International Trade Law News

Published by Jacobson Burton Kelley PLLC

On Tuesday, November 4th, the U.S. Supreme Court will hear oral arguments in the first ever antidumping cases granted certiorari by the Supreme Court.

The consolidated cases, 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), involve appeals arising from an antidumping petition filed in December 2000 on imports of low enriched uranium from various countries, including France. The U.S. Court of International Trade and the Court of Appeals for the Federal Circuit, overturning a decision made by the Commerce Department, held that the contracts for the enrichment of uranium entered into by U.S. buyers and Eurodif S.A, an enricher in France, were contracts for services, rather than for the sale of goods. As a result, the courts held that the low enriched uranium (LEU) processed under the contracts was not subject to the antidumping law.

The central issues in this case are whether the low enriched uranium produced through "separative work unit" (SWU) enrichment contracts are goods or services and subject to the antidumping duty laws and the extent of deference the courts are to give to the Commerce Department under the test established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) in making such determinations. In other words, the Supreme Court is being asked to decide if the Commerce Department reasonably determined that the enrichment contracts were sales of goods subject to the antidumping law and if the Court of International Trade and Court of Appeals for the Federal Circuit overreached by overturning the Commerce Department’s decision.

These cases are significant in many respects. Not only do they involve issues addressing an important interpretation of U.S. antidumping law, they will have an impact on international trade, energy and national security policy, all of which were prominent issues in the current presidential election campaign. It is therefore fitting that the oral argument in these cases will be held on Election Day.

From an antidumping law perspective these cases are significant since they mark the first time the Supreme Court has heard a case involving the interpretation of United States antidumping laws. The Supreme Court rarely considers international trade law cases. While the Supreme Court has 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 has the Supreme Court ruled on a legal issue involving the interpretation of antidumping laws. The Supreme Court has traditionally deferred to the decisions made by judges of the United States Court of International Trade and the United States Court of Appeals for the Federal Circuit.

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

This case is also important from an administrative law perspective, as this is the case since the Supreme Court’s 2004 term that it will review a case under the Chevron test. The Court’s opinion in these cases may provide further guidance and elaboration on the degree of deference that the courts owe to administrative agencies whose decisions they are reviewing.

The Supreme Court’s decision in these cases also has several domestic energy and national security policy implications. For example, if the Supreme Court’s chooses to rule in favor of the United States and USEC and impose antidumping duties on the low enriched uranium imports from France at issue in this case, the utility companies will end up paying more for the fuel needed to power their nuclear power costs and will likely pass along those costs to the businesses and consumers that purchase electricity produced by nuclear power plants. By contrast, if the Commerce Department’s decision is upheld by the Supreme Court the United States and USEC are concerned that Russia may choose to increase its output of LEU used to produce electricity, which would decrease the market price and threaten the viability of the domestic enrichment industry and decrease the United States’ ability to acquire nuclear materials critical to conducting military operations.

Finally, the Supreme Court’s decision in these cases will have an impact outside of the borders of the United States as well. If the Supreme Court reverses the Federal Circuit’s ruling and lets stand the Commerce Department’s decision to apply the antidumping law to manufacturing service contracts, the European Union could file a complaint with the World Trade Organization’s Dispute Settlement Body alleging that the decision is contrary to various WTO agreements. In addition, the possibility also exists that other countries could use the Commerce Department’s reasoning to bring antidumping cases against United States products.

The briefs in these case can be found at the following links:

Labels: Antidumping