Techsnabexport v. United States

Slip Op. 07-143

UNITED STATES COURT OF INTERNATIONAL TRADE

)
TECHSNABEXPORT,
)
)
Plaintiff, )
)
v. ) BEFORE: Pogue, Judge
) Cons. Court No. 06-00228
UNITED STATES, )
)
Defendant, )
)
and )
)
USEC Inc. and United States )
Enrichment Corporation, )
)
)
Defendant-Intervenors. )

[Commerce’s determination remanded]

Decided: September 26, 2007

Pillsbury Winthrop Shaw Pittman LLP (Nancy A. Fischer, Joshua D.
Fitzhugh, Christine J. Sohar, Kemba T. Eneas, and Stephan E.
Becker) for Plaintiff Ad Hoc Utilities Group.

White & Case, LLP (Adams Lee, Carolyn B. Lamm, Joanna Ritcey-
Donohue, Kristina Zissis) for Plaintiff Techsnabexport.

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson,
Director, Patricia M. McCarthy, Assistant Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice
(Stephen Tosini, Trial Attorney) for Defendant.

Steptoe & Johnson LLP (Eric C. Emerson, Alexandra E. Baj,
Evangeline D. Keenan, Richard O. Cunningham, Sohini Chatterjee,
Thomas J. Trendl, Wentong Zheng) for Defendant-Intervenors.

OPINION

Pogue, Judge: These consolidated actions, which are part of a long
Ct. No.06-00228 Page 2

line of uranium cases, arise from a decision made by the Department

of Commerce (“Commerce” or “the government”) to include sales of

uranium enrichment services in an antidumping investigation.

Plaintiffs Techsnabexport (“Tenex”) and Ad Hoc Utilities Group

(“AHUG”)1 (collectively “Plaintiffs”) challenge the final results

(or “determination”) in the second five-year sunset review (“the

Review”) of the suspended antidumping duty investigation of uranium

from Russia. Uranium from the Russian Federation, 71 Fed. Reg.

32,517 (Dep’t Commerce June 6, 2006)(final results of five-year

sunset review of suspended antidumping duty investigation)(“Final

Results”) and the accompanying Issues and Decision Memorandum

(“Decision Mem.”).

Plaintiffs claim that Commerce’s inclusion of and reliance

upon service transactions for uranium enrichment renders unlawful

its findings and conclusions with regard to the products subject to

investigation, or scope of the proceeding, the volume of subject

imports, the likelihood of dumping, and the magnitude of the margin

likely to prevail.

Pursuant to USCIT R. 56.2, Plaintiffs move for judgment on the

agency record. The court has jurisdiction pursuant to 19 U.S.C.

1
AHUG is the Plaintiff in Case no. 06-00229, which has been
consolidated with the captioned matter.
Ct. No.06-00228 Page 3

§ 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c).2 For the reasons

stated below, Commerce’s determination is remanded.

