Ad Hoc Utilities Group v. U.S.

• Decision Date: 15 June 2009
• Docket Number: Court No. 06-00229.,Slip Op. 09-56.
• Citation: 625 F.Supp.2d 1330
• Parties: AD HOC UTILITIES GROUP, Plaintiff, v. UNITED STATES, Defendant, and Usec Incorporated, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

625 F.Supp.2d 1330

AD HOC UTILITIES GROUP, Plaintiff, v. UNITED STATES, Defendant, and Usec Incorporated, et al., Defendant-Intervenors.

Slip Op. 09-56.

Court No. 06-00229.

United States Court of International Trade.

June 15, 2009.

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

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Stephen C. Tosini), and, of counsel, David W. Richardson, Office of Chief Counsel for Import Administration, Department of Commerce for Defendant United States.

Steptoe & Johnson LLP (Eric C. Emerson, Alexandra E.P. Baj, Sheldon E. Hochberg, Richard O. Cunningham, Sohini Chatterjee, Thomas J. Trendl and Wentong Zheng) for Defendant-Intervenors USEC Inc. and United States Enrichment Corp.

Akin Gump Strauss Hauer & Feld LLP (Valerie A. Slater, Margaret C. Marsh, Bernd G. Janzen and Lisa W. Ross) for Defendant-Intervenors Power Resources, Inc. and Crowe Butte Resources, Inc.

Before: Pogue, Judge.

OPINION

POGUE, Judge.

The issue before the court is whether the Plaintiff, a group of American utility companies that obtain and use enriched uranium from Russia, has standing to challenge the Department of Commerce's ("Commerce") decision not to terminate its antidumping duty investigation of that uranium. Because the utility companies individually do not each qualify either as producers or importers of the subject uranium and because the companies as a group do not qualify as a trade or business association a majority of the members of which are producers or importers, the court concludes that the group lacks standing and therefore dismisses this action.

BACKGROUND

The current dispute has its roots in Commerce's 1991 initiation of an antidumping duty investigation of imports of uranium from the U.S.S.R. See Uranium from the Union of Soviet Socialist Republics, 56 Fed.Reg. 63,711 (Dep't Commerce Dec. 5, 1991) (initiation of antidumping duty investigation). Following the dissolution of the U.S.S.R., Commerce continued its investigation and preliminarily concluded that uranium imports from the newly-independent states of Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan were being "dumped," i.e., sold in the United States at less than fair value. See Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan, 57 Fed.Reg. 23,380 (Dep't Commerce June 3, 1992) (preliminary determinations of sales at less than fair value); Uranium from Armenia, Azerbaijan, Byelarus, Georgia, Moldova and Turkmenistan, 57 Fed.Reg. 23,380 (Dep't Commerce June 3, 1992) (preliminary determinations of sales at not less than fair value). Faced with these preliminary determinations, Russian and American representatives entered into negotiations concerning the trade of nuclear materials. These negotiations led to a set of agreements circumscribing the origin, amount and means for importation of Russian low enriched uranium ("LEU") into the United States, and a further 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 (the "HEU Agreement"). As part of these agreements, Commerce undertook to suspend—which is not to terminate¹—its antidumping duty investigation. See Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan, 57 Fed.Reg. 49,220 (Dep't Commerce Oct. 30, 1992) (notice of suspension of investigations and amendment of preliminary determinations). Further, also in accordance with the agreements and related legislation, Defendant-Intervenor USEC, Inc. ("USEC"), as the "United States Executive Agent," was designated as the only entity in the U.S. with authority to purchase enriched uranium from Russia, trade in such goods being generally restricted. See also USEC Privatization Act of 1996 §§ 3102-15, as amended, 42 U.S.C. §§ 2297h-1 to 2297h-13. Consequently, during the period of time relevant here, American utility companies obtained LEU of Russian origin by contracting with USEC,² even though the utility companies considered their purchase agreements to be contracts for uranium enrichment services, and not sales of LEU subject to investigation under the antidumping laws.

In related actions, Commerce also investigated sales of uranium products from other countries, and in one of these actions, USEC Inc. v. United States, 27 CIT 489, 259 F.Supp.2d 1310 (2003) ("USEC I"), this Court held that, because of Commerce's "tolling regulation"³ and prior practice,⁴ Commerce's decision to treat "SWU contracts" for uranium enrichment⁵ as sales of enriched uranium subject to antidumping investigation—rather than as "tolling" or subcontracting arrangements—was unsupported by substantial evidence, as there was no evidence that the enricher ever took ownership of the goods. 27 CIT at 506, 259 F.Supp.2d at 1326.⁶ The Federal Circuit affirmed this holding, concluding that the "SWU contracts" were contracts for services rather than for goods. See Eurodif S.A. v. United States, 411 F.3d 1355, 1364 (Fed.Cir.2005) ("Eurodif I").

