UNITED STATES v. EURODIF S. A. et al.

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Syllabus
UNITED STATES v. EURODIF S. A. et al.
certiorari to the united states court of appeals for
the federal circuit
No. 07–1059. Argued November 4, 2008—Decided January 26, 2009*
Nuclear utilities generally procure their fuel, “low enriched uranium”
(LEU), through one of two types of contracts. Under an “enriched ura
nium product” (EUP) contract, the utility simply pays the enricher cash
for LEU of a desired quantity and “assay,” i. e., its percentage of the
isotope necessary for a nuclear reaction. The amount of energy re
quired to enrich a quantity of “feed uranium” to a given assay is de
scribed in terms of an industry standard called a “separative work unit”
(SWU). Under a “SWU contract,” the utility provides a quantity of
feed uranium and pays the enricher for the SWUs to produce the re
quired LEU quantity and assay. SWU contracts do not require that
the required number of SWUs actually be applied to the utility’s ura
nium. Because feed uranium is fungible and essentially trades like a
commodity, and because profitable operation of an enrichment plant re
quires the constant processing of feed uranium from the enricher’s un
differentiated stock, the LEU provided to a utility under a SWU con
tract cannot be traced to the particular unenriched uranium the utility
provided.
Petitioners (collectively, USEC), who run the only uranium enrich
ment factory in the United States, petitioned the Commerce Depart
ment for relief under the Tariff Act of 1930, which calls for “antidump
ing” duties on “foreign merchandise” sold in this country at “less than
its fair value,” 19 U. S. C. § 1673, but does not touch international sales of
services. USEC alleged that LEU imported from European countries
under both EUP and SWU contracts was being sold in the United
States at less than fair value and was materially harming domestic in
dustry. In its final determination, the Department concluded that LEU
from France, including LEU acquired under SWU contracts, was being
sold here at less than fair value. Among other things, the Department
rejected the claim that such transactions were sales of enrichment serv
ices, as provided in SWU contracts. The Court of International Trade
(CIT) ultimately reversed, noting the “legal fiction” expressed in SWU
contracts that the very feed uranium delivered by a utility to an en
*Together with No. 07–1078, USEC Inc. et al. v. Eurodif S. A. et al.,
also on certiorari to the same court.

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Syllabus
richer is enriched and then returned as LEU to the utility. Finding
that the record did not support a determination that the enricher has
any ownership rights, the CIT reasoned that the Department’s decision
was unsupported by substantial evidence and not in accordance with
law. The Federal Circuit affirmed, approaching the issues much as
the CIT had.
Held: The Department’s take on the transactions at issue as sales of goods
rather than services reflects a permissible interpretation and application
of § 1673. Because § 1677(1) gives this determination to the Depart
ment in the first instance, the Department’s interpretation governs in
the absence of unambiguous statutory language to the contrary or an
unreasonable resolution of ambiguous language. See, e. g., Chevron
U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837.
Two threshold propositions must be accepted. First, the Department
reasonably concluded that § 1673 is not limited by its terms to cash-only
sales. If that were the case, any sale of a manufactured product could
be exempted from the section’s operation by a contractual term stating
part of the purchase price in terms of a commodity. Second, since pub
lic law is not constrained by private fiction, see, e. g., Tcherepnin v.
Knight, 389 U. S. 332, 336, the Department is not bound by the legal
fiction created by SWU contracts that the very feed uranium delivered
by a utility to an enricher is enriched and then returned as LEU to
the utility. Thus, the test of the Department’s position turns first on
whether the statute clearly excludes a transaction involving mixed pay
ment for LEU that may and almost certainly will be produced from
uranium feed distinct from what the utility provides. Although it is
undisputed that § 1673 applies to the sale of goods, not services, the
section simply does not speak with the precision necessary to say defin
itively whether it applies to the LEU and the agreement giving the
utility a right to get it. This is the very situation in which the Court
looks to an authoritative agency for a decision about a statute’s scope.
Once the choice is made, the Court asks only whether the department’s
application of the statute was reasonable. Where, as here, cash plus an
untracked fungible commodity are exchanged for a substantially trans
formed version of the same commodity, the Department may reasonably
treat the transaction as the sale of a good under § 1673. Cf. Powder Co.
v. Burkhardt, 97 U. S. 110, 116. The Department’s position is reinforced
by practical reasons aimed at preserving antidumping duties’ effective
ness. It is undisputed that such duties apply to LEU sold to a domestic
utility by foreign enrichers under an EUP contract calling for a single
cash price that is less than fair value. Such a transaction obviously
opens the domestic enrichment industry to material injury, the very

