Jedwards International, Inc. v. United States ( 2016 )

Slip Op. 16-23
UNITED STATES COURT OF INTERNATIONAL TRADE
JEDWARDS INTERNATIONAL, INC.,
Plaintiff,
v. Before: Leo M. Gordon, Judge
UNITED STATES, Court No. 11-00031
Defendant.
MEMORANDUM and ORDER
[Motion to appear as amicus curiae denied.]
Dated: March 21, 2016
John C. Eustice, Richard A. Mojica, Richard H. Abbey, and Daniel P. Wendt, Miller
& Chevalier Chartered, of Washington D.C. for Plaintiff Jedwards International, Inc.
Jennifer E. LaGrange, Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice of Washington, D.C. for Plaintiff United States. On the brief
with her were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne
E. Davidson, Director, Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief
was Sheryl A. French, Attorney, Office of Assistant Chief Counsel for International Trade
Litigation U.S. Customs and Border Protection of Washington, D.C.
Teresa A. Gleason and Meredith A. DeMent, Baker & McKenzie, LLP of
Washington, DC for Proposed Amicus Curiae DSM Nutritional Products, LLC.
Gordon, Judge: Before the court is a motion by DSM Nutritional Products, LLC
(“DSM”), pursuant to USCIT Rule 76 for leave to file a brief, as amicus curiae, in support
of Defendant regarding the proper classification of bulk krill oil, the imported merchandise
that is the subject of this action. Mot. for Leave to File Amicus Curiae Brief, ECF No. 49.
For the reasons set forth below, DSM’s motion is denied.
Court No. 11-00031 Page 2
Background
Plaintiff Jedwards International, Inc. (“Jedwards”) is the importer of the subject
merchandise, a “krill oil,” which is commonly used as a human nutritional supplement,
taken in capsule form. Joint Statement of Undisputed Facts ¶ 6, ECF No. 38. Upon entry,
Plaintiff classified its krill oil under subheading 1603.00.90 of the Harmonized Tariff
Schedule of the United States (HTSUS), as an extract of an aquatic crustacean.
At liquidation, U.S. Customs and Border Protection (“Customs”) classified the imported
merchandise under HTSUS subheading 3824.90.4090, which provides for “chemical
products and preparations of the chemical or allied industries (including those consisting
of mixtures of natural products), not elsewhere specified or included: Other: Other: Fatty
substances of animal or vegetable origin or mixtures thereof,” dutiable at 4.6%. Plaintiff
protested Customs’ classification, which Customs denied. This action ensued.
Jedwards now claims that its krill oil is properly classifiable under Chapter 15 of
the HTSUS, more specifically under subheading 1506.00.0000, as “Other animal fats and
oils and their fractions, whether or not refined, but not chemically modified,” dutiable at
2.3%, or alternatively under HTSUS subheading 1517.90.9000, as “edible mixtures or
preparations of animal or vegetable fats or oils or of fractions of different fats or oils of this
chapter, other than edible fats or oils or their fractions of heading 1516: Other: Other:
Other,” dutiable at 8.8¢ per kilogram.
DSM is a manufacturer, distributor, and importer of fish oil products that are similar
to Jedwards’ imported krill oil. DSM manufactures its nutritional fish oil products in

Court No. 11-00031 Page 3
Canada from fish that are harvested off the coast of Peru. Letter filed by DSM, ECF
No. 66. DSM’s Canadian products are then imported into the United States, where they
are distributed and sold to retailers. Though similar in function and use—as a human
dietary supplement—DSM states that its fish oil products are physically distinct from the
subject merchandise resulting in the products being classified under different provisions
of the HTSUS. DSM seeks to participate in this litigation because, in its view, the proper
classification of both krill oil and fish oil products turns on the issue of the applicability or
non-applicability of Chapter 15. DSM maintains that Chapter 15 does not govern the
classification of the subject merchandise and that the subject krill oil is classifiable under
HTSUS subheading 2923.20.2000 as “lecithins and other phosphoaminolipids, whether
or not chemically defined: Lecithins and other phosphoaminolipids: Other’” dutiable at 5%.
DSM maintains that its motion and arguments on the merits will aid the court in reaching
the correct decision in accordance with Jarvis Clark Co v. United States, 733 F.2d 873,
878 (Fed. Cir. 1984). Defendant opposes DSM’s motion, and Jedwards takes no position.
Def.’s Reply in Supp. of its Cross-Mot. for Summ. J. & Opp. to Req. to File Amicus Br. 16-
18, ECF No. 59. The court has jurisdiction over a challenge to a denied protest regarding
the classification of imported merchandise pursuant to 28 U.S.C. § 1581(a) (2012).
Discussion
The court notes at the outset that any contested motion to appear as amicus curiae
in a Customs’ classification action is viewed with a measure of skepticism because
Congress long ago codified the practice of this Court’s predecessor, the Customs Court,
limiting participation of third parties in classification and valuation actions. 28 U.S.C.

