Former Employees of Chevron v. U.S. Sec.

• Decision Date: 28 October 2002
• Docket Number: SLIP OP. 02-131.,Court No. 00-08-00409.
• Citation: 245 F.Supp.2d 1312
• Parties: FORMER EMPLOYEES OF CHEVRON PRODUCTS COMPANY, Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.
• Court: U.S. Court of International Trade

245 F.Supp.2d 1312

FORMER EMPLOYEES OF CHEVRON PRODUCTS COMPANY, Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.

SLIP OP. 02-131.

Court No. 00-08-00409.

United States Court of International Trade.

October 28, 2002.

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Meeks & Sheppard, (Ralph H. Sheppard and Diane L. Weinberg), for Plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Henry R. Felix); Louisa Reynolds, Of of the Solicitor, U.S. Department of Labor, for Defendant, of counsel.

OPINION

RIDGWAY, Judge.

In this action, Plaintiffs—former employees of the Roosevelt Terminal division of Chevron Products Company ("the Roosevelt Workers")—contest both the denial of their petition for adjustment assistance benefits under the North American Free Trade Agreement ("NAFTA") Implementation Act and the determination of the U.S. Department of Labor ("Labor Department") declining to reconsider its denial of that petition, as well as the agency's separate determination denying them benefits as secondarily-affected workers under the Statement of Administrative Action accompanying the NAFTA Implementation Act.

Pending before the Court is Plaintiffs' Motion for Judgment on the Agency Record, which seeks "an order reversing [the Labor Department's] determinations and awarding adjustment assistance" or, in the alternative, a remand to the Department for further investigation. See Memorandum in Support of Plaintiffs Motion for Judgment on the Agency Record ("Plaintiffs' Brief) at 2, 8, 12-13; Plaintiffs Reply to Defendant's Response in Opposition to Plaintiffs Motion for Judgment on the Agency Record ("Plaintiffs' Reply Brief) at 4, 5. The Government opposes Plaintiffs' motion and urges that the Labor Department's determinations be sustained as supported by substantial evidence in the record and otherwise in accordance with law. See Defendant's Response in Opposition to Plaintiffs' Motion for Judgment Upon the Agency Record ("Defendant's Brief) at 1, 11, 29.

Jurisdiction lies under 28 U.S.C. § 1581(d)(1) (1994). For the reasons set forth below, the administrative record in this matter is inadequate to support a determination on the Roosevelt Workers' eligibility for NAFTA-TAA benefits. Plaintiffs' Motion for Judgment on the Agency Record is therefore granted in part, and the action is remanded to Defendant for further proceedings consistent with this opinion.

I. Background

A. The Trade Adjustment Assistance Laws

As the court noted in Int'l Union v. Marshall:

The Trade Act of 1974 was intended "to foster the economic growth of and full employment in the United States and to strengthen economic relations between the United States and foreign countries through open and nondiscriminatory world trade," while, at the same time, providing "adequate procedures to safeguard American industry and labor against unfair or injurious import competition, and to assist industries, firm[s], workers, and communities to adjust to changes in international trade flows."

Int'l Union v. Marshall, 584 F.2d 390, 391 (D.C.Cir.1978) (emphasis added) (quoting 19 U.S.C. § 2102(1), (4) (1976)). The court explained the purpose of the Trade Adjustment Assistance ("TAA") Program established by the 1974 Act:

Congress was of the view that fairness demanded some mechanism whereby the national public, which realizes an overall gain through trade readjustments, can compensate the particular industries and workers who suffer a loss much as the doctrine of eminent domain requires compensation when private property is taken for public use. Otherwise the costs of a federal policy that conferred benefits on the nation as a whole would be imposed on a minority of American workers and industries.

Id. at 395 (citations omitted). Under the TAA program, displaced workers are eligible for a variety of trade adjustment assistance benefits, designed to "encourage workers who are unemployed because of import competition to learn the new skills necessary to find productive employment in a changing American economy." S.Rep. No. 100-71, at 11 (1987).

Similarly, Congress and the Administration recognized that—while NAFTA would "result in net economic benefits and increased job opportunities" for workers in the United States—"some workers [would] have to find new employment." See Statement of Administrative Action Accompanying NAFTA Implementation Act ("Statement of Administrative Action"), H.R. Doc. No. 103-159, vol. 1 at 672 (1993). Drawing on "the best aspects of existing programs," the NAFTA Transitional Adjustment Assistance ("NAFTA-TAA") Program¹ established under the NAFTA Implementation Act was deemed "essential" to "provide affected workers with both rapid and early intervention and the ability to engage in long term training while receiving income support." Id. Much like trade adjustment assistance available under the Trade Act of 1974, the NAFTA-TAA program entitles certain workers whose job losses are attributable to increased import competition from (or shifts in production to) Canada or Mexico to receive benefits including employment services, appropriate training, job search and relocation allowances, and income support payments. See id. at 673-74; 19 U.S.C. § 2331(d) (1994).

