International Union, United Auto. v. Reich

• Decision Date: 17 July 1998
• Docket Number: Court No. 96-04-01141.,Slip. Op. 98-103.
• Citation: 20 F.Supp.2d 1288
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW LOCAL 1283 and Employees and Former Employees of Johnson Controls Battery Group, Inc., Plaintiffs, v. Robert REICH, Secretary of Labor, Defendant.
• Court: U.S. Court of International Trade

20 F.Supp.2d 1288

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW LOCAL 1283 and Employees and Former Employees of Johnson Controls Battery Group, Inc., Plaintiffs, v. Robert REICH, Secretary of Labor, Defendant.

Slip. Op. 98-103.

Court No. 96-04-01141.

United States Court of International Trade.

July 17, 1998.

Jordan Rossen, General Counsel International Union, UAW; Charles M. Gayney, Associate General Counsel; Leonard Page, Associate General Counsel; Stephen A. Yokich, Associate General Counsel, for Plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, (Randi-Sue Rimerman); Michele W. Curran, of Counsel, Office of the Solicitor, United States Department of Labor, Washington, DC, for Defendant.

OPINION

WALLACH, Judge.

I INTRODUCTION

This case is before this Court on Plaintiffs' Motion for Judgment on the Agency Record pursuant to USCIT R. 56.1. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW Local 1283, and Employees and Former Employees of Johnson Controls Battery Group, Inc. ("Plaintiffs") challenge the Department of Labor's ("DOL") determination that the former employees of the Johnson Controls Battery Group, Inc. ("Johnson Controls") plant in Louisville, Kentucky ("Louisville plant") are not eligible for certification because increased imports did not contribute importantly to the workers' separation from employment, as required by Section 222 of the Trade Act of 1974, amended by the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418), 19 U.S.C. § 2272(a)(3) ("Trade Act"). See Johnson Controls Battery Group, Inc. Louisville, Kentucky; Notice of Negative Determination of Reconsideration On Remand, 62 Fed.Reg. 31,626 (Dep't Labor 1997) ("Notice of Negative Determination of Reconsideration On Remand"). DOL's denial of certification is supported by substantial evidence and is in accordance with the trade adjustment assistance provisions of the Trade Act. Therefore, DOL's final determination is affirmed.

II BACKGROUND

The purpose of the trade adjustment assistance program is "to offer unemployment compensation, training, job search and relocation allowances, and other employment services to workers who lose their jobs because of import competition." Former Employees of Parallel Petroleum Corp. v. United States Secretary of Labor, 14 CIT 114, 118, 731 F.Supp. 524, 527 (1990).

In order to certify a group of workers as eligible to apply for trade adjustment assistance under Section 222 of the Trade Act, the Secretary of Labor ("Secretary") must determine:

(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).

In order to receive trade adjustment assistance benefits, Plaintiffs must satisfy all three requirements of Section 222 of the Trade Act. 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."); 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.").

On August 22, 1995, pursuant to 19 U.S.C. § 2271, a petition for certification of eligibility for trade adjustment assistance was filed on behalf of the former employees of the Louisville plant. Petition for Trade Adjustment Assistance filed by Puckett on Aug. 22, 1995, Administrative Record ("AR") 2 ("Petition for Trade Adjustment Assistance"). On October 13, 1995, DOL denied certification because increased imports did not contribute importantly to the separation of Louisville employees. See Johnson Controls Battery Group, Inc. Louisville, Kentucky; Negative Determination Regarding Eligibility To Apply for Worker Adjustment Assistance, AR 15 ("Negative Determination"); Notice of Determinations Regarding Eligibility To Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment Assistance, 60 Fed.Reg. 55,063 (Dep't Labor 1995). DOL's investigation revealed that production had been transferred domestically and the firm's sales, production and employment had not declined prior to the implementation of the transfer. Negative Determination, AR 16.

