The Supreme Court today granted certiorari in, and consolidated, two cases of interest to the business community:
International Trade--Administrative Law--Antidumping Duties. The Department of Commerce is empowered, under 19 U.S.C. § 1673, to impose "antidumping" duties when "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," in order to protect domestic industry against unfair foreign competition. The Supreme Court granted certiorari in and consolidated United States v. Eurodif, S.A., No. 07-1059, and USEC, Inc. v. Eurodif, S.A., No. 07-1078, to answer the question whether "foreign merchandise is . . . sold in the United States," as contemplated by the statute, when a U.S. purchaser provides raw materials to a foreign entity that processes those materials for a fee, and redelivers them in their new form to the U.S.
The Department of Commerce determined, after investigation, that companies in France and other European countries were selling low-enriched uranium (LEU), a component in nuclear power generation, at less than fair value. U.S. utilities acquire LEU either by simply purchasing it for cash, or by delivering a quantity of natural uranium to an enricher, paying for "separative work units" (SWUs, a measurement of the effort required to transform natural uranium to LEU), and receiving in exchange a quantity of LEU. The government, concluding that the enrichment is the "most significant manufacturing operation" in the production of LEU, determined that LEU was merchandise subject to the antidumping statute, whether acquired through direct purchase or through SWU transactions. The government rejected the suggestion of a group of U.S. utility companies that SWU transactions amounted merely to the purchase of services, reasoning that a process that "results in the substantial transformation of the input product" is not a "service" in the context of international trade. Eurodif S.A., a French enricher, challenged the determination in the Court of International Trade, which concluded that, because the enricher never obtains full ownership of the uranium in an SWU transaction, its transfer of the LEU back to the utility cannot constitute a "sale." The Court of Appeals for the Federal Circuit affirmed, concluding that the SWU transactions are contracts for the provision of services, and thus that the LEU delivered to a U.S. utility pursuant to such a transaction is unambiguously not "merchandise" within the meaning of the antidumping statute.
The Court's resolution of this case will determine whether or not the Department of Commerce can levy antidumping duties against the outputs of foreign "contract manufacturing," and thus is of great importance to companies using such services to transform materials for delivery in the U.S., and to companies that rely on the antidumping statute for protection from injurious imports. Absent extensions, which are likely, amicus briefs in support of the petitioners will be due on June 12, 2008; amicus briefs in support of the respondents will be due on July 14, 2008. Any questions about the case should be directed to Duane Layton (202-263-3811) in our Washington, D.C. office.
The Supreme Court today also invited the Solicitor General to file briefs expressing the views of the United States in two cases of interest to the business community:
Biomedical Patent Management Corp. v. California Dept. of Health Services, No. 07-956. The case presents two related questions: whether a state that waives its Eleventh Amendment immunity by voluntarily invoking federal jurisdiction may invoke immunity in a subsequent action involving the same parties and the same underlying transaction or occurrence; and whether a state waives its Eleventh Amendment immunity in patent actions by regularly and voluntarily invoking federal jurisdiction to enforce its own patent rights. Petitioner's position is that, if there is no waiver in such circumstances, states will be able to invoke Eleventh Amendment immunity selectively to maximize their patent portfolios. Mayer Brown represents the petitioner in this case.
Denton v. Hyman, No. 07-952. The question presented is whether proof of intentional misconduct is required in order to prevent a corporate officer from discharging in bankruptcy a debt owed to the corporation for misappropriation of corporate assets.