Court Opinion

ID: 820944
Source: CourtListenerOpinion
Date Created: 2013-02-20 21:03:15.752121+00
Date Added: 2024-06-11T12:13:42.892455
License: Public Domain

Slip. Op. 13-23

UNITED STATES COURT OF INTERNATIONAL TRADE

DEPENDABLE PACKAGING
SOLUTIONS, INC.,
Plaintiff,
v.
UNITED STATES,  Before: Richard K. Eaton, Judge

Defendant.  Court No. 10-00330

OPINION and ORDER

[Defendant’s motion for summary judgment is granted; plaintiffs cross-motion for summary
judgment is denied; case dismissed.]

Dated: February 20, 2013
Peter S. Herrick, of Miami, FL, for plaintiff
Stuart F. Deler_'y, Acting Assistant Attorney General; Barbara S. Williams, Attorney in
Charge, International Trade Field Ofiice, C0mmercial Litigation Branch, Civil Division, United
States Department of Justice (Karen V. Gojj'); Office of the Chief Counsel for lmport
Administration, United States Depart1nent of Commerce (Sheryl A. French), of counsel, for
defendant.
Eaton, Judge: At issue is the proper classification of two articles of glass imported by
plaintiff Dependab1e Packaging Solutions, Inc. ("Dependable" or “plaintiff’). Before the court
are the cross-motions for summary judgment of plaintiff and of the United States ("defendant" or

"the Government") on behalf of U.S. Customs and Border Protection ("Customs"). Def.’s Mot.

Court No. 10-00330 2

for Summ. J. (ECF Dkt. No. 25); Pl.’s Cross Mot. for Summ. J. (ECF Dkt. No. 30) ("Pl’s Mot.").
The court has jurisdiction pursuant to 28 U.S.C. § 15 8 1 (a) (2006).

F or the reasons set forth below,»defendant’s motion for summary judgment is
GRANTED, plaintiff’ s cross-motion for summary judgment is DENIED, and the court finds that
plaintiffs merchandise is properly classified under Heading 7013 of the Harmonized Tariff

Schedule of the United States ("HTSUS").

BACKGROUND

The facts described below have been taken from the parties’ 2012 USCIT Rule 56(h)
statements and the record. Where no citation is provided, the statement has been admitted.l
Citation to the record is provided where a fact, although not admitted in the parties’ papers, is
uncontroverted by record evidence.

On May 29, 201 0, Dependable, an importer and distributor of packing, janitorial, floral,
and office supplies, imported the glass items, identifying them on their respective commercial
invoices as "Generic Bud Vases" for the smaller type ("bud vases") and "Generic Trumpet

Vases" ("trumpet vases") for the larger type (collectively, "the vases"). The vases are articles of

1 At the time of flling, Plaintiff’s Response to Defendant’s Statement of Undisputed

Facts ("Dependable’s USCIT R. 56(h)(2) statement") failed to comply with the then-applicable
requirements of USCIT R. 56(h)(4) (2012). That rule required that "[e]ach statement by the
movant or opponent pursuant to Rule 56(h)(1) and (2), including each statement controverting
any statement of material fact, will be followed by citation to evidence which would be
admissible." Dependable’s USCIT R. 56(h)(2) statement, however, summarily denied
paragraphs 13, 17-26, 29, and 35-36, without providing any citation to admissible evidence
supporting the denials. As a consequence, defendant has asked the court to disregard those
denials and deem admitted the facts asserted in the controverted paragraphs. Because this case is
one involving customs classification, the court declines to do so. See Roche Vitamins, Inc. v.
United States, 35 CIT _, _, 791 F. Supp. 2d 1315, 1318 (2011) ("[D]eeming [denials
without citations] admitted could preclude the ‘correct result’ that the Federal Circuit requires
[the Court of Intemational Trade] to reach in customs classification cases.").

Court No. 10-00330 3

glass imported empty from the People’s Republic of China. Both vases have an inexpensive
look and visible seams. At the time of importation, the bud vases were valued at no more than
$0.30 and the trumpet vases at more than $O.30 but no greater than $3.00. Pictures of the vases,
as advertised in Dependable’s brochure, are appended to this opinion.

