International Union, UAW v. Donovan, Civ. A. No. 81-1954.

• Citation: 568 F. Supp. 1047
• Decision Date: 28 July 1983
• Docket Number: Civ. A. No. 81-1954.
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. Raymond J. DONOVAN, Secretary of the United States Department of Labor, Defendant.
• Court: U.S. District Court — District of Columbia

568 F. Supp. 1047

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, et al., Plaintiffs, v. Raymond J. DONOVAN, Secretary of the United States Department of Labor, Defendant.

Civ. A. No. 81-1954.

United States District Court, District of Columbia.

July 28, 1983.

Wendy L. Kahn, A.L. Zwerdling, Zwerdling, Leibig & Kahn, Washington, D.C., John A. Fillion, Leonard Page, Detroit, Mich., Stephen P. Berzon, Trina Grillo, Altshuler & Berzon, San Francisco, Cal., for plaintiffs.

Mark C. Rutzick, William G. Cole, U.S. Dept. of Justice, Civil Div., Washington, D.C., for defendant.

MEMORANDUM OPINION

JOYCE HENS GREEN, District Judge.

The Trade Act of 1974, 19 U.S.C. § 2101 et seq. (Act), authorizes the payment of federally funded benefits, including trade readjustment allowances (TRA), to workers laid off because of a decline in sales or production by their firms because of competition from imports.¹ A worker is eligible to receive TRA benefits if he belongs to a group of workers certified by the Secretary of Labor (Secretary) as eligible to participate in the program and was employed by a single firm for 26 of the 52 weeks immediately preceding the layoff, at wages of at least $30 per week.

Plaintiffs challenge a Department of Labor (DOL) policy which does not permit a week in which an employee draws non-regular wages, such as workers' compensation, disability pay, sickness or accident pay, holiday pay, vacation pay, military pay, back pay or fringe benefits, to be considered a "week of employment" for the purposes of determining whether the 26-week requirement has been met. DOL Manpower Administration Handbook No. 315, Ch. 1, ¶ 9 (July 1975) (Handbook Policy). Plaintiffs contend that this policy violates Section 231 of the Act, 19 U.S.C. § 2291, and, insofar as it affects military leave, violates the Vietnam Era Veterans' Readjustment Assistance Acts of 1972 and 1974, 38 U.S.C. §§ 2013 and 2021 et seq. (Veterans' Acts).

The complaint alleges that some of the individual plaintiffs were determined ineligible for TRA benefits by the state agencies to which they had applied, as a result of the Handbook Policy. From subsequent pleadings, however, it appears that all but four of the eleven individual plaintiffs were ultimately determined eligible, despite the Handbook Policy.² The complaint further alleges that thousands of other members of plaintiff, International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), have been denied benefits by state agencies, acting as agents of DOL, because weeks in which they received workers' compensation, sickness or accident pay, disability pay, holiday pay, vacation pay, military pay, back pay or fringe benefits were wrongfully excluded, in accordance with the Handbook Policy, as weeks of employment in determining TRA eligibility.

Seeking to promote a uniform interpretation of the Act pursuant to 29 C.F.R. § 91.54, DOL has sternly advised that it will invoke the so-called "Lopez rule" whenever a state appeals body rules contrary to DOL's prohibition of the use of various types of compensated leave as qualifying weeks of employment. See Exhs. B, C, I and J in support of plaintiffs' motion for summary judgment, and letter dated March 24, 1983 from Stephen P. Berzon. Under the Lopez rule, a state must reimburse the federal government from its own funds for TRA benefits awarded in defiance of DOL policy.

In 1981, Congress amended the Trade Act provision governing TRA eligibility. Weeks of compensated leave, including inactive duty or active duty military service, are not expressly treated as qualifying weeks of employment for TRA benefits up to certain limits.³ However, plaintiffs seek relief for weeks of employment which began prior to October 1, 1981. Section 2514(b) of the Act exempts adversely affected workers receiving or entitled to receive allowances prior to October 1, 1981 from the limitations on TRA eligibility imposed by the amendments. The sole issue here is the legality of the Handbook Policy as it restricted the eligibility of UAW members for TRA benefits under the Trade Act before the 1981 amendments.

Plaintiffs have moved for summary judgment on the basis that the language of the Trade Act, its legislative history, and DOL regulations, require that weeks of non-regular wages be considered "weeks of employment" in this context, and that the Veterans' Acts prohibit penalizing veterans for periods of military leave in determining TRA eligibility. Defendant has moved to dismiss plaintiffs' claims on the basis that jurisdiction over this case is vested exclusively in state courts by 19 U.S.C. § 2311(d).

