Former Emps. of Shaw Pipe v. U.S. Secy. of Labor, Slip Op. 97-161.

• Decision Date: 02 December 1997
• Docket Number: Slip Op. 97-161.,Court No. 95-04-00482.
• Citation: 988 F.Supp. 588
• Parties: FORMER EMPLOYEES OF SHAW PIPE, INC., Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.
• Court: U.S. Court of International Trade

988 F.Supp. 588

FORMER EMPLOYEES OF SHAW PIPE, INC., Plaintiffs, v. UNITED STATES SECRETARY OF LABOR, Defendant.

Slip Op. 97-161.

Court No. 95-04-00482.

United States Court of International Trade.

December 2, 1997.

Leibert L. Greenberg, New York, NY, for Plaintiffs.

Frank W. Hunger, Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Jeffrey M. Telep); Scott Glabman, Office of the Solicitor, United States Department of Labor, Of Counsel, for Defendant.

OPINION

CARMAN, Chief Judge.

This case is before the Court following remand to the United States Department of Labor ("Labor" or "Department") based on this Court's previously finding the Secretary's determination that plaintiffs were ineligible for certification to receive trade adjustment assistance benefits was not supported by substantial evidence on the record and was not otherwise in accordance with law. See Former Employees of Shaw Pipe, Inc. v. United States, 957 F.Supp. 239, 244 (CIT 1997) ("FEO Shaw Pipe") (remanding matter to Labor with instructions to determine "whether plaintiffs `create or manufacture a tangible commodity, or transform it into a new and different article'") (citation omitted). Pursuant to this Court's order, Labor has filed a Supplemental Administrative Record providing further support for its determination that plaintiffs are not eligible for certification to receive trade adjustment assistance benefits. Plaintiffs assert the Supplemental Administrative Record does not contain substantial evidence supporting the Secretary's determination and move this Court to vacate Labor's determination and remand this matter once again to the Department for further consideration and redetermination.

Defendant asserts the Department of Labor's determination is supported by substantial evidence on the record and should be affirmed by this Court. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1581(d) (1994), and for the reasons set forth below grants defendant's Motion for Judgment Upon the Agency Record.

BACKGROUND

Shaw Pipe, Incorporated ("Shaw Pipe") closed its pipe coating operations in Highspire, Pennsylvania on August 12, 1994, resulting in a group of approximately thirty-five workers losing their jobs. On January 3, 1995, three former employees filed a petition with the Department of Labor on the behalf of all the separated employees seeking certification to receive trade adjustment assistance benefits. Plaintiffs characterize Shaw Pipe's Highspire, Pennsylvania facility as having produced "small diameter steel pipe coated with polyethylene coating" and "large diameter steel pipe coated with concrete coating." Admin. R. at 1. Plaintiffs' petition for certification to receive trade adjustment assistance benefits was denied and plaintiffs appealed the Secretary's determination to this Court.

On January 9, 1997, this Court found the Department of Labor's determination that plaintiffs were not eligible for certification to receive trade adjustment assistance benefits was not supported by substantial evidence on the record and was not otherwise in accordance with law, and remanded the matter to Labor for further consideration. See FEO Shaw Pipe, 957 F.Supp. at 244. In compliance with this Court's order, Labor filed a Supplemental Administrative Record providing further support for its determination with the Court on May 5, 1997.

CONTENTIONS OF THE PARTIES

A. Plaintiffs

Plaintiffs raise two arguments in asserting the Department's determination should not be sustained by this Court. First, plaintiffs assert the Secretary's determination is not supported by substantial evidence on either the administrative record initially submitted to this Court or the Supplemental Administrative Record compiled pursuant to this Court's order remanding the matter to the Department of Labor.

Second, plaintiffs assert Labor's finding that plaintiffs' employment was terminated because Shaw Pipe lost its contract to coat pipe to another domestic competitor is not within the reason of the administrative record in this matter.

B. Defendant

Defendant contends the Supplemental Administrative Record filed pursuant to this Court's remand order provides substantial evidence supporting the Department's determination plaintiffs are ineligible for certification to receive trade adjustment assistance benefits because they do not satisfy either of the two requirements established by 19 U.S.C. § 2272(a)(3) (1994). See 19 U.S.C. § 2272(a)(3) (1994) (in order to certify a group as eligible to receive trade adjustment assistance benefits it must be determined "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").