BACKGROUND

Tenex is the Russian executive agent responsible for the

export of uranium and uranium enrichment services from Russia.3

AHUG is a group of utility companies that use enriched uranium.4

2
All references to the United States Code are to the 2000
edition.
3
Enriched uranium fuel rods are used to generate nuclear
power. The enrichment of uranium is a process by which the
concentration of U-235, an isotope of uranium, is increased from
its naturally occurring concentration. Depending on the increase
in the concentration of U-235, the resulting uranium may be
considered low-enriched uranium (“LEU”) or high-enriched uranium
(“HEU”). LEU is appropriate for the production of nuclear
energy. HEU is weapons-grade uranium, appropriate for nuclear
weapons. For a more complete explanation of the generation of
nuclear energy, see USEC Inc. v. United States, 27 CIT 489, 491,
259 F. Supp. 2d 1310, 314-16 (2003)(“USEC I”). See also, USEC Inc.
v. United States, 27 CIT 1419, 281 F. Supp. 2d 1334 (2003) (USEC
II), aff’d in part Eurodif S.A. v. United States, 411 F.3d 1355
(Fed. Cir. 2005)(“Eurodif I”).
4
In the Review, Commerce treated AHUG as an “industrial
user” of subject merchandise, pursuant to 19 C.F.R. § 351.312,
and did not recognize AHUG’s standing as an “interested party.”
Cf. USEC I, 27 CIT 489, 259 F. Supp. 2d 1310 (2003)(granting
interested party standing to AHUG members as possible “toll”
producers of subject merchandise), aff’d in part by Eurodif I,
411 F.3d 1355 (upholding as reasonable Commerce’s determination
that domestic utilities were not foreign producers of uranium for
purposes of determining industry support of the petition).
Commerce’s denial of “interested party” status did not reflect
any consideration of the nature of the transactions at issue
here. Accordingly, Commerce’s determination did not reflect
“consider[ation of] an important aspect of the problem,” Motor
Vehicles Mfrs. Ass’n v. State Farm Mut., 463 U.S. 29, 43 (1983),
(continued...)
Ct. No.06-00228 Page 4

The Plaintiffs participated in Commerce’s sunset review

proceedings, the results of which are challenged here. Defendant-

Intervenor, USEC, Inc., and its wholly-owned subsidiary, United

States Enrichment Company (collectively, “USEC”) is a domestic

provider of enrichment services. USEC also participated in

Commerce’s sunset review.

Commerce conducts a five-year sunset review of a suspended

antidumping duty investigation pursuant to Sections 751 and 752 of

the Tariff Act of 1930, as amended, 19 U.S.C. § 1675.5

4
(...continued)
and cannot be sustained. On remand, Commerce will have the
opportunity to reconsider its position on this issue. Here, the
government has moved to dismiss Case No. 06-229, claiming that
AHUG lacks standing to bring its complaint. However, the court
need not reach the standing issue as no party challenges Tenex’s
standing to challenge Commerce’s determination.
5
In relevant part, 19 U.S.C. § 1675(c) provides as follows:
5 years after the date of publication of-

(A) . . . a notice of suspension of an investigation,
described in subsection (a)(1) . . . or
(C) a determination under this section to continue an order
or suspension agreement,

the administering authority . . . shall conduct a review to
determine, in accordance with section 1675a of this title,
whether . . . termination of the investigation suspended
under section 1671c or 1673c of this title would be likely
to lead to continuation or recurrence of dumping . . . .

19 U.S.C. § 1675(c).

Further, 19 U.S.C. § 1675(d) provides, in relevant part,
that:
[T]he administering authority shall . . . terminate a
(continued...)
Ct. No.06-00228 Page 5

The original suspended antidumping duty investigation reviewed

here was initiated in December of 1991, just before the dissolution

of the Soviet Union.6 Commerce continued the investigation against

5
(...continued)
suspended investigation, unless–-
(A) the administering authority makes a determination that
dumping . . . would be likely to continue or recur . . . .

19 U.S.C. § 1675(d)(2).

Section 1675a in turn provides, in relevant part that:

(1) In general
In a review conducted under section 1675(c) of this title,
the administering authority shall determine whether . . .
termination of a suspended investigation . . . would be
likely to lead to continuation or recurrence of sales of the
subject merchandise at less than fair value. The
administering authority shall consider--
(A) the weighted average dumping margins determined in the
investigation and subsequent reviews, and
(B) the volume of imports of the subject merchandise for the
period before and the period after the issuance of the
antidumping duty order or acceptance of the suspension
agreement.

