Slip Op. 03-122
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE
RUSS BERRIE & COMPANY, INC.,
Plaintiff,
v. Court No. 00-00018
UNITED STATES,
Defendant.
[Summary judgment for plaintiff.]
Dated: September 17, 2003
Serko & Simon, LLP (Joel Kenneth Simon) for plaintiff Russ
Berrie & Company, Inc.
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 (Mikki Graves Walser); Office of the
Assistant Chief Counsel, International Trade Litigation, United
States Bureau of Customs and Border Protection (Beth C. Brotman),
Of Counsel, for defendant United States.
OPINION
GOLDBERG, Senior Judge: This matter is before the Court on
plaintiff’s motion for summary judgment and defendant’s cross-
motion for summary judgment pursuant to USCIT R. 56. It involves
the proper classification of earrings and pins portraying motifs
associated with Christmas and Halloween. The case requires the
Court to interpret the scope of the term “festive articles” as it
Court No. 00-00018 Page 2
appears in heading 9505 of the Harmonized Tariff Schedules of the
United States (“HTSUS”) and determine the relationship between
Chapters 95 and 71 of the HTSUS.
For the reasons that follow, the Court finds in favor of the
plaintiff and grants plaintiff’s motion for summary judgment.
Defendant’s cross-motion for summary judgment is denied. The
Court exercises jurisdiction pursuant to 28 U.S.C. § 1581(a)
(1994).
I. BACKGROUND
Russ Berrie & Company, Inc. (“Russ Berrie”) imports consumer
gift products. The subject merchandise at issue in this case
consists of three varieties of earrings and one set of pins. All
of the items involved depict holiday symbols; the pins and two of
the earring sets contain Christmas themes, the remaining earring
set contains Halloween themes. The items were advertised in
seasonal Russ Berrie catalogues, and were distributed to be
displayed and sold for the appropriate holiday season.
The items in question entered the United States between
April 1998 and July 1998. The U.S. Customs Service1 (“Customs”)
classified the items at liquidation under heading 7117, HTSUS
1
It has since become the U.S. Bureau of Customs and Border
Protection per the Homeland Security Act of 2002, § 1502, Pub. L.
No. 107-296, 116 Stat. 2135, 2308-09 (Nov. 25, 2002), and the
Reorganization Plan Modification for the Department of Homeland
Security, H.R. Doc. 108-32, p. 4 (Feb. 4, 2003).
Court No. 00-00018 Page 3
(under subheadings 7117.19.90 or 7117.90.90, HTSUS) as “imitation
jewelry” at a duty rate of 11 percent ad valorem. Russ Berrie
protests Customs’ classification, contending that the subject
merchandise should be classified under heading 9505, HTSUS (under
subheadings 9505.10.2500 and 9505.90.6000, HTSUS) as “festive,
carnival or other entertainment articles. . .,” for which there
is no duty.
II. STANDARD OF REVIEW
A. Summary Judgment and Presumption of Correctness
“Summary judgment is proper ‘if the pleadings show that
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law.’”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed.
R. Civ. P. 56). However, “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party,”
summary judgment will not be granted. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). All inferences will be drawn in
favor of the party opposing the motion for summary judgment.
Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).
Customs’ tariff classifications are given a presumption of
correctness; an importer before the court has the burden of
refuting any disputed classification. See 28 U.S.C. § 2639(a)(1)
(1994). In analyzing the viability of such a challenge, the
initial Customs classification must be evaluated “both
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independently and in comparison with the importers’ proposed
alternative.” Anval Nyby Powder AB v. United States, 20 CIT 608,
611, 927 F. Supp. 463, 467 (1996) (quoting Jarvis Clark Co. v.
United States, 733 F.2d 873, 878, reh’g denied, 739 F.2d 628
(Fed. Cir. 1984)).
B. Judicial deference to Customs’ classification rulings
Customs argues that its interpretation of headings 7117 and
9505, HTSUS in Headquarters Ruling Letters (“HRL”) 961913 and
961933 is entitled to judicial respect proportional to its power
to persuade. See Skidmore v. Swift & Co., 323 U.S. 134 (1944).
