S LIP O P
. 03-94 U NITED S TAT ES C OURT OF I NTER NAT IONAL T RADE B EFORE : R ICHA RD K. E ATON , J UDGE

____________________________________ : A UTOM ATIC P LASTIC M OLDI NG , I NC ., :

: P LAINTIFF , :

: v. : C OURT N O
. 99-00365 : U NITED S TATES , : : D EFENDANT
. : ____________________________________: [Application for attorney’s f ees and expenses denied.] Decided: July 28, 2003 Law Office

of George

R. Tuttle, A P.C. ( George R. Tuttle III and Matthew K. Nakachi ), and Tonsing Law Offices (

Michael J. Tonsing

), for Automatic Plastic Molding, Inc. Peter D. Keisler , Assistan t Attorne y G eneral , United Sta

tes Depa rtment of Justice; John J. Mahon , Acting Attorney

in Charge, Inter

national Trade Field Office, Commercial L itigation Branch, Civil Division, United States Department of Justice ( Mikki Graves Walser

); Office of the Assistant Chief Counsel, United States Bureau of Customs and Border Protection ( Beth C. Brotman ), of cou

nsel, for Defend ant.

O PINI ON EATON, Judge : Before the court is the application of Automatic Plastic Molding, I nc. (“APM”), for fees and expenses pursuant to USCIT Rule 68 a nd the Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412 (2000). For the reasons set forth below, the court denie s this application.C OURT N O
. 99-00365 P AGE 2

1 Effective March 1, 2003, the United States Customs Service was rena med the United States Bureau of Customs and Border Protection. See Reorganization Plan Modification for the Department of Homeland Security , H.R. Doc. 108-32, at 4 (2003). B ACKGROUND In the underly

ing action APM challenged the United States Customs Service’s (“Customs”) 1 classification of certain glass containers. After a three-day trial the court held for APM, and found that the merchandise was properly classifiable under subheading 7010.91.50 of the Harm onized Tar

iff Sche dule of th e United S tates (“ HTSUS”) a s “Carboys, bottles, f lasks, jars, pots, vials, ampoules and other containers, of glass, of a kind used for the convey ance or packing of goods.” See Automatic Plastic Molding, Inc. v. United States , 26 CIT __, Slip Op. 02-120 (Oct. 5, 2002). Final judgment was entere d in this matter on October 5, 2002, and Customs was ordered to “reliquidate the entries that are the subjec t of this action . . . and, as provided by law, r

efund with any inter

est any excess duties paid.” See Judgment Order of Oct. 5, 2002. Following entry

of final judgment, the United States (“Government”), on be half of Customs, did not pursue an appeal. Thereafter, on January 2, 2003, APM submitted an “Application for Fees and Other Expenses Pursuant to the Equal Ac cess to Justice Act” (the “Application”). By

this Application APM asks this court to award it costs and expenses for the underlying

action in the amount of $119,586.71. The Government actively opposes the Application.

D IS CUSS ION The rule s of this co

urt permi t the awa rding of costs and fees. Pur

suant to US CIT Ru

le 68, “[t]he court may awar d attorney’s f

ees and expenses where authorized by law. ApplicationsC OURT N O
. 99-00365 P AGE 3

2 APM alleges that the 30 day period for filing the Application did not start to run until the time for appeal expired. See Plaintiff’s Statement in Supp. Application for Fees and Costs Under the Equal Access to Justice Act, 28 U.S.C. § 2412 (“APM’s Mem.”) at 2–3 (citing Former Employees of Shaw Pipe, Inc. v. United States Sec’y of Labor , 22 CIT 430, 432 , 9 F. Supp. 2d 713 , 716 (199 8)); see Gav ette v. O ffice of Pe

rs. Mgmt. , 808 F.2d 1456, 1459 (Fed. Cir. 1986) (“The party

seeking an award under the E AJA must submit the application to the court within 30 days of the date w hen the judgment becomes ‘final and not appea lable.’ Although the Federal Circu it dec ided G avett e’s app eal on the me rits on Febr uary 1, 19 85, t he tim e for fi ling a petition for certiorari did not expire until 90 days late r. Gavette had an additional 30 days, or a total of 120 days from F ebruary 1, to file his application for fees and expenses.” (footnotes omitted)). Here, APM alleges that the Application was timely filed as the Judgment Order “became final a

nd not app ealable , as a mat ter of la w, . . . on D ecembe

r 3, 2002. ” APM’s Me

m. at 3. The Government does not contest the timely filing of the Application.

