Court Opinion

ID: 4189183
Source: CourtListenerOpinion
Date Created: 2017-07-25 15:03:46.678817+00
Date Added: 2024-06-11T07:46:55.152753
License: Public Domain

Slip Op. 17-92

               UNITED STATES COURT OF INTERNATIONAL TRADE

MONDELEZ GLOBAL LLC (SUCCESSOR
TO CADBURY ADAMS USA, LLC),

                      Plaintiff,
                                                   Before: Jane A. Restani, Judge
              v.
                                                   Court No. 12-00076
UNITED STATES,

                      Defendant.

                                          OPINION

[Parties’ cross-motions for summary judgment in customs classification matter are denied.]

                                                                      Dated: July 25, 2017

       Craig A. Lewis, Chandri Navarro, Michael Jacobson, and A. Elizabeth Korchin, Hogan
Lovells US LLP, of Washington, DC, and A. Elizabeth Korchin, Hogan Lovells US LLP, of
New York, NY, for plaintiff.
        Jamie L. Shookman, Trial Attorney, Commercial Litigation Branch, U.S. Department of
Justice, Civil Division, of New York, NY, for defendant. With her on the brief were Chad
Readler, Acting Assistant Attorney General, Amy M. Rubin, Assistant Director, and Justin R.
Miller, Senior Trial Counsel. Of counsel on the brief was Michael W. Heydrich, Office of
Assistant Chief Counsel, U.S. Customs and Border Protection.
       Restani, Judge: This matter is before the court on cross-motions for summary judgment

made by plaintiff Mondelez Global LLC (Successor to Cadbury Adams USA, LLC)

(“Mondelez”), an importer of gum base used in manufacturing chewing gum, and defendant

United States (“the government”). See Def.’s Mem. in Supp. of the Mot. for Partial Summ. J. 1,

ECF No. 63 (“Gov’t Br.”); Mem. of Law in Supp. of Pl.’s Opp’n to Def.’s Partial Mot. for

Summ. J. & in Supp. of Pl.’s Cross Mot. for Summ. J. 1, ECF No. 69 (“Mondelez Br.”). The
Court No. 12-00076                                                                          Page 2

government argues that United States Customs and Border Protection (“Customs”) properly

classified the subject merchandise as a “food preparation” under subheading 2106.90.99 of the

Harmonized Tariff Schedule of the United States1 (“HTSUS”),2 Gov’t Br. at 5–15; Def.’s Mem.

in Opp’n to Pl.’s Mot. for Summ. J. & in Reply to Pl.’s Resp. to Def.’s Partial Mot. for Summ. J.

6–15, 17–21, ECF No. 78 (“Gov’t Resp.”), and that gum base is not classifiable under heading

3824, HTSUS, Gov’t Br. at 16; Gov’t Resp. at 15–17. Mondelez, however, asserts that the gum

base is properly classified under subheading 3824.90.92, HTSUS, as a “chemical product[] and

preparation[] of the chemical or allied industries,”3 Mondelez Br. at 1–2, 24–27; Pl.’s Reply in

Further Supp. of its Cross Mot. for Summ. J. 11–13, ECF No. 83 (“Mondelez Resp.”), and not

1
 All citations to the Harmonized Tariff Schedule of the United States (“HTSUS”) refer to the
HTSUS at the time of importation, i.e. 2010.
2
    The relevant portion of Chapter 21 of the HTSUS reads:

         2106 Food preparations not elsewhere specified or included: . . .
         2106.90 Other: . . .
                    Other: . . .
                       Other: . . .
                            Other: . . .
                               Other: . . .
         2106.99 Other
3
    The relevant portion of Chapter 38 of the HTSUS reads:

         3824 Prepared binders for foundry moulds or cores; chemical products and
         preparations of the chemical or allied industries (including those consisting of
         mixtures of natural products), not elsewhere specified or included: . . .
         3824.90 Other: . . .
                     Other: . . .
         3824.90.92 Other
Court No. 12-00076                                                                            Page 3

under heading 2106, HTSUS, Mondelez Br. at 9–24; Mondelez Resp. at 4–11.4 For the reasons

stated below, the court denies both parties’ motions for summary judgment.

                                                               BACKGROUND

              The following facts are undisputed. Gum base is an ingredient of finished chewing gum.

Def.’s Statement of Undisputed Material Facts ¶ 6, ECF No. 63-1 (“Def.’s SUMF”); Pl.’s Resp.

to Def.’s Statement of Undisputed Material Facts ¶ 6, ECF No. 69-1 (“Pl.’s Resp. to SUMF”). It

is composed of “fillers, plasticizers, softeners, emulsifiers, antioxidants, and other chemicals.”