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threat that § 1673 was meant to counter. But the same injury will occur
if a SWU contract is untouchable. Under a SWU contract, the domestic
utility pays cash to a third party for unenriched uranium and provides
this along with additional cash in exchange for LEU; any EUP contract
could be structured as a SWU contract simply by splitting the transac
tion in two, one contract to buy unenriched uranium and another to
enrich it. And the restructuring would not stop with uranium; con
tracts for many types of goods would be replaced by separate contracts
for the goods and for processing services, and antidumping duties would
primarily chastise the uncreative. The Department’s attempt to fore
close this absurd result by treating such transactions as sales of goods
is eminently reasonable. Pp. 316–322.
506 F. 3d 1051, reversed and remanded.
Souter, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Stewart argued the cause for the
United States in No. 07–1059. On the briefs in No. 07–1059
were former Solicitor General Garre, Assistant Attorney
General Katsas, Deputy Solicitor General Kneedler, Leon
dra R. Kruger, John B. Bellinger III, Daniel J. Dell’Orto,
John D. McInerney, David R. Mason, Jr., Quentin M. Baird,
and David R. Hill. H. Bartow Farr III argued the cause
for petitioners USEC Inc. et al. in No. 07–1078. With him
on the briefs were Sheldon E. Hochberg, Eric C. Emerson,
Charles G. Cole, Michael A. Vatis, John P. Nolan, Peter B.
Saba, and James A. Schoettler, Jr.
Caitlin J. Halligan argued the cause for respondents in
both cases. With her on the brief for respondent Eurodif
S. A. et al. were Stuart M. Rosen, Gregory Silbert,
W. Andrew Ryu, and Lisa R. Eskow. Nancy A. Fischer,
Stephan E. Becker, David J. Cynamon, Joshua D. Fitzhugh,
and Christine J. Sohar filed a brief for respondent Ad Hoc
Utilities Group.†
†David A. Hartquist, Kathleen W. Cannon, Jonathan P. Hiatt, and
Paul Whitehead filed a brief for the Committee to Support U. S. Trade
Laws et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for Alcoa, Inc., by
Catherine E. Stetson, Lewis E. Leibowitz, and Jessica L. Ellsworth; for

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308 UNITED STATES v. EURODIF S. A.
Opinion of the Court
Justice Souter delivered the opinion of the Court.
Section 731 of the Tariff Act of 1930 calls for “antidump
ing” duties on “foreign merchandise” sold in the United
States at “less than its fair value,” 19 U. S. C. § 1673, but
does not touch international sales of services. These cases
test the application of this antidumping provision to imports
of low enriched uranium (LEU), a highly processed deriva
tive of natural uranium used as nuclear fuel, when domestic
utilities contract to obtain LEU for cash plus unenriched
uranium delivered to a foreign enricher. Although the par
ties’ contracts call these transactions sales of uranium en
richment services, the Commerce Department treats them
as sales of “foreign merchandise” subject to the antidump
ing provision. The issue is whether the Commerce Depart
ment’s way of seeing the transactions as sales of goods rather
than services reflects a permissible interpretation and appli
cation of § 1673. We hold that it does.
I
There are five steps in transforming elemental uranium
into fuel rods for nuclear powerplants. After uranium ore
is mined, it is milled into uranium concentrate called “yellow
cake,” which is next converted into uranium hexafluoride gas
or “feed uranium.” The fissionable isotope in unenriched
feed uranium is then concentrated, producing LEU in pellet
form, which is in turn made into uranium fuel rods. These
cases are about the fourth step: enriching uranium feed
stock into LEU.
The uranium isotope needed for a nuclear reaction, U–235,
amounts only to 0.711 percent by weight of natural uranium.
Uranium whose concentration or “assay,” of U–235 has been
the National Atomic Co. “Kazatomprom” by Thomas B. Wilner and Robert
S. LaRussa; and for Techsnabexport by Carolyn B. Lamm, Frank J.
Schweitzer, Adams C. Lee, and Joanna M. Ritcey-Donohue.
Gregory S. Coleman, Edward C. Dawson, Marc S. Tabolsky, and
Stephen R. McAllister filed a brief for Raj Bhala as amicus curiae.

