R.T. Foods, Inc. v. United States , 757 F.3d 1349 ( 2014 )

United States Court of Appeals
for the Federal Circuit
______________________
R.T. FOODS, INC.,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
______________________
2013-1188
______________________
Appeal from the United States Court of International
Trade in No. 09-CV-0455, Judge Gregory W. Carman.
______________________
Decided: July 3, 2014
______________________
PETER S. HERRICK, Peter S. Herrick, P.A., of Miami,
Florida, argued for plaintiff-appellant.
BEVERLY A. FARRELL, Trial Attorney, International
Trade Field Office, Commercial Litigation Branch, Civil
Division, United States Department of Justice, of New
York, New York, argued for defendant-appellee. With her
on the brief were STUART F. DELERY, Assistant Attorney
General, JEANNE E. DAVIDSON, Director, and AMY M.
RUBIN, Acting Assistant Director.
______________________
Before DYK, CLEVENGER, and WALLACH, Circuit Judges.
2 R.T. FOODS, INC. v. US
WALLACH, Circuit Judge.
R.T. Foods, Inc. (“R.T.”) appeals the decision of the
United States Court of International Trade (“CIT”) deny-
ing its motion for summary judgment and granting the
cross-motion for summary judgment of the United States
(the “Government”). See R.T. Foods, Inc. v. United States,
887 F. Supp. 2d 1351 (Ct. Int’l Trade 2012). Because the
CIT properly classified R.T.’s products, this court affirms.
BACKGROUND
Between October 2007 and August 2008, R.T. made
twenty-four entries of “Tempura Vegetables” and “Vege-
table Bird’s Nests” from Thailand (“subject merchandise”),
ten through the port of Boston and fourteen through the
port of Long Beach. “The parties do not dispute the
identity of the subject merchandise: frozen tempura-
battered vegetable mixtures sold under the names of
‘Vegetable Bird’s Nests’ and ‘Tempura Vegetables.’” Id. at
1353. The “Vegetable Bird’s Nests” product consists of
julienne-cut carrots, onion, and kale, which are “mixed
together, dipped in tempura batter, deep fried, flash
frozen,” and packaged for retail. Id. The “Tempura
Vegetables” medley consists of “three Bird’s Nests, three
pieces of sweet potato, three pieces of carrot, three pieces
of wing bean, three pieces of long or green bean, and three
pieces of eggplant”; the individual vegetables are dusted
with tempura batter, deep fried, flash frozen, and pack-
aged for retail. Id.United States Customs and Border Protection (“Cus-
toms”) classified the ten Boston entries and three of the
Long Beach entries under the Harmonized Tariff Sched-
ule of the United States 1 (“HTSUS”) subheading
1 All references to the HTSUS refer to the 2008 edi-
tion.
R.T. FOODS, INC. v. US 3
2004.90.85, 2 which carries a duty rate of 11.2%. The
remaining eleven entries into the port of Long Beach were
liquidated under R.T.’s proposed subheading, HTSUS
2106.90.99, 3 which carries a duty-free preference for
products from Thailand. According to Customs, the latter
entries were accidentally entered duty-free under R.T.’s
claimed subheading.
In March 2009, R.T. timely filed three protests chal-
lenging Customs’ classification of all twenty-four entries.
After the protests were denied, R.T. commenced this
action at the CIT in October 2009. The parties filed
motions for summary judgment. As an initial matter, the
CIT held it only had jurisdiction over three of the twenty-
four entries. 4 On December 14, 2012, the CIT denied
2 HTSUS 2004.90.85 covers “Other vegetables pre-
pared or preserved otherwise than by vinegar or acetic
acid, frozen, other than products of heading 2006: Other
vegetables and mixtures of vegetables: Other: Other,
including mixtures.”
3 HTSUS 2106.90.99 provides for “Food prepara-
tions not elsewhere specified or included: Other: Other:
Other: Frozen.”
4 Under 28 U.S.C. § 2636(a)(1) (2006), a civil action
challenging Customs’ denial of a protest must be com-
menced within 180 days of mailing of the notice of the
denial. Therefore, the CIT found it was barred from
hearing a challenge to one of the three protests, which
covered the ten entries into the port of Boston, because it
fell outside this limitations period. R.T. Foods, 887 F.
Supp. 2d at 1355. As to the eleven entries into the port of
Long Beach covered by another protest, the CIT found
these entries had already liquidated in R.T.’s favor. Thus,
there was no case or controversy as to these entries, so
the CIT lacked jurisdiction over them. Id. at 1356. R.T.
