United Steelworkers of America v. Donovan, Court No. 83-7-00944.

• Decision Date: 12 March 1986
• Docket Number: Court No. 83-7-00944.
• Parties: UNITED STEELWORKERS OF AMERICA and Its Locals 68, 7508, and 196, Plaintiffs, v. Raymond J. DONOVAN, Secretary of Labor, Defendant.
• Court: U.S. Court of International Trade

632 F. Supp. 17

10 CIT 147

UNITED STEELWORKERS OF AMERICA and Its Locals 68, 7508, and 196, Plaintiffs, v. Raymond J. DONOVAN, Secretary of Labor, Defendant.

Court No. 83-7-00944.

United States Court of International Trade.

March 12, 1986.

Bredhoff & Kaiser (James D. Holzhauer, Washington, D.C., on motion), for plaintiffs.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch (Sheila N. Ziff, Washington, D.C., on motion), for defendant.

ON PLAINTIFFS' MOTION FOR REVIEW OF ADMINISTRATIVE DETERMINATION UPON AGENCY RECORD

RE, Chief Judge:

In this action, plaintiffs, on behalf of former employees of the Duval Corporation, seek review of a final determination by the Secretary of Labor which denied certification of eligibility for benefits under the worker adjustment assistance program of the Trade Act of 1974, tit. II, §§ 221-249, 284, 19 U.S.C. §§ 2271-2321, 2395 (1982 & Supp. I 1983). Specifically, the Secretary found that the workers were not eligible for assistance because increases of imports did not contribute importantly to their separation from employment.

After reviewing the administrative record and the arguments of the parties, the Court holds that the determination of the Secretary is not supported by substantial evidence, and is not in accordance with law. Therefore, the case is remanded to the Secretary for further consideration not inconsistent with this opinion.

On July 6, 1982, July 28, 1982, and August 5, 1982, plaintiffs, on behalf of employees at three mining operations of Duval Corporation, filed petitions for certification of eligibility to apply for trade adjustment assistance benefits. Pursuant to section 221(a) of the Trade Act of 1974, 19 U.S.C. § 2271(a), the Office of Trade Adjustment Assistance (OTAA) of the Department of Labor¹ published notices in the Federal Register stating that it had received the petitions and had instituted an investigation into their validity. 47 Fed. Reg. 31,450, 36,484 (1982).

Section 222 of the Trade Act requires the Secretary to certify a group of workers as eligible to apply for trade adjustment assistance benefits 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.

Trade Act of 1974 § 222, 19 U.S.C. § 2272 (Supp. I 1983).

Plaintiffs contend that increased imports of copper contributed importantly to the decline of sales and production by Duval Corporation, and to the workers' separation from employment. The Secretary denied plaintiffs' petition on the grounds that it failed to satisfy the increased imports requirement of section 222. 19 U.S.C. § 2272(3).

The Secretary of Labor's Determination

The OTAA's investigation disclosed that Duval Corporation, a wholly owned subsidiary of Pennzoil Company, owns three mines in Arizona, which are known as Mineral Park, Sierrita, and Esperanza. On December 15, 1981, all three operations ceased production, and approximately 2,000 workers were separated from employment. Some workers were retained at each site and, on April 1, 1982, the Sierrita Mine resumed production at 40 percent of capacity.

The workers at all three mines were found to be engaged in both the mining of copper ore and the production of copper concentrate. Copper ore, concentrate, precipitate, and matte, are types of copper which are smelted or converted into blister copper. The record shows that statistics for the domestic production of copper ore, concentrate, precipitate, and matte are grouped under the heading "copper ore." Statistics are also provided for the later stages of processing, under the headings blister copper and refined copper. Most blister copper is cast into copper anodes for electrolytic refining. Refined copper is cast into wirebar, ingot, or other shapes for later fabrication. Duval processed between 20 and 25 percent of its copper concentrate into blister copper. All of the blister copper and the remainder of the copper concentrate produced by Duval was refined by outside companies on a toll basis.

