Before we get to the legal details, take a second to read my prior post “On 4202: Legal Briefs, Boxer Briefs, and Boxer Dogs,” in which I recounted the difficulty I had trying to exercise my creative writing ambitions as a law clerk. In that post, I was happy to note that Judge Katzmann used anecdotes about Abraham Lincoln and Harry Truman to contextualize a case on the tariff classification of textile pet crates.
In Amcor, Judge Reif used the literary tool of “bookending” to set up his decision. To illustrate the importance of both the plastic and the foil in the combined product, the Judge begins his decision with the famous quip from Casablanca in which Rick Blaine (Humphry Bogart) tells Captain Louis Renault (Claude Rains), “Louis, I think this is the beginning of a beautiful friendship.” The opinion wraps up (pun noted but not intended) with just one word of sage advice to a young Benjamin Braddock (Dustin Hoffman) from Mr. Maguire (Walter Brooke) as delivered in The Graduate. That word? “Plastics.” There is, after all, a great future in plastics.
On the actual substance of the case, the merchandise consists of several layers of plastic combined with a single layer of aluminum foil laminated together and imported in bulk rolls. The material is used to make blister packs for, among other products, pharmaceuticals.
Plaintiff contended that the merchandise is classifiable as aluminum foil whether or not backed with plastic in 7607, which would make it duty free. The United States argued that the merchandise is properly classified in 3921 as “other” plastic in sheets, film, foil or strip. Here, “other” means reinforced, laminated, or otherwise combined with other materials. The government’s classification would result in a 4.2% rate of duty.
The government’s position follows a prior Federal Circuit decision in Alcan Food Packaging, which considered similar merchandise. In that case, the Court of Appeals held that the plastic layers define the product as a flexible food packaging solution with the essential character being plastic.
The distinction between products of Chapter 76 and Chapter 39 follows from Chapter 76, Note 1(d), which states that:
Headings 7606 and 7607 apply, inter alia, to plates, sheets, strips and foil with patterns (for example, grooves, ribs, checkers, tears, buttons, lozenges) and to such products which have been perforated, corrugated, polished or coated, provided that they do not thereby assume the character of articles or products of other headings.
Starting with Heading 7607, the Court first looked at whether the aluminum foil is “backed” by plastic. This resulted in a detailed analysis of the meaning of “backed” and whether the foil has a distinct front side and back side and whether the tariff language requires that distinction. The Court held that the tariff does not require that the backing be applied to a specific side of the foil; nor is it required that the foil be backed on only a single side. If the plastic performs the function of supporting the foil to compensate for its flimsy nature, it is a backing.
Thus, the question comes down to whether the aluminum and plastic combination has assumed the character of plastic. Relying on a prior case involving stamped metal blanks, the Court reasoned that backed foil assumes the character of the backing when it can no longer be described as foil.
Here, the Court found that the foil layer provides the main impermeable barrier of the finished product. While the product gains additional characteristics from the plastic, it is not so distinct from foil that is would not be described as such.
Looking to Heading 3921, the Court found that the heading “conceivably” covers the subject merchandise. However, the Explanatory Notes counsel that Chapter 39 only covers combinations of plastic and other materials that retain the essential character of articles of plastic.
This raises an interesting point, which the Judge carefully explained. So far, the entire analysis of this case is under GRI 1, taking into consideration only the product and the legal text of the HTSUS. The introduction of “essential character” via the Explanatory Notes does not convert this into a GRI 3 case, although GRI 3 considerations now come into play. We are still in GRI 1, as is the case with most classification cases.
The Court found the plastic to comprise the greater share of the product by thickness and value while the aluminum provided the greatest weight. Regarding the role each material plays in the final product, the Court found, consistent with its “assume the character” analysis, that the aluminum performs the central function of containing the packaged goods in an impermeable barrier. The plastic--to continue the movie references--plays a supporting role.
The Court, therefore, classified the plastic backed foil in 7607.20.50, which is a win for the plaintiff.
To quote Judge Reif, “Enough said.”
But, to give aluminum its moment in the movie spotlight, I give you the invention of transparent aluminum: