Former Employers of Merrill Corp. v. U.S., Slip Op. 07-46.

• Decision Date: 28 March 2007
• Docket Number: Slip Op. 07-46.,Court No. 03-00662.
• Citation: 483 F.Supp.2d 1256
• Parties: FORMER EMPLOYEES OF MERRILL CORPORATION, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

483 F.Supp.2d 1256

FORMER EMPLOYEES OF MERRILL CORPORATION, Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 07-46.

Court No. 03-00662.

United States Court of International Trade.

March 28, 2007.

COPYRIGHT MATERIAL OMITTED

White & Case (Frank H. Morgan), New York City, for Plaintiffs.

Peter D. Keisler, Assistant Attorney General; Jeanne E. Davidson, Director, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; Patricia M. McCarthy, Assistant Director, U.S. Department of Justice Civil Division, Commercial Litigation Branch; (Cheryl L. Evans, Stephen C. Tosini), for the defendant.

OPINION & ORDER

CARMAN, Judge.

This matter comes before this Court for consideration of the second and third remand results denying Plaintiffs, the Former Employees of Merrill Corporation, certification for Trade Adjustment Assistance ("TAA"), which were issued by the United States Department of Labor ("Defendant" or "Labor"). The second remand results were published in the Federal Register on December 7, 2005. Merrill Corp., St. Paul, MN, 70 Fed.Reg. 72,857 (Dep't Labor Dec. 7, 2005) (notice of negative determination on reconsideration on remand) ("second remand results"). The third remand results were not published in the Federal Register but were included in Labor's Second Supplemental Administrative Record.¹ (2d Suppl. Admin. R. at 19.) Plaintiffs challenge Labor's determination in each remand to deny Plaintiffs' claim for certification under the Trade Act of 1974 ("Trade Act"), 19 U.S.C. §§ 2291-2298 (2000). Certification under the Trade Act would entitle Plaintiffs to certain benefits accorded to eligible displaced workers.

As set forth below, this Court holds that the second and third remand results are not supported by substantial evidence on the record. Accordingly, this matter is REMANDED to Labor for further action consistent with this opinion.

BACKGROUND

The facts of this case were set forth in Former Employees of Merrill Corp. v. United States, 29 CIT ___, 387 F.Supp.2d 1336 (2005) ("Merrill II").² This Court presumes familiarity with that opinion but, for convenience, provides limited facts herein.

Merrill Corporation is a communications and document services company providing printing[,] photocopying and document management services to the financial, legal and corporate markets. Merrill's services integrate traditional composition, imaging and printing services with online document management and distribution technology for the preparation and distribution of business-to-business communication material.

(Confidential Admin. R. at 12.) Among the documents that Merrill Corporation ("Merrill") provides its clients are "SEC compliance documents, annual reports and other financial documents, and promotional materials." (Confidential Admin. R. at 13.)

Plaintiffs were part of Merrill's Financial Document Services (FDS) group. Plaintiffs' application for TAA stated that the separated employees produced "typeset and html [sic] financial, corporate [and] legal documents for printing and filing with the [Securities and Exchange Commission ("SEC")]." (Admin. R. at 2.) Typesetters at Merrill received faxed, electronic, and hard copy documents, which they then typed, edited, and formatted to meet customer and SEC specifications. Once the documents were finalized, Merrill filed them electronically with the SEC. Merrill also provided printed copies of SEC filings at the customer's request.

In 2003, Merrill eliminated Plaintiffs' positions and shifted their work to a Merrill facility in India. As a result, Plaintiffs filed an application for TAA. Labor denied Plaintiffs' application after finding that Plaintiffs' former employer did not produce an "article" as required for certification under the Trade Act. Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 68 Fed.Reg. 43,372 (Dep't Labor July 22, 2003) (notice of negative determination) ("Initial Determination"). After voluntary remand, Labor upheld its Initial Determination. Merrill Corp., St. Paul, MN; Notice of Negative Determination on Reconsideration on Remand, 69 Fed. Reg. 20,645 (Dep't Labor Apr. 16, 2004) (negative remand determination). Plaintiffs then sought judicial review of Labor's negative Initial Determination.³

