Former Employees of Linden Apparel Corp. v. US, Court No. 87-04-00625.

• Decision Date: 06 June 1989
• Docket Number: Court No. 87-04-00625.
• Parties: FORMER EMPLOYEES OF LINDEN APPAREL CORPORATION, Plaintiff, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

715 F. Supp. 378

13 CIT 467

FORMER EMPLOYEES OF LINDEN APPAREL CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

Court No. 87-04-00625.

United States Court of International Trade.

June 6, 1989.

Bobby A. McGee, Linden, Tenn., for plaintiff.

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

MEMORANDUM OPINION

TSOUCALAS, Judge:

In this action, Billy D. Ward, on behalf of the former employees of Linden Apparel Corporation, challenges a decision of the Secretary of Labor denying certification to apply for worker adjustment assistance benefits under the Trade Act of 1974, 19 U.S.C. §§ 2271-2321, 2395 (1982 & Supp. II 1984). Specifically, plaintiff contests the Secretary's determination that the third eligibility requirement of 19 U.S.C. § 2272 was not satisfied because increased imports did not "contribute importantly" to worker separations at Linden Apparel. The Court has jurisdiction under 28 U.S.C. § 1581(d)(1) (1982).

Governing Law

Under the trade adjustment assistance program, workers whose loss of jobs are attributable to import competition may receive unemployment compensation, training, job search and relocation allowances, and other employment services. See 19 U.S.C. §§ 2291-2298. To apply for benefits, a group of workers must first obtain a certification of eligibility from the Secretary of Labor. Under 19 U.S.C. § 2272, the Secretary is required to certify a group of workers 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, 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.

Employees must meet all three statutory criteria to be certified as eligible for trade adjustment assistance. The instant action involves the Secretary's negative determination of the third criterion.

Facts

In November 1986, Linden Apparel closed its manufacturing plant which produced men's and boys' overalls and painter jeans. The worker separation occurred in two phases. Approximately 119 employees, or 75 percent of the work force, were displaced when Linden Apparel ceased production in May of 1986. The remaining workers, who were retained to press and package apparel made elsewhere, were sporadically laid-off until the plant closure in November of 1986.

On November 21, 1986, three former employees, on behalf of all the former Linden Apparel employees, submitted to the Secretary of Labor a petition for eligibility to apply for worker adjustment assistance. The Secretary's investigation revealed that Linden Apparel was an exclusive contractor for its parent company, Washington Manufacturing Company (Washington). In view of this, the Secretary treated Washington as Linden Apparel's sole customer for purposes of the customer survey. The survey disclosed that "Washington did not use any foreign contractors or import men's and boys' pants and overalls in 1985 or 1986. Washington increased its reliance on other domestic contractors and experienced increasing sales in 1986 compared with 1985." Administrative Record (Public) at 31.

The Secretary denied certification because, he said, the customer survey demonstrates that imports did not "contribute importantly" to the worker separation at Linden Apparel. The notice of this negative determination was published on March 10, 1987. 52 Fed.Reg. 7330.

On April 10, 1987, Billy D. Ward sought an administrative reconsideration of the Secretary's negative determination. In his letter, Mr. Ward contended, inter alia, that: (1) prior to the plant's closing, Haywood Male Inc., an apparel manufacturing company with at least one factory in Haiti, bought out Washington and formed Washington Industries; (2) some of Linden Apparel's machinery were shipped to Haywood Male's plant in Haiti; (3) one of the former employees was sent to repair machines at Haywood Male's Haitian plant; and (4) some former employees pressed, packed, and shipped foreign-made clothing. The Secretary denied the request for reconsideration as untimely, since plaintiff filed its request thirty-one days after the date of publication of the Secretary's determination in the Federal Register. The regulation, 29 C.F.R. § 90.18(a) (1988), provides for the filing of a request for reconsideration within thirty days of the publication date.

In dismissing plaintiff's application as untimely, the Secretary informally advised plaintiff that Haywood Male's operation in Haiti would not form a basis for certification because the plant in Haiti does not produce men's and boys' overalls and painter jeans, but rather men's jackets and shirts. The Secretary further stated that Washington transported most of Linden Apparel's machinery and equipment to domestic locations and that the remainder were shipped to Haiti to make apparel other than men's and boys' overalls and painter jeans.

Mr. Ward sought judicial review by timely mailing a copy of his April 10, 1987 letter to the Office of the Clerk of the United States Court of International Trade. The letter was deemed to constitute a summons and complaint.

Discussion

The Secretary's denial of certification for adjustment assistance is conclusive if it is supported by substantial evidence on the record as a whole and accompanied by reasoned analysis. See 19 U.S.C. § 2395(b); Int'l Union, United Auto., Aerospace and Agricultural Implement Workers of America, UAW v. Marshall, 584 F.2d 390, 396 n. 26 (D.C.Cir.1978); Chapman v. Donovan, 9 CIT 545, 547 (1985). A reviewing court may remand a case and order the Secretary to further investigate if "good cause is shown." 19 U.S.C. § 2395(b). "Good cause" 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.'" United...