To qualify for NAFTA-TAA benefits, a group of workers or their union or other authorized representative must file with their Governor (generally through appropriate state labor authorities) a petition for certification of eligibility to apply for adjustment assistance. After 10 days, the state forwards its preliminary findings and recommendation to the Labor Department, which conducts an investigation and reaches a final determination on the petition. 19 U.S.C. § 2331(b)-(c) (1994).

The trade adjustment assistance statutes are remedial legislation and, as such, are to be construed broadly to effectuate their intended purpose. Woodrum v. Donovan, 5 CIT 191, 198, 564 F.Supp. 826, 832 (1983) (citing United Shoe Workers of Am. v. Bedell, 506 F.2d 174, 187 (D.C.Cir.1974)), aff'd, 737 F.2d 1575 (Fed. Cir.1984); see also Former Employees of Champion Aviation Prods, v. Herman, 23 CIT 349, 352, 1999 WL 397970 (1999) (citations omitted) (NAFTA-TAA statute is remedial legislation, to be construed broadly). Moreover, both "because of the ex parte nature of the certification process, and the remedial purpose of [the statutes], the [Labor Department] is obliged to conduct [its] investigation with the utmost regard for the interests of the petitioning workers." Stidham v. U.S. Dep't of Labor, 11 CIT 548, 551, 669 F.Supp. 432, 435 (citing Abbott v. Donovan, 7 CIT 323, 327-28, 588 F.Supp. 1438, 1442 (1984) (quotations omitted) ("Abbott H")).

Thus, while the Labor Department is vested with considerable discretion in the conduct of its investigation of trade adjustment assistance claims, "there exists a threshold requirement of reasonable inquiry. Investigations that fall below this threshold cannot constitute substantial evidence upon which a determination can be affirmed." Former Employees of Hawkins Oil and Gas, Inc. v. U.S. Sec'y of Labor, 17 CIT 126, 130, 814 F.Supp. 1111, 1115 (1993).²

B. The Facts of This Case

The Labor Department's denial of the Roosevelt Workers' petition for NAFTA-TAA benefits—the action at issue here— has its roots in the Department's denial of the Roosevelt Workers' earlier petition for assistance under the Trade Act of 1974. Upon receipt of that petition ("the TAA petition"), the Labor Department initiated an investigation, and sent Chevron Products Company ("CPDS") a standard form TAA "Business Confidential Data Request" questionnaire. See AR 11.³ CPDS's Human Resources Manager—Irene D. Aviani—responded to the questionnaire, describing the Roosevelt Workers, in essence, as truck drivers, and providing certain other information concerning (1) the company's organizational structure; (2) the company's sales, production and employment; (3) company imports and layoffs; (4) any transfers of production; and (5) the company's major declining customers. See CAR 13-15.

Based on its investigation, the Labor Department denied the Roosevelt Workers' petition for TAA, finding that they were engaged in the performance of services and, thus, did not produce an article within the meaning of the TAA statute. AR 16 (Notice of Negative Determination Regarding Eligibility To Apply For Worker Adjustment Assistance (Feb. 17, 2000)). The Labor Department further found that the reduction in demand for the workers' services did not originate at a production facility whose workers independently met the statutory criteria for certification. AR 16-17.

Seeking to appeal the Labor Department's denial of their TAA petition, the Roosevelt Workers sought the assistance of representatives of the State of Utah's Department of Workforce Services. AR 4. In the process of preparing the appeal, the Utah officials learned for the first time "that Chevron had been buying Canadian oil." AR 4. In light of the Canadian imports, a new petition was filed—this time seeking NAFTA-TAA benefits. AR 1-5 (Petition for NAFTA Transitional Adjustment Assistance, with attachments). It is that NAFTA-TAA petition which is at issue here.

According to the NAFTA-TAA petition, before they were laid off, the Roosevelt Workers were employed as "gaugers," who went to "well head[s] and or crude oil tanks" to perform various tasks to determine whether crude oil should be purchased— "[c]hecking temperature, gaugfing] the amount of crude in the tank, tak[ing] samples for gravity test and grind out for BS & W, and checking] the bottom of the tank for water or impurities." AR 3. The NAFTA-TAA petition further explained that, if the samples were satisfactory and all tests were passed, "a crude oil run ticket [was] written up" and ...