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United States Court of Appeals for the Federal Circuit
04-1209, -1210
EURODIF S.A.,
COMPAGNIE GENERALE DES MATIERES NUCLEAIRES,
and COGEMA, INC.,
Plaintiffs-Appellants,
and
AD HOC UTILITIES GROUP,
Plaintiff-Appellant,
v.
UNITED STATES
Defendant-Cross Appellant,
and
USEC INC. and UNITED STATES ENRICHMENT CORPORATION,
Defendants-Cross Appellants.
Stuart M. Rosen, Weil, Gotshal & Manges LLP, of New York, New York, argued for
plaintiffs-appellants Eurodif S.A., et al. With him on the brief were Gregory Husisian, of
Washington, DC, and Jennifer J. Rhodes, of New York, New York.
Nancy A. Fischer, Shaw Pittman LLP, of Washington, DC, argued for plaintiff-appellant
AD HOC Utilities Group. With her on the brief were Stephan E. Becker, Sanjay J. Mullick, and
Joshua D. Fitzhugh.
Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for defendant-cross appellant United States.
On the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and
Jeanne E. Davidson, Deputy Director. Of counsel on the brief were John D. McInerney, Chief
Counsel, Berniece A. Browne, Senior Counsel, and Robert L. Lafrankie, Senior Attorney, Office
of Chief Counsel for Import Administration, United States Department of Commerce, of
Washington, DC.
Sheldon E. Hochberg, Steptoe & Johnson LLP, of Washington, DC, argued for
defendants-cross appellants USEC Inc., et al. With him on the brief were Richard O.
Cunningham, Eric C. Emerson, Matthew S. Yeo, Evangeline D. Keenan, and Alexandra E.P.
Baj.
Bradford L. Ward, Dewey Ballantine LLP, of Washington, DC, for amicus curiae
Committee to Support United States Trade Laws. With him on the brief was David Hartquist,
Collier Shannon Scott, PLLC, of Washington, DC.
Appealed from: United States Court of International Trade
Judge Donald Pogue
United States Court of Appeals for the Federal Circuit
04-1209, -1210
EURODIF S.A.,
COMPAGNIE GENERALE DES MATIERES NUCLEAIRES,
and COGEMA, INC.,
Plaintiffs-Appellants,
and
AD HOC UTILITIES GROUP,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Cross Appellant,
and
USEC INC. and UNITED STATES ENRICHMENT CORPORATION,
Defendant-Cross Appellants.
ON PETITION FOR REHEARING
Before BRYSON, Circuit Judge, PLAGER, Senior Circuit Judge, and PROST, Circuit
Judges.
PROST, Circuit Judge.
ORDER
More than three months after we decided this case, the Supreme Court issued its
opinion in National Cable & Telecommunications Ass’n v. Brand X Internet Services,
125 S. Ct. 2688 (Jun. 27, 2005). In letters disclosing National Cable as a supplemental
authority pursuant to Federal Circuit Rule 28(j), the United States, USEC, Inc. and the
United States Enrichment Corporation (collectively, “Petitioners”) contend that the
Supreme Court’s reasoning in National Cable strongly supports arguments presented in
their petitions for rehearing. We grant the petitions for rehearing by the panel for the
limited purpose of addressing the applicability of National Cable to this case. In all other
respects, we reaffirm our earlier opinion and judgment. See Eurodif S.A. v. United
States, 411 F.3d 1355 (Fed. Cir. 2005).
I
In National Cable the Supreme Court heard an appeal from the Ninth Circuit in a
case involving the proper regulatory classification of broadband cable Internet service
under the Communications Act of 1934, 48 Stat. 1064, as amended by the
Telecommunications Act of 1996, 110 Stat. 56. See 125 S. Ct. at 2696. The Ninth
Circuit had vacated a ruling by the Federal Communications Commission (“FCC”) to the
extent the FCC’s ruling concluded that cable modem service was not
“telecommunications service” under the Communications Act. Id. at 2698. “Rather than
analyzing the permissibility of that construction under the deferential framework of
Chevron, . . . the Court of Appeals grounded its holding in the stare decisis effect of
AT&T Corp. v. Portland . . . .” Id. (citations omitted).
The Supreme Court reversed and remanded. It held that “[a] court’s prior judicial
construction of a statute trumps an agency construction otherwise entitled to Chevron
deference only if the prior court decision holds that its construction follows from the
unambiguous terms of the statute and thus leaves no room for agency discretion.” Id. at
2700. It similarly stated that “[b]efore a judicial construction of a statute, whether
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contained in a precedent or not, may trump an agency’s, the court must hold that the
statute unambiguously requires the court’s construction.” Id. at 2702.
The Supreme Court explained that Chevron set forth a two-step process to
evaluate whether an agency’s interpretation of a statute is lawful. At step one we
determine “whether the statute’s plain terms ‘directly addres[s] the precise question at
issue.’” Id. (quoting Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S.
837, 843 (1984)). If we determine that the statute is ambiguous on the precise question
at issue, “we defer at step two to the agency’s interpretation so long as the construction
is ‘a reasonable policy choice for the agency to make.’” Id. (quoting Chevron, 467 U.S.
at 845). On the other hand, if we determine that the statute is unambiguous on the
precise question at issue, we do not defer to the agency’s interpretation, regardless of
whether that interpretation is grounded in a reasonable policy choice. See id.
