Outer Circle Products v. United States

Slip Op. 09-3

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS

_____________________________________
:
OUTER CIRCLE PRODUCTS, :
:
Plaintiff, :
:
v. : Court No.: 05-00678
:
UNITED STATES OF AMERICA, :
:
Defendant. :
_____________________________________ :

Held: Plaintiff’s motion for summary judgment is denied. Summary
judgment is granted in favor of the Defendant.

Dated: January 9, 2009

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, (Curtis W.
Knauss, Robert B. Silverman, Robert F. Seely, Edward B. Ackerman,
and Steven P. Florsheim) for Outer Circle Products, Plaintiff.

Gregory G. Katsas, Assistant Attorney General; Barbara S. Williams,
Attorney-in-Charge, International Trade Field Office (Aimee Lee and
Marcella Powell); Alexander Vanderweide, Civil Division, Commercial
Litigation Branch, United States Department of Justice; Of counsel:
Yelena Slepak, Office of Assistant Chief Counsel, International
Trade Litigation, United States Customs and Border Protection, for
the United States, Defendant.

OPINION

TSOUCALAS, Senior Judge: This matter is before the Court on

cross-motions for summary judgment pursuant to USCIT R. 56.

Plaintiff Outer Circle Products (“Plaintiff” or “Outer Circle”)

challenges the classification of its merchandise by the United
Court No. 05-00678 Page 2

States Bureau of Customs and Border Protection (“Customs”) under

the 1997 Harmonized Tariff Schedule of the United States

(“HTSUS”).1 Plaintiff maintains that the merchandise is properly

classified under subheading 3924.10.50, HTSUS, as “Tableware,

Kitchenware . . . of plastics: Other.” Customs cross-moves for

summary judgment stating that the Court should sustain its

classification under HTSUS subheading 4202.92.90 as “bottle cases

. . . [w]ith outer surface of sheeting of plastic or of textile

materials: Other.”

JURISDICTION

The Court has jurisdiction over this matter pursuant to 28

U.S.C. § 1581(a) (1994), which provides the Court “shall have

exclusive jurisdiction of any civil action commenced to contest the

denial of a protest, in whole or in part, under section 515 of the

Tariff Act of 1930.” Section 515 of the Tariff Act, 19 U.S.C. §

1515 (1994), details the process by which Customs modifies and

performs administrative review of its decisions and “provides for

the allowance or denial of protests filed pursuant to section 514

of the Tariff Act of 1930.” Lowa, Ltd. v. United States, 5 CIT 81,

1
The United States Customs Service was renamed the Bureau
of Customs and Border Protection of the Department of Homeland
Security, effective March 1, 2003. See Homeland Security Act of
2002, Pub. L. No. 107-296, § 403, 116 Stat. 2178 (2002);
Reorganization Plan for the Department of Homeland Security, H.R.
Doc. No. 108-32 (2003).
Court No. 05-00678 Page 3

84, 561 F. Supp. 441, 444 (1983) (citations omitted).

STANDARD OF REVIEW

On a motion for summary judgment, the Court must determine

whether there are any genuine issues of fact that are material to

the resolution of the action. See Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 (1986). A factual dispute is material if it

might affect the outcome of the suit under the governing law. See

id. Accordingly, the Court may not decide or try factual issues

upon a motion for summary judgment. See Phone-Mate, Inc. v. United

States, 12 CIT 575, 577, 690 F. Supp. 1048, 1050 (1988). When

genuine issues of material fact are not in dispute, summary

judgment is appropriate if a moving party is entitled to judgment

as a matter of law. See USCIT R. 56(c); see also Celotex Corp. v.

Catrett, 477 U.S. 317, 322-23 (1986).

DISCUSSION

I. Background

This dispute is ripe for summary judgment and the relevant

facts are outlined below. At issue is the proper classification of

the subject merchandise, which was imported through the Port of

Chicago, Illinois in June 1997. Plaintiff purports the merchandise

to be bottle and jug wraps “designed, manufactured and marketed for
Court No. 05-00678 Page 4

the primary purpose to contain beverages and keep them cool.”

Mem. Supp. Pl.’s Mot. for Summ. J. (“Pl.’s Brief”) at 3. Each of

the items was imported in finished condition without the bottles or

jugs attached. See Pl.’s Statement of Material Facts Not in Issue

¶ 7. The containers were designed to accommodate either a one

liter, half gallon, or two gallon plastic bottle or jug, and were

fitted to the size and shape of the bottle or jug they were

designed to carry. See Pl.’s Brief at 2. Zippers placed on either

the side or top allowed for greater plasticity of container to

bottle or jug. See id. at 3. The subject merchandise was

constructed of a foam portion measuring approximately three

millimeters in thickness covered on both sides by a plastic

sheeting, or in the alternate, covered on the inside by a plastic

coated textile fabric and the outside by plastic sheeting. See

Complaint ¶ 5; Def.’s Statement of Undisputed Material Facts ¶ 5.

