Kuehne & Nagel, Inc. v. United States

10 Ct. Int'l Trade 814
CourtUnited States Court of International Trade
DecidedDecember 22, 1986
DocketCourt No. 84-7-00945
StatusPublished

This text of 10 Ct. Int'l Trade 814 (Kuehne & Nagel, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kuehne & Nagel, Inc. v. United States, 10 Ct. Int'l Trade 814 (cit 1986).

Opinion

Opinion

Restani, Judge:

Plaintiff challenges Customs’ classification of certain entries made in 1984 of tobacco, in a form smaller than half leaves, as stemmed filler tobacco under item 170.35 of the Tariff Schedules of the United States (TSUS). Plaintiff claims the appropriate TSUS item is 170.60, scrap tobacco. Alternatively, plaintiff claims classification under item 170.80, tobacco, not specifically provided for.

As always, the starting point as the court’s analysis is the statute. At first glance, the merchandise would seem to be stemmed filler tobacco, and item 170.35 would seem to be applicable. The tobacco reached its condition, that is, less than half-leaf, yet suitable for cigarette manufacture, in a purposeful way. Therefore, item 170.60, scrap tobacco, would not seem applicable.

[815]*815At trial, however, plaintiffs witnesses explained that historically anything smaller than a half leaf of tobacco was considered to be scrap by the Customs Service. This designation was used originally when tobacco leaves, particularly those intended for cigar filler, were hand stemmed so that half leaves resulted. Such larger pieces were particularly useful in producing "long filler” for cigars and were also considered desirable by cigarette manufacturers. Accidentally broken leaves were considered to be scrap. In addition, a practice developed whereby purposely produced pieces, smaller than a half-leaf, also were considered to be scrap by Customs. At one point in time this practice probably applied to inexpensive cigar and chewing tobacco. See Summaries of Tariff Information 1020 (1929); 6 Summaries of Tariff Information 13 (1948). Eventually, Customs applied the practice to tobacco which was acceptable for cigarette manufacture.1

This does not seem consistent with any of the many common meanings of the word "scrap.” The court also notes that Webster’s Third New International Dictionary (1967) contains a definition of "scrap” which reads as follows: "a by-product of the handling of tobacco consisting of loose tangled pieces of leaves, floor sweepings, but no stems.”2 The merchandise at issue is not a "by-product” of tobacco handling. Plaintiff argues that commercial meaning rather than common meaning controls, because Congress specifically adopted Customs practice, which plaintiff contends reflects commercial meaning.3

The court necessarily must be concerned about the meaning of words at the time the TSUS was enacted in the nineteen sixties, whether or not that meaning has changed. Davies Turner & Co. v. United States, 45 CCPA 39, C.A.D. 669 (1957). Therefore, to determine relevant commercial meaning, the court will not focus on trade definitions from the eighties, which reflect both Customs’ current views and the domestic industry’s hoped-for categorization.

The parties agree that the domestic industry, which presumably knows commercial meaning, has input into the formulation of the standards for government grading of tobacco. In their pre-trial papers the parties also agreed as follows:

During the period July of 1952 through April of 1963, the Official Standard Grades for Flue-Cured Tobacco of the Agricultural Marketing Service of the Department of Agriculture defined "web scrap” as follows: "Stemmed scrap or seamless scrap which is a by-product from stemming tobacco or handling strips, consisting chiefly of portions of strips; or a lot of tobacco from which the stems have been removed by thrashing or other means which break the web or sides of leaves into small pieces.”
[816]*816That document defined "scrap” as follows: "A by-product from handling tobacco in both the unstemmed and stemmed forms, consisting chiefly of loose, untied, and unstemmed leaves or the web portions of leaves, which accumulate in warehouses, packing and conditioning plants, and stemmeries; or tobacco which has been reduced to scrap by any process.”

The second part of the definition of "scrap” seems circular but the definition of "web scrap” (although one could debate what the word "small” means) tends to support plaintiffs view of relevant commercial meaning.

Defendant relies on the definitions of "scrap” and "scrap filler” found in the Tobacco Dictionary (R. Jahn 1954) at 144-145:

Scrap
By government definition, a by-product from handling leaves in both the unstemmed and stemmed forms: that is, the leaves, floor sweepings, and all other tobacco materials except stems which accumulate in the manufacturing process.
In the cigar industry scrap is classified as Number One, Number Two, Siftings and Dust. Number One Scrap may be used for short filler, and number two for very inexpensive scrap-filled cigars. Either may be used for blending in smoking or chewing tobaccos. Siftings and Dust are used for fertilizer.
Scrap Filler
Any filler made of scrap tobaccos. Most modern scrap filled cigars are of small sizes. The term has come to indicate especially the poorer grades of scrap filler as distinguished from Short Filler.

These definitions do support defendant’s view. Furthermore, defendant called two industry witnesses (and one government witness) who testified that in the fifties and sixties the commercial meaning of scrap did not include intentionally cut-up tobacco for cigarette manufacture. Although the possible motives of the witnesses cause the court to weigh their testimony carefully, (all were or are associated with domestic interests), the court is not convinced that the testimony conflicted with any of the essential definitions provided, including those provided by plaintiif.4 The definition of "web scrap” cited by plaintiff is not entirely clear and it may reflect Customs former practice, more than general commercial meaning. Weighing all of the testimony, it seems persuasive on the crucial points asserted by defendant. The court recognizes the difficulty plaintiff might have in locating industry witnesses in its favor, but the court cannot consider testimony it did not hear.

Plaintiff, nonetheless, asks that the court disregard what the court finds to be both common and commercial meaning, because Congress had another meaning in mind. Plaintiff directs the court’s [817]*817attention to 3 Tariff Classification Study 205 (1960) which reads in part:

Part 13 of schedule 1 brings together existing tariff provisions applicable to tobacco and tobacco products. The revised schedule clarifies existing tariff language and administrative practice and involves no rate changes.

Apparently, such notes, which are legislative history, have been used to impute to the Congress knowledge of established administrative practice, even if not specifically described in the written legislative history. See Maiden Lane Trading Corp. v. United States, 68 Cust. Ct. 183, 343 F. Supp. 1366 (1972). The court in Maiden Lane, however, viewed such a note as a reference to broad valuation principles and then used the note only to reinforce its conclusion.

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Bluebook (online)
10 Ct. Int'l Trade 814, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kuehne-nagel-inc-v-united-states-cit-1986.