Sc Johnson & Son Inc. v. United States ( 2021 )

Case: 20-1476 Document: 39 Page: 1 Filed: 06/02/2021
United States Court of Appeals
for the Federal Circuit
______________________
SC JOHNSON & SON INCORPORATED,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Appellee
______________________
2020-1476
______________________
Appeal from the United States Court of International
Trade in No. 1:14-cv-00184-JCG, Judge Jennifer Choe-
Groves.
______________________
Decided: June 2, 2021
______________________
MICHAEL EDWARD ROLL, Roll & Harris LLP, Los Ange-
les, CA, argued for plaintiff-appellant. Also represented by
BRETT HARRIS, Washington, DC.
MONICA PERRETTE TRIANA, International Trade Field
Office, United States Department of Justice, New York,
NY, argued for defendant-appellee. Also represented by
JEFFREY B. CLARK, JEANNE DAVIDSON, AIMEE LEE, JUSTIN
REINHART MILLER.
______________________
Case: 20-1476 Document: 39 Page: 2 Filed: 06/02/2021
2 SC JOHNSON & SON INC. v. US
Before MOORE, Chief Judge*, DYK and O’MALLEY, Circuit
Judges.
DYK, Circuit Judge.
S.C. Johnson appeals the Court of International
Trade’s (“Trade Court”) determination that Ziploc® brand
reclosable sandwich bags are classified under Harmonized
Tariff Schedule of the United States (“HTSUS”) heading
3923. We affirm.
BACKGROUND
On May 15, 2013, S.C. Johnson imported 1,512 cases of
Ziploc® brand reclosable sandwich bags from Thailand.
The bags have a single zipper closure and measure six and
one-half inches by five and seven-eighths inches. They are
manufactured from polyethylene resin pellets and are
tested to ensure compatibility with food contact.
Upon entry, Customs classified the sandwich bags un-
der HTSUS subheading 3923.21.00, covering “[a]rticles for
the conveyance or packing of goods, of plastics; stoppers,
lids, caps and other closures, of plastics: Sacks and bags
(including cones): Of polymers of ethylene.” On June 26,
2014, S.C. Johnson filed a protest, which was deemed de-
nied.
S.C. Johnson then initiated this action before the
Trade Court, contending that the sandwich bags should
have been classified under HTSUS subheading 3924.90.56,
covering “[t]ableware, kitchenware, other household arti-
cles and hygienic or toilet articles, of plastics: Other:
Other.” S.C. Johnson additionally argued that, because
the merchandise should have been classified under sub-
heading 3924.90.56 and was imported from Thailand, the
bags were eligible for duty-free treatment under the Gen-
eralized System of Preferences.
The parties filed cross-motions for summary judgment
before the Trade Court. The Trade Court determined
__________________________
* Chief Judge Moore assumed the position of Chief
Judge on May 22, 2021.
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SC JOHNSON & SON INC. v. US 3
“HTSUS Heading 3923 is a principal use provision and en-
compasses goods of plastic used to carry or transport other
goods of any kind.” J.A. 34. The Trade Court also con-
cluded that “HTSUS Heading 3924 is an eo nomine provi-
sion that encompasses plastic goods of or relating to the
house or household.” Id. at 37. The Trade Court declined
to determine on summary judgment whether the sandwich
bags were prima facie classifiable under either heading.
After a bench trial on the papers, the Trade Court con-
ducted a principal use analysis using the Carborundum
factors to determine whether the sandwich bags were
prima facie classifiable under HTSUS heading 3923. 1 The
court concluded that “the majority of the Carborundum fac-
tors support[ed] classification under HTSUS Heading
3923” and that “the subject merchandise [we]re prima facie
classifiable under” that heading. J.A. 21.
The Trade Court also determined that the sandwich
bags were prima facie classifiable under HTSUS heading
3924, noting that “[t]he sandwich bags are designed in a
1 The Carborundum factors are used to determine
whether merchandise is commercially fungible with the
particular class or kind of merchandise that falls under a
principal use provision. See Aromont USA, Inc. v. United
States, 671 F.3d 1310, 1312–13 (Fed. Cir. 2012) (citing
United States v. Carborundum, 536 F.2d 373, 377 (CCPA
1976)). Under Carborundum, courts look to (1) use in the
same manner as merchandise which defines the class;
(2) the general physical characteristics of the merchandise;
(3) the economic practicality of so using the import; (4) the
expectation of the ultimate purchasers; (5) the channels of
trade in which the merchandise moves; (6) the environ-
ment of the sale, such as accompanying accessories and the
manner in which the merchandise is advertised and dis-
played; and (7) the recognition in the trade of this use. Id.
at 1313.
