Court Opinion

ID: 4692154
Source: CourtListenerOpinion
Date Created: 2021-06-02 15:02:58.909821+00
Date Added: 2024-06-11T08:05:14.176100
License: Public Domain

Case: 20-1476    Document: 39     Page: 1    Filed: 06/02/2021

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

       SC JOHNSON & SON INCORPORATED,
                Plaintiff-Appellant

                             v.

                    UNITED STATES,
                    Defendant-Appellee
                  ______________________

                        2020-1476
                  ______________________

    Appeal from the United States Court of International
 Trade in No. 1:14-cv-00184-JCG, Judge Jennifer Choe-
 Groves.
                ______________________

                   Decided: June 2, 2021
                  ______________________

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

     MONICA PERRETTE TRIANA, International Trade Field
 Office, United States Department of Justice, New York,
 NY, argued for defendant-appellee. Also represented by
 JEFFREY B. CLARK, JEANNE DAVIDSON, AIMEE LEE, JUSTIN
 REINHART MILLER.
                 ______________________
Case: 20-1476    Document: 39     Page: 2    Filed: 06/02/2021

 2                                SC JOHNSON & SON INC.   v. US

  Before MOORE, Chief Judge*, DYK and O’MALLEY, Circuit
                        Judges.
 DYK, Circuit Judge.
      S.C. Johnson appeals the Court of International
 Trade’s (“Trade Court”) determination that Ziploc® brand
 reclosable sandwich bags are classified under Harmonized
 Tariff Schedule of the United States (“HTSUS”) heading
 3923. We affirm.
                       BACKGROUND
     On May 15, 2013, S.C. Johnson imported 1,512 cases of
 Ziploc® brand reclosable sandwich bags from Thailand.
 The bags have a single zipper closure and measure six and
 one-half inches by five and seven-eighths inches. They are
 manufactured from polyethylene resin pellets and are
 tested to ensure compatibility with food contact.
     Upon entry, Customs classified the sandwich bags un-
 der HTSUS subheading 3923.21.00, covering “[a]rticles for
 the conveyance or packing of goods, of plastics; stoppers,
 lids, caps and other closures, of plastics: Sacks and bags
 (including cones): Of polymers of ethylene.” On June 26,
 2014, S.C. Johnson filed a protest, which was deemed de-
 nied.
     S.C. Johnson then initiated this action before the
 Trade Court, contending that the sandwich bags should
 have been classified under HTSUS subheading 3924.90.56,
 covering “[t]ableware, kitchenware, other household arti-
 cles and hygienic or toilet articles, of plastics: Other:
 Other.” S.C. Johnson additionally argued that, because
 the merchandise should have been classified under sub-
 heading 3924.90.56 and was imported from Thailand, the
 bags were eligible for duty-free treatment under the Gen-
 eralized System of Preferences.
     The parties filed cross-motions for summary judgment
 before the Trade Court. The Trade Court determined

     __________________________

     * Chief Judge Moore assumed the position of Chief
 Judge on May 22, 2021.
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 SC JOHNSON & SON INC.   v. US                              3

 “HTSUS Heading 3923 is a principal use provision and en-
 compasses goods of plastic used to carry or transport other
 goods of any kind.” J.A. 34. The Trade Court also con-
 cluded that “HTSUS Heading 3924 is an eo nomine provi-
 sion that encompasses plastic goods of or relating to the
 house or household.” Id. at 37. The Trade Court declined
 to determine on summary judgment whether the sandwich
 bags were prima facie classifiable under either heading.
     After a bench trial on the papers, the Trade Court con-
 ducted a principal use analysis using the Carborundum
 factors to determine whether the sandwich bags were
 prima facie classifiable under HTSUS heading 3923. 1 The
 court concluded that “the majority of the Carborundum fac-
 tors support[ed] classification under HTSUS Heading
 3923” and that “the subject merchandise [we]re prima facie
 classifiable under” that heading. J.A. 21.
    The Trade Court also determined that the sandwich
 bags were prima facie classifiable under HTSUS heading
 3924, noting that “[t]he sandwich bags are designed in a

