A Historic Decision for International Trade: U.S. Supreme Court’s First-Ever Ruling on the Antidumping Law

U.S. Supreme Court’s First-Ever Ruling on Antidumping:
Scope of Statute Not Limited by Parties’ Intent in Import Transactions

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(January 26, 2009, Washington, D.C) – Today’s historic – and unanimous –  Supreme Court decision in the consolidated cases of USEC Inc. v. Eurodif S.A., and United States v. Eurodif S.A., has far-reaching implications for international trade, according to attorneys at Steptoe & Johnson LLP, who represented USEC in a long-running legal battle with the French company Eurodif over the correct application of U.S. trade law.

“This is the first time the Court has addressed the antidumping law,” said Sheldon Hochberg, a partner in Steptoe’s International Trade & Investment practice and lead attorney in the matter.  “The Court answered a question that lies at the heart of the antidumping law – when does an import transaction involve a sale of merchandise, rather than a sale of services.  The Court closed a loophole created by the lower courts, which had limited the application of the antidumping law based on the intent of the parties to the import transaction. This decision is important to a great many U.S. industries that compete with foreign goods produced through arrangements in which a customer provides raw materials.  While Eurodif and the lower courts had believed that such transactions involved sales of services outside the scope of the antidumping law, today’s decision makes absolutely clear that such transactions constitute sales of goods subject to that law.”

In addition to Mr. Hochberg, the Steptoe team representing USEC included Eric C. Emerson, Charles G. Cole, Dick Cunningham, Michael Vatis, Tom Trendl, Alex Baj, John P. Nolan, Laura Ardito, Saad Gul, Sohini Chatterjee, Shannon MacMichael, and Stephanie Atkinson. Paralegals Xinli Wang and Karen Tucker provided research and legal support. Several of Steptoe's summer associates also provided assistance including Jeremy Glen, Andrew Guhr, and Charles Kersten.

Today’s decision has importance well beyond the antidumping context, including providing clarification that the application of a regulatory statute to a transaction cannot be limited by the intent of the parties to the transaction, and that deference to an agency under the Supreme Court’s 1984 Chevron decision must be given when the agency applies a statutory term in a particular context, and not just to the abstract interpretation of a statutory term.

“This decision also ensures that the domestic uranium enrichment industry can plan for future expansion to meet the energy needs of the United States without the threat of unfair import competition,” said Mr. Hochberg.

USEC is the only U.S. company that produces low-enriched uranium, a critical component in the domestic production of nuclear power.  Eurodif, a French company, supplies low-enriched uranium to U.S. utility companies for similar purposes.

Today’s ruling overturned decisions by the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of International Trade that antidumping duties could not be levied on imports of low-enriched uranium (LEU) under contracts where the customer supplied fungible unenriched uranium that was “deemed” to have been used to produce the LEU delivered to the customer.  While the Department of Commerce had found that such imports were being sold at “dumped” prices and the International Trade Commission had found that such imports were causing injury to the domestic enrichment industry, the Federal Circuit had concluded that, because of the contract provisions, such transactions involved sales of services outside the scope of the antidumping law, not sales of goods. 

USEC’s petition for review to the Court was consolidated with a petition filed by the U.S. Solicitor General, who was joined by the General Counsels of the U.S. Departments of State, Defense, Commerce, and Energy.  The Committee for the Support of U.S. Trade Laws, which includes numerous domestic companies and unions that file antidumping cases, filed a friend-of-the-Court brief in support of USEC’s and the Government’s position.   

Steptoe’s high-profile International Trade & Investment practice is one of the most experienced and active trade law practices in the world.  In addition to the USEC case, the group has played a leading role in many landmark international trade cases, including the lengthy U.S.-Canada softwood lumber dispute, antidumping cases involving a variety of steel products and anti-friction bearings from nine countries, countervailing duty cases involving the effect of privatizations on pre-privatization subsidies, and litigation involving the constitutionality of the Byrd Amendment. 

The firm has represented both domestic and foreign companies in more than 150 antidumping and countervailing duty cases before the Department of Commerce and the U.S. International Trade Commission.  Many of these involved appeals to the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, bi-national panels under the North American Free Trade Agreement (NAFTA), and to the World Trade Organization (WTO).  The firm is also nationally renowned for its success in litigating unfair trade practice cases under Section 337 of the Tariff Act of 1930, as amended.

In 2007, Chambers USA, a leading international legal directory, named Steptoe's International Trade Group its International Trade Practice of the Year.