United States Court of Appeals 

for the Federal Circuit ______________________ 

DEL MONTE CORPORATION,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

______________________ 

2013-1105

______________________ 

Appeal from the United States Court of International 

Trade in No. 07-CV-0109, Senior Judge Thomas J. Aquilino, Jr.

______________________ 

Decided: September 16, 2013

______________________ 

BRETT IAN HARRIS, Pisani & Roll PLLC, of Washington, DC, argued for plaintiff-appellant. With him on the 

brief were ROBERT J. PISANI; and MICHAEL E. ROLLS, of 

Los Angeles, California. 

ALEXANDER J. VANDERWEIDE, Trial Attorney, Civil Division, International Trade Field Office, United States 

Department of Justice, of New York, New York, argued 

for defendant-appellee. With him on the brief were 

STUART F. DELERY, Acting Assistant Attorney General, 

JEANNE E. DAVIDSON, Director, of Washington, DC; and 
2 DEL MONTE CORPORATION v. US

BARBARA S. WILLIAMS, Attorney in Charge, of New York, 

New York. Of counsel on the brief was YELENA SLEPAK,

Office of the Chief Counsel, United States Customs and 

Border Protection, of New York, New York. 

______________________ 

Before PROST, O’MALLEY, and TARANTO, Circuit Judges.

TARANTO, Circuit Judge. 

Del Monte Corporation imports tuna products consisting of cooked tuna, together with sauce, in a package. 

U.S. Customs and Border Protection classified two of 

those products under subheading 1604.14.10 of the Harmonized Tariff Schedule of the United States, which 

covers tuna packed “in oil,” because their sauces include

some oil. In addition, Customs appraised the goods based 

on the price that Del Monte paid its supplier at the time 

of importation, without adjusting for approximately $1.5 

million that Del Monte later received from its supplier

after negotiations over the accuracy of the amount originally paid. Del Monte brought suit in the Court of International Trade contesting those two agency

determinations. The trade court held that Del Monte’s

goods were properly classified and valued. We affirm. 

BACKGROUND

The imported merchandise at issue consists of tuna 

fillets or strips in a sauce, packed in a sealed microwaveable pouch. There are three varieties: Teriyaki, Albacore 

Lemon & Cracked Pepper, and Yellowfin Lightly Seasoned. In all three, the tuna is not cooked or prepared in 

oil and is processed separately from the sauce, which is 

added after the tuna is placed into the pouch. The tuna 

accounts for 80 percent of the total product weight, and

the sauce accounts for the remaining 20 percent. In the 

Lemon Pepper and Lightly Seasoned products, the sauce 

contains some sunflower oil (2.48 percent and 0.62 per-
DEL MONTE CORPORATION v. US 3

cent of the total weight of the pouch’s contents, or 12.4 

percent and 3.1 percent of the sauce weight, respectively). 

In late 2004, Del Monte requested a ruling on the 

proper classification of its goods under the Harmonized 

Tariff Schedule. Customs issued a letter in March 2005 

finding that those Del Monte products with oil in their 

sauces should be classified as “in oil” under subheading 

1604.14.10. Del Monte requested reconsideration—

arguing that the goods should instead be classified as “not 

in oil”—but the agency again found that subheading 

1604.14.10 was the correct classification. 

Apart from deciding how to classify Del Monte’s

goods, Customs also had to determine how to value them. 

Chotiwat Manufacturing Co., Ltd., packs the products in 

Thailand and supplies them to Del Monte. Chotiwat and 

Del Monte initially estimated that it would cost $1.67 per 

case to convert the tuna and ingredients into a final

product (the “conversion cost”) and that Chotiwat would 

be able to “recover” 40 percent of the tuna for other uses. 

No formal agreement reflected the parties’ alleged understanding, but they did prepare “cost sheets” to use as the 

basis for calculating the price that Del Monte would pay

to Chotiwat. 

In 2005, Chotiwat sent invoices to Del Monte that diverged from those estimates: conversion costs were 

around $3.00 per case and the amount of tuna recovered 

was lower than expected. Del Monte paid the invoiced 

prices, and the goods were entered into the United States. 

Del Monte then initiated discussions with Chotiwat about 

the charges. After 10 months, the parties agreed that the 

conversion costs were $1.87 per case and that 40 percent 

of the tuna could in fact be recovered for other uses. 

Accordingly, Chotiwat issued a “credit note” to Del Monte 

for a little over $1.5 million. When Customs computed 

the final duties owed, it used the invoiced amount that 
4 DEL MONTE CORPORATION v. US

Del Monte paid at importation, without taking into account the subsequent $1.5 million credit. 