II
Petitioners argue that the holding of National Cable strongly supports their
contention that we erroneously relied upon Florida Power & Light v. United States, 307
F.3d 1364 (Fed. Cir. 2002), to conclude that the Department of Commerce’s
(“Commerce’s”) finding, that the separative work units (“SWU”) contracts at issue in this
case were contracts for the sale of goods and therefore subject to the antidumping duty
statute, is not in accordance with law. In particular, the United States argues that we
have not held, either in Florida Power or here, “that the antidumping ‘statute
unambiguously requires’ that the term ‘sold’ excludes the acquisition of imported
merchandise in exchange for raw materials and cash.” Similarly, USEC, Inc. and the
United States Enrichment Corporation (collectively, “USEC”) contend that we
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“erroneously relied upon the earlier determination of this Court in Florida Power & Light
Co. v. United States so as to fail to give appropriate deference to the Commerce
Department’s conclusion that the import transactions [here] involved a sale of
merchandise under the antidumping law.”
III
As a preliminary matter, Petitioners are incorrect to the extent they imply that we
found ourselves bound by Florida Power in this case under the doctrine of stare decisis.
To the contrary, we specifically stated that “Florida Power is not binding precedent for
this case” but that it is “persuasive” authority. Eurodif, 411 F.3d at 1363; cf. National
Cable, 125 S. Ct. at 2701 (noting that the Ninth Circuit held that a prior judicial
construction of a statute categorically controls an agency’s contrary construction).1
On the other hand, Petitioners are correct to the extent they point out that in
Florida Power we did not expressly hold that the antidumping duty statute
“unambiguously” applies to contracts for the sale of goods only and “unambiguously”
does not apply to the contracts at issue in this case in particular. And although in our
opinion in this case we did expressly hold that the countervailing duty statute
unambiguously does not allow for the purchase of services to be considered a subsidy,
Eurodif, 411 F.3d at 1365, as in Florida Power we did not expressly state that the
antidumping duty statute unambiguously applies to contracts for the sale of goods only
and unambiguously does not apply to the contracts at issue in this case in particular.
1
In this regard, we rejected the argument that we should ignore the
analysis and reasoning of Florida Power because that case involved a different statutory
scheme. We chose not to ignore Florida Power, but instead to recognize its persuasive
power, because the nearly identical circumstances in that case were those surrounding
SWU contracts. See Eurodif, 411 F.3d at 1363.
04-1209, -1210 4
We now clarify by stating expressly that the antidumping duty statute
unambiguously applies to the sale of goods and not services. In our opinion, we stated
that “[u]nder the statutory scheme adopted by Congress, the sale of goods (or
‘merchandise’) is covered by the antidumping duty statute” but that the “provision of
services, however, is not . . . .” Eurodif, 411 F.3d at 1361. While we did not use the
term “unambiguous,” we clearly foreclosed any argument that § 1673 is ambiguous on
the precise question of whether the antidumping duty statute encompasses contracts for
services. It undoubtedly does not.
Commerce’s characterization of the SWU contracts at issue in this case would
contradict, we conclude, the statute’s unambiguous meaning because it is clear that
those contracts are contracts for services and not goods. While Petitioners concede
that a sale of goods requires a transfer of ownership, see United States’ Petition for
Rehearing at 9 (citing NSK Ltd. v. United States, 115 F.3d 965 (Fed. Cir. 1997)) and
USEC’s Petition for Rehearing at 2 (same), they do not recognize the critical importance
of the indisputable fact that, pursuant to the contracts at issue in this case, enrichers
never obtain ownership of either the feed (unenriched) uranium during enrichment or
the final low enriched uranium (“LEU”) product. Nevertheless, the inescapable
conclusion flowing from this circumstance is that the enrichers do not “sell” LEU to
utilities pursuant to the SWU contracts at issue in this case.
As we stated in our opinion:
In reviewing the contracts in this case, it is clear that ownership of
either the unenriched uranium or the LEU is not meant to be vested in the
enricher during the relevant time periods that the uranium is being
enriched. While it is correct that a utility may not receive the LEU that was
enriched from the exact unenriched uranium that it delivered to the
enricher, it is nevertheless true that up until the sampling and weighing of
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the LEU before delivery, the utility retains title to the quantity of unenriched
uranium that is supplie[d] to the enricher. The utility’s title to that uranium
is only extinguished upon the receipt of title in the LEU for which it
contracted. Therefore, the SWU contracts in this case do not evidence
any intention by the parties to vest the enrichers with ownership rights in
the delivered unenriched uranium or the finished LEU. As a result, the
“transfer of ownership” required for a sale [of goods] is not present here.
Eurodif, 411 F.3d at 1362. We adhere to that analysis today, noting that the complete
absence of a transfer of ownership over LEU requires that we reject Commerce’s
application of the antidumping duty statute to the SWU contracts.
IV
This Order constitutes the panel’s action in response to the petitions for
rehearing. We conclude that our analysis in this case is consistent with the Supreme
Court’s holding in National Cable, and we reaffirm our decision that Commerce’s finding
that the SWU contracts were contracts for the sale of goods and therefore subject to the
antidumping duty statute was not in accordance with law.
FOR THE COURT
___9-9-05______ s/Sharon Prost__
Date Sharon Prost
Circuit Judge
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