Sewn on to each container was a fabric strap designed to promote

the product’s portability. See Pl.’s Brief at 3. After

importation but prior to resale, the appropriate plastic bottle or

jug was inserted into each container. See id. at 3. The finished

product was then marketed as possessing insulative properties, and

sold to large retail franchises under the trademark label “Arctic

Zone.” Id. at 3,5.

Upon liquidation of the entries, the merchandise was

classified by Customs under subheading 4202.92.90, HTSUS, and
Court No. 05-00678 Page 5

assessed the schedule duty rate of 19.3% ad valorem. The relevant

portions of Heading 4202 are as follows:

4202 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, 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:

Other:

4202.92 With outer surface of sheeting of plastic or of
textile materials:

4202.92.90 Other 19.3%

Outer Circle protested Customs’ classification of the subject

merchandise, asserting that Customs should have classified the

imports under subheading 3924.10.50, HTSUS with a dutiable rate of

3.4% ad valorem. The pertinent parts of Heading 3924 are as

follows:

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

3924.10 Tableware and kitchenware:

3924.10.50 Other 3.4%
Court No. 05-00678 Page 6

Customs denied Plaintiff’s protest and a timely summons was filed

with this Court. All liquidated duties, charges and exactions for

the subject entries were paid prior to the commencement of this

action. Outer Circle seeks reliquidation of the subject imports

and a full refund of duties paid together with interest, as

provided by law. See id. at 11.

Defendant argues that the entries were properly classified

under subheading 4202.92.90, HTSUS “because the merchandise is

identified eo nomine under heading 4202, HTSUS.” Mem. in Opp’n to

Pl.’s Mot. for Summ. J. & in Supp. of Def.’s Cross-Mot. for Summ.

J. (“Def.’s Brief”) at 4. Customs further argues that the imported

merchandise does not fall within the scope of Chapter 39, HTSUS as

a container for food or beverages because “Outer Circle’s bottle

and jug cases clearly do not store food or beverages.” Id. at 13.

II. Arguments of the Parties

A. Plaintiff’s Arguments

Outer Circle maintains that Custom’s wrongly liquidated the

subject merchandise under subheading 4202.92.90 as other items

similar to those described by name in Heading 4202, HTSUS rather

than its appropriate classification as other household articles of

plastics under Heading 3924, HTSUS. See Pl.’s Brief at 6.

Plaintiff premises its argument on two prior decisions of this

Court and the United States Court of Appeals for the Federal
Court No. 05-00678 Page 7

Circuit (“CAFC”). Outer Circle contends that because the subject

imports are substantially similar to the products examined in SGI,

Inc. v. United States, 122 F.3d 1468 (Fed. Cir. 1997) and Dolly,

Inc. v. United States, 27 CIT 1597, 293 F. Supp. 2d 1340 (2003),

this Court is bound by these previous legal determinations. See

id. at 2-4. In both cases, the Courts reviewed the scope of HTSUS

Headings 4202 and 3924, and concluded that the correct

classification for the merchandise at issue was HTSUS Heading 3924.

Outer Circle maintains that because its merchandise was “designed

to contain and transport beverages like the products in SGI, they

should also be classified under Heading 3924, HTSUS.” Id. at 3.

Plaintiff also points to the rule of ejusdem generis which was

employed by both the SGI and Dolly Courts to determine the scope of

the two competing provisions.2 Outer Circle argues that when

applying the rule of ejusdem generis to “the products in this case,

it is clear that the wraps also have the essential characteristics

of the exemplars for Heading 3924, HTSUS - they preserve and store

beverages.” Id. at 4.

Plaintiff cites to the HTSUS General Rules of Interpretation

2
Under the rule of ejusdem generis, which means “of the
same kind,” where the enumeration of specific things is followed
by a general word or phrase, the general word or phrase will be
interpreted to include things of the same kind as those
specified. See Totes, Inc. v. United States, 69 F.3d 495, 498
(Fed. Cir. 1995) (citing Sports Graphics, Inc. v. United States,
24 F.3d 1390, 1392 (Fed. Cir. 1994).
Court No. 05-00678 Page 8

(“GRI”)3 and the Harmonized Commodity Description and Coding System

Explanatory Notes (“Explanatory Notes”),4 as additional support for

its position. More specifically, GRI 1 states in part that for

legal purposes, classification shall be determined according to the

terms of the headings and any relative section or chapter notes.

See id. at 4-5. Outer Circle contends that the subject imports are

correctly classified under HTSUS Heading 3924 because they are used

for the storage and preservation of beverages as contemplated by

such heading. See id. at 5. According to Plaintiff, the

Explanatory Notes for Heading 3924 specifically provide for “food

storage containers” which is “exactly the use for which the bottle

and jug wraps were designed and manufactured.”5 Id. at 7.

