Former Employees of Murray Engineering v. Chao, Slip Op. 04-45.

• Decision Date: 04 May 2004
• Docket Number: No. Slip Op. 03-00219.,No. Slip Op. 04-45.,Slip Op. 04-45.,Slip Op. 03-00219.
• Citation: 346 F.Supp.2d 1279
• Parties: FORMER EMPLOYEES OF MURRAY ENGINEERING, INC. Plaintiff, v. Elaine L. CHAO, United States Secretary of Labor, Defendant.
• Court: U.S. Court of International Trade

346 F.Supp.2d 1279

FORMER EMPLOYEES OF MURRAY ENGINEERING, INC. Plaintiff, v. Elaine L. CHAO, United States Secretary of Labor, Defendant.

No. Slip Op. 04-45.

No. Slip Op. 03-00219.

United States Court of International Trade.

May 4, 2004.

Ken Walter, for Plaintiff, pro se.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, Jayant Reddy, Attorney, Office of the Solicitor, U.S. Department of Labor, for Defendant, of counsel.

OPINION

POGUE, Judge.

[Remanded to the Secretary of Labor for further investigation.]

In this action, Ken Walter ("Plaintiff"), as a former employee of Murray Engineering, Inc. ("Murray"), challenges the determination of the Department of Labor ("Labor" or "Defendant") that he is not eligible for trade adjustment assistance ("TAA") under the Trade Act of 1974 ("the Act"). Labor found that Plaintiff was not eligible for TAA based on its determinations that Murray neither produced an "article,"¹ nor a "component part" for a TAA-certified business within the meaning of the Act.² Because Labor's first determination relies on its flawed interpretation of the terms of the Harmonized Tariff Schedule of the United States ("HTSUS"), 19 U.S.C. § 1202 (2003), the Court remands this action to Labor for further investigation.³ The Court reserves review of the second issue until Labor has made a second determination on remand.

BACKGROUND

Plaintiff is a former employee of Murray Engineering, Inc.⁴ Plaintiff worked at Murray producing custom designs⁵ for industrial machinery. In response to Plaintiff's petition for TAA certification,⁶ Labor initiated an investigation into Plaintiff's eligibility in January 2003. See Consent Motion for Voluntary Remand, Supp. C.R. Doc. No. 3 at 44 (June 17, 2003). Labor denied Plaintiff's petition in February 2003. See Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 68 Fed. Reg. 8,619, 8,620 (Dep't Labor Feb. 24, 2003). Plaintiff requested an administrative reconsideration, which was subsequently denied. Murray Engineering, Inc., Complete Design Service, Flint, MI, 68 Fed. Reg. 18,264, 18,265 (Dep't Labor Apr. 15, 2003) (notice of negative determination regarding application for reconsideration). Plaintiff then appealed his case to the Court. Petition for Judicial Review, Supp. C.R. Doc. No. 3 at 40 (Apr. 30, 2003). The case, however, was voluntarily remanded to Labor. See Former Employees of Murray Eng'g v. United States, slip op. 03-71, at 1, 2003 WL 21508226 (CIT June 25, 2003).

Neither in its original determination, nor on remand did Labor make any factual findings regarding the nature of the items produced by Plaintiff's employer or regarding Plaintiff's eligibility for TAA. Rather, Labor made a legal determination that the terms of the HTSUS precluded Murray's designs from being considered to be "articles" under the Act, and that Murray's employees similarly failed to qualify as adversely affected secondary workers because Murray did not supply a "component part" to a TAA-certified business. See Murray Engineering, Inc., Complete Design Service, Flint, MI, 68 Fed. Reg. 53,395, 53,396-97 (Dep't Labor Sept. 10, 2003) (notice of negative determination on remand) ("Remand Determ.").

After remand, the case now returns before the Court on Plaintiff's challenge to Labor's determinations regarding assistance both as a former employee of a company that manufactures an "article" and as an adversely affected secondary worker. Id.; see also Letter from Ken Walter to the Ct. of Int'l Trade (Sept. 30, 2003); Letter from Ken Walter to the Hon. Donald C. Pogue, Judge, U.S.Ct. of Int'l Trade at 9 (Oct. 17, 2003).

STANDARD OF REVIEW

The Act contains a provision for judicial review of Labor's eligibility determinations. See 19 U.S.C. § 2395(a) (West Supp. 2003).⁷ Subsection (b) of this provision requires that, in reviewing a denial of certification of eligibility, "[t]he findings of fact by the Secretary of Labor ..., if supported by substantial evidence, shall be conclusive." 19 U.S.C. § 2395(b) (West Supp.2003). The statute, however, does not mention how this Court is to treat Labor's legal determinations. That Congress would provide for a deferential level of review for Labor's factual findings, but not mention questions of law, could suggest that Congress meant for this Court to conduct a de novo review of Labor's legal determinations under the Act. See United States v. Mead Corp., 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (arguing that one can infer from "statutory circumstances" whether deference is due to an agency's legal interpretations).

