Dolly, Inc. v. United States

Slip Op. 03-137

UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: GREGORY W. CARMAN, CHIEF JUDGE

DOLLY, INC.,
Plaintiff,

v. Court No. 98-04-00677

UNITED STATES OF AMERICA,

Defendant.

[Judgment is entered for Plaintiff after trial as to Customs’ classification of certain bags based
upon all of the evidence, papers, and arguments submitted by the parties. Defendant is directed
to reliquidate the subject entries at the appropriate duty rate and refund any amounts owing,
including interest, as provided for under the law.]

Neville Peterson LLP (John M. Peterson, Curtis W. Knauss), Washington, D.C., for Plaintiff.

Peter D. Keisler, Assistant Attorney General; John J. Mahon, Acting Attorney in Charge,
International Trade Field Office, Commercial Litigation Branch, Civil Division, United States
Department of Justice; James A. Curley, Attorney, Commercial Litigation Branch, Civil
Division, United States Department of Justice, for Defendant.

Dated: October 22, 2003

OPINION

CARMAN, CHIEF JUDGE: Pursuant to 28 U.S.C. § 2640(a)(1) (2000), this Court tried a

classification dispute involving certain mini bags.1 Plaintiff, Dolly, Inc., challenges the United

1
As discussed, this case turns on the proper description of the subject merchandise. For
the purposes of this opinion, the Court will use the general term “mini bags” to refer to the
merchandise at issue.
Court No. 98-04-00677 Page 2

States Department of Customs’, now the Bureau of Customs and Border Protection, (“Customs”)

classification of the mini bags under heading 4202 of the Harmonized Tariff Schedule of the

United States (“HTSUS”) (1997), 19 U.S.C. § 1202 (1994). The Court has exclusive jurisdiction

pursuant to 28 U.S.C. § 1581(a). Based upon the findings of fact and conclusions of law set

forth below, the Court enters final judgment in favor of Plaintiff.

BACKGROUND

The seven entries at issue in this case were imported in 1997 through the Port of Dayton,

Ohio. (Pretrial Order, Schedule C, Uncontested Facts ¶ 1.) The mini bags were entered and

liquidated under subheading 4202.92.45 HTSUS. (Id. ¶ 2.) Heading 4202 provides:

4202 Trunks, suitcases, vanity cases, attache cases,
briefcases, school satchels, spectacle cases,
binocular cases, camera cases, musical instrument
cases, gun cases, holsters and similar con-
tainers; traveling bags, toiletry bags, knapsacks
and backpacks, handbags, shopping bags, wallets,
purses, map cases, cigarette cases, tobacco
pouches, tool bags, sports bags, bottle cases,
jewelry boxes, powder cases, cutlery cases
and similar containers, of leather or of com-
position leather, of sheeting of plastics, of
textile materials, of vulcanized fiber, or
of paperboard, or wholly or mainly covered
with such materials or with paper:
***
4202.92 With outer surface of sheeting of
plastic or of textile materials:
Travel, sports and similar bags:
With outer surface of textile
materials:
Of vegetable fibers and
not of pile or tufted
construction:
***
4202.92.45 Other............................... 20%
Court No. 98-04-00677 Page 3

HTSUS (1997). Accordingly, Customs assessed a tariff of 20% ad valorem. Plaintiff protested

Customs’ classification of the subject merchandise, asserting that Customs should have

classified the merchandise under subheading 3924.10.50, HTSUS, which provides:

3924 Tableware, kitchenware, other household articles
and toilet articles, of plastics:

3924.10 Tableware and kitchenware:

3924.10.10 Salt, pepper, mustard and ketchup dis-
pensers and similar dispensers

3924.10.20 Plates, cups, saucers, soup bowls,
cereal bowls, sugar bowls, creamers,
gravy boats, serving dishes and
platters

3924.10.30 Trays

3924.10.50 Other................................................ 3.4%

HTSUS (1997). The corresponding duty rate under HTSUS 3924.10.50 is 3.4% ad valorem.

Customs denied Plaintiff’s protests. (Pretrial Order, Schedule C, Uncontested Facts ¶ 3.)