(2) Consideration of other factors
If good cause is shown, the administering authority shall
also consider such other price, cost, market, or economic
factors as it deems relevant.
(3) Magnitude of the margin of dumping
The administering authority shall provide to the Commission
the magnitude of the margin of dumping that is likely to
prevail if the order is revoked or the suspended
investigation is terminated.
19 U.S.C. § 1675a(c).
6
The preliminary determination states the date of
dissolution of the Soviet Union as December 25, 1991. Uranium
(continued...)
Ct. No.06-00228 Page 6

the Soviet republics individually, as newly independent states,

and, using best information available data, came to preliminary

affirmative dumping determinations with regard to uranium products

and services from Kazakhstan, Kyrgyzstan, Russia, Tajikistan,

Ukraine, and Uzbekistan. Uranium from Kazakhstan, Kyrgyzstan,

Russia, Tajikistan, Ukraine, and Uzbekistan, 57 Fed. Reg. 23,380

(Dep’t Commerce June 3, 1992)(preliminary determinations of sales

at less than fair value). However, before Commerce issued final

results in that original investigation, the investigation was

suspended, when the government entered into an agreement

restricting the volume of imports to the United States. Uranium

from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and

Uzbekistan, 57 Fed. Reg. 49,220 (Dep’t Commerce Oct. 30,

1992)(suspension of investigations and amendment of preliminary

determinations)(“Suspension Agreement”).7 As noted above, the

action at issue here is a challenge to the results of the second

five-year sunset review of the suspended investigation.

6
(...continued)
from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and
Uzbekistan, 57 Fed. Reg. 23,380 (Dep’t Commerce June 3,
1992)(preliminary determinations of sales at less than fair
value).
7
Under the Suspension Agreement, uranium products and
services are allowed to enter the U.S. when such products and
services are bought and sold by USEC, pursuant to the Agreement
between the Government of the United States of America and the
Government of the Russian Federation Concerning the Disposition
of Highly Enriched Uranium Extracted from Nuclear Weapons (“HEU
Agreement”) and the USEC Privatization Act, 42 U.S.C. § 2297h.
Ct. No.06-00228 Page 7

In this matter, both Tenex and AHUG challenge Commerce’s scope

determination in the Review and its finding of a likelihood of

continued or recurring dumping if the Suspension Agreement is

terminated, together with other subsidiary findings upon which

Commerce’s decision is based. Specifically, Plaintiffs challenge

Commerce’s inclusion of low-enriched uranium (LEU) obtained

pursuant to uranium enrichment services contracts both in the scope

of the Review and in the “likelihood” determination.8 In addition,

8
Enrichment services contracts have been examined in USEC I,
USEC II and Eurodif I reaff’d 423 F.3d 1275 (Fed. Cir.
2005)(“Eurodif II”), aff’d per curiam 217 F. App’x 963 (Fed. Cir.
2007). Typically, these contracts are structured so that a
utility contracts for the enrichment of a certain amount of
converted uranium (called “feedstock”), which it supplies. The
enricher provides enriched uranium to the utility, in exchange
for a comparable amount of feedstock and payment for the amount
of separative work units (“SWU”) necessary to enrich the
feedstock. Although the enriched uranium is typically not the
same uranium as the feed uranium provided for a given
transaction, it is contractually treated as such. These
contracts or transactions are referred to as “SWU contracts” or
“SWU transactions.”
Commerce defined “SWU transactions” in Low Enriched Uranium
from Fance, final Results of Redetermination Pursuant to Court
Remand, Eurodif S.A. v. United States, (Dep’t of Commerce, June
19,2006) (“Also excluded from the scope of this order is LEU
produced and imported pursuant to a separative work unit (“SWU”)
transaction. For purposes of this exclusion, a SWU transaction
means a transaction in which the parties only contract for the
provision of enrichment processing, and the purchasing party is
responsible for the provision of natural uranium feedstock to the
enricher. At no time, before, during or after enrichment, does
the enricher own or hold title to the LEU product delivered under
the contract. In order to qualify for the exclusion,
the SWU transaction must be performed in accordance with the
relevant terms of a written contract for the provision of SWU.
Entries pursuant to such SWU transactions must be accompanied by
the certification of the end user and enricher.” Available at
(continued...)
Ct. No.06-00228 Page 8

Tenex alleges that if Commerce’s decision is interpreted as having

made the statutorily required finding of a likelihood of dumping if

the investigation were terminated, in accordance with 19 U.S.C.

