Slip Op. 09–149

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Gregory W. Carman, Judge

Court No. 07

‐ 00274

PUBLIC

[ Plaintiff’s motion for partial summary judgment is granted in part and denied in part, and

Defendant’s cross motion for summary judgment is granted in part and denied in part. The Court

finds the appropriate tariff classification is a tariff subheading advanced by neither party. Judgment

to be entered accordingly. ]

Law Offices of Michael R. Doram (Michael R. Doram ) for Plaintiff.

Tony West

, Assistant Attorney General; Barbara S. Williams

, Attorney

‐ in

‐ Charge,

International Trade Field Office, Commercial Litigation Branch, Civil Division, United

States Department of Justice (Jason Matthew Kenner

, Mikki Cottet ); Michael Heydrich

, Office of Assistant Chief Counsel, Int’l Trade Litigation, U.S. Customs and Border

Protection, of counsel, for Defendant.

December 22, 2009

O PINION

C ARMAN

, J UDGE : This matter is before the Court on a Motion for Partial Summary

Judgment by Plaintiff Arko Foods and a Cross Motion for Summary Judgment by

ARKO FOODS INTERNATIONAL,

INC.,

Plaintiff,

v.

UNITED STATES,

Defendant.Court No. 07

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1 Plaintiff’s Separate Statement of Undisputed Material Facts (“Pl.’s Facts”) ¶ 2

(Docket # 34), Defendant’s Response to Plaintiff’s Separate Statement of Undisputed

Material Facts (“Def.’s Resp. Facts”) ¶ 2 (Docket # 46); Defendant’s Public Statement of

Material Facts As To Which There Are No Genuine Issues To Be Tried (“Def.’s Facts”)

¶ 1 (Docket # 36), Plaintiff’s Response to Defendant’s Statement of Undisputed Material

Facts (“Pl.’s Resp. Facts”) ¶ 1 (Docket # 48).

2 Pl.’s Facts ¶¶ 3, 4, Def.’s Resp. Facts ¶¶ 3, 4; Def.’s Facts ¶¶ 16, 17, Pl.’s Resp.

Facts ¶¶ 16, 17.

3 Pl.’s Facts ¶¶ 17, 21, Def.’s Resp. Facts ¶¶ 17, 21; Def.’s Facts ¶ 9, Pl.’s Resp.

Facts ¶ 9. Defendant United States. The parties are in dispute over the correct tariff classification

of a frozen dessert known as mellorine, imported by Plaintiff. For the reasons set forth

below, Plaintiff’s motion is granted in part and denied in part, and Defendant’s motion

is granted in part and denied in part.

F ACTUAL B ACKGROUND

Plaintiff is an importer of mellorine from the Philippines. 1 The parties are not in

dispute as to the nature of mellorine: it is marketed and sold as a frozen dessert, with a

consistency and manner of consumption similar to ice cream; it is eaten in a frozen state

in bowls, ice cream cones and sundaes. 2 The six specific varieties of mellorine involved

in this lawsuit are Ube Royale (made with purple yam), Quezo Royale (also known as

Quezo Real) (made with cheese), Fruit Salad, Mango, Macapuno (made with coconut

preserve), and Durian. 3 Mellorine is manufactured from a variety of ingredients,

including water, refined sugar, vegetable oil, fruit puree or preserve, corn syrup, skimCourt No. 07

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4 Pl.’s Facts ¶ 22, Def.’s Resp. Facts ¶ 22; Def.’s Facts ¶ 20, Pl.’s Resp. Facts ¶ 20.

5 Pl.’s Facts ¶ 22, Def.’s Resp. Facts ¶ 22.

6 Def.’s Facts ¶¶ 11, 12, Pl.’s Resp. Facts ¶¶ 11, 12.

7 Def.’s Facts ¶¶ 14, 15, Pl.’s Resp. Facts ¶¶ 14, 15.

8 Pl.’s Facts ¶ 24, Def.’s Resp. Facts ¶ 24.

9 Compl. ¶ 19, Ans. ¶ 19. milk powder, whey, stabilizers, emulsifiers, artificial food flavors, and maltodextrin. 4

Depending on variety, mellorine may also contain cheese, whole milk powder, purple

yam or pieces of fruit. 5 Mellorine is manufactured by adding fruit or vegetable purees

and artificial colors and flavors to a base mixture, and then partially freezing the result. 6

Once partially frozen, distinguishing fruit preserves, vegetable pieces or cheese are then

added, before the product is completely frozen, packaged and ready for sale. 7

Customs and Border Protection (“Customs”) classified Plaintiff’s mellorine

under HTSUS heading 2105 for “Ice cream and other edible ice, whether or not

containing cocoa.” 8 Specifically, Customs classified mellorine under HTSUS

subheading 2105.00.40, 9 which applies to “dairy products described in additional U.S.Court No. 07

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10 The relevant portion of Chapter 21 of the HTSUS reads:

2105 Ice cream and other edible ice, whether or not containing cocoa:

. . . Other:

Dairy products described in additional U.S. note 1 to

chapter 4:

. . . 2105.00.30 Described in additional U.S. note 10 to chapter 4 and

entered pursuant to its provisions

2105.00.40 Other

heading 2105, HTSUS (2005).

