Former Employees of Marathon Ashland v. Chao

• Decision Date: 16 July 2002
• Docket Number: Slip Op. 02-67. No. 00-04-00171.
• Citation: 215 F.Supp.2d 1345
• 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

215 F.Supp.2d 1345

FORMER EMPLOYEES OF MARATHON ASHLAND PIPELINE, LLC, Plaintiffs, v. Elaine CHAO, United States Secretary of Labor, Defendant.

Slip Op. 02-67. No. 00-04-00171.

United States Court of International Trade.

July 16, 2002.

COPYRIGHT MATERIAL OMITTED

Katten, Muchin & Zavis, Chicago, IL (Marianne Rowden, James L. Sawyer) for Plaintiff.

Robert D. McCallum, Jr., Assistant Attorney General, David M. Cohen, Director; Lucius B. Lau, Assistant Director; (Michele D. Lynch, Delfa Castillo), Commercial Litigation Branch, Civil Division, Department of Justice; Gary E. Bernstecker, Attorney, Office of the Solicitor, Division of Employment & Training Legal Service, U.S. Department of Labor.

OPINION

BARZILAY, Judge.

I. INTRODUCTION

This case is before the court on Plaintiffs' motion for judgment upon the administrative record pursuant to USCIT Rule 56.1(c)(1). Plaintiffs seek judicial review of the Secretary of Labor's (the "Secretary" or "Labor") denial of certification for trade adjustment assistance (TAA) under Section 222 of the Trade Act of 1974, (the "Act"), as amended and codified at 19 U.S.C. § 2272 (1994). See Notice of Determination Regarding Eligibility to Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance ("Determination"), 64 Fed.Reg. 72690, 72691 (Dep't of Labor Dec. 2, 1999), reconsideration denied, 65 Fed Reg. 8743 (Dep't of Labor Feb. 22, 2000). Plaintiffs are former Marathon Ashland Pipeline workers who were employed as gaugers, who state that they performed the functions, inter alia, of testing and determining the quality of crude oil to be purchased and transported. The Secretary determined that the Plaintiffs did not satisfy the statutory criteria under 19 U.S.C. § 2272(a)(3). The Secretary then voluntarily asked for remand of her negative determination to acquire additional information regarding the transportation of articles produced by the parent company of Plaintiffs' employer, Marathon Ashland Pipe Line LLC ("Marathon Ashland"). The Secretary's Notice of Negative Determination of Reconsideration on Remand ("Remand Determination"), 66 Fed.Reg. 52784 (Dep't of Labor Oct. 17, 2001), again denied plaintiffs' petition for certification. Plaintiffs contend the Secretary's initial Determination and Remand Determination are unsupported by substantial evidence and not in accordance with law. Plaintiffs initially claimed that the Secretary failed to investigate: 1) the actual nature of the work performed by the Plaintiffs; 2) whether Plaintiffs' separations were caused by a reduced demand for their services from their parent firm, or a firm otherwise related, whose workers independently meet the statutory criteria for certification under the Act; and 3) whether increased imports of crude oil contributed importantly to Plaintiffs' separations. Following the Secretary's Remand Determination, Plaintiffs reassert all original arguments and additionally claim that the Secretary failed to request information concerning: 1) Marathon Oil Company's ("Marathon Oil") (Marathon Ashland's parent company) importation of foreign oil between 1997 and 1999; 2) the extent to which the importation of oil by Marathon Oil caused or contributed to Marathon Ashland's decrease in domestic oil production and sales; 3) the basis for Marathon Oil's cessation of purchasing oil from the Illinois Basin Area; and 4) the nexus between Marathon Ashland's activities and the crude oil purchased or produced by its parent or related companies. Plaintiffs ask that the Secretary's determination be reversed or, in the alternative, remanded back to the Department for further investigation.

The court has jurisdiction pursuant to 28 U.S.C. § 1581(d)(1) (1994) to review the Department of Labor's final determination regarding eligibility of workers for TAA under Section 223 of the Trade Act of 1974, as amended, 19 U.S.C. § 2273 (1994).

After reviewing the administrative records and the briefs of the parties, the court again remands the action to the Secretary for further proceedings in accordance with this opinion.

