Slip Op. 06-75
United States Court of International Trade
EURODIF S.A., COMPAGNIE GÉNÉRALE
DES MATIÈRES NUCLÉAIRES AND
COGEMA,
INC., ET.AL.,
Before: Pogue, Wallach, and
Plaintiffs, Eaton, Judges
Consol. Court No. 02-00219
v.
UNITED STATES,
Defendant.
[Plaintiffs’ motion for remand granted; Defendant-Intervenor’s
motion denied.]
Decided: May 18, 2006
Per Curiam: This matter arises after remand pursuant to
Eurodif S.A. v. United States, 411 F.3d 1355 (Fed. Cir. 2005)
(“Eurodif I”) and Eurodif S.A. v. United States, 423 F.3d 1275
(Fed. Cir. 2005) (“Eurodif II”). In accordance with these
decisions, we ordered “that Commerce upon remand shall revise such
final determination and order in accordance with the decisions in
Eurodif I and II. Commerce shall specifically explain how its
final determination and order on remand has eliminated all SWU
transactions as required by Eurodif I and II.” Eurodif S.A. v.
United States, 414 F. Supp. 2d 1263, 1263, 30 CIT ___,___(2006)
(emphasis added) (“Eurodif III”).
Consol Ct. No. 02-219 Page 2
In totality, Commerce in its Final Results of Redetermination
Pursuant to Court Remand, recalculated the duty margin by excluding
all low enriched uranium (“LEU”) covered by separative work unit
(“SWU”) contracts from its margin calculation. See Low Enriched
Uranium from France: Final Results of Redetermination Pursuant to
Court Remand, Consol. Ct. No. 02-00219, Slip Op. 06-02 (January 5,
2006 CIT) at 3 (“Remand Redetermination”). Despite the contrary
holdings of Eurodif I and II and the specific instructions of this
court, however, Commerce concluded that it will not modify the
scope of the antidumping duty order to exclude LEU covered by SWU
contracts. Id. at 4-5.
Responding to Commerce’s conclusion, Eurodif S.A., Cogema, and
Cogema, Inc. (collectively “Eurodif”) claim that Commerce erred in
its Remand Redetermination. Eurodif claims that any LEU covered by
SWU contracts should be excluded from the scope of the antidumping
duty order. As such, Eurodif asks the court to direct Commerce to
amend to:
(1) Liquidate all entries without antidumping
duties on LEU imported to fulfill SWU contracts
(and therefore refund cash deposits already
tendered on such entries);
(2) exclude LEU imported to fulfill SWU contracts
from the scope of the order;
(3) cease the suspension of liquidation and any
deposit requirement on such entries.
Eurodif’s Comments re: Commerce’s Final Results of Redetermination
Pursuant to Ct. Remand at 13.
Consol Ct. No. 02-219 Page 3
Alternatively, Defendent-Intervenors, USEC Inc. and United
States Enrichment Corporation (collectively “USEC”), argue that
Commerce excluded too many goods from the margin calculation
through its failure to investigate the facts behind the SWU
contracts. See Resp. USEC Inc. & U.S. Enrichment Corp. Final
Results of Redetermination Pursuant to Ct. Remand at 3-8 (“USEC’s
Resp.”). Specifically, USEC argues that although the SWU contracts
may facially suggest that they cover the provision of services, in
fact, in some instances, the title over the uranium used in the
process transfers during the transaction, making that transaction
a sale of goods. By failing to undertake this investigation, USEC
avers, Commerce impermissibly excluded non-service oriented
transactions. Id. at 4-6. Additionally, USEC argues that Commerce
failed to consider whether Cogema and suppliers of uranium ores
were affiliated and, thereby, improperly excluded certain LEU
covered by SWU contracts from the dumping margin. Id. at 6-8.
We will address each issue.1
(1) Failure to re-open the record to investigate the facts behind
SWU transactions:
1
USEC raised methodological issues in its Compliant for
which this court reserved judgment. In its papers filed in
conjunction with Commerce’s Remand Redetermination, USEC has
advised the court that it waives these arguments. USEC Resp. at
8. Similarly, Eurodif amended its complaint to withdraw any
issues for which this court has reserved judgment. Eurodif’s
Amendment of Compl. by Consent, April 27, 2007.
