CIT Finds Mostly Against Importer in Long-Running Case Over Classification of 'Festive Articles'

The entries at issue in the case dated back to 1992. Russ Berrie and the government have since agreed on the classification of some of the goods, but several remained for the court to decide: trolls dressed in holiday costumes; Christmas and Halloween-themed finger puppets and figurines; a Halloween-themed set that included novelty telescopes and watches; holiday-themed candleholders; an Easter-themed decorative plaque; and holiday-themed baby booties.

Russ Berrie argued each of the articles should be classified in heading 9505 of the Harmonized Tariff Schedule, which covers “festive, carnival or other entertainment articles, including magic tricks and practical joke articles.” In the 1992 HTS, most articles within that heading were dutiable at rates below 6%, with some entering duty free under Chapter 99 temporary duty suspension provisions. CBP had generally liquidated the merchandise in other subheadings with higher duty rates.

According to CIT, “festive, carnival or other entertainment articles” classifiable in 9505 include the following types of goods: “(1) ‘decorations’ and ‘decorative articles’; (2) ‘articles traditionally used at Christmas festivities’ such as artificial Christmas trees, nativity scenes, Christmas crackers, Christmas stockings and imitation yule logs; (3) ‘fancy dress’ i.e., costume, articles such as masks and false beards and mustaches, not including apparel articles made of textiles; (4) ‘throw-balls of paper or cotton-wool, paper streamers . . . cardboard trumpets’ and the like; and (5) magic tricks and practical joke items.”

The trade court found most of Russ Berrie’s goods don’t qualify, instead finding many classifiable as toys. The term “toy” refers “to an article intended solely or primarily for amusement rather than practical use.” Toys are classifiable in the tariff schedule in heading 9403, as well as the now-defunct headings 9401 and 9402 of the 1992 HTS.

A toy isn’t swept into heading 9505 “simply because it displays a design related to a festival or holiday,” CIT said. For example, trolls dressed in holiday clothing imported by Russ Berrie are still designed for amusement, with the plastic and fabric composition and humorous features “typical of a toy rather than a decorative statuette or figurine,” the court said. The holiday “clothing and accessories of the Trolls do not change the doll-like or toy-like character of this merchandise and instead may be observed to contribute to the amusing qualities,” it said.

Finding the trolls classifiable as festive articles because of their clothes would result in a situation where “it could be contended that a doll representing a human being outfitted in a dress with a holiday theme would be prima facie classifiable under heading 9505, HTSUS even though that heading was not intended to encompass dolls or toys generally,” CIT said. “Such a contention would be contrary to the organization of chapter 95” and the chapter’s explanatory notes, CIT said. The trade court applied the same logic to Russ Berrie’s Halloween finger puppets, Halloween-themed monster and witch figurines, Halloween “push puppets” and Christmas-themed figurines.

A collection of Halloween-themed gift items is likewise not classifiable as a set in heading 9505, CIT said. The items aren’t intended to perform a single task together, and are in some cases sold separately at retail, so can’t be considered a set, the trade court said. Instead, the articles comprising the collection are classifiable as toys of heading 9503 and children’s paint pallets of heading 3213. Only “squirt balls” with a disguised ability to shoot a stream of water are classifiable in heading 9505 as “practical joke articles,” CIT said.

Candleholders with Christmas and Thanksgiving designs are classifiable in heading 9405 as lamps, not in heading 9505 as festive articles, CIT said. Notes to the two chapters, which put electric Christmas tree garlands in Chapter 94 but Chinese lanterns in Chapter 95, indicate that the difference is durable lamps are classifiable in the former, while disposable lamps in the latter. As Russ Berrie’s candleholders are made of either porcelain or earthenware, they are durable goods that belong in heading 9405, the trade court said.

And baby booties with holiday designs are classifiable as footwear of Chapter 64, rather than festive articles of heading 9505, CIT said. Though some apparel, namely Christmas sweaters, has been found classifiable in heading 9505, that's because a note to the tariff schedule says articles of heading 9505 are not classifiable in the section for textiles and apparel, it said. "The HTSUS does not contain a provision for chapter 64."

But CIT found one item -- an “image plate” etched with Easter themes -- is classifiable as a festive article of Chapter 95, overturning CBP’s liquidation of the good as a plastic article of Chapter 39. First, the image plates are only partially made of plastic, and the non-plastic parts “are not insignificant components.” On the other hand, the term “festive articles” describes the etched image plates in their entirety, CIT said. “The Etched Images Plaque is an Easter decoration. The Easter Lilies, the gold chalice (depicting the Holy Chalice of the Last Supper), and the message referencing the resurrection of Jesus Christ are symbolic of the Easter holiday. Classification under heading 9505, HTSUS is, therefore, correct,” it said.

(Russ Berrie v. U.S., Slip Op. 18-108, CIT # 93-00391, dated 08/30/18, Judge Stanceu)

(Attorneys: Daniel Gluck of Simon Gluck for plaintiff Russ Berrie & Company, Inc.; Beverly Farrell for defendant U.S. government)