4 R.T. FOODS, INC. v. US
R.T.’s motion for summary judgment and granted the
Government’s cross-motion for summary judgment,
thereby upholding Customs’ classification of the subject
merchandise under HTSUS 2004.90.85.
Appellant filed a timely appeal. This court has juris-
diction pursuant to 28 U.S.C. § 1295(a)(5) (2012).
DISCUSSION
I. Standard of Review
This court reviews the CIT’s grant of summary judg-
ment on tariff classifications de novo. Lemans Corp. v.
United States, 660 F.3d 1311, 1315 (Fed. Cir. 2011);
Cummins Inc. v. United States, 454 F.3d 1361, 1363 (Fed.
Cir. 2006). In assessing Customs’ classification determi-
nations, this court employs the two-step analysis used by
the CIT: (1) ascertaining “the proper meaning of the tariff
provisions, which is a question of law reviewed de novo”;
and (2) determining “whether merchandise falls within a
particular heading, which is a question of fact we review
only for clear error.” Lemans, 660 F.3d at 1315 (citing
Cummins, 454 F.3d at 1363). However, “[w]here, as here,
the nature of the merchandise is undisputed, the inquiry
collapses into a question of law we review de novo.” Id.;
see R.T. Foods, 887 F. Supp. 2d at 1359 (“Since there is no
dispute between the parties as to the nature of the mer-
chandise involved in this case and the only issues to be
resolved are legal, the case is ripe for disposal at the
summary judgment stage.”). Accordingly, there are no
genuine factual disputes precluding summary judgment.
See Link Snacks, Inc. v. United States, 742 F.3d 962, 966
(Fed. Cir. 2014).
Foods has not appealed these determinations so only the
classification of three of the entries remains at issue.
R.T. FOODS, INC. v. US 5
II. Legal Framework
A. Classification Pursuant to the HTSUS
The HTSUS is composed of classification headings,
each of which has one or more subheadings. Deckers
Outdoor Corp. v. United States, 714 F.3d 1363, 1366 (Fed.
Cir. 2013). “The headings contain ‘general categories of
merchandise,’ whereas ‘the subheadings provide a more
particularized segregation of the goods within each cate-
gory.’” Id. (quoting Orlando Food Corp. v. United States,
140 F.3d 1437, 1439 (Fed. Cir. 1998)). Along with the
headings and subheadings, which are enumerated in
chapters 1 through 99 of the HTSUS (each of which has
its own section and chapter notes), the HTSUS statute
also contains the “General Notes,” the “General Rules of
Interpretation” (“GRI”), the “Additional United States
Rules of Interpretation” (“ARI”), and various appendices
for particular categories of goods. 5 See Baxter Healthcare
Corp. of P.R. v. United States, 182 F.3d 1333, 1337 (Fed.
Cir. 1999) (citing 19 U.S.C. § 3004(a) (1994)). The classi-
fication of merchandise is governed by the GRIs and the
ARIs, which are applied in numerical order. BenQ Am.
Corp. v. United States, 646 F.3d 1371, 1376 (Fed. Cir.
2011).
The classification analysis always begins with GRI 1,
which directs that “classification shall be determined
according to the terms of the headings and any relative
section or chapter notes.” HTSUS GRI 1 (emphasis
added); see Orlando Food, 140 F.3d at 1440 (“[A] court
5 The World Customs Organization’s “Explanatory
Notes,” which accompany each chapter of the HTSUS, are
“not legally binding, are ‘persuasive[,]’ and are ‘generally
indicative’ of the proper interpretation of the tariff provi-
sion.” Lemans, 660 F.3d at 1316 (quoting Drygel, Inc. v.
United States, 541 F.3d 1129, 1134 (Fed. Cir. 2008)).
6 R.T. FOODS, INC. v. US
first construes the language of the heading, and any
section or chapter notes in question, to determine whether
the product at issue is classifiable under the heading.”).
“Absent contrary legislative intent, HTSUS terms are to
be construed according to their common and commercial
meanings, which are presumed to be the same.” Carl
Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir.
1999) (citing Simod Am. Corp. v. United States, 872 F.2d
1572, 1576 (Fed. Cir. 1989)). Pursuant to GRI 1, the
possible headings are to be evaluated without reference to
their subheadings, which cannot be used to expand the
scope of their respective headings. Orlando Food, 140
F.3d at 1440 (“Only after determining that a product is
classifiable under the heading should the court look to the
subheadings to find the correct classification for the
merchandise. . . . [W]hen determining which heading is
. . . more appropriate for classification, a court should
compare only the language of the headings and not the
language of the subheadings.”); EOS of N. Am., Inc. v.
United States, 911 F. Supp. 2d 1311, 1327–28 (Ct. Int’l
Trade 2013); BASF Corp. v. United States, 798 F. Supp.