     1    The Carborundum factors are used to determine
 whether merchandise is commercially fungible with the
 particular class or kind of merchandise that falls under a
 principal use provision. See Aromont USA, Inc. v. United
 States, 671 F.3d 1310, 1312–13 (Fed. Cir. 2012) (citing
 United States v. Carborundum, 536 F.2d 373, 377 (CCPA
 1976)). Under Carborundum, courts look to (1) use in the
 same manner as merchandise which defines the class;
 (2) the general physical characteristics of the merchandise;
 (3) the economic practicality of so using the import; (4) the
 expectation of the ultimate purchasers; (5) the channels of
 trade in which the merchandise moves; (6) the environ-
 ment of the sale, such as accompanying accessories and the
 manner in which the merchandise is advertised and dis-
 played; and (7) the recognition in the trade of this use. Id.
 at 1313.
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 4                                SC JOHNSON & SON INC.   v. US

 manner consistent with household food storage” and that
 “S.C. Johnson’s internal study indicate[d] that the sand-
 wich bags can be found in a household.” J.A. 22.
     Because the sandwich bags were prima facie classifia-
 ble under both headings at issue, the court applied General
 Rule of Interpretation (“GRI”) 3, which dictates that goods
 should be classified under the heading that provides the
 most specific description. 2 The court concluded that the
 sandwich bags were properly classified under HTSUS
 heading 3923 because that heading “has requirements that
 are more difficult to satisfy and describe the article with a
 greater degree of accuracy and certainty.” J.A. 24. Be-
 cause the products were classified under HTSUS heading
 3923, the Trade Court did not reach whether the sandwich
 bags were eligible for duty-free treatment under the Gen-
 eralized System of Preferences.
    S.C. Johnson appealed.      We have jurisdiction under
 28 U.S.C. § 1295(a)(5).
                         DISCUSSION
     The classification of merchandise “involves two under-
 lying steps: (1) determining the proper meaning of the tar-
 iff provisions, which is a question of law; and (2)

     2   The GRIs, along with the Additional U.S. Rules of
 Interpretation (“ARIs”), “govern the proper classification of
 all merchandise and are applied in numerical order.” Carl
 Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir.
 1999). GRI 3 provides in relevant part that:
     When . . . goods are, prima facie, classifiable under
     two or more headings . . . the heading which pro-
     vides the most specific description shall be pre-
     ferred to headings providing a more general
     description.
 GRI 3(a).
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 SC JOHNSON & SON INC.   v. US                               5

 determining which heading the particular merchandise
 falls within, which is a question of fact.” Deckers Corp. v.
 United States, 532 F.3d 1312, 1314–15 (Fed. Cir. 2008).
 “We review questions of law de novo, including the inter-
 pretation of the terms of the HTSUS, whereas factual find-
 ings of the Court of International Trade are reviewed for
 clear error.” Id. at 1315. The issues here are legal issues—
 the interpretation of HTSUS headings.
                                 I
     First, we address S.C. Johnson’s argument that the
 Trade Court erred in determining that the sandwich bags
 are classifiable under HTSUS heading 3923. That heading
 provides for classification of
    [a]rticles for the conveyance or packing of goods, of
    plastics; stoppers, lids, caps and other closures, of
    plastics.
 HTSUS heading 3923.
     The Trade Court concluded that HTSUS heading 3923
 “encompasses goods of plastic used to carry or to transport
 other goods of any kind.” J.A. 34. S.C. Johnson argues that
 HTSUS heading 3923 should instead apply only to “articles
 used for commercial purposes,” Appellant’s Br. 46, that is,
 the transportation of goods between sellers and their sup-
 pliers rather than the transportation of goods by custom-
 ers. We disagree.
     In support of its interpretation, S.C. Johnson urges
 that HTSUS heading 3923 should be construed to have the
 same scope as a predecessor tariff provision, Tariff Sched-
 ules of the United States (“TSUS”) item 772.20, which en-
 compassed
    [c]ontainers, of rubber or plastics, with or without
    their closures, chiefly used for the packing, trans-
    porting, or marketing of merchandise.
 TSUS item 772.20.
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 6                               SC JOHNSON & SON INC.   v. US

