CamelBak Products, LLC recently filed notice that it is appealing an unfavorable decision issued by the U.S. Court of International Trade (CIT) which held that the company’s imported “hydration packs” or “hydration systems” are properly classifiable under HTS subheading 4202.92.30 at 17.8% ad valorem as “travel, sports, and similar bags”, rather than as “insulated food or beverage bags” under subheading 4202.92.04, or, alternatively, under subheading 4202.92.08, both dutiable at the rate of 7% ad valorem.

The hydration packs in issue consisted of a textile bag with padded, adjustable shoulder straps, designed to be worn on the back during a recreational activity, such as hiking, biking, snowboarding, or rock climbing. Each of the models featured both a “cargo” compartment (designed to hold food, clothing, gear, and other supplies) and a “reservoir” (bladder) compartment, designed to carry and maintain the temperature of water or another beverage. A piece of 40-inch plastic tubing ran from the reservoir (bladder) to a silicone mouth-piece and bite valve allowing the wearer to drink “hands-free.”

CamelBak claimed that the article was a “composite good” consisting of luggage and an insulated food or beverage bag. Among CamelBak’s claims was that the “essential character” test under General Interpretative Rule (GRI) 3(b), should be used as the criteria for classification, which would compare the travel bag feature with the insulated food or beverage component. CamelBak’s position, rejected by the CIT, was that the hydration pack’s essential character was imparted by the so-called “insulated beverage bag” component, and therefore, was classifiable as an insulated food or beverage bag.

The CIT held that the imported merchandise was not a “composite good” and that the classification should be based upon GRI 1, which provides for classification “according to the terms of the headings and any relative section or chapter notes.” In the view of the CIT each of the hydration systems as a whole is classifiable as “travel, sports and similar bags” under subheading 4202.92. Even though the hydration packs included a special feature which allowed the wearer to carry and dispense cold water or other beverages, the hydration systems were still “backpacks.” The U.S. Court of Appeals for the Federal Circuit will now be called upon to decide whether the lower court was correct.

If you have any questions about these issues, please contact Stephen Spraitzar at (415) 288-0427 or via email at steve.spraitzar@tuttlelaw.com.

Stephen Spraitzar is an attorney with the Law Offices of George R. Tuttle in San Francisco.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

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