Court Opinion

ID: 818818
Source: CourtListenerOpinion
Date Created: 2013-02-03 08:29:23.708411+00
Date Added: 2024-06-11T15:26:42.711237
License: Public Domain

Slip Op. 04 - 8

            UNITED STATES COURT OF INTERNATIONAL TRADE

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VANETTA U.S.A. INCORPORATED,          :

                          Plaintiff, :
                                          Consolidated
                  v.                  :   Court No. 97-01-00117

UNITED STATES,                        :

                          Defendant. :

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                          Opinion

[Upon classification of animal-feed additives,
 judgment for the plaintiff.]

                                          Decided: January 29, 2004

     Barnes, Richardson & Colburn (James S. O'Kelly, Alan Goggins
and Kevin J. Sullivan) for the plaintiff.

     Peter D. Keisler, Assistant Attorney General; Barbara S.
Williams, Attorney in Charge, International Trade Field Office,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Bruce N. Stratvert), for the defendant.

          AQUILINO, Judge:     Although the parties' cross-motions

for summary judgment herein served to condense their controversy,

the court concluded in slip op. 03-67, 27 CIT      (June 25, 2003),

familiarity with which is presumed, that the opinions of their

respective experts on the definitive issue(s) had to be subjected

to cross-examination at a trial. That examination has taken place,

and counsel for both sides have now filed briefs thereon commensu-

rate with their excellent conduct thereof.
Consolidated
Court No. 97-01-00117                                           Page 2

                                   I

             The motion papers showed the imported merchandise in

question to be menadione sodium bisulfite ("MSB"), menadione sodium

bisulfite complex ("MSBC"), menadione dimethylpyrimidinol bisulfite

("MPB"), or menadione nicotinamide bisulfite ("MNB"), each of which

substance is added to animal feeds. After ingestion, the menadione

in these products is converted into a form of vitamin K2, specifi-
cally K2(20).1   The parties agree that K1 and K2 are vitamins for

purposes of the Harmonized Tariff Schedule of the United States

("HTSUS"), classified under heading 2936, and that the chemical

structures of naturally-occurring vitamin K1 ("phylloquinone") and

vitamin K2 ("menaquinones") are 2-methyl-3-phytyl-1, 4-naphthoqui-

none, and 2-methyl-3-alltrans-polyprenyl-1, 4-naphthoquinone,

respectively.     See Slip Op. 03-67, p. 4, 27 CIT at      .

             The U.S. Customs Service declined to classify plaintiff's

goods under HTSUS heading 2936 on the ground that it does not cover

"synthetic substitutes for vitamins", the essence of which was de-

fined in the motion papers as

      a synthesized chemical compound that is not found in
      nature but has vitamin activity. This differs from a

      1
          See Slip Op. 03-67, p. 4, 27 CIT at     .   As stated at the
trial,

      the well-defined role of Vitamin K is to synthesize
      proteins that are needed for normal blood coagulation.
      In the absence of Vitamin K[,] animals can experience
      hemorrhagic events.

Transcript ("Tr."), pp. 13-14.     Cf. id. at 20.
Consolidated
Court No. 97-01-00117                                             Page 3

     synthetically reproduced vitamin whose structure is found
     in nature but has been synthesized from other chemicals.2

Whereupon the defendant rests on HTSUS heading 2914 ("Ketones and

quinones, whether or not with other oxygen function, and their

halogenated, sulfonated, nitrated, or nitrosated derivatives") or

heading 2933 ("Heterocyclic compounds with nitrogen hetero-atom(s)

only; nucleic acids and their salts") as the correct classifica-
tion(s).3

                                  A

             The trial was conducted pursuant to a pretrial order,

Schedule C of which set forth the following uncontested facts:

     2
      Slip Op. 03-67, p. 5, 27 CIT at         .    The defendant asserts
now as a contested fact that

     Customs excluded the imported products from classifi-
     cation under Heading 2936 because they are not natural
     precursors of the natural vitamins K1 and K2, they are
     not naturally occurring vitamins, they are not synthetic
     reproductions of naturally occurring vitamins, nor are
     they derivatives thereof, they are not provitamins within
     the meaning of Heading 2936, and because of the
     exclusions in the HTSUS Explanatory Notes for Heading
     2936.

Pretrial Order, Schedule C-2, para. 15. See also Defendant United
States' Proposed Findings of Fact and Conclusions of Law
[hereinafter referred to as "Defendant's Post-Trial Brief"], p. 2.
         3
        See Defendant's Post-Trial Brief, p. 2. On its part, the
plaintiff reiterates that,

     [w]hile the parties agree that heading 2914 and 2933
     describe the imported merchandise, if such merchandise is
     also described under heading 2936, that heading prevails
     in accordance with headnote 3 to HTSUS Chapter 29.