All liquidated duties, charges, and exactions for the subject entries were paid prior to the

commencement of this action. (Id.) Plaintiff seeks reliquidation of the subject entries and a full

refund of duties paid together with interest as provided by law. (Complaint at 2-3.) In 2001, the

parties filed cross-motions for summary judgment. In denying the parties’ cross-motions for

summary judgment, this Court held that there was a genuine issue of material fact as to the

proper description of the subject merchandise. Dolly, Inc. v. United States, No. 98-04-00677,

2002 Ct. Int’l Trade LEXIS 58, at *9-*10 (Ct. Int’l Trade June 20, 2002).

Throughout the administrative process and this litigation, Plaintiff has continued to assert

that the mini bags were “designed[,] manufactured, marketed and sold to provide the insulated
Court No. 98-04-00677 Page 4

transport and storage of infant and toddler’s food and beverages.” (Pretrial Order, Schedule D-1,

Pl.’s Claims and Defenses ¶ 1.) As such, Plaintiff contends that the mini bags are correctly

classified under 3924.10.50, HTSUS covering other household articles of plastic. (Id. ¶ 2.)

Defendant maintains that the bags at issue were properly classified by Customs as

entered under heading 4202, HTSUS, covering travel bags and similar containers because the

subject merchandise is “designed to hold during transport a variety of items used in caring for an

infant or young child.” (Pretrial Order, Schedule D-2, Def.’s Liability Claims and Defenses ¶ 1.)

Defendant contends that the mini bags “are not principally used to prepare, serve or store food or

beverages,” as required under heading 3924; rather, the mini bags “are used to organize, store,

protect and carry various items.” (Id. ¶ 1-2.)

The Court held a bench trial on September 16, 2003, to resolve factual disputes

surrounding the proper description of mini bags at issue and to determine the correct

classification of the subject merchandise under the HTSUS.

STANDARD OF REVIEW

The Court makes its determination de novo based upon the record before the Court, not

upon the record developed by Customs. 28 U.S.C. § 2640. Customs classification rulings are

usually accorded deference in proportion to their “power to persuade” following United States v.

Mead Corp. and Skidmore v. Swift & Co. See Rubie’s Costume Co. v. United States, 337 F.3d

1350, 1355 (Fed. Cir. 2003) (citing United States v. Mead Corp., 533 U.S. 218, 235 (2001), in

turn quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)). The Federal Circuit has noted

that the Supreme Court’s decision in Mead “indicates that the following factors are to be

evaluated when determining the degree of deference to accord a Customs classification ruling:
Court No. 98-04-00677 Page 5

‘its writer’s thoroughness, logic and expertness, its fit with prior interpretations, and any other

sources of weight.’ Those factors echo the factors set forth in Skidmore for determining the

weight to accord an administrative ruling, interpretation, or opinion . . . ‘depend[ent] 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 power to persuade.’” Rubie’s

Costume Co. v. United States, 337 F.3d 1350, 1355-1356 (Fed. Cir. 2003) (quoting Mead, 533

U.S. at 235 and Skidmore, 323 U.S. at 140). However, in this case, Customs summarily denied

Plaintiff’s protests of the classification without issuing an official ruling, therefore the Court will

consider the parties arguments without deference. Hartog Foods v. Untied States, 291 F.3d 789,

791 (Fed. Cir. 2002) (“[B]ecause Customs denied this protest without an official ruling, this

court extends no Skidmore deference. This court therefore considers the parties’ arguments in

this case without deference.”); see also Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1307-

1308 (Fed. Cir. 2003) (considering, without mention of Skidmore deference, Customs’ summary

denial of the plaintiff’s protest of the classification of the subject merchandise).

ANALYSIS

“Although Customs’s decision ‘is presumed to be correct’ on review, 28 U.S.C. §

2639(a)(1), the CIT ‘may consider any new ground’ even if not raised below, § 2638, and ‘shall

make its determinations upon the basis of the record made before the court,’ rather than that

developed by Customs, § 2640(a).” Mead, 533 U.S. at 233 n.16; see also G&R Produce Co. v.

United States, No. 96-11-02569, 2003 Ct. Int’l Trade LEXIS 118, at *7 (Ct. Int’l Trade Sept. 15,

2003); Int’l Home Textiles, Inc. v. United States, No. 99-10-00627, 2001 Ct. Int’l Trade LEXIS

110, at *6 n.5 (Ct. Int’l Trade Aug. 10, 2001). Under § 2639(a)(1), the presumption of
Court No. 98-04-00677 Page 6

correctness allocates the burden of proof to Plaintiff in presenting evidence that Customs’

classification of the subject merchandise was incorrect. See Universal Electronics, Inc. v. United

States, 112 F.3d 488, 493 (Fed. Cir. 1997).

The General Rules of Interpretation (GRI) of the HTSUS and the Additional United

States Rules of Interpretation direct the classification of merchandise entering the United States.

See Len-Ron, 334 F.3d at 1308; Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed.