The bud vases are eight inches in height, with a quarter-inch lip that the parties agree is
not designed for any sort of closure.z The lip surrounds an opening measuring one and one-half
inches in diameter. The bud vases have a narrow neck extending downward five inches from the
opening. The neck then widens into a bulbous shape, two and three-quarters inches in diameter
at its widest point, and ends in a slightly concave bottom two inches in diameter. The bud vases
also have deepening striations beginning one inch below the lip that continue to the bottom of the
article.

The trumpet vases are nine and three-quarter inches in height with a quarter-inch lip that
the parties agree is not designed for any sort of closure. The lip surrounds an opening measuring
three and three-quarter inches in diameter. The diameter of the opening gradually narrows (as
one moves two-thirds of the way down the vase) to a diameter of three inches, widening again
thereafter to end in a bottom measuring four and one-quarter inches in diameter.

After importation, Dependable sells the vases to mass-market flower packing houses that
fill them with flowers, water, and sometimes an additional nutrient solution from the grower.
The packing houses then ship the flower-packed vases to retailers, typically supermarkets or
similar stores, where the flowers and vases are displayed and sold as a unit. Dependable’s vases

are not sold empty at retail, but vases similar in design are sold empty at retail. Rozanski Decl.

2 The measurements of the vases were determined by the court’s examination of the

samples.

Court No. 10-00330 4

1]1[ 14-15 (ECF Dkt. No. 25-9).3 The vases can be reused. Grandio Dep. 41 :7-41 :10 (ECF Dkt.
No. 25-2)4; Rozanski Decl. 11 14.

At the time of entry, Dependable classified the vases under HTSUS 7018.90.50.5 At
liquidation, Custo1r1s classified the bud vases under HTSUS 7013.99.406 and the trumpet vases
under HTSUS 7013.99.50.7 After its timely filed protest was deemed denieds and the assessed
duties were paid, Dependable commenced this action, abandoning its entered classification under
HTSUS 7018.90.50 by arguing that both vases are properly classified under HTSUS

7010.90.30.9 In its motion for summary judgment, the Government maintains that Customs’

3 Ms. Rozanski is a Senior I1nport Specialist for glass commodities with Customs.

She was responsible for Customs’ classification of the goods. Rozanski Decl. 1111 1-2.

4 Mr. Grandio is in charge of Dependable Packaging’s floral division. Grandio
Dep. 7:7-7:11. He is identified in Dependable’s interrogatory responses as the only person
known to Dependable Packaging "to have personal knowledge of the factual matters" at issue in
this litigation. Pl.’s Resp. to Interrog. & Req. l(a) (ECF Dkt. No. 25-5, at 4).

5 HTSUS 7018.90.5O covers: "Glass beads, imitation pearls, imitation precious or
semiprecious stones and similar glass smallwares and articles thereof other than imitation
jewelry; glass eyes other than prosthetic articles; statuettes and other omaments of lamp-worked
glass, other than imitation jewelry; glass microspheres not exceeding 1 mm in diameter: Other:
Other."

6 HTSUS 7013.99.40 covers: "Glassware of a kind used for table, kitchen, toilet,
office, indoor decoration or similar purposes (other than that of heading 7010 or 701 8): Other:
Valued not over $0.30 each."

7 HTSUS 7013.99.50 covers: "Glassware of a kind used for table, kitchen, toilet,
office, indoor decoration or similar purposes (other than that of heading 7010 or 7 01 8): Other:
Valued over $0.30 but not over $3 each."

8 Where, as here, a party requests accelerated disposition of a protest and Customs
does not act within thirty days, the protest is deemed denied. 19 U.S.C. § 15 l S(b) (2006).

9 The parties disagree as to the language of HTSUS 70l0.90.30. Plaintiff reads that
subheading to cover: "Carboys, bottles, flasks, j ars, pots, vials, ampoules and other containers of

glass, of a kind used for the conveyance or packing of goods; preserving jars of glass; stopper
lids and other closures of glass: Other: Other." Pl.’s Compl. 11 15 (ECF Dkt. No. 4). Customs

Court No. 10-00330 5

classifications were correct and Dependable continues to argue for classification under HTSUS

7010.90.30 in its cross-motion.

STANDARD OF REVIEW

Summary judgment shall be granted "if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to a judgment as a matter of law." USCIT R.
56(a); see Ana'erson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In the context of a
classification action, "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) (citations ornitted).