In accordance with Skidmore, the Supreme Court has held that a
classification ruling by Customs may be granted deference on the
basis of “its writer’s thoroughness, logic, and expertness, its
fit with prior interpretations, and any other sources of weight.”
United States v. Mead Corp., 533 U.S. 218, 235 (2001).
Applying these factors to the subject merchandise in the
instant case, the Court finds that Customs’ classification
rulings are not entitled to Skidmore deference. First, it is
debatable whether Customs gave sufficiently thorough
consideration to HRL 961913 and HRL 961933. Customs does not
claim that the classification rulings were adopted pursuant to a
deliberative notice-and-comment rulemaking process. This is
certainly not dispositive insofar as Skidmore deference is
concerned, but nonetheless may be considered by the Court. In
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addition, Customs’ classification rulings lack thoroughness and
valid reasoning. Neither ruling addresses the operation of
relevant chapter notes in Chapters 71 and 95 pursuant to the
General Rules of Interpretation (“GRI”). As discussed infra,
operation of Chapter 71 Note 3(n) and Chapter 95 Note 2 is
pivotal to the classification of the articles in question.
Despite a number of letters submitted to the plaintiff during the
ruling process, Customs’ classification rulings fail even to make
note of this line of reasoning. Furthermore, classification of
festive articles has long been the subject of controversy, as
demonstrated by Customs’ repeated efforts to narrow the scope of
Chapter 95. See Plaintiff’s Memorandum of Law in Support of
Plaintiff’s Motion for Summary Judgment, 21-22 (“Pl.’s Mem.”).
The Court recognizes that “Customs can bring the benefit of
specialized experience to bear on the subtle questions” that are
present in the instant case. Mead, 533 U.S. at 234. However,
for the aforementioned reasons, Customs’ classification rulings
lack the requisite persuasive power to warrant Skidmore
deference.
III. DISCUSSION
A. Customs’ classification as “imitation jewelry” under heading
7117, HTSUS
Customs classified the subject merchandise under heading
7117 as “imitation jewelry.” Customs argues that this heading is
Court No. 00-00018 Page 6
appropriate because it incorporates any small objects of personal
adornment that do not contain pearls, precious metals, or
precious or semiprecious stones. Memorandum in Support of
Defendant’s Opposition to Plaintiff’s Motion for Summary Judgment
and in Support of Defendant’s Cross-Motion for Summary Judgment,
4, 14-15 (“Def.’s Opp.”).
Plaintiff does not dispute that the subject merchandise
falls within the meaning and scope of the statutory definition of
“imitation jewelry” as defined in Notes 9(a) and 11 to Chapter
71. See Defendant’s Additional Statement of Material Facts Not
In Dispute; Plaintiff’s Response to Defendant’s Additional
Statement of Material Facts As To Which There Is No Genuine Issue
To Be Tried, ¶¶ 2, 3.
B. Classification as “festive articles” under heading 9505,
HTSUS
Customs interprets the decisions in Midwest of Cannon Falls,
Inc. v. United States to hold that heading 9505 only applies to
“articles used for amusement and merriment,” or articles used to
decorate the home during holiday festivities. Def.’s Opp. at 28;
