Slip Op. 09 - 14
UNITED STATES COURT OF INTERNATIONAL TRADE
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FORMER EMPLOYEES OF WARP PROCESSING :
CO., INC.,
:
Plaintiffs,
:
v. Court No. 08-00179
:
UNITED STATES DEPARTMENT OF LABOR,
:
Defendant.
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Memorandum & Order
[Motion for voluntary remand to defendant
regarding plaintiffs’ eligibility for
trade-adjustment assistance granted.]
Dated: February 20, 2009
Steptoe & Johnson LLP (Joel D. Kaufman and Michael T.
Gershberg) for the plaintiffs.
Michael F. Hertz, Deputy Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Christopher L. Krafchek) for the defendant.
AQUILINO, Senior Judge: This action pursuant to 19
U.S.C. §2395 and 28 U.S.C. §1581(d) has been brought by former
employees of Warp Processing Co., Inc. of Exeter, Pennsylvania,
seeking judicial review of the Negative Determinations Regarding
Eligibility To Apply for Worker Adjustment Assistance And
Alternative Trade Adjustment Assistance (Feb. 19, 2008) of the
Court No. 08-00179 Page 2
Employment and Training Administration (“ETA”), U.S. Department of
Labor, No. TA-W-62,655, and of its subsequent Notice of Negative
Determination Regarding Application for Reconsideration (March 18,
2008). Upon the filing of the ETA administrative record (“AR”),
answer to the complaint, and motion by the plaintiffs for judgment
on that record, comes now the Defendant’s Consent Motion for
Voluntary Remand “to enable Labor to state with greater clarity and
accuracy the bases for its determination in a way that would
facilitate this Court’s review.”
I
Suffice it to state that such review, albeit limited to
date, leads to the conclusion that defendant’s motion is well-
taken. Whatever the impact of increased imports from China and
other countries on domestic textile manufacturing, “adversely
affected secondary workers” shall be certified as eligible to apply
for trade adjustment assistance (“TAA”) benefits if the Secretary
of Labor determines that
(1) a significant number or proportion of the
workers in the 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) the workers’ firm (or subdivision) is a supplier
or downstream producer to a firm (or subdivision) that
employed a group of workers who received a certification
of eligibility under subsection (a) of this section, and
such supply or production is related to the article that
Court No. 08-00179 Page 3
was the basis for such certification (as defined in
subsection (c)(3) and (4)[1] of this section); and
(3) either –
(A) the workers’ firm is a supplier and the
component parts it supplied to the firm (or
subdivision) described in paragraph (2) accounted
for at least 20 percent of the production or sales
of the workers’ firm; or
(B) a loss of business by the workers’ firm
with the firm (or subdivision) described in
paragraph (2) contributed importantly to the
workers’ separation or threat of separation
determined under paragraph (1).
19 U.S.C. §2272(b).
A
According to ETA’s Negative Determinations herein, the
agency’s investigation revealed that foregoing subsection 3 had not
been met:
Petitioners allege that job losses were due to their
firm losing business as a supplier firm, producing
components for trade certified firms. The investigation
revealed the subject firm did supply component parts
utilized by customers engaged in textile manufacturing;
however, workers at these textile manufacturing firms
have not received a primary certification making them
eligible to apply for adjustment assistance.
1
Section 2272(c)(3) of Title 19, U.S.C. defines “downstream
producer” as “a firm that performs additional, value-added
production processes for a firm or subdivision, including a firm
that performs final assembly or finishing” and (c)(4) defines a
“supplier” as “a firm that produces and supplies directly to
another firm (or subdivision) component parts for articles that
were the basis for a certification of eligibility”.