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enhanced to 20 percent or more is weapons-grade, highly en
riched uranium, whereas LEU has a U–235 assay of 3 to
5 percent, making it useful as nuclear fuel. One way to
produce LEU, and the method at issue in these cases, is gas
eous diffusion,1 whereby gaseous feed uranium is pushed
through a long series of filters, separating the gas into two
streams. The stream passing through the filters (the “prod
uct stream”) gains a higher concentration of the lighter
U–235 isotope than the stream that is filtered out (the
“tails”). Because the concentration reached at each individ
ual filter is minor, the gas must be forced through hundreds
or even thousands of filters, at great expenditure of electric
ity, before the product stream reaches the desired assay.
The amount of energy required to enrich a quantity of feed
uranium to a given assay is measured in terms of an industry
standard called a “separative work unit” or SWU (pro
nounced “swoo”). In practice, however, a given degree of
enrichment will depend on adjusting the quantities of two
separate variables, feed uranium and electricity, in inverse
proportions. Thus, if the electric rate is stable but the value
of feed uranium falls, an enricher may produce LEU by
“overfeeding,” subjecting a greater quantity of feed uranium
to fewer SWUs, and when the value of feed uranium goes up
and electricity does not, “underfeeding” can use more SWUs
to squeeze extra U–235 from the tails.
Nuclear utilities generally get LEU in one of two ways.
Under an “enriched uranium product” or “EUP” contract, a
utility simply buys a desired quantity and assay of LEU for
cash. Under a “SWU contract,” the utility provides a quan
tity of feed uranium and pays the enricher for the SWUs to
produce the quantity and assay of LEU called for.2 Despite
1 LEU can also be produced through a centrifuge method or by back
blending unenriched uranium with weapons-grade uranium.
2 Many SWU contracts give the utility the option of providing a compa
rable quantity of uranium concentrate in lieu of the specified feed uranium.
App. 13, 83, 268–269 (Sealed).

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their name, SWU contracts do not require that the contrac
tual number of SWUs actually be applied to the quantity of
uranium provided, Notice of Final Determination of Sales at
Less Than Fair Value: Low Enriched Uranium From France,
66 Fed. Reg. 65877, 65884 (2001) (hereinafter LEU from
France); rather, the enricher remains free to overfeed or un
derfeed so long as it delivers the specified LEU. Moreover,
because feed uranium is fungible, and “for all intents and
purposes, trades like a commodity,” ibid., and because prof
itable operation of an enrichment plant requires the con
stant processing of feed uranium from the enricher’s undif
ferentiated stock, the LEU provided to a utility under a
SWU contract cannot be traced to the particular unenriched
uranium the utility provided.
Petitioners, USEC Inc. and its subsidiary, United States
Enrichment Corporation (USEC collectively), run the only
uranium enrichment factory in the United States,3 which was
built by the United States Government in the 1950s and run
by various federal agencies until it was leased to USEC in
1998. In December 2000, USEC petitioned the Commerce
Department for relief under § 731 of the Tariff Act, alleging
that LEU imported from France and other European coun
tries under both EUP and SWU contracts was being sold in
the United States at less than fair value and was materially
harming domestic industry. Notice of Initiation of Anti
dumping Duty Investigations: Low Enriched Uranium From
France, Germany, the Netherlands, and the United Kingdom,
66 Fed. Reg. 1080 (2001).
Section 731 of the Tariff Act of 1930, as added by § 101 of
the Trade Agreements Act of 1979, 93 Stat. 162, as amended,
19 U. S. C. § 1673, provides a two-step process to address
3 There are only five major uranium enrichers in the world, a scarcity
that illustrates the “huge financial investment in facilities and a technically
skilled work force” necessary to support the enrichment process. LEU
from France, 66 Fed. Reg. 65884.