Pl.’s Statement of Undisputed Material Facts ¶ 7, ECF No. 69-2 (“Pl.’s SUMF”); Def.’s Resp. to

Pl.’s Statement of Undisputed Material Facts ¶ 7, ECF No. 78-1 (“Def.’s Resp. to SUMF”).

Gum base lacks any coloring, flavoring, or sweetener. Pl.’s SUMF ¶ 8; Def.’s Resp. to SUMF

¶ 8. Some of the subject merchandise’s ingredients—hydrogenated oil, calcium carbonate,

triacetin, and lecithin—have nutritive value when presented to the body in digestible form. Am.

Compl. ¶ 24, ECF No. 58; Def.’s SUMF ¶¶ 9–10; Pl.’s Resp. to SUMF ¶¶ 9–10.5 Gum base is

not intended to be ingested, eaten, or swallowed. Pl.’s SUMF ¶ 12; Def.’s Resp. to SUMF ¶ 12.

After importation, Mondelez adds flavor, sweetener, and color to the gum base to manufacture

chewing gum. Def.’s SUMF ¶ 7; Pl.’s Resp. to SUMF ¶ 7.

              In July of 2008, Customs issued ruling letter NYRL N031237 (July 10, 2008), available

at 2008 WL 2944756 in response to a request by Mondelez’s predecessor, Cadbury Adams USA,

LLC (“Cadbury”) as to the classification of gum base. In this ruling, Customs classified the

4
 In addition, if gum base is classifiable under both headings, the government contends that
heading 2106, HTSUS, prevails under HTSUS General Rule of Interpretation (“GRI”) 3(a),
Gov’t Resp. at 21–23, whereas Mondelez posits that heading 3824, HTSUS, controls under GRI
3(c), Mondelez Br. at 27–29.

5
  There are three forms of gum base at issue in this case, Def.’s SUMF ¶ 1; Pl.’s Resp. to SUMF
¶ 1, of which only one contains lecithin, Def.’s SUMF ¶¶ 2–4; Pl.’s Resp. to SUMF ¶¶ 2–4.
Court No. 12-00076                                                                                 Page 4

subject merchandise without discussion as a “food preparation” under subheading 2106.90.99.

Id. at *1. Subsequently, in January and February of 2010, Cadbury made six entries of gum base

from Ireland through the Port of Chicago, Illinois. Am. Compl. ¶ 14. Cadbury timely protested

Customs’ classification of these entries as food preparations, which protests Customs denied. Id.

¶¶ 34–35. Cadbury then filed this action challenging Customs’ classification of the gum base.6

Summons 1, ECF No. 1. Both parties now move for summary judgment pursuant to United

States Court of International Trade (“USCIT”) Rule 56. Gov’t Br. at 1; Mondelez Br. at 1.

                                                  JURISDICTION AND STANDARD OF REVIEW

              The court has jurisdiction pursuant to 28 U.S.C. § 1581(a). “The court shall grant

summary judgment if the movant shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” USCIT Rule 56(a). In tariff

classification cases, “summary judgment is appropriate when there is no genuine dispute as to

the underlying factual issue of exactly what the merchandise is.” Bausch & Lomb, Inc. v. United

States, 148 F.3d 1363, 1365 (Fed. Cir. 1998). The court reviews de novo Customs’ classification

decision. See 28 U.S.C. § 2640(a)(1); Telebrands Corp. v. United States, 865 F. Supp. 2d 1277,

1279–80 (CIT 2012).

                                                               DISCUSSION

                 Tariff classification is governed by the General Rules of Interpretation (“GRIs”), which

must be applied in numerical order. Wilton Indus., Inc. v. United States, 741 F.3d 1263, 1266

(Fed. Cir. 2013). GRI 1 states that “classification shall be determined according to the terms of

6
  Cadbury had previously filed a related action, Mondelez Global LLC (Successor to Cadbury
Adams USA, LLC) v. United States, Court No. 11-00393. Summons 1–2, Court No. 11-00393
(CIT Sept. 27, 2011), ECF No. 1. The present case, Court No. 12-00076, was designated as a
test case, and Court No. 11-00393 has been stayed pending disposition of the present case.
Order, Jan. 1, 2016, ECF No. 45.
Court No. 12-00076                                                                           Page 5

the headings and any relative section or chapter notes.” When, as here, a tariff term “is not

defined in either the HTSUS or its legislative history, the term’s correct meaning is its common

meaning. A court may rely upon its own understanding of terms used, and may consult standard

lexicographic and scientific authorities, to determine the common meaning of a tariff term.”

Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994) (internal citation

omitted). A court should also refer to the Explanatory Notes (“ENs”)7 in classification cases,

which “provide persuasive guidance and ‘are generally indicative of the proper interpretation,’

though they do not constitute binding authority.” Schlumberger Tech. Corp. v. United States,

845 F.3d 1158, 1164 (Fed. Cir. 2017) (quoting Kahrs Int’l, Inc. v. United States, 713 F.3d 640,

645 (Fed. Cir. 2013).

I.            Heading 2106, HTSUS (Customs’ Claimed Classification)

              A.             Government’s Construction of “Food Preparation”

              The government contends that gum base is a “food preparation” under heading 2106

because chewing gum is a “food,” a “preparation” is a substance specially prepared for a

particular application, and gum base is used exclusively for manufacturing chewing gum, itself a

food. Gov’t Br. at 6–12; Gov’t Resp. at 10–15. Relying on Franklin v. United States, 289 F.3d
753, 760–61 (Fed. Cir. 2002), Mondelez responds that heading 2106 covers only products that

are themselves “consumed as food,” not those simply used in food, and that gum base is not

“consumed as food.” Mondelez Br. at 9–18. Mondelez also argues that the ENs for HS heading

21.06 weigh against the inclusion of gum base in that heading because gum base falls under a

7
 The ENs to the Harmonized Commodity Description and Coding System (“HS”), of which the
HTSUS is an embodiment, are published by the World Customs Organization. See Tyco Fire
Prods, Ltd. P’ship. v. United States, 841 F.3d 1353, 1356 (Fed. Cir. 2016); Chemtall, Inc. v.
United States, 179 F. Supp. 3d 1200, 1203 (CIT 2016).
Court No. 12-00076                                                                               Page 6

different heading, and gum base is neither “for human consumption” nor “valued for its

nutritional qualities.” Id. at 18–24.

              Products are not classifiable under heading 2106, HTSUS, merely because they are

specifically made for use in food. The government is correct that the word, “preparation,” in this

context means “a substance specially prepared, or made up for its appropriate use or application,

e.g. as food or medicine, or in the arts or sciences.” See Orlando Food Corp. v. United States,

140 F.3d 1437, 1441 (Fed. Cir. 1998) (quoting The Oxford English Dictionary 374 (2d ed.

1989)); Nestle Refrigerated Food Co. v. United States, 18 CIT 661, 673–74 (1994) (“The term

‘preparation’ has been defined as ‘something that is prepared: something made, equipped, or

compounded for a specific purpose . . . .’”) (quoting Preparation, WEBSTER’S THIRD NEW INT’L

DICTIONARY 1790 (unabridged 1993)); abrogated on unrelated grounds Orlando Food, 140 F.3d

at 1440.8 But, the government’s construction of the phrase, “food preparation,” runs counter to

its common meaning. The phrase “food preparation” is simply an attributive noun, “food,”

followed by another noun, “preparation.” Similarly to how the attributive noun “chicken” in the

phrase “chicken soup” describes what type of soup is meant, the word “food” simply specifies

what type of “preparation” is covered by heading 2106, HTSUS.

              The government’s arguments to the contrary are unpersuasive. First, the government

cites Orlando Food and Nestle as support for its construction of heading 2106, HTSUS, but these

cases analyzed materially different headings—ones that covered “preparations” for something,

rather than “preparations” of something. Gov’t Br. at 8–9; see Orlando Food, 140 F.3d at 1441

8
 The government does not explicitly state, but apparently contends, that a product is
“specifically prepared for use in food” only if it is “used exclusively” in food. Gov’t Resp. at
10–11.
Court No. 12-00076                                                                            Page 7

(analyzing a heading covering “sauces and preparations therefor”); Nestle, 18 CIT at 673–74

(interpreting a heading covering “[p]reparation for sauce”).9 Indeed, the difference between the

heading in those cases and heading 2106, HTSUS, highlights the failure of the government’s

argument. The HTSUS is rife with headings and subheadings that distinguish between

preparations for something, and preparations in and of themselves.10 If heading 2106, HTSUS,

were intended to cover “preparations for food,” the HTSUS could have said so. Cf. Whitfield v.

