Court Opinion

ID: 6330658
Source: CourtListenerOpinion
Date Created: 2022-04-13 14:03:57.716146+00
Date Added: 2024-06-11T09:23:04.056251
License: Public Domain

Case: 21-1548    Document: 35     Page: 1    Filed: 03/30/2022

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

                     STARKIST CO.,
                     Plaintiff-Appellant

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2021-1548
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:14-cv-00068-TMR, Judge Timothy M. Reif.
                  ______________________

                 Decided: March 30, 2022
                 ______________________

      MICHAEL EDWARD ROLL, Roll & Harris LLP, Los Ange-
 les, CA, argued for plaintiff-appellant. Also represented by
 BRETT IAN HARRIS, Washington, DC.

     ALEXANDER J. VANDERWEIDE, Civil Division, Commer-
 cial Litigation Branch, United States Department of Jus-
 tice, New York, NY, argued for defendant-appellee. Also
 represented by BRIAN M. BOYNTON, JEANNE DAVIDSON,
 JUSTIN REINHART MILLER; SHERYL FRENCH, Office of Assis-
 tant Chief Counsel, International Trade Litigation, United
 States Customs and Border Protection, New York, NY.
              ______________________
Case: 21-1548     Document: 35      Page: 2    Filed: 03/30/2022

 2                                            STARKIST CO.   v. US

     Before MOORE, Chief Judge, DYK and REYNA, Circuit
                          Judges.
 REYNA, Circuit Judge.
     StarKist Co. challenges a tariff classification of four im-
 ported tuna salad products under subheading 1604.14.10
 of the Harmonized Tariff Schedule of the United States.
 We affirm.
                            HTSUS
     The cross-border movement of goods across interna-
 tional markets is regulated by tariff classification systems
 for ascribing the appropriate tariff to specific imported
 goods. In the United States, the Harmonized Tariff Sched-
 ule of the United States (“HTSUS”) governs the classifica-
 tion of imported goods and merchandise and provides the
 applicable tariff rates. The HTSUS and the Additional
 U.S. Notes to the HTSUS have the force of statutory law.
 Aves. In Leather, Inc. v. United States, 423 F.3d 1326, 1333
 (Fed. Cir. 2005); USITC Pub. 4368, at Preface p. 1 (2013).
     The interpretation of HTSUS provisions is undertaken
 through General Rules of Interpretation (“GRIs”) and the
 Additional U.S. Rules of Interpretation (“ARIs”). BASF
 Corp. v. United States, 482 F.3d 1324, 1325–26 (Fed. Cir.
 2007). Absent contrary legislative intent, we construe
 HTSUS terms according to their common and commercial
 meanings, which we presume to be the same. Carl Zeiss,
 Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999).
     The application of the GRIs and ARIs is rigid. The
 GRIs are to be applied in numerical order, such that, if
 proper classification is achieved through a particular GRI,
 the remaining successive GRIs should not be considered.
 Id. GRI 1 explains that classification under any heading
 shall be determined according to the terms of the headings
 and any relative section or chapter notes. Once the court
 determines the appropriate heading, the court applies
 GRI 6 to determine the appropriate subheading. See
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 STARKIST CO.   v. US                                       3

 Orlando Food Corp. v. United States, 140 F.3d 1437, 1439
 (Fed. Cir. 1998). GRI 6 provides that “the classification of
 goods in the subheadings of a heading shall be determined
 according to the terms of those subheadings and any re-
 lated subheading notes and, mutatis mutandis, to the
 above rules.” Accordingly, where a party disputes a classi-
 fication under a particular subheading, we apply GRI 1 as
 a substantive rule of interpretation, such that when an im-
 ported article is described in whole by a single classifica-
 tion subheading, then that single classification applies,
 and the successive GRIs are inoperative. CamelBak
 Prods., LLC v. United States, 649 F.3d 1361, 1364
 (Fed. Cir. 2011).
                         BACKGROUND
     This appeal involves two varieties of tuna salad prod-
 ucts, albacore and chunk light, each of which is imported
 as ready-to-eat pouches or lunch-to-go kits. J.A. 2. The
 lunch-to-go kits consist of the tuna salad pouches, crackers,
 a mint, a napkin, and a spoon. J.A. 3.
     The administrative record demonstrates that the pro-
 duction processes for both types of tuna salad products are
 the same in all ways relevant to this appeal. The fish is
 caught in South American or international waters, frozen,
 delivered to a facility in Ecuador, sorted, thawed, cooked,
 machine chopped, then hand-folded with a prepared mix-
 ture of other ingredients including a mayo base comprising
 more than 12% soybean oil. J.A. 3–4, 45–53, 55–56, 60–61.
 The resulting mixture is packaged into pouches using
 metal funnels. J.A. 4, 45, 56, 60–61.
      The tuna salad products at issue have been classified
 by   United States Customs and Border Protection
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 4                                          STARKIST CO.   v. US

 (“Customs”) under subheading 1604.14.10. Heading 1604
 provides:

 HTSUS 1604 (emphasis added). Accordingly, subheading
 1604.14.10, which carries a 35% ad valorem duty, covers:
     Prepared or preserved fish; caviar and caviar sub-
     stitutes prepared from fish eggs:
         Fish, whole or in pieces, but not minced:
             Tunas, skipjack and bonito (Sarda
             spp.):
                 Tunas and skipjack:
                     In airtight containers:
                         In oil.
 HTSUS 1604.14.10 (emphases added).
     StarKist seeks a classification under 1604.20.05, which
 covers “products containing meat of crustaceans, molluscs
 or other aquatic invertebrates; prepared meals,” and
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 STARKIST CO.   v. US                                        5

 carries a 10% ad valorem duty. Appellant’s Br. 22–42. Or,
 in the alternative, StarKist seeks a classification under ei-
 ther subheading 1604.14.22, which covers tuna that is “not
 minced” and “not in oil,” carrying a 6% ad valorem duty, or
 subheading 1604.14.30, which covers “other,” carrying a
 12.5% ad valorem duty. Id. at 42–58.
     StarKist timely filed two separate Customs protests
 challenging the classification of the tuna salad products
 under subheading 1604.14.10. Customs denied both pro-
 tests. StarKist paid all applicable duties owed on the im-
 ports and filed this action in the United States Court of
 International Trade challenging the classifications. The
 Court of International Trade granted summary judgment
 in favor of the government, concluding that the tuna salad
 products are properly classified under 1604.14.10 because
 they are “not minced” and “in oil.”
      The term “minced” is not defined under the HTSUS.
 Accordingly, the Court of International Trade analyzed dif-
 ferent factors to interpret the meaning of the term. J.A. 15.
 The Court of International Trade determined that a proper
 understanding of the term requires considering:
 “(1) whether the pieces, based on their size and physical
 characteristics, collectively, should be considered ‘minced,’
 and, (2) whether the tuna pieces are the product of a
 minced cut.” J.A. 15. Based on these factors, the Court of
 International Trade interpreted “minced” under head-
 ing 1604 to require “small pieces of a minced cut [that] are
 the product of a purposeful process that involves cutting or
 chopping.” J.A. 19.
     The Court of International Trade first determined that
 the size and physical characteristics of the pieces collec-
 tively are such that the tuna salad products are “not
 minced.” J.A. 17–18. The Court of International Trade
 reasoned that “the presence of certain tuna pieces equiva-
 lent in size to minced tuna is purely incidental; the defining
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 6                                          STARKIST CO.   v. US

 character is more accurately described as chunky, with
 pieces of varying size.” J.A. 17.
     The Court of International Trade also determined that
 the tuna salad products are produced through a process
 distinct from mincing. J.A. 18–20. The Court of Interna-
 tional Trade observed that the fish is first passed through
 a chopper with four blades, producing pieces of fish larger
 than Customs’ proposed definition of “minced.” J.A. 19–20.
 Then, these pieces are hand-folded with the other ingredi-
 ents, breaking up some of the larger pieces. Id. The Court
 of International Trade reasoned that because the very
 small pieces in the tuna salad are produced by hand-blend-
 ing rather than chopping, the subject merchandise is not
 the product of a minced cut. The Court of International
 Trade concluded that the products are “not minced” both in
 result and in process and, as such, are properly classified
 as “not minced.” J.A. 20.
      The Court of International Trade then determined that
 the tuna salad products are also properly classified as “in
 oil.” J.A. 20–27. The Court of International Trade rea-
 soned that because the oil is added after the fish is cooked
 but before it is packed, the StarKist products have been
 properly classified as “in oil” pursuant to HTSUS Chap-
 ter 16 Additional U.S. Note 1. J.A. 27.
     StarKist timely appealed. We have jurisdiction pursu-
 ant to 28 U.S.C. § 1295(a)(5).
                    STANDARD OF REVIEW
     We review de novo the Court of International Trade’s
 decision to grant summary judgment and apply anew the
 standard used by the Court of International Trade to as-
 sess the subject Customs classification. See Otter Prods.,
 LLC v. United States, 834 F.3d 1369, 1374–75 (Fed. Cir.
 2016). “Although we review the decision[ ] of the CIT de
 novo, we give great weight to the informed opinion of the
 CIT . . . and it is nearly always the starting point of our
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 STARKIST CO.   v. US                                       7

 analysis.” Nan Ya Plastics Corp. v. United States, 810 F.3d
 1333, 1341 (Fed. Cir. 2016) (internal quotation marks,
 brackets, and citation omitted). The Court of International
 Trade “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.”
 U.S. CIT R. 56(a) (2015).
     Proper classification of goods under the HTSUS is a
 two-step process. Sigma-Tau HealthScience, Inc. v. United
 States, 838 F.3d 1272, 1276 (Fed. Cir. 2016). First, we as-
 certain the meaning of the specific terms in the tariff pro-
 vision. Orlando Food Corp., 140 F.3d at 1439. Absent
 contrary legislative intent, we construe HTSUS terms ac-
 cording to their common and commercial meanings, which
 we presume to be the same. Carl Zeiss, 195 F.3d at 1379.
 To assist it in ascertaining the common meaning of a tariff
 term, the court may rely upon the term’s ordinary mean-
 ing, lexicographic and scientific authorities, dictionaries,
 and other reliable information sources. Brookside Veneers,
 Ltd. v. United States, 847 F.2d 786, 789 (Fed. Cir. 1988).
 Second, we determine whether the goods come within the
 description of those terms. Victoria’s Secret Direct, LLC v.
 United States, 769 F.3d 1102, 1106 (Fed. Cir. 2014). This
 step is a factual inquiry that we review for clear error. Id.
 When there is no factual dispute regarding the nature,
 structure, and use of imported merchandise, the proper
 classification turns on the first step. Faus Grp., Inc.
 v. United States, 581 F.3d 1369, 1372 (Fed. Cir. 2009).
                         “NOT MINCED”
     Pursuant to the GRIs, the question of whether the
 products at issue are “not minced” is a threshold question.
 StarKist contends that Customs and the Court of Interna-
 tional Trade erred in interpretating the term “minced”
 and/or clearly erred in concluding that StarKist’s products
 are “not minced.” Appellant’s Br. 25–31. We disagree.
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 8                                          STARKIST CO.   v. US

     First, we address the proper interpretation of the term
 “minced.” Based on the record dictionary definitions, the
 language and context of the relevant subheadings, as well
 as the term’s ordinary meaning, we conclude that when
 used in the context of imported fish, the common and com-
 mercial meaning of the term “minced” at least requires sep-
 aration into very small pieces. 1
     Next, we must assess whether Customs clearly erred
 in its determination that the subject tuna salad products
 are “not minced.” We find no such error. StarKist’s tuna
 salad products at issue are not separated into very small
 pieces. Instead, the products are first roughly chopped,
 then hand-folded with additional ingredients, which re-
 sults in a product consisting of some very small pieces and
 some chunks. J.A. 55, 60–61. More specifically, cooked al-
 bacore tuna is chopped by machine into 0.8–1.0 inch
 chunks, and cooked chunk light tuna is chopped by ma-
 chine into 1.0–1.5 inch chunks. J.A. 45, 47–53, 55–56, 60–
 61, 65. Then, a person hand-folds the tuna pieces with the
 prepared mayonnaise-based dressing, breaking up some of
 these larger pieces. J.A. 48, 50, 56, 61. As the Court of
 International Trade recognized, at the end of this process,
 the products are properly described as chunky, with pieces
 of varying size. J.A. 18. This determination is supported
 by substantial evidence, including sworn testimony and la-
 boratory reports. Accordingly, we determine that Customs
 did not clearly err in determining that the subject tuna
 salad products fall within the meaning of the term “not

