Former Employees of Comp. v. U.S. Sec. of Labor

• Decision Date: 14 April 2005
• Docket Number: Court No. 04-00149.,Slip Op. 05-49.
• Citation: 366 F.Supp.2d 1365
• Parties: FORMER EMPLOYEES OF COMPUTER SCIENCES CORPORATION, Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.
• Court: U.S. Court of International Trade

Page 1365

366 F.Supp.2d 1365

FORMER EMPLOYEES OF COMPUTER SCIENCES CORPORATION, Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.

Slip Op. 05-49.

Court No. 04-00149.

United States Court of International Trade.

April 14, 2005.

Sidley Austin Brown & Wood LLP, (Neil R. Ellis, Washington, DC, Rajib Pal, New York City, and Sharon H. Yuan, Washington, DC), for plaintiffs.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Delfa

Castillo); Peter Nessen, Office of the Solicitor, United States Department of Labor, for defendant, of counsel.

OPINION AND ORDER

TSOUCALAS, Senior Judge.

Plaintiffs, Former Employees of Computer Sciences Corporation ("Plaintiffs"), move pursuant to USCIT R. 56.1 for judgment upon the agency record or, alternatively, for a remand for further investigation. Plaintiffs challenge the United States Department of Labor's ("Labor") determinations denying them eligibility for trade adjustment assistance benefits under Title II of the Trade Act of 1974, as amended 19 U.S.C. § 2272 (West Supp.2004) (the "Trade Act"). See Negative Determination Regarding Eligibility To Apply for Worker Adjustment Assistance ("Negative Determination"), TA-W-53,209 (Dep't Labor Oct. 24, 2003) Admin. R. 55-56; Notice of Determinations Regarding Eligibility To Apply for Worker Adjustment Assistance ("Notice of Determination"), 68 Fed.Reg. 66,877-78 (Dep't Labor Nov. 28, 2003); Notice of Negative Determination on Reconsideration for Computer Sciences Corporation, Financial Services Group ("FSG"), East Hartford, Connecticut ("Negative Reconsideration Determination"), Admin. R. 78-80 (Dep't Labor Feb. 3, 2004) published at 69 Fed.Reg. 8,488 (Dep't Labor Feb. 24, 2004); Notice of Negative Determination on Reconsideration on Remand for Computer Sciences Corporation, Financial Services Group, East Hartford, Connecticut ("Remand Final Negative Determination"), Supplemental Admin. R. 13-17 (Dep't Labor July 29, 2004) published at 69 Fed.Reg. 48,526 (Dep't Labor Aug. 10, 2004). Labor concluded that the employees did not meet the requirements of the Trade Act, basing its conclusion on its findings of fact that: (1) a significant number of workers in Computer Sciences Corporation's ("CSC") Financial Services Group ("FSG") in East Hartford, Connecticut were not separated; (2) Plaintiffs were not involved in the production of articles and did not complete software on physical media; (3) there has not been a shift in production to India of software components and completed software like or directly competitive with those formerly produced by plaintiffs; (4) there has not been or is likely to be an increase in imports of articles like or directly competitive with those formerly produced by plaintiffs.

Plaintiffs request the Court remand this case to Labor with instructions to certify Plaintiffs as eligible for trade adjustment assistance ("TAA") benefits. Alternatively, Plaintiffs request the Court remand this case to Labor with instructions to further investigate because of inadequacies in Labor's previous investigations.

BACKGROUND

The Trade Act provides for TAA benefits to workers who have lost their jobs as a result of increased imports or shifts of production out of the United States. See 19 U.S.C. § 2272. Such benefits include training, re-employment services and various allowances including income support, job search and relocation allowances.

Plaintiffs are former employees of CSC's financial services group who were separated from their employment as information technology professionals on February 28, 2003 (Monali Patel) and May 30, 2003 (Mark Bain and Deborah Corkindale). See Petition for Trade Adjustment Assistance, Sept. 22, 2003, Admin. R. at 2. On September 22, 2003, Plaintiffs petitioned Labor to obtain certification of eligibility for TAA benefits. See id. Labor initiated an investigation and determined that Plaintiffs did not produce an article within the meaning of section 222(c)(3) of the Trade Act and, therefore, were not eligible for TAA benefits. See Negative Determination, Admin. R. at 55-56. Plaintiffs appealed Labor's determination on November 24, 2003. See Mem. P. & A. Supp. Mot. Pls. J. Agency R. ("Pls.' Mem.") at 5. Labor agreed to reconsider its determination and found that the "workers did produce widely marketed software components on CD Rom and tapes, and thus did produce an article within the meaning of the Trade Act." Negative Reconsideration Determination, 69 Fed.Reg. at 8,488. Labor, however, again denied Plaintiffs request for certification because "although [CSC] did report that some `source coding' did shift to India in the relevant period, [CSC] does not import completed software on physical media that is like or directly competitive with that which was produced at the subject facility. Business development, design, testing, and packaging remain in the United States." Id.