United States, 543 U.S. 209, 216 (2005) (reasoning that Congress’s inclusion of an express

overt-act requirement in twenty-two different conspiracy statutes meant that Congress did not

intend such requirement to be included in a statute lacking one). Second, the government relies

on past Customs rulings in which Customs “classified preparations employed in the processing

and manufacture of foods and beverages under heading 2106.” Gov’t Br. at 10 n.6. But, such

arguments fall short because no ruling cited by the government explicitly relied on the

9
  Arbor Foods, Inc. v. United States, 30 CIT 670, 677–78 (2006), cited by the government, does
not aid the inquiry here. In that case, “neither party contest[ed] that the [sugar and gelatin] blend
f[ell] within the definition of food preparation because it [was] used to make confections and
other gelatin-based desserts.” This indicates the parties believed the subject merchandise was
classified under heading 2106, HTSUS, solely because, in accordance with the government’s
interpretation, the subject merchandise was used in food. But, this single sentence noting the
parties’ understanding of the heading does little for the government’s argument, given that the
court in Arbor Foods did not have the occasion, as it does now, to consider the meaning of
heading 2106 in a contested setting.
10
  For instance, in the latter category are “[o]ther [pasta], including pasta packaged with sauce
preparations,” subheading 1902.11.40, HTSUS; “[c]hocolate and other food preparations
containing cocoa,” heading 1806, HTSUS; and “[p]re-shave, shaving or after shave
preparations,” heading 3307, HTSUS. Examples of the former category include “[s]oups and
broths and preparations therefor,” heading 2104, HTSUS; “[m]ixes and doughs for the
preparation of bakers’ wares of heading 1905,” subheading 1901.20, HTSUS; and “other animal
products used in the preparation of pharmaceutical products,” subheading 0510.00, HTSUS.
This distinction in language is further highlighted by heading 2104, HTSUS, which covers both
“[s]oups and broths and preparations therefor” and “homogenized composite food preparations.”
Court No. 12-00076                                                                                 Page 8

incorporation of the subject merchandise into food to classify the subject merchandise under

heading 2106, HTSUS. See NYRL N196776 (Jan. 19, 2012), available at 2012 WL 421493;

NYRL N186795 (Oct. 28, 2011), available at 2011 WL 5829228; NYRL N171670 (July 5,

2011), available at 2011 WL 3473014; HQ W967896 (Feb. 5, 2008), available at 2008 WL
2610983; HQ 965805 (Oct. 7, 2002), available at 2002 WL 32097162. And indeed, each product

at issue in these rulings appears to be a “food,” which term is discussed below, in its own right.

See, e.g., NYRL N171670 (classifying “Orange Jelly Balls” under heading 2106, HTSUS).11

Third, the ENs to HS heading 21.06 do not support the government’s contention that a product is

a “food preparation” simply because it is specifically manufactured for use in food.12 Thus, a

11
  In its opposition to the government’s construction of “food preparation,” Mondelez cites
several Customs rulings in which Customs classified a product ultimately used in food under a
heading other than 2106, HTSUS. Mondelez Br. at 12–14; see NYRL N063515 (July 29, 2009),
available at 2009 WL 2488977; NYRL N061200 (May 29, 2009), available at 2009 WL
1915895; NYRL G82028 (Jan. 18, 2001), available at 2001 WL 359794. These rulings are of
limited value, however, given that they include no discussion as to why the products at issue
were not classified under heading 2106, HTSUS. The government merely contends that a
product used in food can be classified under heading 2106, HTSUS, not that it always must be
classified there.
12
     The Explanatory Notes to HS heading 21.06 provide that the heading covers:

              (A) Preparations for use, either directly or after processing (such as cooking,
              dissolving or boiling in water, milk, etc.), for human consumption.
              (B) Preparations consisting wholly or partly of foodstuffs, used in the making of
              beverages or food preparations for human consumption. The heading includes
              preparations consisting of mixtures of chemicals (organic acids, calcium salts,
              etc.) with foodstuffs (flour, sugar, milk powder, etc.), for incorporation in food
              preparations either as ingredients or to improve some of their characteristics
              (appearance, keeping qualities, etc.) (see the General Explanatory Note to Chapter
              38).

EN Ch. 21 at IV-2106-1 (2007). All citations to the ENs are to the 2007 version, the most
recently promulgated edition at the time of importation.
        As the government notes, paragraph (A) brings under heading 2106, HTSUS, “substances
that are [] themselves ‘for human consumption.’” Gov’t Resp. at 13 (emphasis added).
                                                                                  (continued . . .)
Court No. 12-00076                                                                                                                                                               Page 9

product is not classifiable under heading 2106, HTSUS, merely because it is specially prepared

for use in food, instead the preparation must itself be food. See also Drygel, Inc. v. United

States, 31 CIT 1319, 1328, 507 F. Supp. 2d 1371, 1380 (2007), rev’d on other grounds, 541 F.3d
1129 (Fed. Cir. 2008) (limiting “food preparations” under heading 2106, HTSUS, to “substances

prepared for human consumption.”). Accordingly, the government’s motion for summary

judgment on its construction of heading 2106, HTSUS, is denied.