I. Subject Matter Jurisdiction

"Determinations" by state agencies with respect to entitlement to TRA benefits are subject to review "in the same manner and to the same extent as determinations under the applicable State law." 19 U.S.C. § 2311(d). The phrase "applicable State law" refers to "the unemployment insurance law of the state approved by the Secretary of Labor under Section 3304 of Title 26." 19 U.S.C. § 2319(10). The Secretary contends that § 2311(d) divests the Court of jurisdiction over this action.⁴

As the Secretary acknowledges, the language of 19 U.S.C. § 2311(d) is virtually identical to that in 5 U.S.C. § 8502(d) regarding state unemployment compensation payments to federal employees.⁵ Yet, where a claimant alleges that the state unemployment agency's determination was made in violation of federal law, 5 U.S.C. § 8502(d) has not precluded federal jurisdiction. See Christian v. New York State Department of Labor, 414 U.S. 614, 615-16, 94 S.Ct. 747, 748, 39 L.Ed.2d 38 (1974). Cf. AFL-CIO v. Marshall, 494 F.Supp. 971 (D.D.C.1980) (regulation promulgated under Federal-State Extended Unemployment Compensation Act, 26 U.S.C. § 3304n, challenged as inconsistent with that Act).

Similarly, individuals who have been denied Social Security benefits under state unemployment compensation laws may challenge those laws in federal court as inconsistent with the Social Security Act. Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 97 S.Ct. 1898, 52 L.Ed.2d 513 (1977); California Department of Human Resources v. Java, 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666 (1971).

In the typical case the Act envisions that a disappointed applicant for TRA benefits appeals to the state court the administering agency's application of the pertinent guidelines or regulations to the facts of his case. The instant case, however, is atypical. Here, plaintiffs allege that the guidelines themselves are invalid; they do not contest the particulars of the application of the guidelines to the facts of individual cases. In such circumstances, section 2311(d) of the Act does not divest this Court of jurisdiction.⁶ Other federal courts have entertained similar Trade Act cases without regard to section 2311(d). See Collins v. Marshall, 507 F.Supp. 83 (N.D.Mo.1981), rev'd sub nom. on other grounds, Collins v. Donovan, 661 F.2d 705 (8th Cir.1981); U.A.W. v. Donovan, 554 F.Supp. 1172 (D.D.C.1983); U.A.W. v. Donovan, No. 82-1458, slip op. (D.D.C. June 10, 1983).

Two individual plaintiffs, and the UAW on behalf of other UAW members similarly situated, assert federal statutory rights arising out of their status as veterans.⁷ Claims under the Veterans' Acts may be brought in federal court without first exhausting any available non-federal remedies. McKinney v. Missouri-K.-T. Ry. Co., 357 U.S. 265, 268-69, 78 S.Ct. 1222, 1224-25, 2 L.Ed.2d 1305 (1958). See also Coffy v. Republic Steel Corp., 447 U.S. 191, 194, 100 S.Ct. 2100, 2103, 65 L.Ed.2d 53 (1980). Whatever their ultimate merit, plaintiffs' Veterans' Acts claims are substantial and provide a separate basis for federal jurisdiction sufficient to withstand a motion to dismiss. See Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666-67, 94 S.Ct. 772, 776-77, 39 L.Ed.2d 73 (1974).

Several of the non-veteran plaintiffs were successful at the state administrative level. Ordinarily, these persons would lack standing to sue because they have not suffered actual or threatened injury as a result of the defendant's allegedly unlawful conduct. Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 472, 102 S.Ct. 752, 758, 70 L.Ed.2d 700 (1982). In this instance, however, defendant has jeopardized the likelihood that they will ever receive any payments. In light of defendant's threats to impose the Lopez rule against states which award TRA benefits despite the Handbook Policy, and to decertify state unemployment insurance programs, a state court suit to enforce an administrative determination would be a fruitless gesture.⁸ As noted above, the California court is awaiting a decision from this Court on the precise eligibility issue.

If the Michigan and Delaware agencies had agreed with the California Appeals Board and ruled contrary to DOL's interpretation, the more appropriate way to review the Handbook Policy might have been through federal court actions by the state agencies to challenge the imposition of the Lopez rule or the initiation of decertification proceedings, if DOL executed its threats. See Cabais v. Egger, 690 F.2d 234, 240 (D.C.Cir.1983). But the Handbook Policy has had a sufficiently direct negative impact on many plaintiffs to warrant judicial review at this time and in this manner.⁹ A decision by this Court invalidating the Handbook Policy and directing the Secretary to so inform cooperating state agencies, would secure the precarious relief that some of the plaintiffs have already been granted.¹⁰ The question, then, of the successful plaintiffs' standing is predominantly academic.

Accordingly, defendant's motion to dismiss for lack of subject matter jurisdiction is denied.

II. Trade Act of 1974

The parties agree that the Trade Act issue before the Court is what Congress...