On March 15, 2004, Plaintiffs sought judicial review and filed a letter with the Court which the Clerk of the Court deemed as the filing of a summons and complaint. See Pls.' Mem. at 7. Labor consulted with Plaintiffs and on May 28, 2004, filed a consent motion for voluntary remand indicating that it would further investigate conflicting information in the record. See Consent Mot. Voluntary Remand (May 28, 2004). The Court granted this motion on June 2, 2004. Upon remand, Labor reviewed previously submitted information and contacted CSC officials "to determine the process in which software code is fixed onto tangible media, identify which functions were shifted to India, and determine whether the subject worker group meets the statutory criteria for TAA certification." Remand Final Negative Determination, 69 Fed.Reg. at 48,526. Labor found that CSC had not shifted any "packaging" functions to India. See id. Moreover, Labor found that all "storing" and "copying" of the completed software onto physical media and the delivery of the software continues to take place in the United States. See id. CSC reported to Labor that it does not import any completed software which is like or directly competitive with the completed software produced in East Hartford. See id. Accordingly, Labor again denied Plaintiffs' eligibility for TAA benefits. See id. Plaintiffs now challenge Labor's determinations denying them certification for eligibility for TAA benefits.

JURISDICTION

The Court has jurisdiction over this matter pursuant to 19 U.S.C. § 2395(c) (2000) and 28 U.S.C. § 1581(d) (2000).

STANDARD OF REVIEW

In reviewing a challenge to Labor's determination of eligibility for trade adjustment assistance, the Court will uphold Labor's determination if it is supported by substantial evidence on the record and is otherwise in accordance with law. See 19 U.S.C. § 2395(b) (2000); Woodrum v. Donovan, 5 CIT 191, 193, 564 F.Supp. 826, 828 (1983), aff'd, Woodrum v. United States, 737 F.2d 1575 (Fed.Cir.1984). "Substantial evidence is something more than a `mere scintilla,' and must be enough reasonably to support a conclusion." Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987); see also Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). Additionally, "the rulings made on the basis of those findings [must] be in accordance with the statute and not be arbitrary and capricious, and for this purpose the law requires a showing of reasoned analysis." Former Employees of Rohm & Haas Co. v. United States, 27 CIT ___, ___, 246 F.Supp.2d 1339, 1346 (2003) (quoting Int'l Union v. Marshall, 584 F.2d 390, 396 n. 26 (D.C.Cir.1978)).

Moreover, although "the nature and extent of the investigation are matters resting properly within the sound discretion of [Labor,]" Former Employees of Galey & Lord Indus. v. Chao, 26 CIT ___, ___, 219 F.Supp.2d 1283, 1286 (2002) (quoting Former Employees of CSX Oil & Gas Corp. v. United States, 13 CIT 645, 651, 720 F.Supp. 1002, 1008 (1989) (citation omitted)), "[g]ood cause [to remand] exists if [Labor's] chosen methodology is so marred that [Labor's] finding is arbitrary or of such a nature that it could not be based on substantial evidence." Id. (citations omitted). The Court's review of Labor's determination denying certification of eligibility for TAA benefits is confined to the administrative record before it. See 28 U.S.C. § 2640(c) (2000); see also Int'l Union v. Reich, 22 CIT 712, 716, 20 F.Supp.2d 1288, 1292 (1998).

CONTENTIONS OF THE PARTIES

A. Plaintiffs' Contentions

Plaintiffs argue that record evidence does not support Labor's determination that: (1) a significant number of workers in CSC's FSG in East Hartford, Connecticut, have not become separated; (2) Plaintiffs' were not involved in the production of articles within the meaning of the Trade Act and consequently did not complete software on physical media; (3) there has not been a shift in production by CSC to India of software components and completed software like or directly competitive with those produced by CSC; and (4) there has not been or is likely to be an increase in imports of articles like or directly competitive with those produced by CSC. See Pls.' Mem. at 11.

Plaintiffs assert that they were engaged in the production of an article within the meaning of the Trade Act and completed software on physical media. See id. at 12. Plaintiffs argue that Labor erred in concluding that software components are services and not articles. See id. at 13-14. Plaintiffs assert that "[i]n designing and coding elements of Vantage-One, Plaintiffs created or manufactured a tangible commodity. Plaintiffs created the blueprints for the programs, as well as the source code itself...." Id. at 17. The ordinary meanings of the words "tangible" and "services" indicate that software components are tangible...