On January 26, 2009, the U.S. Supreme Court issued its opinion in U.S. v. Eurodif S.A., et al. and USEC Inc., et al. v. Eurodif S.A. et al., its first antidumping case. Petitioners, who run the only uranium enrichment facility in the U.S., alleged that low enriched uranium (LEU) imported from European countries was being sold in the U.S. at less than fair value and was materially harming domestic industry. Petitioners sought relief under the Tariff Act of 1930, 19 U.S.C. §1673, which provides for antidumping duties on "foreign merchandise" sold in this country at "less than its fair value." 19 U.S.C. §1673 only applies to sales of goods and not to international sales of services.
The LEU at issue was being imported into the U.S. through one of two types of contracts. Under the enriched uranium product (EUP) contract, the enrichment utility simply paid the enricher cash for LEU of a desired quantity and concentration of the uranium. Under the separative work unit (SWU) contract, the utility provided a quantity of feed uranium and paid the enricher for the amount of energy required to enrich a quantity of uranium to a given concentration. The amount of energy required to enrich the uranium is measured in separative work units (SWUs).
On certiorari and applying the Chevron deference, the Court stated that the Commerce Department's interpretation of the §1673 application governed "in the absence of unambiguous statutory language to the contrary or an unreasonable resolution of ambiguous language." The Court held that the Commerce Department's interpretation that §1673 was not limited to cash-only sales was reasonable.
The Court pointed out that if §1673 only applied to cash sales, the application of the section could easily be avoided by a contractually stating part of the purchase price in terms of a commodity. The Court agreed with the Commerce Department that "legal fiction" created by the SWU contracts calling the purchases of uranium as "sale of enrichment services" could not control because, in essence, the SWU contracts were equivalent to EUP contracts, and, therefore, sales of goods. Similarly, if SWU contracts were exempted from §1673, any EUP contract could be transformed into a SWU contract by splitting the uranium purchase transaction in two, where one contract was to purchase the uranium and the second to enrich the uranium. Then, the Court reasoned, the "antidumping duties would primarily chastise the uncreative" as "contracts for imported pasta would be replaced by separate contracts for what and what processing services, [and] sweater imports would give way to separate contracts for wool and knitting services." Thus, the Commerce Department's interpretation of §1673 to foreclose such results by treating the enrichment services as goods was reasonable.