Plaintiff's Post-Trial Brief, p. 1    n. 2.       See Slip Op. 03-67, pp.
8-9, 27 CIT at    .
Consolidated
Court No. 97-01-00117                                       Page 4

          1. The principal use of the imported products is as
     a component in animal feed premixes, in particular
     poultry feed premixes, to provide vitamin K nutrition to
     the animal.

          2. Vitamin K1 (phylloquinone) and vitamin K2 (me-
     naquinones) are not used in animal feeds because they are
     too unstable to withstand the feed pellet manufacturing
     process and too costly in comparison with the imported
     MSB, MSBC, MPB or MNB.

          3. Menadione is a highly reactive substance which
     must be derivatized before it can be used commercially in
     the production of animal feeds.

           4. A provitamin is a substance that, after inges-
     tion, is converted into a vitamin by the human or animal
     body.

          5. After ingestion, the menadione in MSB, MSBC,
     MPB and MNB is converted into menaquinone-4 in the liver
     of the chicken by a natural process.

          6. Menadione has been found in the Asplenium La-
     ciniatum fern and in the husks of Black and English
     walnuts. The chemical structure of naturally occurring
     menadione is 2-methyl-1, 4[-]naphthoquinone.

          7. Menadione sodium bisulfite was first synthesized
     by Moore and Kirchmeyer, which resulted in U.S. Patent
     No. 2,367,302, patented January 16, 1945. . . .

          8. Menadione Dimethylpyrimidinol Bisulfite was
     first synthesized by Nanninga, which resulted in U.S.
     Patent No. 3,325,169, patented June 27, 1967. . . .

          9. The products imported by plaintiff, MSB, MSBC,
     MPB, and MNB[,] are derivatives of menadione.

          Given these representations in the pretrial order, the

plaintiff submits that the central issue before the court in this

case is whether menadione is a natural provitamin.   See Tr., p. 6.

On its part, the defendant also listed this as the number one issue

but proceeded to propound five additional questions about the
Consolidated
Court No. 97-01-00117                                         Page 5

specific "products in issue".4   All of them focus, of course, on

the meaning of HTSUS heading 2936:

     Provitamins and vitamins, natural or reproduced by syn-
     thesis (including natural concentrates), derivatives
     thereof used primarily as vitamins, and intermixtures of
     the foregoing, whether or not in any solvent[.]

                                 (1)
          The answer to the first issue is clear on the record

developed herein.   As the parties have stipulated, a provitamin is

a substance that is converted within the body of an animal into a

vitamin after ingestion. See, e.g., Tr., pp. 12, 14, 180.    Again as

stipulated, menadione has been determined to exist in nature. See,

e.g., Plaintiff's Exhibit 4 and Defendant's Exhibit P (Binder,

Benson & Flath, Eight 1,4-Naphthoquinones from Juglans, 28 Phyto-

chemistry 2799 (1989)); Plaintiff's Exhibit 5 and Defendant's

Exhibit Q (Gupta, Khanna & Sharma, Chemical Components of Asplenium

Laciniatum (1976)); Tr., pp. 16-17, 35, 140-41, 162-63. And, after

ingestion by a chicken, menadione is converted into a form of

vitamin K2, specifically, vitamin K2(20) or menaquinone-4.   Compare

Slip Op. 03-67, p. 4, para. 11, 27 CIT at    , with Pretrial Order,

    4
      Compare Pretrial Order, Schedule F-1, with id., Schedule F-
2. Now, the plaintiff asserts that "the Court conducted a trial to
determine whether the imported products are derivatives of a
natural provitamin." Plaintiff's Post-Trial Brief, p. 2.

     To be sure, the parties, not the court, essentially conducted
the trial, during which and after which the undersigned has been
concerned with more than just this issue.
Consolidated
Court No. 97-01-00117                                        Page 6

Schedule C, para. 5 and Tr. pp. 17-18, 33, 167-69, 187-88.   Where-

upon the plaintiff would now limit the

     issues for this Court to decide [to] whether menadione is
     a "natural" provitamin and whether the imported products
     are used primarily as vitamins.

Plaintiff's Post-Trial Brief, pp. 2-3.

