FORMER EMPLOYEES OF BASS ENT. PRODUCTION v. US

• Decision Date: 24 January 1989
• Docket Number: No. 87-04-00584.,87-04-00584.
• Citation: 706 F. Supp. 897,13 CIT 68
• Parties: FORMER EMPLOYEES OF BASS ENTERPRISES PRODUCTION COMPANY, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

706 F. Supp. 897

13 CIT 68

FORMER EMPLOYEES OF BASS ENTERPRISES PRODUCTION COMPANY, Plaintiffs, v. UNITED STATES, Defendant.

No. 87-04-00584.

United States Court of International Trade.

January 24, 1989.

COPYRIGHT MATERIAL OMITTED

Charles E. Williams, pro se, and for plaintiffs.

John R. Bolton, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice, Elizabeth C. Seastrum, U.S. Dept. of Labor, Washington, D.C., Gary E. Bernstecker, for defendant.

MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

This action is before the Court to review remand results ordered in Former Employees of Bass Enter. Prod. Co. v. United States, 12 CIT ___, 688 F.Supp. 625 (1988), motion to stay remand denied, 12 CIT ___, 688 F.Supp. 1550 (1988), rehearing on motion to stay remand denied, 12 CIT ___, 691 F.Supp. 373 (1988). The Court finds that (1) the statement on behalf of counsel for defendant that it is "unlikely" that plaintiffs "could satisfy" the first criterion for assistance does not amount to a finding by the United States Department of Labor (Labor) that plaintiffs do not satisfy the requirement that a significant number of workers have been or are threatened with separation; (2) although Labor determined that sales or production of oil increased, the statute requires Labor to examine sales or production of the firm or subdivision rather than only one of two related products which are each important to the firm where the petitioning workers produce both articles; and (3) that Labor did not apply the statutory changes to the third criterion which entered into effect before Labor held its hearing and made its determination. The Court vacates and remands for redetermination of eligibility for trade adjustment assistance benefits. The Court also remands for inquiry into charges that Labor's investigation was biased against granting adjustment assistance.

BACKGROUND

In Bass I, the Court found that Labor (a) denied plaintiffs due process in not giving actual notice of the 10-day period in which to request a hearing, and (b) did not support its denial of benefits with a reasoned analysis. Former Employees of Bass Enter. Prod. Co. v. United States, 12 CIT ___, 688 F.Supp. 625 (1988) (Bass I). The Court accordingly vacated the denial of trade adjustment assistance benefits and remanded for a new investigation. Id. at ___, 688 F.Supp. at 632. Following plaintiffs' request for a hearing on remand, Labor scheduled a hearing in Dallas, Texas. Supp.R. 10; Bass Enterprises Production Co., Fort Worth, TX; Public Hearing, 53 Fed.Reg. 29,790 (Aug. 8, 1988).

Before the hearing was held, the Omnibus Trade and Competitiveness Act of 1988 made changes in the law relating to the eligibility of oil and gas workers to apply for adjustment assistance. At the hearing held on August 29, 1988, plaintiffs presented testimony and evidence to supplement the administrative record, and argued that Labor should apply the new trade law provisions which came into effect for oil and gas workers. In its remand determination on September 19, 1988, Labor reaffirmed its original denial of adjustment assistance benefits. Bass Enterprises Production Co., Fort Worth, TX; Negative Determination on Remand, 53 Fed.Reg. 37,655, 37,656 (Sept. 27, 1988).

STANDARD OF REVIEW

The standard of review which the Court must apply to a denial of a petition for adjustment assistance is whether the Secretary of Labor's decision is supported by substantial evidence on the record as a whole and is in accordance with law. 19 U.S.C. § 2395(b) (1982). Labor's findings of fact are conclusive if supported by substantial evidence. 19 U.S.C. § 2395(b) (1982). Rulings made on the basis of those findings must be in accordance with the statute and not be arbitrary or capricious, and for this purpose the law requires a showing of reasoned analysis. International Union, United Auto., Aerospace and Agricultural Implement Workers of Am. v. Marshall, 584 F.2d 390, 396 n. 26 (D.C.Cir.1978); Chapman v. Donovan, 9 CIT 545, 547 (1985).

