Former Employees of CSX Oil and Gas Corp. v. US

• Decision Date: 03 August 1989
• Docket Number: No. 87-09-00978.,87-09-00978.
• Citation: 720 F. Supp. 1002,13 CIT 645
• Parties: FORMER EMPLOYEES OF CSX OIL AND GAS CORP., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

720 F. Supp. 1002

13 CIT 645

FORMER EMPLOYEES OF CSX OIL AND GAS CORP., Plaintiffs, v. UNITED STATES, Defendant.

No. 87-09-00978.

United States Court of International Trade.

August 3, 1989.

Mark J. DeLisle, pro se.

Stuart E. Schiffer, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice (M. Martha Ries), for defendant.

OPINION

CARMAN, Judge:

Plaintiffs, former employees of CSX Oil & Gas Corporation (CSX) move this Court for judgment upon the agency record. Plaintiffs contend the Department of Labor's (Labor) negative determination of eligibility for certification for trade adjustment assistance benefits and its negative determination for reconsideration¹ are not supported by substantial evidence on the record and are not in accordance with law under the Trade Act of 1974 as amended (the Trade Act). 19 U.S.C. § 2271-98 (1982 & Supp. V 1987).²

Plaintiffs request that these determinations be reversed and this Court order Labor to grant their petition for certification for eligibility for trade adjustment assistance. Labor opposes the motion and requests affirmance of its determinations and a judgment of dismissal.

On the basis of the papers submitted herein, the arguments of the parties, the relevant case law and an examination of the administrative record, the Court finds that Labor's determination is based on substantial evidence on the record and is in accordance with law. The determination of Labor is affirmed and the action is dismissed.

BACKGROUND

Plaintiffs are employees of CSX's Western Region, located in the Denver, Colorado District Office. CSX produces crude oil and natural gas products throughout the southwest United States. Plaintiffs, workers in the district office, are employed as geologists (who monitor existing oil and gas reserves and explore for new reserves) and clerical support staff. Plaintiffs were separated from work on February 28, 1987 and filed a petition for adjustment assistance certification with Labor on April 1, 1987. Administrative Record at 2, 33 (hereinafter R.).

Labor initiated an investigation shortly thereafter which culminated in a negative determination of eligibility for certification for adjustment assistance. In that determination, Labor found that

Workers at the Denver District Office are engaged in employment supportive of CSX Oil and Gas Corporation's Production of crude oil and natural gas.

Layoffs at the Denver District Office were part of a corporate wide cost reduction program implemented in April 1986. Employees at the Corporation's Oklahoma City, Oklahoma District Office were also affected by the cost reduction program, and were denied eligibility to apply for adjustment assistance on April 17, 1987 (TA-W-19,136).

Sales of crude oil and natural gas liquids produced by CSX Oil and Gas Corporation increased in quantity in 1986 compared with 1985.

United States imports of dry natural gas decreased absolutely and relative to domestic shipments in 1986 compared with 1985. The ratio of imports to domestic shipments was less than five percent in 1986.

R. 37; 52 Fed.Reg. at 19,783-84. Labor indicated its investigation revealed increased imports did not contribute importantly to worker separations at the firm under 19 U.S.C. § 2272(3). Id. The investigation relied upon by Labor in its determination consisted primarily of data gathered in the context of Labor's prior investigation on behalf of former employees of CSX's Oklahoma City, Oklahoma District Office (TA-W-19,136). See R. 19-28, 81-83.

By letter dated June 8, 1987, plaintiffs' pro se representative wrote Labor requesting reconsideration of the negative determination. R. 43-44. The letter stated:

We are puzzled by the fact that many local offices of oil and gas exploration companies have been awarded certification of their petitions. The Denver exploration office of CSX Oil & Gas does not differ from these other companies. The terminated workers of CSX Oil & Gas Corporation were engaged in exploration and drilling for crude oil, not production of crude oil and natural gas. There is a direct relationship between oil prices and exploration budgets.

While sales of crude oil and natural gas liquids produced by CSX increased in quantity in 1986 compared with 1985, CSX shows a 30% decline in revenues from these sales.... This decrease in revenues was due to sharp drops in prices. The price of oil and condensate fell from $32.61 per barrel in 1982 to $13.67 in 1986. This is directly related to the supply and the price of foreign OPEC crude oil.