Moreover, Plaintiff suggests that the inclusion of the term

“luncheon boxes” in the Explanatory Notes of Heading 3924 “reflects

the likelihood that such boxes would be capable of keeping the

3
Classification of goods under the HTSUS is governed by the
General Rules of Interpretation and the Additional Rules of
Interpretation (“ARI”). See Orlando Food Corp. v. United States,
140 F.3d 1437, 1439 (Fed. Cir. 1998).
4
The Explanatory Notes constitute the official
interpretation of the Harmonized Commodity Description and Coding
System. While neither legally binding nor dispositive, they
provide a commentary on the scope of each heading of the HTSUS
and are generally indicative of its proper interpretation. See
Van Dale Indus. v. United States, 18 CIT 247, 251 n.2 (1994).
5
The Court notes that the term “food storage containers”
was not included in the Harmonized Commodity Description and
Coding System Explanatory Notes until January 2000, almost three
years after the subject imports were entered.
Court No. 05-00678 Page 9

contents warm or cool.” Id. (citing SGI, 122 F.3d at 1473). Outer

Circle posits that because the subject entries also maintain a

desired temperature for beverages, they fall within the scope of

Heading 3924. See id.

Next, Plaintiff argues that the subject imports are improperly

classified under HTSUS Heading 4202 because they do not share any

“common physical characteristics or a unifying purpose” with the

articles identified eo nomine therein. Id. at 8. Namely, the

exemplars listed under Heading 4202 do not contemplate the storage

or preservation of food or beverages. See id. Plaintiff relies on

the CAFC’s holding in SGI which determined that the scope of

Heading 4202 did not “include containers that organize, store,

protect, or carry food or beverages.” 122 F.3d at 1472. Outer

Circle further notes that the term “insulated food or beverage

bags” was not added to HTSUS Heading 4202 until several years after

the subject merchandise was entered.6 This, according to

Plaintiff, is recognition of the fact that, prior to the change,

such items were excluded from the scope of Heading 4202. See Pl.’s

Brief at 9. Therefore, classification of the subject imports under

Heading 4202 is inconsistent with the essential characteristics of

the exemplars listed therein which is to organize, store, protect

and carry various items. See id. at 8.

6
HTSUS Heading 4202 was expanded to include “insulated food
or beverage bags” in December 2001. See Proclamation No. 7515, 66
Fed. Reg. 66549, 66,619 (Dec. 18, 2001).
Court No. 05-00678 Page 10

B. Defendant’s Arguments

In response, Customs argues that the subject merchandise is

properly classified under HTSUS Heading 4202 because “bottle cases”

are specifically enumerated therein, and that goods classified as

such eo nomine fall within the scope of such heading.7 See Def.’s

Brief at 9. Defendant also relies on GRI 1 and its general mandate

that classification be determined according to the terms of the

headings, section and chapter notes. See id. at 7. Because Note

2(ij) of Chapter 39 precludes “containers of heading 4202” from its

coverage, Defendant claims that the subject imports are

“specifically excluded from classification under heading 3924,

HTSUS.” Id. at 8. As evidence of the scope and meaning of the

term “bottle cases,” Defendant points to the language of the

statute itself, and contends that the specific identification of

the items enumerated in Heading 4202 is a clear indication that its

coverage extends to “containers or cases which are designed to hold

specific items which give them their names.” Id. (quoting DRI

Indus., Inc. v. United States, 11 CIT 97, 102, 657 F. Supp. 528,

533 (1987)). While acknowledging that none of the provisions of

the HTSUS define the term “bottle cases,” Defendant relies on

7
Absent contrary legislative intent, an eo nomine
classification provision is one which describes a commodity by a
specific name, usually one that is well known in the trade or to
commerce. See Nidec Corp. v. United States, 68 F.3d 1333, 1336
(Fed. Cir. 1995); Clarendon Marketing Inc. v. United States, 144
F.3d 1464, 1467 (Fed. Cir. 1998).
Court No. 05-00678 Page 11

established case law for the proposition that where a tariff term

is not statutorily defined, such terms are construed in accordance

with their common and popular meaning. See id. at 9-10.

Therefore, Defendant looks to the term’s dictionary meaning as “a

covering or receptacle for holding bottles.” Id. at 10.

Customs disputes Plaintiff’s categorization of the subject

imports as insulated food or storage containers, and asserts that

“Outer Circle’s entire argument hinges on the incorrect premise

that its bottle and jug wraps preserve and store food or

beverages.” Id. at 13. Inasmuch as merchandise is classified

according to its condition when imported, the subject containers

were entered without the plastic bottles or jugs. Defendant claims

that because the containers are incapable of storing food or

beverages in the absence of the related bottles or jugs,

Plaintiff’s classification scheme is ill-conceived. See id. at 22.

The imports are merely conduits for the encasement and transport of

the associated bottles or jugs, which further contain the actual

food or beverages. See id. at 13.