The court reviews Customs’ classification decisions de novo, applying the HTSUS
General Rules of Interpretation ("GRIs") and the HTSUS Additional U.S. Rules of Interpretation
("ARls").lo CamelBak Proa's., LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 201 l). GRI

1 provides, in relevant part, that "classification shall be determined according to the terms of the

has consistently read HTSUS 7010.90.30 as: "Carboys, bottles, flasks, jars, pots, vials, ampoules
and other containers, of glass, of a kind used for the conveyance or packing of goods; preserving
jars of glass; stopper, lids and other closures, of glass: Other: Containers (with or without their
closures) of a kind used for the conveyance or packing of perfume or other toilet preparations;
other containers if fitted with or designed for use with ground glass stoppers: Other." See
Custorr1s Ruling Letter NY N0l6987 (Oct. 4, 2007), available at 2007 WL 3124166; Customs
Ruling Letter NY L82356 (Feb. 23, 2005), available at 2005 WL 713874; Customs Ruling
Letter NY J86508 (July 18, 2003), available at 2003 WL 21916307. While the court agrees with
Customs’ reading of the disputed subheading, that disagreement is ultimately irrelevant here
because Dependable’s vases are not classifiable under Heading 7 010 at the heading level,
eliminating any need for the court to reach the proper reading of HTSUS 7010.90.30.

10 Although referred to separately here, the GRIs and ARIs are part of the HTSUS
statute which "consists of ‘(A) the General Notes; (B) the General Rules of Interpretation; the
Additional U.S. Rules of Interpretation; (D) sections I to XXII, inclusive (encompassing chapters
1 to 99, and including all section and chapter notes, article provisions, and tariff and other
treatment accorded thereto); and (E) the Chemical Appendix." Baxter Healthcare Corp. of
Puerto Rico v. United States, 182 F.3d l333, 1337 (Fed. Cir. l999) (citing 19 U.S.C. § 3004(21)

(1994)).

Court No. 10-00330 6

[HTSUS] headings and any relative section or chapter notes." GRI 1 (2009-2010). "Absent
contrary legislative intent, HTSUS terms are to be construed according to their common and
commercial meanings, which are presumed to be the same." Carl Zeiss, Inc._ v. United States,
195 F.3d 1375, 1379 (Fed. Cir. 1999) (citing Simoa'Am. Coip. v. United States, 872 F.2d 1572,
1576 (Fed. Cir. 1989)). The court "is required to decide the correctness not only of the
importer’s proposed classification but of the Govemment’s classification as well." See Jarvis
Clark Co. v. United States, 733 F.2d 873, 874 (Fed. Cir. 1984).

Here, there is no genuine dispute as to "exactly what the merchandise is" or as to its
actual use. Bausch & Lomb, 148 F.3d at 1365. The only factual disagreement between the
parties is to the "principal use" of the vases, and, as discussed below, this quarrel is not a
material dispute precluding summary judgment. See Aromont USA, Inc. v. United States, 671
F.3d 1310 (Fed. Cir. 2012) (making a principal use determination at summary judgment); ENI
Tech. Inc. v. United States, 33 CIT _, 641 F. Supp. 2d 1337 (2009) (granting summary
judgment on the issue of principal use); Essex Mfg., Inc. v. United States, 30 CIT 1 (2006)
(resolving a principal use issue on the record facts and the court’s examination of the article at

summary judgment).

DISCUSSION
I. Legal Framework
Classification determinations are a two-step process by which "the court first ascertains
the correct meaning of the relevant tariff provisions and then determines the proper classification

for the merchandise at issue." Pomeroy Collection, Ltd. v. United States, 35 CIT _, _, 783 F.

Court No. 10-00330 7

Supp. 2d. 1257, 1259 (2011) (citation ornitted). The first step is a question of law; the second is
a question of fact, Id. (citations orr1itted).

GRI 1 mandates that tariff classification initially "be determined according to the terms
of the headings and any relative section or chapter notes." "[A] court first construes the
language of the heading, and any section or chapter notes in question, to determine whether the
product at issue is classifiable under the heading. Only af`ter determining that a product is
classifiable under the heading should the court look to the subheadings." Orlando Fooa' Cor_p. v.
United States, 140 F.3d 1437, 1440 (Fed. Cir. 1998). In other words, tariff headings are
construed without reference to their subheadings. See id. Accordingly, a court should not look

to subheadings to either lirnit or broaden the scope of a heading.