Relying on Eurodif I, and pursuant to 19 U.S.C. § 1516(a)(2)(A),⁷ Plaintiff Ad Hoc Utility Group ("AHUG"),⁸ in 2006, filed this action to challenge Commerce's decision—in its second "sunset" review of the suspension of its antidumping duty investigation of uranium from Russia— that in the absence of the Russian-American agreements, continued dumping of enriched uranium was likely. See Uranium From the Russian Federation, 71 Fed. Reg. 32,517 (Dep't Commerce June 6, 2006) (final results of five-year sunset review of suspended antidumping duty investigation) ("Second Sunset Review") and the accompanying Issues and Decision Memorandum, A-821-802, Sunset Review (June 6, 2006) http://ia.ita.doc.gov/frn/summary/RUSSIA/E6-8758-1.pdf (last visited May 18, 2009) ("Decision Mem.").⁹

Addressing the issue of AHUG's standing to participate in the Second Sunset Review, Commerce treated AHUG as an "industrial user" of subject merchandise pursuant to 19 C.F.R. § 351.312,¹⁰ and concluded that, in that administrative proceeding, AHUG did not have standing as an "interested party" that is a "producer" of LEU. Decision Mem. 2 n. 1; cf. USEC I, 27 CIT at 512-13, 259 F.Supp.2d at 1331 (granting AHUG's motion to intervene as of right as an "interested party" as possible "toll" "producers" of subject merchandise, and remanding to Commerce to resolve whether AHUG members are "producers"); USEC Inc. v. United States, 27 CIT 1419, 1433, 281 F.Supp.2d 1334, 1346 (2003) ("USEC II") (affirming Commerce's practice of declining to apply the tolling regulation, and finding domestic utilities were thus not foreign producers of uranium, in the industry support context), aff'd in part, Eurodif I, 411 F.3d at 1361.

The court consolidated this case with Court No. 06-00228, Techsnabexport v. United States,¹¹ and remanded the consolidated case to Commerce to reconsider its conclusions in light of Eurodif I. Techsnabexport v. United States, 31 CIT ___, 515 F.Supp.2d 1363 (2007) ("Tenex").¹² The court found that Commerce's denial of "interested party" status did not reflect consideration of the nature of the transactions at issue here, and that therefore Commerce's determination did not reflect "consideration of] an important aspect of the problem." Tenex, 31 CIT at ___, 515 F.Supp.2d at 1364-65 n. 4 (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). Accordingly, the court allowed Commerce the opportunity to review its position regarding AHUG's status in these proceedings. Id.¹³

After reconsidering its position on remand, Commerce issued its remand results. See Final Results on Redetermination Pursuant to Court Remand, A-821-802, Suspension Agreement (Dec. 21, 2007), available at http://ia.ita.doc.gov/ remands/07-143.pdf (last visited June 11, 2009) ("Remand Results"). In these Remand Results, Commerce determined that contracts pursuant to the HEU Agreement did not meet the definition of "SWU contracts" determined in Eurodif I to be contracts for services. Id. 29-32. Thus, Commerce did not exclude these transactions from its likelihood determination. Id. Further, Commerce, in its volume of future imports analysis, relied on a public report from the International Trade Commission ("ITC"). See Uranium from Russia, USITC Pub. No. 3872, Inv. No. 731-TA-539-C (Second Review) (Aug.2006). Commerce noted the ITC report's mention of certain "contingent contracts" that the Russian uranium industry had entered into with American utilities.¹⁴ In light of ITC's reliance on these "contingent contracts," AHUG now also claims that many of its members have "entered into negotiations and signed agreements [i.e., contingent contracts] with Techsnabexport ... or its agent for the purchase of Russian EUP [i.e., enriched uranium product] or enrichment services," and that these contracts confer upon the utility companies entering into them status as importers of the subject merchandise. Supplemental Br. of the Ad Hoc Utilities Group on the Relevance and Effect of the Supreme Court's Eurodif Decision 5.

In its Remand Results, Commerce also reconsidered AHUG's status as an "interested party," but decided that AHUG did not so qualify. Remand Results 49-52. First, Commerce determined that AHUG members were not "producers," given that AHUG members "do not contract directly with the Russian LEU producer .... [,] can only receive Russian LEU [ ] from USEC itself, which USEC purchased from Tenex[,] .... [and] have no control over the Russian producer's production activities." Id. 50-51. In addition, Commerce noted that "title to the Russian LEU from HEU...