In 2007, Del Monte filed suit in the Court of International Trade contesting the agency’s decisions to (1) 

classify the Lemon Pepper and Lightly Seasoned products 

as “in oil” and (2) assess the transaction value of all 

entries based on the amount that Del Monte paid at the 

time of importation. In October 2012, the trade court 

granted summary judgment for the government on both 

issues. Del Monte Corp. v. United States, 885 F. Supp. 2d 

1315 (Ct. Int’l Trade 2012). Del Monte appeals, and we 

have jurisdiction under 28 U.S.C. § 1295(a)(5).

DISCUSSION

A 

Goods imported into the United States are classified 

under the Harmonized Tariff Schedule. Determining the 

proper classification requires first construing the relevant 

provisions of the schedule and then deciding which provision encompasses the merchandise at issue. Cummins 

Inc. v. United States, 454 F.3d 1361, 1363 (Fed. Cir. 

2006). “[W]hen the nature of the merchandise is undisputed,” however, that inquiry “collapses entirely into a 

question of law” about the meaning and scope of the

relevant tariff provisions. Id.; see also Faus Grp., Inc. v. 

United States, 581 F.3d 1369, 1372 (Fed. Cir. 2009). 

To identify the appropriate provision for particular 

merchandise, we proceed hierarchically, first locating the 

proper heading before choosing among the possible subheadings. Orlando Food Corp. v. United States, 140 F.3d 

1437, 1440 (Fed. Cir. 1998). At each step, the schedule’s

text and any applicable section or chapter notes take 

precedence in construing the provisions: when those 

sources are enough to decide the classification question, 

that is the end of the inquiry. See, e.g., CamelBak Prods., 

LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 
DEL MONTE CORPORATION v. US 5

2011); Bauer Nike Hockey USA, Inc. v. United States, 393 

F.3d 1246, 1250 (Fed. Cir. 2004) (stating that we first 

“determine the applicable heading, if possible, by looking 

to the terms of the headings and section or chapter 

notes”). At the subheading level, General Rule of Interpretation (GRI) 6 controls and gives priority to the “terms 

of those subheadings and any related subheading notes” 

as well as “the relevant section, chapter, and subchapter 

notes.” Harmonized Tariff Schedule of the United States, 

USITC Pub. 4368, at GN p.1 (2013), available at

http://hts.usitc.gov/. Included among the specified “notes” 

are Additional U.S. Notes, which Customs describes as 

“legal notes that provide definitions or information on the 

scope of the pertinent provisions or set additional requirements for classification purposes” and which are 

“considered to be statutory provisions of law for all purposes.” U.S. Customs & Border Prot., What Every Member of the Trade Community Should Know About: Tariff 

Classification 32 (2004); see also Harmonized Tariff 

Schedule of the United States, USITC Pub. 4368, at 

Preface p.1 (2013). 

To decide the classification issue in this case, we need 

not look beyond the tariff schedule and the Additional 

U.S. Notes as they read at all relevant times. There is no 

dispute that Del Monte’s products fall under subheading 

1604.14; they are prepared or preserved tuna fish packed 

in an airtight container. The tariff schedule further 

divides such goods into two groups: those “in oil” (subheading 1604.14.10) and those “not in oil” (subheadings 

1604.14.22 and 1604.14.30). Additional U.S. Note 1 to 

Chapter 16 then explains that “the term ‘in oil’ means 

packed in oil or fat, or in added oil or fat and other substances, whether such oil or fat was introduced at the 

time of packing or prior thereto.” For fish products in 

which the only oil is added as part of a liquid substance 

introduced at the time of packing, this note makes clear 

that the goods are considered “in oil” even if the liquid 
6 DEL MONTE CORPORATION v. US

substance does not consist entirely of oil, and it sets no 

minimum threshold for the amount of oil that must be 

present. 

Del Monte’s products were properly classified as “in 

oil” under subheading 1604.14.10 according to Additional 

U.S. Note 1. It is undisputed that the tuna is not cooked 

in oil, that the tuna is placed in the packaging after being 

prepared without using any oil, and that a sauce containing some oil is then added to the pouch. That is sufficient

to describe the Lemon Pepper and Lightly Seasoned 

varieties as tuna “packed . . . in added oil . . . and other 

substances” and thus to bring the goods within the scope 

of subheading 1604.14.10. 

