Former Emps. of Weather Shield Mfg., Inc. v. U.S. Sec'y of Labor
| Decision Date | 01 July 2013 |
| Docket Number | Court No. 10-00299,Slip Op. 13-85 |
| Parties | FORMER EMPLOYEES OF WEATHER SHIELD MANUFACTURING, INC., Plaintiff, v. U.S. SECRETARY OF LABOR, Defendant. |
| Court | U.S. Court of International Trade |
Before: Judith M. Barzilay, Senior Judge
Public Version
[Plaintiffs' motion for judgment on the agency record is denied and the Department of Labor's remand results are sustained.]
Cassidy Levy Kent (USA) LLP (James R. Cannon, Jr.) and Williams Mullen, PC (Dean A. Barclay and J. Forbes Thompson) for Plaintiff Former Employees of Weather Shield Manufacturing, Inc.
Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Antonia R. Soares) for Defendant United States; Vincent Costantino, Office of the Solicitor, United States Department of Labor, of Counsel.
This matter comes before the court upon Plaintiffs' motion for judgment on the agency record filed pursuant to USCIT R. 56.1. The case returns to the court for the fourth time following the U.S. Department of Labor's ("Labor") negative determination on remand. SeeWeather Shield Manufacturing, Inc. Corporate Office, Medford, WI: Notice of Negative Determination on Third Remand, 78 Fed. Reg. 775 (Dep't of Labor Jan. 4, 2013) ("Remand Results"). Plaintiffs are former administrative support employees of Weather Shield Manufacturing, Inc. ("Weather Shield"), a producer of doors and windows, who challenge Labor's decision denying their application for Trade Adjustment Assistance ("TAA") under Section 222 of the Trade Act of 1974, as amended by the Trade and Globalization Adjustment Assistance Act of 2009, 19 U.S.C. § 2272. Labor has again determined that Plaintiffs are ineligible for TAA benefits for the 2008 to 2009 period, and Plaintiffs maintain that this determination is not supported by substantial evidence. The court has jurisdiction pursuant to 28 U.S.C. § 1581(d). For the reasons set forth below the court sustains Labor's determination.
STANDARD OF REVIEW
Findings of fact made by Labor during TAA investigations "if supported by substantial evidence, shall be conclusive." 19 U.S.C. § 2395(b). "Although substantial evidence must be more than a 'mere scintilla,' it is 'something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.'" Former Employees of Barry Callebaut v. Chao, 357 F.3d 1377, 1381 (Fed. Cir. 2004) (quoting Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620 (1966)). Rather, the role of the court is to "merely vet the determination," and to affirm where that determination "is reasonable and supported by the record as a whole . . . ." Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006) (quotation omitted).
DISCUSSION
The TAA program provides a range of benefits to workers who have lost their jobs due to increased imports or shifts in production to a foreign country. See 19 U.S.C. § 2272. Under the statute, Labor must first determine whether a "significant number or proportion of the workers in such workers' firm have become totally or partially separated or are threatened to become totally or partially separated" from employment. See 19 U.S.C. § 2272(a)(1). That requirement is satisfied here.
Once the separation element has been satisfied, Labor must then determine if one of two other provisions of the statute are satisfied. See 19 U.S.C. §§ 2272(a)(2)(A) & (B). Under § 2272(a)(2)(A), Labor must determine whether: (1) "sales or production, or both, of such firm have decreased absolutely;" (2) "imports of articles . . . like or directly competitive with articles produced . . . by such firm have increased;" and (3) that increase in imports "contributed importantly to such workers' separation or threat of separation and to the decline in the sales or production of such firm." 19 U.S.C. § 2272(a)(2)(A)(i) - (iii).
Under § 2272(a)(2)(B), Labor will investigate whether (1) "there has been a shift by such workers' firm to a foreign country in the production of articles . . . like or directly competitive with articles which are produced . . . by such firm;" or the firm "acquired from a foreign country articles . . . that are like or directly competitive with articles which are produced . . . by such firm;" and (2) this shift "contributed importantly to such workers' separation or threat of separation." 19 U.S.C. § 2272(a)(2)(B)(i) - (ii).
