1 SLIP-OP 04-84
UNITED STATES COURT OF I NTERNATIONAL

TRADE

__________________________________________ : THE PIL LSBURY CO., : PUBLIC V ERSION : Plaintiff, : Before: WALLACH, J udge : Court No.: 00-12-00570 v. : : UNI TED STATE S, : : Defend ant. : __________________________________________: [Judgment for Defendant.] Decided: July 12, 2004
Nev il le P ete rso n, LLP , ( John M. Peterson , Curtis W. Kna uss ) for Pla

intiffs. Peter D. Keisler , Assistan t Attorne y G eneral ; Barba

ra S. Willia

ms , Attorney in Charg e, International Trade

Field Office, Department of Justice, Civil Division, Commercial Litiga tion Branch; Saul Davi s , Department of Justice, Civil Division, Commercial Litigation Branch; Michael Hey

drich , Office

of the Ass istant Chie f Counsel, Inte rnationa l Trade L itigation, U.S. Customs and Border Protection, of counsel, for Defenda nt.
WALLACH, Judge:

FINDINGS OF FAC T & CONCLUSIONS OF LAW
I INTRODUC TION
This matter is before the court for decision following a bench trial on November 13, 2003, and November 14, 2003. Plaintiff, the Pillsbury Company , challenges the United States1 Effective March 1, 2003, the United States Customs Service was rena med the United States Bureau of Customs and Border Protection. See Hom ela nd S ecu rit y Act of 2 002 , P ub. L. 107-296, § 1502, 116 Stat. 2135, 2308-09 (2002); Reorganization Plan for the Department of Homeland Security, H.R. Doc . No. 108-32 (2003).

2 HTSUS Subhe ading 0 403.10.90 .00 (1999 ), provid es: 0403. Buttermilk, curdled milk, yog urt, kephir and other fermented or acidified milk and cream, whether or not concentrate d or containing added sugar or other sweetening matter or flavore d or containing added fruit, nuts or cocoa: 0403.10. Yogurt : 0403.10.90.00 Other. 2 Customs Service’s 1 (“Customs”) decision to classify c ertain entries of frozen dessert bars as dairy products under Harmonized Tariff Schedule of the United States (“ HTSUS”) subheading 2105.00.40 (1999). Plaintiff seeks an order directing r eliquidation of these entries, classification of the subject merchandise under HTSUS Subheading 2105.00.50, or in the a lternative under HTSUS Subheading 0403.10.90.00, 2 and a refund of all duties paid, plus interest. This Court has exclusive jurisdiction pursuant to 28 U.S.C. § 1581(a) (1994), which provides for judicial review of denied protests filed in compliance with the provisions of 19 U.S.C. § 1514 (1999). Pursuant to the following findings of fact and conclusions of law , and in accordance with USCI T R. 52(a), the court enters a final judgment in favor of the Defendant and against Plaintiff.
II BACKGROUND Plaintiff entered certain Haag en-Dazs brand frozen dessert bars from Canada , through the Port of Detroit, Michigan, between March 30, 1999, a nd September 17, 1999. The subject merchandise is comprised of two flavors of Haag en-Dazs brand frozen dessert bars. One has3 For convenience the core of both bars is herein referred to as y ogurt, or the y

ogurt portion. E

xcept whe

re explici tly a ddresse d, this ter

m is used fo

r ease o f refe

rence a nd is not to be construed as a finding of fact or law as to the proper classification of that portion of the subject merchandise.

4 HTSUS Subheading 2105.00.30, through 2105.00.50 provide for:
2105.00 Ice cre am and other edible ice, whether or not containing cocoa: Ice cream:

* * * Other: Dairy produc

ts described in additional U.S. note 1 to chapte r 4:
2105.00.30 Describ ed in addi tional U.S. note 10 to chapter 4 and ente

red purs uant to its provisions
2105.00.40 Other.
2105.00.50 Other. Additional U.S. Note 1 to Chapter 4 states that “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: ma

lted milk, a

nd artic les of milk

or crea m (except ( a) white

chocola te and (b ) inedible dried milk powders certified to be used for calibrating infrared milk analy

zers); articles containing over 5.5 percent by weight of butterfat which are suitable f or use as ingredients in the commercial production of edible articles (except articles w ithin the scope of other import quotas provided for in ad ditional U .S. notes 2and 3 to chapter 18 ); or, dr ied milk, w

hey or butter milk (of the type pr

ovided for in subheading 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 pr ocessed or mixed with similar or other ingredients and are not prepared for marketing to the ultimate consume r in the identical form and package in whic h imported.” 3 chocolate sorbet on the outside and vanilla y ogurt on the inside, one with raspberry sorbet on the outside and vanilla yog

urt on the inside. 3 Between February 11, 2000, and July 28, 2000, Customs classified the imported frozen dessert bars under HTSUS Subheading 2105.00.40, 44

assessed duty there on at the rate of 51.7¢ plus 17.5% ad valorem , and liquidated accordingly

. Plaintiff paid all liquidated duties, fees and charges prior to the c ommencement of this action. Between May

10, 2000, and July 31, 2000, Plaintiff filed four timely protests with the Port Director at Detroit, Michigan, challeng ing Customs’ classification. It claimed that the fr ozen de ss er t b ar s w er e p ro pe rl y cl as si fi ed un de r H TS US Su bh ea di ng 21 05 .0 0. 50 , a nd en ti tl ed to du tyfree entry under NAFTA. Customs denied Plaintiff’s protests between July 7, 2000, and October 26, 2000. On December 18, 2000, Plaintiff commenced the instant action by filing a Summons with the Cle

rk of the Court. In its Complaint, Plaintiff claims that the subject merchandise is properly classified under HTSUS subheading 2105.00.50, or, in the alternative, under HTSUS Subheading 0403.10.90.00, and seeks a refund of all duties paid, plus interest. The basis of Plaintiff’s cla im is that the dessert bars are neither primarily characterized by

their frozen yog

urt component, nor is that
componen

t proper ly c lassifie d as a “pr

oduct of m

ilk” as de fined in H TSUS. Defend ant claim s that the d

essert b ars wer

e proper ly c lassifie d and thus r

equests judgment in its favor, affirming its classification and assessment of duties. D efendant contends that the frozen dessert bars are properly classifiable as ‘articles of milk,’ a term which they contend, under statutory

interpretation and case law, is broader than ‘ milk.’ Defendant states that, based on industry standar ds for ice cream and frozen y ogurt, as well as the primary ingredients of the subject product, the frozen y ogurt is the basis of the product, it’s essential nature, whereas the sorbet portion is correc tly viewed as a f

lavoring or coating. Further more, according to Defendant, the y ogurt core is not, in fact y ogurt, but, based on limited portion of fermented ingredients, milk.5 All parties agree that classification under HTSUS subheadings covering ice cr eam would be inappropriate. See Pretrial Order at 6. 5 The parties’ contentions center on classify ing the subject desert bars under one of thr ee possible HTSUS subheadings, 2105.00.40 (requiring a finding tha t the yogur

t portion predominates and

that said p ortion constitutes a n article of milk or c

ream as defined in U.S. note 1 to chapter 4 of the HTSUS), 0403.10.90.00 (requiring a f inding that the yog

urt portion predominates and that said portion constitutes yog urt), or 2105.00.50 (requiring a finding that the sorbet portion pre dominate s). Ultima tely , which of

the thre e categories the se items f all into depends on whether essential characte r is the ‘yog

urt’ portion. If the essential cha racter is the sorbet portion, HTSUS subheading 2105.00.50 is eliminated as a possibility. If the essential character is the ‘y

ogurt’ portion, and this portion is properly characterized as an ‘article of milk’, Customs initi al finding

is confir med. I f the ‘y

ogurt’ portion is c

haract erized a s ‘y

ogurt’ , its proper classification lies under 0403.10.90.00. 5
III STANDARDOF REVIEW Plaintiff paid all li quidated

duties an d charg es prior

to the time ly c ommence

ment of thi s action. Although Customs's decisions are entitled to a presumption of corre ctness under 28 U.S.C. § 2639(a)(1) (1994), the Court makes its determinations upon the basis of the recor d made before the Court, rather than that deve loped by Customs. See United States v. Mead Corp. , 533 U.S. 218, 233 n.16, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001). Accordingly , the Court makes the following findings of fact and c onclusions of law as a result of the de novo trial. See 28 U.S.C. § 2640(a) (1994).6 IV FINDINGS OF FAC T