Court No. 11-00031 Page 4
§ 2631(j)(1)(A) (“Any person who would be adversely affected or aggrieved by a decision
in a civil action pending in the Court of International Trade may, by leave of court,
intervene in such action, except that—(A) no person may intervene in a civil action under
section 515 or 516 of the Tariff Act of 1930.”); Customs Courts Act of 1980, S. REP. No.
96-466 at 14 (1979) (continuing existing law barring intervention in denied protest
litigation); H.R. REP. No. 96-1235 at 52 (1980), 1980 U.S.C.C.A.N. 3729, 3764.
USCIT Rule 76, which governs amicus curiae motions, provides that an applicant
may, with the court’s permission, file “a brief,” and, for extraordinary reasons, participate
in “the oral argument.” USCIT R. 76. The rule is “unique to the U.S. Court of International
Trade as a trial-level federal court. It has no counterpart in the Federal Rules of Civil
Procedure, but instead finds a parallel in Rule 29 of the Federal Rules of Appellate
Procedure.” Corning Gilbert Inc. v. United States, 36 CIT ____, 837 F. Supp. 2d 1303,
1305-1306 (2012). As Corning Gilbert explained:
Rule 76 is a consequence of the hybrid nature of the subject matter
jurisdiction of the U.S. Court of International Trade. In some actions, e.g.,
those brought under section 1581(a), the court functions as a federal district
court hearing cases de novo; in others, such as those commenced under
28 U.S.C. § 1581(c), the court functions as a federal circuit court of appeals,
reviewing determinations based on the record made before an
administrative agency. Rule 76, therefore, should typically find application
in those actions in which the court functions as an appellate court.
The specific contours of Rule 76 make this clear. The rule provides
that an applicant may, with the court's permission, file “a brief,” and, for
extraordinary reasons, participate in “the oral argument.” USCIT R. 76.
These are predominantly (though not exclusively) appellate concepts. The
rule certainly does not contemplate general participation at the trial level,
with everything that entails (e.g., procedural motions, discovery motions, or
settlement discussions).

Court No. 11-00031 Page 5
Id.DSM’s motion and assertion of an alternative classification for the subject
merchandise beyond that claimed by the parties implicates the statutory prohibition
against intervention in classification actions, and raises an issue about the
appropriateness of amicus curiae in de novo classification cases at the U.S. Court of
International Trade. See id. at ___, 837 F. Supp. 2d at 1305 (citing Stewart-Warner Corp.
v. United States, 4 CIT 141, 142 (1982) (“The Court is also somewhat concerned that in
this action participation as amicus should not become a substitute for intervention.
Participation in this action by intervention is expressly forbidden by . . . 28 U.S.C.
§ 2631(j)(1)(A)”)); see also United States v. Michigan, 940 F.2d 143, 165 (6th Cir. 1991)
(“Amicus curiae may not and, at least traditionally, has never been permitted to rise to the
level of a named party/real party in interest nor has an amicus curiae been conferred with
the authority of an intervening party . . . .”).
DSM’s requested involvement—for the purpose of raising an alternative
classification beyond those claimed by Jedwards and Defendant—is problematic as it
potentially implicates additional fact-finding not covered by the parties’ discovery
(e.g., additional laboratory tests). Additionally, DSM has not identified nor has the court
found any case where a competitor was permitted to submit a brief or otherwise
participate as amicus curiae regarding the disposition of the merits of a classification
dispute under 28 U.S.C. § 1581(a). Congress has provided one instance in which a
competitor (albeit, a domestic manufacturer), may challenge a Customs’ classification
decision. See 19 U.S.C. § 1516 (domestic manufacturer’s petition); 28 U.S.C. § 1581(b)