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4 SC JOHNSON & SON INC. v. US
manner consistent with household food storage” and that
“S.C. Johnson’s internal study indicate[d] that the sand-
wich bags can be found in a household.” J.A. 22.
Because the sandwich bags were prima facie classifia-
ble under both headings at issue, the court applied General
Rule of Interpretation (“GRI”) 3, which dictates that goods
should be classified under the heading that provides the
most specific description. 2 The court concluded that the
sandwich bags were properly classified under HTSUS
heading 3923 because that heading “has requirements that
are more difficult to satisfy and describe the article with a
greater degree of accuracy and certainty.” J.A. 24. Be-
cause the products were classified under HTSUS heading
3923, the Trade Court did not reach whether the sandwich
bags were eligible for duty-free treatment under the Gen-
eralized System of Preferences.
S.C. Johnson appealed. We have jurisdiction under
28 U.S.C. § 1295(a)(5).
DISCUSSION
The classification of merchandise “involves two under-
lying steps: (1) determining the proper meaning of the tar-
iff provisions, which is a question of law; and (2)
2 The GRIs, along with the Additional U.S. Rules of
Interpretation (“ARIs”), “govern the proper classification of
all merchandise and are applied in numerical order.” Carl
Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir.
1999). GRI 3 provides in relevant part that:
When . . . goods are, prima facie, classifiable under
two or more headings . . . the heading which pro-
vides the most specific description shall be pre-
ferred to headings providing a more general
description.
GRI 3(a).
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SC JOHNSON & SON INC. v. US 5
determining which heading the particular merchandise
falls within, which is a question of fact.” Deckers Corp. v.
United States, 532 F.3d 1312, 1314–15 (Fed. Cir. 2008).
“We review questions of law de novo, including the inter-
pretation of the terms of the HTSUS, whereas factual find-
ings of the Court of International Trade are reviewed for
clear error.” Id. at 1315. The issues here are legal issues—
the interpretation of HTSUS headings.
I
First, we address S.C. Johnson’s argument that the
Trade Court erred in determining that the sandwich bags
are classifiable under HTSUS heading 3923. That heading
provides for classification of
[a]rticles for the conveyance or packing of goods, of
plastics; stoppers, lids, caps and other closures, of
plastics.
HTSUS heading 3923.
The Trade Court concluded that HTSUS heading 3923
“encompasses goods of plastic used to carry or to transport
other goods of any kind.” J.A. 34. S.C. Johnson argues that
HTSUS heading 3923 should instead apply only to “articles
used for commercial purposes,” Appellant’s Br. 46, that is,
the transportation of goods between sellers and their sup-
pliers rather than the transportation of goods by custom-
ers. We disagree.
In support of its interpretation, S.C. Johnson urges
that HTSUS heading 3923 should be construed to have the
same scope as a predecessor tariff provision, Tariff Sched-
ules of the United States (“TSUS”) item 772.20, which en-
compassed
[c]ontainers, of rubber or plastics, with or without
their closures, chiefly used for the packing, trans-
porting, or marketing of merchandise.
TSUS item 772.20.
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6 SC JOHNSON & SON INC. v. US
Because of the reference to “merchandise,” TSUS item
772.20 was construed as limited to the packing, transport,
or marketing of goods in the stream of commerce. See Im-
perial Packaging Corp. v. United States, 535 F. Supp. 688,
689–90 (Ct. Int’l Trade 1981) (concluding that plastic shop-
ping bags used by customers to carry merchandise did not
fall under TSUS 772.20 because the heading was “not in-
tended to encompass merchandise bags which retail stores
furnish to their customers for carrying purchases home”).
None of the cases on which S.C. Johnson relies was de-
cided by this court or its predecessor. In any event, cases
limiting TSUS item 772.20 to the packing or transportation
of commercial goods do not apply to the “differing language
of the more recently enacted HTSUS.” Mitsubishi Int’l
Corp. v. United States, 182 F.3d 884, 886 (Fed. Cir. 1999);
see also Bausch & Lomb, Inc. v. United States, 148 F.3d
1363, 1367 (Fed. Cir. 1998) (addressing the differences be-
tween an HTSUS sub-heading and TSUS item and stating
that “[w]e can safely assume that Congress changed the
language for a reason”). The language of HTSUS heading
3923 differs from TSUS item 772.20 item in two material
respects. First, HTSUS heading 3923 changed “merchan-
dise” to “goods.” As the government correctly points out,
the term “goods” is broader than “merchandise” and in-
cludes “both personal property as well as items of trade.”