3 The rele

vant lang uage o f the EAJA provides: (A) . . . [A] court shall award to a prevailing party . . . fees and other expenses . . . incurred by that party in any

civil action . . . including proceedings for judicial re view of agency

action, brought by or ag ainst the United States in any court ha ving jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special c ircumstances make an a

ward unj ust. (B) A p arty

seeking an awar d of fee s and othe

r expense s shall, within thirty day

s of final judgment in the action, submit to the court an application for fees and other e xpenses which shows that the party is a pre

vailing party

and is eligible to receive an awar d under this subsection, and the amount sought, including an itemized sta

tement fr om any attorne y or expert wit

ness representing or appearing in behalf of the party

stating the actual time expended and the rate at which fees and other e xpenses were computed. The party

shall also allege that the position of the United States was not substantially justified. Whether or not the (continued...) must be fil ed within 3 0 day s after t he date o f entry

by t he court of a fina l judgme nt.” USCI

T R. 68(a). 2 An application for fees and expenses “shall contain a citation to the author ity which authorizes an award, and shall indicate the manner in which the pr erequisites for an award have been fulfilled.” USCIT R. 68(b). He re, APM cites the EAJA as authority for such award. 3 AsC OURT N O
. 99-00365 P AGE 4

3 (...continued) position of the United States was substantially justified shall be determined on the b asis of the record (includin g the re cord with respect to the action or failure to act by the agency

upon which the civil action is based) which is made in the civil action for which fees an d other expenses ar

e sough t. 28 U.S.C. § 2412(d)(1)(A)–(B).

4 Citi ng Traveler Trading Co. v. United States , 13 CIT 308, 382, 713 F. Supp. 409, 411 (1989). summarize d by

the Court o f Appea

ls for the Feder al Circui t “[t]he EAJA s tatute pr

ovides tha

t a trial court must award attorney ’s fees where: (i) the claimant is a ‘pre vailing party ’; (ii) the government’s position was not substantially justified; (iii) no ‘spe cial circumstances make an award unjust’; and (iv) the fee application is timely submitted and supported by an itemized statement.” Libas, Ltd. v. United States , 314 F.3d 1362, 1365 (Fed. Ci

r. 2003) ( citing 2 8 U.S.C. § 2412(d) (1)(A)

–(B); INS v. Jean , 496 U.S. 154, 158 (1990)). By the Application, APM alleges that: (1)APM was the

“preva iling pa rty ” in the un

derly ing act ion; (2) A PM meets the

net worth requirement and submitted the appropriate supporting documenta tion; (3) no “special circumstances” exist that would make awarding fe es and expenses unjust; and (4) the Government’s litigation position at both the administrative and trial level lacked “substantial justification.” See APM’s Mem. at 4; id. at sched ules A.1, A.2, B, D ; id. at 9, 21. 4 In response, the Government concedes that APM “was the preva iling party in this litigation and ha s met the net worth requirements and provide[d] an itemized statement of fees sought require d by the Rules of th

is Court . . . .” Def. ’s Opp’n to Pl.’s App lication f

or Attorney ’s Fees

and Costs (“Def.’s Mem.”) at 5–6 (footnote omitted). I n addition, the Government makes no argument that “special circumstances” existed in the underly ing action such that an award of fe es and expensesC OURT N O
. 99-00365 P AGE 5

would be u

njust.

Thus, as the partie s agre e that APM was the pr evailing party and provided the r

equisite supportin g documentation

and, fur thermore , there i s no arg

ument tha t “speci al circu

mstance s” existed in the underlying litiga tion, the remaining question for the court is whether the Government’s position was “substantially justified.”