II. The Construction of Headings 7010 and 7013

The court fmds, and the parties agree, that the vases should be classified under HTSUS
chapter 70 ("Glass and glassware"). The parties disagree, however, as to the appropriate
heading. The parties agree_correctly_that the competing headings, 7010 and 7013, are
principal use provisions. See Automatic Plastic Molding, Inc. v. United States, 26 CIT 1201,
1205 n.4 (2002) (noting that the applicable regulation from Customs "concluded headings 7010
and 7013 are ‘principal use’ tariff provisions") (citation omitted); Len-R0n Mfg. Co. v. United
States, 334 F.3d 1304, 1313 n.7 (Fed. Cir. 2003) (observing that principal use provisions
"employ[] the language ‘of a kind"’) (citation omitted).

Principal use provisions, such as those at issue here, are governed by ARI l(a), which the
Federal Circuit has stated "calls for a determination as to the group of goods that are

commercially fungible with the imported goods" so gas to identify the "use which exceeds any

Court No. 10-00330 8

other single use." Aromont, 671 F.3d at 1312 (quoting Primal Lite, Inc. v. United States, 182
F.3d 1362, 1365 (Fed. Cir. 1999); Lenox Collections v. United States, 20 CIT 194, 196 (l996)).
This Court customarily uses several factors, commonly referred to as the "Carborundum

Factors", to inform its determination as to which goods are “commercially fungible with the

imported goods." Id. (quoting Primal Lite, 182 F.3d at 1365) (intemal quotation marks orr1itted).

Those
factors include: use in the same manner as merchandise which defines the class; the
general physical characteristics of the merchandise; the economic practicality of so using
the i1nport; the expectation of the ultimate purchasers; the channels of trade in which the
merchandise moves; the environment of the sale, such as accompanying accessories and
the marmer in which the merchandise is advertised and displayed; and the recognition in
the trade of this use.

Id. (citing United States v. Carborundum Co., 536 F.2d 373, 377 (Fed. Cir. 1976)). lt is worth

mentioning that the actual use of the goods is "evidence of the principal use" but is still only

"one of a number of factors." Id.

A. Heading 7010

HTSUS Heading 7010 covers "Carboys, bottles, flasks, jars, pots, vials, ampoules and
other containers, of glass, of a kind used for the conveyance or packing of goods; preserving jars
of glass; stoppers, lids and other closures, of glass." Glass articles that are not capable of
closure, while not expressly excluded by the language of the heading, are atypical of the type of
article covered by HTSUS 7010. The Explanatory Notes to the Harmonized Commodity
Description and Coding System, 4th ed., 70. 10 (2007) ("Explanatory Notes") observe that
containers classified under HTSUS 7010 "are generally designed for some type of closure." The
Explanatory Notes, "while not legally binding, are ‘persuasive’ and are ‘ generally indicative’ of

the proper interpretation of [a] tariff provision.” See Lemans Coig). v. United States, 660 F.3d

court No. 10-00330 ' 9

1311, 1316 (Fed. Cir. 201 1) (quoting Drjygel, Inc. v. United States, 541 F.3d 1129, 1134 (Fed.
Cir. 2008)). Indeed, in Automatic Plastic Molding, this court considered the ability of an article
to accept a secure, sanitary closure to be an important factor in determining whether an article of
glass was properly classified in chapter 7010. Automatic Plastic Molding, 26 CIT at 1207 (citing
Kraft, Inc. v. United States, 16 CIT 483, 487 (1992)). There, even though the article was not
shipped with a closure that could form a sanitary seal, the fact that it was designed with a finish
capable of closure was "probative as to its principal use as a container for the conveyance or
packing of goods." Id. at 1204 n.3.

Although the vases are not designed to accept any kind of closure, plaintiff argues that
they are properly categorized as "containers, of glass, of a kind used for the conveyance or
packing of goods." HTSUS 7010. In making its claim, plaintiff notes that the articles are made
of glass and insists that their principal use is as a packing container for the wet transportation of
flowers." In other words, according to plaintiff, glass packing containers, rather than glass vases
used for decoration, are "the group of goods that are commercially fungible with" the vases at

issue. Aromont, 671 F.3d at 1312 (citation and intemal quotation marks ornitted).