11 In its entirety, Additional U.S. note 1 to Chapter 4 of the HTSUS reads:

For the purposes of this schedule, the term “dairy products described in

additional U.S. note 1 to chapter 4 ” means any of the following goods: malted

milk, and articles of milk or cream (except (a) white chocolate and (b)

inedible dried milk powders certified to be used for calibrating infrared milk

analyzers); articles containing over 5.5 percent by weight of butterfat which

are suitable for use as ingredients in the commercial production of edible

articles (except articles within the scope of other import quotas provided for

in additional U.S. notes 2 and 3 to chapter 18); or, dried milk, whey or

buttermilk (of the type provided for in subheadings 0402.10, 0402.21, 0403.90

or 0404.10) which contains not over 5.5 percent by weight of butterfat and

which is mixed with other ingredients, including but not limited to sugar, if

such mixtures contain over 16 percent milk solids by weight, are capable of

being further processed or mixed with similar or other ingredients and are

not prepared for marketing to the ultimate consumer in the identical form

and package in which imported. note 1 to chapter 4.” 10 Additional U.S. note 1 to chapter 4 encompasses three categories

of dairy products, separated by semicolons. 11 Customs classified Plaintiff’s product

under HTSUS subheading 2105.00.40 because it regards mellorine as falling within the

first of these three categories as an “article[] of milk or cream.”Court No. 07

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12 Pl.’s Mot. for Partial Summ. J. (“Pl.’s MSJ”) 2 (Docket # 34).

13 Def.’s Mot. Summ. J. (“Def.’s MSJ”) 3

‐ 4 (Docket # 36). P ROCEDURAL B ACKGROUND

Plaintiff moves the Court for partial summary judgment, asking the Court “to

issue an order determining that [General Rule of Interpretation] GRI 3(b) controls the

proper tariff classification of mellorine and to construe the term ‘articles of milk’ in

additional U.S. note 1 to Chapter 4 to exclude merchandise in which milk constitutes a

minor ingredient, compared to the predominant ingredients.” 12 Defendant moves the

Court for summary judgment in favor of its proffered classification, asserting that

mellorine is properly classified as “ice cream and other edible ice” and as a “dairy

product described in additional U.S. note 1 to Chapter 4.” 13

J URISDICTION AND S TANDARD OF R EVIEW

This Court has jurisdiction pursuant to 28 U.S.C. § 1581(a). “Partial summary

judgment is appropriate when it appears that some aspects of a claim are not genuinely

controvertible and genuine issues remain regarding the rest of the claim.” Ugg Int ʹ l,

Inc. v. United States

, 17 CIT 79, 83, 813 F.Supp. 848, 852 (1993) (quotations and citations

omitted). Summary judgment is appropriate when “there is no genuine issue as to any

material fact and that the movant is entitled to judgment as a matter of law.” USCIT R.

56(c).Court No. 07

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14 The statute reads:

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) (2006). Under 28 U.S.C. § 2639(a)(1), 14 “a classification of merchandise by Customs is

presumed to be correct

. . . [so] the burden of proof is upon the party challenging the

classification.” Rollerblade, Inc. v. United States

, 282 F.3d 1349, 1352 (Fed. Cir. 2002)

(internal quotations and citations omitted). A party challenging Customs’ preferred

classification may satisfy its burden of proof simply by demonstrating that Customs’

classification is incorrect, without necessarily providing the correct classification. See

Jarvis Clark Co. v. United States

, 733 F.2d 873, 878 (Fed. Cir. 1984). Ultimately, it is “the

court ʹ s duty

. . . to find the correct result, by whatever procedure is best suited to the

case at hand.” Id. The Court of International Trade reviews Customs’ protest decisions

“upon the basis of the record made before the court.” 28 U.S.C. § 2640(a)(1).

When there is a dispute over classification, the court first undertakes the legal

question to “construe the relevant classification headings” and then undertakes the

factual question to “determine under which of the properly construed tariff terms the

merchandise at issue falls.” Bausch & Lomb, Inc. v. United States

, 148 F.3d 1363, 1365

(Fed. Cir. 1998). When “the nature of the merchandise is undisputed,

. . . theCourt No. 07

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15 Pl.’s MSJ 1

‐ 2. Rule 3 of the General Rules of Interpretation of the Harmonized

System reads, in pertinent part:

When, by application of rule 2(b) or for any other reason, goods are, prima

facie

, classifiable under two or more headings, classification shall be effected

as follows:

. . . (b) Mixtures, composite goods consisting of different materials or made

up of different components

. . . shall be classified as if they consisted

of the material or component which gives them their essential

character, insofar as this criterion is applicable.