Court No. 08-00179 Page 4
AR, p. 112. Without any supplementation of the administrative
record, ETA’s negative determination regarding the petitioners’
application for reconsideration explains that the investigation
revealed that Warp’s only customer was Brawer Brothers, Inc. See
id. at 142. That determination also reports that the agency
considered three companies, which the petitioners claimed to have
been supplied with component products by Warp and which had
currently TAA-certified worker groups. The agency found that such
certifications in re Cortina Fabrics and Guilford Mills, Inc. had
expired prior to the period at issue in this matter. As for Native
Textiles, Inc., while its workers were certified as eligible to
apply for benefits under 19 U.S.C. §2272(a) during the relevant
period, ETA found that circumstance to be
irrelevant because the subject firm did not conduct
business with that company during the relevant period and
because warped synthetic fiber is not a component part of
the warp knit synthetic tricot fabric produced by Native
Textiles.
Id.
II
In an action such as this, the Secretary of Labor’s
findings of fact are conclusive, if supported by substantial
evidence. However, the court, “for good cause shown, may remand
the case to such Secretary to take further evidence, and . . . make
Court No. 08-00179 Page 5
new or modified findings of fact”. 19 U.S.C. §2395(b). Moreover,
since the governing Trade Act of 1974 is remedial legislation, the
Secretary is “obliged” to conduct an investigation with the utmost
regard for the interests of the petitioning workers. E.g., Abbott
v. Donovan, 7 CIT 323, 327-28, 588 F.Supp. 1438, 1442 (1984).
A
As the court reads the administrative record, such as it
is, there is actually a finding by ETA of failure to satisfy 19
U.S.C. §2272(b)(2), supra, as opposed to (b)(3), per its report
that the
investigation revealed the subject firm did supply
component parts utilized by customers engaged in textile
manufacturing; however, workers at these textile
manufacturing firms have not received a primary
certification making them eligible to apply for
adjustment assistance.
AR, p. 112. Although not stated, the record does indicate that
Brawer Brothers, Inc. did not employ a group of workers who
received a certification of eligibility under 19 U.S.C. §2272(a)
during the relevant period of investigation. See id. at 55.
However, there is not sufficient evidence on the record to support
a finding that Brawer Brothers, Inc. was Warp Processing Co.’s only
customer. Cf. Former Employees of General Elec. Corp. v. U.S.
Dep’t of Labor, 14 CIT 608 (1990)(no deference is due to
determinations based on inadequate investigations).
Court No. 08-00179 Page 6
This view appears to be shared now by the parties. See
Defendant’s Consent Motion for Voluntary Remand, p. 3:
. . . [P]laintiffs refer[] to supplemental evidence
allegedly showing that Warp and Brawer Bros. may have
operated as one entity. A remand would enable Labor to
place this information on the record and determine the
scope of the relationship between Warp and Brawer Bros.
Whether or not Warp was a downstream producer for Native Textiles,
Inc., a product of which was warp knit synthetic tricot fabric,
evidence currently on the record does not provide the dispositive
answer. With regard to ETA’s survey of Brawer Brothers’ customers,
there appears only to have been an inquiry into whether there were
increased imports, and not whether that firm’s customers were
certified within the meaning of 19 U.S.C. §2272(b)(2), supra.
III
In view of the foregoing, defendant’s motion for remand
should be, and it hereby is, granted. On remand, ETA should
supplement the record in this matter as necessary to reach a
determination supported by substantial evidence. Specifically,
before deciding eligibility for adjustment or alternative
adjustment assistance, the defendant is directed to determine the
relationship between Warp Processing Co., Inc. and Brawer Brothers,
Inc.; to determine the degree, if any, Native Textiles, Inc. was or
Court No. 08-00179 Page 7
is a customer of Warp Processing Co., Inc.; to determine the
degree, if any, the firms on the lists provided by petitioner Keith
Thieman (AR, p. 75) and the firms presumably provided by Brawer
Brothers, Inc. as a listing of its Major Declining Customers (id.
at 102) were or are customers of Warp Processing Co., Inc.; and, in
that regard, to determine if any workers of customers of Warp
Processing Co., Inc. were certified as eligible under 19 U.S.C.
§2272(a) to apply for adjustment assistance at a relevant time.
The defendant may have until May 22, 2009 to carry out
this remand and report the results thereof. The plaintiffs may
file any comments thereon on or before June 19, 2009.
So ordered.
Dated: New York, New York
February 20, 2009
/s/ Thomas J. Aquilino, Jr.
Senior Judge