      Because of the reference to “merchandise,” TSUS item
 772.20 was construed as limited to the packing, transport,
 or marketing of goods in the stream of commerce. See Im-
 perial Packaging Corp. v. United States, 535 F. Supp. 688,
 689–90 (Ct. Int’l Trade 1981) (concluding that plastic shop-
 ping bags used by customers to carry merchandise did not
 fall under TSUS 772.20 because the heading was “not in-
 tended to encompass merchandise bags which retail stores
 furnish to their customers for carrying purchases home”).
      None of the cases on which S.C. Johnson relies was de-
 cided by this court or its predecessor. In any event, cases
 limiting TSUS item 772.20 to the packing or transportation
 of commercial goods do not apply to the “differing language
 of the more recently enacted HTSUS.” Mitsubishi Int’l
 Corp. v. United States, 182 F.3d 884, 886 (Fed. Cir. 1999);
 see also Bausch & Lomb, Inc. v. United States, 148 F.3d
 1363, 1367 (Fed. Cir. 1998) (addressing the differences be-
 tween an HTSUS sub-heading and TSUS item and stating
 that “[w]e can safely assume that Congress changed the
 language for a reason”). The language of HTSUS heading
 3923 differs from TSUS item 772.20 item in two material
 respects. First, HTSUS heading 3923 changed “merchan-
 dise” to “goods.” As the government correctly points out,
 the term “goods” is broader than “merchandise” and in-
 cludes “both personal property as well as items of trade.”
 Appellee’s Br. 21; see also Good, Webster’s II New College
 Dictionary 480 (1999) (defining “goods” as “a. Commodities:
 wares . . . b. Portable personal property”).
      Second, the provision was changed to apply to items for
 “conveyance or packing,” HTSUS heading 3923, rather
 than “packing, transporting, or marketing,” TSUS item
 772.20. Thus, HTSUS 3923 applies more broadly to arti-
 cles for the “conveyance or packing of goods,” and is not
 limited to transportation between sellers and their suppli-
 ers.
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 SC JOHNSON & SON INC.   v. US                            7

     The materiality of this difference in language is con-
 firmed by a comparison of the Summary of Trade and Tariff
 Information for TSUS item 772.20 and the current Explan-
 atory Notes for HTSUS heading 3923. The Summary of
 Trade and Tariff Information states that
    [b]ags and similar nonrigid articles which are not
    covered here under TSUS item 772.20 include dis-
    posable household bags such as garbage and gar-
    den bags, sandwich bags, and food bags.
 Summary of Trade and Tariff Information, TSUS item
 772.20, 772.85, and 772.86 (April 1981), U.S. International
 Trade Commission. By contrast, the Explanatory Notes for
 HTSUS Heading 3923 state that the heading covers
    [c]ontainers such as boxes, cases, crates, sacks
    and bags (including cones and refuse sacks),
    casks, cans, carboys, bottles, and flasks.
 J.A. 14 (citing EN 39.23(a), (c) (2012) (emphasis added)).
 Thus, while TSUS item 772.20 did not cover disposable
 household bags, the modified language of HTSUS heading
 3923 does.
     Next, S.C. Johnson contends that the Trade Court’s de-
 termination as to the scope of HTSUS heading 3923 is in-
 consistent with Customs rulings finding that heading 3923
 should be limited to “articles used to package or convey
 bulk or commercial merchandise.” Appellant’s Br. 43–44
 (emphasis omitted); see also HQ H026225 (June 4, 2009)
 (stating that HTSUS heading 3923 “provides for cases and
 containers used for shipping purposes” and therefore the
 heading “provides for cases and containers of bulk goods
 and commercial goods, not personal items”). These Cus-
 toms rulings are not entitled to Chevron deference and are
 not persuasive. See United States v. Mead Corp., 533 U.S.
 218, 221 (2001) (holding that a Customs classification rul-
 ing “has no claim to judicial deference under Chevron” but
 can “claim respect according to its persuasiveness”). Nor
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 8                                SC JOHNSON & SON INC.   v. US

 are they consistent. As the government correctly points
 out, Customs previously classified Dow Chemical’s “poly-
 ethylene food bags with minigrip closures” under HTSUS
 subheading 3923.21.00, the same provision at issue in this
 case. HQ 086579 (March 7, 1990).
     Finally, S.C. Johnson contends that our prior decision
 in SGI, Inc. v. United States, 122 F.3d 1468 (Fed. Cir.
 1997), “reject[ed] classification of household food storage
 articles as ‘articles for the conveyance or packing of goods’
 within HTSUS heading 3923.” Appellant’s Br. 45. In SGI,
 this court summarily ruled that soft-sided vinyl insulated
 coolers for transporting food or beverages did not fall
 within the scope of HTSUS heading 3923 because heading
 3923 does not specifically mention “foodstuffs.” SGI, 122
 F.3d at 1473 n.1. S.C. Johnson appears to interpret this
 statement as a determination that HTSUS 3923 does not
 apply to personal food transportation or storage. However,
 there is nothing in HTSUS heading 3923 that excludes con-
 tainers for transporting foodstuffs. As the explanatory
 notes to HTSUS heading 3923 illustrate, the heading in-
 cludes “boxes, cases, crates, sacks and bags (including
 cones and refuse sacks), casks, cans, carboys, bottles and
 flasks” and “[c]ups without handles having the character of
 containers used for the packing or conveyance of certain
 foodstuffs.” EN 39.23. Thus, HTSUS heading 3923 encom-
 passes containers for the packing or transport of foodstuffs.
 Whatever the meaning of SGI, it does not help S.C. John-
 son here. 3

     3    S.C. Johnson also relies on the Explanatory Notes
 for HTSUS heading 3923. The Explanatory Notes exclude
 household articles “which are used as tableware or toilet
 articles and do not have the character of containers for the
 packing or conveyance of goods, whether or not sometimes
 used for such purposes” from HTSUS heading 3923. EN
 39.23. Thus, the Explanatory Notes make clear that this
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 SC JOHNSON & SON INC.   v. US                                9

     S.C. Johnson does not appear to otherwise challenge
 that the sandwich bags are used for the packing or convey-
 ance of goods. Nor could it. The record overwhelmingly
 shows that the sandwich bags are used for the transporta-
 tion of food that is consumed away from home. As
 S.C. Johnson’s witness, Amy Bigna, explained, the bags are
 “predominantly used for packing lunches, whether it be for
 someone to take it to work or to send it to school with your
 child.” J.A. 735.
                                 II
     Next, we address S.C. Johnson’s challenge to the Trade
 Court’s determination that HTSUS heading 3924 is an eo
 nomine provision rather than a use provision. If HTSUS
 heading 3924 is a use provision, then both HTSUS head-
 ings at issue would be use provisions, and under ARI 1(a),
 the “principal use” would govern classification of the sand-
 wich bags. S.C. Johnson contends that the principal use of
 the bags is household food storage. We agree with the
 Trade Court that HTSUS heading 3924 is an eo nomine
 provision. As the Trade Court determined, the key inquiry
 under the terms of the heading is where the articles at is-
 sue are located, rather than how they are used. This head-
 ing provides in pertinent part for the classification of
    [t]ableware, kitchenware, other household articles
    and hygienic or toilet articles, of plastics.
 HTSUS Heading 3924.
     There are two types of HTSUS headings, eo nomine and
 use provisions. “An eo nomine provision ‘describes an arti-
 cle by a specific name,’ whereas a use provision describes