11 Dependable is correct that if the vases are classifiable under this heading, they are

unclassifiable under Heading 7013 by operation of the language in Heading 7013 excepting
articles classi§able in Heading 7010. See Mia’west of Cannon Falls, Inc. v. United States, 122
F.3d l423, 1429 (Fed. Cir. 1997). That observation, however, means little here. Such "other
than that of heading" provisions in the tariff schedule obviate the need to apply GRI 2 to
determine under which of two competing headings an article is properly classified. These
provisions, however, play no role in construing competing principal use provisions for the simple
reason that an article can have only one principal use. Once that principal use is determined,
only one of the competing headings can possibly cover the merchandise.

Court No. 10-00330 10
B. Heading 7013

HTSUS 7013 covers "[g]lassware of a kind used for table, kitchen, toilet, office, indoor
decoration or similar purposes (other than that of heading 7010 or 7018)." Vaseslz are
specifically identified in the Explanatory Notes to section 7013 as exemplary of items of glass
used for indoor decoration that fall under this heading. Explanatory Notes 70.13 ("This heading
covers . . . [g]lassware for indoor decoration and other glassware . . . such as vases."). As a
matter of law, then, this heading properly covers items of glass which meet the common meaning
of “vase" and are primarily used for decorative purposes.

Although plaintiff has avoided use of the term "vase" in its moving and responsive
papers, the company identified the merchandise as vases on its entry documents. Further, an
examination of the merchandise confirms that there can be no genuine factual dispute that the
articles are vases. See Peerless Clothing Int’l., Inc. v. United States, 33 CIT _, __, 602 F.
Supp. 2d l309, 1315 (2009) ("An issue of fact is to be considered ‘genuine’ when ‘the evidence
is such that a reasonable jury could return a verdict for the nonmoving party."’) (quoting
Anderson, 477 U.S. at 248); Ricci v. DeStefano, 557 U.S. 557, 586 (2009) ("Where the record
taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no

genuine issue for trial.") (citation and intemal quotation marks orr1itted).

12 The word "vase" is defined by the American Heritage Dictionary of the English

Language as "An open container, as of glass or porcelain, used for holding flowers or for
ornamentation" and by Merriam-Webster’s Online Dictionary as "a usually round vessel of
greater depth than width used chiefly as an ornament or for holding flowers." AMERICAN
HERITAGE D1cT1oNARY oF THE ENGLISH LANGUAGE 1904 (4th ed. 2000); MERR!AM-WEBSTER’S
ONLINE DICTIONARY, Vase, available at http://www.merriarn-webster.com/dictionary/vase (last
visited Feb. 5, 2013); see also OxFoRD ENGLISH DIcTroNARY (2d ed. 1989) ("A vessel, usually
of an ornamental character, commonly of a circular section and made either of earthenware or
metal, but varying greatly in actual form and use.")

Court No. 10-00330 _ ll

Irnportantly, in addition to identifying the merchandise as vases on its entry documents,
the goods are advertised as vases on plaintiffs website (Def.’s Mot., Ex. D (ECF Dkt. No. 25-8,
at 24-25)), referred to as vases by plaintiff in its interrogatory responses (e.g., Pl.’s Resp. to
Interrog. & Req. 6-10 (ECF Dkt. No. 25-5, at 10-14)), referred to by plaintiffs employee as
vases in his deposition testimony (e.g., Grandio Dep. 9:15-9:21, 29:12-29:15, 35 :3-35:9), and
the court’s inspection of the samples attests that they are vases.

In its papers, the Govemment argues that the principal use of Dependable’s vases is as
decoration because Dependable’s vases are commercially fi.mgible with other, physically similar,

glass vases that are sold empty at retail.

III. The Principal Use of the Vases

A. The Carborundum F actors
Application of the Carborundum Factors demonstrates that Dependable’s vases are

commercially fungible with other clear glass vases that are primarily used for decorative

pl.lI'pOSCS.

The General Physical Characteristics of the Merchandise
The first Carborundum Factor, "the general physical characteristics of the merchandise,"

shows that the vases are commercially fungible with other clear glass vases that are sold empty at
retail and are used for decorative purposes. First, the record contains photographic evidence of
vases, identical to plaintiffs in all material respects, offered for sale empty at retail, both on the
shelves of stores and via the intemet in bulk. Rozanski Decl., Ex. 2 (ECF Dkt. No. 25-9, at 25,
27-30); Ex. 3 (ECF Dkt. No. 25-9, at 3); Ex. 5 (ECF Dkt. No. 25-9, at 39, 41-42, 49-52, 54).