              B.             Common Meaning of “Food Preparation”

                             1.             Construction

              Having concluded that a product may be classified under heading 2106, HTSUS, only if

it is a “preparation” that is “food,” the court turns to the question of the common meaning of

“food” under heading 2106, HTSUS.13 See GRI 1. The government never directly defines

“food,” but appears to hold to the following definition— a “food” need not be “edible,” a term

which the government describes as “suitable for human consumption,” see Gov’t Resp. at 14,

need not be swallowed or ingested, see Gov’t Br. at 13–14, and need not provide nutritive value

in digestible form or even have nutrition at all, although the government states that if a product

does have nutritive value then it is a “food,” see id. at 11–12 n.8; Gov’t Resp. at 7–8, 16. The

only requirement the government would impose is that “food” must be “for human

Although paragraph (B)’s language of “used in the making of . . . food preparations” seems to
lend some support to the government’s contention, paragraph (B) applies only to preparations
consisting “wholly or partly of foodstuffs.” EN Ch. 21 at IV-2106-1. Thus, paragraph (B) does
not capture a product solely because it is specially made for use in food. Furthermore, paragraph
(B) appears intended to note that a preparation “for human consumption,” that is, as discussed
below, a “food,” need not itself be composed entirely of classic “foodstuffs” such as flour and
sugar, but can also contain items commonly described as “chemicals.” (Although the court notes
that, of course, even food is composed of chemicals.)
13
   Other than disputing whether a “food preparation” covers something specially prepared for use
in food, the parties do not argue over whether gum base is a “preparation.”
Court No. 12-00076                                                                            Page 10

consumption,” which the government defines as “the act of consuming, as by use, decay, or

destruction.” See Gov’t Br. at 10 (defining “consumption”); Gov’t Resp. at 13–14. Mondelez

on the other hand seems to define “food” as a substance that is intended to be ingested. See

Mondelez Br. at 9–11, 20, 22; Mondelez Resp. at 6, 9. Mondelez reads the case law and ENs’

references to “edible,” “for human consumption,” and “consumed as food” to be merely myriad

ways of describing this same definition of food.14 See Mondelez Br. at 9–11, 20, 22; Mondelez

Resp. at 6, 9. Mondelez qualifies its definition by noting that some substances, for example, tea

and a bouquet garni, are “consumed as food” because they impart flavor or nutrients without

themselves necessarily being ingested. Mondelez Br. at 14 n.10. Of course, some compounds

from the tea and bouquet garni become part of the ingested food, and that is their chief purpose.

              The common meaning of “food” is that of a substance that is intended to be ingested. See

Franklin, 289 F.3d at 760–61 (concluding that a sand coral packet used to purify water was not a

“food preparation” under heading 2106, HTSUS, because no evidence suggested the product

itself was consumed as food); EN Ch. 21 at IV-2106-1 (stating that a “preparation” only qualifies

as a “food preparation” if it is “for human consumption”);15 Food, OXFORD ENGLISH

14
  Mondelez provides a table in its opening brief that seems to indicate a distinction between the
concepts of “food” and “edible.” See Mondelez Br. at 15–16. But, elsewhere, Mondelez makes
clear that it believes these ideas to be indistinguishable. See Mondelez Resp. at 9 (stating that
Franklin “found that merchandise must be edible to be ‘consumed as food’”); Mondelez Br. at 22
(“[T]he USCIT has equated ‘for human consumption’ with being ‘edible.’”).
15
   The phrase “consumed as a food” in Franklin, 289 F.3d at 761 and “for human consumption”
in the ENs to HS heading 21.06 refer to the substance being intended to be ingested, as opposed
to the government’s preferred definition of “consumption” as “the act of consuming, as by use,
decay, or destruction.” See Consume, AMERICAN HERITAGE DICTIONARY, available at
https://ahdictionary.com/word/search.html?q=consume&submit.x=0&submit.y=0 (last visited
July 20, 2017) (defining “consume” as “[t]o take in as food; eat or drink up”); Consume,
OXFORD ENGLISH DICTIONARY, available at
http://www.oed.com/view/Entry/39973?rskey=8Wko6X&result=1#eid (last visited July 20,
                                                                                   (continued . . .)
Court No. 12-00076                                                                                                                                                             Page 11