 exclusion does not generally apply to household articles
 having “the character of containers for the packing or con-
 veyance of goods,” such as sandwich bags, regardless of
 whether the articles are located in the household.
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 10                               SC JOHNSON & SON INC.   v. US

 articles according to their principal or actual use.” Schlum-
 berger Tech. Corp. v. United States, 845 F.3d 1158, 1164
 (Fed. Cir. 2017) (quoting Aromont, 671 F.3d at 1312). On
 its face heading 3924 does not define its coverage by refer-
 ence to the “use” of the goods in question. While a use pro-
 vision need not expressly use the words “used for,” see
 StoreWALL, LLC v. United States, 644 F.3d 1358, 1365
 (Fed. Cir. 2011) (Dyk, J., concurring), “a use limitation
 should not be read into an eo nomine provision unless the
 name itself inherently suggests a type of use,” Carl Zeiss,
 Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999).
     In determining whether a provision inherently sug-
 gests a type of use, we have previously looked to dictionary
 definitions of heading terms. In Minnetonka Brands, Inc.
 v. United States, the Trade Court concluded that HTSUS
 heading 9503, covering “Other toys,” was a principal use
 provision because dictionary definitions suggested that
 toys are “designed and used for amusement, diversion or
 play, rather than practicality.” 110 F. Supp. 2d 1020, 1026
 (Ct. Int’l Trade 2000). The Trade Court’s reasoning in Min-
 netonka was adopted by this court in Processed Plastics Co.
 v. United States, 473 F.3d 1164, 1170 (Fed. Cir. 2006) (“We
 agree with the standard adopted in Minnetonka to deter-
 mine whether merchandise should be classified as a toy.”).
     Other cases have determined that generic terms pre-
 ceded by an adjective suggesting a manner of use can con-
 stitute principal use provisions. See, e.g., Stewart-Warner
 Corp. v. United States, 748 F.2d 663, 667 (Fed. Cir. 1984)
 (explaining that the TSUS term encompassing “bicycle
 speedometers” was “a term ‘controlled by use’ . . . because
 the noun ‘bicycle’ acts as an adjective modifying ‘speedom-
 eter’ in a way that implies use of the speedometer on a bi-
 cycle”).
     Here, the Trade Court noted that “‘[h]ousehold’ is de-
 fined as ‘the maintaining of a house,’ ‘household goods and
 chattels,’ ‘a domestic establishment,’ or ‘of or relating to a
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 SC JOHNSON & SON INC.   v. US                               11

 household.’” J.A. 36 (quoting Webster’s Third New Interna-
 tional Dictionary 1096 (1993)); see also id. at 11. The court
 also determined that “‘[a]rticle’ is defined as an ‘individual
 thing or element of a class; a particular object or item.’” Id.
 at 36 (quoting The American Heritage Dictionary of the
 English Language 101 (4th ed. 2000)); see also id. at 11. As
 the Trade Court concluded, these definitions do not suggest
 a specific type of use. Further, none of the terms in HTSUS
 heading 3924 acts as an adjective that suggests a type of
 use rather than a location where the objects can be found.
     S.C. Johnson argues that “an unbroken line of cases”
 establishes that “household article” constitutes a use pro-
 vision. Appellant’s Br. 21. In support, S.C. Johnson relies
 on several cases in which this court or its predecessor de-
 termined that the different tariff term “household utensils”
 used in paragraph 339 of the Tariff Act of 1930 constituted
 a use provision. See M. Pressner & Co. v. United States, 42
 CCPA 48, 49 (1954); Frank P. Dow Co. v. United States, 21
 CCPA 282, 287 (1933); see also Stewart-Warner Corp. v.
 United States, 748 F.2d 663, 667 (Fed. Cir. 1984) (noting
 that the trade court had previously determined that
 “household utensils” was a use classification).
     Even if “household utensils” were a use provision, that
 does not change the outcome of this case. As the govern-
 ment points out, the term “utensil” is defined as “an imple-
 ment, instrument, or vessel used in a household and
 especially a kitchen.” Appellee’s Br. 33 (quoting Utensil,
 Merriam-Webster, https://www.merriam-webster.com/dic-
 tionary/utensil (last visited May 10, 2021)). Thus, the term
 “utensil,” like the term “toy,” suggests a specific use and
 could be construed as a use provision. Processed Plastics,
 473 F.3d at 1170 (discussing the tariff term “Other toys”).
 As we have noted, in contrast, the term “Article” does not
 suggest a type of use and should not be construed as creat-
 ing a use provision.
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 12                               SC JOHNSON & SON INC.   v. US

