Former Empl. of Marathon Ashland v. Chao
| Decision Date | 11 June 2003 |
| Docket Number | SLIP OP. 03-64.,No. 00-04-00171.,00-04-00171. |
| Citation | 277 F.Supp.2d 1298 |
| Parties | FORMER EMPLOYEES OF MARATHON ASHLAND PIPELINE, LLC, Plaintiffs, v. Elaine CHAO, United States Secretary of Labor, Defendant. |
| Court | U.S. Court of International Trade |
Katten, Muchin, Zavis, Rosenman, (Marianne Rowden, James L. Sawyer) for Plaintiffs.
Robert D. McCallum, Jr., Assistant Attorney General, Civil Division, United States Department of Justice, David M. Cohen, Director, Commercial Litigation Branch, Lucius B. Lau, Assistant Director, (Delfa Castillo), Trial Attorney; Gary E. Bernstecker, Attorney, Office of the Solicitor, Division of Employment & Training Legal Service, United States Department of Labor.
Before the court is the Remand Determination performed by the United States Department of Labor ("Labor") pursuant to this court's opinion and remand order. See Fmr. Emps. of Marathon Ashland Pipeline, LLC v. Chao, 26 CIT ___, 215 F.Supp.2d 1345 (2002) ("Marathon I"). In Marathon I the court considered an appeal from a determination by the Secretary of Labor denying certification for Trade Adjustment Assistance ("TAA") to former employees of Marathon Ashland Pipe Line ("MAPL"), who were laid off from their jobs as "gaugers." See id. Labor denied their claim reasoning that they were service workers, not production workers—who did not meet the statutory criteria because their separation was caused by the sale of the company division they served, and not the importation of crude oil.1
In its remand opinion the court instructed Labor to verify and further investigate the circumstances surrounding the asset sale and specifically Plaintiffs' claims that the sale was prompted by Marathon Oil's increased imports of oil from Mexico and Canada. The remand opinion also instructed Labor to define the term "production" within the context of the oil and gas industry. Regrettably, Labor has not followed the court's remand instructions. For this and other reasons discussed below, the court orders certification of Plaintiffs' petition for trade adjustment assistance.
The Plaintiffs in this case are eight former employees of a company called Marathon Ashland Pipe Line LLC. Marathon Ashland Pipe Line is a subsidiary of Marathon Ashland Petroleum LLC. Marathon Ashland Petroleum, in turn, is a partnership owned by Marathon Oil Corporation and Ashland Inc. In March 1999, Marathon Ashland Petroleum announced that it had reached an agreement to sell off one of its subdivisions. See Remand Determination at 14.2 That subdivision, Scurlock Permian LLC, was the "crude oil gathering business" which employed the Plaintiffs. Nothing in the public record indicates why the subdivision was sold. The confidential record before the court gives only vague and generic business reasons.
The sale of Scurlock Permian coincided with several announcements that Marathon or one of its subsidiaries had reached agreements to purchase crude oil from overseas sources, including Canada and Mexico. See First Remand Determination at 2. Plaintiffs in this case, who lost their jobs following the sale of the assets, claim that the increase in imports of foreign crude oil contributed to their termination. Plaintiffs worked at the Illinois Basin crude oil field located in Bridgeport, Illinois. Their primary job, according to Labor, was to perform quality control on the crude oil collected in tanks from various independently-operated crude oil sources (called leases). Once the crude was tested and verified for quality, the gaugers would release for delivery amounts sold to the parent company for refining at the Robinson, Illinois plant. Plaintiffs contend that the Robinson plant was "converted" so that it could "refine crude oil imported from Mexico and Canada at cheaper prices, reducing the need for Illinois Basin `sweet' crude." First Remand Determination at 1.
Plaintiffs are seeking TAA benefits. This program "allows workers whose job losses are attributable to import competition to receive unemployment compensation, training, job search, relocation allowances, and other employment services." Fmr. Emps. of Alcatel Telecomms. Cable v. Herman, 24 CIT 655, 660, 2000 WL 1118208 (2000) . The requirements for TAA certification are set out in 19 U.S.C. § 2272 (1999). Under the statute, a three-prong test must be met:
(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.
This is the third time this case has come before the court. See Marathon I at 1349. In Marathon I the court issued a remand order with explicit instructions, having found that Labor's previous investigation fell "below the threshold requirement of reasonable inquiry by failing to offer any explanation of the analysis used to determine that Plaintiffs' work as gaugers did not constitute `producing' an article within the meaning of Section 2272." Marathon I at 1352. The court was concerned that Labor relied solely on the information provided by the Plaintiffs' former employer, despite the fact that Plaintiffs had cast doubt on the veracity of those statements. Id. at 1352-53. Labor relied on that information not only to establish facts as to the nature of the Plaintiffs' work, but also to interpret the statute in question.
