Del Monte Corporation v. United States
730 F.3d 1352
Fed. Cir.2013Background
- Del Monte imported ready-to-eat tuna in sealed microwave pouches (three varieties); tuna = ~80% of weight, sauce = ~20%.
- Two varieties (Lemon & Cracked Pepper; Lightly Seasoned) contained small amounts of sunflower oil in the sauce (2.48% and 0.62% of total pouch weight).
- U.S. Customs classified those products under HTSUS subheading 1604.14.10 (tuna “in oil”) because oil was present in the added sauce; Del Monte sought reconsideration and then sued.
- Valuation dispute: Del Monte paid invoices at import reflecting higher conversion costs; ~10 months later supplier issued a $1.5 million credit after renegotiation. Customs valued the entries based on the price actually paid at import and did not deduct the later credit.
- The Court of International Trade granted summary judgment for the government on classification and valuation; Del Monte appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tuna with sauce containing some oil is classifiable as "in oil" under HTSUS 1604.14.10 | Richter Bros. controls; products not "packed in oil" because tuna was not cooked in oil and oil content in sauce is minimal | Additional U.S. Note 1 defines "in oil" to include fish "packed in added oil . . . and other substances"; no minimum oil threshold | Affirmed: classified as "in oil" under Additional U.S. Note 1 |
| Whether post‑importation supplier credit can reduce transaction value for appraisal under 19 U.S.C. §1401a | Parties had an agreed pre‑import "formula" to reconcile costs; 19 C.F.R. §152.103(a)(1) allows formula‑based pricing that can account for later adjustments | Statute bars post‑import decreases in price; no clear, definite pre‑import formula (no written contract); Del Monte paid invoiced price at import | Affirmed: Customs properly used the price actually paid at import; post‑import credit disregarded |
Key Cases Cited
- Cummins Inc. v. United States, 454 F.3d 1361 (Fed. Cir.) (hierarchical HTSUS interpretation; when facts undisputed, classification is question of law)
- Faus Group, Inc. v. United States, 581 F.3d 1369 (Fed. Cir.) (classification analysis principles)
- CamelBak Prods., LLC v. United States, 649 F.3d 1361 (Fed. Cir.) (text and notes control tariff classification)
- Orlando Food Corp. v. United States, 140 F.3d 1437 (Fed. Cir.) (heading/subheading hierarchy in tariff classification)
- Richter Bros., Inc. v. United States, 44 C.C.P.A. 128 (C.C.P.A.) (distinguishes cases where oil entered packing only from cases where oil was introduced at packing)