Cir. 1998). The HTSUS is organized by headings, followed by one or more subheadings which

provide a more detailed segregation of the heading. Orlando Food, 140 F.3d at 1439. Under

GRI 1, the Court must first construe the language of the heading and any section or chapter notes

in question to determine whether the product at issue is classifiable under that heading. GRI 1,

6. After determining whether the merchandise is classifiable under the heading, the Court may

look to the subheadings to find the correct classification for the merchandise at issue. Orlando

Food, 140 F.3d at 1440; GRI 1, 6.

Determining the proper classification of the mini bags involves a two-step analysis: “(1)

ascertaining the proper meaning of specific terms in the tariff provision; and (2) determining

whether the merchandise at issues comes within the description of such terms as properly

construed.” Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1391; see also Universal

Elecs., 112 F.3d. at 491. The first step is a question of law; the second is a question of fact. Id.

Turning first to the central question of law, the competing tariff provisions are heading

4202 and heading 3924, HTSUS. Heading 4202 provides for “[t]runks, suitcases, vanity cases,
Court No. 98-04-00677 Page 7

attache cases, . . . and similar containers,”2 and heading 3924 covers “[t]ableware, kitchenware,

other household articles and toilet articles, of plastics.” HTSUS (1997).

Chapter 39, Note 2(ij) states that Chapter 39 does not cover “[s]addlery or harness

(heading 4201) or trunks, suitcases, handbags or other containers of heading 4202.”

Accordingly, if the mini bags are prima facie classifiable under heading 4202, then applying

Note 2(ij), the mini bags are specifically excluded from classification under heading 3924. See

Midwest of Cannon Falls, Inc. v. United States, 122 F.3d 1423, 1429 (Fed. Cir. 1997).

Therefore, it is necessary to determine whether or not the mini bags are classifiable within

heading 4202 before heading 3924 can be considered. Id.

Heading 4202 and heading 3924 are organized as lists of items or exemplars followed by

general phrases: “similar containers” in heading 4202; “other household articles” in heading

3924. As the Federal Circuit has directed, “when a list of items is followed by a general word or

2
In 2001, pursuant to Presidential Proclamation 7515, the term “insulated food or
beverage bags” was added in the text of Heading 4202, HTSUS. Proclamation No. 7515, 66
Fed. Reg. 66,549, 66,619 (Dec. 18, 2001), as corrected by Technical Corrections to the
Harmonized Tariff Schedule of the United States, 67 Fed. Reg. 2008 (Jan. 15, 2002). The
provision now reads:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle
cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters
and similar containers; traveling bags, insulated food or beverage bags, toiletry bags,
knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases,
cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes,
powder cases, cutlery cases and similar containers, of leather or of composition
leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of
paperboard, or wholly or mainly covered with such materials or with paper.
HTSUS 4202 (2003) (emphasis added). This change requires that all insulated food or beverage
bags and similar containers, entered on or after January 10, 2002, be classified under Heading
4202. The Court notes that these mini bags were entered in 1997; therefore, the duty rate as it
was determined then under the HTSUS will apply in this case. See 19 C.F.R. § 141.69.
Court No. 98-04-00677 Page 8

phrase, the rule of ejusdem generis3 is used to determine the scope of the general word or

phrase.” Avenues in Leather, Inc. v. United States, 178 F.3d 1241, 1244 (Fed. Cir. 1999) (citing

Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed. Cir. 1995)). “In classification cases, ejusdem

generis requires that . . . the [subject] merchandise must possess the same essential

characteristics or purposes that unite the listed examples preceding the general term.” Id.

(citations omitted). Under an ejusdem generis analysis, this Court “must consider the common

characteristics or unifying purpose of the listed exemplars in a heading as well as consider the

specific primary purpose of the imported merchandise.” Id. The Federal Circuit has noted that

“[c]lassification . . . under ejusdem generis is appropriate only if the imported merchandise

shares the characteristics or purpose and does not have a more specific primary purpose that is

inconsistent with the listed exemplars.” Id. (citations omitted).

First, the Court must consider the common characteristics or unifying purpose of the

exemplars listed in the tariff provisions relevant in this case: heading 4202 and heading 3924,

HTSUS. This particular question has been addressed in prior cases before this Court and the

Federal Circuit. See, e.g., Len-Ron Mfg. Co. v. United States, 118 F. Supp. 2d 1266 (Ct. Int’l

Trade 2000), aff’d, 334 F.3d 1304 (Fed. Cir. 2003) (determining the proper classification of

small plastic cosmetic bags used in cosmetic sales promotions under heading 4202); Avenues in

Leather, Inc. v. United States, 11 F. Supp. 2d 719 (Ct. Int’l Trade 1998), aff’d, 178 F.3d 1241,

1242 (Fed. Cir. 1999) (affirming Customs’ classification of leather folios used to store, organize,

and carry papers, books, pens, pencils, etc. under heading 4202); SGI, Inc. v. United States, 917