16 Compl. ¶¶ 22

‐ 36; Pl.’s MSJ 4

‐ 5. classification issue collapses entirely into a question of law.” Cummins Inc. v. United

States

, 454 F.3d 1361, 1363 (Fed. Cir. 2006) (citations omitted).

D ISCUSSION

I. Mellorine Is Properly Classifiable Under HTSUS Heading 2105

A. Parties’ Contentions as to HTSUS Heading

The first challenge Plaintiff brings in its motion for partial summary judgment is

to the appropriate tariff heading of the HTSUS for mellorine. Plaintiff contends that

mellorine is a “composite good” and therefore should be classified according to GRI

3(b). 15 Plaintiff asserts that if GRI 3(b) controls classification, mellorine would either fall

under heading 0811, which covers “fruit and nuts, uncooked or cooked by steaming or

boiling in water, frozen, whether or not containing added sugar or other sweetening

matter,” or heading 2106, which covers “[f]ood preparations not elsewhere specified or

included.” 16 Plaintiff argues for heading 0811 on the basis of the large quantity, byCourt No. 07

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17 Pl.’s MSJ 5

‐ 6.

18 Def.’s Resp. to Pl.’s Mot. for Partial Summ. J. (“Def.’s Resp.”) 7

‐ 8 (Docket # 46)

(citing Explanatory Notes to Chapter 8 HTSUS).

19 Id. 8 (citing Harmonized Commodity Description and Coding System

Explanatory Notes (“Explanatory Notes”) to Chapter 8 HTSUS).

20 Id. at 9. weight, of fruit in each of the varieties of mellorine. 17

Defendant responds by asserting that only products with “small quantities of

sugar” may be classified in heading 0811, and that products such as mellorine, which

contain “significant levels of sugar and syrups” cannot be so classified. 18 Defendant

also asserts that the small quantities of sugar permitted in frozen fruit and nuts under

heading 0811 may only be added in order to “inhibit oxidation and thus prevent[] the

change of colour which would otherwise occur, generally on thawing out,” and that

sugar is not added to Plaintiff’s mellorine for that purpose. 19 Last, Defendant argues

that the presence of multiple additional ingredients including “vegetable oil, skim milk

powders, corn syrup, stabilizers, emulsifiers, artificial flavors, artificial colors, and

maltodextrin” means that mellorine is not prima facie classifiable under heading 0811. 20

Defendant also advances arguments in support of its own preferred tariff

classification, heading 2105. Defendant asserts that the heading for “Ice cream and

other edible ices” is an eo nomine provision, and that products described by the specificCourt No. 07

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21 Def.’s MSJ 8

‐ 9.

22 Id. (citing Explanatory Notes to heading 2105).

23 Def.’s MSJ 11 (citing 21 C.F.R. Part 135 (2006).) name of the heading are therefore appropriately classified in that heading. 21 For a

definition of what constitutes an “edible ice,” Defendant points to a food science

textbook which states

The broad term, frozen desserts, refers to ice cream and related products.

Specific products include ice cream and its lower fat varieties, frozen custard,

frozen yogurt, mellorine (vegetable fat frozen dessert), sherbet, water ice and

frozen confections. Some of these desserts are served either soft frozen or

hard frozen.

. . . The broader category, frozen desserts, also called edible

ice, includes products that contain no milk

‐ derived ingredients, e.g., water

ices.

(Def.’s MSJ 10 (quoting Ice Cream 1 (2003 6 th edition) (emphasis added)).) Defendant

also cites to the explanatory notes for heading 2105 which state “[t]his heading covers

ice cream, which is usually prepared with a basis of milk or cream, and other edible ice

(e.g. sherbet and iced lollipops) whether or not containing cocoa in any proportion.” 22

Finally, Defendant points to regulations issued by the Food and Drug Administration

(FDA) which indicate that ice cream, mellorine and sherbet are all members of a

broader category of “frozen desserts.” 23

B. Analysis of HTSUS Heading

HTSUS GRIs direct the proper classification of all merchandise and are “appliedCourt No. 07

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24 An eo nomine provision is one “in which an item is identified by name.” Len

‐

Ron Mfg. Co., Inc. v. United States

, 334 F.3d 1304, 1308 (Fed. Cir. 2003). in numerical order.” Carl Zeiss, Inc. v. United States

, 195 F.3d 1375, 1379 (Fed. Cir.

1999). The court may not consult any subsequent GRI unless the proper classification

cannot be determined by reference to GRI 1. Conair Corp. v. United States

, 29 CIT 888,

891 (2005) (citing Mita Copystar Am. v. United States

, 160 F. 3d 710, 712 (Fed. Cir. 1998).