A. Substantially justified Pursuant t

o statute a court shall award to a prevailing pa rty . . . fee s and other expenses . . . incurred by

that party in any

civil action . . . including proceedings for judicial review of agency action . . . . The [applicant] shall . . . allege that the position of the United States was not substantially justified. Whether or not the position of the United States was substantially justified shall be de termined on the basis of the record (including the rec ord with respect to the action or failure to act by the age ncy upon which the civi l action is based) which is made in the civil action for which fees a nd other expenses a

re soug ht. 28 U.S.C. § 2412(d)(1)(A), (B). Thus, the statute require s that the Government’s position be substantially justified at both the administrative level and at trial. Am. Bayridge Corp. v. United States , 24 C IT 9, 10, 86 F. S upp. 2 d 1284 , 1285 (2000 ) (cit ing Covington v. Dep’t of Health & Human Se

rvs. , 818 F.2d

838, 839 (Fed. Cir . 1987); Traveler Trading , 13 CIT at 381, 7 13 F. Supp. at 41 1)) (“If the cou rt deter mines that

the appli cant pre

vailed, t he gove rnment mus t demonstrate that its position, both at the agency level and throughout the litigation was substantially justified, or that special circ umstances make an award unjust.”). APM contendsC OURT N O
. 99-00365 P AGE 6

that “the Government needlessly continued this litigation after it knew or should have known that its position

regar ding the classifi cation of

the gla ss contai

ners in qu estion wa s not substa

ntially justified .” APM’s M em. at 6. I n support o f its positio

n, APM state s that “[a]d

mittedly, the test for attorney

fees and costs under the EAJA is not whether [a party ] succeeded on the merits, but whether the gov ernment

was clearly

reasonable in asserting its position . . . in view of the law and the facts.’” Id. at 13 ( empha sis an d elli psis in ori ginal) (citi ng Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States , 837 F.2d 465, 467 (Fed. Cir. 1988)).

The Government concedes that it “must demonstrate that its position, both at the agenc y level and throughout the litigation was substantially justified, or that special circumstances make

an awar d unjust . . . .” Def. ’s Mem. a t 6 (citing 28 U.S.C. § 2 412 (d)( 1)(A); Covington , 818 F.2d at 839; Am. Bayridge , 24 CIT at 10, 86 F. Supp. 2d at 1285).

The Court of Appeals for the Federa l Circuit has held that the government bears the burden of showing that its position was substantially justified under the EAJA. Libas , 314 F.3d at 136 5 (cit ing Neal & Co. v. United States , 121 F.3d 683, 686 (Fed. Cir. 1997)) (“[T]he imperative language of [28 U.S.C.] § 2412(d)(1)(A), ‘ a court shall award,’ requires that the
gover nment bea

rs the bur den of pr oving its position wa s substant

ially justified .”); see Inner Secrets/Secretly Yours, Inc. v. United States , 20 CIT 210, 213, 916 F. Supp. 1258, 1261–62 (1996) ( quoting Traveler Trading , 13 CIT at 381, 713 F. Supp. at 411) (“I n this matter, the ‘government bears the burden of establishing that its position was substantially justified or that special circumstances should preclude an award under the EAJA.’”). I n determining whatC OURT N O
. 99-00365 P AGE 7

constitutes substantial justification, the Supreme Court has defined the term to mean “‘justified in substan

ce or in t he main’ — that is, ju stified to a degr ee that c ould satisf

y a reasona ble person.” Pierce v. Underwood , 487 U.S. 5 52, 565 (1 988); see Owen v. United States , 861 F.2d 1273, 1274 ( Fed. C ir. 19 88) (q uoti ng Pierce , 487 U.S. a t 565); Urbano v. United States , 15 CIT 639, 641, 779 F. Supp. 1398, 1401 (1991), aff’d , 985 F .2d 58 5 (199 2) (ci ting Pierce , 487 U.S. at 565; Owen , 861 F.2d

at 1274); see also Kerin v. United States Postal Service , 218 F.3d 185, 189 (2nd C ir. 20 00) (K atzm ann, J .) (ci ting Pierce , 487 U.S. at 563, 566) (“With respect to the second
prong o f this test , the go vernmen t’s position was ‘su