DICTIONARY, available at http://www.oed.com/view/Entry/72632?rskey=McgZSa&result=1#eid

(last visited July 20, 2017) (including in the definition of food a requirement “that people or

animals eat or drink” the substance). But, a preparation that itself is not ingested in the classic

sense is nonetheless a food if its purpose is to impart flavor or nutrition into a substance that is

ingested. See Franklin, 289 F.3d at 761 (noting that herbal infusions and teas are “food

preparation[s]” even though they are not “consumed as food” and holding that a coral sand

packet’s impartation of hardness and alkalinity into water did not qualify it as a “food

preparation”); EN Ch. 21 at IV-2106-3 (stating that “herbal infusions” and “herbal ‘teas’” are

food preparations).

              Although some dictionaries also require that a substance provide nutrition for it to be a

“food,” see, e.g. Food, OXFORD ENGLISH DICTIONARY (defining food as “[a]ny nutritious

substance that people or animals eat or drink in order to maintain life and growth”), substances

can be “food” for tariff classification purposes even if they do not provide nutrition. Neither

Franklin nor the ENs require a nutrition analysis, thus, neither party argues that providing

nutrition is a necessary condition for a product to be a food. Furthermore, as demonstrated by

this case, such analysis would increase the cost of resolving tariff disputes due to the laboratory

experiments required to determine if a product provides nutrition. Although the government

claims that being a vehicle for delivering nutrition is a sufficient condition for a substance to be a

“food,” the common meaning of “food” requires that the substance be ingested.

              The parties agree that gum base is not intended to be ingested. Pl.’s SUMF ¶ 12; Def.’s

Resp. to SUMF ¶ 12. Thus, gum base is not to be classified under heading 2106, HTSUS, unless

2017) (defining “consume” as “[t]o eat or drink; to ingest”). If a food were simply something
that is done away with by the human mouth, as the government seems to contend, clearly non-
food products such as toothpaste and cigarettes could qualify as “food preparations.”
Court No. 12-00076                                                                             Page 12

like tea leaves or bouquet garni it is intended to leach flavor or any nutritive compounds it

contains to be then ingested themselves. No party argues that gum base provides flavor. See

Pl.’s SUMF ¶¶ 8, 14; Def.’s Resp. to SUMF ¶¶ 8, 14. So, the question is, does gum base contain

and is it intended to provide nutritive compounds to be ingested?

               2.      Application to Gum Base

       The court declines to rule at this time on the purpose that gum base’s only nutritive

ingredients—vegetable oil, calcium carbonate, lecithin, and triacetin—serve. Mondelez

contends that the court should rule on its summary judgment motion now because the

government has shown nothing more than a “‘speculative hope’ of finding evidence to support

[its] claim.” Mondelez Resp. at 15 (quoting Brubaker Amusement Co., Inc. v. United States, 304
F.3d 1349, 1361 (Fed. Cir. 2002)). The government responds that it has not had “adequate time

for discovery.” Gov’t Resp. at 1 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986));

see also Def.’s Resp. to SUMF at 1 (stating “that the Government has not had an adequate

opportunity to develop [its position] in discovery . . . [T]he parties jointly moved to keep

discovery open pending the resolution of the Government’s [partial] motion [for summary

judgment]. Therefore, if the Court denies the Government’s motion, the Government would

request that the Court refrain from deciding Mondelez’s motion for summary judgment without

first allowing the Government to probe the facts asserted in [Mondelez’s statement of facts].”).

       The government moved for summary judgment prior to discovery’s close to avoid

expenses associated with proving that gum base’s ingredients are released from chewing gum

and subsequently digested. Def.’s Partial Mot. for Summ. J. 2–3, ECF No. 63 (“Gov’t Summ. J.

Mot.”). The government should not, in effect, be punished for attempting to save expenses.

Although Mondelez has submitted evidence supporting its contention that “[e]ach of the
Court No. 12-00076                                                                           Page 13

components of gum base are added for structural, tactile, cohesion, or preservation purposes” and

that “[n]one of the constituent ingredients of gum base are included for a nutritional purpose,”

and the government has not submitted evidence to the contrary, the government should have the

opportunity to do so. See Pl.’s SUMF at ¶¶ 9–10.16 Indeed, the government has “yet to

complete depositions or discuss the necessity for expert witnesses.” Gov’t Summ. J. Mot. at 2.