According to GRI 1, “classification shall be determined according to the terms of the

headings and any relative section or chapter notes[.]” HTSUS GRI 1.

The heading under which Customs classified mellorine is HTSUS 2105, “Ice

cream and other edible ice, whether or not containing cocoa.” HTSUS heading 2105.

Mellorine is not ice cream, nor do the parties contend that it is, so the first issue for the

Court to decide is whether mellorine is an “other edible ice” within the meaning of this

heading. 24 The term “other edible ice” is not explicitly defined within the HTSUS, and

the Court of Appeals for the Federal Circuit has explained that in such circumstances,

the court

may rely upon its own understanding of terms used, and may consult

standard lexiographic and scientific authorities to determine the common

meaning of a tariff term. In addition, the court may look to the Explanatory

Notes accompanying a tariff subheading as a persuasive, but not binding,

interpretative guide.

Value Vinyls, Inc. v. United States

, 568 F.3d 1374 (Fed. Cir. 2009) (internal citations and

quotations omitted). After conducting such analysis, the Court concludes that “otherCourt No. 07

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25 Pl.’s Facts. ¶ 2

‐ 3, Def.’s Resp. Facts ¶ 2

‐ 3. edible ice” plainly includes mellorine.

The Court is persuaded by the three authorities cited by Defendant that

mellorine is a type of edible ice within the meaning of heading 2105. First, the Court

notes that the food science textbook cited by Defendant indicates that the term “edible

ice” is interchangeable with the term “frozen dessert.” See Robert T. Marshall, H.

Douglas Goff & Richard W. Hartel, Ice Cream 1 (6th ed. 2003). As both parties have

acknowledged that mellorine is a frozen dessert, 25 it follows that mellorine is also an

edible ice. Second, the Explanatory Notes for heading 21.05 list as examples of other

edible ice: “sherbet, iced lollipops.” Explanatory Notes 21.05. Sherbet, like mellorine, is

a frozen dessert with some dairy component; a dictionary definition of sherbet is “a

water ice to which milk, egg white, or gelatin is added before freezing.” Webster’s

Third New International Dictionary 2094 (1981). The Court is persuaded that the

composition of mellorine is sufficiently similar to sherbet to warrant the conclusion that

mellorine is also a type of “edible ice” within the meaning of heading 2105. Third, the

Food and Drug Administration regulations have grouped ice cream, goat’s milk ice

cream, mellorine, sherbet and water ices under the heading “frozen dessert,” which is

further persuasive evidence in support of Customs’ position. See 21 C.F.R. Part 135

(2006). Taken together, the Court concludes that these three sources provide substantialCourt No. 07

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26 See Compl. ¶¶ 22

‐ 35.

27 Def.’s Facts ¶ 16; Pl.’s Resp. Facts ¶ 16.

28 Def.’s Facts ¶ 17; Pl.’s Resp. Facts ¶ 17.

29 Def.’s Facts ¶ 18; Pl.’s Resp. Facts ¶ 18. justification for the conclusion that mellorine is an “other edible ice” within the

meaning of HTSUS heading 2105.

Having concluded that HTSUS 2105 is the appropriate heading for classifying

mellorine, Plaintiff’s second argument, that GRI 3(b) dictates that mellorine should be

classified under heading 0811 as “fruit and nuts“ is unavailing. 26 Resort to a later

numbered GRI is inappropriate if the correct heading for the product in question can be

determined under GRI 1, as in this case. See Conair Corp.

, 29 CIT at 891. Moreover,

mellorine does not meet the threshold requirement which permits classification

pursuant to GRI 3(b); it is not prima facie classifiable under more than one heading.

Mellorine, which the parties agree is “similar to ice cream in consistency and manner of

consumption,” 27 “is eaten frozen in bowls, ice cream cones and sundaes,” 28 and is

sometimes “referred to as imitation ice cream,” 29 is not made “fruit and nuts“ for tariff

classification purposes simply because select varieties of mellorine are flavored with

such ingredients. Consequently, as to the issue of the correct HTSUS heading, the Court

finds that mellorine is classifiable under heading 2105 as “Ice cream and other edibleCourt No. 07

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30 Ans. ¶ 19; Def.’s MSJ 14

‐ 18.

31 Pl.’s MSJ 5

‐ 7.