§§ 1675(c) and 1675a(c), then such a determination was neither in

accordance with law nor supported by substantial evidence because,

inter alia, the determination failed to exclude SWU transactions.

Lastly, Tenex challenges as unsupported by substantial

evidence Commerce’s reliance upon the 115.82% margin set in

Commerce’s original preliminary determination, and adopted in the

Final Results here as the margin likely to prevail in and after the

Review. This last challenge, according to Tenex, is based on the

alleged “extraordinary circumstances” that have occurred since the

commencement of the investigation and preliminary determination,

such as the decline of the Soviet Union and Russia’s emerging

status as a market economy country,9 exacerbated by the fact that

8
(...continued)
http://ia.ita.doc.gov/remands/06-75.pdf)
Pursuant to the HEU Agreement, USEC is the U.S. Executive
Agent authorized to sell SWU obtained from Russia on the U.S.
market. (USEC also has enrichment facilities of its own in the
United States). The SWU Russia sells, through its executive
agent, Tenex, is inherent in LEU which Tenex prepared by
downblending high enriched, weapons-grade uranium: HEU.
9
Plaintiffs noted that Commerce recognized Russia as a
market economy on April 1, 2002. Mem. from Albert Hsu, Senior
Economist, to Faryar Shirzad, Assistant Secretary, Import
Administration Re: Inquiry into the Status of the Russian
Federation as a Non-Market Economy Country Under the U.S.
Antidumping Law (June 6, 2002) available at http://ia.ita.doc.gov
(continued...)
Ct. No.06-00228 Page 9

in the preliminary determination, Commerce relied upon the “best

information available” in making its determination. Tenex argues

that Commerce, in conducting its sunset review, should not rely on

USSR information but rather should look to Russia-specific

information and take into account the changed economy of the

country as well. In addition, Tenex challenges the connection

between Commerce’s finding that prices were likely to be depressed

if the Suspension Agreement was lifted and its conclusion that

uranium would be sold at less than fair value, noting that there is

no necessary, logical connection between prices which may be low

and prices which are less than normal value and therefore

constitute dumping.

STANDARD OF REVIEW

The court will uphold Commerce’s determination unless it is

unsupported by substantial evidence on the record, or otherwise not

in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

It is settled law that LEU processed pursuant to uranium

enrichment services transactions is not a “good” or “merchandise”

subject to the antidumping duty statute and that such transactions

9
(...continued)
/download/russia-nme-status/russia-nme-decision-final.htm.
Ct. No.06-00228 Page 10

do not constitute a “sale” subject to those statutory provisions.

See 19 U.S.C. § 1673;10 see also, Eurodif I, 411 F.3d 1355; Eurodif

II, 423 F.3d 1275. The Federal Circuit’s holdings were based

primarily on the utilities’ retention, in a SWU transaction, of

ownership of the uranium. Eurodif I, 411 F.3d at 1362 (explaining

that “the utility retains title to the quantity of unenriched

uranium that is [sic] supplies 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.”). The utility thus

maintains title to its feed uranium until it receives the enriched

uranium, at which time it pays for the SWU necessary to enrich the

relevant amount of feed uranium into the LEU it receives. As a

result, there is no “transfer of ownership,” as required for a

sale, because the utility has ownership of the relevant uranium at

all times during the transaction. Id. citing NSK Ltd. v. United

States, 115 F.3d 965 (Fed. Cir. 1997). The court in Eurodif I also

pointed to the “fundamental purpose” of the transaction, which was

“the provision of enrichment services” as opposed to the sale of

enriched uranium. Eurodif I, 411 F.3d at 1362-63. In Eurodif II,

the court clarified its earlier holding “by stating expressly that

10
That section reads in relevant part: “[i]f . . . the
administering authority determines that a class or kind of
foreign merchandise is being, or is likely to be, sold in the
United States at less than its fair value . . . then there shall
be imposed upon such merchandise an antidumping duty . . . .” 19
U.S.C. § 1673 (emphasis added).
Ct. No.06-00228 Page 11

the antidumping duty statute unambiguously applies to the sale of

goods and not services” and that “Commerce’s characterization of

the SWU contracts [as contracts for the sale of goods] . . . would

contradict . . . the statute’s unambiguous meaning because it is

clear that those contracts are contracts for services and not

goods.” Eurodif II, 423 F.3d at 1278.