2d 1353, 1362 (Ct. Int’l Trade 2011). Finally, if the proper
heading can be determined under GRI 1, the court is not
to look to the subsequent GRIs. See CamelBak Prods.,
LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir.
2011) (citing Mita Copystar Am. v. United States, 160
F.3d 710, 712 (Fed. Cir. 1998)) (“We apply GRI 1 as a
substantive rule of interpretation, such that when an
imported article is described in whole by a single classifi-
cation heading or subheading, then that single classifica-
tion applies, and the succeeding GRIs are inoperative.”).
B. The Competing Headings
Customs classified the subject merchandise under
HTSUS 2004, which provides for “Other vegetables pre-
pared or preserved otherwise than by vinegar or acetic
R.T. FOODS, INC. v. US 7
acid, frozen, other than products of heading 2006.” 6 This
heading is an eo nomine provision, or one that “describes
an article by a specific name.” CamelBak Prods., 649 F.3d
at 1364 (citing Carl Zeiss, 195 F.3d at 1379). “[A]n eo
nomine provision includes all forms of the named article,
including improved forms.” Kahrs Int’l, Inc. v. United
States, 713 F.3d 640, 646 (Fed. Cir. 2013) (citing Camel-
Bak Prods., 649 F.3d at 1364–65). However, “when an
article ‘is in character or function something other than as
described by a specific statutory provision—either more
limited or more diversified—and the difference is signifi-
cant,’ it is not properly classified within an eo nomine
provision.” CamelBak Prods., 649 F.3d at 1365 (emphasis
added) (quoting Casio, Inc. v. United States, 73 F.3d 1095,
1097 (Fed. Cir. 1996)). To determine whether such a
difference is significant enough to remove an article from
an eo nomine provision, this court has looked to “‘whether
the item possess[es] features substantially in excess of
those within the common meaning of the term,’” or
whether the subject article is “a change in identity of the
article described by the statute.” Id. (alteration in origi-
nal) (citations omitted).
R.T.’s proposed heading is HTSUS 2106, which pro-
vides for “Food preparations not elsewhere specified or
included.” This heading is a “basket provision” as indi-
cated by the terms “not elsewhere specified or included.”
Int’l Bus. Machs. Corp. v. United States, 152 F.3d 1332,
1338 (Fed. Cir. 1998); HTSUS 2106. “A basket provision
is not a specific provision.” Int’l Bus. Machs., 152 F.3d at
1338. Therefore, “[c]lassification of imported merchandise
in a basket provision is only appropriate if there is no
tariff category that covers the merchandise more specifi-
6 HTSUS 2006 concerns “[v]egetables, fruit, nuts,
fruit-peel and other parts of plants preserved by sugar”
and therefore is inapplicable here.
8 R.T. FOODS, INC. v. US
cally.” Rollerblade, Inc. v. United States, 116 F. Supp. 2d
1247, 1251 (Ct. Int’l Trade 2000), aff’d, 282 F.3d 1349(Fed. Cir. 2002). In other words, because HTSUS 2106 is
a basket provision, any products that are “specified or
included” in another tariff heading cannot be classified in
HTSUS 2106.
III. The Subject Merchandise Was Properly Classified in
HTSUS 2004
The CIT found the subject merchandise fell under the
eo nomine heading of HTSUS 2004, stating “[t]o prima
facie fall under heading 2004 . . . five criteria must be
met: the products must be (1) vegetables that are (2)
prepared or preserved, (3) otherwise than by vinegar or
acetic acid, which are (4) frozen, and are (5) other than
products of heading 2006.” R.T. Foods, 887 F.2d at 1358.
The CIT explained that both the “Vegetable Bird’s Nests”
and the “Tempura Vegetables” satisfied all five criteria
because “they are (1) vegetables that are (2) prepared (3)
in tempura batter, not in vinegar or acetic acid, which are
(4) flash frozen, and are (5) not products preserved by
sugar as provided for by heading 2006.” Id. After finding
the subject merchandise prima facie fell within HTSUS
2004, the CIT then “review[ed] . . . the possible subhead-
ings” and determined “the proper subheading is
2004.90.85,” which provides for “Other vegetables pre-
pared or preserved otherwise than by vinegar or acetic
acid, frozen, other than products of heading 2006: Other
vegetables and mixtures of vegetables: Other: Other,
including mixtures.” Id. at 1359; HTSUS 2004.