The OTAA performed a trade and industry analysis to ascertain the effect of imports on the domestic copper industry. The investigation disclosed that imports of copper ore in 1980 increased 70.6 percent over 1979. In 1981, imports of copper ore decreased 20.6 percent to a level representing 2.7 percent of domestic production. During the first three quarters of 1982, imports of copper ore increased 338.5 percent. Imports of blister copper decreased 70.3 percent in 1979, from a 5-year high attained in 1978. In 1980, however, imports rose 88.8 percent. Imports of blister copper decreased in 1981 by 35.5 percent, and increased by 229.2 percent in 1982. The investigation also disclosed that imports of refined copper increased 107 percent in 1980 from 1979. Imports of refined copper declined by 21.8 percent in 1981 and 23.7 percent in 1982. The Secretary noted that an industry-wide strike of mine workers affected the total level of copper imports in 1980.

Based on these findings, the Secretary concluded that the workers should be denied certification because, "U.S. imports of refined copper declined both absolutely and relative to domestic production in 1981 compared to 1980 and in the January through September 1982 period compared to the same period in 1981." See 48 Fed. Reg. 12,006 (1983).

Thereafter, plaintiffs applied for reconsideration of the administrative determination. On April 25, 1983, the Secretary issued a notice of negative determination in response to plaintiffs' application. 48 Fed. Reg. 28,524 (1983). Subsequently, plaintiffs commenced this action seeking judicial review of the Secretary's final negative determination.

On April 30, 1984, the Court granted the Secretary's motion for a voluntary remand in order to allow the Secretary to supplement the record with a survey of Duval's customers. After reconsideration, on June 29, 1984, the Secretary issued a "further determination," which stated that the "results of the customer survey confirmed the Department's original determination that imports did not contribute importantly to ... worker separations at the Duval Corporation in 1982." Plaintiffs then requested this Court to set aside the Secretary's determination.

Discussion

Section 284 of the Trade Act of 1974 empowers the Court of International Trade to review a determination by the Secretary of Labor that denies certification of eligibility for adjustment assistance to assure that the determination is supported by substantial evidence and is in accordance with law. 19 U.S.C. § 2395(c); see Woodrum v. Donovan, 5 CIT 191, 193, 564 F.Supp. 826, 828 (1983), aff'd, 737 F.2d 1575 (Fed.Cir.1984). The findings of fact by the Secretary are conclusive if supported by substantial evidence. Trade Act of 1974 § 284(b), 19 U.S.C. § 2395(b) (1982). Moreover, "the rulings made on the basis of those findings must be in accordance with the statute and not be arbitrary or capricious, and for this purpose the law requires a showing of reasoned analysis." International Union v. Marshall, 584 F.2d 390, 396 n. 26 (D.C. Cir.1978), quoted in ILWU Local 142 v. Donovan, 9 CIT ___, Slip Op. 85-127, at 9 (Dec. 11, 1985); see 19 U.S.C. § 2273(c).

The plaintiffs urge that the Secretary's negative determination of eligibility should be set aside. First, they contend that the Secretary improperly used 1982 as a comparison year, because the workers were separated from employment in 1981, not 1982. Second, plaintiffs allege that it was improper for the Secretary to consider import statistics for the third quarter of 1982, a time period subsequent to the separation of the workers. Third, they maintain that the Secretary "erred as a matter of law in limiting his focus to refined copper," and that the Secretary should also have considered imports of copper ore and blister copper. The plaintiffs also contend, for the same reasons, that the customer survey conducted by the Secretary did not accurately reflect the effect of imports on Duval's sales.

It is well established that, in the absence of a valid reason to consider a different time period, the Secretary determines whether there has been an increase of imports by a comparison of the year of separation with the immediate preceding year. See, e.g., Paden v. United States Dep't of Labor, 562 F.2d 470, 473 (7th Cir.1977); Katunich v. Donovan, 8 CIT 157, 594 F.Supp. 744, 752 (1984). In this case, the Secretary found that there were "major layoffs" in both 1981 and 1982, and, therefore, 1982 was a base year for comparison. Plaintiffs contend that, since a significant number of workers were separated from employment in 1981, by using 1982 as a base year, the Secretary has considered an irrelevant and erroneous time period. Thus, the question presented in this case is whether the Secretary's finding that 1982, in addition to 1981, is a year of separation is supported by substantial evidence in the record, and is in accordance with law.

The Secretary found that, at all three mines, major layoffs occurred in December 1981 and March, May, June, and July 1982. Duval separated approximately 2,000 workers, over 68 percent of its total work force, when the mines ceased production in December 1981. This represented an 88 percent decline in the average number of workers employed at the Mineral Park mines, a 54 percent decline at the Sierrita mine, and an 83 percent decline at the Esperanza mine....