The layoffs at the Denver office were part of a corporate wide cost reduction program implemented in April, 1986. This cost reduction program, caused by the collapse of oil and gas prices in 1986, was directed at domestic exploration and drilling....

Id. The letter further argued that "the increase of cheap oil imports contributed significantly to the termination of employees within the Denver (and Oklahoma City) exploration offices." Id. at 44. In support of this claim, plaintiffs submitted selected portions of CSX's 1986 Annual Report. R. 46-51.

On July 8, 1987, Labor issued its denial of plaintiffs' request for reconsideration. R. 55-58; 52 Fed.Reg. at 27,074-75. The denial of reconsideration stated substantially as follows:

Petitioner implies that the Department's investigation was off its mark when it investigated the production of crude oil and natural gas at CSX Oil & Gas instead of looking at the relationship between oil prices and exploration budgets. The Department investigated the entire CSX Corporation in order to determine whether the support workers at the Denver District Office could qualify for adjustment assistance. Under certain conditions, service or support workers may become eligible for benefits. In general, the conditions are that the reduction in demand for services must be determined to have originated at a production facility related to the workers' firm by ownership whose workers independently meet the statutory criteria for certification. However, these conditions do not exist for workers of the Denver District Office since there are no CSX Oil & Gas Corporation facilities where workers are certified eligible to apply for adjustment assistance.

CSX is mainly a dry gas and natural gas liquids producer, a minor percentage of its production in 1986 was crude oil. Findings in the investigation show that production workers at CSX did not meet the worker group certification criteria of Section 222 of the Trade Act of 1974. CSX experienced an increase in sales and production of natural gas liquids and crude oil in 1986 compared to 1985. U.S. imports of dry natural gas decreased absolutely and relative to domestic shipments in 1986 compared to 1985.

With respect to petitioner's claim that workers at several Denver offices of other oil and gas exploration companies were certified eligible to apply for adjustment assistance and workers at CSX were not, the Department's records show that workers at other oil and gas exploration companies in the Denver area met the statutory worker group certification criteria of section 222 of the Trade Act.

... Worker separations at the Denver District Office were part of a corporate-wide cost reduction program implemented in April of 1986. Also, workers at the Oklahoma City District Office of CSX Oil & Gas were denied eligibility to apply for adjustment assistance on April 17, 1987....

Finally, decreased revenues and declining crude oil prices, in themselves, would not form a basis for certification. Revenues and prices are not criteria for a worker group certification under the Trade Act.

R. 55-58; 52 Fed.Reg. at 27,074-75. Thereafter plaintiffs initiated this action.

CONTENTIONS OF THE PARTIES

In their brief in support of judgment upon the agency record, plaintiffs contest both factual and legal conclusions of Labor.³ Generally, plaintiffs claim Labor's determination that no increase of imports contributed importantly to the workers' separations is based upon insufficient data. In particular, plaintiffs contest Labor's failure to investigate CSX's Western Region specifically. Plaintiffs contend labor erred by comparing quantity of sales instead of value of sales. Plaintiffs also contest Labor's conclusion that the separations were caused by a corporate-wide cost reduction program, not increased imports. Lastly, plaintiffs claim Labor improperly determined that plaintiffs were support workers not engaged in production of an article for purposes of eligibility certification. Labor counters that its determination is based upon substantial evidence on the record, is in accordance with law and represents a reasonable exercise of its discretion.

STANDARD OF REVIEW

Section 284 of the Trade Act of 1974 empowers the Court of International Trade to review a negative determination by the Secretary of Labor denying certification of eligibility for adjustment assistance. The statute provides in part as follows:

the findings of fact by the Secretary of Labor ..., if supported by substantial evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary to take further evidence and the Secretary may thereupon make new or modified findings of fact.... Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence.

19 U.S.C. § 2395(b) (1982). Substantial evidence has been held to be more than a "mere scintilla," but sufficient evidence to reasonably support a conclusion. Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986) (and cases cited therein), aff'd, 810 F.2d 1137 (Fed.Cir.1987). Additionally, the rulings made on the basis of the factual 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 v. Marshall, 584 F.2d...