bstantial ly ju stified’ if it had ‘ a reasonable basis both in law and in fact.’ ‘To be “substantially justified” means, of course, more than merely undese

rving of sanctions for frivolousness; that is assuredly not the standard for Gov ern men t l it iga ti on o f wh ich a re aso nab le p ers on w oul d ap pro ve. ’” ( cit ati ons om it ted )). In addition, “‘substa

ntial justif

ication’ require s that the G overnme nt show tha

t it was clearly reasonable in asserting its position, including its position at the agency level, in view of the law and the facts. The Government must show that it has not ‘persisted in pressing a tenuous factual or legal position, albeit one not wholly without foundation.’” Gavette , 808 F.2d at 1467 (emph asis i n origi nal) ( citi ng Schuenemeyer v. United States , 776 F.2d 329, 330–33 (Fed. Cir. 1985) ; quo ting Gava v. United States , 699 F.2d 1367, 1375) (Fed. Cir. 1983) (Baldwin, J., dissenting)). Thus, the court now turns to whether the Governme nt has met its burden.

1. Customs’s

position at t

he admini strative l evel was c learly re

asonable APM first ta

kes issue with the G overnme

nt’s positi on at the a

dministra tive leve l. APM argues thatC OURT N O
. 99-00365 P AGE 8

5 The court notes that footnote five deals with the application of Skidmore v. Swift & Co. , 323 U.S. 134 (1944). See Automatic Plastic Molding , 26 CIT at __ n.5, Slip Op. 02-120 at 9 n. 5 (cit ing Skidmore v. Swift & Co. , 323 U.S. 1 34 (1944) ; Rocknel Fastener, Inc. v. United States , 267 F.3d

1354 (Fe d. Cir. 200 1)). The court fo und that H QRL 96 2378 was n ot suffic iently thorough to rate Skidmore deference. Rockne ll , 267 F .3d 13 57 (ho ldin g Skidmore defere nce is appropriate where Customs’s classification decision revea led its thorough analy sis). [d]uring the administrative proceeding below, Customs ignored critica l evidenc e and g ave sele ctive an d conclus ory

treatme nt to other evidence before it. As observed by this court in footnote 5 of its decision in the instant case, Customs failed to apply the re levant law in the administr

ative pr oceedin gs: Here, Customs’ determination [HQRL 962378] that the Merchandise is not classifiable under subheading 7010.90.50 is both selective and conclusory, a

nd simply does not follow from the criteria set out in T.D. 96-7, Carborundum , and Kraft.

. . . In short, this w as not a “ clearly reasona ble” ana lys is, it was a selectiv e and conclusory

analy sis. APM’s Mem. a t 14 (b racket ed mat erial in tex t; em phase s remo ved) (c itin g Automatic Plastic Molding , 26 CI T at __, Slip Op. 02-12 0 at 9 n.5) ; see T.D. 96-7; Tariff Classification of I mported Glasswa re, 61 F ed. Reg . 223 (De

p’t Trea sury

Jan. 3. 1996 ) (chan

ge of practice ); Kraft, Inc. v. United States , 16 CI T 483 (199 2); United States v. Carborundum Co. , 536 F.2d 373 (C.C.P.A. 1976). 5 In support of its position, APM highlights several of the c ourt’s findings claiming that they demonstrate Customs “ig nored important evidence regar ding the lugs,” “failed to acc ount for other evidence as to the glass,” and made “conclusory

findings at the administrative level [that] lack

ed any explanation and wer

e ‘simply unconvincing.’ ” APM’s Me m. at 14, 15 . APM concludes that “[i]n short, Customs . . . followed the same pattern administratively as was observe d in court . Its u

nsupporte d assert

ion was no t only

not a ‘cl early

reasona ble’ ana lys is, itC OURT N O
. 99-00365 P AGE 9

wa s a co nc lu si on su pp or te d b y no analysi s . As such, it was clearly unreasonable and arbitrary .” Id. at 16 (emphasis in original).

