Nos. 07-1059 and 07-1078
In the Supreme Court of the United States
UNITED STATES OF AMERICA, PETITIONER
EURODIF S.A., ET AL.
USEC, INC., ET AL., PETITIONERS
EURODIF S.A., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES
GREGORY G. GARRE
Acting Solicitor General
Counsel of Record
GREGORY G. KATSAS
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
LEONDRA R. KRUGER
Assistant to the Solicitor
JEANNE E. DAVIDSON
PATRICIA M. MCCARTHY
STEPHEN C. TOSINI
Department of Justice
Washington, D.C. 20530-0001
JOHN B. BELLINGER, III
Department of State
Washington, D.C. 20520
DANIEL J. DELL'ORTO
Acting General Counsel
Department of Defense
Washington, D.C. 20301
LILY FU CLAFFEE
JOHN D. MCINERNEY
Chief Counsel for Import
DAVID R. MASON, JR.
QUENTIN M. BAIRD
Department of Commerce
Washington, D.C. 20230
DAVID R. HILL
Department of Energy
Washington, D.C. 20585
1. QUESTION PRESENTED
Section 1673 of Title 19 of the United States Code provides that, when "a class or kind of foreign merchan dise is being, or is likely to be, sold in the United States at less than its fair value," to the detriment of a domestic industry, the Department of Commerce (Commerce) shall impose antidumping duties on entries of the for eign merchandise. The question presented is:
Whether the court of appeals erred in rejecting Com merce's conclusion that foreign merchandise is "sold in the United States" within the meaning of 19 U.S.C. 1673 when a purchaser in the United States obtains foreign merchandise by providing monetary payments and raw materials to a foreign entity that performs a major man ufacturing process in which substantial value is added to the raw materials, thereby creating a new and different article of merchandise that is delivered to the U.S. pur chaser.
PARTIES TO THE PROCEEDING
The petitioner in No. 07-1059 is the United States of America, which was the Defendant-Appellant in the court of appeals. The petitioners in No. 07-1078 are USEC Inc. and the United States Enrichment Corpora tion, which were Defendant-Intervenor-Appellants in the court of appeals.
Respondents who were Plaintiffs-Appellees below are Eurodif S.A., AREVA NC (formerly Compagnie Generale des Matieres Nucleaires), and AREVA NC, Inc. (formerly COGEMA, Inc.).
Respondent who was the Plaintiff-Intervenor-Appel lee below is Ad Hoc Utilities Group.
In the Supreme Court of the United States
UNITED STATES OF AMERICA, PETITIONER
EURODIF S.A., ET AL.
USEC, INC., ET AL., PETITIONERS
EURODIF S.A., ET AL.
ON WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
BRIEF FOR THE UNITED STATES
The final decision of the court of appeals (Pet. App. 1a-7a1) is reported at 506 F.3d 1051. The opinion of the court of appeals on interlocutory appeal (Pet. App. 8a- 28a) is reported at 411 F.3d 1355, and its order denying a petition for rehearing on that appeal (Pet. App. 29a- 35a) is reported at 423 F.3d 1275. The opinion of the Court of International Trade from which the interlocu tory appeal was taken (Pet. App. 36a-68a) is reported at 281 F. Supp. 2d 1334, and its initial remand order (Pet. App. 178a-219a) is reported at 259 F. Supp. 2d 1310. The Department of Commerce's Notice announcing its preliminary determination in its antidumping investiga tion of low enriched uranium from France (J.A. 238-259) is reported at 66 Fed. Reg. 36,744, and its final determi nation (Pet. App. 220a-262a) is reported at 66 Fed. Reg. 65,877. Its decision on first remand from the Court of International Trade (Pet. App. 69a-177a) is unreported.
The judgment of the court of appeals was entered on September 21, 2007. On December 11, 2007, the Chief Justice extended the time within which to file petitions for a writ of certiorari to and including January 22, 2008. On January 14, 2008, the Chief Justice further extended the time to and including February 15, 2008, and the petitions for a writ of certiorari in No. 07-1059 and No. 07-1078 were filed on that date. The petitions were granted and the cases were consolidated on April 21, 2008. The jurisdiction of this Court rests on 28 U.S.C. 1254(1).
STATUTORY PROVISION INVOLVED
Section 1673 of Title 19 of the United States Code is reproduced in the appendix to this brief. App., infra, 1a.
1. In international trade law, the practice of export ing goods to another country to be sold at less than their fair value-i.e., the price for which they are sold in the producer's home market, or their cost of production- is known as "dumping." See 19 U.S.C. 1677(34). For almost a century, Congress has provided a remedy to domestic industry harmed by the dumping of foreign goods in the United States. See Anti-Dumping Act, 1921, ch. 14, 42 Stat. 9, repealed by Trade Agreements Act of 1979, Pub. L. No. 96-39, § 106(a), 93 Stat. 193; Tariff Act of 1930, Tit. VII, 19 U.S.C. 1673 et seq. The antidumping-duty statute provides that, when "foreign merchandise is being, or is likely to be, sold in the United States at less than its fair value," 19 U.S.C. 1673(1), duties must be imposed on the merchandise in the amount of the difference between the "normal value" of the merchandise (generally the price of the good at home) and its "export price" (generally the price at which the good is sold to an unaffiliated U.S. purchaser). 19 U.S.C. 1673, 1673e(a), 1677a, 1677b. That difference is known as the "dumping margin." 19 U.S.C. 1677(35)(A).
The Department of Commerce (Commerce) has stat utory responsibility for administering the antidumping- duty statute. 19 U.S.C. 1677(1). If an interested party, including a member of a domestic industry, petitions Commerce, or if Commerce independently determines that the statutory criteria are met, Commerce must undertake a formal investigation to determine whether antidumping duties should be imposed on a particular class or kind of imported merchandise. 19 U.S.C. 1673a(a) and (b). Commerce imposes antidumping du ties if two independent determinations are made. First, Commerce must determine that the subject merchandise was "sold in the United States for less than its fair value," or "dumped," during a period of investigation. 19 U.S.C. 1673(1); see 19 U.S.C. 1677(1) and (34). Sec ond, the International Trade Commission (ITC) must determine that the domestic industry was materially injured or threatened with material injury by virtue of dumped imports. 19 U.S.C. 1673(2); see 19 U.S.C. 1677(2). If both those determinations are made, Com merce issues an antidumping-duty order directing U.S. Customs and Border Protection (Customs) to assess du ties on the merchandise in an amount equal to the dump ing margin. 19 U.S.C. 1673d(c)(2), 1673e(a)(1).
An interested party may challenge a final antidump ing-duty determination before the Court of Interna tional Trade (CIT) pursuant to 19 U.S.C. 1516a(a)(2) and 28 U.S.C. 1581(c). Commerce's determination must be sustained unless "unsupported by substantial evidence on the [administrative] record, or otherwise not in accor dance with law." 19 U.S.C. 1516a(b)(1)(B)(i).
2. This case concerns the application of the anti dumping-duty statute to imports of low enriched ura nium (LEU). LEU is a critical component for the pro duction of nuclear power. It is produced by converting natural uranium-that is, mined uranium that has been milled or refined-to uranium hexafluoride gas, then subjecting the uranium hexafluoride to a process of iso tope separation that increases the concentration of the fissionable isotope U235, or "assay," to a desired level. By weight, the concentration of U235 in natural uranium is approximately 0.711%. Most nuclear utilities require fuel with an assay between 3% and 5%. The process of increasing the concentration of U235 is known as "enrich ment." Once the uranium has been enriched, the fin ished LEU is fabricated into fuel rods, which are used in nuclear reactors to generate power. Pet. App. 9a, 181a- 183a, 230a-231a; cf. Huffman v. Western Nuclear, Inc., 486 U.S. 663, 665 n.2 (1988) (describing the uranium en richment process).
The "amount of energy or effort required to separate [i.e., increase the concentration of] a given quantity of feed uranium into LEU" is measured in "separative work units," or "SWUs." Pet. App. 183a. The amount of LEU that can be produced from a given quantity of feed uranium varies in proportion to the quantity of SWUs applied. The same amount of LEU can be produced by using more feed uranium and applying fewer SWUs, or by using less feed uranium and applying more SWUs. J.A. 80-81.
Utilities in the United States generally acquire LEU from uranium enrichers in one of two ways. First, utili ties may enter into contracts in which they agree to pay the enricher for a specified quantity of LEU at a given assay. Such contracts are known as "enriched uranium product," or "EUP," contracts. Second, utilities may enter into contracts in which they agree to arrange for the delivery of a quantity of unenriched uranium (known as "feed") to an enricher, and pay the enricher for the number of SWUs to be applied to create LEU. Such contracts are known as "SWU" contracts. Pet. App. 182a-184a.2 This case concerns the treatment of the lat ter type of contracts-SWU contracts-under the anti dumping-duty statute.