The design features of the vases that Dependable points to as indicating use as a packing material

Court No. 10-00330 12

(narrow waists, long necks, small openings, inexpensive glass) are apparent in these other,
virtually identical vases as well, indicating that the vases at issue here are commercially fungible
with these other similarly priced vases that are sold empty at retail for decorative purposes. See
Pl.’s Br. 12-13. Moreover, the record reflects that the designs of Dependable’s vases are not
new or unique to Dependable. Grandio Dep. 37:7-37: 1 7 ("The trumpet, 1 designed that
approximately [10 years before starting at Dependable]"; "The bud vase has been around

forever.").

T he Expectations of the Ultimate Purchasers
The second Carborundum Factor, "the expectations of the ultimate purchasers" also

favors the conclusion that the vases are primarily used for decorative purposes. First, the record
contains evidence that the retail purchaser pays extra for the pairing of flowers and vase when
compared to the cost of flowers alone.n Grandio Dep. 47:17~47:22 ("Q. . . . You take'the exact
same bouquet of roses, you buy it out of the bucket without a Vase, it’s less expensive than the
bouquet in the vase[?] A. Yes. It’s less cost for transport and product obviously.") Thus, the
consumer is willing to pay more for the combination of the products (flowers plus vase) than for
the flowers alone. The added cost to the price of the flowers in combination with the vase is
probative, indicating that the "acquisition of the [vases] was [not] incidental" to the purchase of
the flowers, as packing containers are generally expected to be. Automatic Plastic Molding, 26

CIT at 1208 (citation and intemal quotation marks orr1itted). lt is apparent, then, that the

13 At oral argument, Dependable took the position that the "ultimate purchaser" of

the vases for Carborundum Factor purposes was not the retail purchaser, but packing houses who
are Dependable’s clients. Case law, however, makes clear that it is the retail consumer who is
the "ultimate purchaser" when examining this factor. See, e.g., Automatic Plastic Molding, 26
CIT at 1208 (evaluating the expectations of the retail purchaser of a glass container as the
"ultimate purchaser", not the wholesale packer); Kraft, 16 CIT at 489 (evaluating the
expectations of the retail purchaser of packed food items).

Court No. 10-00330 13

purchaser is willing to pay something to obtain the vase and that the purchaser only does so in
order to use the vase to display the flowers.

Next, although there is some disagreement on the record as to whether the vases are
frequently reused, it is undisputed that the vases are capable of reuse and that the ultimate
purchaser would have the option to do so "based on personal preference." Grandio Dep. 40:l0-
401 18. Indeed, despite arguing that the vases are used only for transport hom the point of retail
purchase to the home or office of the ultimate purchaser and then typically discarded,
Dependable has offered no studies, testimony of consumers, or other objective evidence of the
behavior of fmal purchasers to support this proposition. Grandio Dep. 41 :l 1-41 :13 ("Q. Are
you aware of how any particular consumer uses the vase once they purchase it? A. No."). That
the vases are not of the finest quality is not probative on this point, as other nearly identical
empty vases are sold without flowers at retail.

Therefore, the undisputed record evidence indicates that the retail purchaser buys the

vases for decorative purposes.

The Chamtels of T rade in Which the Merchana'ise M0ves
The third factor, "the channels of trade in which the merchandise moves," is not

particularly probative. As has been noted, the vases are imported empty, sold to a packer who
fills them with flowers, and then resold to a retailer. The weight of these facts as evidence that
the vases are principally used for the conveyance or packing of goods, however, is rninimal.
This is because the record is clear that similar vases are sold unpacked at retail to be filled with
flowers by their purchasers. In other words, the movement of the vases in trade merely suggests
that Dependable’s vases travel in an atypical manner to the final purchasers who employ them in

a typical manner.

Court No. 10-00330 14

T he Environment of Sale

Fourth, "the environment of sale" of the vases is also probative of a decorative purpose.
The vases are displayed _for sale to consumers packed with flowers, encouraging the retail
customer to purchase both flowers and the vase for their combined decorative value. Moreover,
Dependable’s own advertising brochure places vases in a separate "floral" section, depicting

both packed and unpacked vases. Def.’s Mot., Ex. B (ECF Dkt. 25-3, at 7, 8, 24.)