F. Supp. 822 (Ct. Int’l Trade 1996); rev’d, 122 F.3d 1468, 1469 (Fed. Cir. 1997) (examining the

3
“Of the same kind, class, or nature.” BLACK’S LAW DICTIONARY 517 (6th ed. 1990).
Court No. 98-04-00677 Page 9

applicability of headings 4202 and 3924 in classifying “portable soft-sided vinyl insulated

coolers with handles or straps used for storage of food or beverages”); Totes, Inc. v. United

States, 865 F. Supp. 867 (Ct. Int’l Trade 1994), aff’d, 69 F.3d 495 (Fed. Cir. 1995) (considering

the classification of “Totes Trunk Organizers” under heading 4202); Sports Graphics, Inc. v.

United States, 806 F. Supp. 268 (Ct. Int’l Trade 1992), aff’d, 24 F.3d 1390 (Fed. Cir. 1994)

(reviewing the classification of soft-sided plastic containers with foam insulation, a zippered top,

and carrying straps under competing provisions of the Tariff Schedules of the United States

(“TSUS”) that are similar to headings 4202 and 3924, HTSUS.)

“It is well-established that the essential characteristic and purposes of the heading 4202,

HTSUS, exemplars is ‘to organize, store, protect and carry various items.’” Len-Ron, 118 F.

Supp. 2d at 1279-1280 (quoting SGI, 122 F.3d at 1471; Totes, 865 F. Supp. 867, 872), see also

Len-Ron, 334 F.3d at 1309 n.4. (“This court has noted that the essential characteristics of the

exemplars listed in Heading 4202 are to organize, store, protect and carry various items.”).

The essential characteristic and purpose of the exemplars listed in heading 3924, HTSUS

is to store or contain food and beverages. SGI, 122 F.3d at 1473 (“The exemplars listed in

Heading 3924 encompass various household containers for foodstuffs.”). Although

acknowledging that the Explanatory Notes are not controlling legislative history, the Federal

Circuit looked to the Explanatory Notes accompanying heading 3924 for additional guidance.

Id. “The explanatory notes specifically mention ‘luncheon boxes,’ an article similar to the

coolers at issue, as ‘other household articles.’” Id. The Federal Circuit agreed with this Court’s

analysis that “the coolers [could] be considered ‘household articles [because they] may be used

in a number of locations where food or beverages might be consumed, such as in and around the
Court No. 98-04-00677 Page 10

home and during trips away from home on picnics, sporting, and at spectator and participation

sporting events.’” Id. (quoting SGI, 917 F. Supp. at 825).

Under the second step in the ejusdem generis analysis, the Court must “consider the

specific primary purpose of the imported merchandise.” Avenues in Leather, 178 F.3d at 1244.

The specific primary purpose “must be [the subject merchandise’s] predominant use, rather than

simply one possible use.” Len-Ron, 334 F.3d at 1311. To determine the specific primary

purpose, the Court “must look to all the pertinent circumstances . . . includ[ing] the general

physical characteristics of the merchandise, the expectation of the ultimate purchasers, the

channels, class or kind of trade in which the merchandise moves, the environment of the sale

(i.e., accompanying accessories and the manner in which the merchandise is advertised and

displayed), [and] the use.” United States v. Carborundum Co., 536 F.2d 373, 377 (C.C.P.A.

1976). Once the specific primary purpose of the subject merchandise has been established, the

Court must determine if the subject merchandise shares the same essential characteristic or

purpose as the exemplars in the competing headings.

When comparing between classification under heading 4202 and heading 3924, HTSUS,

the Federal Circuit noted with approval this Court’s analysis that “the focus should be on

whether food or beverage is involved.” SGI, 122 F.3d at 1469, 1471-72; see also Sports

Graphics, 24 F.3d at 1393 (“The trial court concluded that when determining the classification

of the merchandise at issue here, under a proper analysis, the focus should be on whether food or

beverage is involved. We agree.”). The appellate court held that “[i]n focusing on whether food

or beverage is involved, it is clear that the [subject] merchandise has a different purpose, the

storage of food and beverage, which precludes the merchandise from being ejusdem generis with

the exemplars listed in [4202].” SGI, 122 F.3d at 1469-1470 (emphasis added).
Court No. 98-04-00677 Page 11

Here, the trial on September 16, 2003, was held to establish the specific primary purpose

of the mini bags at issue. As Defendant asserts, if the Court finds that the specific primary

purpose of the mini bags is to “organize, store, protect, and carry various items,” then the mini

bags were correctly classified by Customs under 4202 and are specifically excluded from

classification under heading 3924 by operation of Chapter 39, Note 2(ij). However, consistent

with Plaintiff’s contentions, if the Court finds that the specific primary purpose of the mini bags

is to “store food and beverages,” then, following the Federal Circuit’s analysis in SGI, the mini

bags are precluded from being ejusdem generis with the exemplars listed in 4202 and should be

classified under heading 3924, HTSUS.