3. a. In December 2000, petitioners USEC Inc. and United States Enrichment Company (collectively, USEC) filed with Commerce a petition alleging that LEU imports from France, as well as other European countries, were being, or were likely to be, sold in the United States at less than fair value. J.A. 39.3 USEC is a private, for-profit corporation that has assumed en richment operations formerly performed by the Depart ment of Energy. See USEC Privatization Act, 42 U.S.C. 2297h et seq. It is now the only enricher of uranium in the United States. Pet. App. 9a. USEC alleged that, as a result of the unfair pricing of the imported LEU, the domestic enrichment industry was materially injured. Commerce commenced an investigation. Low Enriched Uranium From France, Germany, the Netherlands, and the United Kingdom, 66 Fed. Reg. 1080 (2001) (no tice of initiation of antidumping investigation).
b. At the outset of its investigation, Commerce in vited interested parties to comment on the investiga tion's scope. 66 Fed. Reg. at 1080. Although no party disputed that LEU acquired pursuant to EUP contracts was potentially subject to antidumping duties, respon dent Ad Hoc Utilities Group (AHUG), a group of utilities in the United States that purchase and utilize both im ported and domestic LEU, argued that Commerce should exclude imported LEU acquired pursuant to SWU contracts from the investigation because SWU contracts "constitute the provision of services, not the production or sale of goods subject to the antidumping law." J.A. 243. Commerce preliminarily determined that, because "there is little substantive commercial dif ference" between EUP transactions and SWU transac tions, LEU acquired pursuant to both types of contracts fell within the scope of the investigation. J.A. 245. Com merce, however, invited further comments on the issue. J.A. 247.
c. In December 2001, Commerce issued its final determination that LEU from France was being sold, or likely to be sold, in the United States at less than fair value. Pet. App. 220a-262a. In that determination, Commerce concluded that all LEU imported from France is subject to the antidumping law, "regardless of whether the sale is structured as one of enrichment pro cessing." Id. at 231a. Although the structure of the transaction may be relevant to the calculation of the duties to be imposed on the good, Commerce concluded that it "is not relevant to the issue of whether the [antidumping] law is applicable" in the first instance. Id. at 230a.
Commerce found that "the enrichment of uranium accounts for approximately 60 percent of the value of the LEU entering the United States," and that "enrichment processing adds substantial value to the natural uranium and creates a new and different article of commerce." Pet. App. 238a-239a. Commerce explained that "it is the enricher who creates the essential character of the LEU. The enrichment process is not merely a finishing or completion operation, but is instead the most signifi cant manufacturing operation involved in the production of LEU," and "creat[es] a clearly distinct product from uranium feedstock." Id. at 251a. Having found that "the enrichment process is a major manufacturing oper ation for the production of LEU" that results in "sub stantial transformation of the uranium feedstock," Com merce concluded that "the LEU enriched in and ex ported from Germany, the Netherlands, the United Kingdom and France is a product of those respective countries," and, when delivered to a U.S. customer at less than its fair value, is subject to the antidumping law. Id. at 229a-230a.
Commerce rejected arguments that the antidumping- duty law does not apply to LEU produced pursuant to SWU contracts because enrichers do not sell merchan dise, but rather sell enrichment "services." Pet. App. 228a, 230a. Noting that "enrichment services" are a "component of LEU," id. at 228a, Commerce concluded that, rather than merely paying for a "service," utili ties that acquire LEU pursuant to SWU contracts also purchase merchandise, id. at 231a.
Commerce explained that enrichment processing is not merely a "'service' in the same sense that activities such as accounting, banking, insurance, transportation and legal counsel are considered by the international trading community to be services," because enrichment is "a major manufacturing operation" that "result[s] in subject merchandise being introduced into the com merce of the United States." Pet. App. 231a, 239a-240a. Commerce concluded that, although it is always possible to contract separately for the purchase of raw materials and manufacturing "services," when a "purchaser has contracted out for a major production process that adds significant value to the input and that results in the sub stantial transformation of the input product into an en tirely different manufactured product," it has purchased the finished product. Ibid. Commerce also found it sig nificant that enrichers do not use the specific feedstock furnished by a utility to produce LEU for that utility, and that enrichers, not the utilities, control the produc tion process. Id. at 227a, 247a.
Commerce found further support for its conclusion in the purposes underlying the antidumping-duty statute. It explained:
[T]he unfair trade laws must be applicable to mer chandise produced through contract manufacturing, just as they are applicable to merchandise manufac tured by a single entity. To do otherwise would con travene the intent of Congress by undermining the effectiveness of the [antidumping] laws, which are designed to address practices of unfair trade in goods, as well as have profound implications for the international trading system as a whole. To the ex tent that contract manufacturing can be used to con vert trade in goods into trade in so-called "manufac turing services," the fundamental distinctions be tween goods and services would be eliminated, thereby exposing industries to injury by unfair trade practices without the remedy of the [trade] laws.
Pet. App. 239a.
Commerce further rejected arguments that the regu lation then in force concerning the treatment of entities engaged in so-called "tolling" (i.e., subcontracting) oper ations precluded application of antidumping duties to imported LEU obtained through SWU transactions. That regulation, which has recently been withdrawn, provided that Commerce will "not consider a toller or subcontractor to be a manufacturer or producer where the toller or subcontractor does not acquire ownership, and does not control the relevant sale, of the subject merchandise." 19 C.F.R. 351.401(h) (2007), withdrawn by 73 Fed. Reg. 16,517 (2008). In its determination, Commerce explained that the regulation was not "rele vant or applicable in determining whether merchandise entering the United States is subject to" the anti dumping-duty. Pet. App. 235a. Rather, Commerce ex plained, Section 351.401(h) was a subsection of a regula tion that "was intended to 'establish certain general rules that apply to the calculation of export price, con structed export price and normal value,' and not for pur poses of determining whether the [antidumping or other trade] laws are applicable" in the first instance. Ibid. (quoting 19 C.F.R. 351.401(a)). Commerce acknowl edged that it had previously applied the tolling regula tion to classify a subsequent sale of the merchandise by a tollee or contractor (i.e., the entity obtaining the tolled merchandise from the toller or subcontractor), rather than the sale made by the toller or subcontractor, as the "relevant sale" for purposes of calculating the dumping margin. Pet. App. 235a. But the agency noted that it had "never applied, nor relied upon, section 351.401(h) to exempt merchandise from [antidumping] proceed ings." Ibid.
Against this background, Commerce found that en richers make a "relevant sale" for purposes of calculat ing the dumping margin, regardless of the structure of the transaction. Pet. App. 250a-251a. Commerce found that the object of a SWU contract, like the object of an EUP contract, is for "an exact amount of LEU to be delivered [by the enricher to the utility] over the life of the contract." Id. at 253a. "And it is this bottom line (i.e., a precise amount of LEU delivered over the life of the contract) that forms the fundamental nature of the agreement between buyer and seller in a SWU con tract." Ibid. Accordingly, Commerce concluded that "the contracts designated as SWU contracts are func tionally equivalent to those designated as EUP transac tions," and that "the overall arrangement under both types of contracts is, in effect, an arrangement for the purchase and sale of LEU." Id. at 254a, 255a.
In particular, Commerce noted that, under both types of transactions, "utility customers are not con cerned with how LEU is produced or the amount of work expended (SWU) to produce such LEU. Instead, utility customers are interested in obtaining a specific quantity of a standardized product at a specified product assay." Pet. App. 255a. "[U]nder both types of con tracts, * * * the enricher ultimately determines how much uranium feed is used, [and] the amount of SWU actually applied," among other aspects of the production process. Id. at 256a. Moreover, Commerce noted, "for both types of contracts[,] ownership of the LEU is only transferred to the utility customer upon delivery of the LEU. Consistent with this provision, for both types of transactions, the enricher incurs the risk of loss with respect to the LEU." Ibid.
Finally, Commerce explained, "the enrichment com panies engage in the most significant portion of the pro duction of LEU, and thus the value of enrichment is be yond question the most significant element of value in determining the price of LEU." Pet. App. 256a-257a. Commerce accordingly determined that "the pricing behavior of the enrichment companies in these transac tions is relevant to the Department's determination." Id. at 257a. To isolate the enrichers' pricing behavior, Commerce calculated the dumping margin by comparing the value of the complete LEU product acquired by U.S. customers via SWU contracts with the normal value of LEU, using the same value for the natural uranium com ponent of LEU "on both sides of the equation." Ibid. Thus controlling for the cost of raw materials in SWU transactions, Commerce determined that LEU from France was being sold in the United States at less than its fair value. Ibid.4
d. In February 2002, the ITC determined that im ports of LEU from France at less than fair value had a significant negative effect on USEC, the only domestic producer of LEU. The ITC accordingly determined that an industry in the United States was materially injured by imports of LEU from France at less than fair value. See U.S. Int'l Trade Comm'n, Pub. No. 3486, Low En riched Uranium from France, Germany, the Nether lands, and the United Kingdom (2002) <http://hotdocs. usitc.gov/docs/pubs/701 731/pub3486.pdf> (determina tion and views of the Commission). Shortly thereafter, Commerce issued an order imposing antidumping duties on LEU from France. Low Enriched Uranium from France, 67 Fed. Reg. 6680 (Dep't of Commerce 2002) (notice of amended final determination of sales at less than fair value and antidumping-duty order).
4. a. Respondent Eurodif, S.A., a French enricher of uranium, challenged Commerce's final determination, along with its owner, respondent Compagnie General des Matieres Nucleaires (now AREVA NC), and its U.S. subsidiary, respondent COGEMA, Inc. (now AREVA NC, Inc.). The CIT remanded the matter to Commerce for further explanation, focusing upon Commerce's de termination that its tolling regulation did not apply to SWU transactions. Pet. App. 178a-219a. Although the CIT acknowledged that the tolling regulation does not "exempt merchandise from [antidumping] proceedings," the court concluded that the regulation is nevertheless relevant because "a determination that the enricher pro vides a tolling service would mean that the price charged by the enricher to the utility for the enrichment cannot form the basis of the export price for the purpose of de termining dumping margins." Id. at 206a (citation omit ted). The CIT determined that the circumstances of this case resembled previous cases in which Commerce had examined tolling arrangements providing for a tollee to furnish raw materials to a toller, which in turn produced and delivered a finished product to the tollee. Id. at 197a. Noting that Commerce had determined in those cases that the tolling transaction is not a "relevant sale" for purposes of calculating the dumping margin, id. at 190a-192a & n.9, the court ruled that Commerce's deci sion not to apply the tolling regulation in this case "require[d] a more persuasive explanation than provided in the agency's determinations." Id. at 207a.
b. In its determination on remand, Pet. App. 69a- 177a, Commerce provided further explanation of its con clusion that the tolling regulation did not apply to SWU transactions. The agency explained that the regulation did not apply because, inter alia, "the enrichers make the only relevant sales that can be used for purposes of establishing U.S. price and normal value." Id. at 126a. And it further explained that SWU transactions are "sales" as the Federal Circuit had defined the term in NSK Ltd. v. United States, 115 F.3d 965 (Fed. Cir. 1997), in which it held that the term "requires both a transfer of ownership to an unrelated party and consid eration." Pet. App. 134a (quoting NSK Ltd., 115 F.3d at 975). Commerce determined that SWU transactions qualify as "sales" under that definition because, among other things, "these sales represent the transfer of own ership in the complete LEU product for consideration." Id. at 131a.
