Otter Products, LLC v. United States
2015 WL 3463083
Ct. Intl. Trade2015Background
- Otter Products (OtterBox) imported Commuter and Defender series phone cases (entries Apr–Jul 2012) and paid duties at 20% under HTSUS 4202.99.9000; entries were liquidated at that rate.
- OtterBox timely protested CBP’s classification (July 2, 2013); protest deemed denied and suit filed contesting the denial.
- The cases are multi-component: a rigid polycarbonate outer shell, a silicone/thermoplastic elastomer mid-layer, and (for Defender) holster/belt-clip and clear membrane; some packages include a self-adhesive plastic screen protector.
- CBP classified the products as “similar containers” under heading 4202 (20% rate); OtterBox contends they are plastic articles under heading 3926 (5.3% rate).
- OtterBox also paid duties on “assists” (post-importation interim/reconciliation payments) and seeks refund of any overpayments tied to the challenged classification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper tariff classification of OtterBox cases | Cases are plastic articles properly classifiable under HTSUS 3926.90.9980 (5.3%); chapter 39 headings apply | Cases are "similar containers" under HTSUS 4202 (20%) by ejusdem generis — they enclose/protect devices | Held for OtterBox: not "similar containers" under 4202; properly classified under 3926.90.9980 (5.3%) |
| Whether the cases are "similar containers" for HTSUS 4202 purposes | Cases do not perform organizing or storing and allow full use of enclosed devices, so they lack essential characteristics uniting 4202 exemplars | Cases enclose/hold devices and sometimes include holsters or clips; at least some unifying characteristics present | Held: although they protect, they do not share the essential purposes (organizing/storing/carrying as in 4202) and permit full use while enclosed; hence not similar containers |
| Application of GRI 3(b) "essential character" (material-dominant) | Even if essential-character analysis applied, rigid plastic imparts essential character consistent with classification in chapter 39 | Defendant contends chapter 39 is displaced by 4202 Note 2(m) if 4202 applies; material analysis irrelevant if 4202 governs | Held: because 4202 does not apply, GRI 1 leads to 3926.90.9980; plaintiff’s position on essential character unnecessary but consistent with placement in 3926 |
| Jurisdiction to seek refund of duties paid on assists (post-importation payments) | Jurisdiction exists because plaintiff timely protested CBP’s classification (which governs the rate applied to entire transaction value, including assists) and paid all liquidated duties before suit | Payments on assists were voluntary (interim/reconciliation) and therefore not a "charge or exaction" subject to protest; plaintiff did not protest those payments specifically | Held: Court has jurisdiction. Classification protest covers the rate applied to entire transaction value (including assists); plaintiff paid all liquidated duties for the entries and exhausted remedies, so refund claim related to classification is within 28 U.S.C. § 1581(a) jurisdiction |
Key Cases Cited
- Link Snacks, Inc. v. United States, 742 F.3d 962 (Fed. Cir. 2014) (two-step classification analysis; tariff terms given common/commercial meaning)
- Jarvis Clark Co. v. United States, 733 F.2d 873 (Fed. Cir. 1984) (court must determine correctness of government classification and compare alternatives)
- Roche Vitamins, Inc. v. United States, 772 F.3d 728 (Fed. Cir. 2014) (use of chapter notes and Explanatory Notes in HTSUS construction)
- Avenues in Leather, Inc. v. United States, 423 F.3d 1326 (Fed. Cir. 2005) (ejusdem generis analysis for HTSUS 4202 unifying purposes)
- Victoria’s Secret Direct, LLC v. United States, 769 F.3d 1102 (Fed. Cir. 2014) (limitations in unifying characteristics can exclude otherwise similar goods)
- SGI, Inc. v. United States, 122 F.3d 1468 (Fed. Cir. 1997) (specific predominant use can remove goods from 4202 classification)
- Totes, Inc. v. United States, 69 F.3d 495 (Fed. Cir. 1995) (ejusdem generis and context-specific similarity analysis)
- United States v. Ford Motor Co., 463 F.3d 1286 (Fed. Cir. 2006) (discussed in connection with prior-disclosure/voluntary payments context)
- Brother Int’l Corp. v. United States, 246 F. Supp. 2d 1318 (CIT 2003) (context on prior disclosure and payments; distinctions from voluntary tender)
- DaimlerChrysler Corp. v. United States, 442 F.3d 1313 (Fed. Cir. 2006) (jurisdictional requirement that all liquidated duties be paid when suit is commenced)
- Pillowtex Corp. v. United States, 171 F.3d 1370 (Fed. Cir. 1999) (statistical suffixes not part of HTSUS legal text)