II.           Heading 3824, HTSUS (Plaintiff’s Claimed Classification)

              The government argues that gum base is excluded from heading 3824, HTSUS, because

it is included in heading 2106, HTSUS. Gov’t Br. at 16. The government also contends the ENs

exclude gum base from heading 3824, HTSUS, because gum base has nutritional value, and this

nutritive value is not “incidental” to its function because the nutritive value of gum base did not

occur “merely by chance.” Gov’t Resp. at 16–17. Mondelez counters that Note 1(b) to Chapter

38 of the HTSUS does not exclude gum base from heading 3824, HTSUS, because gum base has

no nutritive value, given that its nutritive ingredients, although nutritive when consumed

independently, are not digested when chewing gum is chewed. Mondelez Br. at 24 & n.17.

Mondelez also asserts that, even if gum base has nutritive value, the “mere presence” of nutritive

ingredients in gum base does not exclude it from heading 3824, HTSUS. Mondelez Br. at 23, 26

n.19; Mondelez Resp. at 13.

              Heading 3824, HTSUS, covers, inter alia, “chemical products and preparations of the

chemical or allied industries (including those consisting of mixtures of natural products), not

elsewhere specified or included.” Note 1(b) to Chapter 38 of the HTSUS provides that Chapter

16
  For instance, Mondelez cites an expert report that “[e]ach of the components of gum base is
added for structural, tactile, cohesion, or preservation purposes” and that “[n]one of the three
subject gum bases includes any ingredient that is added for nutritional purposes.” Decl. &
Expert Report of Glenn Visscher, Ph.D. ¶¶ 13, 19, ECF No. 69-4 (“Visscher Rep.”).
Court No. 12-00076                                                                               Page 14

38 does not cover “[m]ixtures of chemicals with foodstuffs or other substances with nutritive

value, of a kind used in the preparation of human foodstuffs (generally, heading 2106).” The

heading is further explained by the ENs. First, the General EN to HS Chapter 38 states that

              The mere presence of ‘foodstuffs or other substances with nutritive value’ in a
              mixture would not suffice to exclude the mixture from Chapter 38, by application
              of Note 1(b). Substances having a nutritive value that is merely incidental to their
              function as chemical products, e.g., as food additives or processing aids, are not
              regarded as ‘foodstuffs or substances with nutritive value’ for the purpose of this
              Note. The mixtures which are excluded by virtue of Note 1(b) are those which
              are of a kind used in the preparation of human foodstuffs and which are valued for
              their nutritional qualities.

EN from Chapter 38 at VI-38-3. Second, EN(B) to HS heading 38.24, says that

              the heading does not cover mixtures of chemicals with foodstuffs or other
              substances with nutritive value, of a kind used in the preparation of certain human
              foodstuffs either as ingredients or to improve some of their characteristics (e.g.,
              improvers for pastry, biscuits, cakes and other bakers’ wares), provided that such
              mixtures or substances are valued for their nutritional content itself.

EN Ch. 38 at VI-3824-2.

              Products that are mixtures of chemical products with “foodstuffs or other substances with

nutritive value” are excluded from heading 3824, HTSUS, only if the mixture is valued for its

nutritional content. Although Note 1(b) to Chapter 38 of the HTSUS is somewhat ambiguous,

the ENs, which “are generally indicative of the proper interpretation,” Schlumberger Tech.

Corp., 845 F.3d at 1164 (quoting Kahrs Int’l, Inc., 713 F.3d at 645), clarify the matter. See EN

Ch. 38 at VI-38-3 (“The mixtures which are excluded from Chapter 38 by virtue of Note 1(b) are

those which are of a kind used in the preparation of human foodstuffs and which are valued for

their nutritional qualities.”) (emphasis added).17 A necessary question to be resolved in deciding

17
  As long as a product prima facie falls under Chapter 38, which gum base does, and is not
valued for its nutritional qualities, a product is not excluded from heading 3824, HTSUS, merely
because it is used in a food preparation. See EN Ch. 38 at VI-3824-3, 5 (listing “[s]orbitol other
                                                                                    (continued . . .)
Court No. 12-00076                                                                                                                                                             Page 15

whether gum base is excluded from heading 3824, HTSUS, then, is whether gum base is valued

for its nutritive properties.18 This is essentially the same question to be resolved with respect to

heading 2106, HTSUS.