see Midwest of Cannon Falls, Inc. v. United States, 20 CIT 123
(1996) (“Midwest I”) aff’d in part, rev’d in part, 122 F.3d 1423
(Fed. Cir 1997) (“Midwest II”). Customs argues that since the
court in Midwest I noted that the articles in question under
heading 9505 were, “principally, if not exclusively, used only
Court No. 00-00018 Page 7
during the holiday season for the specific purpose of decorating
or ornamenting the home or Christmas tree,” only like merchandise
can fit under the same heading. Def.’s Opp. at 27; see also
Midwest I, 20 CIT at 129. Therefore, according to Customs,
because the merchandise at issue is jewelry, which is used for
personal adornment, and not “entertainment” articles or home
decorations, it is not prima facie classifiable under heading
9505. Def.’s Opp. at 20, 28.
The Court rejects Customs’ argument. In an effort to
maintain consumer flexibility and not limit heading 9505 to
traditional subjects, courts have been hesitant to impose
“extraneous limitations that are not based on the actual language
of the [heading].” Midwest II, 122 F.3d at 1428. Furthermore,
Customs mistakenly intimates that “personal adornment” and
“amusement and merriment” are mutually exclusive labels. Def.’s
Opp. at 28. This is simply untrue, as there is no reason why an
individual item cannot be construed as both. Midwest II, 122
F.3d at 1427 (“[A]ll of the items at issue are used in
celebration of and for entertainment on a joyous holiday, and
they are all prima facie classifiable as ‘festive articles’ under
heading 9505.”).
There are two requirements for finding a prima facie
classification under heading 9505. The merchandise must be (1)
“closely associated” with the applicable holiday, and (2)
Court No. 00-00018 Page 8
displayed and used only during that holiday. Midwest II, 122
F.3d at 1429.
An item is “closely associated” if “the physical appearance
of an article is so intrinsically linked to a festive occasion
that its use during other time periods would be aberrant.” Park
B. Smith, Ltd. v. United States, 25 CIT __, Slip Op. 01-63, 6
(May 29, 2001); see also Brookside Veneers, Ltd. v. United
States, 6 Fed. Cir. (T) 121, 125, 847 F.2d 786, 789 (1988). An
item may be deemed closely associated if it incorporates
traditional festive symbols, such as a jack-o’-lantern for
Halloween. Midwest II, 122 F.3d at 1429; see also Springwater
Cookie & Confections, Inc. v. United States, 20 CIT 1192, 1196
(1996) (wax candles embellished with holly sprigs were considered
festive articles linked with Christmas). Another characteristic
indicative of close association is color schemes or patterns in
accordance with the respective holiday. Smith, 25 CIT at __,
Slip Op. 01-63 at 8 (for example, a cloth design labeled
“Christmas Highland” was deemed closely associated with
Christmas, despite no display of Christmas symbols, primarily
because “the colors green and red in combination are closely
associated with the festive association of Christmas.”).
The items in question are closely associated with their
respective holidays. Item # 19005, “Kringle Cuties,” consists of
three earring sets, two with Santa Claus designs and one of a
Court No. 00-00018 Page 9
snowman decorated with holly. The former designs incorporate
Santa Claus, the preeminent modern commercial Christmas symbol.
The latter design is similar to the candles in Springwater in
that they both display hollies, except that the items in this
case additionally display a snowman. Item # 17347, “Li’l
Frightful Friends,” consists of four earring sets representing
ghosts, jack-o’-lanterns, witches’ heads, and monsters’ heads.
All of these representations bear a strong traditional linkage to
Halloween. Items # 19054 and # 19055, “Jolly Jingles,” consist
of jingle bell earrings in red, green, and gold balls, decorated
with red or green ribbons. Jingle bells are symbolic of
Christmas. In addition, the color combinations and patterns of
the “Jolly Jingles” earring sets clearly resonate as Christmas-
like. Smith, 25 CIT at __, Slip Op. 01-63 at 8.
The second requirement for a prima facie classification
under heading 9505 is that the items be displayed and used only
during the holiday with which they are associated. Midwest II,
122 F.3d at 1429. This analysis mandates balancing two distinct,
but coinciding factors. First, the item in question must be
linked to the respective holiday to such an extent that it would
be unlikely to be displayed at other points during the calendar
year. Smith, 25 CIT at __, Slip Op. 01-63 at 8 (this component
was met because “the design and the colors are so closely
associated with the festive occasion . . . that the design would
Court No. 00-00018 Page 10
likely not be used by a consumer during any other time of the
year.”). Essentially, this element is satisfied if the “close
association” requirement has been met, as has been found in the
instant case. The second factor is that the merchandise in
question must be only marketed and sold during the applicable
season. Id. (“[the subject merchandise] was also shown to have
been designed, marketed and sold for use during festive occasions
and was in fact displayed and used by consumers only during
festive occasions.”). As in Midwest II, the items in the instant
case were designed, marketed, and sold only during their
particular holidays. Midwest II, 122 F.3d at 1429. “Krinkle
Cuties” and “Jolly Jingles” were displayed and available for sale
only in the Russ Berrie Christmas 1998 catalog, and “Li’l
Frightful Friends” was displayed in the 1998 Thanksgiving-
Halloween catalog. They were all entered into the United States
to be distributed in time for their respective holiday seasons.