Consol Ct. No. 02-219 Page 4
USEC claims that although the contracts in question might be
read as service contracts, in some instances, the transactions may
really entail the sale of goods under the test enunciated in
Eurodif I and II. See id. at 4-6. USEC argues that some
transactions involve the enricher’s client providing certain feed
uranium and receiving from the enricher LEU not made from the
uranium the client supplied. Id.2 Under such an arrangement, USEC
asserts, title over the feed uranium supplied by the client must
transfer to the enrichers, and title over the enricher’s uranium
(which the client receives back) must revert to the client.
Therefore, USEC claims, such arrangements would constitute a sale
of goods under the Federal Circuit’s Eurodif I and II.
In its Remand Redetermination, Commerce found that our remand
instructions did “not allow for a transaction-by-transaction
2
For example, under USEC’s theory, if a person took his or
her Hummer® to the carwash and received a different(albeit clean)
Hummer® back such a transaction would involve the sale of goods,
i.e., a new Hummer®. The Hummer® the client initially provides
would merely constitute part of the consideration for the new
Hummer®. To address such factual circumstances, USEC proposes a
test for differentiating those transactions involving the
provision of services from those providing the sale of goods. It
appears that under this test, presumptively SWU contracts will be
treated as contracts for the provision of services. This
presumption however, could be overcome in instances where (1)
“contracts which provide for utilities to deliver natural uranium
in less time than necessary to cover the average production and
delivery time for LEU imply transactions in which the enricher
owns the LEU during the enrichment process” or (2) “the short
natural uranium delivery lead time in such contract implies that
the enricher effectively conveyed ownership of natural uranium
used in the enrichment to the utility when production began.”
USEC Comments at 4.
Consol Ct. No. 02-219 Page 5
analysis of each SWU contract or of the broader context of each
sale made under these contracts.” Remand Redetermination at 3.
Rather, Commerce concluded that our order required the exclusion of
all LEU covered by SWU contracts regardless of any other factors
parties raised regarding the enriching transactions covered by SWU
contracts. Therefore, Commerce declined to reopen the record in
order to investigate USEC’s allegations. Id.
We agree with Commerce. The Federal Circuit held in Eurodif
II that the “inescapable conclusion flowing from [the circumstances
present] is that the enrichers do not ‘sell’ LEU to utilities
pursuant to the SWU contracts at issue here.” Eurodif II, 423 F.3d
at 1278. In so holding, Eurodif II reaffirmed Eurodif I’s holding
that under “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.” Id. (quoting Eurodif I, 411 F.3d at
1362). Both Eurodif I and II found that this conclusion was not
altered by factual circumstances operating behind the individual
contracts at issue here. Significantly, in specifically rejecting
the argument USEC raises here, Eurodif II held that “[w]hile 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 the LEU before delivery, the utility retains title to
Consol Ct. No. 02-219 Page 6
the quantity of unenriched uranium that is supplie[d] to the
enricher.” Id. (quoting Eurodif I, 411 F.3d at 1362).
Accordingly, the Federal Circuit has already considered this
issue and held that the facts/arguments USEC raises in this respect
are of no moment. Thus, Commerce’s Remand Redetermination on this
issue is sustained.
(2) Affiliated Party Feed Purchase Claim
Next, USEC contends that “Commerce’s approach failed to
examine whether a given SWU transaction in which the natural
uranium was supplied by Cogema – a respondent in this case – or an
affiliate thereof should be treated as a sale of merchandise.”
USEC’s Resp. at 6. Commerce did not squarely address this issue
apparently finding that the remand instructions did not direct it
reopen the record on this question.
Commerce is correct. Nothing in this court’s remand order
pertained to this question. In our original decision USEC Inc. v.
United States, 27 CIT ___,___, 259 F. Supp. 2d 1310, 1316 n.4
(2003), we specifically noted that the record did not indicate that
such an affiliation was relevant to Commerce’s decision. Commerce
chose not to pursue this analysis. See Final Remand Determination
for USEC Inc. And United States Enrichment Corporation v. United
States, Court Nos. 02-00112, 02-00113, 02-00114, and Consol. Court
Nos. 02-00219, XX-XXXXXXX, 02-00227, 02-00229, and 02-00233 Slip.
