Former Employees of Shaw Pipe v. U.S. Sec. of Lab., Slip Op. 97-4.

Citation957 F.Supp. 239
Decision Date09 January 1997
Docket NumberCourt No. 95-04-00482.,Slip Op. 97-4.
PartiesFORMER EMPLOYEES OF SHAW PIPE, INC., Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.
CourtU.S. Court of International Trade

Leibert L. Greenberg, New York City, for plaintiffs.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Jeffrey M. Telep); Scott Glabman, Office of the Solicitor, United States Department of Labor, of Counsel, for defendant.

OPINION

CARMAN, Chief Judge.

This case is before the Court on plaintiffs' motion for judgment on the agency record pursuant to U.S. CIT R. 56.1. Plaintiffs challenge the United States Department of Labor's ("Labor" or "Department") determination that the former employees of Shaw Pipe, Incorporated's ("Shaw Pipe") Highland, Pennsylvania facility are not eligible for certification to receive trade adjustment assistance benefits because they do not produce an article within the meaning of 19 U.S.C. § 2272(a)(3) (1994). Plaintiffs assert Labor's determination that plaintiffs are ineligible for certification to receive trade adjustment assistance benefits is not supported by substantial evidence on the record and is not otherwise in accordance with law. Plaintiffs move this Court to vacate the determination and remand this matter to the Department of Labor for further consideration and redetermination.

Defendant asserts the Department of Labor's determination is supported by substantial evidence on the record and should be affirmed by this Court. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(d) (1994), and for the reasons set forth below grants plaintiffs' motion for judgment upon the agency record, vacates the Department's determination finding it unsupported by substantial evidence on the record and not otherwise in accordance with law, and remands the matter to the Department of Labor for further appropriate action.

BACKGROUND

Plaintiffs are a group of approximately thirty-five workers who were separated from Shaw Pipe's Highspire, Pennsylvania facility which was closed on August 12, 1994. Three former employees filed a petition with the Department of Labor on behalf of all separated employees for trade adjustment assistance on January 3, 1995. Plaintiffs characterized Shaw Pipe's Highspire, Pennsylvania facility as producing "small diameter steel pipe coated with polyethylene coating" and "large diameter steel pipe coated with concrete coating." (Admin. R. at 1.)

Labor initiated its investigation into plaintiffs' petition on January 3, 1995. On February 8, 1995, Labor sent a questionnaire to the plant accountant at Shaw Pipe's Highspire, Pennsylvania facility requesting information regarding operations conducted at that facility. []

On February 23, 1994, the Office of Trade Adjustment Assistance, Department of Labor, reached a final negative determination, concluding the former employees of Shaw Pipe's Highspire facility were not eligible for certification to receive trade adjustment assistance benefits. See Notice of Negative Determination Regarding Eligibility to Apply for Worker Adjustment Assistance, 60 Fed.Reg. 13,177 (Dep't Comm.1995). The basis for the Department's negative determination was its conclusion "the workers ... do not produce an article within the meaning of Section 222(3) of the Act." (Admin. R. at 17.) Labor's determination went on to note "workers of Shaw Pipe, Incorporated, Highspire, Pennsylvania may be certified only if their separation was caused importantly by a reduced demand for their services from a parent firm, a firm otherwise related to the subject firm by ownership, or a firm related by control." The determination concluded "[t]hese conditions have not been met" and accordingly denied plaintiffs' application for certification to receive trade adjustment assistance benefits. (Id. at 18.)

CONTENTIONS OF THE PARTIES
A. Plaintiffs

Plaintiffs advance two arguments in challenging the Department's determination which found plaintiffs ineligible for certification to receive trade adjustment assistance benefits. First, plaintiffs challenge the Department's failure to "indicate any investigation of whether these were in fact `articles' within the meaning of the Trade Act of 1974," and assert "there is no support in the agency record for the order entered in this action." (Pls.' Br. at 10.) Additionally, plaintiffs characterize the Department's analysis as "deficient and more like a post hoc analysis." (Pls.' Br. at 9.) Plaintiffs specifically challenge the failure of the investigation to include "sales or production figures for any of the relevant time periods," its "fail[ure] to discuss the time frame in which these articles were produced," and the Department's failure to determine if any imports of the products at issue entered the United States. (Pls.' Br. at 11.) Plaintiffs also challenge the Department's failure to verify Shaw Pipe's statements concerning loss of contracts and decreased sales, and its failure to determine whether there were any imports of the product at issue. Plaintiffs assert this absence of evidence in the record "fails to provide the court with an opportunity to review the basis of the administrative decision." (Id.)