A Facts Uncontested By The Parties And Agree d To In The Pretrial Order
1. The merchandise which is the subject of this case (the “ subject merchandise”) consists o f frozen

dessert bars. Two variet

ies of the subject me

rchandi se are i

ncluded i n this case: (A) one bar consists of an outer shell of r aspberry flavored sorbet and an inner filling of vanilla-flavored frozen y

ogurt, and (B) the second barconsists of an outer shell of chocolateflavored sorbet and an inner filling of vanilla- flavored frozen y ogurt. 2. In their condition as imported, the dessert bar s are frozen, and are packaged for retail sale. Each of the frozen dessert bars features a wooden stick which is used to hold the bars while they are

being eaten.
3. Between March 30, 1999, and September 17, 1999, Plaintiff e ntered at the Port of Detroit, Michiga

n, under cover of consumpti on entrie s listed in t he Summons, shipments containi ng the su bject mer chandise ; frozen d

essert b ars. 4. Between February 11, 2000, and July 28, 2000, the Post Director of Customs at the Port of Detroit, Michigan liquidated the subject entries, classify ing the imported frozen dessert bars in liq

uidation u

nder HTSU S Subheadi

ng 2105. 00.40, as

“Ic e crea m and othe

r edible ice, whether or not containing cocoa : Other: Dairy pr oducts described in additional U.S. note 1 to chapter 4: Other” and assessing duty thereon at the rate of 51.7¢ plus 17.5% ad valorem

. Plaintiff paid all liquidated duties, fees and charges prior to the c ommencement of this action. 5. Between May

10, 2000, and July 31, 2000, Plaintiff caused to be filed with the Port Director of Custom s at Detr oit, Michigan, timely

protests, challen

ging th e classif ication in liquidation of the imp orted me rchandi se, and a sserting

that the f rozen des sert bars are pr

operly classified under HTSUS Subheading 2105.00.50, as “I ce cream and other edible ice, w hether or not containing cocoa: Other: Other” and e ntitled to duty-free e

ntry under NA

FTA. 6. The Port Director of Customs denied Plaintiff’s protests between July 7, 2000, and October 26, 2000.
7. On D ecembe r 18, 2 000, P laint iff ti mely comm enced t he ins tant a ction by filin g a Summons with

the Clerk of the Cou

rt. 8. Neither the imported frozen dessert bars, nor any component thereof, constitute or consists of “ice cream,” as that term is commonly or commercially

known. The imported frozen dessert bars are not classifiable under HTSUS subhea dings 2105.00.05 through 2105.00.20.6 The chocolate flavor of dessert bar has been discontinued. 7 9. The merchandise which is the subject of this action was also the subject of N ew York Customs Ruling Letter No. D84417 (Dec . 3, 1998), in which the Bureau of Customs and Border Protection (then th e United S tates Cust oms Servic e) clas sified the subject me

rchandi se under HTSUS subheading 2105.00.40.
B Facts Established At Trial 10. Plaintiff’s current packaging , entered into evidence as Plaintiff’s exhibit 2, differs from the subject merchandise as imported. However , although the box has been updated, the subject frozen dessert bars inside remain unchang ed.
11. The cur ren t p ack agi ng s tat es t hat th e bo x c ont ain s “F AT F RE E VA NILLA FROZEN YOGURT COATED WI TH RASPBERRY SORBET.” The packaging a lso specifies that “ [w]e ta

ke ri ch, cream

y H aag en-D azs y

ogur t and dip it in inc redi bly smoot h Haa gen -Daz s sorbet. . .” 12. Althou

gh the p ackag ing spec ifies tha t the y ogurt is dipped in s orbet, in manufacturing the subject merchandise, the sorbet is, in fact, poured into a mold and chilled. When it reaches a certain temperature a portion of the unfrozen center is “sucked back” and saved for future use. The frozen y ogurt portion is then injected into the void to create the frozen yogur t center. 13. Haagen-Dazs’ development and mar keting documentation demonstrates that the yogur t portion of the dessert bars was tested with a variety of flavorings. The documentation indicate s that the s