As a result of these holdings, the Federal Circuit has

determined that Commerce’s claim that LEU produced as a result of

SWU contracts or transactions is subject to antidumping duties is

not in accordance with law. Id. Together, Eurodif I and Eurodif II

make it clear that contracts for enrichment services are contracts

for services, not goods, and that as such, they are not subject to

the antidumping laws.11 See also Eurodif S.A. v. United States,

11
Although the USEC Privatization Act of 1996 post-dates the
original Suspension Agreement at issue here, it seems clear to
the court that Congress, in that 1996 Act, intended that future
transactions in enriched Russian uranium be limited to
transactions structured as SWU transactions. See 42 U.S.C.
§ 2297h-10(b)(3) (permitting only transactions where equivalent
amounts of feed uranium are exchanged by the contracting parties,
with the result that the “purchase” would be of SWU for any
deliveries of enriched uranium on or after January 1, 1997). It
is also clear that Congress was intentionally differentiating
between sales that included feed uranium, see, e.g., 42 U.S.C.
§§ 2297h-10(b)(1), (2)(mandating that prior to December 31, 1996,
the U.S. Executive Agent transfer without charge title to the
natural uranium component of LEU obtained pursuant to the HEU
Agreement to the Secretary of Energy to sell, and that such
uranium would be considered of Russian origin) and sales that
were only to be for SWU, 42 U.S.C. § 2297h-10(b)(3) (dictating
that the equivalent amount of U.S. origin feed uranium
transferred by USEC to the Russian executive agent was to be
(continued...)
Ct. No.06-00228 Page 12

Appeal No. 2007-1005-1006 at 4 (Fed. Cir. Sept. 21,

2007)(identifying the “SWU contract exception” established by

Eurodif I and Eurodif II).

In the Review at issue here, Commerce continued to include,

within the scope of the investigation, LEU obtained pursuant to

enrichment services transactions. Commerce also made a

determination that there was a likelihood of continued or recurring

dumping, based at least in part on data that included SWU

transactions.

Commerce defended its scope position in the Review, in part,

by claiming that the Eurodif “litigation . . . has not been

completed, and [Commerce] is continuing to actively pursue all

avenues in the litigation process . . . [t]herefore, this

litigation has no effect on the Suspension Agreement or this sunset

review,” and by asserting that it would follow its policy not to

“evaluate scope issues or revise the scope of a proceeding in the

context of a sunset review.” Decision Mem. at 14-15 (Cmt. 2),

citing Uranium from Russia, 65 Fed. Reg. 41,439 (Dep’t Commerce

July 5, 2000)(final results of full sunset review of suspended

11
(...continued)
considered Russian in origin), thereby setting up, for sales
going forward, the same “legal fiction” defined by the Eurodif
cases as SWU transactions. As such, it is not clear to the court
how Commerce can continue to argue that these transactions can be
subject to the antidumping statutes.
Ct. No.06-00228 Page 13

antidumping duty investigation) and the accompanying Issues &

Decision Mem. (Cmt. 1)(noting that a scope determination was

currently before Commerce, and that it was “not appropriate to

evaluate scope issues or revise the scope language in the course of

this sunset proceeding.”). Commerce further determined that

because the Eurodif I and Eurodif II decisions covered an

investigation with a scope that was limited to LEU, the decisions

were not necessarily applicable to the investigation at hand, which

covered LEU in addition to other uranium products. Id.

Plaintiffs argue that Commerce is bound by stare decisis to

follow the binding precedent in the Eurodif cases by excluding SWU

transactions from the scope of the investigation. See Pl.’s Mot.