     In SGI, this court determined that the items at issue
 (soft-sided coolers) fell under HTSUS heading 3924.10.50,
 explaining that “the coolers may be considered ‘household
 articles’ because ‘[t]he coolers may be used in a number of
 locations where food or beverages might be consumed.’”
 SGI, 122 F.3d at 1473 (quoting SGI, Inc. v. United States,
 917 F. Supp. 822, 825 (Ct. Int’l Trade 1996), rev’d, 122 F.3d
 1468) (alteration in original). Whether HTSUS heading
 3924 constitutes a use provision or an eo nomine provision
 did not affect the result of that case. The coolers would
 have been classifiable under HTSUS heading 3924 even if
 the heading were an eo nomine provision because they were
 located in the household. We do not view SGI as determin-
 ing that HTSUS heading 3924 was a use provision. 4
      S.C. Johnson also points to Customs’ website, which
 states that “other household articles . . . [i]ncludes any ar-
 ticle principally used in or around the home.” Appellant’s
 Reply Br. 15 (quoting U.S. Dep’t of Homeland Security, The
 Importation of Tableware, Kitchenware, Other Household
 Articles    and     Toilet    Articles    of     Plastics   9,
 https://www.cbp.gov/sites/default/files/assets/docu-
 ments/2020-Feb/icp031_3.pdf).       However, S.C. Johnson
 agrees that this court need not afford deference to Customs’
 website.

      4  We additionally note that SGI was superseded by
 statute when HTSUS heading 4202 was amended by Pres-
 idential Proclamation to include “insulated food or bever-
 age bags.” Proclamation 7515, 66 Fed. Reg. 66,549, 66,619
 (Dec. 18, 2001), as corrected by Technical Corrections to the
 Harmonized Tariff Schedule of the United States, 67 Fed.
 Reg. 2008 (Jan. 15, 2002). SGI ’s conclusion that insulated
 cooler bags are not classifiable under HTSUS heading 4202
 because the provision “[did] not include containers that or-
 ganize, store, protect, or carry food or beverages,” 122 F.3d
 at 1472, is therefore no longer good law.
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 SC JOHNSON & SON INC.   v. US                                13

     We conclude that HTSUS heading 3924 encompasses
 goods of plastic commonly found in the home and affirm the
 Trade Court’s determination that the heading is an eo nom-
 ine provision. ARI 1(a) therefore does not apply. We also
 agree that the sandwich bags are prima facie classifiable
 under HTSUS heading 3924.
                                 III
     Because the Trade Court concluded that the sandwich
 bags were prima facie classifiable under both HTSUS
 headings, it applied GRI 3 to determine which heading pro-
 vided the more specific description of the products. The
 Trade Court believed that HTSUS heading 3923 describes
 the bags more specifically than HTSUS heading 3924. Nei-
 ther party challenges the Trade Court’s determination that
 HTSUS heading 3923 “has requirements that are more dif-
 ficult to satisfy and describe the article with a greater de-
 gree of accuracy and certainty.” J.A. 24.
     We therefore affirm the Trade Court’s determination
 that the sandwich bags are properly classified under
 HTSUS Heading 3923.
                         AFFIRMED