DISCUSSION

I. Denial of Eligibility for Adjustment Assistance

19 U.S.C. § 2272 (1982 & Supp. IV 1986) directs the Secretary of Labor to certify a group of workers as eligible to apply for adjustment assistance if the Secretary 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.

The Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, §§ 1421, 102 Stat. 1107, 1242-44 (1988), renumbered the preceding section as 19 U.S.C. § 2272(a) and added the following provision relating to the eligibility of oil and gas workers to apply for adjustment assistance benefits:

(b) For purposes of paragraph (a)(3)—

(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 or 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 or natural gas, or otherwise produces oil or 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 (1982 & Supp. IV 1986), as amended by the Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, § 1421(a)(1), 102 Stat. 1107, 1242-44 (1988). This provision is retroactive to workers separated after September 30, 1985. Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, § 1421(a)(2), 102 Stat. 1107, 1243 (1988). See also Trade Adjustment Assistance; Oil and Gas Exploration Workers; Petitions, 53 Fed.Reg. 35,390 (Sept. 13, 1988).

The changes under the 1988 Omnibus Trade Act have not altered the rule under the former provision that failure to satisfy any one of the three criteria for certification of workers for assistance will result in denial of adjustment assistance. See Former Employees of Asarco's Amarillo Copper Refinery v. United States, 11 CIT ___, 675 F.Supp. 647, 651 (1987); Abbott v. Donovan, 8 CIT 237, 239, 596 F.Supp. 472, 474 (1984). Accordingly, if the Court sustains Labor's determination regarding the failure to satisfy any one of the three requirements for certification, the Court will sustain the negative determination as a whole.

19 U.S.C. § 2272(a)(1)

Labor states that "new findings on reconsideration show that Bass Enterprises replaced geologists and geophysicists with contract employees—geological consultants —performing these services." 53 Fed.Reg. at 37,655.

Defendant's brief states that "it is unlikely that plaintiffs could satisfy the first criterion of the adjustment assistance requirements." Defendant's Reply to Plaintiffs' Response to Labor's Negative Determination Upon Remand, at 16 (emphasis added). Labor made no express determination on remand whether the finding that Bass had "replaced geologists and geophysicists with contract employees" meant that plaintiffs had failed to satisfy the requirement "that a significant number or proportion of workers in such workers' firm or an appropriate subdivision have become totally or partially separated, or are threatened to become totally or partially separated." 19 U.S.C. § 2272(a)(1).

In Bass I the Court found that Labor's determination under this first criterion was not supported by a reasoned analysis. 12 CIT at ___, 688 F.Supp. at 630. Labor had failed to address claims that because imports will not affect accountants, administrators, engineers, secretaries, janitors, health club employees, security personnel, and other workers, Labor should look only to Bass workers who were involved in producing crude oil and natural gas. Id. at ___, 688 F.Supp. at 629.

In the absence of a specific finding by the Secretary of Labor that the Bass Employees did not satisfy 19 U.S.C. § 2272(a)(1), and a reasoned analysis to support that determination if it was in fact made, the Court is unable to affirm the denial of adjustment assistance benefits based only on counsel for defendant's assertion that it is "unlikely" that plaintiffs "could satisfy" 19 U.S.C. § 2272(a)(1). The statute provides that the Secretary of Labor must make each of the three determinations, not attorneys representing the Department of Labor. 19 U.S.C. § 2272(a) (1982 & Supp. IV 1986), as amended by the Omnibus Trade and Competitiveness Act of 1988, Pub.L. No. 100-418, § 1421(a)(1), 102 Stat. 1107, 1242-43 (1988).

Defendant's brief states that "regardless of the merit of plaintiffs' contentions concerning separation of workers," Labor's denial should still stand for plaintiffs' failure to satisfy the remaining criteria. Defendant's Reply to Plaintiffs' Response to Labor's Negative Determination Upon Remand, at 17. The Court accordingly turns to Labor's analysis of the other criteria for adjustment assistance.

19 U.S.C. § 2272(a)(2)

In its remand determination, Labor stated that

Bass was primarily a crude oil producer with natural gas accounting for an important portion of the total production. Investigation findings for Bass showed increased sales and production of crude oil for 1985 and 1986. Accordingly, there is no need for a customer survey of Bass' crude oil customers since the workers could not meet all three group eligibility criteria.

53 Fed.Reg. at 37,655. Labor also found that the petitioning workers "were not separately identifiable by...