Use in the Same Manner Which Deft`nes the Class
Fifth, the actual use or "use in the same manner which defines the class," favors

classification with other glass vases primarily used for decorative purposes. Although plaintiff s
vases are never sold empty at retail, indicating that they have some value as packing materials,
the vases ultimate use, consistent with the marmer in which other similar inexpensive glass vases
are used, is decorative. lt is also undisputed that the vases are displayed filled with flowers at the
point of sale, command a higher price than either the vase or the flowers individually, that retail
purchasers can display the accompanying flowers in the vases and reuse the vases to display later

purchased flowers, all of which evidence a decorative purpose. Grandio Dep. 42:4-42:6 ("Q. So

then would you say the vases aid in the sale of the flowers? A. Yes."); Compl. 11 31 ("The design

of Dependable’s glass containers are decorative in nature and aid in the sale of the flowers.").
Moreover, where the "physical characteristics” factor so strongly favors one principal use, the
actual use of an imported article will frequently not be controlling. See Primal Lite, 182 F.3d
1362, 1346 (1999) ("[A] classification covering vehicles principally used for automobile racing
would cover a race car, even if the particular imported car was actually used solely in an

advertising display .").

Court No. 10-00330 15

Ec0n0mic Practicality of the Specified Use

There is no admissible evidence on the record that the vases’ use as packing containers is
economically practical. Plaintiff argues that wet packing the flowers using the vases_a process
that entails packing the vase with flowers and liquid, placing the filled vase in a plastic sleeve,
placing the plastic sleeve in a partitioned box, and then covering the box with an additional
plastic liner--is economically feasible because the end retailers need not employ florists, and
thus wet packing saves them labor costs. The only evidence on the record for this proposition,
however, are the interrogatory responses signed by Mr. Grandio and the deposition testimony of
Mr. Grandio in which he states that his knowledge of this information is hom having spoken to
"random people" employed by a Miami supermarket. Grandio Dep. 83:13-85:5. As such, the
assertion that wet packing saves labor costs is really that of the supermarket employees to whom
Mr. Grandio apparently spoke, not that of Mr. Grandio himself`, and is offered for the truth of the
out of court assertion that wet packing saves labor costs. As a consequence, Mr. Grandio’s
testimony on this point is not based on personal knowledge and is derivative of inadmissible
hearsay. Thus, it is not evidence upon which summary judgment can be either granted or denied.
See Fed. R. Evid. 801(c), 802 (defming hearsay and indicating its general exclusion); Fed. R.
Evid. 602 (requiring that witnesses have personal knowledge of the facts to which they testify).

There is, however, record evidence indicating that the use of plaintiff s vases in the same
manner as other inexpensive glass vases is economically feasible (i.e., that empty vases could be
sold profitably at retail). First, the pricing of Dependable’s vases is compatible with the
advertised retail prices of similar vases. In a sales e-mail produced by Dependable, and which
was sent by Dependable employee Ross Borer to a potential customer, the pre-shipping price of

the bud vases was quoted at "$.12-.125 FOB China per unit in clear" with a "[l]anded cost

Court No. 10-00330 16

[of] .225-.235" and the trumpet vases at "$.34 FOB China per unit in clear" with a "[l]anded cost
[of] .615-.628." Def.’s Mot., Ex. B (ECF Dkt. No. 25-4 at 10). Dependable’s invoices similarly
reflect a unit price for the bud vases of between $0.30-.31 and $0.72 for the trumpet vases.
Def.’s Mot. ., Ex. B (ECF Dkt. No. 25-4 at 12, 14).

Next, evidence on the record shows that similar glass vases are sold empty at retail for
between $1 and $3.20 per unit. Rozanski Decl., Ex. 2 (ECF Dkt. No. 25-9, at 23-30); Ex. 3
(ECF Dkt. No. 25-9, at 32-33). Dependable’s vases, therefore, could be sold profitably at retail
when empty, as other similar vases are. Indeed, Mr. Grandio testified that there is a retail market
for similar vases. Grandio Dep. 95 :4-95:8 ("Q. . . . This particular utility vase that [D]ependable
sells is not sold at retail. ls that correct? A. What we sell is not for retail. We might have
competition, Syndicate Sales. That is their specialty. They sell vases to [be resold at] retail.").

