There is a saying among lawyers that a prosecutor can get a NY grand jury to indict a ham sandwich. Apparently, it is harder to classify a tuna sandwich, or at least the tuna in the sandwich.
This deep thought relates to the dispute between U.S. Customs and Border Protection and StarKist Co. over the tariff classification of tuna salad imported ready-to-eat in pouches. We first addressed this debate in the post No Mincing Words on Tuna Classification (customslaw.blogspot.com). After being caught, the tuna is processed in Ecuador where it is cooked, machine chopped, then hand-folded with a mayonnaise base comprising more than 12% soybean oil. Customs classified the prepared tuna in HTSUS item 1604.14.10 as Prepared or preserved fish; Tunas; In airtight containers: In oil, which carries a duty rate of 35%. The importer argued that the proper classification is in three alternative tariff items:
- 1604.20.05 (10%), which covers minced fish prepared or preserved including "products containing meat of crustaceans, molluscs or other aquatic invertebrates; prepared meals . . . ."
- 1604.14.22 (6%), which covers tuna "not minced" and "not in oil" in containers with limitations on the weight of the packages and subject to quota restrictions
- 1604.14.30 (12.5%), which covers "other" not minced fish not in oil
|Photo by Youjeen Cho on Unsplash|
First, I want to avoid any possible confusion as to the plaintiff's first argument, as it is illustrative of an important concept in tariff classification. The argument presented was not that tuna is a crustacean, mollusk (as spelled in North America), or invertebrate. That grouping of delicious critters is before the semicolon and stands alone. "Prepared meals" is a separate category and is broader than the listing of invertebrates. For more on the power of thew semicolon, see Logitech: Is a Teams Call Television? (customslaw.blogspot.com).
Next, I have a fact question: From my vast experience watching competitive cooking on television, I know that mayonnaise contains egg yolks and possibly other ingredients in addition to oil. Here is a NY Times recipe for reference: Mayonnaise Recipe - NYT Cooking (nytimes.com). That recipe includes egg yolk, dijon mustard, lemon juice, salt and water in the oil. The decision says that the tuna was mixed with "a prepared mixture of other ingredients including a mayo base comprising more than 12% soybean oil." It is not clear to me if the may itself was more than 12% oil or if the mixture as a whole contained oil in addition to the oil present in the mayo. In the StarKist facts, the other ingredients in the salad mixture were presumably about 88% not oil. [I know that "more than 12%" might mean 99%, but the lower court decision is clear that the oil is less than 13% of the mayo base.] Given that mayonnaise is an emulsion of other ingredients in oil, it is manifestly different from the oil. I suspect, but do not know, that the mixture added to the fish was mayonnaise, other ingredients, and more oil separate from the mayo base.
To differentiate between 1604.20 and all of the alternatives in 1604.14, the threshold question is whether the tuna in the pouches is minced. If so, 1604.20.05 would be correct and plaintiff should prevail.
Unfortunately for those of you classifying fish products, "minced" is not defined in the HTSUS. In its decision, the Court of International Trade found that mincing is a purposeful process of chopping into small pieces. The CIT further held that the tuna in the pouches had been because it had been cut into larger chunks. The chunks were then broken down to smaller pieces when workers folded the tuna and other ingredients together by hand. According to the CIT, the presence of mince-sized tuna was incidental to the production and process and not the result of purposeful chopping.
The Court of Appeals first concluded that the common and commercial meaning of "minced" requires that the fish be separated into very small pieces. On this point, the Court found that the evidence presented to the CIT shows that the albacore tuna had been roughly chopped to into pieces that range from 0.8 to 1.0 inches and chunk light tuna had been chopped into pieces that range from 1.0 to 1.5 inches. After hand folding, the tuna was in pieces of varying size, presumably including some that were closer in size to a mince. Having found that the tuna was not of a size that equates to "minced," the Court did not determine whether the size had been accomplished through a purposeful process of cutting or chopping.
Once the Court determined that the tuna was not minced, the next relevant question was whether the fish was packed in oil. StarKist argued that the mayo mixture, which contains oil, was added as part of the preparation process and not as packaging. Here, there is a note that matters. HTSUS Chapter 16, Additional U.S. Note 1 states:
For the purposes of this chapter, the term “in oil” means packed in oil or fat, or in added oil or fat and other substances, whether such oil or fat was introduced at the time of packing or prior thereto.
The gist of StarKist's argument follows from a 1957 case called Richter Bros. Inc. v. U.S., which involved tins of fried herring. The herring was coated in wheat meal and then fried in a combination of herring oil and tallow, which must have made for a tasty snack. The fried fish was then packed in tins with a brine of wine, vinegar, water, sugar, and salt. I am not sure how that does not result in a soggy mess, but there must have been little if any fried coating on the fish. Enough of the cooking oil was present in the tins that Customs decided to classify the fish as "packed in oil." The Court of Customs and Patent Appeals, the predecessor to the current Court of Appeals for the Federal Circuit, overruled Customs and held that the fish was cooked in oil but not packed in oil. That is, according to StarKist, analogous to the preparation of the tuna salad with mayo.
The Court disagreed. It read Note 1 as differentiating between products in which oil from preparation incidentally remains with the packaged product from those in which the oil is separately added. Because the oil was introduced to the fish prior to packaging and not as an incidental part of preparation, the fish as imported is "in oil."
Following these two determinations that the tuna is not minced but is in oil, the Federal Circuit affirmed Customs' classification.
Back to my thoughts on mayo. The classification of mayo is not at issue here, but it is telling to me that mayo and salad dressings, which are often largely oil, are classified in 2103.90.90. Soybean oil is classified in Heading 1507. By that measure, and without the benefit of knowing the fact beyond what is stated here, it seems that "in mayo" is not the same as "in oil." If all of the oil was bound up in the mayonnaise, it seems like this decision equates mayonnaise with oil, which is not how I think of the two products. If there is an extra bit of oil in the mixture, I can follow the decision more easily.