In addition, Customs performed its own tests of the insulative

properties of the subject merchandise, and presents findings that

call into question the efficacy of the goods’ insulative

capabilities. See id. According to Defendant, the results of

these laboratory tests demonstrate that “Outer Circle’s imported

articles have no material insulative properties, and therefore
Court No. 05-00678 Page 12

cannot properly preserve or store food or beverages.”8 See id. at

16. Since they cannot be considered insulated food or beverage

bags, any attempt at classification of the subject merchandise

under HTSUS Heading 3924 is misplaced. See id. at 23.

In response to Outer Circle’s argument that the term

“insulated food or beverage bags” was not added to HTSUS Heading

4202 until years after its merchandise was imported, Defendant

points out that while this may be true, the term “bottle cases” has

always been an eo nomine provision in Heading 4202. See id. at 15.

This fact notwithstanding, Customs maintains that the legislative

history of Heading 4202 demonstrates that “insulated food or

beverage bags” were always meant to fall within the heading’s

8
Customs tested the one liter and half liter cases by
measuring the temperature of liquids within bottles placed into
the cases against liquids within bottles placed into a brown
paper bag and liquids within bottles not placed into any
container, i.e. exposed to open air. At the end of a four hour
period the difference in the temperature of a liquid insulated by
the half liter container and that of a liquid insulated by the
brown paper bag was 0.4°F. Likewise, the difference in the
temperature of the liquid insulated by the one liter case and
that of the brown paper bag over the same four hour period was
1.1°F. The differences recorded for the open air containers were
similarly minimal. See Def.’s Brief, Exhibit A.
Plaintiff tested the subject merchandise on two separate
occasions. The first test, performed in January 2008, compared
the temperature of a liquid contained within a bottle left
exposed to open air against a liquid within a bottle placed into
one of the subject containers. The second test, conducted in
August 2008, measured the temperature of a bottled beverage in
three states: 1) wrapped in a subject wrap; 2) unwrapped; and 3)
wrapped in a paper bag. Plaintiff argues that these tests
demonstrate as incorrect, the conclusions drawn by Customs in its
laboratory tests. See Pl.’s Brief, Exhibit 8; Pl.’s Resp. to
Def.’s Cross-Mot. for Summ. J. (“Pl.’s Resp.”), Exhibit 1.
Court No. 05-00678 Page 13

coverage. See id. In adopting the amendments to the text of

Heading 4202, which included the addition of the term “insulated

food or beverage bags,” the Harmonized System Committee of the

World Customs Organization stated that the “new texts involved no

change in scope.” Id.

Customs refutes Outer Circle’s contention that judicial

precedent is controlling with regard to this classification.

Defendant maintains that the circumstances in the cases on which

Plaintiff relies are distinguishable from those present here. See

id. at 17. In particular, the CAFC’s holding in SGI is predicated

on the application of the subject merchandise as one for the

storage of food or beverages. Moreover, the physical

characteristics of Plaintiff’s bottle and jug containers differ

markedly from the merchandise at issue in SGI. See id. For

example, whereas the imports in SGI were capable of storing both

food and beverages, Plaintiff’s merchandise is designed to store a

single bottle or jug. See id. Defendant concludes, that because

the Plaintiff has “failed to produce any competent evidence that

its merchandise involves food or beverage storage,” the holding of

SGI is not controlling for purposes of this proceeding. Id. at 18.

Defendant further contests, as inapplicable to the underlying

action, the CAFC’s holding in Dolly. Customs alleges that, as was

the case in SGI, the physical composition of subject merchandise

differs considerably from Outer Circle’s bottle and jug
Court No. 05-00678 Page 14

containers.9 See id. at 19. The merchandise at issue in Dolly was

found to have a specific primary purpose of “transporting and

storing infant and toddler food and beverages at a desired

temperature over a period of time.” Id. (quoting Dolly, 27 CIT at

1605, 293 F. Supp. 2d at 1346). Defendant claims that because the

subject imports at issue here are “bottle cases,” they are not

adequately comparable to the articles examined in Dolly. See id.

Furthermore, the Court in Dolly relied on the rule of ejusdem

generis to determine the appropriate tariff classification, which

was contingent upon an examination of dissimilar merchandise,

namely food and beverage containers. See id. at 19-20. Therefore,

the conclusions the Court reached in Dolly are not relevant to the

proper classification of the items in the present action. See id.

at 21.

Finally, Customs argues that the subject imports are not

specifically described by the exemplars listed under HTSUS

subheading 3924.10, nor are they similar in any material way. See

id. at 22. More to the point, each of the exemplars in subheading

3924.10 are themselves used for the containment of food or

beverages whereas Outer Circle’s products merely secure bottles and

9
Customs observes that the insulative foam layer in the
merchandise in both SGI and Dolly were significantly more dense
than Plaintiff’s imports. It is Defendant’s contention that the
degree to which these items differ make the articles in SGI and
Dolly inappropriate for comparison to Outer Circle’s bottle and
jug containers. See Def.’s Brief at 19.
Court No. 05-00678 Page 15

jugs. See id. at 22-23.

