Former Employees of Galey & Lord Indust. v. Chao

• Decision Date: 30 July 2002
• Docket Number: SLIP OP. 02-74.,Court No. 01-00130.
• Citation: 219 F.Supp.2d 1283
• Parties: FORMER EMPLOYEES OF GALEY & LORD INDUSTRIES, INC., Plaintiffs, v. Elaine L. CHAO, United States Secretary of Labor, Defendant.
• Court: U.S. Court of International Trade

219 F.Supp.2d 1283

FORMER EMPLOYEES OF GALEY & LORD INDUSTRIES, INC., Plaintiffs, v. Elaine L. CHAO, United States Secretary of Labor, Defendant.

SLIP OP. 02-74.

Court No. 01-00130.

United States Court of International Trade.

July 30, 2002.

Buckley & Klein, LLP (Edward D. Buckley) for the plaintiffs.

Robert D. McCallum, Jr., Assistant Attorney General; David M. Cohen, Director, and Lucius B. Lau, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Delfa Castillo); and Office of the Solicitor, Division of Employment & Training Legal Service, U.S. Department of Labor (Jay Reddy), for the defendant, of counsel.

Memorandum

AQUILINO, Judge.

This action arises out of two current, pervasive and yet different American phenomena, namely, the discontinuance of domestic manufacturing and displacement of workers therein, and the reliance on the Internet even for matters formerly composed with greater care. In this instance, upon reception of an amorphous transmittal on or about April 9, 2001, and consistent with established practice, the Clerk of this Court of International Trade deemed the content thereof to be a timely appeal from a denial by the U.S. Department of Labor's Employment and Training Administration ("ETA") of a petition on behalf of employees "engaged in yarn manufacturing at Galey & Lord Ind., Inc. plant in Shannon, Georgia"¹ for certification of eligibility to apply for trade adjustment assistance. See ETA, Notice of Determinations Regarding Eligibility To Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 66 Fed.Reg. 9,599 (No. TA-W-38,376) (Feb. 8, 2001).

I

That petition was filed on ETA Form 8650 for assistance under the Trade Act of 1974, as amended, 19 U.S.C. § 2271 et seq. It pointed to Galey & Lord product(s) described as

[c]otton and cotton blended carded and combed yarns used in the production of cotton and cotton blended fabrics, primarily twills and poplins,²

and reported related worker separations totalling 120 and 480 on November 20 and 27, 2000, respectively. See AR, p. 2. The petition concluded with the following averment:

During the last several years there has been a significant increase in the quantity of yarn imports into the U.S. in the categories (300 — Carded Yarns, 301 — Combed Yarns) produced at the Shannon Georgia facility. At the same time, there have been equally significant increases in the importing of the fabrics for which these yarns are used (Categories 317 — Cotton Twills and 314 — Cotton Poplin and Broadcloth). The continued growth of imported yarns and fabrics in the U.S. market has resulted in significant downward pressure on the price of those products realized by the Company which has resulted in the erosion of profit margins.

The factors; continued growth of imports in the U.S. market, negative pricing pressure and profit erosion with no prospect for change in the trend have made any significant capital investment for modernization impractical. The result is the closure of the previously identified yarn manufacturing operations.

Id. at 3.

Plaintiffs' packet of papers now part of the court's case file contains a letter to one of the displaced Galey & Lord employees from the Georgia Department of Labor that refers to "pursuing other options that may be of assistance to the workers laid off', as well as a copy of a petition on ETA Form 9042 for NAFTA Transitional Adjustment Assistance filled out by hand in the name of that and two other employees presumably similarly situated and bearing the scribbled date April 6, 2001, or just before this action commenced.

Above-named counsel then formally appeared in this action on behalf of the plaintiffs, whereupon traditional give-and-take ensued between the parties as to scheduling and also whether or not the Form 9042 had been forwarded to the Governor of Georgia, as contemplated by 19 U.S.C. § 2331(b)(1), and, if so, whether he had timely notified the defendant thereof, as is required by section 2331(b)(2)(A). In any event, their interchange was followed by defendant's Consent Motion for Remand to the Department of Labor for Reconsideration, which was granted.

