Slip Op. 13-36

UNITED STATES COURT OF INTERNATIONAL TRADE

LINK SNACKS, INC., Plaintiff,

v. UNITED STATES,

Defendant. Before: Leo M. Gordon, Judge

Consol. Court No. 09-00304

OPINION [Summary judgment denied for Plaintiff; summary judgment granted for Defendant.] Dated: March 20, 2013

Lizbeth R. Levinson and R onald M. Wisla, Kutak Ro ck LLP, of Washington, DC, for Plaintiff Link Snacks, Inc. Alexander J. Vanderweide, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, NY, for Defendant United States. With him on the brief were Stuart F. Delery , Principal Deputy Assist ant Attorney General, Barbara S. Williams, Attorney-in-Charge. Of Counsel was Sheryl French, Office of Assistant Chief Counsel, International Trade Litigation, U.S. Customs and Border Protection, of New York, NY.

Gordon, Judge: This case is before the court on cross-motions for summary judgment. See Pl.’s Mo t. for Summ. J., ECF No. 41 (“Pl.’s Br.”); Def.’s Cross-Mot. for Summ. J. and Resp. to Pl.’s Mot. for Summ. J. , ECF No. 46. Plainti ff Link Snacks, Inc. (“Link Snacks”), challenges the decision of Defendant U.S. Customs and Border Protection ("Customs") denying Li nk Snacks’ protests of Cust oms’ classification of the imported beef jerky within the Harmonized Tariff Schedule of the United States ("HTSUS"). Customs classified the me rchandise as "[c]ured or pickled" underConsol. Court No 09-00304 Page 2

subheading 1602.50.09 of the HTSUS, which carries a 4.5% duty rate. Plaintiff claims that the merchandise is properly classified as "[o]ther" under subheading 1602.50.2040 of the HTSUS, which carries a 1.4% duty rate. The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (2006). Fo r the reasons set forth below, Defendant’s motion for summary judgment is granted, a nd Plaintiff’s motion is denied. I. Undisputed Facts The following facts are not in dispute. See Joint Statement of Undisputed Facts, ECF No. 60 (“Undisputed Facts”). Jacks Links New Zealand, a rela ted company in New Zealand, manufactured the subj ect beef jerky products that we re imported at the Port of Long Beach in Court No. 09-00304. Ferreira In ternational, LTDA, a related company in Brazil, manufactured the subjec t beef jerky products that were imported at the Ports of JFK and Long Beach in Court No. 09-00464. The subject beef jerky consists of sliced, cooked, cured, and dried meat seasoned with salt and other spices and flavors. The subject beef jerky products do not contain cereal or vegetables. To process and manufacture th e beef jerky at issue, the following steps are taken. First, boneless beef is purchased from a Braz ilian USDA approved meat supplier (takes 1 minute to 2 days, depending on negotiations). Next, the boneless beef is inspected by Quality Control for wholes omeness upon receiving it (30 minutes per delivered load). The boneless beef is then sliced (4 to 5 hours per 20,000 pounds). It is then placed into a sanitary stainless steel vacuum tumbler for 20 minutes. Seasoning, sodium nitrite, and water are then added to the vacuum tumbler (5 minutes). The meat and the ingredients are then tumbled under vacuum fo r 8 to 15 minutes. The meat is thenConsol. Court No 09-00304 Page 3

