U.S. Supreme Court Sides With Commerce Department in First Antidumping Decision Rendered by Court

The U.S. Supreme Court today released its opinion in the first ever antidumping case heard by the U.S. Supreme Court.

In United States v. Eurodif S.A., et al. (Docket No. 07-1059) and USEC, Inc., v. Eurodif S.A., Docket No. (Docket No. 07-1078), cases involving the imports of low enriched uranium (LEU) from France and other countries, the Supreme Court ruled 9-0 that LEU produced through "separative work unit" (SWU) enrichment contracts are goods and subject to U.S. antidumping duty laws.

In the unanimous opinion written by Justice Souter, the Court held:

Where a domestic buyer’s cash and an untracked, fungible commodity are exchanged with a foreign contractor for a substantially transformed version of the same commodity, the Commerce Department may reasonably treat the transaction as the sale of a good under §1673. We therefore reverse the judgment of the Federal Circuit and remand the cases for further proceedings consistent with this opinion.

While recognizing that "SWU contracts exemplify a class of transactions that the Federal Circuit recognized does 'not fall neatly’ either into the category of contracts for services or the category of contracts for the sale of goods,'" relying on the standard in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Court held that the Commerce Department reasonably determined that the enrichment contracts were sales of goods subject to the antidumping law and the Court of International Trade and Court of Appeals for the Federal Circuit overreached by overturning the Commerce Department’s original decision.

Specfically, the Court stated:

First, we think the Department reasonably concluded that §1673 is not limited by its terms to cash only sales. Otherwise, any sale of a manufactured product could be exempted from the operation of §1673 by a contractual term stating part of the purchase price in terms ofa commodity. Second, in applying §1673, the Commerce Department is not bound by the “legal fiction [created by SWU contracts]that the very feed uranium delivered by a utility to an enricher is enriched and then returned as LEU to the utility.”

This case is one of a very small number of international trade law cases heard by the U.S. Supreme Court. While the Court previously ruled on other aspects of international trade laws, such as the classification of imported merchandise under the customs laws (e.g., United States v. Mead, 533 U.S. 218 (2001) and United States v. Haggar Apparel Co., 526 U.S. 380 (1999)) and whether the harbor maintenance tax imposed on exports violated the Constitution’s export clause (United States v. United States Shoe Corp., 523 U.S. 360 (1998)), never in the long history of the United States antidumping laws had the Supreme Court ruled on a legal issue involving the interpretation of antidumping laws.

This case was closely watched by practitioners and parties involved on both sides in antidumping cases since the decision will affect the scope of products and types of processing arrangements subject to future antidumping investigations and antidumping duties.

UPDATE: The press release issued today by USEC, the U.S. petitioner in the original antidumping case can be found here. The press release issued by the Committee to Support U.S. Trade Laws (CSUSTL), which filed an amicus brief supporting the government's position in the case, can be found here.