32 Def.’s MSJ 16. ice, whether or not containing cocoa.”

II. Mellorine Is Not An Article Of Milk Or Cream Within The Meaning Of

Additional U.S. Note 1 to Chapter 4 of the HTSUs

A. Parties’ Contentions

The Court now turns to the question of the appropriate subheading for the

product in this case. Defendant classified mellorine under HTSUS subheading

2105.00.40, as “dairy products described in additional U.S. note 1 to Chapter 4,” because

it maintains that mellorine is an “article[] of milk or cream.” 30 Plaintiff argues that

mellorine is not an article of milk or cream, and therefore is not a dairy product

described in additional U.S. note 1 to Chapter 4. 31

As support for its position that mellorine is an article of milk or cream,

Defendant points to a Customs tariff classification ruling from 1993: HQ 952776. 32 In

this ruling, the agency determined that “beverages which contain over 5 percent milk

solids are considered to have an appreciable amount of milk.” Customs Headquarters

Ruling Letter (February 10, 1993) (“HQ 952776”). The products classified in this ruling

letter were three flavors of protein drink, each of which were comprised chiefly of

water, sweetener and nonfat dry milk. Id. Defendant asserts that since issuing thisCourt No. 07

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33 Def.’s MSJ 16

‐ 17 (citing Skidmore v. Swift & Co.

, 323 U.S. 135 (1944).)

34 Id. at 15

‐ 16.

35 Pl.’s MSJ 5; Pl.’s Opp. to Def.’s Cross

‐ Mot. for Summ. J. (“Pl.’s Resp.”) 2

‐ 3

(Docket # 47). ruling, Customs has consistently “applied that 5% standard in determining what is an

article of milk,” and this ruling letter is consequently owed Skidmore deference and

speaks persuasively on the appropriate classification of mellorine. 33 Defendant’s

position is that mellorine contains more than 5% milk, ergo it is an article of milk or

cream. 34

The Plaintiff offers two legal bases for its position that mellorine is not an article

of milk or cream. First, Plaintiff points to Wilsey Foods, Inc. v. United States

, 18 CIT 212

(1994). In Wilsey Foods

, the court construed a similar phrase to the one at issue in this

litigation

– “food preparations of milk or cream”

– under HTSUS 1901.90.3030. Id. The

court found that the product in question was not a food preparation of milk or cream

because “milk or cream [was] not the essential ingredient, not the ingredient of chief

value, nor [was] it the preponderant ingredient[.]” Id.

, at 213. The court went on to

note that the products were “comprised chiefly of vegetable fat and sugar and in any

event were not considered milk or cream products in the industry.” Id. Plaintiff asserts

that under this rubric, mellorine also is not an article of milk or cream. 35

Plaintiff goes on to point out that Customs itself actually relied on the frameworkCourt No. 07

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36 Pl.’s Resp. 3

‐ 4.

37 Id. citing Customs Headquarters Ruling Letter (Oct. 17, 2002) (“HQ 965771“).

38 Id.

39 Def.’s Resp. 8 (referring to the standard of identity for mellorine, including non

‐

fat milk solids provided in 21 C.F.R. § 135.130(a)).

40 Id. at 7 (citing Def.’s Ex. F at 54). of Wilsey Foods in another classification ruling, and that this ruling should be accorded

Skidmore deference in the present case. 36 Plaintiff points to Customs Headquarters

Ruling Letter HQ 965771, in which Customs determined that white chocolate with

sweetener was not an article of milk or cream because, “the Court of International Trade

has ruled in Wilsey Foods

. . . that products which are comprised chiefly of vegetable fat

and sugar are not to be classified as articles of milk or cream.” 37 Plaintiff argues that

because mellorine is comprised chiefly of vegetable fat and sugar, it too should not be

classified as an article of milk or cream. 38

The government contends that mellorine is an article of milk or cream, even

under the rubric of Wilsey Foods

. It asserts that “the dairy ingredients in the mellorine

at issue are essential because mellorine is legally required to contain a significant

percentage of dairy.” 39 Defendant also relies on the testimony of its expert witness, Dr.

Bradley, that the frozen dessert industry considers mellorine to be a dairy product. 40

It should be noted that Arko Foods previously received a tariff classificationCourt No. 07

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41 2105.00.30 is for products “[d]escribed in additional U.S. note 10 to chapter 4

and entered pursuant to its provisions.” 2105.00.30, HTSUS. Additional U.S. note 10 to

chapter 4 is a quota provision limiting the quantity of goods importable under this

subheading to “4,105,000 kilograms” in any calendar year. Additional U.S. note 10 to

chapter 4

, HTSUS. After the quota has been met, goods that would be entered pursuant

to this subheading, are instead entered under 2105.00.40. Plaintiff’s mellorine was

liquidated under 2105.00.40.

42 Defendant simply notes that in this case, Customs has classified mellorine

consistently with the description of NYRL H83504. (Def.’s MSJ 2.)