In re sponse, the Gover

nment ar gues tha t “based upon the e

vidence before it, Customs’ position was ‘clearly

reasonable’ and, therefore , substantially justified during its considera tion of APM’s protest.” Def.’s Mem. at 6–7. I n support, the Government contends that “[f]rom the outset in its decision, this Court recognized that not all of the evidence presented to the Court was raised before or considere d by Customs.” Id. at 7 (ci ting Automatic Plastic Molding , 26 CIT at __, Slip Op. 02-120 at 3–4). The Government continues that

[i]n addition to the testimony of APM’s four witnesses, the Court had two sa

mples of the importe d jar and various o ther exhib its present ed by APM from w

hich the Co

urt could ascert ain the f acts necessary to render its decision. On the other hand, Customs had only pictorial repre sentations of the imported jar and limited factua l informa tion pres ented by

APM with wh

ich it cou ld ascertain the facts necessary to render its decision. Id. (citing APM’s Protest, HQRL 962378, April 8, 1999). The Gove rnment further states that [a]s clearly set forth in HQ 962378, in deter mining the proper classification of imported merchandise, Customs considered the terms of the competing headings, revie wed and applied the General Rules of Interpretation (“G RIs”), Additional U.S. Rules of Interpretation (“A

RIs”), the Explanatory

Notes to the competing provisions, lexicographic reference sourc es, prior judicial decis ions , prio r HQ rul ings, and T. D. 96- 7. Indeed , alth ough additionally considering

the Explanatory Notes to the competing provisions and prior HQ ruling letters, Customs considered the very same sour

ces as th e Court. Id. at 7–8 (footnote omitted). The Government concludes that

[i]nasmuch as Customs’ position in HQ 962378 was based upon limited information provided by APM, a corr ect constructionC OURT N O
. 99-00365 P AGE 10

6 A review of the Headquarters Ruling Letter issued in response to protest number 2809-98-100508 shows that, contrary to APM’s assertion that Customs’s conclusion that the subject merchandise was properly classifiable under HTSUS subheading 7013 was supported by no analysis, Customs did, indeed, acknowledg e the factors set out in T.D. 96-7, Kraft , and Carbonundum and applied those factors to the limited facts before it. See HQRL 962378. Customs stated:

The article appears to be manufactured by automatic mac hines from ordinary

glass. It is similar in shape to an urn. I t has a wide opening, moderate length neck, a nd is configured to hold a rubber lined, wooden lid. Because of the unusual and attrac tive shape, an ultimate purchaser’s primary expectation would be to reuse the article after the convey

ed or packed goods are use d (note also that the article is configured for a wooden lid which allows for repetitive, extremely ea sy, opening a nd closing). We note that although the protestant states that the container is sold from the importer to a customer who fills it with Italian cookies, pac king cookies for sale in glassware is rela tively rare ; cookie jars are principally used as stora

ge articles in the home. There is evidenc e that container is emphasized over the goods packed in it, i.e., (continued...) and/or interpretation of the terms of the competing hea dings, the Explanatory Notes, the GRI s, ARIs, and judicial decisions, and the correc t applica tion of the

law to the

facts be fore it a

t that time, it follows that Customs’ position regarding APM’s protest was clearly r easonable. Id. at 9.

The court finds that the Government has adequately sustained its burden that Customs’s position at the administrative level was substantially justified. While APM notes that several of Customs’s arguments at the administrative level were found by this court to be insufficient at trial, Customs nonetheless examined the evidence before it, applied what it considered to be the appropriate legal standard, and pr ovided an analy sis based on the facts and law as it understood them. 6 In addition, certain evidenc e that was before the court was not prese nted to Customs. ForC OURT N O
. 99-00365 P AGE 11