allowed to cure for 24 to 48 hours. Subsequently, the m eat is placed on sanitary stainless steel hanging rods (4 to 5 hour s per 20,000 pounds). The meat, still containing the rods, is then placed on stainless steel smok ehouse trucks (4 to 5 hours per 20,000 pounds). The smokehouse trucks are then placed in sanitary stainless steel smokehouses (20 minutes to load 1 house). The product is then cooked with smoke cycle and smoked until all the USDA Appendix A requirements ar e met (3 to 6 hours). The product is then removed from the smokehous e and cooled (30 to 60 minutes). The cooled product is removed fr om the stainless steel rods and placed into USDA approved sanitary containers (6 hours per 10,000lbs). The cooked jerky is then placed into a protective liner bag (6 hours per 10,000lbs). The protective liner bag is pl aced into a barrier plastic bag (6 hours per 10,000lbs). Oxygen scavengers ar e then placed into the barrier bag, most of the air is removed, and the bag is hermetically sealed (6 hours per 10,000 lbs). 1 The hermetically sealed bag is placed into a ca rdboard shipping container with all the pertinent Brazilian and USDA required labels (6 hours per 10,000 lbs). The boxed jerky is then placed into 20 or 40 foot shipping containers (30 minutes to 1 hour). Thereafter, the shipping containers go to the export por t (3 to 5 hour drive depending on traffic). The imported beef jerky is shelf-stable for 18-20 months. The parties agree that the subject beef jerky is classified under subheading 1602.50, HTSUS, as “Other prepared or preserved meat , meat offal or blood: Of bovine animals.”

1 For purposes of this litigation only, t he Government does not contest whether the imported merchandise is in airtight containers.Consol. Court No 09-00304 Page 4

II. Standard of Review The court reviews Customs' protest decisions de novo

. 28 U.S.C. § 2640(a)(1). USCIT Rule 56 permits summary judgment when “there is no genuine issue as to any

material fact . . . .” USCIT R. 56(c); see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247 (1986). In considerin g whether material facts ar e in dispute, the evidence must be considered in a light most favo rable to the non-moving party, drawing all reasonable inferences in its favor, as we ll as all doubts over factual issues. See

Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157 (1970); Anderson , 477 U.S. at 261 n.2.

A classification decision involves two st eps. The first step addresses the proper meaning of the relevant tariff provisions, which is a question of law. See Faus Group,

Inc. v. United States , 581 F.3d 1369, 1371-72 (Fed. Cir. 2009) (citing Orlando Food Corp. v. United States , 140 F.3d 1437, 1439 (Fed. Cir. 1998)). The second step involves determining whether the merchandise at issue falls within a particular tariff provision as construed, which, when di sputed, is a question of fact. Id. When there is no factual dispute regarding the merchandise, the resolution of the classification issue turns on the first step, determining the proper meaning and scope of the relevant tariff provisions. See Carl Zeiss, Inc. v. United States , 195 F.3d 1375, 1378 (Fed. Cir. 1999); Bausch & Lom b, Inc. v. United States , 148 F.3d 1363, 1365-66 (Fed. Cir. 1998). This is such a case, and summary judgment is appropriat e. See Bausch &

Lomb , 148 F.3d at 1365-66.

While the court accords deference to Cust oms classification rulings relative to their “power to persuade,” United States v. Mead Corp ., 533 U.S. 218, 235 (2001)Consol. Court No 09-00304 Page 5

(citing Skidmore v. Swift & Co. , 323 U.S. 134, 140 (1944) ), the court has “an independent responsibility to dec ide the legal issue of the proper meaning and scope of

HTSUS terms.” Warner-Lam bert Co. v. United States , 407 F.3d 1207, 1209 (Fed. Cir. 2005) (citing Rocknel Fastener , Inc. v. United States , 267 F.3d 1354, 1358 (Fed. Cir. 2001)).

III. Discussion Classification disputes under the HTSU S are resolved by reference to the General Rules of Interpretation (“GRIs”) and the Additional U.S. Rules of Interpretation. See Carl Zeiss, 195 F.3d at 1379. The GR Is are applied in numer ical order. Id. Interpretation of the HTSUS begins with the language of the tariff headings, subheadings, their section and chapter notes, and may also be aided by the Explanatory Notes published by the World Cu stoms Organization. Id. “GRI 1 is paramount . . . The HTSUS is designed so that most classification questions can be answered by GRI 1 . . . .” Telebrands Co rp. v. United States, 36 CIT ___, ___, 865 F. Supp. 2d 1277, 1280 (2012). Pursuant to GRI 1, merchandise that is described “in whole by a single classification heading or subheading” is cla ssifiable under that heading. CamelBak

Prods. LLC v. United States , 649 F. 3d 1361, 1364 (Fed. Cir. 2011). GRI 1 is applied as a substantive rule of interpretation when an imported article is de scribed in whole by a single classification heading or subheading. If t hat single classification applies, the succeeding GRIs are inoperative. Mita C opystar Am. v. United States, 160 F.3d 710, 712 (Fed. Cir. 1998). Here, GRI 1 resolves the classification of Link Snacks’ beef jerky,Consol. Court No 09-00304 Page 6

and the court, does not reach Link Sna cks’ other arguments under subsequent GRIs. See Pl’s Br. at 7-10; Pl.’s Supp. Legal Mem. at 6, ECF No. 66 (“P l.’s Supp. Br.”).