The results of that remand have been filed herein, and the plaintiffs present a formal response. Defendant's reply thereto prays for judicial affirmance of its negative determination(s) of eligibility for adjustment assistance and for dismissal of this action.

The court's jurisdiction to grant such relief is pursuant to 19 U.S.C. § 2395 and 28 U.S.C. §§ 1581(d)(1), 2631(d)(1).

II

Under the Trade Act of 1974, as amended, the Secretary of Labor shall certify workers as eligible to apply for adjustment assistance if she 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, 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). Subsection 2272(b)(1) defines "contributed importantly" to mean "a cause which is important but not necessarily more important than any other cause."

On this statute's face, and as reaffirmed by the courts, all three of the foregoing requirements must be satisfied by petitioners for assistance. See, e.g., Int'l Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. United States, 22 CIT 712, 713, 20 F.Supp.2d 1288, 1290 (1998). In reviewing ETA determinations,

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 such Secretary to take further evidence....

19 U.S.C. § 2395(b). See 28 U.S.C. § 2640(c). See also Former Employees of Shaw Pipe, Inc. v. United States, 21 CIT 1282, 1284, 988 F.Supp. 588, 590 (1997) (such determinations must be in accordance with law). "Substantial evidence ... must be enough reasonably to support a conclusion". 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), citing Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938); Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). "Good cause [to remand] exists if the Secretary's chosen methodology is so marred that his finding is arbitrary or of such a nature that it could not be based on substantial evidence". Former Employees of Barry Callebaut v. United States, 25 CIT ___, ___, 177 F.Supp.2d 1304, 1308 (2001), citing Former Employees of Linden Apparel Corp. v. United States, 13 CIT 467, 469, 715 F.Supp. 378, 381 (1989), quoting United Glass & Ceramic Workers of North America, AFL-CIO v. Marshall, 584 F.2d 398, 405 (D.C.Cir.1978). But, in general, "the nature and extent of the investigation are matters resting properly within the sound discretion of the administrative officials". Former Employees of CSX Oil & Gas Corp. v. United States, 13 CIT 645, 651, 720 F.Supp. 1002, 1008 (1989), quoting Cherlin v. Donovan, 7 CIT 158, 162, 585 F.Supp. 644, 647 (1984).

A

The ETA's initial negative determination herein states that its investigation of the facts and circumstances of plaintiffs' lost jobs revealed that the criteria of 19 U.S.C. § 2272(a)-(3), supra, were not met because

[t]he yarn produced by the workers at the subject firm was produced for internal consumption in the company's manufacturing process. Galey & Lord did not import yarn in the time period relevant to the investigation.

AR, p. 35. See 66 Fed.Reg. at 9,599. Upon reconsideration after the court-ordered remand, the ETA affirmed its original notice, denying eligibility to apply for adjustment assistance for the plaintiffs. That affirmance reports, in sum and substance:

On remand, the Department contacted officials of Galey & Lord to obtain clarification of the production and employment data provided with respect to the worker group in Shannon, Georgia. Although workers at the plant produced yarn and fabric, the petition was filed by a company official on behalf the [sic] workers at the plant producing yarn. The information obtained ... on remand[] show [sic] that the production data provided for 1998 through November 2000[] was [sic] specifically for yarn production. The employment data provided by the subject firm for that same time period was [sic] for all workers at the Shannon ... plant. The workers are separately identifiable between yarn and fabric production.

Other findings on remand show that the company imported insignificant quantities of yarn and fabric during the time period relevant to the investigation. Those imports were for evaluation purposes only and were not imported on a sustained basis.

Supplemental AR, pp. 4-5.

Plaintiffs' counsel are seemingly unable to take exception to this determination predicated as it is upon 19 U.S.C. § 2272(a)(3), supra. See Plaintiffs' Response to the Department of Labor's Redetermination Upon Remand passim. Indeed, there is enough evidence on the record to reasonably support it. The record indicates, for example, that Galey & Lord was seeking to maximize efficiency and assure long-term profitability by closing the yarn operation and modernizing its remaining weaving division. The production of yarn was to be outsourced to Parkdale Mills Inc., a North Carolina-, as opposed to foreign-, based company, enabling Galey & Lord to acquire yarn as needed at lower cost. Money saved by the closing was for purchase of "state-of-the-art looms for the weaving operation." AR, p. 5...