FORMER EMP. OF PARALLEL PETRO. v. SEC'Y OF LABOR, Court No. 88-05-00383.

• Decision Date: 27 February 1990
• Docket Number: Court No. 88-05-00383.
• Parties: FORMER EMPLOYEES OF PARALLEL PETROLEUM CORPORATION, Plaintiffs, v. U.S. SECRETARY OF LABOR, Defendant.
• Court: U.S. Court of International Trade

731 F. Supp. 524

14 CIT 114

FORMER EMPLOYEES OF PARALLEL PETROLEUM CORPORATION, Plaintiffs, v. U.S. SECRETARY OF LABOR, Defendant.

Court No. 88-05-00383.

United States Court of, International Trade.

February 27, 1990.

Givens and Kelly, Robert T. Givens and Rayburn Berry, Houston, Tex., for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Washington, D.C. and Velta A. Melnbrencis, New York City, for defendant.

MEMORANDUM OPINION AND ORDER

MUSGRAVE, Judge.

Parallel Petroleum Corporation ("Parallel") is an oil and natural gas-producing firm located in Midland, Texas. This case concerns Parallel's termination from employment of Gary Elander, Rex Paschell and Judy Wilson, who worked as an "integrated exploration team" for the company. These plaintiffs conducted oil and gas exploration activities, and all three were discharged from Parallel's employ between November, 1987 and January, 1988.

Plaintiffs filed a Petition for Trade Adjustment Assistance with the U.S. Department of Labor ("Labor") on February 18, 1988, in response to which Labor initiated an investigation on March 7, 1988 to determine whether the separated workers were eligible to apply for adjustment assistance because of increased imports. On April 20, 1988, Labor decided that increased imports did not contribute importantly to declines at the subject firm, and thus denied plaintiffs' request for benefits.

Plaintiffs then initiated this action pursuant to 19 U.S.C. § 2395, seeking a remand to the U.S. Secretary of Labor ("the Secretary") for further consideration of the denial of trade adjustment assistance benefits under 19 U.S.C. § 2273. Their principal argument centers on the Secretary's failure to consider the impact of increased oil and natural gas imports on exploration activities of the subject firm, which, plaintiff claims, is required under the 1988 amendment to 19 U.S.C. § 2272.¹

The government, in opposition, claims that the amendment has no retroactive application to plaintiffs because it was not intended to apply to employees of firms that engaged in exploration or drilling as well as production of crude oil or natural gas. Because employees of such companies were eligible under the old law to apply for benefits, they are foreclosed from invoking the retroactive provisions of the amendment, argues the government.

Thus, before examining the alleged failure of the Secretary to consider the impact of imports on exploration activities of Parallel, the Court must ascertain whether the 1988 amendment to 19 U.S.C. § 2272 has any application under the present circumstances. That amendment has been codified as 19 U.S.C. § 2272(b), and now reads (together with subsection (a)):

§ 2272. Group eligibility requirements; agricultural workers; oil and natural gas industry

(a) The Secretary shall certify a group of workers (including workers in any agricultural firm) as eligible to apply for adjustment assistance under this part if he determines —

(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,

(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.

(b) For purposes of subsection (a)(3) of this section —

(1) The term "contributed importantly" means a cause which is important but not necessarily more important than any other cause.

(2)(A) Any firm, or appropriate subdivision of a firm, that engages in exploration or drilling for oil and natural gas shall be considered to be a firm producing oil or natural gas.

(B) Any firm, or appropriate subdivision of a firm, that engages in exploration or drilling for oil and natural gas, shall be considered to be producing articles directly competitive with imports of oil and with imports of natural gas.

19 U.S.C. § 2272 (1988) (emphasis supplied).

The government's argument, in essence, relies entirely on a somewhat garbled section of the amendment to § 2272, and the amendment's legislative history. Section 1421(a)(1)(B) of Pub.L. No. 100-418 provides:

Notwithstanding section 223(b) of the Trade Act of 1974 19 U.S.C. 2273(b), or any other provision of law, any certification made under subchapter A of chapter 2 of title II of such Act this subpart which —

(i) is made with respect to a petition filed before the date that is 90 days after the date of enactment of this Act Aug. 23, 1988, and

(ii) would not have been made if the amendments made by subparagraph (A) amending this section had not been enacted into law, shall apply to any worker whose most recent total or partial separation from the firm, or appropriate subdivision of the firm, described in section 222(a) of such Act 19 U.S.C. 2272(a) occurs after September 30, 1985.