43 Pl.’s MSJ 7 (citing Structural Indus., Inc. v. United States

, 356 F.3d 1366, 1370

(Fed. Cir. 2004.)). letter for mellorine which determined the product was classifiable under HTSUS

2105.00.3000 41 or 2105.00.4000 as a dairy product described in additional U.S. note 1 to

chapter 4. New York Ruling Letter (August 23, 2001) “NYRL H83504“. Notably,

however, the government does not argue that this ruling letter is controlling on the

Court’s current decision, or even persuasive on the issue of classification. 42 Plaintiff also

argues prophylactically that because the ruling letter “was not adopted pursuant to a

deliberative notice and comment rulemaking process,” it is not proper to accord the

ruling Skidmore deference. 43

B. Analysis

In a dispute over classification the Court is obliged to determine “the proper

meaning of the tariff provisions at hand.” Universal Elecs. Inc. v. United States

, 112

F.3d 488, 491 (Fed. Cir. 1997.) Here, the Defendant asserts that of the various categoriesCourt No. 07

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44 See Def.’s MSJ 16. of dairy products “described in additional U.S. note 1 to chapter 4,“ the only one that

pertains to mellorine is “articles of milk or cream.” This phrase is not defined in the

HTSUS, and the parties dispute whether mellorine is an article of milk or cream.

Therefore, the Court must construe the term to determine its proper meaning, and then

decide whether the term encompasses mellorine.

The Court finds that the Customs classification ruling pertaining to certain milk

‐

based beverages, cited by Defendant, does not warrant Skidmore deference either in the

Court’s ultimate question–

‐ the proper classification of mellorine–

‐ or in the immediate

task of construing the phrase “articles of milk or cream.”

Under the Skidmore standard articulated in Mead

, a classification ruling may

at least seek a respect proportional to its power to persuade. Mead teaches

that whether Skidmore deference should be afforded to a Customs

classification ruling varies depending on its writer ʹ s thoroughness, logic, and

expertness, its fit with prior interpretations, and any other sources of weight.

Structural Indus.

, 356 F.3d at 1370 (internal citations and quotations omitted). Contrary

to Defendant’s characterization, HQ 952776 does not “set forth a detailed and careful

analysis for [Customs’] determination of what may constitute an article of dairy.” 44

Instead, the ruling letter addresses the considerably narrower question of what

percentage of milk solids a beverage needs to have in order to “have an appreciable

amount of milk.” HQ 952776 at 2. This ruling letter lacks the power to persuade in theCourt No. 07

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45 Additionally, NYRL H83504, the ruling letter obtained in 2001 by Arko Foods

stating that mellorine would be classified under HTSUS 2105.00.30 or 2105.00.40, does

not warrant Skidmore deference. Defendant has justly avoided asserting that it does, as

the ruling letter is barren of any logical explanation for this classification, and therefore

lacks any power to persuade.

46 The Court also notes that in Arbor Foods, Inc. v. United States

, 30 CIT

__, __,

2006 WL 1359965 at *6, the court relied on this approach from Wilsey Foods to

determine whether a particular product was a food preparation “of gelatin.” present case because mellorine is not a beverage, and because the varieties of mellorine

imported by Arko Foods contain not just water and sweeteners, but significant

quantities of vegetable fat and various fruit purees and preserves as well. 45 Moreover,

the Court is not concerned with the quantity of milk solids necessary to make a

beverage have an “appreciable amount of milk,” but rather with what makes a food

product an article of milk or cream.

The Court is persuaded that the factors set out in Wilsey Foods for determining

whether a product was a “food preparation of milk or cream” provide an appropriate

rubric for determining what constitutes an “article of milk or cream” within the

meaning of additional U.S. note 1 to Chapter 4 of the HTSUS. 46 Specifically, in

determining if an item is an article of milk or cream, the Court will consider whether

milk or cream is the essential ingredient, the ingredient of chief value, and the

preponderant ingredient. See Wilsey Foods

, 18 CIT at 213. Additionally, the Court will

consider any evidence that mellorine is considered an article of milk or cream withinCourt No. 07

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47 The Court has treated as stipulations those facts set forth by Plaintiff or

Defendant and accepted as true by the opposing party. (Compare Pl.’s Facts, with Def.’s

Resp. Facts; and Def.’s Facts, with Pl.’s Resp. Facts.) The Court also accepts the

information submitted by Plaintiff regarding cost data for mellorine, to which

Defendant stipulated. (See Defendant’s Stipulation Concerning Cost Data (Docket

# 61).) the industry. See id. On the basis of the record assembled before the Court, including

various stipulations 47 by the parties, the Court concludes that mellorine is not an article

of milk or cream.

1. Milk or Cream is Not the Essential Ingredient

In order for mellorine to be labeled and sold as such in the United States, it must

conform with the “standard of identity” set out by FDA regulation. In pertinent part,

the regulation states:

Mellorine is a food produced by freezing, while stirring, a pasteurized mix

consisting of safe and suitable ingredients including, but not limited to, milk

‐

derived nonfat solids and animal or vegetable fat, or both, only part of which

may be milkfat

. Mellorine is sweetened with nutritive carbohydrate

sweetener and is characterized by the addition of flavoring ingredients.