Specifically, "[b]ased upon the contracts and other evidence of record," Pet. App. 131a, Commerce found that "[t]he enrichers transfer ownership of, and title to, the LEU to the utilities upon delivery of the merchan dise for consideration." Ibid. By contrast, "utility cus tomers hold title to the natural uranium feedstock that they provide to the enrichers," and it is only "[a]t the time of delivery" that "title to the LEU is transferred to the customer, and [the customer's] title to the feed ma terial is extinguished." Id. at 132a. Moreover, Com merce explained, because the enricher treats natural uranium feedstock as fungible, before delivery of LEU "[t]he customer does not hold title to the LEU, nor does she hold title to the feed material contained within the recently produced LEU," because the "LEU produced by the enricher cannot be identified as having been de rived from the feedstock provided by any particular cus tomer." Id. at 133a. Indeed, Commerce found that "LEU delivered to a utility customer by an enricher un der an enrichment contract may be produced before any natural uranium supplied by that customer could have been part of the production process for that LEU," thereby making it "impossible to conclude that the LEU produced and delivered by the enricher is in any way derived from the uranium supplied by the customer." Ibid. (emphasis added).
Based upon those findings, Commerce concluded that, "between the time in which the LEU is produced and the time in which it is delivered as specified under the contract, the enricher holds title and holds owner ship in the complete LEU product." Pet. App. 133a. Commerce further found "that enrichers make a * * * sale when they transfer ownership of the complete LEU to the utilities through the delivery of such merchandise for consideration." Id. at 134a (citing NSK Ltd., 115 F.3d at 973 (Fed. Cir. 1997)); see NSK Ltd., 115 F.3d at 975.
c. The CIT reversed. Pet. App. 36a-68a. The court rejected Commerce's conclusion that enrichers obtain ownership of LEU enriched under SWU contracts, rea soning that "although the enrichers obtain the right to use and possess the feedstock, and assume the risk of loss or damage, there is no evidence that they ever ob tain ownership of either the feed uranium or the final enriched product." Id. at 44a. The court therefore held that the transfer of LEU from the enricher to the utility cannot constitute a relevant "sale," id. at 45a (citing NSK Ltd., 115 F.3d at 975), and that Commerce's con trary determination was neither supported by substan tial evidence nor in accordance with law, id. at 46a. The court certified the question for interlocutory appeal un der 28 U.S.C. 1292(d). 27 Ct. Int'l Trade 1925 (2003).5
4. a. The court of appeals affirmed. Pet. App. 8a- 28a. Without addressing the question of "relevant sales" under the tolling regulation, the court held that LEU acquired pursuant to SWU transactions is not "mer chandise * * * sold" within the meaning of Section 1673, and thus is not subject to antidumping duties, how ever calculated. Id. at 17a-24a.
The court of appeals reasoned that Section 1673 cov ers "the sale of goods (or 'merchandise')," but not "[t]he provision of services." Pet. App. 17a. The court con cluded that, because SWU contracts are contracts for the provision of services, not for the sale of goods, LEU that enters the United States pursuant to SWU con tracts is not "merchandise * * * sold" within the meaning of 19_U.S.C. 1673(1). Id. at 17-24a.
In reviewing the contracts, the court of appeals agreed with the CIT's conclusion that "the SWU con tracts do not evidence any intention by the parties to vest the enrichers with ownership rights in the delivered unenriched uranium or the finished LEU." Pet. App. 20a. It thus agreed with the CIT that, under the trans fer-of-ownership definition of "sale" set out in NSK Ltd., SWU transactions cannot be said to constitute "sales" of merchandise for purposes of the antidumping-duty stat ute. Ibid. The court also found support for its conclu sion in its earlier decision in Florida Power & Light Co. v. United States, 307 F.3d 1364 (Fed. Cir. 2002). Pet. App. 20a-24a. In that case, the Federal Circuit had held that, although SWU contracts do not clearly constitute either contracts for services or contracts for goods- because they do "not fall neatly" into either category- they are "best characterized" as service contracts for purposes of the Contract Disputes Act of 1978, 41 U.S.C. 601 et seq. Florida Power & Light Co., 307 F.3d at 1373.
b. While the government's petition for rehearing was pending, this Court issued its decision in National Cable & Telecommunications Ass'n v. Brand X Internet Ser vices, 545 U.S. 967 (2005), which held that "[a] court's prior judicial construction of a statute trumps an agency construction otherwise entitled to * * * 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 982. The government brought the Brand X decision to the attention of the court of appeals, explaining that the court's reliance upon Florida Power & Light Co. was inconsistent with the principles of agency deference that the Court reaffirmed in Brand X. In an order denying rehearing, Pet. App. 29a-35a, the court rejected that argument, stating that it had not considered itself "bound" by Florida Power & Light Co., but had treated it only as "'persuasive' authority" in holding that SWU contracts are contracts for services, not for the sale of goods. Id. at 32a. The court further held that Com merce's construction of Section 1673 did not, in any event, warrant deference under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984), because "the antidumping duty statute unambiguously applies to the sale of goods," and not "contracts for services." Pet. App. 31a, 33a.
Notwithstanding its previous acknowledgment that certain SWU contracts did "not fall neatly" into either the goods or services category, Florida Power & Light Co., 307 F.3d at 1373, the court of appeals now found that "it is clear that [the SWU] contracts are contracts for services and not goods," Pet. App. 33a. The court based that conclusion upon "the critical importance" of what it characterized as "the indisputable fact that, pur suant 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." Ibid. In the court's view, "the inescapable conclusion flowing from this circum stance is that the enrichers do not 'sell' LEU to utilities pursuant to the SWU contracts at issue in this case." Id. at 33a-34a.
6. On remand, the CIT determined that the court of appeals' decision required Commerce to rewrite the scope of its antidumping order with respect to future LEU entries, as well as to exclude past LEU entries covered by SWU contracts from its duty calculations. 431 F. Supp. 2d 1351, 1354-1355 (2006) (per curiam); 442 F. Supp. 2d 1367 (2006) (per curiam). Although the gov ernment complied, under protest, with the CIT's order with respect to past entries of LEU, it appealed the CIT's conclusion with respect to future entries. See Gov't C.A. Br. in Nos. 07-1005 & 07-1006, at 3. The court of appeals found those issues not ripe for review and dismissed the appeal. Pet. App. 1a-7a.
SUMMARY OF ARGUMENT
The Department of Commerce reasonably concluded that the antidumping remedy is available when utilities in the United States acquire imported, foreign-produced LEU for less than its fair value, and that the remedy does not become unavailable simply because the parties structure the transaction as separate purchases of raw materials and of essential manufacturing processes, rather than as a one-step exchange of cash for finished product. That conclusion is consistent with the text of the statute and its context. In addition, as Commerce determined, a contrary conclusion would not only be inconsistent with the remedial purposes of the statute, but would also open a loophole that would encourage widespread evasion of the unfair trade laws. Under Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984), the agency's statutory interpretation is reasonable and should be upheld.
A. As the "administering authority" under the anti dumping-duty statute, 19 U.S.C. 1677(1), Commerce is charged with investigating and adjudicating allegations that foreign goods are being dumped in the United States. The scope of Commerce's authority under the antidumping-duty law establishes that Congress in tended Commerce to speak with the force of law on the meaning of the statute. Commerce's reasonable inter pretation of the statute therefore warrants Chevron def erence, and must be sustained unless unambiguously foreclosed by the text of the statute.
B. Commerce in this case reasonably determined that imported LEU produced pursuant to SWU con tracts, like any imported good produced pursuant to similar contract-manufacturing arrangements, is subject to antidumping duties if it is acquired for less than its fair value. Under the statute, if an item manufactured abroad is delivered to a customer in the United States in exchange for monetary or other consideration, that mer chandise has been "sold" in the United States, and therefore is subject to the antidumping-duty statute. The structure of the underlying transaction does not change that result.
Nothing in the statute's reference to sales of mer chandise unambiguously forecloses Commerce's inter pretation. The statute does not ask whether a particular contract between a foreign manufacturer and a U.S. pur chaser is better characterized as a contract for the sale of goods or a contract for the "service" of manufacturing goods; it asks whether the goods are being, or are likely to be, "sold" in the United States at less than their fair value. This Court's cases have recognized that statutory references to "sales" of particular commodities may en compass various transactions that result in the delivery of the commodity for a price, and that administrative agencies are entitled to disregard the form of the trans action where necessary to effectuate the policies of the statute. In this case, statutory context confirms that Congress did not intend Section 1673's reference to "merchandise * * * sold" to have a narrower scope.
Commerce's decision not to treat imported merchan dise produced via contract-manufacturing arrangements as beyond the reach of the antidumping-duty statute advances the purpose of the statute: to remedy the harm to domestic manufacturing industry that results from unfairly priced foreign products. That harm is not lessened in the case of contract-manufactured goods. Regardless of the structure of the transaction, if a do mestic purchaser acquires foreign merchandise at less than its fair value, the harm to the integrity of the do mestic market and the viability of domestic industry is the same.