In doing so, the CIT rejected R.T.’s proposed heading,
HTSUS 2106, which it described as “an expansive basket
heading that only applies in the absence of another appli-
cable heading.” R.T. Foods, 887 F.2d at 1358 (“To prima
facie fall under [HTSUS] 2016 . . . two criteria must be
met: the products must be (1) a food preparation, which is
(2) not elsewhere specified or included. Both Bird[’s]
R.T. FOODS, INC. v. US 9
Nests and Vegetable Medley satisfy the first criterion, but
not the second: they are (1) a food preparation by common
meaning, but they are (2) elsewhere specified or includ-
ed.”). The CIT also noted “Customs has consistently
classified tempura-coated products by the underlying
main food dipped into the tempura batter, not as a food
preparation.” Id.
R.T. argues the CIT erred in classifying the subject
merchandise under the eo nomine provision of HTSUS
2004 because “[t]here is a significant difference between
eo nomine vegetables in heading 2004 . . . and RT’s prod-
ucts which changed the identity of the vegetables to pre-
made ready-to-eat meals.” Appellant’s Br. 3. In other
words, according to R.T., because its manufacturing
process changed the identity of the vegetables, the prod-
ucts were removed from the eo nomine provision. Id. at 1,
7–8; Reply 2–3 (“[T]he processing of the original vegeta-
bles . . . transforms the vegetables into a ‘food prepara-
tion’ distinct from vegetables that are simply prepared or
preserved. It is that transformation—a change in identi-
ty—that precludes the use of subheading 2004.90.85.”).
In support, R.T. points to Note 1 to Chapter 20, which
specifies that Chapter 20, under which HTSUS 2004 falls,
does not cover vegetables prepared or preserved by the
processes described in Chapter 7, which “covers vegeta-
bles, . . . whether fresh, chilled, frozen (uncooked or
cooked by steaming or boiling in water), provisionally
preserved or dried (including dehydrated, evaporated or
freeze-dried).” HTSUS ch. 20, note 1; HTS ch. 7, Explana-
tory Note 1 (J.A. 186). To Appellant, because its products
“have been cut, wrapped in tempura batter, deep-fried
and frozen in a process as specified under Chapter 7, they
cannot be classified under Chapter 20.” Appellant’s Br. at
8–9.
R.T. also argues that, because classification under
heading 2004 is incorrect, the CIT erred in failing to
perform a “principle use” analysis, which R.T. contends
10 R.T. FOODS, INC. v. US
would have led the CIT to conclude that classification
pursuant to R.T.’s proposed basket provision was proper.
A “principle use” analysis is only used for those headings
“controlled by use,” as opposed to eo nomine headings.
See HTSUS ARI 1(a). Such an analysis involves deter-
mining “the use which exceeds any other single use” of the
merchandise in the United States. Aromont USA Inc. v.
United States, 671 F. 3d 1310, 1312 (Fed. Cir. 2012);
HTSUS ARI 1(a). Appellant argues, under such an anal-
ysis, “RT’s food preparations are not principally used as
vegetables. RT’s consumer’s expectation is to buy a pre-
made meal that ‘makes even the worst cook look like a
pro.’” 7 Appellant’s Br. 3 (citation omitted). According to
Appellant, the manufacturing process of the subject
merchandise transforms the vegetables into a product
that is principally used as a pre-made meal.
The subject merchandise is properly classified under
HTSUS 2004. As noted, the identity of the subject mer-
chandise is not in dispute; the only issue is whether the
products are named by the eo nomine provision or wheth-
er they differ so significantly they can no longer be
properly classified within this provision. See CamelBak
Prods., 649 F.3d at 1365 (“In order to determine whether
the subject article is classifiable within an eo nomine
provision, we look to whether the subject article is merely
an improvement over or whether it is, instead, a change in
identity of the article described by the statute.” (emphases
added)). The merchandise named by HTSUS 2004 in-
7 R.T.’s record citations do not at all show the sub-
ject products are pre-made meals. See J.A. 52, 106.
Indeed, at oral argument, R.T.’s counsel conceded the
subject merchandise was not “referenced at all” in the
portion of the record cited by R.T. for that proposition.
Oral Arg. at 28:37–29:00, available at http://www.cafc.
uscourts.gov/oral-argument-recordings/2013-1188/all.
R.T. FOODS, INC. v. US 11
cludes “Other vegetables prepared or preserved otherwise
than by vinegar or acetic acid, frozen, other than products
of [HTSUS] 2006.” This court agrees with the CIT that
the subject merchandise prima facie falls into this head-
ing because the products are (1) vegetables, (2) that are
prepared, (3) in tempura batter (and not in vinegar or
acetic acid), (4) flash frozen, and are (5) not products
preserved by sugar as provided for by HTSUS 2006.