Appellee’s Br. 21; see also Good, Webster’s II New College
Dictionary 480 (1999) (defining “goods” as “a. Commodities:
wares . . . b. Portable personal property”).
Second, the provision was changed to apply to items for
“conveyance or packing,” HTSUS heading 3923, rather
than “packing, transporting, or marketing,” TSUS item
772.20. Thus, HTSUS 3923 applies more broadly to arti-
cles for the “conveyance or packing of goods,” and is not
limited to transportation between sellers and their suppli-
ers.
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SC JOHNSON & SON INC. v. US 7
The materiality of this difference in language is con-
firmed by a comparison of the Summary of Trade and Tariff
Information for TSUS item 772.20 and the current Explan-
atory Notes for HTSUS heading 3923. The Summary of
Trade and Tariff Information states that
[b]ags and similar nonrigid articles which are not
covered here under TSUS item 772.20 include dis-
posable household bags such as garbage and gar-
den bags, sandwich bags, and food bags.
Summary of Trade and Tariff Information, TSUS item
772.20, 772.85, and 772.86 (April 1981), U.S. International
Trade Commission. By contrast, the Explanatory Notes for
HTSUS Heading 3923 state that the heading covers
[c]ontainers such as boxes, cases, crates, sacks
and bags (including cones and refuse sacks),
casks, cans, carboys, bottles, and flasks.
J.A. 14 (citing EN 39.23(a), (c) (2012) (emphasis added)).
Thus, while TSUS item 772.20 did not cover disposable
household bags, the modified language of HTSUS heading
3923 does.
Next, S.C. Johnson contends that the Trade Court’s de-
termination as to the scope of HTSUS heading 3923 is in-
consistent with Customs rulings finding that heading 3923
should be limited to “articles used to package or convey
bulk or commercial merchandise.” Appellant’s Br. 43–44
(emphasis omitted); see also HQ H026225 (June 4, 2009)
(stating that HTSUS heading 3923 “provides for cases and
containers used for shipping purposes” and therefore the
heading “provides for cases and containers of bulk goods
and commercial goods, not personal items”). These Cus-
toms rulings are not entitled to Chevron deference and are
not persuasive. See United States v. Mead Corp., 533 U.S.
218, 221 (2001) (holding that a Customs classification rul-
ing “has no claim to judicial deference under Chevron” but
can “claim respect according to its persuasiveness”). Nor
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8 SC JOHNSON & SON INC. v. US
are they consistent. As the government correctly points
out, Customs previously classified Dow Chemical’s “poly-
ethylene food bags with minigrip closures” under HTSUS
subheading 3923.21.00, the same provision at issue in this
case. HQ 086579 (March 7, 1990).
Finally, S.C. Johnson contends that our prior decision
in SGI, Inc. v. United States, 122 F.3d 1468 (Fed. Cir.
1997), “reject[ed] classification of household food storage
articles as ‘articles for the conveyance or packing of goods’
within HTSUS heading 3923.” Appellant’s Br. 45. In SGI,
this court summarily ruled that soft-sided vinyl insulated
coolers for transporting food or beverages did not fall
within the scope of HTSUS heading 3923 because heading
3923 does not specifically mention “foodstuffs.” SGI, 122
F.3d at 1473 n.1. S.C. Johnson appears to interpret this
statement as a determination that HTSUS 3923 does not
apply to personal food transportation or storage. However,
there is nothing in HTSUS heading 3923 that excludes con-
tainers for transporting foodstuffs. As the explanatory
notes to HTSUS heading 3923 illustrate, the heading in-
cludes “boxes, cases, crates, sacks and bags (including
cones and refuse sacks), casks, cans, carboys, bottles and
flasks” and “[c]ups without handles having the character of
containers used for the packing or conveyance of certain
foodstuffs.” EN 39.23. Thus, HTSUS heading 3923 encom-
passes containers for the packing or transport of foodstuffs.