After Labor requested and was granted voluntary remand, Former Employees of Merrill Corp. v. United States, Slip Op. 04-2, 2004 WL 34548, 2004 Ct. Intl. Trade LEXIS 2 (CIT Jan. 4, 2004), and again determining that Plaintiffs were ineligible for TAA, in Merrill II, this Court held that printed matter is an article for purposes of the Trade Act. Merrill II, 387 F.Supp.2d at 1344. This Court also ruled that commercial value is not an acceptable standard for determining what constitutes an "article" for purposes of the Trade Act. Id. Further, this Court rejected Labor's contention that because it classified Merrill as a service provider the former employees were thereby ineligible for assistance under the Trade Act. Id. at 1345. As this Court stated, "the Trade Act does not limit eligibility to only those `articles' produced by manufacturing facilities." Id. Lastly, this Court held that Labor failed to conduct a reasonable inquiry and remanded the case for further investigation. Id. at 1345-46. On remand, this Court directed Labor to

determine whether (1) Plaintiffs were engaged in "production" of printed matter or other articles; (2) the volume of articles produced by Plaintiffs; (3) Merrill's customers contracted for the production of printed matter; (4) sales or production (or both) have decreased; (5) there has been or is likely to be an increase in imports of articles like or directly competitive with Merrill's articles; (6) any increase in imports contributed importantly to Plaintiffs' separation from Merrill and to its decline in sales or production; and (7) there was shift in production to a foreign country of articles like or directly competitive with Merrill's articles, and if so, to what country.

Id. at 1346.

REMAND RESULTS & PARTIES' CONTENTIONS

I. Second Remand

In the second remand results, Labor defined the scope of its investigation as covering the period from June 2002 through May 2003. Second Remand Results, 70 Fed.Reg. at 72,857. Labor stated that

Since no production took place at the subject facility during the relevant period, [Labor] investigated whether the subject workers supported production at an affiliated, domestic production facility during June 2002 through May 2003, whether sales and/or production declined at that production facility, and whether increased imports during the relevant period contributed importantly to those declines.

Id. Labor found "that production at all five printing facilities decreased during June 2002 through May 2003 from June 2001 through May 2002 levels." Id. However, Labor concluded that Plaintiffs should not be certified for TAA benefits even though their jobs were undisputedly sent to India. Id. Labor based its decision on the finding that Plaintiffs "created electronic documents for printing and filing with the Securities and Exchange Commission (SEC)." Id. Labor went on to state that it has consistently maintained that "electronic creations are not `articles' for the purposes of the Trade Act unless they are embodied in a physical medium." Id. As a result, Labor maintained that Plaintiffs did not produce an article as required by the Trade Act. Id.

In addition, Labor found that "there are no articles which are `like' or `directly competitive' to any single `article' created by Merrill because each electronic file is a unique document which is created for the sole purpose of satisfying a specific customer's particular need at a particular point in time." Id. at 72,858. "Since there are no articles which are like or directly competitive with those produced by the subject company," Labor concluded that "there cannot be any imports, much less increased imports" as required by the Trade Act. Id. Labor explained that "it is not enough for the process to be `like or directly competitive.'" Id.

Although Labor determined that Plaintiffs "could be viewed as supporting production of an article" (i.e., SEC filings printed in book form at the customer's request), Labor found that "no printing was transferred to another country," and "[t]herefore, there was no shift of production of an article." Id.

A. Plaintiffs' Contentions

In their comments to the second remand results, Plaintiffs allege that Labor failed to address several of the issues it was directed by this Court to examine and "has not conducted an adequate investigation or provided a reasoned basis for its decision." (Pls.' Comments on the Dep't. of Labor's 2d Remand Determination ("Pls.' 2d Remand Resp.") 2.) Plaintiffs argue that Labor's conclusion that there are no "like or directly competitive" articles (id. at 7) is not supported by statute or legislative history and "irrationally discriminates between similarly situated workers" (id. at 8). Plaintiffs insist that neither the Trade Act nor its legislative history "limits adjustment assistance to workers that produce commodity (i.e., non-custom made) products." (Id. at 8.)

Plaintiffs also submit that the administrative record — although not as complete as it should be — is sufficient to establish that Plaintiffs are eligible for TAA certification. (Id. at 10.) Based upon the remand results, Plaintiffs deduce that Labor "conducted its analysis to arrive [at] a particular result." (Id. at 12.) Accordingly, Plaintiffs urge this Court "to set Labor's determination aside and order Labor to certify them as eligible for trade adjustment assistance." (Id.)

Lastly, Plaintiffs take issue with holes detected in Labor's investigation and explanation. Specifically, Plaintiffs contend that Labor failed to reconcile the agency's definition of "directly competitive" with the facts of the...