A. Findings of Fact

Pursuant to Rule 52(a), “in all actions tried upon the facts without a jury . . . the court

shall find the facts specially and state separately its conclusions of law thereon.” USCIT R.

52(a) (2002). As stated above, determining whether the mini bags come within heading 4202 or

heading 3924 as properly construed, is a question of fact. See Universal Elecs., 112 F.3d at 491.

Under the ejusdem generis analysis, having already established the essential characteristics or

purposes of the exemplars in heading 4202 and heading 3924, the Court must now find the

specific primary purpose of the mini bags. See Avenues in Leather, 178 F.3d at 1244. As

detailed below, the evidence presented at trial supports the finding that the mini bags at issue are

of a distinct class or kind of merchandise within the juvenile products industry that have the

specific primary purpose of transporting and storing infant and toddler food and beverages at a

desired temperature over a period of time.

The following uncontested facts were agreed to by the parties in the pretrial order

submitted to the Court on September 3, 2003.
Court No. 98-04-00677 Page 12

1. The bags at issue were imported under the following seven entries listed on the

summons: Entry Nos. F81-0068724-0, F81-0068823-0, F81-0068830-5, F81-0068750-5,

F81-0068831-3, F81-0068914-7, F81-0068946-9. (Pretrial Order, Schedule C,

Uncontested Facts ¶ 1.)

2. The bags at issue are nine different styles, designated by Dolly, Inc. as style numbers

1270, 8458, 8467, 8477, 8483, 8496, 8498, 8499, and 8525. (Id. ¶ 1.)

3. The bags at issue share several common design features: each bag has either a zipper or a

hook and loop closure on top; the interior of each bag contains elastic bottle loops; the

bags have attached carrying straps; and five of the bags have small exterior pockets. (Id.

¶¶ 5-9.)

The Court finds the following facts based upon the parties’ submissions at trial and the Court’s

examination of the evidence:

4. The nine mini bag styles at issue are described in Dolly’s advertising literature as

follows: Style No. 1270 “Pooh ‘Profile’ Mini Bottle Tote” (Def.’s Ex. I at 40); Style No.

8458 “Noah’s Parade Mini” (Id. at 44, 50); Style No. 8467 “Pastel Icons Mini” (Id. at

57); Style No. 8477 “Checkerboard Mini” (Id. at 71); Style No. 8483 “Bedtime Babies

Mini” (Id. at 34); Style No. 8496 “Alphabet Mini” (Id. at 70); Style No. 8498 “Checks

Mini” (Id. at 72); Style No. 8499 “Honeypots Mini” (Id. at 63); Style No. 8525 “Noah’s 2

by 2 Mini.” (Id. at 44, 49).

5. The mini bags are made of three layers of plastic: a decorative outer layer; an insulative

middle layer approximately one-fourth of an inch thick; and an interior layer of white

plastic. (See Pl.’s Exs. 1-9.)
Court No. 98-04-00677 Page 13

6. The main distinguishing feature among the bags is the decorative graphics featured on

the outer layer of plastic, for example, Disney characters, Winnie the Pooh, Noah’s Ark,

etc., which do not affect the classification of the merchandise. (Id.)

7. Although each bag has slightly different dimensions, overall, the bags are approximately

nine inches long, four and one-half inches wide, and ten and one-half inches high. (See

Pl.’s Exs. 1-9; Def.’s Ex. J, Diaper Bag Specifications Style No. 8496; Def.’s Ex. K,

Diaper Bag Specifications Style No. 8498; Def.’s Ex. L, Diaper Bag Specifications Style

No. 8467; Def.’s Ex. M, Diaper Bag Specifications Style No. 8525; Def.’s Ex. N, Diaper

Bag Specifications Style No. 8458; Def.’s Ex. O, Diaper Bag Specifications Style No.

8499.)

8. Most of the styles of mini bags at issue have a stiff white plastic-coated cardboard floor

insert so that the items placed inside the mini bags will not fall over. (Pl.’s Exs. 2-9.)

9. The mini bags possess some insulative properties.4

10. Plaintiff presented the testimony of Mr. Dennis J. Sullivan, President and C.E.O. of

Dolly, Inc. since 1985. (Trial Tr. at 18, 20.)

11. Mr. Sullivan has over 30 years of experience in the juvenile industry, including

participation and leadership in various juvenile trade associations. (Id. at 19-24.)