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harm to domestic manufacturing from foreign goods sold at
an unfair price:
“If—
“(1) the administering authority [the Secretary of
Commerce] 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 [United States International Trade] Commis
sion 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 reason
of sales (or the likelihood of sales) of that merchandise
for importation,
“then there shall be imposed upon such merchandise an
antidumping duty, in addition to any other duty imposed,
in an amount equal to the amount by which the normal
value exceeds the export price (or the constructed ex
port price) for the merchandise. . . . ”
See also § 1677(1) (designating the Secretary of Commerce
as the “ ‘administering authority’ ”); § 1677(2) (explaining that
the term “ ‘Commission’ ” refers to the United States Inter
national Trade Commission).
The Tariff Act’s antidumping provision derives from simi
lar terms in the Anti-Dumping Act, 1921, 42 Stat. 11, which
were adopted to “protec[t] our industries and labor against a
now common species of commercial warfare of dumping
goods on our markets at less than cost or home value if nec
essary until our industries are destroyed . . . .” H. R. Rep.
No. 1, 67th Cong., 1st Sess., 23 (1921).
Following the USEC charges, the Commerce Department
opened an investigation into the practices of respondents, a

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French enricher, Eurodif S. A., its owner, Compagnie Ge´ n
e´ ral des Matie` res Nucle´ aires (now AREVA NC), its U. S.
subsidiary, COGEMA (now AREVA NC, Inc.), and United
States utilities that consume LEU (Eurodif collectively).
Eurodif conceded that EUP contracts were for the sale of
LEU, but argued that SWU contracts involved only the sale
of uranium enrichment services, and were therefore out
side the scope of § 1673. LEU from France, 66 Fed. Reg.
65882–65883.
In its final determination, the Commerce Department con
cluded that LEU from France, including LEU acquired
under SWU contracts, was being sold, or likely to be sold, in
the United States at less than fair value.4 Id., at 65878. In
deciding that SWU contracts are for a sale of LEU, not en
richment services, the Department stressed several features
of the transactions. First, because the enrichment process
accounts for approximately 60 percent of the value of LEU
and works a “substantial transformation” on uranium feed
stock, id., at 65881, enrichment creates “the essential charac
ter” of LEU, id., at 65884. Second, “enrichers not only have
complete control over the enrichment process, but in fact
control the level of usage of the natural uranium provided.”
Ibid. Third, the utilities themselves take no part in the
manufacture of LEU and are the sole purchasers of the prod
uct. Ibid.
The Commerce Department also rejected the argument
that LEU transferred pursuant to SWU contracts should not
be considered “sold” in light of a “tolling” regulation then
(but no longer) in effect. Ibid. The regulation stated that
a “toller,” a subcontractor who sells processing services in,
4 The Commerce Department concluded in a separate determination that
LEU from the United Kingdom, Germany, and the Netherlands was not
being sold, or likely to be sold, at less than fair value. Notice of Final
Determinations of Sales at Not Less Than Fair Value: Low Enriched Ura
nium From the United Kingdom, Germany and the Netherlands, id., at
65886.

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or material for incorporation into, subject merchandise,
would not be considered a manufacturer or producer “where
the toller or subcontractor does not acquire ownership, and
does not control the relevant sale, of the subject merchan
dise.” 19 CFR § 351.401(h) (2000) (withdrawn in Import
Administration, Withdrawal of Regulations Governing the
Treatment of Subcontractors (“Tolling” Operations), 73 Fed.
Reg. 16517 (2008) (hereinafter Tolling Operations)). This
regulation, the Commerce Department explained, was in
tended to apply in situations where a good is first sold by a
manufacturer and then resold by an exporter or reseller.
LEU from France, 66 Fed. Reg. 65880. The regulation pro
vides that in such a situation the second sale should be used
to calculate the U. S. price and normal value of the manufac
tured good; however, the Commerce Department concluded,
the regulation was not meant to preclude antidumping duties
where a manufacturer makes the only relevant sale that can
be used to establish U. S. price and normal value. Ibid.; id.,
at 65884–65885.
Finally, the Commerce Department reasoned that lan
guage in SWU contracts speaking of the transactions as the
sale of enrichment services could not control, lest deferring
to the parties’ characterizations allow them to “convert trade
in goods into trade in so-called ‘manufacturing services,’ . . .
thereby exposing industries to injury by unfair trade prac
tices without the remedy of the [antidumping] laws.” Id., at
65881. In economic reality, the Commerce Department said,
“the contracts designated as SWU contracts are functionally
equivalent to those designated as EUP transactions.” Id.,
at 65885.5
5 In February 2002, the International Trade Commission found that im
ports of LEU from France materially injured the enrichment industry in
the United States, allowing the imposition of antidumping duties. U. S.
Int’l Trade Comm’n, Low Enriched Uranium From France, Germany, the
Netherlands, and the United Kingdom (Pub. No. 3486).