J. Agency R., Court No. 06-00228 at 12-14 (“Tenex Br.”); see also

Initial Br. of Ad Hoc Utilities Group in Supp. R. 56.2 Mot. J.

Agency R., Court No. 06-00229 at 19-20 (“AHUG Br.”). AHUG further

argues that Commerce cannot decline to follow precedent based on

its “policy” of not reviewing scope determinations during a sunset

review, because ignoring controlling law (here, the Eurodif cases)

is not acting in accordance with law. AHUG Br. 21-22, citing

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, 842-43 (1984). Tenex also argues that Commerce must

depart from its policy where, as here, the policy is in conflict

with Commerce’s obligation to comply with the law. Tenex Br. 13-

14. Plaintiffs further note that although the scope of the review
Ct. No.06-00228 Page 14

in this action is broader than that in the Eurodif cases, in that

it covers uranium other than LEU, the Eurodif holdings were not

limited to LEU. Rather, the Eurodif cases are applicable to all

transactions pursuant to SWU contracts, and stand for the

proposition that those transactions are not subject to antidumping

duty law. Tenex Br. at 16; AHUG Br. at 21. Thus, Plaintiffs

contend--correctly--that the Eurodif cases are both controlling and

applicable here.

Commerce’s inclusion of uranium enrichment services in the

scope of the review at issue here also undermines its decision with

regard to the likelihood of continued or recurring dumping. During

the sunset review, Commerce stated its conclusion that there was a

likelihood of continued or recurring dumping of uranium products

from the countries of the former Soviet Union on the American

market. In making this statement, Commerce relied on uranium

enrichment services transactions in addition to the importation of

goods, stating that “absent the Suspension Agreement, imports of

Russian uranium and SWU would likely undercut and depress or

suppress U.S. market prices for uranium products.” Decision Mem. at

8 (Cmt. 1)(emphasis added). Plaintiffs argue that SWU transactions

cannot be included in the determination of recurrence of dumping,

as such transactions are not subject to the antidumping laws.

Tenex Br. at 14-15; AHUG Br. at 28-30.
Ct. No.06-00228 Page 15

The government has indicated that it does not oppose a remand

to exclude from the scope of its review LEU obtained pursuant to

uranium enrichment services contracts, and to redetermine the

likelihood of future dumping, again excluding from its findings LEU

that will be obtained pursuant to enrichment services transactions.

See Restated Mot. to Dismiss No. 06-00229 & Response to Pls.’ Mots.

for J. Upon the Admin. R. 14 (consenting to a remand to implement

the Eurodif cases because “Commerce based its determination upon an

analysis of the domestic and world market in uranium in all forms,

including sales of SWU.” (emphasis added))(“Def.’s Br.”).12

The government’s consent to remand is well-founded because

Commerce must abide by the Eurodif decisions in both its scope

determination and its determination of the likelihood of continued

or recurring dumping. The court will therefore remand the matter

to Commerce for a determination of the correct scope of the

investigation, excluding all sales pursuant to enrichment services

transactions, as outlined in the Eurodif cases, and a re-

12
Citing 19 U.S.C. § 1675(d)(2)(“the administering authority
shall . . . terminate a suspended investigation, unless . . .
[it] makes a determination that dumping . . . would be likely to
continue or recur”), Tenex opposes remand, asking that the court
instead order Commerce to terminate the investigation. Tenex
argues that it is futile to expect Commerce to now engage in the
statutorily required analysis. The court notes that Commerce has
yet to articulate, in its uranium cases, a coherent
interpretation of the statutes that is consistent with its
interpretations in other industries or contexts. Nonetheless, as
Commerce has consented to remand, the court will not, at this
stage, conclude that the futility standard has been met.
Ct. No.06-00228 Page 16

determination of the likelihood of continued or recurring dumping

without reliance on such transactions.