On November 13, 1995, the employees petitioned for reconsideration of the negative determination. Letter from Puckett to Trunzo dated Nov. 13, 1995, AR 18-19. The application noted that workers from three other Johnson Controls' production facilities that had closed in the preceding 18 months had been certified after an initial denial. Id. It alleged that production from those facilities has been shipped to a new facility in Torreon, Mexico which produced new and aftermarket batteries. Id. at 18. It also asserted that batteries from the Louisville plant were being shipped to Mexico and returned to the United States in new cars. Id.¹

On November 30, 1995, DOL granted the request for reconsideration because "[t]he petitioner [had presented] evidence that the subject firm shifted production to a foreign owned facility." Johnson Controls Battery Group, Inc. Louisville, Kentucky; Notice of Affirmative Determination Regarding Application for Reconsideration, 60 Fed.Reg. 63,733 (Dep't Labor 1995).

On February 6, 1996, the Secretary affirmed the denial of certification. Johnson Controls Battery Group, Inc. Louisville, KY; Notice of Negative Determination on Reconsideration, 61 Fed.Reg. 6658, 6659 (Dep't Labor 1996). DOL concluded it was irrelevant whether batteries from Mexico were entering the United States in new automobiles, as Plaintiffs alleged, because DOL was statutorily required to examine whether imports of articles like or directly competitive with the automobile batteries produced at the Louisville plant contributed importantly to Plaintiffs' separation. See id. at 6658.

In accord with its general practice, DOL surveyed the Louisville plant's customers to determine whether the "contributed importantly" test was satisfied. See id. DOL found that the Louisville plant's customers did not increase their purchases of imports while decreasing their purchases from the Louisville plant. Id. at 6658-59. DOL also found there was no evidence that the Louisville plant imported automobile batteries. Id. at 6659. In addition, it determined that the value of United States imports of automobile batteries declined from 1993 to 1994 and from October 1993 to September 1994 to the same twelve-month period in 1994-95. Id.

As for the workers at the other three plants that were certified, DOL stated that "[e]ach worker group petition is determined for certification on its own merits. The Trade Act was not intended to provide TAA benefits to everyone who is in some way affected by foreign competition but only to those who experienced a decline in sales or production and employment and an increase in imports of like or directly competitive products which `contributed importantly' to declines in sales or production and employment." Id.

On April 24, 1996, Plaintiffs challenged DOL's negative determination in this Court. On December 12, 1996, DOL requested a voluntary remand to more fully investigate whether the workers met the eligibility criteria. Defendant's Memorandum In Opposition at 7-8. On February 4, 1997, this Court remanded this action to DOL to conduct an additional investigation of Plaintiffs' application for certification and ordered Plaintiffs to submit to DOL any additional information warranting consideration.

On remand, DOL submitted a supplemental questionnaire to Johnson Controls. Letter from Poole to Bagley dated Apr. 29, 1997 with attachment, Supplemental Confidential Administrative Record ("SCAR") 2-3. DOL asked whether Johnson Controls had shifted any battery production from Louisville to Mexico, and whether it had imported automobile batteries from Mexico or any other foreign source like or directly competitive with batteries made at the Louisville plant. Id. at 3. DOL also requested information on the percentage of sales from the Louisville plant to each of its customers from January to September 1995. Id. Johnson Controls responded that no production had been shifted from the Louisville plant to Mexico, noted that production of automotive batteries sold to Gonher de Mexico from Louisville were transferred to its St. Joseph, Missouri facility, provided the percentage of battery sales to each plant customer, and explained why imported batteries from Johnson Controls' Mexican facility were different from batteries produced at the Louisville plant. Johnson Controls Completed Supplemental Questionnaire dated May 5, 1997, SCAR 5 ("Johnson Controls Completed Supplemental Questionnaire").

On May 16, 1997, DOL affirmed its original denial of certification. Notice of Negative Determination of Reconsideration On Remand, 62 Fed.Reg. at 31,626. DOL explained that it granted certification petitions for former workers at Johnson Controls' Garland, Texas; Bennington, Vermont; and Owosso, Michigan plants because their customers reported increased imports of aftermarket batteries, the product those plants produced, during the relevant time period. Id. at 31626. As a result, "it was determined...