Former Employ. of Elec. Data v. U.S. Sec. of Labor, Slip Op. 05-148.

CourtU.S. Court of International Trade
Citation408 F.Supp.2d 1338
Docket NumberCourt No. 03-00373.,Slip Op. 05-148.
PartiesFORMER EMPLOYEES OF ELECTRONIC DATA SYSTEMS CORP., Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.
Decision Date14 November 2005

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, (Patricia M. McCarthy), Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice Michael F. Bahler and (Michael D. Panzera), Stephen Jones, Office of the Solicitor, U.S. Department of Labor, for the defendant, of counsel.

OPINION

BARZILAY, Judge:

This case is before the court on Plaintiffs' USCIT R. 56.1 motion for judgment upon the agency record challenging the Department of Labor's denial of certification for trade adjustment assistance ("TAA") on remand. See Electronic Data Systems Corporation: Notice of Negative Determination on Remand, SAR 21-32 (Jan. 31, 2005) ("Remand Determination"), Plaintiffs, the former employees of Electronic Data Systems Corporation, I Solutions Center, Fairborn, Ohio ("EDS"), urge this court to order the Secretary of Labor to certify Plaintiffs for TAA. On first remand, this court found that Labor's determination denying TAA benefits was not supported by substantial evidence and not in accordance with law. Labor was instructed to compile more evidence about the type of work that the Plaintiffs' firm was engaged in and "to explain and support clearly its position with respect to the characterization of the computer programs at issue as articles or services." Former Employees of Elec. Data Syss. Corp. v. U.S. Sec'y of Labor, 350 F.Supp.2d 1282 (CIT 2004) (hereinafter "EDS I"). Upon review of Labor's remand results, Plaintiffs' comments and other submissions, the court finds that while Labor's factual investigation resulted in a sufficiently developed record, with certain exceptions that will need to be addressed on remand, Labor has failed to explain and legally support its position why the particular software produced by Plaintiffs was not an "article" within the meaning of the TAA statute.

BACKGROUND

Plaintiffs, the affected worker group, were separated from their employment with the EDS Fairborn facility in March-April 2002 after the production of computer programs, job control language, database support and documentation, and other related work was moved from Fairborn, Ohio, to Juarez, Mexico. Petition Trade Adjustment Assistance for Workers at EDS, Dec. 27, 2002. Labor denied Plaintiffs' petition for TAA on the grounds that the EDS Fairborn facility did not produce an article. Notice of Determination Regarding Eligibility to Apply to Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 67 Fed.Reg. 64,922 (Oct. 22, 2002); Negative Determination Regarding Eligibility to Apply for Worker Adjustment Assistance, EDS Fairborn, TA-W-5-486, 68 Fed.Reg 6211 (Feb. 6, 2003). After Plaintiffs' request for administrative reconsideration was denied, Plaintiffs brought this action before the court challenging Labor's denial of TAA on May 28, 2004. On Plaintiffs' motion on the agency record, this court remanded the case with the following instructions:

First, [Labor] must explain and support clearly its position with respect to the characterization of the computer programs at issue as articles or services.... Second, because Labor failed to thoroughly investigate Plaintiffs' claims, its determination is not supported by substantial evidence on the record.... Labor shall conduct a thorough investigation into Plaintiffs' claims. In particular, Labor shall: (1) determine whether computer programs were embodied in any medium when transferred to customers; (2) explain the significance of custom-designed computer programs as opposed to mass produced computer programs; (3) identify what type of documentation was produced by EDS (brochures, manuals, etc.); (4) determine what was the production volume of such documentation and whether it was considered a part of the product purchased by EDS's customers; and (5) with respect to each finding made in its determination, state with specificity the facts relied upon in reaching such finding, including specific references to documents in the record.

EDS I, at 1293. Familiarity with EDS I is presumed.

Labor conducted a remand investigation to determine whether the subject worker group met the criteria in the Trade Act of 1974 for TAA certification as primarily affected workers. See EDS Fairborn; Notice of Negative Determination on Remand, 70 Fed.Reg. 6730-01 (Feb. 8, 2005). Labor's information request sought "to ascertain whether the work performed by the petitioning worker group was mass replicated on a physical carrier medium, such as books, manuals, CD-Rom, or diskette, and if so, whether there was an increase in imports or shift in production of articles like or directly competitive with those produced by [the EDS Fairborn facility]." Id. at 6731; see Letter with Attached Questionnaire, Dec. 17, 2004, Confidential SAR,1 at 5.

