Nutricia Tries to End CIT Case on Classification of Medical Foods

Nutricia seeks a Court of International Trade judgment overturning CBP's classification of its infant and children food formulas as food preparations of heading 2106, it said in a motion for summary judgment filed Jan. 24 in the hopes of bringing to a close an over 6-year-old test case. The importer says its formulas, intended to treat a variety of diseases and disorders in infants or children, are "medical foods" classifiable as medicaments of heading 3004 and also duty-free under special tariff provisions for articles for the handicapped under subheading 9817.00.96 (Nutricia North America v. United States, CIT #16-00008).

The dispute stems from a series of imports by Nutricia in 2014 and 2015 and subsequent protests filed with the CBP over alleged misclassifications. Nutricia says that in 1990, CBP issued Nutricia a binding ruling that classified a series of products used to treat specific conditions under the heading 3004. Again in 2007, CBP issued three separate rulings classifying what Nutricia calls "substantially similar or identical" products under heading 3004. This case was filed in July 2015 after four separate protests seeking reclassification were denied by CBP. Between June 2015 and September 2016, Nutricia filed seven other cases against CBP for alleged misclassification of the same items. This past October, Judge Timothy Stanceu granted the Nutricia's motion to suspend the seven other cases and designate this case as a test case to decide the classification issue

"Heading 2106 is limited to food preparations 'not elsewhere specified.' This provision is what the courts have referred to as an 'expansive basket heading that only applies in the absence of another applicable heading,'" Nutricia said. That means for classification in heading 2106, the foods can't be classifiable as medicaments of Chapter 30.

According to Nutricia, the products are both designed and prescribed for therapeutic use and specifically not for general use as food. "Healthy children do not consume them (in some cases such consumption would be dangerous)," Nutricia said in its brief. The products have been the subject of "hundreds of use and efficacy studies written by and for medical experts" and Nutricia has provided the government with over 200 studies, it said. Nutricia argues that CBP wants to narrow the scope of heading 3004 by adding requirements that medicaments "must feature an active ingredient and cure a disease," neither of which is a requirement of heading 3004.

On the secondary heading 9817.00.96, Nutricia argues that the core issue is specifically "whether the patients suffering from these diseases are 'handicapped.'" The motion points out that the Americans with Disabilities Act contains a nearly identical definition of "handicapped" to the tariff schedule. The motion notes that CBP’s only response is to argue that these patients must simply “avoid” certain categories of food (as would be the case for a person with diabetes or a peanut allergy), and that their conditions do not impair “the physical act of eating.”