Commerce's decision also prevents circumvention of the unfair trade laws. Domestic sales of virtually all manufactured merchandise could be structured as sepa rate purchases of raw materials and manufacturing "services," in the same manner as SWU transactions. A rule that treated the structure of contract-manufactur ing arrangements as dispositive would naturally encour age foreign manufacturers and their domestic customers to restructure their transactions to avoid imposition of antidumping duties.
The prospect of such evasion is a matter of particular concern in the sensitive context of trade in enriched ura nium. The effective implementation of the antidumping- duty statute in that context is a matter of considerable importance to U.S. national security and foreign policy interests, and, in particular, serves as the foundation for a key element of the Nation's nuclear nonproliferation policy. The courts should be particularly reluctant to second-guess the agency's judgment on the proper im plementation of the antidumping law in this context.
C. Even if Commerce were not entitled to conclude that purchases of imported, contract-manufactured goods categorically fall within reach of the antidumping- duty statute, Commerce identified several salient fea tures of the specific contract-manufacturing arrange ments at issue in this case that make it particularly clear that LEU acquired pursuant to SWU transactions may properly be said to have been "sold" within the meaning of Section 1673. Most critically, although SWU con tracts operate based on a legal fiction that the enricher merely performs the "service" of enriching a customer's feed uranium, the fiction is just that: enrichers treat feedstock as fungible, and although utilities retain title to the quantity of feedstock they supplied to the en richer throughout the enrichment process, they do not obtain title to the LEU for which they had contracted immediately upon production of the LEU. The result is that a utility that started out with title to a particular lot of raw materials ends up with title to a different lot of finished merchandise. As Commerce reasonably deter mined, the overall arrangement is one for the transfer of ownership of the finished LEU product for consider ation in the form of raw materials and cash. Such an arrangement is reasonably regarded as a "sale" of "mer chandise."
The court of appeals erred in concluding that, despite the fact that customers do not obtain title to the finished LEU upon production, and despite the fact that the fin ished LEU bears no necessary relationship to any raw materials provided by the customer, LEU produced pur suant to SWU transactions is unambiguously exempt from antidumping duties because the contracts do not evidence the parties' intention to vest ownership of raw materials or of the finished product in the enricher. That conclusion directly contradicts Commerce's reason able determination that, when title passes to the cus tomer, it passes from the enricher. But in any event, the question of contractual vesting of title in the enricher is beside the point; the statute, which uses the word "sold" in the passive, is concerned with the ultimate disposition of merchandise that enters the commerce of the United States. It is not concerned with the parties' private doc uments or contractual intentions with respect to the man ufacturer's ownership rights.
THE DEPARTMENT OF COMMERCE REASONABLY DE TERMINED THAT IMPORTED LOW ENRICHED URANIUM PRODUCED THROUGH SEPARATIVE WORK UNIT CON TRACTS IS SUBJECT TO ANTIDUMPING DUTIES
This Court has long held that courts are to accord deference to "reasonable interpretation[s]" of a statute adopted by the agency that has been "charged with re sponsibility for administering the provision." Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 844, 865 (1984). The treatment of imported LEU purchased pursuant to SWU transactions under the antidumping-duty statute is an issue as to which the statute is silent, and which implicates U.S. national security and foreign policy in terests that the Executive, rather than the Judiciary, is in the best position to assess. Under Chevron, Com merce's final determination that such LEU transactions are subject to the antidumping-duty statute is reason able and therefore should be upheld.
A. Commerce's Interpretation Of The Antidumping-Duty Statute Is Entitled To Deference
In Chevron, this Court explained that the "power of an administrative agency to administer a congressio nally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." Chevron, 467 U.S. at 843 (quoting Morton v. Ruiz, 415 U.S. 199, 231 (1974)). The Court accordingly held that, while courts "must give effect to the unambiguously expressed intent of Congress" if "Congress has directly spoken to the precise question at issue," courts must defer to the responsible agency's interpretation of the statute if "the statute is silent or ambiguous with respect to the spe cific issue" and the agency has acted reasonably in filling the statutory gap. Id. at 842-843.
It is undisputed that the antidumping-duty statute does not directly speak to the precise question at issue -i.e., whether the statute exempts goods that U.S. con sumers acquire through contract-manufacturing ar rangements, and that enter the United States at less than fair value. As a result, this case turns on the appli cation of Chevron's second step, and the deference prin ciples articulated in Chevron are fully applicable in this case.
Congress has conferred on Commerce the power to administer the antidumping-duty statute. 19 U.S.C. 1677(1). Commerce is statutorily responsible for investi gating allegations that imported merchandise is being, or is likely to be, dumped in the United States; for mak ing final determinations regarding sales at less than fair value; and ultimately for issuing orders imposing anti dumping duties to remedy such unfair trade practices. 19 U.S.C. 1673(1), 1673a(a)(1), 1673d(a)(1) and (c)(2), 1673e(a)(1).
As the Federal Circuit has recognized, "[a]ntidumping investigations are complex and compli cated matters in which Commerce has particular exper tise," Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1379 (2001) (quoting Thai Pineapple Pub. Co. v. United States, 187 F.3d 1362, 1367 (Fed. Cir. 1999), cert. denied, 529 U.S. 1097 (2000)), and are "fairly characterized as 'relatively formal administrative procedure[s]' that adjudicate parties' rights," id. at 1381 (quoting United States v. Mead Corp., 533 U.S. 218, 230 (2001)). Commerce's "decisions are, moreover, self-exe cuting (that is, binding without the need for judicial en forcement), another indication of Chevron entitlement." Id. at 1382. When an interested party seeks judicial review, the court reviews Commerce's factual findings under a deferential "substantial evidence" standard, which requires a court to uphold an agency's findings unless no reasonable factfinder could agree with them. 19 U.S.C. 1516a(b)(1)(B)(i); INS v. Elias-Zacarias, 502 U.S. 478, 481 & n.1, 484 (1992); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951).
The scope of Commerce's authority under the anti dumping-duty statute makes clear that "Congress would expect the agency to be able to speak with the force of law when it addresses ambiguity in the statute or fills a space in the enacted law." Mead, 533 U.S. at 229. Com merce's construction of the statute, articulated in the course of formal antidumping proceedings, is entitled to Chevron deference. See ibid.
B. Commerce Reasonably Concluded That The Antidump ing-Duty Statute Applies To Imports Of Merchandise Produced Through Contract Manufacturing
As discussed above, Commerce began its analysis in this case by observing that the enrichment of uranium, though often referred to as a "service," Pet. App. 239a, is not "a 'service' in the same sense that activities such as accounting, banking, insurance, transportation, and legal counsel are considered by the international trading community to be services," id. at 240a-or in the same sense that, for example, the "cleaning of a suit" is a "ser vice," id. at 230a. Rather, Commerce found, uranium enrichment is a "major manufacturing operation," id. at 229a, that results in the "substantial transformation" of unenriched uranium to "create a new and different article of commerce," id. at 239a-240a. Whereas, "[i]n the case of cleaning services, the cleaner merely returns to its customer a cleaned suit," in the case of uranium enrichment pursuant to SWU contracts, the enricher delivers to the customer an item of commerce that is "a clearly distinct product" from any raw materials that had been delivered to the enricher. Id. at 230a-231a, 239a, 251a.
In Commerce's considered view, a U.S. customer's acquisition of finished merchandise from a foreign man ufacturer in exchange for payment constitutes a "sale" of "foreign merchandise" under Section 1673, regardless of whether, under the particular form of the contract, the U.S. customer purchased the merchandise in a single transaction, with a single price term covering all ele ments of the value of the merchandise, or separately purchased raw materials and a manufacturing process that transforms the materials into the desired merchan dise. Commerce determined that, for purposes of the antidumping-duty law, the structure and form of the transaction is less important than its substance. Pet. App. 240a. In a so-called "contract-manufacturing" transaction, as in a familiar one-step exchange of cash for the finished product, the overall arrangement is ded icated to the delivery of the finished product, and thus is, "in effect, an arrangement for the purchase and sale" of merchandise. Id. at 254a. That conclusion reflects a permissible interpretation of the statutory text, and a reasonable policy choice that effectuates the purposes of the law. Under Chevron, Commerce's determination should have been upheld.
1. Commerce's interpretation reflects a permissible reading of the statute's text
Commerce's interpretation satisfies the first step of the Chevron analysis: it reflects a permissible reading of the statutory text.
a. In holding that Commerce's reading of the statute was unambiguously foreclosed by the text of Section 1673, the court of appeals reasoned that Section 1673 unambiguously "applies to the sale of goods" and not "contracts for services." Pet. App. 33a. The unstated assumption underlying that decision is that the determi nation whether "merchandise" is "sold" for purposes of Section 1673 is limited to an examination of the terms of the contract between the manufacturer and purchaser to determine whether the monetary payment term is writ ten as covering the entire value of the finished product, or only the value of the "service" of producing that prod uct. See id. at 23a-24a (citing Florida Power & Light Co. v. United States, 307 F.3d 1364, 1373-1374 (Fed. Cir. 2002)). The consequence of that approach is that, if the parties do not provide for the purchase of all of the com ponents of the finished merchandise in a single contract, but instead structure the transaction as separate pur chases of raw materials and manufacturing "services," then the finished merchandise is immune from the antidumping-duty statute. That is true even though the parties to the contract-manufacturing arrangement, as well as the domestic industry, are effectively in the same position in which they would be had the transaction been structured as a single-step sale of finished merchandise: The domestic entity has acquired merchandise from abroad at below its fair value, and domestic competitors of the foreign producer have lost their fair chance to compete.