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Eurodif challenged the Department’s determination before
the Court of International Trade (CIT), which remanded for
“a more persuasive explanation” of the tolling regulation.
USEC Inc. v. United States, 259 F. Supp. 2d 1310, 1326
(2003). On remand, the Commerce Department repeated
that the tolling regulation governed which price should be
used to calculate antidumping duties, not whether imports
are subject to the antidumping provision in the first instance.
Final Remand Determination, USEC Inc. and United States
Enrichment Corp. v. United States (June 23, 2003), App. G
to Pet. for Cert. 211a (hereinafter Final Remand Determina
tion). The Department further explained its conclusion that
SWU contracts lead to transfers of LEU for consideration.
The contracts and other evidence in the record convinced the
Department that “enrichers own, and hold title to, all the
LEU they produce,” id., at 217a, a conclusion grounded on
findings that “enrichers hold inventories of uranium from
various sources, including uranium owned by the enricher
itself, and produce LEU without relying solely upon the
input from a particular customer.” Id., at 221a. Finally,
the Department emphasized that the enrichers “have com
plete control over the enrichment process and control the
amount of uranium and energy actually used in producing
the LEU.” Id., at 231a.
The CIT was unconvinced and reversed, relying on what
it candidly recognized as a “legal fiction” expressed in SWU
contracts, “that the very feed uranium delivered by a utility
to an enricher is enriched and then returned as LEU to the
utility.” USEC Inc. v. United States, 281 F. Supp. 2d 1334,
1339 (2003). The CIT reasoned, because “nothing in the rec
ord support[ed] a determination that the enricher has any
ownership rights,” the Commerce Department’s determina
tion was “unsupported by substantial evidence and not in
accordance with law.” Id., at 1340.
USEC challenged this conclusion in an interlocutory ap
peal to the Court of Appeals for the Federal Circuit, which

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affirmed. Eurodif S. A. v. United States, 411 F. 3d 1355
(2005) (Eurodif I). The court approached the issues much
as the CIT had, with the observation that “the SWU con
tracts in this case do not evidence any intention by the par
ties to vest the enrichers with ownership rights in the deliv
ered unenriched uranium or the finished LEU.” Id., at 1362.
It recalled that in a previous case, Florida Power & Light
Co. v. United States, 307 F. 3d 1364 (CA Fed. 2002), it had
accepted the Government’s position that SWU contracts
were for services, not for “ ‘disposal of personal property,’ ”
and so were outside the cause of action provided by the Con
tract Disputes Act of 1978, 41 U. S. C. § 601 et seq. Eurodif
I, supra, at 1363, and n. 3 (quoting Florida Power & Light
Co., supra, at 1373). While the court conceded that SWU
agreements “do ‘not fall neatly’ either into the category of
contracts for services or the category of contracts for the
sale of goods,” 411 F. 3d, at 1364 (quoting Florida Power &
Light Co., supra, at 1373–1374), it still concluded that “even
under the deferential standard of review that we apply in
this case, we choose not to ignore our previous holdings,”
Eurodif I, supra, at 1363.
Shortly after this decision, we held in National Cable &
Telecommunications Assn. v. Brand X Internet Services,
545 U. S. 967, 982–983 (2005), that a court’s choice of one rea
sonable reading of an ambiguous statute does not preclude
an implementing agency from later adopting a different rea
sonable interpretation. On rehearing, the Federal Circuit
responded to National Cable & Telecommunications Assn.
by explaining that it had not rejected the Commerce Depart
ment’s position because it conflicted with the prior interpre
tive choice that carried the day in Florida Power & Light.
Eurodif S. A. v. United States, 423 F. 3d 1275, 1277–1278
(2005). The Circuit, rather, saw no statutory uncertainty to
be resolved: “the antidumping duty statute unambiguously
applies to the sale of goods and not services” and “it is clear
that [SWU] contracts are contracts for services and not