              Mondelez also makes a separate argument that it is entitled to summary judgment on the

classification of gum base under heading 3824, HTSUS, because gum base’s nutritive

ingredients are not released during the chewing process. Mondelez Resp. at 11–12. Mondelez

correctly notes that if a product has nutritive ingredients but does not release these ingredients,

then the mixture does not have “nutritive value” for purposes of Note 1(b) to Chapter 38 because

inherent in a product having nutrition is that it provides nutrition. Id. at 12; see Nutrition,

MERRIAM-WEBSTER DICTIONARY, https://www.merriam-

than that of heading 29.05,” “[s]alt for curing or salting,” and “[p]reparations used mainly for
clarifying wines and other fermented beverages” as examples of products classifiable under
heading 38.24.” Thus, even though gum base is used in a food, gum, this fact does not on its
own exclude gum base from heading 3824, HTSUS. See subheading 1704.10.00, HTSUS
(classifying “[c]hewing gum” under a heading for “[s]ugar confectionary”); subheading
2106.90.99, HTSUS (classifying “gums . . . containing synthetic sweetening agents (e.g.,
sorbitol) instead of sugar” under heading 2106, HTSUS).
18
   A possibly separate, but ultimately indistinguishable question, is whether gum base’s nutritive
properties are “incidental” to its other functions. This possible threshold question derives from
the General EN to Chapter 38’s sentence that “[s]ubstances having a nutritive value that is
merely incidental to their function as chemical products, e.g., as food additives or processing
aids, are not regarded as ‘foodstuffs or substances with nutritive value’ for the purpose of this
Note.” EN Ch. 38 at VI-38-3. Mondelez contends this is a separate inquiry from whether the
substance is valued for its nutritional properties. See Mondelez Resp. at 13. The government,
meanwhile posits that “incidental” means “without intention.” See Gov’t Resp. at 16–17.
“Incidental” here, however, means “[o]f a minor, casual, or subordinate nature,” rather than
“without intention,” given that the ENs’ language refers to the substance’s nutritive value being
“incidental to” other functions rather than being “incidental” in general. See Incidental,
AMERICAN HERITAGE DICTIONARY, available at
https://ahdictionary.com/word/search.html?q=incidental (last visited July 20, 2017); EN Ch. 38
at VI-38-3. Given this meaning of “incidental,” regardless of whether the “incidental” question
is technically a separate inquiry from whether the product is valued for its nutritive properties,
the analysis is the same.
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webster.com/dictionary/nutrition?utm_campaign=sd&utm_medium=serp&utm_source=jsonld

(last visited July 20, 2017) (defining nutrition as “the sum of the processes by which an animal or

plant takes in and utilizes food substances”) (emphasis added); Nutrition, AMERICAN HERITAGE

DICTIONARY, https://ahdictionary.com/word/search.html?q=nutrition (last visited July 20, 2017)

(defining “nutrition” as [t]he process of nourishing or being nourished, especially the process by

which a living organism assimilates food and uses it for growth and for replacement of tissues.”)

(emphasis added). Without a substance having “nutritive value,” there is, of course, no need to

consider whether the substance is valued for its nutritive ingredients. Here, although Mondelez

has submitted evidence that gum base’s nutritive ingredients are not released from gum base

during the chewing of chewing gum, see Decl. & Expert Report of Glenn Visscher, Ph.D. ¶¶ 10,

18, 22–23, ECF No. 69-4, summary judgment is not appropriate on this issue at this time. The

government contends that nutrients in gum base may be released during chewing, and indeed, the

reason it moved for summary judgment was to avoid the costs associated with determining this

fact. See Gov’t Summ. J. Mot. at 2; Def.’s Resp. to SUMF ¶ 16 (averring that “the Government

has not had an adequate opportunity to fully test or probe the evidence that Mondelez cites in

support of [its statement that ‘[g]um base is non-nutritive’]”).

       Whether the chewing process releases nutrients is a necessary but not sufficient fact to

sustain the government’s classification. As discussed above, the government must establish that

gum base is valued for its nutritive properties or that the nutritive value is not incidental. Given

the government’s approach to this litigation it may decide against trying to prove that nutrition is

not incidental or that nutrition is a valuable aspect of the gum base. The bare existence of

nutritive properties will not win the day.
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                                        CONCLUSION

       For the foregoing reasons, the parties’ summary judgment motions are denied. The

government shall advise within 10 days whether it desires discovery. If no further discovery is

desired Mondelez will prevail on its uncontroverted evidence that gum base lacks nutritive value

and that any nutritive value is incidental to the gum base’s functions. Any discovery shall be

completed no later than 60 days from the date of this opinion.

                                                                        /s/ Jane A. Restani
                                                                            Jane A. Restani
                                                                                Judge
Dated: July 25, 2017
       New York, New York