United States Court of International Trade

Tapenades are Classified as Sauces under the HTSUS

Before the Court in Mondiv, Div. of Lassonde Specialties, Inc. v. United States, Slip Op. 18-102, Court No. 16-00038, were cross motions for summary judgment regarding the tariff classification of imported artichoke antipasto and green olive tapenade. The main issue was if the imported food products were “other vegetables prepared or preserved” or “sauces” under the Harmonized Tariff Schedule of the United States (“HTSUS”). Both products consist of either artichokes or green olives mixed with other various vegetables and oils, then cooked, and packaged for retail sale. For the following reasons the Court found the antipasto and tapenade were properly classified as sauces.

“The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (“GRIs”) … applied in numerical order.” Id. at 7. “GRI 1 instructs that, for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes,” construed according to their common and popular meaning. Id. at 7. GRI 3(a) instructs that “when a product is prima facie classifiable under two or more headings, the heading which provides the most specific description shall be preferred.” Id. at 18.  The Court found the products were prima facie classifiable as “other vegetables prepared or preserved” because the products were made from: vegetables, prepared or preserved, otherwise than by vinegar or acetic acid, not frozen, and were not preserved using sugar fulfilling the requirements the HTSUS provides. The Court also found that the products were prima facie classifiable as sauces “because both products are mixtures of ingredients in semisolid form that add flavoring to food.” Id. at 18. Using GRI 3(a) the Court found that the sauces heading was more appropriate because “the requirements of the sauce provision are more difficult to satisfy because preparing a sauce involves some degree of processing or adding ingredients.” Id. at 18.

Cross Motions for Summary Judgment Denied

Before the Court in Porsche Motorsport North America, Inc. v. United States, Slip Op. 18-105, Court No. 16-00182, were cross motions for summary judgment. The case involved the re-importation of various automobile parts, tools, nuts and bolts. Porsche had provided “emergency support for race teams during three of the Canadian 2014 Porsche GT3 Cup Challenge races in case of accidents or unexpected breakdowns” by sending the various parts across to border. Id. at 2. Porsche sold some of the parts it had exported during each of the three races, and it remained unclear what exactly was in the shipments returned. U.S. Customs and Border Protection (“CBP”) ultimately classified the articles under various dutiable tariff provisions of the HTSUS. Porsche filed a protest arguing the entries should be liquidated under HTSUS subheading 9801.00.85.00 and assessed duty free. For the following reasons the Court denies both parties motions for summary judgment regarding classification under HTSUS subheading 9801.00.85.00 and grants the defendant’s motion for summary judgment regarding if some of the entries were entitled to liquidation by operation of law.

“If there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law, summary judgment is appropriate.” Id. at 5.   The Court said with respect to the plaintiff’s substantive motion for summary judgment, “the identification of the merchandise remains imprecise” and the motion was premature because the Court cannot “make an informed determination regarding the propriety of a particular tariff provision without knowing exactly what it is being asked to classify.” Id. at 9-10. The Court also said the parties did not agree over the nature of the articles claimed for classification under HTSUS 9801.00.85. The Court said, “the “nature” of the imported article(s) actually remains in dispute, as whether the articles at bar are or are not “tools of the trade” returned to the United States after having been exported for “temporary use” abroad cannot be “found” on summary judgment.”  Id. at 18. As such, both the motions for summary judgment were denied. The other issue was if plaintiff was entitled to liquidation as an operation of law because Customs did not timely issue notices of extension of liquidation or provide adequate reasoning. The Court found the dispute centered on disputed facts and was not proper for summary judgment. However, in regards to the argument involving failing to provide a reason for the notices, the government was entitled to summary judgment because “the failure to include a reason for an extension on such notice constitutes harmless error and does not invalidate the extension notice.” Id. at 7.

Defendant’s Motion to Amend the Court’s Decision was Denied

Before the Court in Consolidated Fibers, Inc. v. United States, Slip Op. 18-103, Court No. 14-00222 (August 16, 2018), was the defendant’s motion for the Court to amend language concerning the application of the Equal Access to Justice (“EAJA”) in the Court’s previous decision on the case’s merits from November 2017.  The government requested the Court change its language “discussing the Government’s burden of demonstrating that its position was substantially justified for purposes of the EAJA.” Id. at 4. For the following reasons the Court denied the Government’s motion.

“The major grounds justifying a grant of a motion to reconsider a judgment are an intervening change in the controlling law, the availability of new evidence, the need to correct a clear factual or legal error, or the need to prevent manifest injustice.” Id. at 4. The Court said the language in the previous decision could not possibly be interpreted to show “the court … failed to apply the correct legal standard.” Id. at 6. The Court dismissed the government’s argument that the standard applied by the Court was not clear. In addition, the Court said the precedent cited by the Government was dicta and was not binding on the Court.

Jurisdictional Requirements Not Met; Case Dismissed

Before the Court in DIS Vintage, LLC v. United States, Slip Op. 18-104, Court No. 16-00085 (August 21, 2018), was defendant’s motion to dismiss the case for lack of subject matter jurisdiction. Plaintiffs brought this case to challenge the tariff classification of imported clothing. On April 12, 2013 plaintiff imported apparel into the Port of Miami. Customs liquidated the entry under subheading 6110.30.30 at an assessed duty rate of 32%, and issued a bill to plaintiffs for $9,247.29 plus interest. In July 2013, plaintiffs filed a protest, arguing the apparel was worn and should be duty free, and in November 2015 plaintiff requested accelerated deposition. The protest was denied in December 2015. On April 4, 2015 the bill issued by Customs remained unpaid, and Customs mailed to plaintiff a letter stating, “Full Amount Due Upon Receipt of $10,031.01 and an Amount Due After 4-05-16 (including interest) of $10,057.08.” Id. at 2. Plaintiff received the notice on April 11th and mailed Customs a check for $10,031.01. On May 9, 2015 Customs issued another notice stating that a balance of $26.16 remained. Plaintiff alleges they received this notice on May 16, 2015. On May 12, 2015 plaintiff filed this case and quickly paid the remaining balance. For the following reasons the Court grants defendant’s motion to dismiss.

28 U.S.C. § 1581(a) grants the Court exclusive jurisdiction over any civil action commenced to contest the denial of a protest under section 515 of the Tariff Act of 1930. To invoke the Trade Court’s jurisdiction under 28 U.S.C. § 1581(a), “an aggrieved importer must first file a protest under 19 U.S.C. § 1514, which the United States Customs and Border Protection” then denies. Id. at 3. “Once Customs denies that protest, the importer must then pay all liquidated duties, charges, or exactions owed before commencing suit in the Trade Court.” Id. at 3-4. The Court said the requirement “that all liquidated duties, charges, or exactions have been paid at the time the action is commenced is a jurisdictional requirement and, accordingly, is not a requirement that may be waived by the court.” Id. at 5. In addressing the plaintiff’s argument that an equitable exception be made, the Court made clear that it lacked the power to allow such exception. The Court also showed that even if such an exception was allowed, it could not be granted in this case because “Dis Vintage was placed on actual notice that payments were owing on the entry” on May 16th. Id. at 12. According to the Court, plaintiffs knew they did not meet the Court’s jurisdictional requirements and still chose not to refile the action invoking the proper jurisdiction of the Court.