The record establishes that EDS workers who lost their jobs produced and maintained computer software and related documentation for one client's computer systems. Confidential SAR, at 15. [].2 The information supplied by EDS shows that the Fairborn facility employees performed two roles in supporting financial systems software of its single client. Confidential SAR, at 12. []. In addition to one principal client, EDS also had some other clients requiring "special projects." Confidential SAR, at 12. EDS' response did not delve into the nature of those projects.

EDS's reply established that software developed by EDS Fairborn was installed into a data center and was accessible to the EDS's client through certain terminals. Confidential SAR, at 12. []. In addition, certain supporting materials were accessible to the client in electronic format and were occasionally provided in hard copies only at the client's request. Confidential SAR, at 12. EDS did not provide information about the volume of documentation given to the client in hard copies. This information is supported by statements of individual EDS former and current employees. []. See Confidential SAR, at 2-3.

In the remand order, the Court directed Labor to "identify what type of documentation was produced by EDS (brochures, manuals, etc.)," and to "determine what was the production volume of such documentation and whether it was considered part of the product purchased by EDS's customers." EDS I, at 1293. In the Remand Determination, Labor found that the supporting documentation was rarely sent to the client in hard copy because it was chiefly printed by a third-party copy facility when requested in rare instances by the client. In its questionnaire response regarding means of delivery of the product to the client, EDS explained that its work products were usually delivered to the client electronically, either by e-mail or through common electronic repositories. Confidential SAR, at 12. Two of the petitioners confirmed that the code was almost always delivered electronically. Confidential SAR, at 18, 19.

Based on these newly compiled facts, Labor concluded that EDS "performed information technology services supporting financial systems software for a single client." Remand Determination, 70 Fed. Reg. at 6731. Labor focused on the finding that the software and documentation designed and/or supported by the workers of the subject facility was rarely delivered to the client on a physical carrier medium, but was installed onto a mainframe data center, which the client could access remotely and print if necessary. Id. at 6731. Labor concluded that the evidence established that the workers of the subject facility did not produce an article within the meaning of the Trade Act, nor did they support the production of an article either directly or through an appropriate subdivision of EDS.

JURISDICTION AND STANDARD OF REVIEW

This Court has exclusive jurisdiction over civil actions arising from Labor's determinations "with respect to the eligibility of workers for adjustment assistance." 28 U.S.C. § 1581(d)(1) (2004). Labor's determination denying certification of eligibility for TAA will be upheld only if it is supported by substantial evidence on the record and is otherwise in accordance with the law. See 19 U.S.C. § 2395(b) (2004); Int'l Union v. Reich, 22 CIT 712, 716, 20 F.Supp.2d 1288, 1292 (1998).

When reviewing Labor's conclusions of law, the court will consider whether they are "in accordance with the statute and not ... arbitrary and capricious, and for this purpose the law requires a showing of reasoned analysis." Former Employees of Ericsson, Inc. v. United States Sec'y of Labor, Slip Op. 04-130, 2004 WL 2491651, at *2 (CIT Oct. 13, 2004); EDS I, at 1286-87. Under this standard, the court "will sustain the agency's interpretation of the statute where it has a rational basis in law, even though the court might have reached a different interpretation." Abbott v. Donovan, 6 C.I.T. 92, 100-101, 570 F.Supp. 41, 49 (1983). However, "the court will reject the agency's interpretation or application of a statute when it is inconsistent with the legislative purpose of the statute or frustrates Congress' intent." Id. at 101, 570 F.Supp. 41. "[I]t is for the courts, to which the task of statutory construction is ultimately entrusted, to determine whether or not administrative interpretations are consistent with the intent of Congress and the words of the Act." Woodrum v. Donovan, 5 CIT 191, 194, 564 F.Supp. 826, 829 (1983).

The central issue in this case is Labor's legal definition of the term "articles" that appears in the TAA statute.3 See 19 U.S.C. § 2272(a) (West Supp.2004). Although Labor has not defined the term "articles" in its regulations, it has defined the meaning of the terms "like or directly competitive" — the adjectives that...

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