Nothing in Section 1673 unambiguously limits the reach of the antidumping-duty law to foreign merchan dise acquired via a single-step exchange of cash for fin ished product. Nor does the text of the statute unam biguously exclude goods acquired through contracts that provide in part for the "service" of manufacturing. Un like, for example, the statute at issue in the Federal Cir cuit's prior decision in Florida Power & Light Co., su pra, which explicitly called for an inquiry into whether a SWU contract qualified as a "contract * * * for * * * the disposal of personal property," Contract Dis putes Act of 1978, 41 U.S.C. 602(a), Section 1673 con tains no such mandate. See Florida Power & Light Co., 307 F.3d at 1373-1374. Indeed, the word "contract" does not appear anywhere in the provision. The words that do appear- and, in particular, the statutory reference to "merchandise * * * sold"-are capable of bearing the meaning Commerce assigned them.
In ordinary usage, the verb "sell," when used in con nection with real or personal property, refers broadly to the act of giving up, transferring, exchanging, or dispos ing of property for consideration. See Webster's Third New International Dictionary of the English Language 2061 (1993) (defining "sell" as "to give up (property) to another for money or other valuable consideration: hand over or transfer title to (as goods or real estate) for a price"); Webster's New International Dictionary of the English Language 2272 (2d ed. 1958) (defining "sell" as "[t]o transfer (property) for a consideration; to trans fer the absolute or general title to (anything, as lands, goods, choses in action) to another for a price, or sum of money; to give up for a valuable consideration; to dis pose of in return for something; to convey"); The Ameri can Heritage Dictionary of the English Language 1177 (1976) (defining "sell" as "[t]o exchange or deliver for money or its equivalent"); The Random House Dictio nary of the English Language 1296 (1966) (defining "sell" as "to give up or make over to another for a con sideration; dispose of to a purchaser for a price"). Sec tion 1673 uses the verb "to sell" in the passive voice. It thus refers to merchandise that has been given up, transferred, delivered, or disposed of to another, for consideration.
A reasonable reading of the statute is that, when a foreign manufacturer delivers a newly produced good to a customer in the United States for monetary or other valuable consideration, that good is "sold" within the meaning of Section 1673 and thus potentially subject to antidumping duties. Commerce's reading of the statu tory language to cover goods produced by contract man ufacturing is consistent with the way other statutory references to the "sale" of particular commodities have been interpreted. This Court's cases have recognized that such references may encompass various transac tions that result in the delivery of the commodity to a purchaser for a price, and that administrative agencies are entitled to disregard the form of the transaction where necessary to carry out the relevant statutory scheme. In United Gas Improvement Co. v. Continental Oil Co., 381 U.S. 392 (1965), for example, the Court held that sales of leases of land containing gas reserves con stitute "'sales' of natural gas in interstate commerce" for purposes of establishing Federal Power Commission jurisdiction under the Natural Gas Act, 15 U.S.C. 717 et seq., reasoning that "[a] regulatory statute such as the Natural Gas Act would be hamstrung if it were tied down to technical concepts of local law." 381 U.S. at 400.
United Gas Improvement Co., in turn, cited Gray v. Powell, 314 U.S. 402 (1941), in which the Court held that a "sale or delivery or offer of sale" of coal occurred, for purposes of the Bituminous Coal Act of 1937, 15 U.S.C. 828 et seq. (1940) (expired 1943, repealed 1966), where owners of land with established mining facilities leased the land, including mineral rights, to a large coal con sumer; the landowners leased the mining facilities to a contractor selected by the consumer; and the contractor operated the mine under contract with the consumer. See Gray, 314 U.S. at 407-409; see also United Gas Im provement Co., 381 U.S. at 400-401. Noting that the effect of that series of transactions was to deliver to the consumer the entire output of the coal mine, the Court rejected the argument that there was no "sale or deliv ery or offer for sale" because title to the coal never passed. Gray, 314 U.S. at 416. The Court concluded that the statute did not require a transfer of title "in the technical sense," and that to interpret the statute to con tain such a requirement would hamper the statute's pur poses. Id. at 414-417.
Nothing in Section 1673's reference to "merchandise * * * sold" precludes a similarly flexible interpretation that focuses on the substance, rather than the form or structure, of a transaction, to effectuate the purposes of the antidumping-duty statute.
b. Context confirms that the antidumping-duty stat ute does not unambiguously exempt contract-manufac tured goods that enter the United States at less than fair value. See, e.g., Zuni Pub. Sch. Dist. No. 89 v. De partment of Educ., 127 S. Ct. 1534, 1546 (2007) ("[S]tat utory ambiguity is a creature not just of definitional pos sibilities but also of statutory context.") (internal quota tion marks, citation, and brackets omitted). As an initial matter, the statute refers not only to merchandise that "is being * * * sold" but also merchandise that is "likely to be sold" at less than its fair value. 19 U.S.C. 1673(1) (emphasis added). In making an antidumping determination on the basis of "likely" sales, it may well be impossible to know in advance the form that the transaction will take, or the precise contractual terms between the producer and the consumer. It is implausi ble that Congress intended for the application of the antidumping-duty statute to "likely" sales of merchan dise to turn on matters that are unknowable in advance of the consummation of the transaction.
Moreover, as amended in 1984, the antidumping-duty statute provides that the "reference to the sale of for eign merchandise includes the entering into of any leas ing arrangement regarding the merchandise that is equivalent to the sale of merchandise." 19 U.S.C. 1673. Enacted as part of the Trade and Tariff Act of 1984, Pub. L. No. 98-573, § 602(b)(2), 98 Stat. 3024, that provi sion was "intended to clarify the applicability of [the unfair trade] laws to sham leases or leases which are tantamount to sales." H.R. Rep. No. 725, 98th Cong., 2d Sess. 11 (1984). As the staff of the Senate Committee on Finance explained: "Import transactions may be struc tured in a variety of ways that may not be denominated as sales but are in fact permanent exchanges for valu able consideration. This section would ensure that these unfair trade practice laws are not avoided on the basis of form alone." Staff of Senate Comm. on Finance, 98th Cong., 2d Sess., S. Prt. No. 98-219, Omnibus Tariff and Trade Measures: Explanation of Provisions Approved by the Committee on July 31, 1984, To Be Offered as a Committee Amendment to H.R. 3398, at 22-23 (Comm. Print 1984).
Congress later enacted a provision setting out guid ance regarding the application of the lease-sale provi sion of Section 1673. See Omnibus Trade and Competi tiveness Act of 1988, Pub. L. No. 100-418, § 1327, 102 Stat. 1204 (19 U.S.C. 1677(19)). That provision directs Commerce to consider a number of factors in applying the lease-sale provision, "including whether the lease transaction would permit avoidance of antidumping or countervailing duties." 19 U.S.C. 1677(19)(F). The House Conference Report explained that, "[i]n applying the provision, it is intended that Commerce and the ITC focus on commercial realities and the substance of the transaction, rather than its form," and that "[t]he scope of the term 'sale' should be broad enough to cover a wide variety of transactional arrangements." H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 615-616 (1988).
Although the statute's lease-sale provision does not answer the precise question in this case, its text and history confirm that it was reasonable for Commerce to interpret the statutory reference to sales of foreign mer chandise in a manner that focuses on "commercial reali ties and the substance of the transaction, rather than its form," H.R. Conf. Rep. No. 576, supra, at 616. It would be odd indeed if a statute that explicitly provides that merchandise that is leased to a customer may be consid ered to have been "sold," and thus subject to antidump ing duties, were read unambiguously to exempt im ported merchandise as to which the customer obtains permanent dominion, merely because the customer di vided the acquisition of the merchandise into two trans actions.
2. Commerce's interpretation effectuates the purposes of the antidumping-duty statute
Commerce's decision that merchandise produced by contract manufacturing falls within the reach of the anti dumping-duty statute constitutes "a reasonable policy choice" at the second step of the Chevron analysis. 467 U.S. at 845.
a. The basic purpose of the antidumping-duty stat ute is to prevent or remedy injury to domestic industry harmed by, or threatened with harm by, unfair foreign competition. When Congress enacted the first version of the antidumping-duty law in 1921, Anti-Dumping Act, 1921 (1921 Act), ch. 14, 42 Stat. 9, it did so to "protect our industries and our labor against a now common spe cies of commercial warfare of dumping goods on our markets at less than cost or home value if necessary until our industries are destroyed," H.R. Rep. No. 1, 67th Cong., 1st Sess. 23 (1921). When, in 1979, Congress repealed the 1921 Act, and reenacted the law as Title VII of the Tariff Act of 1930, see Trade Agreements Act of 1979 (1979 Act), Pub. L. No. 96-39, Tit. I, 93 Stat. 150; id. § 106, 93 Stat. 193, it reaffirmed its intent to protect domestic industry from unfairly priced foreign imports. The Senate Report accompanying the 1979 Act ex plained that dumping is one of "the most pernicious practices which distort international trade to the disad vantage of United States commerce," and that the revi sions to the antidumping-duty statute were designed, among other things, to provide for more effective relief for domestic industry. S. Rep. No. 249, 96th Cong., 1st Sess. 37 (1979).
b. As Commerce concluded in its determinations in this case, the harms that Congress sought to prevent are not lessened when a domestic consumer acquires foreign merchandise at unfairly low prices by making separate purchases of raw materials and manufacturing pro cesses, as opposed to buying the finished product (and, thereby, all of its components) at once. See Pet. App. 232a, 239a-241a. The statute itself makes clear that un fair prices may be the result of undercharging for the cost of raw materials, of production processes, or both. See 19 U.S.C. 1677b(e)(1) (providing that, where the "normal value" of a good cannot be established by refer ence to the prices prevailing in foreign markets, the "constructed value" of the merchandise is based in part on "the cost of * * * fabrication or other processing of any kind employed in producing the merchandise," as well as "the cost of materials").