The court construes tariff terms a ccording to their common and commercial meanings, and may rely on both its own underst anding of the term as well as upon lexicographic and scientific aut horities. See Len-Ron Mfg. Co. v. United States, 334 F.3d 1304, 1309 (Fed. Cir. 2003). The court may also refer to the Harmonized Description and Coding System's Expl anatory Notes ("Explanatory Notes") "accompanying a tariff subheading, which--alt hough not controlling--provide interpretive guidance." E.T. Horn Co. v. United States, 367 F.3d 1326, 1329 (Fed. Cir. 2004) (citing Len-Ron, 334 F.3d at 1309). The question before the court is whether Link Snacks’ beef jerky is properly

classified under HTSUS 1602.50.09 as “cur ed” prepared or preserved beef, or under

HTSUS 1602.50.2040 as “ot her” prepared or preserved beef. The common and commercial meaning of “cured” is the addition of salt and nitrate/nitr ite to meat. See Andrew Milkowski Expert Report, Ex. 3, 8, ECF No. 41 (“. . . the modern definition of curing involves the addition of ni trite. . . . “Two main ingr edients must be used to cure meat: salt and nitrate.”) (citi ng Hedrick, H. B., Aberle, E. D. Forreset, J.C. Judge, M.D. Merkel, R.A. Principles of Meat Science. Dubuque: Kendall/Hunt Publishing Company, 1994, p.134.); Wedliny Domowe, Ex. H, ECF No. 46 (“Curing is adding salt and nitrates/nitrites to meat. If you use only salt it is called salting. If you use salt and water it is called brining. The mom ent you add nitrates and salt to meat it is considered curing.”); Dep. of Donald Thomas, Ex. G, 33, ECF No. 46 (“[A] classical meat scienceConsol. Court No 09-00304 Page 7

definition of curing is [the 24 to 48 hour period that Link Snacks’ beef was in a sodium nitrite] solution.”). Link Snacks also conc edes that its “beef jerky undergoes a curing process in its initial stages of production.” Pl.’s Br. at 8; see al so Undisputed Facts, para. 3, 7 (“The subject beef jerky consists of . . . cured . . . meat . . . The meat is then allowed to cure for 24 to 48 hours.”). This is enough for Defendant, which makes the simple, straightforward argument that Link Snacks’ beef jerky mu st therefore be classified as “cured.” The court, for its part, acknowledges the attractive simplicit y to this classification of the subject merchandise, one that is difficult to overcome . Link Snacks, nevertheless, offers a creditable attempt by focusing on the co mmon and commercial meaning of “beef jerky,” which it contends is much more than simply “cured” beef. Link Snacks argues that the further process of dehydration changes the cured beef to a completely differ ent product, beef jer ky, and that it s hould therefore be

classified as “other” under HTSUS 1602.50.2040. It contends that Customs “seeks to define beef jerky entirely by the fact that it is dipped in a curing solution, and to ignore entirely the further processing that gives beef jer ky its new identity as a finished article.” Pl.’s Supp. Br. at 11. Link Snacks explains that beef jerky is dr ied beef that varies greatly with “common cured processed meats such as ham, bacon and hot dogs . . . .” Id. at 9-11 (“[T]he defining characteristic of beef jerky is its dried state.”). Plaintiff explains that unlike ham, bacon, and hot dogs, which are highly perishable, beef jerky is not. “Without refr igeration, these processed meats [ham, bacon and hot dogs] would only last 1 to 2 days before spoiling and developingConsol. Court No 09-00304 Page 8