R.T.’s argument that its manufacturing process trans-
formed the vegetables into pre-made ready-to-eat meals is
unsupported by any evidence and is unpersuasive. This
court has noted there are “several analytical tools or
factors [used] to assess whether the subject articles are
beyond the reach of [an] eo nomine . . . provision,” which
include the design, use, and function of the subject arti-
cles. CamelBak Prods., 649 F.3d at 1367. R.T. has not
identified a feature or component of the subject merchan-
dise that so substantially transforms the vegetables so as
to remove them from the eo nomine provision. Further-
more, R.T. has not shown how tempura battering and
frying does not fall within the eo nomine provision’s
specification that the frozen vegetables be “prepared or
preserved otherwise than by vinegar or acetic acid.”
Absent such a substantial transformation, it is clear the
merchandise falls within the scope of heading 2004.
Additionally, there is no basis for interpreting the
heading so as to exclude merchandise prepared in this
manner. This court has cautioned that “we should not
read a use limitation into an eo nomine provision unless
the name itself inherently suggests a type of use.” Kahrs
Int’l, 713 F.3d at 646 (“While Kahrs’ merchandise pos-
sesses some unique features related to its intended use
. . . , we disagree with Kahrs that these features are
sufficiently significant to transform its identity . . . and
we see no reason to read additional limitations into the
tariff schedule.”). There is no such suggestion in this eo
nomine provision that a use limitation is appropriate, nor
12 R.T. FOODS, INC. v. US
is there any indication that the identity of the goods was
so significantly transformed so as to remove the goods
from this provision. See CamelBak Prods., 649 F.3d at
1365. Accordingly, R.T. has failed to show that its prod-
ucts possess a feature or component that endows them
with a unique identity substantial enough to justify
removal from the scope of the eo nomine provision in
which they prima facie fall.
As to R.T.’s argument that classification under
HTSUS 2004 is precluded by Note 1(a) to Chapter 20, R.T.
is correct that HTSUS 2004 is qualified by Note 1(a),
which provides: “This chapter does not cover: (a) Vegeta-
bles, fruit or nuts, prepared or preserved by the processes
specified in chapter 7, 8 or 11.” However, Chapters 8 and
11 do not encompass vegetables, and Chapter 7 covers
various vegetables that are “fresh, chilled, frozen (un-
cooked or cooked by steaming or boiling in water), provi-
sionally preserved or dried (including dehydrated,
evaporated or freeze-dried).” J.A. 186 (emphasis added).
R.T. has offered no record evidence that the subject mer-
chandise is prepared or preserved by the processes in-
cluded within HTSUS Chapter 7. Indeed, while the
“Vegetable Bird’s Nests” and the “Tempura Vegetables”
are comprised of frozen vegetables, they are not “un-
cooked or cooked by steaming or boiling in water,” nor are
they “provisionally preserved or dried.” Because Chapter
7 does not include processes such as dipping in batter and
frying, the subject merchandise is not excluded from
HTSUS 2004 by virtue of Note 1(a) to Chapter 20.
Finally, because the subject merchandise is “specially
provided for” elsewhere, Int’l Bus. Machs., 152 F.3d at
1338, classification under R.T.’s proposed basket provision
is inappropriate. R.T.’s proposed “principal use” analysis
has no bearing on the proper classification of the subject
merchandise because the products are named by an eo
nomine provision.
R.T. FOODS, INC. v. US 13
IV. The Subject Merchandise Was Properly Classified in
Subheading 2004.90.85
Having determined the proper heading, this court
must now determine the proper subheading for the sub-
ject merchandise. Upon independent review of HTSUS
2004’s subheadings, this court finds the subject merchan-
dise is properly classified under subheading 2004.90.85.
The subheadings of HTSUS 2004 are as follows:
2004 Other vegetables prepared or pre-
served otherwise than by vinegar or
acetic acid, frozen, other than products
of heading 2006:
2004.10 Potatoes
2004.10.40 Yellow (Solano) potatoes
2004.10.80 Other
French fries
Other
2004.90 Other vegetables and mixtures of
vegetables:
2004.90.10 Antipasto
2004.90.80 Beans
2004.90.85 Other
Carrots
Sweet corn
Peas
Other, including mixtures
HTSUS 2004 (emphases added). Because the subject
merchandise is not “potatoes” it is properly classified
under subheading 2004.90, which encompasses “mixtures
of vegetables.” Furthermore, because the subject mer-
chandise is not “antipasto” or “beans,” it is properly
classified under subheading 2004.90.85 for “Other: Other,
including mixtures.”
14 R.T. FOODS, INC. v. US
CONCLUSION
Accordingly, the decision of the Court of International
Trade is
AFFIRMED