In its previous remand order, the court directed Labor to provide a fuller explanation for a downward adjustment in Weather Shield's 2008 sales data, and to further investigate whether Weather Shield's customers were purchasing imports. Following issuance of that order, Laborsent a number of emails to Weather Shield requesting that it explain why its 2008 sales were adjusted downward from [[ ]] to [[ ]]. Supplemental Updated Administrative Record ("SUAR") 32-34. This adjustment was material because 2009 sales were [[ ]], so the new 2008 sales number turned a decrease in sales during the 2008-2009 period into an increase. Brandon Brunner, Weather Shield's corporate counsel, responded that the original higher 2008 number had included intercompany sales and the lower number was adjusted to reflect net sales to customers only. Id. at 32.
Because 19 U.S.C. § 2272(a)(2)(A)(i) contemplates an award of TAA if either sales or production have decreased, Labor also requested production data from Weather Shield for the relevant period. Id. at 35-38. After receiving several follow-up requests from Labor, Brunner responded that he Id. at 35. Brunner followed up the next day stating that Weather Shield had manufactured [[ ]] window and door units in 2008 and [[ ]] in 2009. Id. at 41. Noting that these numbers reflected a [[ ]] decrease in production during the same period that Weather Shield reported a [[ ]] sales increase, Labor asked Weather Shield to explain the "contradictory pattern" evidenced by this data. Id. at 40. Labor did not receive an immediate response to this inquiry and so it sent a follow-up email with a reminder that this information was necessary to conclude the investigation. Id. At that point, Brunner responded that he did not know the answer to the question, and was unable to divert resources to the request. Id.
Upon receiving this response from Brunner, Labor reiterated the importance of the requested information to the remand investigation, and issued to Weather Shield a subpoenawarning letter. Id. at 46-47. The letter provided a deadline by which Weather Shield was to explain the inconsistent sales and production data, and stated that if Weather Shield failed to provide an explanation, Labor would issue a subpoena in order to obtain it. Id. at 47. When Weather Shield failed to provide an explanation by the deadline, Labor issued a subpoena citing 19 U.S.C. §§ 2272(d)(3)(B) & 2321 and 29 C.F.R. 90.14(a). 1 At that point, Weather Shield submitted a letter to Labor saying that the production numbers previously reported were incorrect, and that production had actually increased from [[ ]] units in 2008 to [[ ]] units in 2009. Id. at 81. Labor received two sets of comments from Plaintiffs challenging the sales and production data Weather Shield provided. Id. at 382-86, 467-69; Remand Results, 78 Fed. Reg. at 777-78. Ultimately, however, Labor found the information provided by Weather Shield reliable, and the company's increased sales and production between 2008 and 2009 formed a basis for the Remand Results' negative determination.
Plaintiffs argue that Labor's determination cannot be sustained because Weather Shield never explained why it changed its production numbers, and the agency should have investigated the change further. Additionally, Plaintiffs call into question the accuracy of Weather Shield's production data by relying on the company's closure of its Greenwood, WI manufacturing facility in 2009. Id. at 15. "One would expect," Plaintiffs argue, a plant closure to lead to a decrease in production, yet Weather Shield reported an increase and Labor failed to inquire further into this "apparent contradiction." Pl. Br. 16. Regarding the sales data, Plaintiffs point out that the original 2008 and 2009 sales numbers were reported at the same time. Plaintiffs argue that it is therefore "logical to assume" that the numbers were based on the same type ofdata, and that if the 2008 number was adjusted downward after excluding intercompany sales the 2009 number may merit a similar adjustment. Pl. Br. 18. Because Labor failed to inquire into this possibility, Plaintiffs argue that the court cannot sustain the Remand Results as supported by substantial evidence.
After reviewing the record, the court concludes that Labor's determination regarding Weather Shield's increased sales and production is supported by substantial evidence. Upon providing the adjusted production numbers, Brunner informed Labor that the numbers originally provided were incorrect and that he was providing corrected numbers. Id. at 81. Likewise, Brunner informed Labor that the 2008 sales numbers were adjusted downward because the original numbers included intercompany sales. Id. at 32. Accordingly, Labor was not faced with a record containing unaddressed or unexplained contradictions. While Weather Shield's explanations were not extensive, they did provide a basis according to which Labor could weigh Weather Shield's adjusted numbers. See Former Employees of Marathon Ashland Pipe Line, LLC v. Chao, 370 F. 3d 1375, 1385 (Fed. Cir. 2004) (...
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