III. Analysis

A. Motion for Summary Judgment

Determining whether imported merchandise was classified under

the appropriate tariff provision entails a two-step process. See

Bausch & Lomb, Inc., v. United States, 148 F.3d 1363, 1365 (Fed.

Cir. 1998). First, the proper meaning of specific terms in the

tariff provision must be ascertained. See id. Second, determine

under which of the properly construed tariff terms the subject

merchandise falls. See id. Interpreting the proper meaning of

terms is a question of law, while determining whether the item fits

within such meaning is a question of fact. See Avenues In Leather,

Inc. v. United States, 423 F.3d 1326, 1330 (Fed. Cir. 2005)

(“Avenues III”). While the second step, viewed as focusing on the

particular merchandise and where it fits into the statutory scheme,

is deemed a question of fact, a conceptual dilemma arises in its

application. If the second step in the analysis is adjudged a

question of fact, no party would ever stipulate to their

adversary’s classification as being factually correct, “since ‘to

do so would be to stipulate oneself out of court.’” Bausch & Lomb,

Inc., 148 F.3d at 1365 (quoting Bausch & Lomb, Inc. v. United

States, 21 CIT 166, 167, 957 F. Supp. 281, 282 (1997)). This

quandary becomes especially acute in decisions on summary judgment.
Court No. 05-00678 Page 16

Because the inquiry on such motions is whether a “genuine issue as

to any material fact” exists, USCIT R. 56(c), a court would be

precluded from rendering summary judgment in such instances.

Presently, the parties offer differing characterizations of the

subject merchandise. Yet, they both agree that there are no

material facts in dispute, and that the matter is ripe for summary

judgment. Therefore, the question before the Court is whether the

facts on which the parties disagree rise to the level of material

facts so essential to a claim or defense embodied in the summary

judgment motion. The Court finds that they do not.

In the event there is a real dispute as to the facts, it

initially must be determined whether the facts at issue are

material. A dispute as to an immaterial fact does not preclude

summary judgment. See Houston North Hosp. Properties v. Telco

Leasing, Inc., 688 F.2d 408, 410 (5th Cir. 1982). While there is

no established standard which governs the question of what

constitutes a material fact, the courts have held that a fact is

material “if it tends to resolve any of the issues that have been

properly raised by the parties.” Allied Int’l v. United States, 16

CIT 545, 548, 795 F. Supp. 449, 451 (1992) (quoting 10 Charles Alan

Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and

Procedure § 2725 at 93-95 (2d ed. 1983)). Summary judgment thus

may be appropriate in a Customs classification case “when there is

no genuine dispute as to the underlying factual issue of exactly
Court No. 05-00678 Page 17

what the merchandise is.” Bausch & Lomb, 148 F.3d at 1365.

Whereas Outer Circle categorizes its imports as “insulated food or

beverage containers,” see Pl.’s Brief passim, Customs applies the

designation “bottle cases” to those same items. See Def.’s Brief

passim. The disagreement over the subject imports’ proper

nomenclature, however, is more a byproduct of the parties’

preferred classification schemes. Both parties agree on the basic

physical composition of the imported merchandise. See Pl.’s

Statement of Material Facts Not in Issue ¶¶ 4-6; Pl.’s Resp. to

Deft.’s Statement of Undisputed Material Facts ¶ 1; Def.’s

Statement of Undisputed Material Facts ¶ 5; Def.’s Resp. to Pl.’s

Statement of Material Facts Not in Issue ¶¶ 4-6. What remains in

dispute is the significance of the items’ purported insulative

capabilities. This, however, is not relevant to the Court’s

inquiry. In determining under what tariff provision the subject

imports should properly fall, the Court’s focus must be on “whether

food or beverage is involved.” SGI, 122 F.3d at 1472. While the

insulative properties of the subject merchandise may be indicative

of an ability to store beverages at a desired temperature, it is

not legally dispositive of the products’ ability to store or

transport beverages in general. Thus, the insulative nature of the

imports is not a fact that tends to resolve any of the issues

properly raised by the parties, i.e., whether food or beverages are

being stored or transported. Therefore, the Court agrees with the
Court No. 05-00678 Page 18

parties, that there are no disputed material issues of fact to be

resolved by trial in the instant matter and disposition by summary

judgment is appropriate. See Pl.’s Brief at 7; Def.’s Brief at 4-5.

B. Presumption of Correctness

Relying on section 2639(a)(1) of title 28 of the United States

Code, Customs argues that the agency’s classification decision is

presumed to be correct with the burden of overcoming this

presumption resting with Plaintiff.10 See Def.’s Brief at 5.

