Vanetta U.S.A. Inc. v. United States , 27 Ct. Int'l Trade 860 ( 2003 )


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  •                            Slip Op. 03 - 67
    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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    Memorandum & Order
    [Cross-motions for summary judgment as to
    classification of animal-feed additives
    denied.]
    Dated:   June 25, 2003
    Barnes, Richardson & Colburn (James S. O'Kelly) for the
    plaintiff.
    Robert D. McCallum, Jr., Assistant Attorney General; John J.
    Mahon, Acting Attorney in Charge, International Trade Field Office,
    Commercial Litigation Branch, Civil Division, U.S. Department of
    Justice (Bruce N. Stratvert); and Office of Assistant Chief
    Counsel, International Trade Litigation, U.S. Bureau of Customs and
    Border Protection (Joseph M. Spraragen), of counsel, for the
    defendant.
    AQUILINO, Judge:     The parties have interposed cross-
    motions for summary judgment in this consolidated action, which
    contests U.S. Customs Service classification of certain additives
    imported from Italy for animal feeds.       While this court's careful,
    albeit belated, review of these motions does not lead it to
    conclude that such judgment can be entered, they do substantiate,
    yet again, the accumulated wisdom encompassed by USCIT Rule 56(d)
    that such motions aid in
    Consolidated
    Court No. 97-01-00117                                              Page 2
    ascertain[ing] what material facts exist without substan-
    tial controversy and what material facts are actually and
    in good faith controverted[,]
    thereby streamlining preparation for and conduct of the trial on
    the remaining material issue(s) of fact.
    I
    Subsequent   to   the   filing   of   plaintiff's   motion   for
    summary judgment, the defendant chose to respond with such a motion
    of its own.   This form of response has precipitated a formal motion
    to strike by the plaintiff, which takes the position that defend-
    ant's cross-motion "was not timely filed in accordance with the
    scheduling order in this case."
    That order of the court issued pursuant to USCIT Rules 1
    and 16 set a date certain for submission of any dispositive
    motions.   The plaintiff met the deadline, whereas the defendant
    twice moved for, and obtained, formal extensions of time "to
    respond to plaintiff's motion for summary judgment". Whereupon the
    plaintiff presses that "[i]n neither instance did defendant seek a
    modification of the scheduling order or request more time to file
    its own motion for summary judgment." Plaintiff's Motion to Strike
    Defendant's Motion for Summary Judgment, p. 2.
    The precision of this motion to strike is unimpeachable,
    but, when faced with a similar challenge by the plaintiff in
    Consolidated
    Court No. 97-01-00117                                        Page 3
    Rollerblade, Inc. v. United States, 
    24 CIT 812
    , 
    116 F.Supp.2d 1247
    (2000), aff'd, 
    282 F.3d 1349
     (Fed.Cir. 2002), the court determined
    to accept "as such"     the defendant's cross-motion for summary
    judgment on the ground that the
    practice of combining the cross-motion for summary judg-
    ment with the party's response to the original motion for
    summary judgment is an efficient use of court resources.
    24 CIT at 813 and 
    116 F.Supp.2d at 1250, n. 1
    .   Since the motion to
    strike at bar does not show any prejudice to the plaintiff as a
    result of the nature of defendant's chosen response, this court
    discerns no basis for deviation from the determination in Roller-
    blade.   Indeed, all parties are at liberty to posit motions for
    summary judgment whenever, in the exercise of sound analysis, they
    come to conclude "that there is no genuine issue as to any material
    fact and that the[y are] entitled to a judgment as a matter of
    law." USCIT Rule 56(c).   Moreover, it has long been the mandate in
    an action like this that the court reach "the correct result[] by
    whatever procedure is best suited to the case at hand."     Jarvis
    Clark Co. v. United States, 
    733 F.2d 873
    , 878, reh'g denied, 
    739 F.2d 628
     (Fed.Cir. 1984) (emphasis in original).         Here, that
    procedure may well include cross-motions for summary judgment.