Del Monte’s argument on appeal is premised on one 

case, Richter Bros. Inc. v. United States, 44 C.C.P.A. 128 

(1957). Del Monte contends that Richter Bros. dictates 

the meaning of “packed in oil” for the relevant tariff 

provisions, and that the classification of its products was 

erroneously based on an earlier case, Strohmeyer & Arpe 

Co. v. United States, 5 Ct. Cust. 527 (Ct. Cust. App. 1915), 

which was overruled by Richter Bros. Those two cases, 

however, concern products that differ from Del Monte’s in 

a critical respect: in both, the fish was cooked in oil, 

which was then partially but not entirely drained off 

before the fish was packed in a liquid substance, such that 

some oil from the cooking process subsequently made its 

way into the liquid introduced at packaging. See Richter 

Bros., 44 C.C.P.A. at 129; Strohmeyer, 5 Ct. Cust. at 527-

28. On those facts, Strohmeyer held that the fish was 

“packed in oil and other substances” because that language was “intended to reach any case in which oil is part 

of the substance in which the fish is found packed when 

offered for importation.” 5 Ct. Cust. at 528. Over 40 

years later, citing revised language in the tariff provisions, Richter Bros. found that fish that was fried in oil, 

drained, and then packed in a liquid without oil was not 

“packed in oil” because “no oil whatever was used in the 
DEL MONTE CORPORATION v. US 7

actual packing process.” 44 C.C.P.A. at 131. The only oil 

in Del Monte’s products, by contrast, arrives in a separate 

sauce that is added during packaging, after the fish is 

already in the pouch. Accordingly, although Richter Bros.

does appear to undermine the broader declaration in 

Strohmeyer, there is no disagreement between those two

decisions as to the circumstances present in this case. 

B 

Imported merchandise must be appraised, when possible, based on its “transaction value.” 19 U.S.C. 

§ 1401a(a)(1). The “transaction value” is defined by 

statute as “the price actually paid or payable for the 

merchandise when sold for exportation to the United 

States” (plus some additional amounts), id. § 1401a(b)(1), 

and “[a]ny rebate of, or other decrease in, the price actually paid or payable that is made or otherwise effected 

between the buyer and seller after the date of the importation of the merchandise into the United States shall be 

disregarded in determining the transaction value,” id.

§ 1401a(b)(4)(B). A regulation concerning transaction 

value provides that “the price actually paid or payable 

will be considered without regard to its method of derivation [and] may be arrived at by the application of a formula, such as the price in effect on the date of export in the 

London Commodity Market.” 19 C.F.R. § 152.103(a)(1). 

The same regulation also states that “[t]he word ‘payable’ 

refers to a situation in which the price has been agreed 

upon, but actual payment has not been made at the time 

of importation.” Id. 

Del Monte argues that it had agreed to a “formula” 

with its supplier, Chotiwat, pursuant to which actual and 

estimated costs would be reconciled after importation, and 

that the trade court erred in failing to consider 19 C.F.R. 

§ 152.103(a)(1) in order to account for this “formula” in

determining transaction value. We see at least two 

problems with Del Monte’s position. First, Del Monte
8 DEL MONTE CORPORATION v. US

never cited that regulation to the trade court or argued 

that its arrangement with Chotiwat constituted a “formula” under § 152.103(a)(1) for purposes of calculating

transaction value. Yet the issue that Del Monte asks us 

to decide is “whether the [trade] court . . . erred in not 

applying 19 C.F.R. § 152.103(a)(1).” 

Second, and in any event, we are not persuaded that 

the arrangement between Del Monte and Chotiwat qualifies as a “formula” under § 152.103(a)(1). In order for 

recognition of a “formula” to avoid swallowing the otherwise-strong statutory prohibition on using payments postdating importation to alter the tariffs owed, 19 U.S.C. 

§ 1401a(b)(4)(B), we think that an agreed-upon, preimportation “formula” must be clear and definite. Each of 

the Customs decisions cited by Del Monte, in which the 

transaction value calculation included some postimportation adjustments based on actual costs, involved 

at least that much. We find nothing like that here. There 

was no written contract, formal policy, or other hallmarks 

of a formal agreement between Del Monte and Chotiwat 

setting out a “formula” to be applied. Rather, the parties 

estimated costs, Chotiwat sent invoices for more, Del 

Monte paid the full invoiced amount, and the parties then 

negotiated for months before Chotiwat credited roughly 

$1.5 million to Del Monte. On those undisputed facts, 

there is not enough to overcome the statutory mandate to 

“disregard[]” any post-importation “decrease in[] the price 

actually paid.” 19 U.S.C. § 1401a(b)(4)(B).

CONCLUSION

Del Monte focuses its appeal on one legal authority for

each of the two issues raised—the Richter Bros. case for 

the classification issue, and the “formula” provision of 19 

C.F.R. § 152.103(a)(1) for the valuation question. Concluding that neither authority applies to the facts of this 

case, we affirm the trade court’s determination that the

imported merchandise was properly classified and valued. 
DEL MONTE CORPORATION v. US 9

AFFIRMED