Court No. 11-00031 Page 6
(legal challenge negative determination on domestic manufacturer’s petition).1 Congress
has not provided other parties with the right to challenge Customs’ classification of a
competitor’s imported merchandise. The court believes that granting DSM’s motion would
do just that and allow DSM to litigate the merits of a classification challenge to a denied
protest, something that is statutorily barred by § 2631(j)(1)(A). Of equal note, were the
court to grant DSM’s motion, DSM could possibly obtain retroactive relief (reclassification
of the subject merchandise and the payment of additional duties by Plaintiff), a far more
expansive remedy than any prospective relief that a domestic manufacturer might obtain
pursuant to 19 U.S.C § 1516 and 28 U.S.C. § 1581(b). This strikes the court as an
incongruous result.
As for DSM’s belief that Jarvis Clark’s oft-cited objective “to reach a correct result”
in classification cases, 733 F.2d at 878, might trump any prohibition on intervention in
28 U.S.C. § 2631(j)(1)(A), Jarvis Clark is not as expansive as DSM believes. To be sure,
Jarvis Clark is a seminal decision that altered this Court’s customs jurisprudence by
eliminating the dual burden of proof on importers in classification cases, 733 F.2d at 876-
878.2 The Jarvis Clark decision, however, and the statutory provision it interpreted,

1
In Stewart-Warner Corp. v. United States, 4 CIT 141 (1982), a 1581(b) action, the court
granted a motion, without explanation, for Diversified Products Corporation, an American
manufacturer, whose imported competing product was the focus of Stewart-Warner’s
domestic manufacturer’s petition, to file a brief as amicus curiae on the merits of the
classification dispute and in support of Customs’ then existing classification.
2
The dual burden of proof required importers to establish “that the government's
classification [was] incorrect [and] also that the importer's proposed classification [was]
correct.” Jarvis Clark, 733 F.2d at 878. It meant that Customs’ classification stood “until

Court No. 11-00031 Page 7
28 U.S.C. 2643(b), did not repeal or invalidate the prohibition on intervention contained
in 28 U.S.C. § 2631(j)(1)(A). And it is important to recall that classification decisions are
not given res judicata effect. Schott Optical Glass, Inc. v. United States, 3 Fed. Cir. (T)
35, 36, 750 F.2d 62, 64 (1984) (“[A] determination of fact or law with respect to one
importation is not res judicata as to another importation of the same merchandise by the
same parties.” (citing United States v. Stone & Downer Co., 274 U.S. 225 (1927))). So
although the court does endeavor to reach the correct result, it need not boil the ocean to
do so (e.g., override the statutory prohibition in 28 U.S.C. § 2631(j)(1)(A) by granting
amicus curiae motions). On the off chance the best classification is not identified in the
litigation, either Customs or the importer is free to reclassify (and if necessary litigate)
subsequent entries of the merchandise, until the “correct” classification is achieved.
There is no denying that the prohibition on intervention in classification cases does
make it more challenging for a competitor like DSM to affect the classification of
merchandise it does not import. It may be that the best (and only) avenue is to persuade
Customs to reach the “correct” classification of the merchandise or lobby Congress to
modify the HTSUS to reach DSM’s desired outcome. In any event here the prohibition on
intervention counsels against the grant of DSM’s motion to file a brief as amicus curiae.

(footnote continued)
the importer pointed to a better definition,” so the court would have “to affirm an incorrect
government decision when the importer . . . failed to establish a correct alternative.” Id.

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Accordingly, it is hereby
ORDERED that DSM’s motion to participate, as amicus curiae, is denied.
/s/ Leo M. Gordon
Judge Leo M. Gordon
Dated: March 21, 2016
New York, New York