CIT Rules on Classification Decorative Plant Parts in Customs Spat

The Court of International Trade on Sept. 21 ruled in a customs classification case involving eight different categories of decorative plant parts, siding with importer Second Nature Designs on its preferred classification of two of the categories and with the government on one of the categories. Pertaining to three other categories, Judge Gary Katzmann said that there were fact questions remaining, leading the judge to deny summary judgment and advance litigation to its "second phase."

As part of this phase, Second Nature and the government will file a joint status report and lay out a scheduling order, which will "provide for any discovery, inducing written discovery and depositions," that may be needed for classifying the goods in these three categories. For those keeping track, the parties agreed on the classification of the remaining two category types, which in total accounted for 125 different product styles.

Categories One and Three

Katzmann began his discussion of each of the categories by starting with the first, which covers foliage, branches or other parts of plants, without flower buds or grasses that have glitter or some other coating and have been dyed. For this category, Second Nature championed Harmonized Tariff Schedule subheading 0604.90.30, which provides for "Foliage, branches and other parts of plants, without ... flower buds, and grasses ... fresh, dried, dyed, bleached, impregnated or otherwise prepared: Other: Other." The government moved for classification under subheading 0604.90.30, which covers the same products, but replaces "Other: Other," with "Other: dried or bleached."

The judge first addressed whether subheading 0604.90.30, when read with the terms of the superior heading, can be construed as an eo nomine provision. Second Nature said that a subheading made of only adjectival terms can be read in this way, while the government said it cannot since the terms "dried or bleached" are not a specific name for a commodity but are a description of a way to process the goods in question. Citing U.S. Court of Appeals for the Federal Circuit precedent, Katzmann said a subheading with only adjectival phrases is an eo nomine designation, making subheading 0604.90.30 eo nomine for purposes of this case.

With that established, the judge said the category one goods are properly filed under this subheading. The government claimed that since the goods are dyed or glittered, they are not merely dried or bleached goods, adding that even if the provision is eo nomine, the items are transformed with features in excess of those within the common meaning of dried or bleached. Katzmann ruled that the only inquiry here is whether or not the item in question has been dried. The category one goods have been, meaning the U.S.'s claims fail to overcome the simple classification of the goods as dried products.

Katzmann again sided with the importer regarding the classification of goods in category three -- "thin flat strips of a plant of the Calamus genus that are dried, dyed, and/or glittered, and shaped directly into decorative curls." The government said the goods fit under heading 4602 as "other articles, made directly to shape from plaiting materials," in addition to heading 0604. Second Nature said heading 4602 is limited by interpretive canons and that the Calamus strips are not plating materials.

The court found ambiguity in the terms "other articles" and "made directly to shape," given the lack of a clear definition. Turning to the context of the HTS, Katzmann said that the government's interpretation of these terms, in light of this context, is "overbroad." The government said that since the merchandise is shaped directly into curls, it aligns with the heading language. This reading implies that any shaped items whatsoever would fall under 4602 so long as it is made of plaiting materials. This is too broad, the judge said, adding that the heading was crafted in a way to capture items of basketwork, wickerwork and other articles involving methods such as "interlacing, weaving, or other similar methods."

Category Six

The court sided with the U.S. on its preferred classification of goods in category six, which include handmade items using "metal wire, tape, or glue to affix various dried plant materials into shapes resembling flowers or fruit." Katzmann said the products' proper home was the government's alternative classification under subheading 6702.90.65 as artificial flowers or fruit. Second Nature claimed that the meaning of artificial flowers can only refer to flowers constructed of man-made materials and not natural materials, including plants or plant parts that have been dried or bleached.

The judge said artificial flowers don't need to be made solely of non-natural materials. The importer's definitions don't support its "synecdochic proposition that the materials comprising an artificial flower must themselves be artificial to warrant 'artificial' classification for the whole," the opinion said.

Categories Four, Five and Seven

For another three categories, Katzmann said that there were issues of material fact warranting a second phase of litigation. Goods of category four were made of thin flat strips of colored willow plaited into the shape of triangle and impaled on a stick, while category five goods were made of thin flat strips of vegetable materials, not of willow or wood, shaped directly into balls or other shapes, and some of which are also impaled on sticks.

Second Nature said the proper tariff classification for the category four goods is in subheading 4602.19.35 as items of wickerwork, as opposed to subheading 4602.19.45, while the proper classification of the category five goods is subheading 4602.19.60. The court identified the primary issue to be whether the goods qualify as wickerwork. As such, there is a genuine issue of material fact as to whether the product types are made of twigs and the like or whether they are made of "strips, filaments, and the like." A "factfinder considering the exhibit may reasonably conclude either that the items are made from twigs of a generally cylindrical shape, or that the cross-sections are rounded," the opinion said.

Katzmann also found a genuine fact issue for category seven goods, which all "contain more than one type of item." The government said that even if the products are properly described in heading 0604, as Second Nature claims, they also contain items from other headings, meaning the court must apply the third General Rule for Interpretation. However, the judge said this analysis may not be used when analysis under GRI 1 is "not exhausted."

Nevertheless, a genuine issue of material fact remains on the nature of the merchandise, the opinion said. The importer claimed that Note 2 of Chapter 6 resolves the issue, but the government claims that since the goods all have parts that fall under different tariff provisions and that since none of the parts are mere accessories, the goods fall outside the scope of the chapter note. The U.S. said that since it doesn't know the actual components of the goods in this category, further discovery is needed.

(Second Nature Designs v. United States, Slip Op. 23-139, CIT # 17-00271, dated 09/21/23; Judge: Gary Katzmann; Attorneys: John Peterson of Neville Peterson for plaintiff Second Nature; Brandon Kennedy for defendant U.S. government)