     1   Because, as explained below, Customs did not
 clearly err in determining that the subject tuna salad prod-
 ucts do not satisfy this requirement, we do not reach
 whether the pieces must be “the product of a purposeful
 process that involves cutting or chopping” to qualify as
 “minced.” J.A. 19.
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 STARKIST CO.   v. US                                         9

 minced.” Next, we turn to whether the products are
 properly classified as “in oil.”
                           “IN OIL”
     StarKist contends that its products are not properly
 classified as “in oil” because HTSUS Chapter 16 requires
 classification of tuna products as “in oil” only where the oil
 was added for purposes of packing—i.e., at the “packing
 stage.” Appellant’s Br. 42–58 (citing J.A. 56, 61, 593, 599).
 StarKist further contends that because the oil in its prod-
 ucts is added during the preparation stage, and not the
 packing stage, its products are properly classified as “not
 in oil.” Id.
     HTSUS Chapter 16 Additional U.S. Note 1 governs this
 inquiry. Note 1 states:
     For the purposes of this chapter, the term “in oil”
     means packed in oil or fat, or in added oil or fat and
     other substances, whether such oil or fat was intro-
     duced at the time of packing or prior thereto.
 HTSUS Chapter 16 Additional U.S. Note 1 (second empha-
 sis added). This statutory authority explicitly states that
 for the term “in oil” to apply, it matters not whether the oil
 was added during preparation or in the packing process.
     StarKist cites two cases in support of its contention
 that Note 1 does not settle this issue in the government’s
 favor: Del Monte Corp. v. United States, 730 F.3d 1352
 (Fed. Cir. 2013), and Richter Bros., Inc. v. United States,
 44 C.C.P.A. 128 (1957).
     Del Monte involves the tariff classification of StarKist’s
 “Tuna Fillets” products—cooked tuna products packaged in
 airtight foil pouches consisting of chunks of cooked alba-
 core and yellowfin tuna marinated with a mixture of fla-
 voring ingredients in a viscous sauce. 730 F.3d at 1355. In
 contrast with this case, in Del Monte, the tuna was placed
 in the packaging first, then a sauce containing oil was
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 10                                          STARKIST CO.   v. US

 added. Id. This court determined that those StarKist prod-
 ucts are “packed in oil” within HTSUS Chapter 16. Id.
     In Richter, the product at issue was herring that was
 cleaned, covered with wheat meal, put on sieves, and then
 fried in a pan. 44 C.C.P.A. at 131. The frying fat consisted
 of 50% herring oil and 50% tallow. Id. After frying, the
 herring was cooled, and as much as possible of the remain-
 ing oil was drained off. Id. After cooling, the herring was
 packed into tins filled with a brine of wine, vinegar, water,
 sugar, and salt. Id. It was undisputed that some of the oil
 remained in the tins as a result of the frying process, but
 no oil, nor any ingredient containing oil, was added to the
 tins during packing. Id. Our predecessor court held that
 these products were not “packed in oil” under a different
 tariff schedule. Id.
      StarKist contends that its tuna salad products are not
 “packed in oil” because they are prepared in a similar fash-
 ion to the products in Richter. StarKist argues that, under
 Del Monte, the oil must be added after the fish is already
 in the package to be considered “packed in oil.” Contrary
 to StarKist’s contention, Note 1 resolves this dispute by
 clarifying that “in oil” is meant within Chapter 16 to dis-
 tinguish products that incidentally contain oil as a result
 of their preparation, as was the case in Richter, from those
 in which oil is separately added, as is the case here and in
 Del Monte. Accordingly, we determine that the tuna salad
 products are properly classified as “in oil” under subhead-
 ing 1604.14.10 because the oil in the tuna salad products
 was introduced to the fish prior to packing and the oil is
 not merely incidental to the preparation, as described in
 Note 1.
                        CONCLUSION
     We hold that the tuna salad products at issue are
 properly classified under subheading 1604.14.10 of the
 HTSUS because they are “not minced” and are “in oil.” We
 have considered the parties remaining arguments and find
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 STARKIST CO.   v. US                                    11

 them unpersuasive. Accordingly, we affirm the judgment
 of the Court of International Trade.
                         AFFIRMED