ubject me rchandi se was c onsistentl y id entified by t he y ogurt c omponent. (“Pl. Ex.”) 11-14. 14. The yog

urt portion of the subject merchandise weighs 32 g rams. The raspberry portion of that flavor of dessert bar weighs 36 g rams. The chocolate portion of that flavor of dessert bar weig hs 35.9 g rams. 6 An entire

dessert bar weig hs approximately

71 gra ms. 15. The do cumenta

tion ente red as Pl. Ex. 3, p.48, d

escribin g the ing redient s used to produce the subject merchandise, demonstrates that by weight and volume, milk is an essential ingred ient. 16. By we ight, milk products ( LK skim/conditioned skim milk blend and condensed fresh US Grade A skim mil k) comprise 2 1.43% of the total weight of subject m erchandise. By volume, milk products comprise approximately the same pe rcentage. 17. This pe

rcenta ge of mi lk products is appro ximately equal to t he weig ht of the f ruit7 See 21 C.F.R. §§ 131.200, 131.203, 131.206 (1999) covering y ogurt generally . Each states tha t yo gurt is a

“food pr oduced by c

ulturing one or mor

e of the o ptional da

iry ingred ients specified in paragraph (c ) of this section with a characterizing bacter ial culture that contains the lactic acid-producing bacter ia, Lactobacillus bulga

ricus and Streptococcus thermophilus.” 8 ingredients in the raspberry flavored bar. 18. The weight of the milk ingredients in both ty pes of bars are exceeded only by the weight of the water and sweete ners 19. The court finds highly probative and credible the expert testimony of Professor Robert L. Bradley

, Jr. The court designated Professor Bradle y as an expert in the production, process ing and

formulas relating to frozen yog urt and y ogurt. 20. Professor Bradley

is currently a Prof

essor Emeritus at the University of Wisconsin, where he earned his Ph.D. in 1964. From 1964 until the present, he ha s taught food science at the University of Wisconsin and has published extensively . Professor Bradley holds memberships in several professional societies and has rec eived numerous awards. He has taug ht courses in the manufacture of both y ogurt and frozen y

ogurt. 21. Profe ssor Bra

dley testifie d at trial

that in his e

xpert opinion the y

ogurt portion is what gives the bars their essential chara cter. His opinion is based on the industry a nd Code of Federal Regulations standard of c omparing solids content, a comparison of which portion is more nutritious, and his review of Plaintiff’s development, production, processing and mar keting documents. 22. Plaintiff offered certain product testing doc uments, entitled “Live and active culture test for Haagen-Da zs fat free frozen y

ogurt” and admitted as Pl. Ex. 8., which the court admitted n

ot to estab lish the va

lidity of the te sts or res

ults, but on

ly to establish that from time to time, the Pillsbury Company tests frozen yog

urt. 23. Profe ssor Bra

dley reviewe d these te sting doc uments an

d Plaintiff

’s formul a documents concerning the composition of the subject mercha ndise. 24. Professor Bradley

testified credibly that y

ogurt, according to the National Yog urt Associat ion and un

der the Co de of Fe deral Re gulatio ns, 7 is a product in which all milk solids have been fermented. 25. The yog

urt portion of the subject merchandise is not one in which all milk solids have been fermented. 26. National I

mport Spec ialist Thomas Bra dy, with the N ational Commodity Speciali st Division of Customs, testified regarding the practices of Customs regarding classification of9

merchandise under the provisions of Heading 2105. T his testimony was credible a nd probative. 27. The decision to classify the subject merchandise under 2105.00.40 was based on the age ncy ’s deter