For purposes of the antidumping-duty law, whether a domestic customer pays for the raw materials and the production at the same time and pursuant to the same contract, or at different times under different contracts, is far less important than the end result: the importa tion of a finished product for a price. If that price repre sents less than the fair value of the product, then, no matter how the transaction was structured, any injury to domestic industry is the same. The transaction may have displaced a sale that would otherwise have been made by domestic industry, or depressed the prices of domestic merchandise. As Commerce explained, to draw distinctions between merchandise obtained strictly via cash exchange and merchandise obtained through delivery of a combination of cash and raw materials would "expos[e] industries to injury by unfair trade practices without the remedy of" the antidumping-duty law, and thus "contravene the intent of Congress." Pet. App. 239a.
3. Commerce's interpretation prevents evasion of the statute
Commerce's decision also serves the important end of avoiding circumvention of the antidumping-duty law.
a. As Commerce recognized, the production of virtu ally all merchandise involves processing for which the parties could contract separately, in the same manner as under SWU contracts. Steel could be obtained by sup plying iron ore for "smelting and rolling services"; lum ber could be obtained by supplying trees for "harvesting and milling services"; semiconductors could be obtained by supplying silicon for "processing services." See Pet. App. 239a-240a. By focusing on the substance of such transactions rather than their form or structure, Com merce's interpretation of the statute avoids opening a loophole that would allow parties to evade antidumping duties simply by restructuring their transactions to avoid paying for raw materials and manufacturing in a single transaction.
This Court has endorsed similar approaches in analo gous contexts. It has held that it is reasonable for an administrative agency to look behind the form of a transaction, including the parties' arrangements for transfer of title, to determine whether there has been a "sale" of a particular commodity that is subject to fed eral regulation. See United Gas Improvement Co., 381 U.S. at 400-401; Gray, 314 U.S. at 414-417; see also SEC v. National Sec., Inc., 393 U.S. 453, 466-467 (1969) (af firming the SEC's construction of the statutory term "purchase or sale of any security" under the antifraud provisions of the securities laws to include a stock swap accomplished during a merger). The Court likewise has frequently employed a "doctrine of substance over form" in which it "has looked to the objective economic reali ties of a transaction rather than to the particular form the parties employed" to evaluate its tax consequences, Frank Lyon Co. v. United States, 435 U.S. 561, 572-573 (1978); see, e.g., Boulware v. United States, 128 S. Ct. 1168, 1176 (2008). And the Court has applied a similar rule in evaluating the proper enforcement of other regu latory regimes. See, e.g., Landreth Timber Co. v. Land reth, 471 U.S. 681, 688 (1985) (noting that the Court has "decided a number of cases in which it looked to the eco nomic substance of the transaction, rather than just its form, to determine whether" the securities laws ap plied).
In this case, Commerce understood that a rule that would allow form to trump substance would encourage industries to structure acquisitions of foreign merchan dise in a manner that avoided imposition of antidump ing duties. The result would be to eviscerate the protections that Congress intended to afford domestic industry by enacting the antidumping-duty statute. Commerce's determination sensibly avoids that result.
b. Respondents have argued (Eurodif Br. in Opp. 16- 17, AHUG Br. in Opp. 22 & n.17) that Commerce's con cerns about widespread circumvention are unfounded. They contend that, even if Commerce cannot impose antidumping duties on contract-manufactured goods when they are first acquired by a U.S. customer, Com merce can always impose antidumping duties on domes tic sales of merchandise that incorporates the imported materials. See Eurodif Br. in Opp. 16-17 (arguing that "the first downstream domestic sale of * * * an article in which [imported materials] were incorporated would trigger applicable dumping duties"). According to re spondents, the uranium industry is an unusual exception to that rule because "the imported material (LEU) is consumed in a nuclear reactor and thus no sale in the United States occurs." Id. at 16.
Contrary to respondents' argument, that domestic utilities "consume" imported LEU in the production of electricity, rather reselling it in tangible form, does not render this case unique. A domestic entity might simi larly "consume" processed steel, milled lumber, or semi conductors by using them in its own operations, e.g., in equipment used to produce other items.
In any event, if foreign merchandise is not subject to an antidumping-duty order when it enters the United States, the subsequent sale of that merchandise in the United States does not trigger liability for anti dumping duties. Upon entry of non-subject merchandise into the United States, liquidation (i.e., processing) of the entry documents is not suspended pending final de termination of antidumping duties, and no deposits of estimated antidumping duties are collected. 19 U.S.C. 1673b(d)(1)(B) and (d)(2).
Commerce refers to downstream sales in situations in which merchandise indisputably subject to antidump ing duties has been sold by a foreign producer to an af filiated party in the United States. In such situations, Commerce cannot calculate a dumping margin on the basis of the nominal price between the related parties. Commerce instead constructs an export price by taking the price of the first downstream sale by the U.S. pur chaser to an unaffiliated customer in the United States, and subtracting expenses incurred after importation. 19 U.S.C. 1677a(e). Where, as here, there is no allegation that the foreign seller is affiliated with the U.S. pur chaser, downstream sales would not be used to calculate dumping margins, and the existence or nonexistence of such sales would be irrelevant.
c. Although the prospect of the evasion of antidump ing duties with respect to manufactured goods generally is a matter of considerable concern, it is of particular concern in the sensitive context of trade in enriched ura nium. The proper application of the trade laws in this context serves important national security and foreign policy interests.
In particular, application of the antidumping-duty statute to imports of LEU provides the essential back drop to a key element of this Nation's nuclear nonproliferation policy, the United States' Highly En riched Uranium (HEU) Agreement with the Russian Federation. See 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), Feb. 18, 1993, Hein's No. KAV 3503, State Dep't No. 93-59, 1993 WL 152921. Un der the HEU Agreement, the Russian Federation has undertaken by 2013 to convert 500 metric tons of weap ons-grade HEU-enough for approximately 20,000 Rus sian nuclear warheads-into LEU for use in generating electricity in the United States. In return, the United States has agreed to purchase LEU downblended from 30 metric tons of weapons-grade HEU each year through 2013. See ibid.
The foundation for the HEU Agreement was laid in 1992, when Commerce agreed to suspend an antidump ing investigation into Russian uranium that had been prompted by a surge of low-price Russian uranium im ports into the United States. See Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan, 57 Fed. Reg. 49,235 (1992) (notice of suspension of investigations and amendment of prelim inary determinations). The antidumping suspension agreement restricts imports of Russian LEU produced through commercial enrichment processes, but exempts from those restrictions "any or all" HEU, and LEU pro duced through a process of downblending HEU "result ing from the dismantlement of nuclear weapons." Id. at 49,237.
The suspension agreement, which was negotiated in parallel with the HEU Agreement, provides an impor tant incentive for the Russian Federation to produce LEU for export through a process of downblending, rather than through the less costly (and hence more profitable) method of enriching natural uranium through commercial processes. Russia is the largest enricher of uranium in the world, and enriching natural uranium for commercial LEU sales is the most economically viable use of its vast enrichment capacity. See Issues and De cision Memorandum for the Sunset Review of the Agree ment Suspending the Antidumping Investigation on Uranium from the Russian Federation 6 (June 6, 2006) <http://ia.ita.doc.gov/frn/summary/RUSSIA/E6-8758- 1.pdf> (Sunset Review Memorandum); Final Results of Five-Year Sunset Review of Suspended Antidumping Duty Investigation on Uranium from the Russian Fed eration, 71 Fed. Reg. 32,517 (2006). Today Russia has substantially more enrichment capacity than necessary to supply its own domestic market, and other markets- notably in the European Union and Asia-have imposed restrictions on imports of Russian uranium products. Sunset Review Memorandum 6.
Absent full implementation of the suspension agree ment, Russia would have a strong financial incentive to direct its enrichment capacity toward commercial en richment of natural uranium for the U.S. market, rather than downblending weapons-grade uranium, for the same market at higher cost. Sunset Review Memoran dum 6. But full implementation of the suspension agree ment depends on full enforcement of the antidumping- duty law to imports of LEU, including LEU purchased pursuant to SWU contracts. See 19 U.S.C. 1673c(c) (generally limiting scope of suspension agreements to "subject merchandise").6
4. Commerce's now-withdrawn tolling regulation provides no basis for rejecting the agency's statutory interpretation
Respondents have argued (Eurodif Br. in Opp. 14-15; AHUG Br in Opp. 8-9, 20) that Commerce's decision in this case is inconsistent with its now-withdrawn tolling regulation. See 19 C.F.R. 351.401(h) (2007) (providing that Commerce will "not consider a toller or subcontrac tor to be a manufacturer or producer where the toller or subcontractor does not acquire ownership, and does not control the relevant sale, of the subject merchandise"), withdrawn by 73 Fed. Reg. 16,517 (2008). Respondents are incorrect.
By its terms, the tolling regulation (even when it was in effect) had no bearing on the question presented here. See Pet. App. 17a-24a, 27a. The regulation appeared in a section of Commerce's regulations that "establishes certain general rules that apply to the calculation of ex port price, constructed export price and normal value." 19 C.F.R. 351.401(a). Thus, as the CIT itself acknowl edged, while the tolling regulation provided guidance for calculating the dumping margin for goods within the scope of the antidumping-duty law, it "[did] not provide a basis to exclude merchandise from the scope of an [antidumping] investigation." Pet. App. 191a (citation omitted); see id. at 235a-236a.7
Respondents have also relied (Eurodif Br. in Opp. 14-15, 17; AHUG Br. in Opp. 9 & n.9, 20 & n.13) on ad ministrative decisions in which Commerce applied the tolling regulation to identify the sale between contractor and buyer, as opposed to the sale between subcontractor and the contractor, as the relevant sale for purposes of calculating the dumping margin. Respondents empha size, as did the CIT, that in one such decision, Com merce stated that it "do[es] not consider the 'sale' be tween the subcontractor and * * * a contractor to be a sale of subject merchandise at all," but rather to be "a sale of certain inputs and subcontracting services." Pet. App. 193a-194a (quoting Response to Court Remand at 5, Taiwan Semiconductor Mfg. Co. v. United States, 143 F. Supp. 2d 958 (Ct. Int'l Trade 2001) <http:// ia.ita.doc.gov/remands/00-48.htm>).
