defendant United States. Judgment shall be entered accordingly.

/s/

Richard K. Eaton

Dated: August 12, 2005
New York, New York