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goods.” Id., at 1278. After final judgment was entered,
Eurodif S. A. v. United States, 506 F. 3d 1051, 1053 (CA
Fed. 2007), we granted certiorari, 553 U. S. 1003 (2008), to
consider whether transactions under SWU contracts may be
subjected to antidumping duties under the Tariff Act. We
now reverse.
II
The issue is not whether, for purposes of 19 U. S. C. § 1673,
the better view is that a SWU contract is one for the sale of
services, not goods. The statute gives this determination to
the Department of Commerce in the first instance, § 1677(1),
and when the Department exercises this authority in the
course of adjudication, its interpretation governs in the ab
sence of unambiguous statutory language to the contrary
or unreasonable resolution of language that is ambiguous.6
United States v. Mead Corp., 533 U. S. 218, 229–230 (2001)
(citing Chevron U. S. A. Inc. v. Natural Resources Defense
Council, Inc., 467 U. S. 837 (1984)). This is so even after a
change in regulatory treatment, which “is not a basis for
declining to analyze the agency’s interpretation under the
Chevron framework.” National Cable & Telecommunica
tions Assn., 545 U. S., at 981. “ ‘[T]he whole point of Chev
ron is to leave the discretion provided by the ambiguities of
a statute with the implementing agency.’ ” Ibid. (quoting
Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735,
742 (1996)).7
6 The specific factual findings on which an agency relies in applying its
interpretation are conclusive unless unsupported by substantial evidence.
5 U. S. C. § 706(2)(E).
7 Respondents’ assertion that the Commerce Department’s prior tolling
regulation is inconsistent with its position in these cases is therefore be
side the point. For the reasons given by the Department in its remand
determination, we are not convinced that the tolling regulation precludes
viewing SWU transactions as the sale of LEU; but even if it did, it has
since been withdrawn, Tolling Operations, 73 Fed. Reg. 16517, and cannot
now constrain the Commerce Department’s interpretive authority under
Chevron. National Cable & Telecommunications Assn., 545 U. S., at 981

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In approaching the Department’s position on the applica
tion of § 1673, two threshold propositions must be taken as
given. First, we think the Department reasonably con
cluded that § 1673 is not limited by its terms to cash-only
sales. Otherwise, any sale of a manufactured product could
be exempted from the operation of § 1673 by a contractual
term stating part of the purchase price in terms of a
commodity.8
Second, in applying § 1673, the Commerce Department is
not bound by the “legal fiction [created by SWU contracts]
that the very feed uranium delivered by a utility to an en
richer is enriched and then returned as LEU to the utility.”
USEC, 281 F. Supp. 2d, at 1339. The parties are free to
contract as they wish, and they may genuinely regard SWU
agreements as contracts for the sale of enrichment services.
But, whatever the significance of such a term in a contract
dispute, cf. Florida Power & Light Co., 307 F. 3d 1364, it is
well settled that in reading regulatory and taxation statutes,
“form should be disregarded for substance and the emphasis
(“Unexplained inconsistency is, at most, a reason for holding an interpreta
tion to be an arbitrary and capricious change from agency practice under
the Administrative Procedure Act”). Likewise, even if the position taken
by the Department of Energy in Florida Power & Light Co. v. United
States, 307 F. 3d 1364 (CA Fed. 2002), was inconsistent with the Gov
ernment’s position here, it would not speak to the deference owed the
Commerce Department under Chevron.
8 Respondents argue that, after determining that SWU contracts in
volved the sale of LEU, the Commerce Department employed an imper
missible methodology by constructing the normal value of the LEU based
on the combined costs to Eurodif of obtaining feed uranium and enrich
ment. Brief for Respondent Eurodif S. A. et al. 48–50. These calcula
tions, respondents argue, “were a charade, underscoring that the anti
dumping law[s] cannot be applied to these SWU contracts.” Id., at 48.
To the degree respondents’ argument is that antidumping duties may
never be applied to mixed cash-commodity sales, it is doomed by implausi
bility. If respondents are contending that the Commerce Department’s
dumping determination improperly assessed the normal value of LEU,
they are raising an issue well outside the scope of our grant of certiorari.