Pl.’s Mem. at 5-7.
Accordingly, because all of the items in question were
closely associated with the applicable holiday and were only
displayed and used during that holiday, the imports are prima
facie classifiable under heading 9505, HTSUS.
C. Operation of Chapter 71, Note 3(n), HTSUS
The Court holds that Customs’ classification of the
earrings and pins under heading 7117 as imitation jewelry is
Court No. 00-00018 Page 11
prima facie correct, and holds that Russ Berrie’s proposed
classification under heading 9505 as festive articles is also
prima facie correct. To resolve the classification conflict, the
Court looks to the relevant notes in Chapters 71 and 95.
GRI 1 dictates that “for all legal purposes,
classification shall be determined according to the terms of the
headings and any relevant section or chapter notes.” Chapter 71
Note 11 defines “imitation jewelry” as “articles of jewelry. . .
not incorporating natural or cultured pearls, precious or
semiprecious stones (natural, synthetic or reconstructed),
precious metal or metal clad with precious metal.” As noted
supra, the subject merchandise shares the characteristics of
imitation jewelry as defined in Chapter 71. However, the Court
finds that Chapter 71 Note 3(n) excludes the subject merchandise
that is prima facie classifiable under heading 9505 and
referenced in Chapter 95 Note 2. Note 3(n) to Chapter 71 states
that the chapter does not cover “Articles covered in note 2 to
chapter 95.” Note 2 to Chapter 95 provides: “This chapter
includes articles in which natural or cultured pearls, precious
or semiprecious stones (natural, synthetic or reconstructed),
precious metal or metal clad with precious metal constitute only
minor constituents.” The parties agree that the articles at
issue consist of earrings and pins which do not incorporate
natural or cultured pearls, precious or semiprecious stones, or
Court No. 00-00018 Page 12
precious metal or metal clad with precious metals. See
Plaintiff’s Statement of Material Facts as to Which There Is No
Genuine Issue To Be Tried (“Pl.’s Statement”) and Defendant’s
Response to Pl.’s Statement, ¶¶ 15, 16. Customs contends that
since the earrings and pins at issue do not contain the elements
listed in Chapter 95 Note 2 as minor constituents, they are not
covered by Chapter 95 Note 2 and thus cannot be excluded from
classification under heading 7117 by operation of Chapter 71 Note
3(n). The Court rejects this argument as it is clear that
articles of jewelry having no precious stones are not necessarily
classifiable in Chapter 71. The operation of the chapter notes
in the instant case parallels the Federal Circuit’s analysis of
Note 2(ij) to Chapter 95 in Midwest II. See 122 F. 3d at 1429.
Accordingly, the Court finds the subject merchandise is properly
classified under heading 9505 by operation of Note 3(n) to
Chapter 71, which excludes articles covered by Note 2 to Chapter
95.
III. CONCLUSION
For the aforementioned reasons, Customs erred in its
classification of the merchandise incorporating festive symbols,
color schemes, and patterns because operation of Chapter 71, Note
3(n), HTSUS compels Customs to classify these items as festive
articles under heading 9505, HTSUS.
Court No. 00-00018 Page 13
Accordingly, plaintiff’s motion for summary judgment is
granted and defendant’s cross-motion for summary judgment is
denied. Judgment for the plaintiff will be entered accordingly.
_________________________________
Richard W. Goldberg
Senior Judge
Date: September 17, 2003
New York, New York
ERRATUM
Russ Berrie & Company, Inc. v. United States, Court No. 00-00018,
Slip Op. 03-122, issued September 17, 2003.
• On page 1, the identification of plaintiff’s counsel should
read: “Serko & Simon, LLP (Joel Kenneth Simon and Despina
Keegan) for plaintiff Russ Berrie & Company, Inc.”