           The HTSUS, at least chapter 29 thereof, does not define
natural.   Its predecessor Tariff Schedules of the United States

("TSUS") did define "natural substances" as

     those substances found in nature which comprise whole
     plants and herbs, anatomical parts thereof, vegetable
     saps, extracts, secretions and other constituents
     thereof; whole animals, anatomical parts thereof, glands
     or other animal organs, extracts, secretions and other
     constituents thereof, and which have not had changes made
     in their molecular structure as found in nature[.]

TSUS Schedule 4, Part 3, Headnote 3(a) (1986).   And Customs has let

it be known that TSUS definitions

     are applied by [it] to the HTSUS, in the absence of
     specific definitions, since these definitions are com-
     monly accepted and it is clear from the wording of the
     HTSUS provisions that the same distinction between
     natural and synthetic is intended.

HQ 086658, p. 2 (March 21, 1990).    In Schering Corporation v.

United States, 1 CIT 217, 219 (1981), the court pointed out that,

for a substance to be natural within the meaning of the foregoing

TSUS headnote 3(a),

     (1) It must be found in nature in a vegetable or animal
     source; and (2) it cannot have had changes made in its
     molecular structure as found in nature.
Consolidated
Court No. 97-01-00117                                                  Page 7

Moreover, absent contrary legislative intent, tariff terms can be

construed in accordance with their common or popular meaning.

E.g., Marubeni America Corp. v. United States, 35 F.3d 530, 534

(Fed.Cir. 1994).    And, to

     assist it in ascertaining the common meaning of a tariff
     term, the court may rely upon its own understanding of
     the terms used and it may consult lexicographic and
     scientific authorities, dictionaries, and other reliable
     information sources.
Brookside    Veneers,   Ltd.   v.   United   States,   847   F.2d   786,   789

(Fed.Cir. 1988). Here, this court can and does accept "natural" as

the pristine adjectival reference to proven existence in nature5,

notwithstanding the fact that certain lexicographers and parsers of

the English language have sought to expand this seminal usage to

the limits of human experience.       See, e.g., Webster's New Interna-

tional Dictionary of the English Language, 2d ed. Unabridged, pp.

1630-31 (1945); Funk & Wagnalls Standard Dictionary of the English

Language, Int'l ed., pp. 845-46 (1963).          Whichever approach,       the

court finds menadione to be a natural provitamin.            See, e.g., Tr.,

p. 189.

                                     (2)

            The answer to the second triable issue posited by the

defendant in its schedule F-2 to the pretrial order, namely,

whether the products under consideration are natural vitamins or

natural provitamins, is also clear.          They are neither.      As far as

this record is concerned, none has been found to exist in nature,

     5
         Cf. Tr., pp. 12, 13.
Consolidated
Court No. 97-01-00117                                        Page 8

and the court can only find that none would exist but for the

ingenuity of man.

                                 (3)

            Defendant's next issue is whether plaintiff's products

are reproductions by synthesis of natural vitamins or natural pro-

vitamins.     The court cannot find that they are, nor does the

plaintiff argue otherwise.
                                 (4)

            The defendant articulates its remaining "triable issues"

as follows:

     4. Whether the products in issue are derivatives, used
     primarily as vitamins, of natural vitamins or natural
     provitamins.

     5. Whether the bisulfite adducts of menodione [sic],
     in issue, represent an "added stabilizer," within the
     meaning of HTSUS Chapter 29 Note 1(f).

     6. Whether the products in issue are intermixtures of:
     provitamins and vitamins, natural or reproduced by syn-
     thesis, and/or derivatives thereof used primarily as vi-
     tamins.6

    6
      Pretrial Order, Schedule F-2. The HTSUS headnote 1 referred
to provides that the headings of chapter 29 apply, in part, only
to:

     (a)    Separate chemically defined organic compounds,
            whether or not containing impurities;

     (b)    Mixtures of two or more isomers of the same
            organic compound (whether or not containing
            impurities), except mixtures of acyclic hydro-
            carbon isomers (other than stereoisomers),
            whether or not saturated (chapter 27);

     (c)    The products of headings 2936 to 2939 or the
            sugar ethers and sugar esters, and their

                                               (footnote continued)
Consolidated
Court No. 97-01-00117                                        Page 9

The answer to number 4 is in the affirmative, given the record

support, supra, for the court's finding that menadione is a natural

provitamin and the parties' above-numbered stipulated fact 9 that

MSB, MSBC, MPB and MNB are derivatives7 of menadione.   See Tr., pp.

           salts, of heading 2940, or the products of
           heading 2941, whether or not chemically de-
           fined;
     (d)   Products mentioned in (a), (b) or (c) above
           dissolved in water;