6 (...continued) molded glass handles and a unique, decorative sha pe, and the physical form of the

article (see above) indicates that this is so. The cost of the cookie filled article ($16.00) supports the conclusion that the glass jar is the primary focus of the purchaser with the contents simply emphasizing a suggested use of the reusabl e jar. The criter

ion of com

mercial use to con

vey foodstuf fs, etc., is addressed by

the other criteria (see above and be low). There is no eviden

ce that the contai

ner is ca pable of being u sed in the hot packing process. The phy sical form of the articles (see above) indicates that rather than using the c ontainers to pack and convey goods to a consumer who discards them after their initial use, the c ontainers, and not t heir con tents, ar e emphas ized to customers. On the b asis of the se crite ria, we c onclude t

hat these articles are not principally used for the convey

ance or packing of goods. Id

.
7 See Automatic Plastic Molding , 26 CIT at __, Slip Op. 02-120 at 9 n.5 instance, the Government insists that “[n]o evidence that the jar was capable of being used in the hot packing process was submitted to Customs by APM.” Def.’s Mem. at 7 (emphasis removed) (citing APM’s Protest; HQRL 962378). Furthe r, the Government maintains “[n]o evidence regarding the principal use of the jar was provided by APM to Customs for its use in determining the proper classification of the merchandise.” Id. (emphasis removed). Thus, Customs reached its position at the administrative level with only pictorial represe ntations of the subject merchandise and a limited factual record. A s a result, Customs was in the position of applying the criteria found in T.D. 96-7, Kraft , and Carborundum , 7 without the benefit of the evidence the court would later have before it. Nothing ha s been presented to the court that would indicate that Customs’s a

pplication of the la

w to these

limited fa

cts was not “justifie d to a deg ree tha t would satisfy a re asonable person.” Pierce , 487 U.S. at 565. Indeed, an examination of the evidenc eC OURT N O
. 99-00365 P AGE 12

that was b efore Cu stoms shows that it wa s suscept

ible to dif ferent interpre tations by reasona ble people. As such, Customs was clearly reasonable in maintaining its position at the administrative level and that it did not “press[] a tenuous position without factual or legal foundation.” Gavette , 808 F.2d a

t 1467. Usi

ng this st andard, the cour

t finds tha t the Gove

rnment ha s satisfie d its burden of proof that Customs’s position at the administrative level was substantially justified.

2. Customs’s

position at t

rial was cle

arly reas onable In a ddition to it s arguments conc erning Customs’s a

ctions at t he admini strative

level, APM insists that the Gov ernment ’s litiga tion position was not s

ubstantia lly j ustified. APM claims that “the Government presented no evidence that seriously refute d anyof the facts and supporting evidence made known to it by APM during the discovery process.” APM’s Mem. at 19 (emphasis in original). Furthermore, APM restate s this court’s finding that “[a]t trial, the Government made only

a limited attempt to justify its classification of the Mercha ndise as ‘Glassware of a kind used for table, kitchen . . . indoor de coration, or similar purposes’ under subheading 7013.39.20. Rather, the Government focuse d its efforts on refuting Plaintiff’s asserted classification.” Id. at 18 ( quot ing Automatic Plastic Molding , 26 CIT at __, Slip Op. 02- 120 at 11) (ellipsis in original).

The Government strongly contests APM’s claim that its litigation position was not substantially justified and insists that its position at trial “was founded on a wide varie ty of leg al and factual bases.” Def.’s Mem. at 10. The Government maintains that its litigation position was “based upon a consideration of the class or kind of goods to which the imported articlesC OURT N O
. 99-00365 P AGE 13

belong, the phy sical characteristics of these goods, a nd the subsequent uses to which the imported jars could be put.” Id. at 11 n.3.

With respect to the Government’s litigation position, APM’s claim fails under all of the cited authority. Despite A PM having prevailed at trial, and its arguments to the contra ry notwithsta

nding, the Gover

nment was

clearly reasona ble in ass erting

its position

with resp ect to the crite ria foun d in T.D. 96 -7. A re ading o f the opin ion reve als that the court was requi red to weigh the evidence and make de terminations about which reasonable persons might disag ree. APM corr

ectly states tha t the cour t relied on the factors foun d in T.D. 96 -7 for a

portion of

its opinion and that in analyzing these f actors it found that five of the seven factors supported APM’s cla ssificat