mination that the fr

ozen dese rt bars c onstituted

an “art icle of mi lk or cre am” under HTSUS additional U.S. note 1 to chapter 4. 28. Brian Sweet, Product Quality Manager for Haag en-Dazs testified. Mr. Sweet identified the subject merchandise, and discussed how it is manufacture d. He testified as to the formulation of the components. He also described the marketing plans and product development within Pillsbury during the time of the subject entr ies. His testimony was credible a nd probative. 29. The product does not contain full cream milk, or skimmed milk. 30. The yog

urt portion of the subject merchandise is made from 88% by weight of a “vanilla flavored ice milk base” and 12% by weight of a “y

ogurt base.” 31. The “va

nilla flav ored ice m ilk ba se” p ortion of the y

ogur t cor e is ma de fr om [a percentage] by

weight of a reduced lactose skim milk blend, toge ther with [a percentage of] liquid amber sugar, [a percentag e of] corn syrup solids, [a perce ntage] of a blend of corn sy rup and liquid sugar, [a percentage ] of charcoal-filtered water, and [a per centage of] specialty

corn syr up solids. 32. The “yog

urt base” portion of the y ogurt core is made from [a percenta ge] by weight of condensed fresh U.S. Gra de A skim milk, [a percentage of] charcoal-f iltered water, and [a per

centag e of cer

tain ty pes of] y ogurt c ultures. 33. Of the yog

urt portion, only a very

small percentage actually contained yog

urt cultures. This percentage is diluted with the “vanilla flavor ed ice-milk base” to provide the flavor o f yogurt. 34. Once the “y

ogurt base” and “vanilla flavore d ice-milk base” are mixed, there is no further fermen tation due to the con

centra tion of sug ars. 35. The va

nilla fla vored ic e-milk ba se which made up a

majority of the ‘y ogurt’ portion was never fermented 36. Plaintiff offered into evidence the requirements of the National Yogurt Association for live and active culture y ogurt. Pl. Ex. 7.
37. Base d on these

standar ds, as we ll as the te stimony of Prof. B radley

and Mr. Sw eet, in order to meet the criteria of the National Yog urt Association criteria for live and active culture yog urt, samp ling and

analy tical pro cedure s Nationa

l Yogur t Associa tion, a pr oduct must , inter alia , contain a certain level of active cultures, 10 7 CFU per gram, a t the end o f the stat

ed shelf8 Genera l Rule of I

nterpre tation 3(b ) states t

hat: Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, w hich cannot be classified by re ference to 3(a), shall be classified a s if they consisted of the materia l or component whic

h gives t hem their essentia l chara cter, in sofar a s this criterion is applicable. Explanatory note to Genera l Rule of Interpretation 3(b) state s that “[t]he factor which determines essential character will vary by the nature of

the material or component, its bulk, quantity, weig

ht or value, or by the

role of a constituent material in relation to the use of the goods.” 10 life, and have a certain titratable ac idity, at least 0.15%, obtained fr om fermentation. 38. Plaintiff failed to establish through credible evidence that the y ogurt portion of the subject me

rchandi se conta

ined the r equisite l evel of a

ctive cu ltures at the end of

the state d shelf life. 39. Plaintiff failed to establish through credible evidence that the y ogurt portion of the subject merchandise had the requisite titratable acidity as a result of fermentation. 40. If any

of these Findings of Fact shall more prope rly be Conclusions of Law, they shall be deemed to be so.
V CONCLUSIONS OF LAW 1. Plaintiff did not meet its burden of proving that the imported desert bars are not within the

scope of the tarif f provision for “a

rticle[s] of

milk or cr

eam” of a kind des cribed i

n additional U.S. Note 1 to HTSUS Chapter 4. 2. Based on the foregoing Findings of Fact, the court finds the essential c haracter of the subject merchandise to be the y ogurt portion of the dessert bar. 8 The subje ct bars a re compo site goods, consisting of two or more materials or components c lassified in different headings of the tariff, frozen y

ogurt portion under 2105.00.40, and sorbet portion classifiable under 2105.00.50. The esse ntial cha racter of an ent ry is “that a ttribute w hich strongly

marks or serves t o disting uish what it is. Its essential characte r is that which is indispensable to the structure, core or condition of the article, i.e., what it is. Webster's Third New I nternational Dictionary , 1966 edition.” Oak Laminates D/O Oak Mater ials Group v. United States , 8 CIT 17 5, 180 (1984 ) (cit ing United China & Glass Co. v. United States , 61 Cust. Ct. 386, C.D. 3637, 293 F. Supp. 734 (1968)). The marketin g of the mercha ndise, the weight and volume

of the ing

redient s, and the

product i tself, in addition to other facts revealed at trial support this conclusion. The court in Mead Corp. v.11

