Pemberton v. Marshall, 79-2173

• Decision Date: 14 January 1981
• Docket Number: No. 79-2173,79-2173
• Parties: , 205 U.S.App.D.C. 276 Robert W. PEMBERTON, et al., Petitioners, v. F. Ray MARSHALL, Secretary, Department of Labor, United States of America, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 798

639 F.2d 798

2 ITRD 1243, 205 U.S.App.D.C. 276

Robert W. PEMBERTON, et al., Petitioners, v. F. Ray MARSHALL, Secretary, Department of Labor, United States of America, Respondent.

No. 79-2173.

United States Court of Appeals District of Columbia Circuit.

Argued Oct. 9, 1980.

Decided Jan. 14, 1981.

Petition for Review of an Order of the United States Department of labor.

Harry Goldman, Jr., Baltimore, Md., of the bar of the Supreme Court of the United States, pro hac vice, by special leave of court, with whom Lester W. Bridgeman, Washington, D. C., was on the brief, for petitioners.

Diddo Ruth Clark, Atty., U. S. Dept. of Labor, Washington, D. C., with whom John R. Garson, Atty., U. S. Dept. of Labor, Washington, D. C., was on the brief, for respondent.

Before TAMM and ROBINSON, Circuit Judges, and HARLINGTON WOOD, Jr., ^* U. S. Circuit Judge for the Seventh Circuit.

Opinion for the court filed by Circuit Judge WOOD.

WOOD, Circuit Judge:

This is an appeal of an order of the Secretary of Labor denying trade adjustment assistance to workers employed by Bethlehem Steel Corporation at its Baltimore Yards, one of several Bethlehem facilities in the Chesapeake Bay Area. Under Subchapter II, Part 2, of the Trade Act of 1974, 19 U.S.C. § 2272 (1975), ¹ workers may be certified eligible for assistance if it is 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.

Certification was denied because it was determined that the workers' firm, the Baltimore Yards, does not produce an article but instead provides the services of repair and maintenance of marine vessels. Certification could be granted only if (1) the services were provided in conjunction with the production of an article adversely affected by imports and (2) the workers' separations were the result of reduced demand due to the imports for these services by the parent firm, an appropriate subdivision or a firm related by control or ownership. The Secretary denied eligibility under that criterion since ninety-four percent of appellants' work consisted of services to customers totally unrelated to the parent firm, Bethlehem Steel Corporation, and in particular its Sparrows Point Shipyard.

In their request for administrative reconsideration, ² appellants argued that the earlier certification for workers assistance of the Sparrows Point Shipyard, ³ a subdivision of Bethlehem Steel engaged in shipbuilding, required certification of the Baltimore Yards. Noting similarities in contracts, benefits and seniority, appellants reasoned that the identity of interests and functions between the two groups necessitates equal treatment. The Secretary rejected this contention, pointing to the crucial difference between the facilities: the workers at Sparrows Point produce an article, ships, while those at the Baltimore Yards do not. The application was denied and this appeal followed.

Appellants offer no new arguments on appeal, but assert error in the findings of the Secretary that (1) repaired ships are not articles within the meaning of § 2272(3) and (2) the Baltimore Yards is a separate subdivision from Sparrows Point and does not merit equal treatment. We find no error in these conclusions and affirm the order denying eligibility.

The investigation of the Department of Labor disclosed that the operations of the Baltimore Yards mainly involved maintenance and repairs of marine vessels owned by companies other than Bethlehem Steel. Only six percent of the total activity of the yards was devoted to work for various Bethlehem Steel facilities: a hull and blast furnace hatch cover were fabricated for the Sparrows Point Yard and some repairs were made on an ore carrier chartered by the parent company. It was noted by the field investigator that these activities were done "only when the other Bethlehem facilities are overbooked or ... have experienced breakdowns or when the equipment is too small to handle a certain job."

Appellants categorize the work of their facility as "remanufacture" and suggest that there is no difference between their activity and the initial creation of a ship. Stressing the remedial nature of the Act, they contend that it would be inconsistent to deny certification in this instance. While it is true that the assistance provisions are to be construed liberally, United Shoe Workers of America v. Bedell, 506 F.2d 174, 187 (D.C.Cir.1974), the parameters cannot be ignored. The benefits of the Act are not universal and some hardships may result. See, e. g., Machine Printers and Engravers Association v. Marshall, 595 F.2d 860 (D.C.Cir.1979); United Shoe Workers of America v. Bedell, 506 F.2d 174 (D.C.Cir.1974).

The Act requires the manufacture of an article the demand for which is decreased by the importation of a like article. The legislative history of the Act offers no specific guidance on the interpretation of the term "article," but a reading of the entire statute, its purposes and goals, leaves no doubt that Congress contemplated an equalization of markets for domestic goods. The repair and maintenance of a ship is clearly a service to an existing commodity. Even if the repair necessitates the use of new materials, it cannot be said to be the creation of a new ship any more than overhauling an automobile can be said to be manufacturing a car. ⁴ Semantics do not overcome the reality that nothing new is entered into the stream of commerce.

Fortin v. Marshall, 608 F.2d 525 (1st Cir. 1979), leaves no doubt that services do not fall within the terms of § 2272. In that case, employees of Pan American Airways sought adjustment assistance when a trade agreement with Great Britain resulted in the loss of their London-Boston route to British Airways. The court carefully considered the use of the word "article" throughout the Trade Act, id. at 527-28, and concluded that transportation service could not be considered an article. Appellants contend that Fortin is distinguishable because in that case nothing tangible was produced. In our situation, the service did involve a tangible item a ship but the same item was also the end product. There was no transformation, but a mere refurbishing of what already existed.

Even if we accept that material items were created, they can only be described as customized parts for marine vessels. In order to fall within the statutory language, the increased imports of like articles similar fabrications would have to be shown. Nowhere is such a claim made; appellants instead assert that imported new ships are the cause of the decline in business. But the completed product cannot be considered a "like article" to a component part. This court examined this issue exhaustively in United Shoe Workers of America v. Bedell, 506 F.2d 174 (D.C.Cir.1974). In that case, the business of a manufacturer of shoe counters was diminished because the increased importation of shoes reduced domestic demand for counters. Certification was denied because the counters were not "like articles" to completed shoes but merely component parts....