First, defendant contends 19 U.S.C. § 2272(a)(3) requires applicants for certification to receive trade adjustment assistance benefits to have worked at a firm which "produce[s]" articles. The statutory language has been interpreted to require a determination that applicants must work at a firm that "create[s] or manufacture[s] a tangible commodity, or transform[s] it into a new and different article" to be eligible for certification. Nagy v. Donovan, 6 CIT 141, 145, 571 F.Supp. 1261, 1264 (1983) (interpreting eligibility requirements to receive trade adjustment assistance benefits established by 19 U.S.C. § 2272(3) (1980)). Defendant contends the Supplemental Administrative Record contains substantial evidence supporting the Secretary's determination that in applying protective coatings to steel pipe, Shaw Pipe's Highspire facility did not "create or manufacture a tangible commodity, or transform it into a new and different article." Id.

Additionally, defendant asserts even if the Court finds the record fails to support the Department's determination that plaintiffs did not work at a company which "create[s] or manufacture[s] a tangible commodity, or transform[s] it into a new and different article," id., plaintiffs additionally fail to satisfy the second condition on eligibility for certification established by 19 U.S.C. § 2272(a)(3). The second condition requires a determination that an "increase[] of imports of articles like or directly competitive with articles produced by [plaintiffs'] firm ... contributed importantly to [plaintiffs'] total or partial separation, or threat thereof, and to such decline in sales or production." 19 U.S.C. § 2272(a)(3) (1994). Defendant contends the Court's finding either of these two arguments to be supported by substantial evidence on the record provides sufficient grounds for the Court to uphold the Secretary's determination that plaintiffs are not eligible for certification to receive trade adjustment assistance benefits.

STANDARD OF REVIEW

In reviewing determinations of the Department of Labor denying certification of eligibility to receive trade adjustment assistance benefits, this Court will sustain the Department's determination when it is supported by substantial evidence on the record and is otherwise in accordance with law. See 19 U.S.C. § 2395(b)-(c) (1994); see also Former Employees of General Electric Corp. v. U.S. Department of Labor, 14 CIT 608, 611, 1990 WL 129488 (1990). "Substantial evidence has been held to be more than a `mere scintilla,' but sufficient evidence to reasonably support a conclusion." Former Employees of General Electric Corp., 14 CIT at 611 (citations omitted).

In reviewing Labor's determination, this Court will give deference "`to the agency's chosen [investigative] technique, only remanding a case if that technique is so marred that the Secretary's finding is arbitrary or of such a nature that it could not be based on "substantial evidence."'" Former Employees of CSX Oil & Gas Corp. v. United States, 13 CIT 645, 651, 720 F.Supp. 1002, 1008 (1989) (quoting United Glass & Ceramic Workers of North America v. Marshall, 584 F.2d 398, 404-05 (D.C.Cir.1978) (footnote omitted)).

DISCUSSION

In order for the Secretary of Labor to certify a group of workers to receive trade adjustment assistance benefits as provided for under Section 222 of the Trade Act of 1974, it must be determined:

(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) (1994). Case law clearly establishes that plaintiffs must satisfy all three of these statutory requirements in order to receive trade adjustment assistance benefits. See, e.g., Former Employees of Bass Enterprises Production Co. v. United States, 13 CIT 68, 70, 706 F.Supp. 897, 900 (1989) ("[F]ailure to satisfy any one of the three criteria for certification of workers for assistance will result in denial of adjustment assistance.") (citations omitted); Abbott v. Donovan, 8 CIT 237, 239, 596 F.Supp. 472, 474 (1984) ("If any of these three statutory conditions does not exist, the Secretary must deny certification.").

The conditions established by 19 U.S.C. § 2272(a)(1) and (a)(2) are not at issue in this matter. Rather, at issue in this matter is whether there is substantial evidence on the record to support the Secretary's determination that plaintiffs are ineligible to receive trade adjustment assistance benefits because they fail to satisfy the...