Plaintiffs also argue that Commerce’s reliance on information

from the original, preliminary determination in the antidumping

investigation renders Commerce’s final determination unsupported by

substantial evidence because of the extraordinary changes in

circumstance since the time of the original determination. Tenex

Br. 28, citing Government of Uzbekistan v. United States, 25 CIT

1084 (2001)(remanding sunset review results to Commerce to gather

new data and make new findings of dumping margin, because using

best information available was inappropriate given the

extraordinary circumstances of the dissolution of the U.S.S.R.).

These issues were raised by Tenex during the Review. The

government has not responded to this argument.

As noted above, Commerce is charged with making a likelihood

determination that is in accordance with law. 19 U.S.C. § 1675(c).

It has not done so here, and it therefore must do so on remand. The

requirement that Commerce follow the precedent by which it is

bound, articulated in the Eurodif cases, will necessitate a

reconsideration of relevant economic factors, in accordance with 19

U.S.C. § 1675a(c)(directing Commerce to consider other relevant

factors where the record provides an appropriate, “good cause”

basis for it to do so). Therefore, on remand, in reassessing the
Ct. No.06-00228 Page 17

likelihood of continued dumping, Commerce must necessarily examine

economic and political changes that have occurred since the

preliminary determination, such as the dissolution of the Union of

Soviet Socialist Republics and Russia’s change of status to a

market economy, and determine whether these changes affect the

reevaluation of the likelihood of continued or recurring dumping.

See Government of Uzbekistan v. United States, 25 CIT 1084, 1088

(2001)(“As a threshold matter, Commerce must support its finding of

a non-de minimus margin before it can embark on a rational

§ 1675(c) analysis.”)

In addition to arguments relating to the Eurodif cases and

market and political changes in Russia, Tenex challenges Commerce’s

conclusion that there is a likelihood of continued or recurring

dumping as not logically connected to its factual findings.

Specifically, Tenex argues that Commerce never found that sales of

subject merchandise would be at less than fair value, as required

by 19 U.S.C. § 1675a(c).13 Tenex Br. at 20. Rather, Tenex claims

that the determination at most finds that there would be greater

imports from Russia which would lower U.S. market prices for

uranium products, but that lower prices do not necessitate a

finding that dumping has occurred. Tenex Br. at 20-21, citing

Decision Mem. at 6-9. Commerce describes this argument by Tenex as

13
Supra, n.5.
Ct. No.06-00228 Page 18

being based on “economic factors,” and argues that it is barred by

the exhaustion doctrine. Def.’s Br. at 15-16. However, Tenex is

challenging the conclusion drawn by Commerce (the likelihood of

continued dumping) as not supported by the actual findings

(likelihood of price depression and of some “margin” likely to

prevail).14 Thus, in this argument, Tenex is not merely challenging

the specific price data used, or a specific finding made,15 but

rather both the analysis followed and the conclusion drawn. This

challenge is in contrast to those in the cases the government cites

to support its proposition that the court should here exercise its

discretion to “require the exhaustion of administrative remedies,”

as those cases generally involved the challenge of a specific

economic factor,16 or are otherwise not applicable.17

14
In addition to finding the price would be driven down,
Decision Mem. at 8-9 (Cmt. 1), Commerce found a margin of
115.82%, Decision Mem. at 21-23 (Cmt. 3), but never connected the
two findings.
15
Although Tenex does challenge the findings on various
grounds.
16
Zhejiang Machinery Imp. & Exp. v. United States, Slip-Op.
07-15, 473 F. Supp. 2d 1365 (2007)(exporter failed to exhaust its
administrative remedies available and therefore could not
challenge use of Indian surrogate values for scrap because it did
not raise such issue in underlying administrative proceeding nor
include it in the complaint); Carpenter Technology Corp. v.
United States, 30 CIT __, 452 F. Supp. 2d 1344 (2006)(court
exercised its discretion to dismiss for a failure to exhaust
administrative remedies, noting that plaintiff’s failure to
challenge Commerce’s decision to collapse entities resulted in a
lack of administrative record to review in addition to not
allowing Commerce to consider plaintiff’s arguments in the first
(continued...)
Ct. No.06-00228 Page 19