Customs cites to a Court of Customs and Patent Appeals decision,

United States v. New York Merchandise Co., Inc., 58 CCPA 53, 435

F.2d 1315 (1970), for the proposition that this presumption extends

to its decision as a whole, including purely legal portions of the

determination. See id. at 6. The Court finds this argument

unavailing. Although the presumption of correctness carries force

on any factual components of a classification decision, the

situation is quite different with respect to pure questions of law.

See Universal Electronics, Inc. v. United States, 112 F.3d 488, 492

(Fed. Cir. 1997). Questions of law, such as the proper

10
The relevant portions of the statute read as follows:
Except as provided in paragraph (2) of this
subsection, in any civil action commenced in the Court
of International Trade under section 515, 516, or 516A
of the Tariff Act of 1930, the decision of the
Secretary of the Treasury, the administering
authority, or the International Trade Commission is
presumed to be correct. The burden of proving
otherwise shall rest upon the party challenging such
decision. 28 U.S.C. 2639(a)(1).
Court No. 05-00678 Page 19

interpretation of a particular tariff provision, “lie within the

domain of the courts.” Id. Moreover, Customs’ understanding of

section 2639(a)(1) is inconsistent with established judicial

precedent. The statutory presumption of correctness is irrelevant

where there is no factual dispute between the parties. See Goodman

Mfg., L.P. v. United States, 69 F.3d 505, 508 (Fed. Cir. 1995);

Rollerblade, Inc. v. United States, 112 F.3d 481, 484 (Fed. Cir.

1997). Here, the parties filed cross-motions for summary judgment

and agree that there are no disputed issues of material fact. As

noted above, none of the pertinent characteristics of the

merchandise are in dispute, and thus the sole issue is a matter of

properly construing the relevant tariff provisions to determine

whether the scope of those provisions are broad enough to encompass

the subject imports. Therefore, the presumption of correctness

does not apply.

C. Stare Decisis

Outer Circle urges this Court to find in its favor, in part,

on the doctrine of stare decisis. Plaintiff points out that the

same two provisions of the HTSUS at issue here were examined by the

Federal Circuit in SGI. See Pl.’s Brief at 2. Specifically, the

scope of Heading 4202 was determined not to include the soft-sided

cooler bags at issue in SGI, and that the proper classification for

these products was under Heading 3924. The Court further held that

the common characteristics or unifying purpose of the exemplars
Court No. 05-00678 Page 20

listed in Heading 3924, was their capacity to store food and

beverages. See SGI, 122 F.3d at 1472. Thus, according to

Plaintiff, if the Court agrees with the facts alleged by Outer

Circle, i.e., that the subject wraps were designed to carry

beverages, then it is bound by the holding in SGI. See Pl.’s Brief

at 2 n. 1.

Stare decisis essentially “makes each judgment a statement of

the law, or precedent, binding in future cases before the same

court or another court owing obedience to its decision.” Avenues

III, 423 F.3d at 1331 (quoting Mendenhall v. Cedarapids, Inc., 5

F.3d 1557, 1570 (Fed. Cir. 1993)). Plaintiff is correct in its

assessment of the effects of this previous CAFC holding, as this

determination relates to the scope of HTSUS Headings 3924 and 4202

- questions of law. Because the doctrine of stare decisis applies

only to legal issues and not issues of fact, this Court is burdened

by the previous holding in SGI only to the extent that such issues

apply. The determination of whether the merchandise at issue comes

within the description of either HTSUS Heading 3924 or 4202,

however, is a question of fact. Therefore, the classification of

soft-sided cooler bags in SGI is not stare decisis to the

classification of the subject imports in this case.

D. HTSUS Classification

The parties’ remaining arguments are directed to the issue of

whether the properly interpreted scope of HTSUS Heading 4202 or
Court No. 05-00678 Page 21

3924 encompasses Outer Circle’s imported bottle containers.

As previously noted, the determination as to the proper

classification of imported merchandise, is directed by the GRI and

ARI of the HTSUS. See Orlando Food Corp., 140 F.3d at 1439. The

HTSUS is organized by headings, each of which has one or more

subheadings. Whereas the headings set forth general categories of

merchandise, the subheadings provide a more particularized taxonomy

of the goods within each category. Under GRI 1, the HTSUS

headings, as well as relative section or chapter notes, govern the

classification of a product. See GRI 1. Only after a court

determines that a product is classifiable under the heading should

it look to the subheadings to find the correct classification for

the merchandise. See Orlando Food Corp., 140 F.3d at 1440. As

Customs points out, Note 2(ij) to Chapter 39 provides that the

chapter “does not cover . . . trunks, suitcases, handbags or other

containers of heading 4202.” Note 2(ij), Chapter 39, HTSUS (1997

ed.). Thus, the Court must first determine whether the containers

are prima facie classifiable under Heading 4202. If the Court so

concludes, the bags are precluded from classification under Heading

3924.