21 C.F.R. § 135.130(a)(1) (2006) (emphasis added). The Court finds that while “milk

‐

derived nonfat solids” make up an essential ingredient of mellorine, they do not make

up the essential ingredient. According to this standard of identity, mellorine must also

include animal or vegetable fat and nutritive carbohydrate sweetener.

Moreover, the Court notes that the mere presence of milk

‐ derived ingredients in

a product does not make that product “an article of milk or cream” within the meaningCourt No. 07

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of additional U.S. note 1 to Chapter 4. For example, in other standards of identity

issued by the FDA, there are products which are similarly required to have milk

‐

derived ingredients, but which do not thereby become articles of milk or cream. For

instance, 21 C.F.R. § 136.130, governing “Milk bread, rolls, and buns,” states that “the

only moistening ingredient permitted in the preparation of the dough is milk or, as an

alternative, a combination of dairy products [meeting certain technical specifications.]”

21 C.F.R. § 136.130 (2006). Similarly, 21 C.F.R. § 139.120 requires that in milk macaroni

products, “milk [or certain specified milk ingredients] is used as the sole moistening

ingredient in preparing the dough.” 21 C.F.R. § 139.120 (2006). That milk bread and

milk macaroni are likely not “articles of milk or cream” within the meaning of

additional U.S. note 1 to chapter 4 suggests that the mere presence of dairy in a given

product is not controlling, and underscores that the multi

‐ faceted consideration of

Wilsey Foods is reasonable and justified.

2. Milk or Cream is Not the Ingredient of Chief Value in Most

Varieties of Mellorine

Turning to the second factor from Wilsey Foods

, upon considering the

stipulation of the parties indicating the relative value of the different ingredients in each

flavor of mellorine, the Court finds that milk is not the ingredient of chief value in

mellorine. Skim milk powder is the ingredient of [[ ]] in [[

]] varieties of mellorine, and in relative terms, the value of milk

‐ derivedCourt No. 07

‐ 00274 Page 21

48 See Confidential Declaration of Florecita C. Fernandez (October 19, 2009)

(stipulated to by Defendant November 12, 2009 (Docket #61)).

49 See id.

50 Def.’s MSJ Conf. Exhibit 3. ingredients is frequently a [[ ]] of the value of the signature fruit preserve

or puree in each flavor. 48 In one flavor of mellorine, [[ ]]

is the ingredient of chief value, but if the value of [[ ]]

in that flavor are combined, the milk

‐ derived ingredients would fall to the same

position it occupies in the other flavors of mellorine: second. 49 The Court again notes,

however, the prudence of allowing a three

‐ part rubric to determine whether a given

product is an article of milk or cream. When the relative value of milk

‐ derived

ingredients for this flavor of mellorine is considered alongside of the essentiality and

preponderance of the milk

‐ derived ingredients, it becomes clear that different flavors of

mellorine do not require classification under different subheadings.

3. Milk or Cream is not the Preponderant Ingredient in Mellorine

As in Wilsey Foods

, the Court finally considers whether milk or cream is the

preponderant ingredient in mellorine. It is not. In most varieties of mellorine, there is

more water, sugar, fruit preserve or puree and vegetable oil than milk. In order of

preponderance, milk

‐ derived ingredients range from third to sixth most prevalent

ingredient among the varieties of mellorine at issue in this litigation. 50Court No. 07

‐ 00274 Page 22

4. Other Considerations

In Wilsey Foods

, after setting out the rubric analyzed above, the court also noted

that “in any event [the products] were not considered milk or cream products in the

industry.” Wilsey Foods

, 18 CIT at 213. Industry treatment is therefore not irrelevant to

the Court’s determination, and the Court considers the testimony of the government’s

expert witness that the frozen dessert industry considers mellorine to be a dairy product

to have some persuasive weight. However, Dr. Bradley’s testimony is of limited value

because the Court’s obligation is not to determine whether mellorine is a dairy product

in general, but rather whether it is a specific type of dairy product: namely, a dairy

product described in additional U.S. note 1 to Chapter 4 as an article of milk or cream.

The question of whether mellorine is an article of milk or cream for tariff classification

purposes is a decision that lies within the sole discretion of the Court on the basis of the

record assembled before it. See Jarvis Clark

, 733 F.2d at 878 (“the court’s duty is to find

the correct result”) (emphasis in original).

Because the Court finds that milk or cream is not the essential ingredient, not the

ingredient of chief value and not the preponderant ingredient in mellorine, the Court

finds that the Plaintiff has carried its burden of proof, and rebutted the presumption of

correctness that attaches to Customs’ classification. However, as Plaintiff has not

identified an alternative subheading within heading 2105, the Court finds that neitherCourt No. 07

‐ 00274 Page 23

Plaintiff nor Defendant have advanced the proper tariff subheading for mellorine.