Op. 03-34, (March 25, 2003) at 60. As such, Commerce’s Remand
Consol Ct. No. 02-219 Page 7
Determination now before the court is sustained on this issue.
(3) Scope of the Order
Last, Eurodif argues that we should remand with instructions
for Commerce to modify the scope of the antidumping order to
exclude LEU covered by SWU contracts. Commerce and USEC concede,
as they must, that when the court finds that the scope of an order
improperly extends to certain goods, Commerce must ordinarily
revise the antidumping duty order to exclude such goods.
Nevertheless, both argue that the order’s scope is proper here.
Directing the court to 19 U.S.C. § 1677(25), Commerce argues that
“‘subject merchandise’ means the class or kind of merchandise that
is within the scope of an investigation, a review, a suspension
agreement, [or] an order under this subtitle . . . .” Because all
LEU imported is of the “class or kind of merchandise . . . within
the scope of an . . . order,” Commerce claims, all LEU must fall
within the order. Commerce admits that certain LEU may be excluded
from antidumping duties by virtue of the Federal Circuit’s holdings
in Eurodif I and II. Nonetheless, Commerce claims that those goods
are only excludable on the basis of the non-physical features,
i.e., that they are covered under SWU contracts. See, e.g.,
Def.’s Resp. Parties Remand Cmts. 6-7; cf. Remand Redetermination
Consol Ct. No. 02-219 Page 8
at 5.3 Non-physical features, Commerce contends, are not a basis
for distinguishing goods from the “class or kind of merchandise”
subject to the antidumping duty order. Consequently, Commerce
concludes that the adjustments Eurodif I and II require may only be
made in an administrative review rather than through modifying the
antidumping duty order.
The first flaw with Commerce’s argument is that it is circular
– LEU produced under SWU contracts are only of the “class or kind
of merchandise” covered by the order if Commerce does not modify
3
Commerce’s Remand Redetermination offered minimal
justification for declining to modify the scope of its
antidumping order. In its entirety, Commerce wrote:
We agree with USEC that the scope of the order should not
be revised in order to address the Eurodif I and Eurodif
II decisions by the Federal Circuit. The term subject
merchandise is defined as a class or kind of merchandise
that is within the scope of an investigation, a review,
a suspension agreement, and order or a finding. See
Section 771(25) of the Tariff Act of 1930, as amended.
LEU imported into the United States for consumption that
meets the description of the merchandise established in
the AD order on LEU continues to be subject merchandise.
However, pursuant to the Eurodif I and Eurodif II
decisions, Commerce will not assess AD duties on imports
of LEU sold under SWU transactions. Whether a sale is
excludable on the ground that it constitutes a SWU sale
is a question that must be determined in the context of
an administrative review by the administering authority
analyzing the terms and conditions of the contract, and
the parties’ performance of such contracts. If the
contract in question is determination to be a SWU
transaction, consistent with Eurodif I and Eurodif II,
Commerce will not include the SWU price in its dumping
margin calculation. Based upon the above, Commerce has
not revised the scope of the AD order on LEU.
Remand Redetermination at 4-5.
Consol Ct. No. 02-219 Page 9
the order’s definition of the “class of kind of merchandise” to
exclude such merchandise in compliance with Eurodif I and II. Put
differently, if the Federal Circuit’s decisions direct Commerce to
modify the order to exclude LEU covered by SWU contracts, then such
imports would not be of the “class or kind of merchandise . . .
within the scope of . . . an order.” Because the holdings of
Eurodif I and II obligate Commerce to “eliminate[] all SWU
transactions” from its antidumping duty order, Eurodif III, 414
F. Supp. 2d at 1263, 30 CIT at ___, such merchandise may not be of
the “class or kind of merchandise” covered by the antidumping duty
order. Therefore, pursuant to these opinions, the scope of the
order must be redrawn to exclude LEU covered by SWU contracts from
the ambit of the “class or kind of merchandise” covered by the
order. See 19 U.S.C. § 1673e(a)(2) (the antidumping duty order is
to include a description of the subject merchandise). When such a
modification is made, LEU covered by SWU contracts will therefore
no longer be within the “class or kind” of merchandise covered by
the antidumping duty order.
Nor do the terms “class or kind of merchandise” require that
differentiations between scope and non-scope merchandise be based
only on physical characteristics. To the contrary, in determining
whether a given product is within the “class or kind” of
merchandise under order, Commerce must take into account “[t]he
description of the merchandise contained in . . . the
Consol Ct. No. 02-219 Page 10
determination[] of the Secretary . . . ,” 19 C.F.R. §
351.225(k)(1); there is no basis for saying that the “description”
must embody only the physical attributes of a product. This
conclusion is rendered unavoidable when considered in relation to
the other factors of which Commerce may take into account (besides
a product’s physical characteristics) when considering the scope or
an antidumping duty order, namely: (1) the expectations of the
ultimate purchaser; (2) the ultimate use of the product; (3) the
channels of trade in which the product is sold; and (4) the manner
in which the product is advertised and displayed. 19 C.F.R. §
351.225(k)(2); see also Diversified Prods. Corp. v. United States,
6 CIT 155, 572 F. Supp. 883 (1983). Consequently, there is a
strong basis for an antidumping duty order’s differentiation
between products based on “non-physical” attributes.
Relatedly, Commerce’s assertion that whether a product falls
within the scope of an order is something “that must be determined
in the context of an administrative review by the administering
authority analyzing the terms and conditions of the contract, and
the parties’ performance of such contracts,” Remand
Redetermination at 5, is unavailing. Commerce is correct in that
it “is responsible for interpreting the antidumping duty order and
determining whether certain products fall within the scope of the
order as interpreted.” Ericsson GE Mobile Commnc’ns, Inc. v.
United States, 60 F.3d 778, 783 (Fed. Cir. 1995). But this does
Consol Ct. No. 02-219 Page 11
not mean that the administrative review is the proper forum to
address whether merchandise is within the scope of an order.
Rather, when a question regarding the scope of an antidumping duty
order arises as it pertains to a specific import, Commerce may, for
example, “initiate an inquiry” as to whether a given product falls
within the scope of an order, 19 C.F.R. § 351.225(b); additionally,
“any interested party may apply [to Commerce] for a ruling as to
whether a particular product is within the scope of an order or a
suspended investigation.” 19 C.F.R. § 351.225(c). During such a
“scope determination,” liquidation is suspended on the products at
issue, 19 C.F.R. § 351.225(l)(2); following a scope determination,
any interested party may seek judicial review of Commerce’s
determination under 19 U.S.C. § 1516a(2)(B)(vi). See Sandvik Steel
Co. v. United States, 21 CIT 140, 143, 957 F. Supp. 276, 278 (1997)
aff’d Sandvik Steel Co. v. United States, 164 F.3d 596 (Fed. Cir.
1997). As such, Commerce has a mandated procedure, apart from the
administrative review, to make such fact intensive/product specific
determinations. Accordingly, Commerce’s own regulations belie its
assertion that an administrative review is the proper forum to
raise such objections. Indeed, nothing in the antidumping statute
precludes correction of the order in accordance with the holdings
of the Federal Circuit issued here. As noted above, Commerce here
is required to “specifically explain how its final determination
and order on remand has eliminated all SWU transactions as required
Consol Ct. No. 02-219 Page 12
by Eurodif I and II.” Eurodif III, 414 F. Supp. 2d at 1263, 30
CIT at ___ (emphasis added).
CONCLUSION
According to the discussion above, Commerce’s Remand
Redetermination not to re-open the record to further investigate
the SWU transactions at issue here is sustained; Commerce’s Remand
Redetermination with respect to the scope of the order is remanded.
On remand Commerce shall address Eurodif’s objections in accordance
with this opinion and the Court’s order in Eurodif III. Commerce
shall have until June 19, 2006 to provide a remand determination.
Parties shall submit comments on Commerce’s remand determination no
later than June 26, 2006 and rebuttal comments no later than July
7, 2006.
/s/ Donald C. Pogue
Donald C. Pogue
Judge
/s/ Evan J. Wallach
Evan J. Wallach
Judge
/s/ Richard K. Eaton
Richard K. Eaton
Judge
Dated: May 18, 2006
New York, New York