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should be on economic reality,” Tcherepnin v. Knight, 389
U. S. 332, 336 (1967). See also Frank Lyon Co. v. United
States, 435 U. S. 561, 573 (1978) (“ ‘In the field of taxation,
administrators of the laws, and the courts, are concerned
with substance and realities, and formal written documents
are not rigidly binding’ ” (quoting Helvering v. F. & R. Laza
rus & Co., 308 U. S. 252, 255 (1939))). Surrender to private
contractual terms is especially uncalled for in dealing with
international tariffs, as Congress saw when it amended the
Tariff Act to say that the sale of foreign merchandise in
cludes “the entering into of any leasing arrangement regard
ing the merchandise that is equivalent to the sale of the mer
chandise.” Trade and Tariff Act of 1984, § 602(b)(2), 98 Stat.
3024, 19 U. S. C. § 1673.
Since public law is not constrained by private fiction, the
test of the Department’s position turns first on whether
the statute clearly excludes a transaction involving mixed
payment for LEU that may and almost certainly will be
produced from uranium feed distinct from what the utility
provides. No one disputes that § 1673 applies to the sale of
goods, not services, LEU from France, 66 Fed. Reg. 65882–
65883. Nor do we think anyone would deny that the ex
change of cash combined with a commodity for a product
that uses that very commodity as a constituent material is
sometimes a sale of services and sometimes a sale of goods,
the distinction being clear at the extremes. A customer
who comes to a laundry with cash and dirty shirts is clearly
purchasing cleaning services, not clean shirts. And a cus
tomer who provides cash and sand to a manufacturer of ge
neric silicon processors is clearly buying computer chips
rather than sand enhancement services.
But the line blurs when the facts get more complicated,
and SWU contracts exemplify a class of transactions that the
Federal Circuit recognized does “ ‘not fall neatly’ either into
the category of contracts for services or the category of con
tracts for the sale of goods.” Eurodif I, 411 F. 3d, at 1364

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(quoting Florida Power & Light Co., supra, at 1373–1374).
The agreement is not like the laundry ticket, which says that
the same shirts are supposed to come back, just minus the
dirt around the collar. And it is not on all fours with the
agreement of the chip buyer and the manufacturer, in which
it is inescapable that the silicon processors delivered are a
separate good from the sand provided. Section 1673 simply
does not speak with the precision necessary to say defini
tively whether it applies to the LEU and the agreement that
gives the utility a right to get it.
This is the very situation in which we look to an authorita
tive agency for a decision about the statute’s scope, which
is defined in cases at the statutory margin by the agency’s
application of it, and once the choice is made we ask only
whether the department’s application was reasonable. As
to that, the Commerce Department relied on two related
characteristics of these transactions in deciding SWU con
tracts should be treated as a sale of LEU. It stressed that
the utility in a SWU contract provides cash plus a fungible
commodity that is not tracked after its delivery to the en
richer, in exchange for a product owned by the enricher.9
9 Eurodif argues that the Commerce Department erred in concluding
that enrichers own LEU prior to its delivery under a SWU contract. Id.,
at 36–37. While the precise form of this argument is unclear, it fails
under any reading. Respondents seem to mean that the Commerce De
partment’s interpretation of § 1673 is impermissible as being inconsistent
with the formal terms of SWU contracts, an argument we rejected above.
The argument could also be read to suggest that the Commerce Depart
ment lacked substantial evidence to conclude that, contractual formalities
aside, enrichers in fact own the LEU provided under SWU contracts prior
to its delivery. But the evidence in the record not only supports the De
partment’s conclusion, it compels it. It is undisputed that the LEU deliv
ered under a SWU contract is not actually derived from the feed uranium
provided as consideration; as the CIT observed, the notion that the same
feed uranium delivered by a utility to an enricher is enriched and then
returned as LEU to the utility is “a legal fiction.” USEC Inc. v. United
States, 281 F. Supp. 2d 1334, 1339 (2003). Moreover, the enricher is free
to vary the amount of feed uranium used to produce an order of LEU,

