On January 5, 2010, the US Court of Appeals for the Federal Circuit (CAFC) reversed the CIT’s decision in Outer Circle Products v. United States. The CAFC held that the CIT erred when it ruled that the bottle and jug wraps should be classified as “bottle cases” under HTSUS subheading 4202.92.90 and subject to a duty rate of 19.3 percent ad valorem. The CAFC determined that the subject articles were food organizers, properly classified as other plastic kitchenware under HTSUS subheading 3924.10.50 and, therefore, subject to a duty rate of 3.4 percent ad valorem. The bottle and jug wraps at issue consisted of soft-sided, flexible wraps constructed of a PVC closed-cell thermal-insulating foam layer.
In reaching its decision, the CAFC noted that it had previously ruled in SGI, Inc. v. United States that HTSUS heading 4202 did not include “containers that organize, store, protect, or carry food and beverages.” The CAFC rejected the CIT’s attempt to distinguish the SGI coolers from the subject bottle and jug wraps on the basis that the SGI coolers were fully capable of storing food or beverage while the subject articles required the insertion of a bottle or jug before achieving such capability. Rather, the CAFC found that both the coolers in SGI and the subject bottle and jug wraps were not designed to hold uncontained food or beverage and, because the subject articles “organize, store, protect, or carry food or beverages,” they could not be classified under HTSUS heading 4202.