contaminants that could cause serious illness.” Id. at 9. In contrast, beef jerky can last

for months at room te mperature and 12 months or longer if vacuum packaged. Id. at 10. Further, beef jerky has a lower moisture to pr otein ratio (MPR) than the other identified cured meats. Specifically, beef jerky has a 0.75 to 1 MPR, while cooked ham has a 3.75 to 1 MPR, and a typical hot dog or bologna product has a 5 to 1 MPR. Id. at 9-10. Link Snacks explains that because water is added to those products to improve palatability, it is common to visibly see vo lumes of water when opening the packaging of these products, while water is indiscernible to the naked eye in beef jerky. Id. at 10. Next, Link Snacks relies on the U.S. Department of Ag riculture’s (“USDA”) Food Standards and Labeling Policy Book’s description of beef jerky to argue that it is not “cured” meat. The USDA provides the followi ng under “Jerky : [a]ll Jerky products must

have a MPR of 0.75:1 or less . . . Products ma y be cured or uncured, dried, and may be smoked or unsmoked, air or oven dried.” Pl.’ s Supp. Br. at 12 (citi ng Pl.’s Br. Ex. 5). Therefore, Link Snacks argues that beef jerky c annot be “cured” beef because curing is optional for beef jerky. Pl.’s Supp. Br. at 12. Link Sna cks’ beef industry expert, Dr. Andrew Milkowski, also explai ns that there are uncured co mmercial beef jerky products sold in the United States, which he has per sonally purchased and examined. Id. His review of the uncured beef jerky reveals that it has the “same range of salt, moisture and water activity as the cured Jack Link ’s[sic] representative product.” Id.

Dr. Milkowski states that the “water activity of all the samples satisfies the federal requirements for a product that is labeled as a shelf stable product such as beef jerky.” Id. Last, Link Snacks distinguishes beef jer ky from cured meat by relying on the USDAConsol. Court No 09-00304 Page 9

regulation, 9 C.F.R. § 94.4, which prohibits the importa tion of cured or pickled products from certain countries because of rinderpest or foot and mouth di sease, yet allows dehydrated products because they are preserved by a different process than cured beef. Specifically, the regulation permits the importation of meats that have been “thoroughly cured and fully dried. . . .” 9 C.F.R. § 94.4(a)(3)(i). Link Snacks contends that the regulation “acknowledges by its very term s that “cured” and dried” are different processes and the latter is not encompassed by t he former . . . .” Pl .’s Supp. Br. at 13. Therefore, Link Snacks argues th at beef jerky, whose intrinsic quality is its dried state, is a separate, distinct product from “cured” beef. These are strong arguments that beef je rky is a product defined more by its dehydration than its curing. With that said, however, the court is not persuaded they are sufficient to overcome the otherwise simple and straightforward HTSUS classification for “cured” beef that depends no t on dehydration processes or specific measures like MPR, but instead on the more general charac teristic of whether beef is “cured.” Plaintiff’s beef jerky is cured. The HTSUS classification of “c ured” beef encompasses all sorts of beef products, and does not dr aw distinctions based upon MPR or dehydration processes. The cour t is reluctant to impose su ch distinctions not found in the HTSUS. Here, the “[c] ured” subheading, 1602.50.09, is an eo nomine provision that “include[s] all forms of the named article,” even improved forms.” Carl Zeiss, 195 F.3d at 1379. Therefore, although Plaintiff’s beef jerky ma y specifically be defined by a preservative process of dehydration yielding a product with a relatively low MPR, that beef jerky, nevertheless, remains “cur ed” within the meaning of the HTSUS.Consol. Court No 09-00304 Page 10

Accordingly, the court agrees with Customs that the correct classifi cation of Plaintiff’s beef jerky is under HTSUS 1602.50.09, “[c]ured” beef.

III. Conclusion

The court will therefore ent er judgment denying Plaintiff’s motion for summary judgment, and granting De fendant’s motion for summary judgment.

/s/ Leo M. Gordon Judge Leo M. Gordon

Dated: March 20, 2013 New York, New York