Former Employees of Barry Callebaut v. Herman

• Decision Date: 02 November 2001
• Docket Number: No. 00-05-00202.,Slip Op. 01-127.,00-05-00202.
• Citation: 177 F.Supp.2d 1304
• Parties: FORMER EMPLOYEES OF BARRY CALLEBAUT, Plaintiff, v. HERMAN, United States Secretary of Labor, Defendant.
• Court: U.S. Court of International Trade

177 F.Supp.2d 1304

FORMER EMPLOYEES OF BARRY CALLEBAUT, Plaintiff, v. HERMAN, United States Secretary of Labor, Defendant.

Slip Op. 01-127.

No. 00-05-00202.

United States Court of International Trade.

November 2, 2001.

Coudert Brothers (Steven H. Becker, Scott D. Schauf, and Paul A. Horowitz), New York City, for Plaintiffs.

Stuart E. Schiffer, Acting Assistant Attorney General; David M. Cohen, Director; Velta A. Melnbrencis, Assistant Director, U.S. Department of Justice, Civil Division, Commercial Litigation Branch (Franklin E. White, Jr.), Washington, D.C., for Defendant.

OPINION

WALLACH, District Judge.

I INTRODUCTION

This case is before the court following the United States Department of Labor's ("Labor" or the "Department") voluntary remand of January 31, 2001. Plaintiffs, Former Employees of Barry Callebaut ("Former Employees") filed petitions for transitional adjustment assistance ("TAA") and NAFTA transitional adjustment assistance ("NAFTA TAA"). Following the voluntary remand, Labor denied Plaintiffs' eligibility for both programs. Barry Callebaut USA, Incorporated, Van Leer Division, Jersey City, New Jersey; Notice of Negative Determination on Remand ("Remand Determination"), 66 Fed.Reg. 18116 (Dep't Labor, Apr. 5, 2001). For the reasons set forth below, the Remand Determination is remanded to Labor for further investigation.

II BACKGROUND

Barry Callebaut Van Leer Division (the "plant") was a manufacturing plant in Jersey City, New Jersey, which produced finished chocolate products and related ingredients. See Plaintiffs' Comments on Defendant's Negative Determination on Remand ("Plaintiffs' Comments") at 4 (listing the products as including, but not limited to, cocoa butter, chocolate liquor, sugar-free chocolate and chocolate snaps). The plant began laying off employees in late Spring 1999 and closed in April 2000. See id. at 4-5.

On July 9, 1999, employees who were slated for lay off applied for TAA, claiming that their previous employer Van Leer was bought by Barry Callebaut (the "company"), and that Barry Callebaut was shifting production to Canada, resulting in their separations. Confidential Administrative Record at 5; see also Plaintiffs' Comments at 5; Investigations Regarding Certifications of Eligibility to Apply for Worker Adjustment Assistance, 64 Fed. Reg. 65728 (Dep't Labor, Nov. 23, 1999).

On August 12, 1999, after having been laid off, the employees filed a petition for NAFTA TAA. They claimed that the lay offs resulted from shifts in production to and imports from Canada. Administrative Record—Business Confidential Information Supplemental ("Adm. Rec. I") at 1; see also Plaintiffs' Comments at 5; Investigations Regarding Certifications of Eligibility to Apply For NAFTA Transitional Adjustment Assistance, 64 Fed.Reg. 55757 (Dep't Labor, Oct. 14, 1999).

Labor initiated an investigation in which it sent a NAFTA TAA Confidential Data Request Questionnaire ("NAFTA TAA Questionnaire") to Barry Callebaut. See Plaintiffs' Comments at 5. It obtained questionnaire responses dated October 15, 1999, from the company's Human Resources Manager. Adm Rec. I at 8-14; see Plaintiffs' Comments at 5; Defendant's Memorandum in Opposition to Plaintiffs' Comments on Defendant's Negative Determination on Remand ("Defendant's Response") at 3. In its response, the company stated that there was no recent decline in production or increase in imports, and that no shift of production to Canada was planned. Adm Rec. I at 9; see Plaintiffs' Comments at 6; Defendant's Response at 3. Two weeks later, on October 25, 1999, in response to Labor's inquiry about a decline in production at the plant, the company said that production was being shifted to other domestic plants. Adm Rec. I at 16-17; see Plaintiffs' Comments at 6; Defendant's Response at 4.