Second, plaintiffs assert an investigator at the Department of Labor improperly supplemented the administrative record on June 1, 1995, by including in the record a letter received from Shaw Pipe after the Department reached its final determination on February 24, 1995. Plaintiffs note the Labor investigator's memorandum to the files concerning the letter stated "some of the investigator notes relevant to the findings of the investigation were missing" and therefore, the plaintiffs contend, "the [Department of Labor] failed to follow the rules for conducting a proper investigation." (Pls.' Mem. of Law in Supp. of Mot. for Remand (Pls.' Br.) at 7.)

Plaintiffs contend these alleged flaws in the investigation require this Court to vacate Labor's determination finding plaintiffs ineligible for certification to receive trade adjustment assistance benefits, and request the Court grant its motion so "this action [may] be remanded to the Department of Labor for a more complete and adequate investigation and redetermination." (Pls.' Br. at 6.)

B. Defendant

Defendant opposes plaintiffs' motion for judgment upon the agency record, contending Labor's determination should be upheld as supported by substantial evidence on the record and otherwise in accordance with law. Specifically, defendant contends the Department properly declined to certify plaintiffs for trade adjustment assistance benefits because the conduct engaged in by plaintiffs does not constitute the production of an article as defined by § 222(3) of the Trade Act of 1974. Defendant notes in order to be eligible to receive trade adjustment assistance benefits, "increases of imports of articles like or directly competitive with articles produced by such workers' firm or an appropriate subdivision thereof, [must] contribute[] importantly to such total or partial separation, or threat thereof, and to such decline in sales or production." (Def.'s Resp. to Pls.' Mot. for J. on Admin.R. (Def.'s Br.) at 5 (quoting 19 U.S.C. § 2272(a)(3) (1988)) (emphasis omitted).) Defendant asserts the Department's determination is in accordance with law because "pipe coating is a service, not an article." (Def.'s Br. at 6.) Additionally, defendant contends substantial evidence on the record supports the Department's determination that plaintiffs were not employed as service workers by a firm which produces articles adversely affected by increased imports, and therefore are ineligible to receive trade adjustment assistance benefits.

STANDARD OF REVIEW

In reviewing determinations of the Department of Labor denying certification of eligibility to receive trade adjustment assistance benefits, this Court will sustain the Department's determination when it is supported by substantial evidence on the record and is otherwise in accordance with law. See 19 U.S.C. § 2395(b)-(c) (1994); see also Former Employees of General Electric Corp. v. United States Department of Labor, 14 CIT 608, 611, 1990 WL 129488 (1990). "Substantial evidence has been held to be more than a `mere scintilla,' but sufficient evidence to reasonably support a conclusion." Former Employees of General Electric Corp., 14 CIT at 611 (citations omitted).

In reviewing Labor's determination, this Court will give deference "`to the agency's chosen [investigative] technique, only remanding a case if that technique is so marred that the Secretary's finding is arbitrary or of such a nature that it could not be based on `substantial evidence.''" Former Employees of CSX Oil & Gas Corp. v. United States, 13 CIT 645, 651, 720 F.Supp. 1002, 1008 (1989) (quoting United Glass & Ceramic Workers of North America v. Marshall, 584 F.2d 398, 404-05 (D.C.Cir.1978) (footnote omitted)).

DISCUSSION

In order to certify a group of workers as eligible to receive trade adjustment assistance benefits as provided for under Section 222 of the Trade Act of 1974, the Secretary of Labor must determine:

(1) that a significant number or proportion of the workers in such workers' firm or an appropriate subdivision of the firm have become totally or partially separated, or are threatened to become totally or partially separated,

(2) that sales or production, or both, of such firm or subdivision have decreased absolutely, and

(3) that increases of imports of articles like or directly competitive with articles produced by such workers' firm or an appropriate subdivision thereof contributed importantly to such total or partial separation, or threat thereof, and to such decline in sales or production.

19 U.S.C. § 2272(a) (1994). It is well-settled that in order to receive trade adjustment...

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