Del Monte Corp. v. United States
2012 CIT 131
Ct. Intl. Trade2012Background
- Plaintiff Del Monte challenges CBP classification of tuna pouches as not in oil versus oil-bearing products under HTSUS; second count challenges valuation of the entries.
- Pouches are tuna fillets in sauce with water and oil; tuna content ~80% by weight; oil is present but not used to cook the tuna—the packing medium is primarily water.
- CBP Note 1 to HTSUS chapter 16 and precedent hold that any oil in the packing medium can render product as “packed in oil”; Strohmeyer & Arpe Co. v. United States (1915) is cited in that context.
- Rulings HQ 967515 and HQ 967742 considered the oil presence and USFDA regulations, concluding the classification should follow the “packed in oil” interpretation and not regulatory guidance; Bestfoods v. United States is cited to limit FDA standards’ controlling effect on tariff classification.
- Pre-import agreements between Del Monte and Chotiwat set cost sheets and tuna recovery percentages; post-import unilateral changes occurred, leading to restitution by Chotiwat of overcharges, but the court treats these as post-importation dealings related to valuation rather than controlling the classification issue.
- The court grants summary judgment for CBP on both counts, sustaining the 1604.14.10 classification (35% duty) for certain pouches and rejecting plaintiff’s valuation theory under 19 U.S.C. §1401a(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pouches are “packed in oil” for HTSUS classification | Del Monte: oil is a minor, functional additive in sauce, not packing medium | Oil presence in the medium constitutes packing in oil under authority and precedent | No; classification sustained as not packed in oil under the controlling notes and precedents. |
| Whether post-import price adjustments affect transaction value under 19 U.S.C. §1401a(b)(4)(B) | Post-import rebates/adjustments should be disregarded per statute | Statutory directive requires disregarding rebates; evidence does not rebut this | Valuation denied; defendant’s summary judgment on valuation upheld. |
| Role of FDA regulations in tariff classification | FDA identity standards should influence classification | FDA standards not controlling for tariff purposes | CBP’s classification respected tariff law; FDA guidance not controlling. |
Key Cases Cited
- Strohmeyer & Arpe Co. v. United States, 5 Ct.Cust.App. 527 (1915) (oil in packing medium can render fish 'packed in oil' regardless of method)
- Bestfoods v. United States, 342 F.Supp.2d 1312 (2004) (FDA standards of identity not controlling for tariff classification)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard guidance cited)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard guidance cited)