4
During the course of his testimony, Mr. Sullivan, president and C.E.O. of Dolly, Inc.,
was presented with two bottles of cold milk. Plaintiff’s counsel asked Mr. Sullivan to place one
bottle of cold milk inside one mini bag, Style No. 1270, and allowed the other bottle of cold milk
to remain exposed to the open air of the courtroom. (Trial Tr. at 27-28.) Each bottle had a
thermometer attached which read 33.8 degrees. (Id. at 27.) After approximately fifty minutes,
Mr. Sullivan read the temperatures on the bottles. (Id. at 69-70.) The bottle inside the mini bag
maintained a colder temperature, 44.4 degrees, versus the bottle that was exposed to the open air
of the courtroom, 52.8 degrees. (Id. at 69)
Court No. 98-04-00677 Page 14

12. Mr. Sullivan’s testimony was based on his professional experience and various market

research that had been conducted by Dolly, Inc. regarding their full line of juvenile

products. (Id. at 36.) The Court finds his testimony credible and highly probative.

13. Plaintiff also presented the testimony of Ms. Tracy Bowden, a former buyer of juvenile

products for the Kmart Corporation. (Id. at 88, 91.)

14. Ms. Bowden has over fifteen years of experience in the juvenile products line. (Id. at 88,

109.)

15. Ms. Bowden’s testimony was based on her professional experience and Kmart’s sales

records. (Id. at 96, 109.) The Court finds the testimony given by Ms. Bowden credible

and highly probative.

16. In the juvenile products industry, there is a general umbrella category of products

referred to as “diaper bags.” (Id. at 24, 93.)

17. Within that umbrella category, the industry recognizes two distinct kinds of merchandise:

diaper bags or standard tote bags and mini bags. (Id. at 24, 85, 93.)

18. Diaper bags or standard tote bags are marketed, designed, and primarily used to carry

various baby necessities. (Id. at 56-58, 102.) These standard tote bags are large, at least

twice the size of mini bags, have greater storage capacity, usually have multiple interior

and exterior pockets or compartments for organizing various baby necessities, and often

come with a separate “dirty duds” bags to hold soiled clothing. (Id. at 59-61, 103-104.)

19. Mini bags are marketed, designed, and primarily used to carry baby bottles, jars of baby

food, “sipee” cups for toddlers, and other feeding items for toddlers and infants. (Id. at

26-28, 53-54, 58, 94-95, 102, 104.) Mini bags are small, insulated bags, usually with
Court No. 98-04-00677 Page 15

only one storage compartment, and contain elastic bottle loops in the interior of the bag.

(Id. at 25, 30-51, 94-97; Pl.’s Exs. 1-9; )

20. Consumers generally purchase both kinds of bags, standard totes and mini bags, because

they are used for two different functions. (Id. at 31-33, 95-96.)

21. Mini bags are used on trips when storing baby bottles and food is the primary concern.

(Id. at 52, 102.)

22. The main reason why purchasers buy mini bags is to transport baby food, bottles, milk,

formula, etc. (Id. at 32-33, 102, 107.)

23. Mini bags allow consumers to keep feeding items separate from diaper changing items.

(Id. at 32-33, 61.)

24. Mini bags are not primarily used to carry other baby necessities (i.e., toys, clothing,

diaper changing accessories) because consumers want to keep baby food, bottles, and

feeding accessories away from other baby items that might be soiled. (Id. at 32.)

25. Mini bags are generally sold in the infant department of retail stores with the other

juvenile products. (Id. at 36-37, 96-97, 158.)

26. Mini bags are usually sold adjacent to feeding accessories and sometimes near diapering

supplies. (Id. at 96, 102, 158.)

27. Five styles of the mini bags submitted into evidence have “hang tags” attached which are

intended to advertise the mini bags to the consumer. (See Pl.’s Exs. 1, 2, 4, 6, 8.) Four of

the hang tags describe the merchandise as “mini totes,” and list the features as “insulated

fabric keeps contents warm or cool – elastic bottle loops inside – waterproof lining/vinyl

lining – vinyl wipes clean with damp cloth – fabric styles hand washable.” (Pl.’s Exs. 1,
Court No. 98-04-00677 Page 16

8, 6, 4.) One hang tag describes the merchandise as a “diaper bag” and lists the features

as “fashion friendly diaper bags for all those away-from-home baby necessities. Inside

bottle holders – comfortable shoulder-length handles – water resistant lining – easy care,

wipe-clean fabrics.” (Pl.’s Ex. 2.)