III. The Proper Classification of Mellorine is HTSUS 2105.00.50

Plaintiff has not, and is not required to, establish the correct classification of

mellorine to prevail in its case. See id. In a case such as this, where Plaintiff has

succeeded only in demonstrating the incorrectness of Customs’ preferred classification,

the final step of classification belongs to the Court. See id. In its entirety, the text of

HTSUS heading 2105 reads:

2105.00 Ice cream and other edible ice, whether or not containing cocoa:

Ice cream:

2105.00.05 Described in general note 15 of the tariff schedule and

entered pursuant to its provisions

2105.00.10 Described in additional U.S. note 5 to this chapter and

entered pursuant to its provisions

2105.00.20 Other

Other:

Dairy products described in additional U.S. note 1 to chapter

4:

2105.00.25 Described in general note 15 of the tariff schedule and

entered pursuant to its provisions

2105.00.30 Described in additional U.S. note 10 to chapter 4 and

entered pursuant to its provisions

2105.00.40 Other

2105.00.50 Other

See heading 2105, HTSUS (2005). Having determined that mellorine is an “other edible

ice” within the meaning of heading 2105, but not a dairy product described in

additional U.S. note 1 to Chapter 4, there remains only one subheading under which it

can be classified: 2105.00.50 “Ice Cream and other edible ice, whether or not containingCourt No. 07

‐ 00274 Page 24

51 Pl.’s Letter of December 16, 2009 at 1 (Docket # 67.)

52 Def.’s Public Response to the Court’s December 8, 2009 Letter at 1 (Docket # 68.)

(Defendant did not file a confidential version of this letter.)

53 See generally

, id. cocoa: Other: Other” at a duty rate of 17% ad valorem

. See id.

On December 8, 2009 the Court submitted a letter to the parties soliciting their

perspectives and comments on the appropriateness of HTSUS 2105.00.50 as a

classification for mellorine. Plaintiff states that it “fully agrees” with this classification,

but only “[t]o the extent the Court may be considering

. . . 2105.00.3000 or 2105.00.4000

as incorrect.” 51 Plaintiff then proceeds to reiterate its argument that GRI 3(b) directs the

tariff classification of mellorine under heading 0811. Defendant, in its response to the

Court’s request, states that “2105.00.50, HTSUS, is not an appropriate classification for

the different flavors of mellorine at issue. Mellorine is not only an edible ice, it is also a

dairy article.” 52

After considering the positions of the parties, the Court’s opinion remains

unchanged. The Court notes that Defendant, in its opposition to the Court’s proffered

subheading, goes to great length to demonstrate how mellorine is a “dairy product” or

“dairy article.” 53 As already explained, supra at 21

‐ 22, this is not the precise question

facing the Court, and the Court finds Defendant’s arguments unavailing.Court No. 07

‐ 00274 Page 25

54 In challenging Customs’ preferred tariff subheading for mellorine, Plaintiff has

asked the Court to issue an order determining that “the term ‘dairy product’ in heading

2105 excludes merchandise in which the dairy component is a minor ingredient.” (Pl.’s

MSJ 1.) While the Court agrees with Plaintiff that mellorine is not an article of milk or

cream, the Court declines to issue this specific form of broad declaratory relief. C ONCLUSION

As explained above, Plaintiff moved the Court for partial summary judgment,

which is appropriate “when it appears that some aspects of a claim are not genuinely

controvertible [but] genuine issues remain regarding the rest of the claim.” Ugg Int’l

,

17 CIT at 83. Because there is no dispute between the parties as to the nature of the

merchandise involved in this case, and the only issues to be resolved are legal, there is

no need merely to grant partial summary judgment; 54 the case is ripe for disposal at the

summary judgment stage. See e.g.

, Value Vinyls, Inc. v. United States

, 31 CIT

__, __,

2007 WL 273839 at *2 (2007) (citing Anderson v. Liberty Lobby, Inc.

, 477 U.S. 242, 247

‐ 49

(1986).)

Because the Court agrees with Defendant’s preferred tariff heading, but also

agrees with Plaintiff’s challenge to Customs’ preferred tariff subheading, Plaintiff’s

Motion for Partial Summary Judgment is granted in part and denied in part, and

Defendant’s Motion for Summary Judgment is granted in part and denied in part. For

the foregoing reasons, and pursuant to the Court’s independent obligation to determineCourt No. 07

‐ 00274 Page 26

the correct tariff classification, Plaintiff’s entries of the subject merchandise shall be

reliquidated under HTSUS 2105.00.50. Judgment to enter accordingly.

/s/ Gregory W. Carman

Gregory W. Carman, Judge

Dated: December 22, 2009

New York, New York