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And it recognized that the enrichment process results in a
substantial transformation of the unenriched uranium.
The combination of these characteristics reasonably cap
tures a common understanding of the sale of a good. Be
cause an individual’s shirts are not fungible, they are tracked
during the cleaning process and returned to the same cus
tomer who brought them in; there are no good reasons to
treat them as owned for a time by the laundry, and no one
does. And without any transfer of ownership, the salient
feature of the transaction is the cleaning of the shirt, a serv
ice. Conversely, where a constituent material is untracked
and fungible, ownership is usually seen as transferred, and
the transaction is less likely to be a sale of services, as the
Court explained years ago in distinguishing a common law
bailment from a sale:
“[W]here logs are delivered to be sawed into boards, 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 manufacturer 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 a loan, and the
title to the thing delivered vests in the manufacturer.”
Powder Co. v. Burkhardt, 97 U. S. 110, 116 (1878).10
either stockpiling feed uranium or supplementing its stores from other
sources. Finally, the SWU contracts at issue provide that the utility re
tains title to the feed uranium until delivery of the LEU, at which point
it obtains title in the LEU. In light of this process, some entity must
own the LEU prior to delivery and obtain title to the feed uranium after
delivery, absent some modern analog to the abhorrent possibility of an
abeyance of seizen; the enricher is the only serious candidate.
10 Common law definitions do not necessarily control the meaning of
terms in modern trade laws; we merely mean to show the long pedigree
of the distinction relied upon by the Commerce Department.

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And when the manufacturer is not only free to return differ
ent material, but also substantially transforms the material
it uses, it is even more likely that the object of the transac
tion will be seen as a new product, not work on enduring
material of primary interest to the buyer. After all, what
makes the hypothetical exchange of sand for silicon proces
sors so obviously a sale of goods is the extreme transforma
tion brought about by the chip manufacturer.
These are good analytical grounds to show that SWU
transactions are reasonably placed within the ambit of sale
of goods, and the Department’s reliance on them is reinforced
by practical reasons aimed at preserving the effectiveness of
antidumping duties. There is no dispute that LEU sold
under an EUP contract at less than fair value must be sub
jected to antidumping duties under § 1673, there being a
clear sale of goods when a domestic utility pays a single sale
price in cash for the feed uranium and enrichment compo
nents represented by LEU. If foreign enrichers set this
price below the fair value of LEU, the domestic enrichment
industry is obviously open to material injury, the very threat
the antidumping statute was meant to counter, see H. R.
Rep. No. 1, at 23. But the same injury would occur if a
SWU contract were untouchable. Under a SWU contract,
the domestic utility pays cash to a third party for unenriched
uranium and provides this along with additional cash in ex
change for LEU; any EUP contract could be structured as a
SWU contract simply by splitting the transaction in two, one
contract to buy unenriched uranium and another to enrich
it.11 And the restructuring would not stop with uranium;
11 This would be particularly easy in these cases, since COGEMA, Eu
rodif ’s parent company, “is a major world supplier of natural uranium for
the production of LEU.” Final Remand Determination, App. G to Pet.
for Cert. 221a, n. 38. In fact, many SWU contracts provide that if a util
ity fails to deliver feed uranium, the enricher will substitute feed uranium
of its own, which may then be purchased from the enricher. App. 13–14,
185–186, 537 (Sealed).

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contracts for imported pasta would be replaced by separate
contracts for wheat and wheat processing services, sweater
imports would give way to separate contracts for wool and
knitting services, and antidumping duties would primarily
chastise the uncreative.12 The Commerce Department’s at
tempt to foreclose this absurd result by treating SWU trans
actions as sales of goods is eminently reasonable.
III
Where a domestic buyer’s cash and an untracked, fungible
commodity are exchanged with a foreign contractor for a
substantially transformed version of the same commodity,
the Commerce Department may reasonably treat the trans
action as the sale of a good under § 1673. We therefore re
verse the judgment of the Federal Circuit and remand the
cases for further proceedings consistent with this opinion.
It is so ordered.
12 Eurodif suggests the Commerce Department could combat such cir
cumvention of antidumping duties by taxing domestic downstream sales
of such products. Brief for Respondent Eurodif S. A. et al. 53–54. But
this ignores the substantial number of manufactured goods that are not
resold. More fundamentally, this argument fails to explain why the Com
merce Department should be required to chase after downstream resellers
when the first sale has the same economic substance.