28. The subject merchandise is referred to by many names throughout Dolly, Inc.’s various

advertisements, price lists, invoices, and product specifications: “mini” (Def.’s Ex. I at

23-24, 33-34, 38-39, 44-45, 57, 63, 70-72, 84, 94-95, 99-102, 104-111, 113-120, 122-

123, 126-127, 130-132, 134-136); “bottle tote” (Id. at 74-76, 81-82, 85); “mini bag” (Id.

at 86-92); “mini diaper bag” (Id. at 85, 93, 96); “mini-tote” (Id. at 85, 128); and “mini

bottle tote” (Id. at 25, 40).

29. One style of the subject merchandise is described on Dolly’s price list as “Disney Babies

Bottle Tote,” under the general category of “Diaper Bags.” (Id. at 74.)

30. In one Dolly, Inc. advertisement, standard tote bags and mini bags are marketed as “New

Disney Diaper Bags and Bottle Totes.” (Id. at 75.) The advertisement states that “Dolly

and Disney team up to bring fashion and function together in this new line of diaper bags

and bottle totes.” (Id.) Further, the advertisement states that “[a] bottle tote, a standard

and a deluxe diaper bag are available in pink or blue.” (Id.)

31. Another Dolly, Inc. advertisement presents standard tote bags and mini bags as “New

Dolly Diaper Bags and Bottle Totes.” (Id. at 81.)

32. Dolly, Inc. urges retailers in one advertisement to “[s]tock Disney Babies Diaper Bags

and Bottle Totes.” (Id. at 82.)
Court No. 98-04-00677 Page 17

33. Another Dolly, Inc. advertisement attempts to sell to retailers an in-store merchandising

aid which describes the subject merchandise as a “Lunch Bag, Bottle Tote, Mini Diaper

Bag, School Tote, Carry-all for Travel.” (Id. at 85.)

34. The subject merchandise is described as “bottle bags” in Plaintiff’s protests. (Id. at 35-

36, 20-21, 26-27, 41-42, 51-52, 58, 64.)

35. In the invoices, packing lists, and weight lists provided to Plaintiff by its Hong Kong

exporters, the subject merchandise is listed as “PVC diaper bags.” (Id. at 29-32, 47, 54-

56, 60-62, 66-69.)

36. The subject merchandise is listed as “diaper bags” on the entry papers. (Def.’s Exs. A-

G.)

37. Defendant presented the testimony of Mr. Kevin P. Gorman. (Trial Tr. at 114.) The

Court finds the testimony given by Mr. Gorman to be credible and probative.

38. Since 1975, Mr. Gorman has been a national import specialist in charge of the product

line covered by heading 4202, HTSUS. (Id. at 117-118, 120.)

39. Mr. Gorman based his knowledge regarding the subject merchandise on his examination

of the mini bags, visits to various retail stores over the course of his employment with

Customs, his personal observations, and general knowledge. (Id. at 156, 159.)

40. Mr. Gorman conceded that the mini bags were insulated. (Id. at 147-148.)

41. Mr. Gorman testified that he had attended “all types of trade shows that might be relevant

to the assigned line of merchandise.” (Id. at 120.) Yet, Mr. Gorman acknowledged that

he had never attended a trade show for juvenile products. (Id. at 181.)
Court No. 98-04-00677 Page 18

1. Factual Conclusions

At trial, Defendant claimed that the bags at issue are merely smaller versions of standard

tote bags and are manufactured, designed, and primarily used to carry various baby necessities.

(Id. at 193.) The Court is not persuaded by Defendant’s claims. At trial, Defendant relied

heavily on the Hong Kong exporters’ invoices and packing lists, and a few references in Dolly

Inc.’s literature, that identify the subject merchandise as “diaper bags.” (Trial Tr. at 197-198.)

However, a thorough review of the exhibits submitted by Defendant reveals that Dolly, Inc.

refers to the subject merchandise by a variety of names, most commonly “mini” or “mini bottle

totes.” (See generally Def.’s Ex. I.) Further, the former buyer for Kmart testified that the

subject merchandise is recognized throughout the juvenile products industry as “minis.” (Trial

Tr. at 93.) The overwhelming evidence presented at trial indicates that the mini bags are a

distinct product, identifiable within the juvenile products industry, and recognized by retailers

and consumers. The Court finds the testimony of Mr. Sullivan and Ms. Bowden very persuasive.

As this Court’s predecessor stated: “It has long been held that importers and merchants have

every incentive for knowing the uses to which their goods are or may be put. . . . [E]xecutives

concerned with designing, framing specifications, ordering, importing, selling, distributing, and

promoting an article have to know its chief uses and are competent to testify about them.

