In a recent Opinion, the United States Court of International Trade denied cross motions for summary judgment filed by Ziploc bag producer S.C. Johnson & Son (“S.C. Johnson”) and the U.S. government which sought competing classifications for the well-known plastic bags.

S.C. Johnson argued that the 6 1/2 inch by 5 7/8 inch version of its polyethylene zipper-sealed bags should be classified under HTSUS Subheading 3924.90.56 covering “tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: other: other” which can be imported duty free. The government asserted that the bags were properly classified under Subheading 3923.21.00 covering: “articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps, and other closures, of plastics: sacks and bags (including cones): of polymers of ethylene” which would be subject to a 3% ad valorem duty.

The CIT found that neither party had presented sufficient undisputed factual support for their proposed classification.  The CIT set forth its two-part classification analysis. First, determining the legal question of the proper meaning of the terms of the tariff provisions and; second, determining the factual question of whether the product at issue falls within that provision.

Accordingly, the CIT examined the terms definitions of the terms “conveyance” and “packing” in defining the scope of Heading 3923 and determined that the principal use of that provision is “goods of plastic used to carry or to transport other goods of any kind.” The CIT also examined the words”household” and “article” which a central terms under Heading 3924 and determined that the heading encompasses “plastic goods of or relating to the house or household.”

Having dispensed with the first step in its analysis — determining the proper meaning of the prospective tariff provisions — the CIT found that it could not go further because issues of fact remained as to under which heading the bags fell.  Specifically, while acknowledging that the physical characteristics of the bags and customers uses and expectations with respect to the bags were uncontested, the CIT found that neither party had provided sufficient undisputed facts to permit a full analysis under the factors set forth in Carborundum.

Under Carborundum, the Court looks at factors including: [1] use in the same manner as merchandise which defines the class; [2] the general physical characteristics of the merchandise; [3] the economic practicality of so using the import; [4] the expectation of the ultimate purchasers; [5] the channels of trade in which the merchandise moves; [6] the environment of the sale, such as accompanying accessories and the manner in which the merchandise is advertised and displayed; and [7] the recognition in the trade of this use.

Therefore, with the proper definition of each proposed heading now established, the parties must move forward to trial to finally determine the proper classification of the bags and the resulting tariff.

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