Heading 4202 is structured as a list of exemplars followed by

the general term “similar containers.” Customs argues that the

subject imports are classifiable under Heading 4202 because they

are encompassed by the listed exemplar “bottle cases.” See Def.’s
Court No. 05-00678 Page 22

Brief at 9. The tariff term “bottle cases” is an eo nomine

provision under Heading 4202, as it describes the merchandise by

name. An eo nomine designation, without limitation or contrary

legislative intent, is construed according to its common and

commercial meanings, which are presumed to be the same. See Carl

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

As the term “bottle cases” is not specifically defined in the HTSUS

or in the relevant legislative history, it is necessary for the

Court to determine, as a matter of law, the common and commercial

meaning of the term to decide whether Outer Circle’s merchandise

can be classified as such. In so doing, the Court may rely upon

its own understanding of the term, and may consult lexicographic

and scientific authorities, dictionaries, and other reliable

information sources. See id. (citing Baxter Healthcare Corp. of

P.R. v. United States, 182 F.3d 1333, 1337-1338 (Fed. Cir. 1999).

A party who argues that a tariff term should not be given its

common or dictionary meaning must prove that it has a different

commercial meaning that is definite, uniform, and general

throughout the trade. See Rohm & Haas Co. v. United States, 727

F.2d 1095, 1097 (Fed. Cir. 1984).

It is well established that an eo nomine provision, such as

4202.92.90, HTSUS, includes all forms of the named article. See

National Advanced Systems v. United States, 26 F.3d 1107, 1111

(Fed. Cir. 1994); Hasbro Indus., Inc. v. United States, 879 F.2d
Court No. 05-00678 Page 23

838, 840 (Fed. Cir. 1989); Nootka Packing Co. v. United States, 22

CCPA 464, 470 (1935); Sabritas v. United States, 22 CIT 59, 63, 998

F. Supp. 1123, 1127 (1998). By any measure, application of this

principle to the term “bottle cases” would cast a wide net, and

thus would appear to encompass Outer Circle’s imports. However,

the Court is not writing on a clean slate here. The CAFC has

already determined that the scope of Heading 4202 does not include

containers that organize, store, protect or carry food or

beverages. See SGI, 122 F.3d at 1472. Therefore, the Court’s

focus is further limited to whether or not Outer Circle’s products

are designed to contain, organize store, protect or carry food or

beverages.

While not specifically framed as such, Outer Circle presents

an argument based upon the subject merchandise’s “principal use.”

“Principal use” is defined as the use “which exceeds any other

single use” of the article. Lenox Collections v. United States, 20

CIT 194, 196 (1996) (citation omitted). To the extent that a

classification is controlled by use other than actual use, HTSUS

ARI 1(a) provides that:

[A] tariff classification controlled by use (other than
actual use) is to be determined in accordance with the
use in the United States at, or immediately prior to, the
date of importation of goods of that class or kind to
which the imported goods belong, and the controlling use
is the principal use.

Plaintiff claims that “the primary purpose of the goods is to store

and transport beverages.” Pl.’s Resp. at 16. In support, Outer
Court No. 05-00678 Page 24

Circle submits an affidavit and deposition from its founder and

former president of the company, Thomas Melk. See Pl.’s Brief,

Exhibit 1 (Melk Affidavit), Exhibits 2, 3, 4, 6, 7 (Melk

Deposition). Melk’s affidavit and deposition testimony focus on

the factors a court considers in determining the principal use of

a subject import.11 The Court finds it unnecessary to comment on

the sufficiency of each individual factor except to note that each

is predicated on the marriage of Outer Circle’s containers to their

respective bottles or jugs. For example, Melk states that the

“primary purpose of the subject merchandise is to help retain the

cool temperature of the water or other beverage contained within it

(in the bottle or jug) for the period of hours expected.” Pl.’s

Brief, Exhibit 1 (Melk Affidavit ¶ 7). It is fundamental in

Customs cases that merchandise subject to classification “must be

evaluated for tariff purposes in its condition as imported.”

Rollerblade, Inc., 112 F.3d at 487 (citing Simod Am. Corp. v.

United States, 872 F.2d 1572, 1577 (Fed. Cir. 1989). Thus, in

order to produce uniformity in the imposition of duties, “the

11
These factors are outlined in United States v.
Carborundum Co., and include: (1) the general physical
characteristics of the merchandise; (2) the expectation of the
ultimate purchasers; (3) the channel of trade in which the
merchandise moves; (4) the environment of the sale (i.e., the
manner in which the merchandise is advertised and displayed); (5)
the usage of the compared to the use if any, in the same manner
as merchandise which defines the class, and adds to additional
factors of consideration; (6) the economic practicality of so
using the import; and (7) the recognition in the trade of this
usage. 536 F.2d 373, 377 (CCPA 1976).
Court No. 05-00678 Page 25

dutiable classification of articles imported must be ascertained by

an examination of the imported article itself, in the condition in

which it is imported.” KMW Johnson, Inc. v. United States, 13 CIT

1079, 1082, 728 F. Supp 754, 755-56 (1989) (quoting Worthington v.