Whatever the meaning of SGI, it does not help S.C. John-
son here. 3
3 S.C. Johnson also relies on the Explanatory Notes
for HTSUS heading 3923. The Explanatory Notes exclude
household articles “which are used as tableware or toilet
articles and do not have the character of containers for the
packing or conveyance of goods, whether or not sometimes
used for such purposes” from HTSUS heading 3923. EN
39.23. Thus, the Explanatory Notes make clear that this
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SC JOHNSON & SON INC. v. US 9
S.C. Johnson does not appear to otherwise challenge
that the sandwich bags are used for the packing or convey-
ance of goods. Nor could it. The record overwhelmingly
shows that the sandwich bags are used for the transporta-
tion of food that is consumed away from home. As
S.C. Johnson’s witness, Amy Bigna, explained, the bags are
“predominantly used for packing lunches, whether it be for
someone to take it to work or to send it to school with your
child.” J.A. 735.
II
Next, we address S.C. Johnson’s challenge to the Trade
Court’s determination that HTSUS heading 3924 is an eo
nomine provision rather than a use provision. If HTSUS
heading 3924 is a use provision, then both HTSUS head-
ings at issue would be use provisions, and under ARI 1(a),
the “principal use” would govern classification of the sand-
wich bags. S.C. Johnson contends that the principal use of
the bags is household food storage. We agree with the
Trade Court that HTSUS heading 3924 is an eo nomine
provision. As the Trade Court determined, the key inquiry
under the terms of the heading is where the articles at is-
sue are located, rather than how they are used. This head-
ing provides in pertinent part for the classification of
[t]ableware, kitchenware, other household articles
and hygienic or toilet articles, of plastics.
HTSUS Heading 3924.
There are two types of HTSUS headings, eo nomine and
use provisions. “An eo nomine provision ‘describes an arti-
cle by a specific name,’ whereas a use provision describes
exclusion does not generally apply to household articles
having “the character of containers for the packing or con-
veyance of goods,” such as sandwich bags, regardless of
whether the articles are located in the household.
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10 SC JOHNSON & SON INC. v. US
articles according to their principal or actual use.” Schlum-
berger Tech. Corp. v. United States, 845 F.3d 1158, 1164
(Fed. Cir. 2017) (quoting Aromont, 671 F.3d at 1312). On
its face heading 3924 does not define its coverage by refer-
ence to the “use” of the goods in question. While a use pro-
vision need not expressly use the words “used for,” see
StoreWALL, LLC v. United States, 644 F.3d 1358, 1365
(Fed. Cir. 2011) (Dyk, J., concurring), “a use limitation
should not be read into an eo nomine provision unless the
name itself inherently suggests a type of use,” Carl Zeiss,
Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999).
In determining whether a provision inherently sug-
gests a type of use, we have previously looked to dictionary
definitions of heading terms. In Minnetonka Brands, Inc.
v. United States, the Trade Court concluded that HTSUS
heading 9503, covering “Other toys,” was a principal use
provision because dictionary definitions suggested that
toys are “designed and used for amusement, diversion or
play, rather than practicality.” 110 F. Supp. 2d 1020, 1026
(Ct. Int’l Trade 2000). The Trade Court’s reasoning in Min-
netonka was adopted by this court in Processed Plastics Co.
v. United States, 473 F.3d 1164, 1170 (Fed. Cir. 2006) (“We
agree with the standard adopted in Minnetonka to deter-
mine whether merchandise should be classified as a toy.”).
Other cases have determined that generic terms pre-
ceded by an adjective suggesting a manner of use can con-
stitute principal use provisions. See, e.g., Stewart-Warner
Corp. v. United States, 748 F.2d 663, 667 (Fed. Cir. 1984)
(explaining that the TSUS term encompassing “bicycle
speedometers” was “a term ‘controlled by use’ . . . because
the noun ‘bicycle’ acts as an adjective modifying ‘speedom-
eter’ in a way that implies use of the speedometer on a bi-
cycle”).
Here, the Trade Court noted that “‘[h]ousehold’ is de-
fined as ‘the maintaining of a house,’ ‘household goods and
chattels,’ ‘a domestic establishment,’ or ‘of or relating to a
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SC JOHNSON & SON INC. v. US 11
household.’” J.A. 36 (quoting Webster’s Third New Interna-
tional Dictionary 1096 (1993)); see also id. at 11. The court
also determined that “‘[a]rticle’ is defined as an ‘individual
thing or element of a class; a particular object or item.’” Id.
at 36 (quoting The American Heritage Dictionary of the
English Language 101 (4th ed. 2000)); see also id. at 11. As
the Trade Court concluded, these definitions do not suggest
a specific type of use. Further, none of the terms in HTSUS
heading 3924 acts as an adjective that suggests a type of
use rather than a location where the objects can be found.