In other words, oil and gas workers separated after September 30, 1985 are eligible to apply for benefits under the new amendment as long as their petitions are filed within one year of the date of their separation from employment, and are filed no later than November 18, 1988 (the last business day before the statutory ninety-day period expired on November 21, 1988).² Workers may not apply if they would have qualified for benefits under the old law.

The government then relies on the legislative history of the Omnibus Trade and Competitiveness Act of 1988 to support their theory that because Parallel produced oil, as well as explored and drilled for oil, their employees could have qualified for benefits under the old § 2272. Since the amendment was intended to limit benefits only to independent firms engaged in drilling or exploring, plaintiff has no recourse to the retroactive provisions of the 1988 amendment; thus, argues defendant, the Secretary's decision in this case was supported by substantial evidence in the record and was otherwise in accordance with the law.

H.R.Rep. 576, 100th Cong., 2d Sess. 694 (April 20, 1988) (emphasis added) provides in pertinent part:

The purpose of this amendment is to facilitate the availability of benefits under the trade adjustment assistance program for workers engaged in exploration or drilling for crude oil or natural gas. Under present law, workers employed by such firms have been denied program benefits because they are not considered to be employed by firms that produce articles that are like or directly competitive with increased imports. However, under present law, workers engaged in exploration or drilling for firms that also produce crude oil or natural gas are considered as eligible for such benefits.

The conferees intend that workers employed by independent firms engaged in exploration or drilling be eligible to apply for program benefits on the same basis as workers employed by firms that are engaged in the production of crude oil or natural gas as well as exploration or drilling ...

With this legislative history in mind, the government claims the administrative record amply demonstrates that Parallel was engaged in exploration and production of crude oil and natural gas during the time period in question. Therefore, the amendment has no application in this situation, and the Secretary's denial of certification was reasonable.

In their reply to the government's opposition to their motion for judgment on the agency record, plaintiff contends that Parallel was not actually involved in the production of oil and gas during the applicable period prior to their termination. Even if the company did "produce" oil or gas, plaintiff maintains that the amendment applies to firms engaged in exploration or drilling or production of natural gas.

Plaintiff asserts that the government's approach was expressly rejected by this Court in Former Employees of Bass Enterprises Prod. Co. v. United States, 13 CIT ___, 706 F.Supp. 897 (1989). There, Judge DiCarlo ruled that Labor failed to adhere to the statutory requirements of 19 U.S.C. § 2272 in denying trade adjustment assistance benefits, and the case was remanded. Id. at 903. In particular, Labor failed to consider the effect of the 1988 amendment on § 2272(a)(3), requiring that any firm that produced oil or natural gas to be producing articles directly competitive with imports of both oil and natural gas. Id. The Court reached this conclusion despite the government's assertion that the 1988 amendment did not apply, since the subject company both explored for and produced the articles under investigation. Id. Judge DiCarlo, without reference to the legislative history, cited the plain language of § 2272 in holding that the amended statute applies to "`any firm, or appropriate subdivision of a firm, that engages in exploration or drilling for oil or natural gas, or otherwise produces oil or natural gas,'" id., quoting Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, § 1421(a)(1)(A), 102 Stat. 1107, 1243 (1988) (emphasis added).

It appears, then, that reliance upon the legislative history of the amendment is misplaced, as the cited language fails to comport with either the plain language of the statute or case law interpreting the statute. Both § 2272(b)(2)(A) and (B) refer to the "production" of oil and gas as a function that qualifies a firm as "producing an article" within the meaning of § 2272(a)(3). This being so, Congress could hardly have intended to limit the availability of benefits under the amendment to firms engaged only in exploration or drilling, when the statute expressly references "production" as a defining term for invoking the benefits of the trade adjustment assistance legislation.

Moreover, in the legislative history (as even the...