Labor relied upon the company's unverified questionnaire responses in denying the petitions for TAA and NAFTA TAA. Adm Rec. I at 18-22; see Plaintiffs' Comments at 6-7; Defendant's Response at 4; see also Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 64 Fed. Reg. 72690, 72691 (Dep't Labor, Dec. 28, 1999) (stating that the TAA claim was denied for failure to meet the criterion of an "increase[] of imports of articles like or directly competitive with articles produced by the firm or appropriate subdivision hav[ing] contributed importantly to the separations".); Notice of Determinations Regarding Eligibility To Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 65 Fed.Reg. 5690, 5691 (Dept' Labor, Feb. 4, 2000) (stating that the NAFTA TAA claim was denied because "[i]mports from Canada or Mexico did not contribute importantly to workers' separations. There was no shift in production from the subject firm to Canada or Mexico during the relevant period.").

On January 13, 2000, one of the Former Employees, Robert Bloom, requested that Labor reconsider its negative determination. He claimed that 30% or more of production from the plant had been shifted or was in the process of being shifted to Canada, and that equipment was being dismantled and sent to Canada. Adm Rec. I at 40-41; Plaintiffs' Comments at 7. Labor granted his request. Barry Callebaut, USA, Incorporated Van Leer Division Jersey City, New Jersey; Notice of Affirmative Determination Regarding Application for Reconsideration, 65 Fed.Reg. 5690 (Dep't Labor, Feb. 4, 2000).

The Department then initiated a second investigation. It sent a letter on January 24, 2000, to the Human Resources Manager requesting additional information. Adm Rec. I at 46-47. The letter laid out Plaintiffs' claims as made in the request for reconsideration. Labor's first question was, "We ask that you respond to the petitioners claims." Id. at 46. In its February 16, 2000, submission, the company did not respond to this question. Id. at 51. The remaining questions related to production shifts to and imports from Canada and other foreign countries. Id. at 46-47. Labor stated that "[t]he company has responded that it expects to shift some production from Jersey City to Canada in the near future, but to date, no shift has occurred." Barry Callebaut USA, Incorporated, Van Leer Division, Jersey City, New Jersey; Notice of Negative Determination on Reconsideration ("Reconsideration Determination"), 65 Fed.Reg. 13991 (Dep't Labor, Mar. 15, 2000). The company stated that it "did not import any chocolate products or ingredients from Canada" and that "except for cocoa powder, the company did not import any chocolate product or ingredients from any other foreign country." Defendant's Response at 7. This information, like the information from the first investigation, was sent by the Human Resources Manager. See id. Without verifying his response, Labor affirmed its negative determination. See id.; Reconsideration Determination, 65 Fed. Reg. at 13991.

Mr. Bloom then filed this suit on behalf of the Former Employees. After Defendant answered, Plaintiffs filed a Motion for Judgment on the Agency Record. In response, Defendant filed a Motion for a Voluntary Remand "for the purpose of allowing the agency to conduct an additional investigation and to make a redetermination as to whether petitioners qualify for certification for" TAA and/or NAFTA TAA. Defendant's Motion for Voluntary Remand at 2.

Labor then initiated a third investigation. On February 12, 2001, it requested detailed information from the Accounting Manager of Barry Callebaut, USA, Inc. regarding the organizational structure of the company; the products produced at the Jersey City plant; where production and machinery were shifted once the plant closed; sales, production and imports for each product produced; and the plant's major customers.¹ Adm Rec. II at 3. Labor also asked the company to "provide comments or documentation that would contradict the Department's negative determination" as to worker eligibility. Id. at 4. Labor's request was forwarded to Ms. Isabelle Eysseric, who appears to be the company Spokesperson,² and she responded on February 26, 2001.³ According to a chart she submitted, only [a very small percentage] of the Jersey City plant's production was transferred to the plant at St. Hyacinthe, Quebec, Canada. Id. at 41. The submission indicates that all other production was transferred to other domestic plants. Id.

Based upon the unverified information provided by Ms. Eysseric, Labor found that "[a] negligible amount of" production of products formerly produced at the plant "was shifted to Canada." Remand Determination. The three ingredient products produced at the Jersey City plant were chocolate liquor, cocoa butter and cocoa cake. Supplemental Confidential Administrative Record at 42. Labor found that imports of chocolate liquor were negligible, purchases of chocolate cake increased but domestic production also increased significantly, and imports of cocoa butter accounted for a "negligible portion of the company's domestic needs." Remand Determination. The finished products made at the plant were chocolate, sugar-free chocolate and chocolate snaps, and the Department found that the "vast majority" of production of these items "was shifted to other Barry Callebaut domestic locations." Id. Based on these findings, Labor affirmed its previous determinations and denied the petitions for TAA and NAFTA TAA. Id.

The Motion presently before the court followed. Plaintiffs challenge the denials of their petitions, claiming that Labor conducted an inadequate investigation. Plaintiffs' Comments at 1-2. They argue that Labor failed to "perform a reasoned analysis" of the record evidence, failed to inquire into contradictory information in the record, and "reached material conclusions for which there is no supporting evidence in the administrative record". Id.

III JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction under 28 U.S.C. §...