    II
    The court's jurisdiction to hear and decide this matter
    is pursuant to 
    28 U.S.C. §§ 1581
    (a), 2631(a).       Cf. Defendant's
    Reply Brief in Support of Motion for Summary Judgment and in
    Consolidated
    Court No. 97-01-00117                                         Page 4
    Opposition to Plaintiff's Response, p. 2, n. 3 ("the Government
    withdraws its jurisdictional objections previously advanced").
    As required by Rule 56, plaintiff's motion for summary
    judgment is accompanied by a statement of the material facts as to
    which it contends there is no genuine issue to be tried.    Included
    therein are the following averments:
    4.    The imported merchandise consists of Menadione
    Sodium Bisulfite (hereinafter "MSB"), Menodi-
    one Sodium Bisulfite Complex (hereinafter
    "MSBC"), Menadione Dimethylpyrimidinol Bisulf-
    ite (herein after "MPB")and Menadione Nicotin-
    amide Bilsulfite (hereinafter "MNB"). . . .
    5.    The chemical structure of naturally occurring
    Vitamin K1 phylloquinone is 2-methyl-3-phytyl-
    1, 4-naphthoquinone. . . .
    6.    The chemical structure of naturally occurring
    Vitamin K2 menaquinone is 2-methyl-3-all-
    trans-polyprenyl-1, 4-naphthoquinone. . . .
    7.    Vitamin K1 and vitamin K2 are vitamins for
    purposes of the HTSUS and are classified under
    heading 2936, HTSUS. . . .
    *   *   *
    11.   When MSB, MSBC, MPB or MNB is ingested, the
    menadione in these products is converted into
    a form of vitamin K2, specifically vitamin
    K2(20). . . .
    12.   The principal use of the imported products is
    as a component in animal feeds. . . .
    13.   Customs excluded the imported products from
    classification under heading 2936 because, as
    interpreted by Customs, this heading does not
    include "synthetic substitutes for vitamins".
    . . .
    Consolidated
    Court No. 97-01-00117                                       Page 5
    14.   The phrase "synthetic substitute for a vita-
    min" does not appear anywhere in the HTSUS
    statute enacted by Congress. . . .
    15.   Defendant defines "synthetic substitute for a
    vitamin" as "a synthesized chemical compound
    that is not found in nature but has vitamin
    activity. This differs from a synthetically
    reproduced vitamin whose structure is found in
    nature but has been synthesized from other
    chemicals." . . .
    *   *   *
    17.   The imported MSB was classified by Customs as
    "Ketones and quinones, whether or not with
    other oxygen function, and their halogenated,
    sulfonated, nitrated or nitrosated deriva-
    tives: . . . Halogenated, sulfonated, nitrated
    or nitrosated derivatives: Aromatic: . . .
    Other", under subheading 2914.70.20, HTSUS,
    dutiable at 11% ad valorem. . . .
    18.   The imported MSB has the same menadione moiety
    (2-methyl-1, 4-naphthoquinone) as naturally
    occurring Vitamin K1 phylloquinone and natu-
    rally occurring Vitamin K2 menaquinone. . . .
    19.   The SB or sodium bisulfite portion of MSB is
    excreted by the body after ingestion. . . .
    20.   From a nutritional perspective, the menadione
    (2-methyl-1, 4-naphthoquinone) moiety is the
    most important component of MSB. . . .
    *   *   *
    21.   The imported MSBC was [also] classified by
    Customs . . . under subheading 2914.70.20,
    HTSUS, [supra, para. 17,] dutiable at 11% ad
    valorem. . . .
    22.   The imported MSBC has the same menadione
    moiety (2-methyl-1, 4-naphthoquinone) as na-
    turally occurring Vitamin K1 phylloquinone and
    naturally occurring Vitamin K2 menaquinone.
    . . .
    Consolidated
    Court No. 97-01-00117                                       Page 6
    23.   MSBC is essentially MSB with additional sodium
    bisulfite added for increased stability.
    . . .
    24.   The SBC or sodium bisulfite complex portion of
    MSBC is excreted by the body after ingestion.