II. BACKGROUND

On October 23, 1999, Plaintiffs filed a petition for TAA with the Department of Labor under Section 221(a) of the Act on behalf of Operations Technicians at Marathon Ashland. See Administrative Record ("A.R.") at 1.¹ Marathon Ashland is a [" ."] A.R. at 18. Prior to the administrative review of Plaintiffs' petition, some of Marathon Oil Company's workers had been certified for TAA. Plaintiffs worked at Marathon Ashland's Bridgeport, Illinois, location and petitioned the Secretary for TAA after their separation from Marathon Ashland.

The Secretary issued a Notice of Investigation on November 8, 1999, to determine if Plaintiffs were eligible for TAA. See 64 Fed.Reg. 69039. Labor had to ascertain if "increased imports have contributed importantly to actual or threatened decreases in employment and to decreases in sales or production at the petitioning workers' plant."² A.R. at 12. To facilitate the investigation, Labor sent an information request to Marathon Ashland's Human Resource Representative, Mike Leland, asking him to furnish specific information regarding Marathon Ashland's organizational structure, sales, production, employment, and imports. In Leland's response he stated, inter alia, that [ ] See A.R. at 16-18. Based on Leland's response and other information compiled from the investigation, the Secretary determined that Plaintiffs did not "produce" an article within the meaning of Section 222(3) and their separation was not "caused importantly by a reduced demand for services from a parent firm...."³ A.R. at 24. The Secretary found that because "[t]he Department of Labor has consistently determined that the performance of services does not constitute production of an article, as required by Section 222 of the Trade Act of 1974," Plaintiffs did not qualify for TAA benefits. Id.

On December 16, 1999, Plaintiffs requested reconsideration of the negative determination. Plaintiffs asserted that their jobs involved more than merely transporting crude oil. Plaintiffs contended that their work as gaugers constituted "production" of an article pursuant to Section 222 of the Act. Plaintiffs argued that as gaugers they tested the crude oil and determined if the oil "was of such quality as to be purchased by Marathon Oil Company and transported into the pipe line maintained by Marathon Ashland Pipe Line LLC." A.R. at 33. Labor reviewed the application and determined: 1) the workers provided a service that was not covered by the Act; 2) although some Marathon Oil workers received TAA certification, Marathon Ashland did not serve the locations under existing certification; and 3) the Plaintiffs were terminated because of the sale of their firm's assets to another company. Notice of Negative Determination Regarding Application for Reconsideration ("Determination Reconsideration"), 65 Fed.Reg. 8743. Citing to the 1988 Omnibus Trade and Competitiveness Act amendments to the Trade Act of 1974, Labor explained that the amendments "extended coverage to service workers engaged in exploration and drilling for crude oil and natural gas." Id. Labor concluded that "[t]he same consideration cannot be given to those workers engaged in employment related to the transmission of crude oil or natural gas after drilling." Id. Therefore, Labor denied Plaintiffs' request for administrative review.

On January 24, 2001, Plaintiffs filed their Motion for Judgment on the Administrative Record with this court. On August 7, 2001, Labor sought a voluntary remand of its investigation. Noting that it had failed to conduct a complete investigation, Labor again contacted Leland for additional information regarding whether the gaugers supported crude oil production by Marathon Oil.⁴ Supplemental A.R. at 5. The investigation on remand revealed that in 1997, 1998 and through March of 1999, Marathon Ashland Pipe Line did not transport via pipeline any articles produced by the parent company, Marathon Oil Company, Inc. See Supplemental A.R. at 6. The Secretary's investigation found that in 1997, the parent company purchased crude oil at the Illinois Basin⁵ that was transported by Marathon Pipe Line Company. Id. "In 1998, Marathon Ashland Petroleum LLC was formed and it purchased crude from the Basin which it transported via the pipeline." Id. In 1999, Marathon Ashland Petroleum LLC did not purchase from the lease (Illinois Basin). See id. On these findings, the Secretary affirmed her original notice of negative determination of eligibility to apply for TAA benefits for the former workers of Marathon Ashland Pipe Line, LLC.

III. STANDARD OF REVIEW

Cases contesting the denial of trade adjustment assistance filed under 28 U.S.C. § 1581(d) must be upheld if the Department of Labor's determination 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 International Union v. Marshall, 584 F.2d 390, 396 n. 26 (D.C.Cir.1978)).

Furthermore, this court has noted that "`because of the ex...