Appeal from the United States Court of International Trade in No. 09-CV-0095, Senior Judge Judith M. Barzilay.
WILLIAM RANDOLPH RUCKER, Drinker Biddle & Reath LLP, of Chicago, Illinois, argued for plaintiff-appellant.
AIMEE LEE, International Trade Field Office, Commercial Litigation Branch, Civil Division, United States Department of Justice, of New York, New York, argued for defendant-appellee. With her on the brief were STUART F. DELERY, Assistant Attorney General, JEANNE E. DAVIDSON, Director, and AMY M. RUBIN, Acting Assistant Director, International Trade Field Office. Of counsel on the brief was PAULA SMITH, Office of Assistant Chief Counsel, United States Customs and Border Protection, of New York, New York.
Before PROST, Chief Judge, DYK and TARANTO, Circuit Judges.
Taranto, Circuit Judge.
This case involves a dispute over whether a flexible multilayer sheet, composed of several plastic layers encasing a single aluminum layer, should be classified under (a) a plastics heading or (b) an aluminum-foil heading of the Harmonized Tariff Schedule of the United States (HTSUS). The Court of International Trade classified the product, called Flexalcon, under HTSUS subheading 3921.90.40--" Other plates, sheets, film, foil and strip, of plastics: Other: flexible." Alcan Food Packaging (Shelbyville) v. United States, 929 F.Supp.2d 1338, 1351 (Ct. Int'l Trade 2013). We affirm, concluding that Flexalcon comes within that heading and that the competing aluminum-foil heading defers to the applicable plastics heading.
In 2005 and 2006, Alcan Food Packaging (Shelbyville) imported Flexalcon, an aluminum-plastic laminate foil made to be used for food packaging with stringent shelf-life requirements, such as packaging for the United States military's Meals Ready to Eat (MREs). The Flexalcon at issue is a flat, multi-layer material that comes in two configurations: a four-layer material for the base of a package and a three-layer material for the lid. Each configuration has a thin layer of aluminum foil sandwiched between layers of plastic.
The aluminum layer serves an important barrier function. It substantially prevents the penetration of light, water vapor, oxygen, and other harmful contaminants that would degrade the packaging's food contents. J.A. 750, 757. The plastic too serves important functions. It gives the packaging tensile strength during production, processing, and in the final product. See J.A. 591-92. It increases heat resistance so that the packaging can withstand the sterilization and sealing processes. Id. It allows the package to be hermetically sealed to protect the food within. Id. And it substantially prevents cracking, piercing, and pinhole formation in expected use--all common problems with thin aluminum foils like the foil used in Flexalcon. J.A. 318-19, 618. All of these properties, both those imparted by aluminum and those due to plastic, are important for meeting the military's requirements for flexible food packaging. J.A. 759-79.
When Alcan imported the Flexalcon at issue, it listed the material as classifiable under HTSUS subheading 7607.20.50. That heading carries no duty rate and covers " [a]luminum foil (whether or not printed, or backed with paper, paperboard, plastics or similar backing materials) of a thickness (excluding any backing) not exceeding 0.2 mm: Backed: Other." The Bureau of Customs and Border Protection subsequently notified Alcan that it had reclassified the imports of Flexalcon under HTSUS subheading 3921.90.40. That heading has a 4.2% duty rate and covers " [o]ther plates, sheets, film, foil and strip, of plastics: Other: Flexible." Alcan protested under 19 U.S.C. § § 1514-1515. After the protests were denied, Alcan filed suit in the Court of International Trade under 28 U.S.C. § 1581(a), arguing for classification under subheading 7607.20.50.
On July 25, 2013, the Court of International Trade upheld the classification on cross-motions for summary judgment. The dispute was and is entirely over HTSUS headings 3921 and 7607, not over subheadings within those headings. The court held that heading 3921 supplies the proper classification.
The court concluded that both headings cover some composites of plastic and aluminum. Alcan, 929 F.Supp.2d at 1346-48. Drawing from the accompanying chapter and explanatory notes, the court held that such composites could be classified under heading 3921 " provided they retain their essential character as articles of plastics," id. at 1346, and under 7607 " provided that they do not . . . assume the character of articles or products of other headings," id. at 1347. The court therefore analyzed Flexalcon to determine its " essential character," examining " 'the nature of the material or component, its bulk, quantity, weight [and] value, [and] the role of a constituent material in relation to the use of the goods.'" Id. at 1348 (quoting Explanatory Note to General Rule of Interpretation 3(b)). It found that " the plastic layers predominate in terms of 'bulk, quantity, weight [and] value.'" Id. at 1349. And with respect to the ...