    . . .
    25.   From a nutritional perspective, the menadione
    (2-methyl-1, 4-naphthoquinone) moiety is the
    most important component of MSBC. . . .
    *   *   *
    27.   The chemical structure of MPB is 2-methyl-1,
    4-naphthoquinone 2-hydroxy-4, 6-dimethylpyri-
    midine bisulfite. . . .
    28.   The imported MPB has the same menadione moiety
    (2-methyl-1, 4-naphthoquinone) as naturally
    occurring Vitamin K1 phylloquinone and natu-
    rally occurring Vitamin K2 menaquinone. . . .
    29.   The PB portion of MPB is excreted by the body
    after ingestion and has no nutritional value.
    . . .
    30.   From a nutritional perspective, the menadione
    (2-methyl-1, 4-naphthoquinone) moiety is the
    most important component of MPB. . . .
    *   *   *
    32.   Nicotinamide is also known as niacinamide.
    . . .
    33.   Niacinamide is a vitamin described in heading
    2936, HTSUS. . . .
    34.   The bisulfite portion of MNB is excreted by
    the body after ingestion. . . .
    35.   The nicotinamide portion is not excreted by
    the body after ingestion and provides niacin
    or niacinamide activity. . . .
    Consolidated
    Court No. 97-01-00117                                           Page 7
    36.    The nicotinamide portion of MNB is a vitamin,
    as described in subheading 2936.29.1530,
    HTSUS. . . .
    *   *   *
    38.    Defendant is unaware of any uses of MNB as a
    component of animal feeds other than as a
    source of vitamin K activity and niacin. . . .1
    The defendant admits without any reservation all but one
    of these averments. See Defendant's Response to Plaintiff's State-
    ment of Material Facts as to Which There is No Genuine Dispute, pp.
    1-4.       As for that single, enumerated paragraph, 4, supra, the de-
    fendant admits it with regard to MSB and MSBC but
    [a]vers that none of the imported merchandise is
    described on the commercial invoices as MNB, or MPB,
    or their equivalents.
    Id. at 1, para. 4.       As for defendant's own statement of material
    facts in support of its cross-motion, the plaintiff admits the
    following averments contained therein:
    2.     MSB, MNB and MSBC are aromatic derivatives of
    quinones.
    3.     MPB is an aromatic heterocyclic       compound
    containing a pyrimidine ring.
    *   *   *
    5.     Menadione is not the natural precursor of
    vitamins K1[] in plants and K2 in bacteria.
    1
    Plaintiff's Rule 56(i) Statement of Material Facts as to
    Which No Genuine Dispute Exists (citations in support of each
    averment omitted).
    Consolidated
    Court No. 97-01-00117                                       Page 8
    6.   The Menadione found in nature is not a pro-
    vitamin of Phylloquinone.2
    In sum, there is agreement between the parties with
    regard to many of the salient facts.    Hence, the plaintiff also
    agrees that HTSUS chapter 29 (1994)
    contemplates that some organic chemical products may be
    described in more than one of its headings. MSB, MSBC,
    MPB and MNB are examples of four such products.
    Plaintiff's Memorandum, p. 12.   This means that MSB, MNB and MSBC
    are at least arguably covered by HTSUS subheading 2914.70.20 and
    MPB by subheading 2933.59.70, as now posited by the defendant.
    Be such concurrence as it may, a court
    first construes the language of the heading, and any
    section or chapter notes in question, to determine
    whether the product at issue is classifiable under the
    heading. Only after determining that a product is class-
    ifiable under the heading should the court look to the
    subheadings to find the correct classification for the
    merchandise. See GRI 1, 6. Furthermore, when determin-
    ing which heading is the more specific, and hence the
    more appropriate for classification, a court should
    compare only the language of the headings and not the
    language of the subheadings. See GRI 1, 3.
    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)("GRI" referring to the HTSUS General
    2
    Compare Defendant's Statement of Additional Material Facts
    as to Which There is No Genuine Issue to be Tried, p. 1, paras.
