CIT Rules Medical Foods Are Food, Not Medicaments

The Court of International Trade ruled Dec. 4 that a medical food company's imports would be classified as food, not as pharmaceutical products.

Nutricia North America, which sells foods, baby formula and vitamins intended as dietary supplements for people with disabilities or ailments, had been in court since July 2015 arguing that several of its products were properly classified under duty-free heading 3004 for “mixed or unmixed products for therapeutic or prophylactic use” packaged for retail sale.

Upon liquidation of Nutricia’s 2014 shipment, CBP classified the products in question -- Periflex Infant, Periflex Junior, Neocate, MSUD Lophlex and KetoCal -- as “food preparations not elsewhere specified or included” under Harmonized Tariff Schedule heading 2106, subject to a 6.4% duty.

On a motion for summary judgment, CIT ruled in favor of Commerce.

Chapter 30 specifically excludes all foods or beverages other than nutritional preparations for IV use, CIT said, citing Chapter 30’s note 1(a). Nutricia described its products as “medical food” and “nutritional substances,” necessitating they were food and would be excluded, the court said.

CIT didn't consider Nutricia’s other claim that the products could be classified under heading 9017 as items for people with disabilities. “The parties have not advocated, and the court has not identified, any other candidate headings within chapters 1 through 97,” it said.

The court rejected all of Nutricia’s arguments for a Chapter 30 pharmaceutical classification.

Nutricia argued in its motion for summary judgment that the primary purpose of its products is treatment of medical problems, which was the “defining characteristic of a medicament.” Commerce would have to demonstrate its products were not medicaments to classify them otherwise, it said.

CIT disagreed. It said the HTS’s general rules of interpretation require the court first to look to the notes of any relevant section or chapter. Those prevented classification of Nutricia’s products under Chapter 30, it said.

Both the counsel for Nutricia and DOJ declined to comment.

CIT’s ruling comes after a long reclassification battle waged by Nutricia. In 1990 and 2007, CBP issued rulings classifying “substantially similar or identical” products under heading 3004, Nutricia said. Starting in 2014, the company filed four protests with CBP, then brought eight cases to CIT over the five products before it agreed to proceed solely with this one as a test case (see 2201270019).

Nutricia’s case was delayed in 2022 when DOJ informed Nutricia it had just won a conviction against the company’s expert witness, physician Joel Lavine, for sexual abuse of a former patient. Nutricia was granted a motion to reopen discovery so that it could choose a new witness (see 2204220046).

(Nutricia North America v. U.S., Slip Op. 23-170, CIT # 16-00008, dated 12/4/23; Judge: Timothy Stanceu; Attorneys: John Brew for plaintiff Nutricia North America; Luke Mathers for defendant U.S. government)