ion. For its part, t hough, t he Gover nment marshaled e

vidence to support

its position. First, the Government presented witness testimony at trial. The Government’s expert witness, Dr. Sher Paul Singh, a professor of packag ing design and materials, testified that the subject me

rchandi se “[did] not

have the similariti es of the

of the ty pes of ja rs that ar e used to commercially c onvey foodstuffs.” Trial Tr. at 595:7–9. In addition, the National I mport Specialist Associate and the Import Specialist of the Port of San Francisco testified that they examined ja

rs similar to the subj ect merc

handise t hat could be purchased fr

om Pier 1, T arget , JCPenney, Le chter’s, and Cost Plus World Market and were sold empty as “storage jars.” See id. at 483:15–

490:4; id. at 517:12–527:20. While the court found Plaintiff’s position to be more convinci ng base d on the te stimony of other witnesse s, nothing

present ed by the Gove rnment in the way of te stimony would lead to the conclusion that it was “pre ssing a tenuous factual or legal position, albeit one not wholly without foundation.” Gavette , 808 F.2d at 1467. Indeed, theC OURT N O
. 99-00365 P AGE 14

witnesses testified with respect to matters about which reasonable pe ople might disagree. Second, a t trial the Government submitt

ed stora ge con tainers i nto evide nce—Tr ial Exhibits P and G—and noted their similarity to the subjec t merchandise in an effort to persuade the c ourt that the subject merchandise was properly classified under heading 7013 of the HTSUS. Although the court distinguished the subject merchandise fr om Trial Exhibits P and G based on their respective shapes and the quality of the glass used, see Automatic Plastic Molding , 26 CIT at __, Slip O

p. 02-120 at 6–7, the

Government neve

rtheless present ed a cle arly

reasona ble—if ultimately

unconvincing—b asis for C ustoms’s po sition. The

Government also presente d some evidence that the subject merchandise: (1) did not come with a c losure that would “provide the seal integrity

level required in convey

ing jars for food packaging,” Trial Tr. at 596:5–6; (2) was “significantly

of a higher glass distribution and wall thickness than ty pical jars used for conveying

goods in the same volume,” id. at 595:21–24; (3) was fifteen to twenty percent heavier than jars commonly used for packaging, id. at 182:24– 183:4; and (4) had handles w

hich wer e “in a shape and in a region which consumer s normally do not use to pick [up] these ty pe of products,” id. at 600:3–5 . Althoug h APM demon strated t

o the cour t that the s

ubject me rchandi se shared many

of the characteristics of merchandise properly c lassified under heading 7010 of the HTSUS, there was nothing about the Government’s evidenc e with respect to these matters that would suggest its position was not substantially justified, or that it was pr essing a tenuous position. Gavette , 808 F.2d at 1467. In addition, the court made findings relating to the expectations of the ultimate purchaser based on secondary evidence rather than on direct evidence. Automatic Plastic Molding , 26 CIT at __, Slip Op. 02-120 at 13–14. Finally, the court’s own obser

vation of the merc handise weighed

heavily it its deci sion. For

instance , inC OURT N O
. 99-00365 P AGE 15

reaching its decision the court was require d to make findings with respect to what constituted a “large opening” a

nd a “short neck.” Id. , 26 CI T at __, Slip Op. 02-12 0 at 13. Whil e APM did present credibl e eviden

ce that s uccessf ully convince d the cour

t that Custo ms erred

in its classifi cation, i

t cannot b e said tha

t the Gove

rnment, on behalf

of Customs, did not mak e out a substantial case or that its insistence on its position was not clearly reasonable.

C ONCLUS ION As the Gov ernment ’s position in this act

ion was c learly

reasona ble with r espect b oth to the law and facts it relied on at both the administrative and trial levels, the cour t is persuaded that the Gove rnment wa s substant

ially justified in claimin

g that th e subject mercha

ndise wa s proper

ly classified as “Glassware of a kind used for table, kitchen, . . . indoor decoration or similar purposes” under HTSUS subheading 7013.39.20. Theref ore, APM’s Application for attorney ’s fees and expenses is denied.

____________________________ Richa rd K. E aton, Judge Decided: July 28, 2003

New York, New York