Robbins, 139 U.S. 337, 341 (1891).

Presently, the subject containers are imported without the

plastic bottles or jugs. Far from being mere accoutrements, the

bottles and jugs are basic to the accomplishment of the articles’

purported design and purpose, which is the maintenance and storage

of beverages at a desired temperature. Thus, Plaintiff’s argument

that the subject imports are designed to contain and transport

beverages is flawed. The bottle wraps, as imported, cannot make

this claim. Their utility as insulated beverage containers arises

only after the containers are mated to the requisite bottle or jug.

Plaintiff claims that the wraps were designed to store and

transport beverages and not the bottles which “merely act as

vessels for the beverages.” Pl.’s Resp. at 9. Outer Circle points

to the articles examined in SGI and argues that the same analysis

applies in the instant matter. Because of the subject imports’

similarity to the merchandise at issue in SGI, “they should also be

classified under Heading 3924, HTSUS.” Pl.’s Brief at 3. The

Court disagrees.

First, neither the Court in SGI nor Dolly conducted an

analysis of the tariff term “bottle cases.” While holding that the
Court No. 05-00678 Page 26

scope of Heading 4202 does “not include containers that organize,

store, protect, or carry food or beverages,” SGI, 122 F.3d at 1472,

this finding is inter-reliant with and contingent upon the

principal use of the subject merchandise. The Court’s

determination, in SGI, was based on an examination of merchandise

fully capable of storing food and/or beverages without further

compilation. Outer Circle’s products, on the other hand, require

the additional assemblage of bottle or jug to achieve this end.

Second, in both SGI and Dolly the Court undertook an analysis

based on the rule of ejusdem generis,12 the fulcrum of which, once

again, turned on the products’ ability to store food or beverages.

In both cases, the merchandise at issue was found to have retained

the essential characteristics of being able to transport and store

food and beverages in an insulated environment. The Court

therefore concluded that the proper classification was under

Heading 3924. Here, the Court has already determined that the

subject merchandise, as imported, are incapable of storing food or

beverages. Therefore, neither of these decisions is apposite for

purposes of the case at bar. Regardless, an ejusdem generis

analysis is ill-suited for the tariff term at issue here. The rule

of ejusdem generis is a rule of statutory construction appropriate

12
In classification cases, the rule of ejusdem generis
requires that the subject merchandise must possess the same
essential characteristics or purposes that unite the listed
exemplars preceding the general term. See Totes, Inc. v. United
States, 69 F.3d 495, 498 (Fed. Cir. 1995).
Court No. 05-00678 Page 27

where the statutory language is unclear. It is “applicable

whenever a doubt arises as to whether a given article not

specifically named in the statute is to be placed in a class of

which some of the individual subjects are named.”13 DRI Indus.,

Inc., 11 CIT at 101, 657 F. Supp. at 532 (1987) (quoting United

States v. Damrak Trading Co., Inc., 43 CCPA 77, 79 (1956). It may

not be resorted to when there is no doubt as to the meaning of a

term. See John V. Carr & Son, Inc. v. United States, 77 Cust. Ct.

103, 108 (1976). The term “bottle cases” in this context is not a

general word or phrase, and is specifically named. Thus, the

statutory language is clear. As with all principles of statutory

interpretation, “ejusdem generis is ‘used only as an

instrumentality for determining the legislative intent in cases

where it is in doubt.’” Airflow Technology, Inc. v. United States,

31 CIT __, 483 F. Supp. 2d 1337, 1346 n.11 (2007) (citations

omitted). Because Outer Circle has failed to establish any

ambiguity in the statutory term “bottle cases,” the principle of

ejusdem generis is not implicated.

13
Plaintiff’s statement that its bottle and jug wraps are
correctly classifiable under Heading 3924 “because that provision
specifically describes them” is inconsistent with its reliance on
the doctrine of ejusdem generis. Pl.’s Brief at 5.
Court No. 05-00678 Page 28

CONCLUSION

As the merchandise is prima facie classifiable under Heading

4202, HTSUS, Chapter 39, Note 2(ij) precludes classification of the

imports under that chapter. Therefore, Plaintiff’s proposed

alternative classification under subheading 3924.10.50, HTSUS

cannot stand. In addition, the Court finds that the tariff term

“bottle cases” is broad enough to encompass the subject containers.

Accordingly, the Court finds that Customs properly classified the

subject merchandise under Heading 4202.92.90, HTSUS.

Based on the foregoing, Outer Circle’s motion for summary

judgment is denied and Customs’ motion for summary judgment is

granted. Judgment to be entered accordingly.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: January 9, 2009
New York, New York