If allowed to stand, the Secretary's negative determination would provide a definition of "production" that excludes those duties performed by gaugers. This definition, however, essentially would be an interpretation of the statute by Marathon Ashland's company officials, and not, as the law requires, by the Secretary. Whether Plaintiffs provided a service and did not participate in the "production" of an "article" within the provisions of Section 2272 is a determination that the Secretary must make based on evidence in the record by discussing the duties performed by the gaugers and how their responsibilities fit into the oil production scheme of their parent company, Marathon Oil.
The court also instructed Labor to investigate further "Plaintiffs' claim that imports from Mexico and Canada prompted the sale of Marathon Oil's assets, and as a result, caused the loss of petitioning employees' jobs." Id. at 1356 (citations omitted). The court noted that the general business reason given by the company for selling the assets (which led to the Plaintiffs' layoff) was not in conflict with the cause given by the Plaintiffs.3
In the Remand Determination now before the court Labor again denied TAA certification, finding that the gaugers did not "produce" an article.
Since the gaugers, who are employed by the pipeline company were merely responsible for certifying the quality and quantity of crude oil being shipped to customers, the gaugers were not engaged in activities related to the exploration or production of crude oil. The gaugers worked from crude oil already in tanks. Their functions were after the stage of the production of crude oil.
Remand Determination at 18-19.
As to the question of whether crude oil imports led to the decision to sell the relevant subdivision the Remand Determination states:
These assets were part of an overall sale of assets by Marathon Ashland Petroleum LLC because they were not of strategic value to the company. Marathon Ashland Pipeline LLC still transports Illinois Basin crude oil (gauged and trucked by various companies from the wellhead to Marathon Ashland Pipeline LLC facilities) to locations determined by the crude oil purchases. The company indicated that the employees at Marathon Ashland Pipe Line LLC, Bridgeport, Illinois were terminated as a result of an asset sale in May 1999, not the decision by Marathon to import crude oil.
The court will sustain the Department of Labor's determination if it is supported by substantial evidence and is otherwise in accordance with law. See 19 U.S.C. § 2395(b); Woodrum v. Donovan, 5 CIT 191, 193, 564 F.Supp. 826, 828 (1983), aff'd, 737 F.2d 1575 (Fed.Cir.1984). The factual findings of the Secretary must be accepted if supported by "substantial evidence." "Substantial evidence has been held to be more than a `mere scintilla,' but sufficient enough to reasonably support a conclusion." Former Employees of Swiss Industrial Abrasives v. United States, 17 CIT 945, 947, 830 F.Supp. 637, 639-40 (1993) (citing 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)). "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 General Electric Corp. v. U.S. Dep't of Labor, 14 CIT 608, 610-11 (1990) (quoting Int'l Union v. Marshall, 584 F.2d 390, 396 n. 26 (D.C.Cir.1978)).
To understand the legislative history and role of the workers in this case it is necessary to provide a basic overview of the industry. The petroleum industry...
To continue reading
Request your trial
-
Former Em. of Bmc Software v. Sec. of Labor
... ... See generally Former Employees of Marathon Ashland Pipe Line, LLC v. Chao, 370 F.3d 1375, 1385 (Fed.Cir.2004) ... ...
-
Former Employees v. U.S. Secretary
...where agency "failed to conduct an adequate investigation after four opportunities"); Former Employees of Marathon Ashland Pipeline LLC v. Chao, 27 CIT 820, 837, 277 F.Supp.2d 1298, 1312-13 (2003), rev'd on other grounds, 370 F.3d 1375 (Fed. Cir.2004) (ordering certification after multiple ......
-
Former Emp. of Chevron v. U.S. Sec. of Labor
...by any factual or legal basis, it also conflicts directly with Marathon Ashland II. See Former Employees of Marathon Ashland Pipeline v. Chao, 27 CIT ___, 277 F.Supp.2d 1298 (June 11, 2003). In light of the Labor Department's intransigence, the Marathon Ashland court's searching opinion loo......
-
Former Employees, Mara. Ashland Pipe Line v. Chao, 03-1556.
...that the Secretary's negative determination was not supported by substantial evidence. Former Employees of Marathon Ashland Pipeline, LLC v. Chao, 277 F.Supp.2d 1298 (Ct. Int'l Trade 2003). The court regarded the question of statutory eligibility for adjustment assistance as turning on whet......