S.C. Johnson argues that “an unbroken line of cases”
establishes that “household article” constitutes a use pro-
vision. Appellant’s Br. 21. In support, S.C. Johnson relies
on several cases in which this court or its predecessor de-
termined that the different tariff term “household utensils”
used in paragraph 339 of the Tariff Act of 1930 constituted
a use provision. See M. Pressner & Co. v. United States, 42
CCPA 48, 49 (1954); Frank P. Dow Co. v. United States, 21
CCPA 282, 287 (1933); see also Stewart-Warner Corp. v.
United States, 748 F.2d 663, 667 (Fed. Cir. 1984) (noting
that the trade court had previously determined that
“household utensils” was a use classification).
Even if “household utensils” were a use provision, that
does not change the outcome of this case. As the govern-
ment points out, the term “utensil” is defined as “an imple-
ment, instrument, or vessel used in a household and
especially a kitchen.” Appellee’s Br. 33 (quoting Utensil,
Merriam-Webster, https://www.merriam-webster.com/dic-
tionary/utensil (last visited May 10, 2021)). Thus, the term
“utensil,” like the term “toy,” suggests a specific use and
could be construed as a use provision. Processed Plastics,
473 F.3d at 1170 (discussing the tariff term “Other toys”).
As we have noted, in contrast, the term “Article” does not
suggest a type of use and should not be construed as creat-
ing a use provision.
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12 SC JOHNSON & SON INC. v. US
In SGI, this court determined that the items at issue
(soft-sided coolers) fell under HTSUS heading 3924.10.50,
explaining that “the coolers may be considered ‘household
articles’ because ‘[t]he coolers may be used in a number of
locations where food or beverages might be consumed.’”
SGI, 122 F.3d at 1473 (quoting SGI, Inc. v. United States,
917 F. Supp. 822, 825 (Ct. Int’l Trade 1996), rev’d, 122 F.3d
1468) (alteration in original). Whether HTSUS heading
3924 constitutes a use provision or an eo nomine provision
did not affect the result of that case. The coolers would
have been classifiable under HTSUS heading 3924 even if
the heading were an eo nomine provision because they were
located in the household. We do not view SGI as determin-
ing that HTSUS heading 3924 was a use provision. 4
S.C. Johnson also points to Customs’ website, which
states that “other household articles . . . [i]ncludes any ar-
ticle principally used in or around the home.” Appellant’s
Reply Br. 15 (quoting U.S. Dep’t of Homeland Security, The
Importation of Tableware, Kitchenware, Other Household
Articles and Toilet Articles of Plastics 9,
https://www.cbp.gov/sites/default/files/assets/docu-
ments/2020-Feb/icp031_3.pdf). However, S.C. Johnson
agrees that this court need not afford deference to Customs’
website.
4 We additionally note that SGI was superseded by
statute when HTSUS heading 4202 was amended by Pres-
idential Proclamation to include “insulated food or bever-
age bags.” Proclamation 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). SGI ’s conclusion that insulated
cooler bags are not classifiable under HTSUS heading 4202
because the provision “[did] not include containers that or-
ganize, store, protect, or carry food or beverages,” 122 F.3d
at 1472, is therefore no longer good law.
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SC JOHNSON & SON INC. v. US 13
We conclude that HTSUS heading 3924 encompasses
goods of plastic commonly found in the home and affirm the
Trade Court’s determination that the heading is an eo nom-
ine provision. ARI 1(a) therefore does not apply. We also
agree that the sandwich bags are prima facie classifiable
under HTSUS heading 3924.
III
Because the Trade Court concluded that the sandwich
bags were prima facie classifiable under both HTSUS
headings, it applied GRI 3 to determine which heading pro-
vided the more specific description of the products. The
Trade Court believed that HTSUS heading 3923 describes
the bags more specifically than HTSUS heading 3924. Nei-
ther party challenges the Trade Court’s determination that
HTSUS heading 3923 “has requirements that are more dif-
ficult to satisfy and describe the article with a greater de-
gree of accuracy and certainty.” J.A. 24.
We therefore affirm the Trade Court’s determination
that the sandwich bags are properly classified under
HTSUS Heading 3923.
AFFIRMED