Thus, the record contains evidence of the commercial practicability of selling
Dependable’s vases in a manner consistent with that of other similar glass vases sold empty at
retail, and there is no admissible evidence of the commercial practicability of using the vases as a
packing container. Accordingly, this factor supports classification of the plaintiffs vases with

other similar inexpensive glass vases sold empty at retail.

Recognition in the Traa'e of the Specifz`ed Use
Finally, the factor of "recognition in the trade of this use" is not very probative. The only

record evidence as to trade recognition of the vases being used to convey goods as packaging is
Mr. Grandio’s testimony that wet packing with "utility vases" is an accepted trade practice
within the “mass market floral [industry]." Grandio Dep. 96:3-96:6. Close examination of Mr.
Grandio’s testimony indicates, however, that "mass market floral [industry]" means

"[s]uper.markets and the vases in question which are our vases." Grandio Dep. 96:3-96:10. In

Court No. 10-00330 17

other words, the "industry" referred to is limited to the actual use of Dependable’s vases by its
customers, rather than cor_1noting any broad commercial meaning or industry practice. Grandio
Dep. 38:22-39:4 ("Q. ls that a term of art, utility vase? A. Of art, no. Q. ls it something used
in the industry, that term "utility vase"? A. They usually use utility vase as cheap."). Indeed,
there is significant record evidence that vases virtually indistinguishable from Dependable’s
product are sold empty at retail to customers for decorative purposes. Rozanski Dec1., Ex. 2

(ECF Dkt. No. 25-9, at 23-30); Ex. 3 (ECF Dkt. No. 25-9, at 32-54).

B. T he Court ’s Examination of the Articles

The court has undertaken an examination of the samples of the bud vase and trumpet vase
provided by the parties. Simoa’, 872 F.2d at 1578 ("[T]he merchandise itself is often a potent
witness in classification cases."). To the court’s eyes,' Dependable’s vases are indistinguishable
from the other inexpensive clear glass vases depicted in the record, which are indisputably sold

empty at retail and used for decorative purposes. See appendix infra.

C. The Vases ’ Principal Use is Decorative

In sum, based on the foregoing analysis of the Carborundum Factors_in particular the
very weighty factor of the relevant physical characteristics of the vases-a reasonable jury could
only conclude that the vases here are commercially fungible with other inexpensive clear glass
vases whose principal use is decorative, rather than with glass packing containers. As such, the
vases are not classifiable under Heading 7010, i.e., no reasonable jury could conclude that they
are principally "used for the conveyance or packing of goods." Accordingly, Customs’
classification of the vases under Heading 7013 was correct, as the vases are articles of glass
which a reasonable jury could conclude are principally "used for table, kitchen, toilet, office,

indoor decoration or similar purposes." Given the vases’ respective values and the lack of any

Court No. 10-00330 18

other appropriate subheadings under Heading 7013, Customs’ selection of subheadings

7013.99.40 and 7013.99.50 was also correct.

CONCLUSION

Based on the foregoing, it is hereby
ORDERED that defendant’s Motion for Summary judgment is GRANTED, plaintiffs

Cross-Motion for Sumrnary Judgment is DENIED, and the case is dismissed.

/s/ Richard K. Eaton
Richard K. Eaton

Dated: February 20, 2013
New York, New York

APPENDIX

  

Trumt \/e

     

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“Biié! uses

\,"

UNITED STATES COURT OF INTERNATIONAL TRADE

DEPENDABLE PACKAGING
SOLUTIONS, 1NC.,
Plaintiff,
v.
UNITED STATES,  Before: Richard K. Eaton, judge
Defendant.  Court No. 10-00330

jUDGMENT

Upon consideration of the papers and proceedings had herein, and in conformity with the
court’s decision in this matter, it is hereby
ORDERED that the defendant’s Motion for Sumrnary judgment is GRANTED,

plaintiffs Cross-Motion for Summary judgment is DENIED, and the case is dismissed.

/s/ Richard K. Eaton
Richard K. Eaton

Dated: February 20, 2013
New York, New York

Vase - Def1r1ition and More from the Free Merriam-Webster Dictionary

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: a usually round vessel of greater depth than width used “V\

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French, from Latin vas vessel

F|rst Kn°wn use: 1629 Seen & Heard: N1ne conflicts and

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ace, base, bass, brace, case, chase, dace, face, grace, |ace,
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