     (e)   Products mentioned in (a), (b) or (c) above
           dissolved in other solvents provided that the
           solution constitutes a normal and necessary
           method of putting up these products adopted
           solely for reasons of safety or for transport
           and that the solvent does not render the pro-
           duct particularly suitable for specific use
           rather than for general use;

     (f)   The products mentioned in (a), (b), (c), (d)
           or (e) above with an added stabilizer nec-
           essary for their preservation or transport;
           . . ..
     7
       In answering an interrogatory propounded by the plaintiff
pretrial, the defendant stated that, for
     purposes of Heading 2936, a chemical derivative is a
     compound containing the same basic structure as its
     theoretical parent compound without any significant
     portion of the parent compound having been removed. Our
     definition is consistent with the definition in HRL
     085775, dated February 27, 1990, which states: "a
     derivative of a compound results from the modification of
     that compound by adding to the moiety or the basic
     structure of the compound without loss of that basic
     structure."

Plaintiff's Exhibit 15 [Defendant's Response to Plaintiff's First
Interrogatories], p. 3, para. 9; Tr., p. 28. The defendant pointed
in subsequent paragraph 12 of its Response to definitions of
derivatives found in Hackh's Chemical Dictionary, Webster's Third
New International Dictionary, and in the sixth edition of Van
Nostrand's Scientific Encyclopedia. See Tr., pp. 28-29. Cf. id. at
70-71.
Consolidated
Court No. 97-01-00117                                         Page 10

28-29, 66, 104, 173, 196.    See also Defendant's Post-Trial Brief,

pp. 4-5, 22-23.    Moreover, the evidence shows that the bisulfite

adducts of these products are stabilizers necessary for their

preservation or transport.    See, e.g., Tr., pp. 66, 184; Slip Op.

03-67, p. 6, para. 23, 27 CIT at       .   Finally, the primary if not

only use of these products shown on the record is "to provide

vitamin K nutrition to the animal." Pretrial Order, Schedule C,
para. 1.   This occurs within the body of the animal when the sodium

bisulfite stabilizer becomes disassociated (and then excreted),

leaving the provitamin menadione for conversion to vitamin K2(20).

See, e.g., Tr., pp. 25-26, 44, 53, 78-79, 112, 149, 167-68, 178-79.

                                   B

           The defendant has admitted that HTSUS heading 2936 covers

"synthetic derivatives of naturally occurring vitamins or pro-

vitamins".   Plaintiff's Exhibit 17 [Defendant's Response to Plain-

tiff's First Request for Admission], p. 1, para. 1.       Indeed, the

Explanatory Notes to that heading emphasize this point.       See De-

fendant's Exhibit N, p. 462, para. (a).          Moreover, the HTSUS

chapter 29 subheading note 1 states:

     Within any one heading of this chapter, derivatives of a
     chemical compound (or group of chemical compounds) are to
     be classified in the same subheading as that compound (or
     group of compounds) provided that they are not more
     specifically covered by any other subheading and that
     there is no residual subheading named "Other" in the se-
     ries of subheadings concerned.
Consolidated
Court No. 97-01-00117                                              Page 11

            The defendant refers the court to that part of the Ex-

planatory Notes to HTSUS heading 2936 which would exclude from its

coverage "[s]ynthetic substitutes for vitamins", listing, among

others,

       Vitamin K3: menadione, menaphthone, methylnaphthone or 2-
       methyl-1, 4-naphthoquinone; sodium salt of 2-methyl-1, 4-
       naphthoquinone bisulphite derivative (heading 29.14);
       Menadiol or 1,4-dihydroxy-2-methylnaphthalene (heading
       29.07).

Defendant's Exhibit N, p. 468, para. (2)(a) (bold face in orig-

inal).

            The plaintiff claims that this exclusion misses the mark

-- as proven in this case.       First, at the time of publication in

1964   of   the   Third   Impression   of   the   Brussels   Nomenclature,

menadione was considered to be a form of vitamin K and given the

subscript 3.      Since then, science has concluded that menadione is

not a vitamin, rather a provitamin for menaquinone-4, a form of

vitamin K2.    See Tr., pp. 33-34.     Hence, K3 is no longer the prop-

er reference.      See id. at 33-34, 57, 120.      Second, menadione has

since been discovered in nature.       It is not a synthetic substitute

for a vitamin, nor are provitamins such synthetic substitutes.