Novelty Import Co. v. United States, 285 F. Supp. 160, 165-166 (Cust. Ct. 1968) (citation

omitted), see also Mast Indus., Inc. v. United States, 9 C.I.T. 549, 551-552 (Ct. Int’l Trade

1985). Defendant did not present any contrary evidence of use, other than Mr. Gorman’s

anecdotal evidence regarding his personal observations of the general public. Although Plaintiff

conceded that the mini bags could be used to carry anything that would fit inside (Trial Tr. at 79-
Court No. 98-04-00677 Page 19

80), that possibility does not change the fact that the use of the mini bags “which exceeds all

others” is the storage of food and beverages. Sports Graphics, 24 F.3d at 1392-1394.

The former Court of Customs and Patent Appeals stressed that in classification disputes,

“the [subject] merchandise itself may be strong evidence of use.” Mast Indus., 9 C.I.T. at 552

(citing United States v. Bruce Duncan Co., 50 C.C.P.A. 43, 46 (1963)); see also Int’l Home

Textiles, 2001 Ct. Int’l Trade LEXIS at *10. Here, the Court has examined the mini bags at issue

and concludes that the mini bags are small, insulated, posses a single compartment, lack other

organizing features, and have at least two elastic bottle loops that, when filled with bottles of

milk or jars of baby food, would leave little room for much else. Although some styles of the

mini bags at issue have a small, flat pocket on the front panel of the bag, this design feature does

not add significant storage space or other organizational properties that might change the

primary use of the subject merchandise. Weighing all of the evidence submitted, the Court finds

that the mini bags have the specific primary purpose of transporting and storing infant food and

beverage over a period of time in an insulated environment.

B. Conclusions of Law

In light of the factual findings set forth above, the Court concludes that the mini bags at

issue do not share the essential characteristics of the exemplars listed in heading 4202, that is,

containers whose principal use is to protect, carry, and store various items. Similar to the cooler

bags examined in SGI, the mini bags at issue have the specific primary purpose of transporting

and storing food and beverages in an insulated environment. As the appellate court reasoned in

SGI, merchandise that has the specific primary purpose of storing food and beverages, is

“preclude[d] . . . from being ejusdem generis with the exemplars listed in [4202].” SGI, 122

F.3d at 1469-1470.
Court No. 98-04-00677 Page 20

Because the mini bags’ primary purpose of storing and transporting food and beverages

precludes classification under heading 4202, the Court next examines whether classification

under Plaintiff’s proposed heading 3924, HTSUS, would be appropriate. In considering

classification under 3924, the focus should be on whether food and beverage in involved. SGI,

122 F.3d at 1469; see also Sports Graphics, 24 F.3d at 1393. As the Federal Circuit stated in

SGI, “none of the exemplars under [4202] involves containment of any food or beverage . . .

however, [heading 3924] does encompass exemplars that are ejusdem generis with the [subject

merchandise] because their purpose is to contain food and beverages.” SGI, 122 F.3d at 1472.

The Court concludes that the mini bags at issue are ejusdem generis with the exemplars listed in

3924 because the mini bags’ specific primary purpose is to contain food and beverages.

Under the GRI 6, the next step in the analysis is examining the classification of the mini

bags under the appropriate subheading. See GRI 6. Heading 3924, HTSUS is organized as

follows:

3924 Tableware, kitchenware, other household articles
and toilet articles, of plastics:

3924.10 Tableware and kitchenware:

3924.10.10 Salt, pepper, mustard and ketchup dis-
pensers and similar dispensers

3924.10.20 Plates, cups, saucers, soup bowls,
cereal bowls, sugar bowls, creamers,
gravy boats, serving dishes and
platters

3924.10.30 Trays

3924.10.50 Other................................................ 3.4%
Court No. 98-04-00677 Page 21

HTSUS (1997). The catch-all subheading, 3924.10.50, “Other,” is appropriate because the other

subheadings under 3924 are inapposite. See Orlando Food, 140 F.3d at 1442. “Absent a more

apt subheading,” the catch-all subheading 3924.10.50, HTSUS is the appropriate classification

for the mini bags at issue. See id. Accordingly, the Court concludes that the mini bags are

correctly classified under subheading 3924.10.50, HTSUS. The corresponding duty rate under

3924.10.50, HTSUS, is 3.4% ad valorem. HTSUS (1997).

CONCLUSION

In accordance with the foregoing findings of fact and conclusions of law, the Court

concludes that the bags at issue are properly classified under HTSUS subheading 3924.10.50.

Defendant is directed to reliquidate the subject entries at the appropriate duty rate and refund any

amounts owing, including interest, as provided for under the law.

______________________________
Gregory W. Carman
Chief Judge
Dated: October 22, 2003
New York, New York