But the question in those cases was not whether there was a "sale" of merchandise for purposes of appli cation of the antidumping-duty law; it was whether a particular sale qualified as the "relevant sale" for pur poses of calculating the dumping margin in accordance with Commerce regulations. 19 C.F.R. 351.401(h) (2007) (emphasis added). And as Commerce explained in this case in its determination on remand from the CIT, in its prior decisions Commerce had always confronted that question in the context of situations in which "both the toller and the tollee would make sales that could be con strued as sales of subject merchandise"; Commerce ap plied the tolling regulation to select the tollee as the respondent "producer" for purposes of constructing the relevant export price. Pet. App. 122a-124a. That selec tion reflected the agency's "preference [for] select[ing] the respondent whose price covers the full cost of pro duction (i.e., the full value of the subject merchandise)." Id. at 128a.
Commerce further explained, however, that in no instance did the agency apply the regulation to deter mine that the tolling transactions were entirely beyond the reach of the antidumping-duty law. Pet. App. 112a, 235a. To the extent that the language of the agency's prior decisions might have suggested that the transac tion between toller and tollee could never result in a rel evant sale for purposes of calculating the dumping mar gin, Commerce reasonably determined that such a result in this case would frustrate the purpose of the regula tion and of the antidumping-duty statute in a situation where, as here, the tollee does not sell the toll-produced merchandise. Id. at 124a, 128a-129a, 157a-158a.
Commerce's determination not to allow prior deci sions concerning dumping-margin calculations to control the threshold question whether the antidumping-duty statute applies at all was a reasonable choice, given the breadth and flexibility of the statutory scheme. The statute provides Commerce with a wide array of tools with which to determine the difference between the price of the imported merchandise with the value of that same (or comparable) merchandise in the home market. Although Commerce normally establishes the dumping margin by comparing the prices of sales in each market, the statute provides a broad range of alternatives where prices are not available for that purpose.
For example, the price of the merchandise imported into the United States can be established on the basis of the price charged upon export (19 U.S.C. 1677a(a)), the price at which a reseller in the United States who is af filiated with the foreign producer first resells the mer chandise in the U.S. market (19 U.S.C. 1677a(b)), or the price of a lease equivalent to a sale (19 U.S.C. 1673). Where the imported merchandise is transferred to a related party in the United States that incorporates it into a different product that is sold in the United States, Commerce may use the price at which merchandise com parable to the imported merchandise is sold, or "any other reasonable basis." 19 U.S.C. 1677a(e).
Similarly, the statute permits Commerce to deter mine the value of the comparable merchandise in the home market (i.e., "normal value") on the basis of actual home market prices of such merchandise (19 U.S.C. 1677b(a)(1)(B)); the price of merchandise when sold to third countries (19 U.S.C. 1677b(a)(1)(C)); the con structed value of the merchandise sold in the United States (19 U.S.C. 1677b(a)(4)), based on, inter alia, costs of materials and fabrication (19 U.S.C. 1677b(e)); in the case of non-market economy countries, the constructed value of the merchandise based on the factors of produc tion in the home market, as valued in a market economy country (19 U.S.C. 1677b(c)(1)); and the price of compa rable merchandise sold in other countries (19 U.S.C. 1677b(c)(2)). As Commerce explained, the statute's pro visions concerning the calculation of dumping margins are consistent with the principle that "the form of the sale" need not control "the application of the law." Pet. App. 232a.
In short, nothing in Commerce's prior applications of the tolling regulation undermines Commerce's reason able conclusion that the antidumping-duty statute cov ers imports of foreign merchandise produced via con tract manufacturing. Those decisions concerned a ques tion-namely, how to calculate antidumping duties- that is logically distinct from the threshold question whether the antidumping-duty statute applies at all. And to the extent that the language of Commerce's prior decisions is in tension with its determination that the antidumping-duty statute applies to the merchandise at issue in these proceedings, Commerce was entitled to exercise its expert judgment in resolving that tension. As this Court explained in Chevron, an "agency inter pretation is not instantly carved in stone. On the con trary, the agency * * * must consider varying inter pretations and the wisdom of its policy on an ongoing basis." Chevron, 467 U.S. at 863-864. "Agency inconsis tency is not a basis for declining to analyze the agency's interpretation under the Chevron framework"; "if the agency adequately explains the reasons for a reversal of policy, 'change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of the statute with the implementing agency.'" National Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (quoting Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 742 (1996)). Commerce in this case fully explained its rea sons for declining to embrace the full possible implica tions of the language in its prior tolling decisions, which would frustrate Commerce's ability to give the antidumping-duty statute its intended scope.
C. Additional Reasons Identified By Commerce After Re viewing the Contracts And Other Record Evidence Sup port Its Decision To Impose The Antidumping Duties At Issue
Commerce's decision to focus on the substance, rather than the form or structure, of contract-manufac turing arrangements reflects a permissible interpreta tion of the statutory text and a reasonable policy choice to which the court of appeals should have deferred. But even if the antidumping-duty statute's reference to the "sale" of merchandise can be read unambiguously to require something more than the facts that are present in contract-manufacturing transactions generally-that is, the delivery of a newly produced good to a customer that ordered its manufacture, in return for consider ation-the court nevertheless erred in overriding Com merce's determination in this case. After examining "the contracts and other evidence of record," Commerce identified salient features of SWU transactions that make it particularly clear that the transactions "repre sent the transfer of ownership in the complete LEU product for consideration." Pet. App. 131a. That deter mination, concerning a matter within the agency's ex pertise, is reasonable, and warrants deference as well.
1. Commerce reasonably disregarded the fiction that en richers merely return the customer's unenriched ura nium in enriched form
When Commerce examined the SWU contracts and other record evidence in accordance with the CIT's re mand instructions (Pet. App. 69a-177a), it made two findings of particular relevance here: (1) that, although utility customers hold title to the natural uranium feedstock they provide to the enrichers, title to the fin ished LEU passes to the utilities only upon delivery of the LEU, and (2) that, because enrichers treat feedstock as fungible, the LEU delivered to the customer bears no necessary relationship to the feed uranium that the cus tomer provided to the enricher. Id. at 131a-134a. The finished LEU product the customer receives is not sim ply the customer's own original unenriched uranium, returned in enriched form; the result of a SWU transac tion is that a utility that originally had title to a particu lar lot of raw material ends up with title to a lot of fin ished LEU that bears no necessary relationship to the raw material it furnished (along with cash) to the enricher.
a. After examining the contracts and other evidence, Commerce concluded that "the utility customers hold title to the natural uranium feedstock that they provide to the enrichers," but that they do not have or receive title to the finished LEU immediately upon its produc tion. Pet. App. 132a ("The contracts state that the enrichers transfer title to the LEU to the utilities upon production and delivery of the LEU."); id. at 133a ("[A]t the point in time in which the enricher produces the LEU but before delivery is performed, the customer * * * does not hold title to the LEU."); see, e.g., C.J.A. 17, 333. The enricher bears the risk of loss with respect to the LEU until it is delivered. Pet. App. 256a; see, e.g., C.J.A. 18, 189. Commerce further found that the utility's title to the quantity of feedstock furnished to the enricher is extinguished upon receipt of the LEU. Pet. App. 132a; see, e.g., C.J.A. 17, 188.
The courts below understood the arrangements in similar terms. See Pet. App. 20a (explaining that "the utility retains title to the quantity of unenriched ura nium that it supplies to the enricher," and that title in the feedstock "is only extinguished upon the receipt of title in the LEU for which [the utility] contracted"); see id. at 44a (citing discussion noting that "title passes to the enriched product" only when "it is returned in en riched form") (citation omitted). Commerce therefore reasonably determined that, upon production of the LEU, "the enrichers own the LEU, including the right to sell the LEU at issue to any buyer." Id. at 133a-134a.
b. Commerce acknowledged that the contractual provisions "establish a legal fiction that the enrich ment process will be performed on the uranium provided by the customer." Pet. App. 133a (citation omitted). As explained above, see pages 25-44, supra, Commerce rea sonably concluded that the legal fiction, even if accepted, would not exempt the finished product from the anti dumping-duty statute. But Commerce also concluded that, in this case, the fiction did not comport with fact; the record made clear that the contracts were dedicated to delivery, for consideration, of the complete LEU product, and not only the manufacturing component.
Record evidence shows that, when a customer ar ranges for the delivery of unenriched uranium under a SWU contract, the enricher does not segregate the cus tomer's feed uranium for separate processing, but adds it to its store of feed uranium. E.g., J.A. 121, 265; C.J.A. 17; see Pet. App. 133a. Although the customer retains title to the feed uranium it had delivered to the enricher, the enricher's commingling of the feedstock means that the customer cannot demand return of the specific lot of feed uranium it had supplied. See ibid.
Nor, in fulfilling its obligations under the contract, is the enricher necessarily limited to processing the spe cific quantity of feed uranium the customer had sup plied. To produce the finished LEU product, the en richer may use more or less feed uranium than the cus tomer had supplied, Pet. App. 253a, and, indeed, may deliver the finished LEU product before it ever receives feed uranium from the customer, id. at 133a. The opera tion of the SWU contract scheme thus "mak[es] it impos sible to conclude that the LEU produced and delivered by the enricher is in any way derived from the uranium supplied by the customer." Ibid. Respondents have acknowledged that, at the time the LEU is imported into the United States, the enricher generally does not know the utility to which a specific shipment of LEU is to be delivered, or whether its production was governed by a SWU contract or an EUP contract. See J.A. 304-306; J.A. 299 ("[I]mports of LEU frequently are not allocated to specific SWU contracts or orders prior to importa tion-or even at the time of entry."). They have also acknowledged that the enricher generally ships the LEU to a nuclear fuel fabricator in the United States and "delivers" the LEU to the customer by directing the fabricator to make a book transfer of the LEU to the customer's account. J.A. 299-300; see, e.g., C.J.A. 15, 332, 470.