            The courts have consistently pointed out that the HTSUS

Explanatory Notes are not legally binding but that they may be

consulted for guidance and are generally indicative of the proper

interpretation of the various provisions of the Harmonized Tariff
Consolidated
Court No. 97-01-00117                                                    Page 12

Schedule.      See, e.g., Park B. Smith, Ltd. v. United States, 347

F.3d 922, 929 n. 3 (Fed.Cir. 2003); Russell Stadelman & Co. v.

United States, 242 F.3d 1044, 1050 (Fed.Cir. 2001); Carl Zeiss,

Inc. v. United States, 195 F.3d 1375, 1378 n. 1 (Fed.Cir. 1999);

Intercontinental Marble Corp. v. United States, 27 CIT               ,     , 264

F.Supp.2d 1306, 1320 (2003); Toy Biz, Inc. v. United States, 26 CIT

   ,         , 219 F.Supp.2d 1289, 1293-94 (2002); North American
Processing Co. v. United States, 23 CIT 385, 387 n. 5, 56 F.Supp.2d

1174, 1176 n. 5 (1999), aff'd, 236 F.3d 695 (Fed.Cir. 2001).

              To consider the above-quoted exclusionary note is to lead

the court to conclude that it is not of moment in this case.                 To

repeat, menadione is a natural provitamin.           See, e.g., Tr., p. 31.

It is not a synthetic substitute for vitamin K, nor are the

bisulfite      adducts   that   simply   stabilize   the   "highly   reactive

substance" that is menadione on its intended path to a chicken's

liver.      Moreover, the court notes in passing that a subsection of

that exclusionary note (2), namely, "(d) Cysteine, a vitamin B

substitute (heading 29.30)", seems out of place8 in that the other

four lettered subsections, (a), (b), (c) and (e), at least refer to

forms of K, the vitamin at issue herein.             In short, all that the

record developed herein supports is a finding that the note(s) at

bar could stand some correction and updating.

       8
           See Tr., pp. 75, 177-78.
Consolidated
Court No. 97-01-00117                                              Page 13

                                     II

            As pointed out in slip opinion 03-67, the court first

construes the language of an HTSUS heading, and any relevant

section or chapter notes, to determine whether merchandise at issue

is classifiable under that heading. Only after determining that it

is classifiable thereunder should the court look to subheadings to
determine the correct classification of the particular good.            27

CIT at      , quoting Orlando Food Corp. v. United States, 140 F.3d

1437, 1440 (Fed.Cir. 1998); Schulstad USA, Inc. v. United States,

26 CIT      ,      , 240 F.Supp.2d 1335, 1338 (2002).     Three subhead-

ings of heading 2936 have the same setting in the matrix, to wit,

2936.10.00 ("Provitamins, unmixed"), 2936.21.00 ("Vitamins and

their derivatives, unmixed"), and 2936.90.00 ("Other, including

natural concentrates").       Clearly, plaintiff's products are not

vitamins and their derivatives within the purview of subheading

2936.21, nor are they provitamins, unmixed per 2936.10.00.           Ergo,

each   of   them   falls   within   the   basket   provision,   subheading

2936.90.00.     Cf. Plaintiff's Post-Trial Brief, p. 17:

       . . . [E]ven if heading 2936 does not by its very terms
       include synthetic derivatives of provitamins, Subheading
       Note 1 directs the classification of such derivatives
       therein, specifically, under subheading 2936.90.0000,
       HTSUS.
Consolidated
Court No. 97-01-00117                                              Page 14

                                   III

            In view of the foregoing, which represents this court's

findings of fact and conclusions of law within the meaning of USCIT

Rule 52(a), the summary "LAW AND ANALYSIS" set forth in HQ 957946

(Dec. 10, 1996) and HQ 950338 (Feb. 16, 1993), which the defendant

offered in evidence as exhibits Y and Z and upon which it now re-

lies9, is not controlling.        As the Supreme Court explained in
Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), and reaffirmed

in United States v. Mead Corp., 533 U.S. 218, 228 (2001), the

     weight [accorded an administrative ruling] in a particu-
     lar case will depend upon the thoroughness evident in its
     consideration, the validity of its reasoning, its con-
     sistency with earlier and later pronouncements, and all
     those factors which give it power to persuade, [even] if
     lacking power to control.

Here, defendant's classification of plaintiff's products under

HTSUS chapter 29 (1994) is entitled to deference, but not to the

extent of foreclosure of their most correct classification under

subheading    2936.90.00   in   accordance   with   headnote   3   to   that

chapter.    Judgment will enter accordingly.

Decided:    New York, New York
            January 29, 2004

                                         Thomas J. Aquilino, Jr.
                                                      Judge

     9
         See Defendant's Post-Trial Brief, p. 18.