    2, 3, 5, 6 with Plaintiff's Response to Defendant's Statement of
    Additional Material Facts as to Which There is No Genuine Issue
    to be Tried, paras. 2, 3, 5, 6.
    Consolidated
    Court No. 97-01-00117                                       Page 9
    Rules of Interpretation). As indicated above, the headings favored
    by the defendant are as follows:
    2914 Ketones and quinones, whether or not with
    other oxygen function, and their halogenated,
    sulfonated, nitrated, or nitrosated deriva-
    tives[.]
    2933 Heterocyclic compounds with nitrogen hetero-
    atom(s) only; nucleic acids and their salts[.]
    Headnote 3 to HTSUS chapter 29 provides, however, that
    [g]oods which could be included in two or more of the
    headings of this chapter are to be classified in that one
    of those headings which occurs last in numerical order.
    The plaintiff relies on this note in pressing for classification of
    its merchandise under heading 2936, to wit:
    Provitamins and vitamins, natural or reproduced by
    synthesis (including natural concentrates), derivatives
    thereof used primarily as vitamins, and intermixtures of
    the foregoing, whether or not in any solvent[.]
    With regard to this rubric, the defendant complains that the
    plaintiff
    ignores, completely, the Government's key point that
    while the MSB, MSBC, MPB, and MNB undoubtedly are pro-
    vitamins (albeit artificial provitamins), they assuredly
    do not reproduce natural provitamins2, and hence, cannot
    be described, and are not described, by the language of
    Heading 2936, HTSUS, which, by its terms, only covers
    natural vitamins, natural provitamins, reproductions of
    natural vitamins or provitamins, and derivatives of na-
    tural vitamins or provitamins.
    Defendant's Reply Brief, pp. 1-2 (emphasis in original, footnote 3
    omitted).   Footnote 2 to this reply states in part:
    Consolidated
    Court No. 97-01-00117                                               Page 10
    Reproduce means to produce a copy of something. Inasmuch
    as the HTSUS heading, in issue, Heading 2936, provides
    for "[p]rovitamins and vitamins, natural or reproduced by
    synthesis," clearly, the only provitamins described by
    this language are natural provitamins or reproductions of
    natural provitamins, which MSB, MSBC, MPB, and MNB
    plainly are not. . . .
    Id. at 2, n. 2 (emphasis in original).
    III
    This reply by the defendant is the crux of the contro-
    versy at bar.     Having studied the affidavits of Dr. John W. Suttie,
    Dr. T.M. Frye, and Dr. Mark W. LaVorgna, as well as Binder, Benson
    & Flath, Eight 1,4-Naphthoquinones From Juglans, 28 Phytochemistry,
    pp. 2799-2801 (1989), and Shils & Young, Vitamin K, Modern Nu-
    trition in Health and Disease, ch. 14 (7th ed. 1988), proffered by
    the plaintiff in support of its instant motion, and having compared
    their rather esoteric contents with those of the two affidavits of
    Dr. Robert E. Olson filed on behalf of the defendant, the court is
    unable   to    conclude   that   the    parties   cross-motions   completely
    satisfy the requirement that "there be no genuine issue of material
    fact."   Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 248 (1986)
    (emphasis in original).      The foregoing material matter articulated
    by the defendant must be addressed at trial and subjected to cross-
    examination, "which has been said to be the surest test of truth
    and a better security than the oath."             The Hanover Ins. Co. v.
    United States, 25 CIT        ,         , Slip Op. 01-57, p. 21 (2001).
    Consolidated
    Court No. 97-01-00117                                     Page 11
    Thus, the parties' cross-motions for summary judgment
    must be, and they hereby are, denied.    Counsel are directed to
    confer and propose to the court on or before August 1, 2003 a
    schedule for the necessary preparation for, and conduct of, the
    trial of those issue(s) of fact which are not already agreed to
    herein and which cannot be stipulated to in the pretrial order.
    So ordered.
    Dated:   New York, New York
    June 25, 2003
    Judge