United States , 283 F.3d 1342, 1349 (Fed. Cir., 2002), explained that “[w]hile the importer’s marketing of the goods will not dictate the classifica tion, such evidence is relevant to the determination.” Thus, in accordance with Gene ral Rule of Interpre

tation No. 3 (b), this court finds that the yog

urt portion gives the merchandise its essential charac ter. 3. HTSUS subheading 2105.00.40 covers “I ce cream and other edible ice, w hether or not containing cocoa: Other: Dairy products described in additional U.S. note 1 to chapter 4: Other.” The court finds that the y ogurt portion of dessert bars constitutes a dairy product described in additional U.S. note 1 to Chapter 4 of the HTSUS, given that this portion is not entirely fe

rmented and based upon the nature of the ing redients used. 4. Note 1 to Chapter 4 of the HTSUS states that “[t]he expression ‘ milk ’ means f ull cream milk or partially

or completely skimmed milk.” 5. Additional U.S. note 1 to Chapter 4 of the HTSUS states that “[f]or the purposes of this sche dule, the

term ‘ dairy products described in additional U.S. note 1 to chapter 4 ’ means and of the following goods: malted milk, and articles of milk or cre am. . .” Thus, the range of it em s c ov er ed by “ dairy products described in additional U.S. note 1 to chapter 4 ”, are broader than full cream milk or partially or completely skimmed milk. 6. As the court explained in United States v. Andrew Fisher Cy cle Inc. , 57 CCPA 102, 426 F.2d 1 308 (1970 ); Washington Int’l I ns. Co. v. United States , 24 F.3d 2 24 (1994) , the name under which merchandise is marketed is not dispositive for classification purposes. Thus, the fact tha t Plaintiff routinely refer s to the core as “y

ogurt” and mark

ets the de ssert ba

rs that wa y is not suffic ient to est

ablish the n, lega l classif ication a s yo gurt. 7. As the fermented part comprises only about 12% of the yog

urt portion, this court finds that it would be improper to classify the e ntire yog urt portion, and thus the entire entry , as yog urt. 8. Merchandise must be examined to determine whether, as imported, it contains the named ingredients. Imprex, Inc . v. United States , 17 CIT 650 (1993). Here the merchandise was not comprised chiefly of

yogur t as imported. The dessert bars did contain articles of milk or cream as defined in HTSUS additional U.S. note 1 to Chapter 4. 9. By oper

ation of the finding that the subject merchandise contains ar ticles of milk or cream, the dessert bars cannot be c lassified under HTSUS heading 0403 covering YOGURT. The Explanatory Notes discuss the scope of Chapter 4, which includes the “y ogurt” of HTSUS heading 0403, it sta

tes: The Chapter also excludes , inter alia , the following:

(c) Ice c

ream and other edible ice (heading 21.05).12

Harmonized Commodity duty Description and Coding sy stem, Explanatory Notes (1st ed. 1986) at 30. 10. As a confection, dessert, or novelty, the subject merchandise is properly covered by HTSUS heading

2105. 11. Because the evidence shows that the subjec t merchandise is an article of milk as defined in U.S. note

1 to chapt

er 4 of th e HTSUS, the court f inds that the merchandise is properl y classified under HTSUS subheading 2105.00.40.
12. Accordingly

, Plaintiff has faile d to overc ome the pr esumption

of corr ectness , pursuant to 28 U.S.C. § 2639(a

) (1994) , that atta

ches to Cu stoms’ cla ssificat ion decis ions. 13. If any

of these Conclusions of Law shall more prope rly be Finding s of Fact, they shall be deemed to be so.

/s/ Evan. J. Wallach Judge Dated: July 12, 2004 New York, New York