In the Review at issue here, Commerce’s finding of likelihood

of continued or recurring dumping was challenged on various grounds

by both Tenex and AHUG. Tenex argued that the inclusion of SWU

transactions in its data was unlawful, that Russia’s status as a

market economy, no longer part of the U.S.S.R., warranted the use

of different data, and that changes in the Russian uranium industry

and the global market for uranium warranted a broader analysis. In

addition, AHUG also argued that Russia’s status as a market

economy, no longer part of the U.S.S.R., warranted a use of

different data. Commerce was thus given the opportunity to develop

a record in order to address its ultimate finding that dumping was

likely to occur or continue.18 Tenex claims that those findings,

however, simply do not support the conclusion Commerce has drawn.

While Tenex disputed these issues in the context of the magnitude

16
(...continued)
instance); Ta Chen Stainless Steel Pipe, Ltd. v. United States,
28 CIT __, 342 F. Supp. 2d 1191 (2004)(plaintiff failed to
exhaust administrative remedies by not challenging denial of
offset adjustment before Commerce).
17
Sharp Corp. v. United States, 837 F.2d 1058 (Fed. Cir.
1988)(court found it was unnecessary to reach the question of
exhaustion); JCM, Ltd. v. United States, 210 F.3d 1357, 1359
(Fed. Cir. 1999)(dismissal was based on lack of jurisdiction
under 28 U.S.C. 1581(i) because Plaintiff had failed to exhaust
administrative remedies available under other sections, having
not participated in challenge before Commerce).
18
Accordingly, there can be no claim that Commerce did not
have the opportunity to develop a record with respect to
determining the likelihood of dumping, or to use its expertise.
Cf., e.g., Carpenter Technology Corp. v. United States, 30 CIT at
__, 452 F. Supp. 2d at 1346.
Ct. No.06-00228 Page 20

of the margin likely to prevail, rather than in the finding of

likelihood of recurrence or continuation of dumping, Tenex did

challenge the likelihood finding at the administrative level, and

properly sought administrative relief from the result it felt was

improperly reached by the agency. See, Techsnabexport Case Brief in

response to Uranium from the Russian Federation, 71 Fed. Reg. 16,

560 (Dep’t Commerce Apr. 3, 2006)(preliminary results) and

accompanying Issues and Decision Mem., P.R. Doc. 38 at 2 (Cmt.

1)(“[Commerce’s] failure to acknowledge the [Court of Appeals for

the Federal Circuit’s] Eurodif rulings invalidates any of

[Commerce’s] findings regarding . . . the likelihood of dumping and

effect on U.S. market prices . . . .”). As Tenex notes,

determining whether dumping is likely to recur is precisely what

Commerce was doing during this sunset review. Pl.’s Reply Br.

Supp. R. 56.2 Mot. J. Agency R., Court No. 06-00228 at 11 (“[t]he

issue is the basic statutory obligation in a sunset review to make

a determination of dumping that should be and is crystal clear”).

Accordingly, Tenex has not failed to exhaust its administrative

remedies with regard to its claim that Commerce failed to make a

finding regarding future sales, future margins, and the likelihood

of continued dumping.

Although the court may, in its discretion, hear this argument,

it need not reach the issue today. On remand, Commerce will be

reexamining data relating to the likelihood of continued or
Ct. No.06-00228 Page 21

recurring dumping, and the margin likely to prevail. In that

context, it will have the opportunity to further examine whether

its findings support its ultimate conclusion.

Conclusion

For the foregoing reasons, the court remands Commerce’s

determination, for re-determination in accordance with this

opinion, and denies Plaintiffs’ Motions for Judgment on the Agency

Record.

Remand results are due by November 26. Comments are due by

December 17. Reply comments are due by December 27. SO ORDERED.

/s/ Donald C. Pogue

Donald C. Pogue, Judge

Dated: September 26, 2007

New York, New York