In the case at issue here, however, Labor seeks to interpret the terms of the Act through its interpretation of the terms of another federal statute, the HTSUS. Regardless of whether Congress intended to give Labor the scope to interpret the Act, see id.,⁸ the HTSUS contains no indication that Congress intended for Labor to have authority to interpret its terms. Rather, the agency charged by Congress with applying and interpreting the HTSUS is the United States Bureau of Customs and Border Protection.⁹ See 19 U.S.C. § 1500. Nor is there any reason to believe that Labor possesses any particular expertise in regard to the HTSUS. Cf. NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256-57, 115 S.Ct. 810, 130 L.Ed.2d 740 (1995). Therefore, there appears to be no Congressional intent for this Court to grant deference to Labor's interpretation of the HTSUS under the doctrine articulated in Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ("Chevron").¹⁰

Moreover, even had Congress delegated to Labor the authority to enforce or administer the HTSUS, Chevron still requires that the agency's interpretation be "reasonable." Chevron, 467 U.S. at 844, 104 S.Ct. 2778. Labor's interpretation of the HTSUS, however, for reasons discussed below, is faulty, because of its misapprehension as to the scope and coverage of the schedule. See infra pp. 9-12. In addition, the flaws in Labor's interpretation of the HTSUS deprive that interpretation of the "power to persuade." See Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944).

The terms of the Act's provision regarding judicial review, the failure of Congress to assign Labor a role in the administration of the HTSUS, and the failure of Labor to put forth a reasonable or persuasive interpretation of the HTSUS all lead the Court to conclude that deference is not warranted in this case. Therefore, on the record here, Labor's statutory interpretation is subject to de novo review.

DISCUSSION

Having identified the standard of review appropriate to this case, the Court now turns to the legal issues. Labor has made two legal findings in its negative determination on remand: that Plaintiff is not eligible for TAA because Plaintiff's company does not produce "articles" within the meaning of 19 U.S.C.A. § 2272(a) (West Supp.2003) and that Plaintiff is not eligible for assistance as an "adversely affected secondary worker" because Plaintiff's company does not produce a "component part" for a certified company within the meaning of 19 U.S.C.A. § 2272(b) (West Supp.2003). See Remand Determ., 68 Fed. Reg. at 53,397; see also 19 U.S.C.A. § 2272(a-b) (West Supp.2003). The Court's opinion will focus on the first finding.

Defendant bases its negative determination of eligibility for assistance under 19 U.S.C.A. § 2272(a) (West Supp.2003) on two sources — the HTSUS and the North American Industry Classification System ("NAICS") — both of which it cites as support for the legal finding that Plaintiff's company does not produce "articles" within the meaning of 19 U.S.C.A. § 2272(a) (West Supp.2003). See Remand Determ., 68 Fed. Reg. at 53,396-97. The Court discusses each in turn.

Labor argues that the HTSUS furnishes a guide for determining whether Murray's designs are "articles." See Remand Determ., 68 Fed. Reg. at 53,396; see also Def.'s Mem. Opp'n to Pl.'s Comments Regarding Def.'s Remand Determ. at 10-11 ("Def.'s Mem."). Labor appears to argue that recourse must be had to the HTSUS to determine whether a given object is an "article" because "[t]hroughout the Trade Act, an article is often referenced as something that can be subject to a duty." Remand Determ., 68 Fed. Reg. at 53,396. Indeed, the Act does so reference articles. See, e.g., 19 U.S.C. §§ 2119, 2252(d)(4)(B)-(C)(2000) (discussing "rate of duty on any article", "amount of duty with respect to any article," suspension of liquidation "with respect to an imported article," and imposition of duty "with respect to an imported article").

Labor therefore looked to the HTSUS in deciding whether or not the designs created by Murray were "articles," or objects that could be subject to a duty. See Remand Determ., 68 Fed. Reg. at 53,396; Def.'s Mem. at 10-11. Specifically, Labor looked to the terms of heading 4906, HTSUS, which provide, in part, for "[p]lans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, being originals drawn by hand." See Remand Determ., 68 Fed. Reg. at 53,396; Def.'s Mem. at 11.; see also heading 4906, HTSUS. Labor appears to have taken this provision, which singles out hand-drawn originals, to imply that Congress intended to deny to plans and drawings made with the aid of computers the status of "articles." Remand Determ., 68 Fed. Reg. at 53,396-97, Def.'s Mem. at 11. The provisions of the HTSUS, however, do not support the implication that Labor drew.

Heading 4906 is located within chapter 49 of the HTSUS. Chapter 49 deals generally with printed matter. Chapter 49, HTSUS. While it contains numerous...