Based on this evidence, Commerce reasonably con cluded that it is in fact a complete LEU product that is "sold" as a result of a SWU contract, and not only the enrichment component. Although, as Commerce ac knowledged, the utilities' provision of feed uranium "may not be a payment-in-kind in the formal sense un der these contracts, * * * the arrangement between buyer and seller in a SWU contract nonetheless is dedi cated to the delivery of LEU." Pet. App. 254a. By pro viding a combination of raw materials and monetary payment as consideration, a utility obtains title to a lot of finished LEU product that bears no necessary rela tion to the unenriched uranium the utility furnished to the enricher. Commerce determined, based on that ar rangement, that, "[b]etween the time in which the LEU is produced and the time in which it is delivered as spec ified under the contract, the enricher holds title and holds ownership in the complete LEU product." Id. at 133a (emphasis added). And enrichers "sell" that prod uct "when they transfer ownership of the complete LEU to the utilities through delivery of such merchandise for consideration." Id. at 134a (emphasis added).
c. That SWU transactions result in the passage of title to a finished product that bears no necessary rela tionship to the customer's raw materials makes amply clear that SWU transactions are permissibly termed "sales." Similar usages of the term were common long before the antidumping-duty statute was enacted. This Court, in Powder Co. v. Burkhardt, 97 U.S. 110 (1878), concluded that the question of fungibility is what distin guishes a common-law "bailment" from a "sale." The Court explained:
[W]here logs are delivered to be sawed into board, or leather to be made into shoes, rags into paper, olives into oil, grapes into wine, wheat into flour, if the product of the identical articles delivered is to be returned to the original owner in a new form, it is said to be a bailment, and the title never vests in the manufacturer. If, on the other hand, the manufac turer is not bound to return the same wheat or flour or paper, but may deliver any other of equal value, it is said to be a sale or loan, and the title to the thing delivered vests in the manufacturer. We understand this to be a correct exposition of the law.
Id. at 116; accord Sturm v. Boker, 150 U.S. 312, 329-330 (1893); see, e.g., B.A. Ballou & Co. v. Citytrust, 591 A.2d 126, 130 (Conn. 1991). Although the Congress that drafted the antidumping-duty statute may not have spe cifically meant, by the use of the word "sold," thereby to incorporate the definition of "sale" prevailing in the law of bailments, that definition is at least one permissible way to understand the text of the antidumping-duty statute.
Of course, the fungibility of raw materials makes little difference as a matter of statutory policy; whether the manufacturer delivers a product that contains the customer's own raw materials, or merely materials that are equivalent to those the customer had supplied, is largely irrelevant from the standpoint of protecting do mestic industry from the harms of unfair foreign price competition. But if it was somehow unreasonable for Commerce to conclude that imported merchandise pro duced pursuant to contract-manufacturing transactions, without more, may be considered "merchandise * * * sold" within the meaning of Section 1673, it surely was reasonable for Commerce to conclude that these contract-manufacturing transactions, under which utili ties exchange money and a quantity of raw materials for title to a quantity of finished LEU that bears no neces sary relationship to the raw materials the customer had provided, result in merchandise being "sold" within the meaning of the statute.
2. The court of appeals erred in assigning dispositive sig nificance to the absence of contractual provisions explic itly vesting title in the enricher
Addressing Commerce's review of the record in this case, the court of appeals overrode Commerce's applica tion of the antidumping-duty statute based on the court's own determination that the parties to SWU transactions do not intend to vest ownership of the raw materials or the finished merchandise in the enricher "during the relevant time periods that the uranium is being enriched." Pet. App. 20a. The court concluded that, absent evidence of "any intention by the parties to vest the enrichers with ownership rights in * * * the finished LEU," enrichers cannot be said to "sell" LEU to utilities pursuant to SWU contracts. Ibid. That con clusion is incorrect.
As a preliminary matter, the Federal Circuit's ruling is directly contrary to Commerce's finding, based on the contracts and other record evidence, that, "between the time in which the LEU is produced and the time in which it is delivered as specified under the contract, the enricher holds title and holds ownership in the complete LEU product." Pet. App. 133a. Commerce's finding on that point is supported by substantial evidence. But even leaving that agency finding aside, the Federal Cir cuit's determination is in considerable tension with the facts that utilities do not receive title to the LEU imme diately upon its production, and that the utilities have no title to the specific lot of feed uranium used to produce that LEU. Id. at 20a, 44a, 132a, 133a. Those facts sup port Commerce's determination that, when title to the finished LEU passes to the utility, it passes from the enricher. The court of appeals nevertheless dismissed that conclusion, without so much as attempting to offer an alternative explanation for the identity of the party from whom title passes to the purchasing utility. Id. at 20a.
But more fundamentally, even assuming arguendo that the Federal Circuit was correct that the enricher never formally acquires title to the LEU, there is no basis in the statute for requiring that the parties provide for title to vest in the manufacturer before a SWU-type transaction can be considered a "sale" of "foreign mer chandise," namely, finished LEU. The antidumping- duty statute only asks, in the passive voice, whether for eign merchandise "is being * * * sold." 19 U.S.C. 1673(1). It does not unambiguously require proof of the parties' intention to vest any particular party with title to the merchandise before the customer obtains title. It is undisputed that, under a SWU-type arrangement, a utility provides raw materials and monetary consider ation to the enricher and, in exchange, receives delivery of and title to finished LEU that is not necessarily trace able to the particular lots of uranium feedstock supplied by the utility. Pet. App. 20a, 131a-132a. In these cir cumstances, Commerce acted reasonably in concluding that what occurs is a sale.
Finally, the court of appeals' inquiry into the parties' intentions with respect to ownership rights is particu larly misplaced in the context of a regime designed to remediate unfair trade practices. The intent of parties to a contract is of course an important consideration in the law of contracts. See, e.g., United States v. Winstar Corp., 518 U.S. 839, 911 (1996) (Breyer, J., concurring). But giving dispositive effect to private documents or intentions in determining whether a federal regulatory regime applies to the product of parties' dealings would permit the parties to decide for themselves whether to opt in or out of regulation.
Commerce's decision avoids that absurd result, and in a manner that is consistent with statute's text and that advances the statute's purposes of protecting do mestic industry from the harms of unfair foreign compe tition. The court of appeals erred in overriding its de termination.
The judgment of the court of appeals should be re versed.
JOHN B. BELLINGER, III
Department of State
DANIEL J. DELL'ORTO
Acting General Counsel
Department of Defense
LILY FU CLAFFEE
JOHN D. MCINERNEY
Chief Counsel for Import
DAVID R. MASON, JR.
QUENTIN M. BAIRD
Department of Commerce
DAVID R. HILL
Department of Energy
GREGORY G. GARRE
Acting Solicitor General
GREGORY G. KATSAS
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
LEONDRA R. KRUGER
Assistant to the Solicitor
JEANNE E. DAVIDSON
PATRICIA M. MCCARTHY
STEPHEN C. TOSINI
1 References in this brief to "Pet. App." are to the appendix to the petition for a writ of certiorari filed in No. 07-1059.
2 SWU contracts became common in the uranium enrichment in dustry in the 1960s and 1970s, when the U.S. government "had a monopoly on enrichment services, but offered no other services relating to the production of nuclear fuel." Pet. App. 186a. Utilities accordingly purchased feed uranium from third parties to be enriched by the U.S. government. Ibid.
3 References in this brief to "J.A." are to the Joint Appendix. References to "C.J.A." are to the Confidential Joint Appendix.
4 In a separate determination, Commerce concluded that LEU from the United Kingdom, Germany, and the Netherlands, was not being sold or likely to be sold at less than fair value. Low Enriched Uranium from the United Kingdom, Germany, and the Netherlands, 66 Fed. Reg. 65,886 (2001) (notice of final determination of sales at not less than fair value).
5 The CIT rejected Commerce's determination that the tolling pro vision is altogether inapplicable in this case, Pet. App. 50a-56a, but held that Commerce acted reasonably in declining to apply the tolling pro vision in determining the members of the affected domestic industry, id. at 56a-59a.
6 The CIT is currently reviewing a challenge to Commerce's decision not to terminate the Russian suspension agreement, in which the plaintiffs have argued that, under the court of appeals' decision in this case, the suspended investigation must exclude LEU obtained pursuant to SWU contracts. Techsnabexport v. United States, 515 F. Supp. 2d 1363, 1367-1370 (Ct. Int'l Trade 2007).
7 The CIT in this case did, however, reject Commerce's conclusion that the tolling regulation does not apply in determining whether do mestic utilities qualify as producers for purposes of export-price calculations. Pet. App. 50a-56a. The Federal Circuit did not address that ruling, see id. at 27a, and it is not at issue here. Commerce with drew the tolling regulation in response to the CIT's misreading of the regulation. See 73 Fed. Reg. at 16,517.
STATUTORY PROVISION INVOLVED
19 U.S.C. 1673 provides:
Imposition of Antidumping Duties
(1) 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, and
(2) the Commission determines that-
(A) an industry in the United States-
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United States is materially retarded,
by reason of imports of that merchandise or by rea son of sales (or the likelihood of sales) of that mer chandise for importation,
then there shall be imposed upon such merchandise an antidumping duty, in addition to any other duty im posed, in an amount equal to the amount by which the normal value exceeds the export price (or the con structed export price) for the merchandise. For pur poses of this section and section 1673d(b)(1) of this title, a reference to the sale of foreign merchandise includes the entering into of any leasing arrangement regarding the merchandise that is equivalent to the sale of the merchandise.