Slip Op. 11-59
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
FORMER EMPLOYEES OF SOUTH EAST AIRLINES,:
:
Plaintiff, :
: Court No.
v. : 09-00522
:
UNITED STATES SECRETARY OF LABOR, :
:
Defendant. :
________________________________________:
[The Department of Labor’s Remand Determinations are affirmed.]
Sidley Austin, LLP (Neil R. Ellis, Jill Caiazzo) for Former
Employees of South East Airlines, plaintiff.
Tony West, Assistant Attorney General; Jeanne E. Davidson,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice, Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice, (Jacob A. Schunk); Jonathan Hammer,
Office of the Solicitor, United States Department of Labor, of
Counsel, for the United States Department of Labor, defendant.
Dated: May 26, 2011
OPINION
TSOUCALAS, Senior Judge: Plaintiffs, Former Employees of
Southeast Airlines (“the Former Employees”), move pursuant to USCIT
R. 56.1 for judgment upon the agency record or, alternatively, a
remand for further investigation. The Former Employees challenge
the United States Department of Labor’s (“Labor”) determinations
denying them eligibility for certification of Trade Adjustment
Assistance (“TAA”) under the Trade Act of 1974, tit. II, §§ 221-
Court No. 04-00374 Page 2
249, 284, as amended 19 U.S.C. §§ 2271-2321, 2395 (Supp. II 2008)
(the “Trade Act”). See Notice of Determination Regarding
Eligibility to Apply for Worker Adjustment Assistance (“Negative
Determination”), 74 Fed. Reg. 59,251, 59,255 (Dep’t Labor Nov. 17,
2009); Notice of Negative Determination Regarding Application for
Reconsideration (“Negative Reconsideration”), 74 Fed. Reg. 64,736
(Dep’t Labor Dec. 8, 2009); Notice of Negative Determination on
Remand (“First Remand”), 75 Fed. Reg. 57,517 (Dep’t Labor Sept. 21,
2010); Notice of Negative Determination on Second Remand (“Second
Remand”), 76 Fed. Reg. 4733 (Dep’t Labor Jan. 26, 2011). Labor
determined that the Former Employees were not entitled to TAA
because they did not meet the statutory requirements for
certification.
BACKGROUND
The Former Employees were employed by Atlantic Southeast
Airlines (“the Airline”), and worked at the Fort Smith, Arkansas
airport facility. Under a contract between the Airline and Delta
Airlines, the Former Employees provided airport station management,
ticketing and baggage services. See Second Remand Comments of
Plaintiff Former Employees of Atlantic Southeast Airlines at 8, 11,
15. The Former Employees were severed from their employment in
May of 2009. Their application for TAA was denied on September 28,
2009. In their request for administrative reconsideration, they
asserted that they were eligible to receive TAA as “downstream
Court No. 04-00374 Page 3
producers” for various local firms that were certified as eligible
for TAA. Upon receiving a negative determination on that request,
the Former Employees sought judicial review in this Court on
December 7, 2009. Labor, during both remands, determined that the
Former Employees were not entitled to TAA benefits for a number of
reasons including that they were not downstream producers within
the meaning of the statute.
JURISDICTION
The Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1581(d)(1) (2000).
STANDARD OF REVIEW
In reviewing a challenge to Labor’s determination of
eligibility for TAA, the Court will uphold Labor’s determination if
it is supported by substantial evidence on the record and is
otherwise in accordance with law. See 19 U.S.C. § 2395(b) (2000);
Woodrum v. Donovan, 5 CIT 191, 193, 564 F. Supp. 826, 828 (1983),
aff’d, Woodrum v. United States, 737 F.2d 1575 (Fed. Cir. 1984).
“Substantial evidence is something more than a ‘mere scintilla,’
and must be enough reasonably to support a conclusion.” Ceramica
Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F. Supp.
961, 966 (1986), aff’d, 810 F.2d 1137 (Fed. Cir. 1987); see also
Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).
Additionally, the Court’s review of Labor’s determination denying
certification of eligibility for TAA benefits is confined to the
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administrative record before it. See 28 U.S.C. § 2640(c) (2000);
see also Int’l Union v. Reich, 22 CIT 712, 716, 20 F. Supp. 2d
1288, 1292 (1998).
A court “must accord substantial weight to the interpretation
put on the statute by the agency charged with its administration.”
Former Employees of Asarco’s Amarillo Copper Refinery v. United
States, 11 CIT 815, 817, 675 F. Supp. 647, 649 (1987). Moreover,
a court “must defer to an agency’s reasonable interpretation of a
statute even if the court might have preferred another.” Koyo
Seiko Co., Ltd. v. United States, 36 F.3d 1565, 1570 (Fed. Cir.
1994).
ANALYSIS
The Trade Act provides for TAA benefits to workers who have
been completely displaced as a result of increased imports into, or
shifts of production out of, the United States. See 19 U.S.C. §
2272. Such benefits include “unemployment compensation, training,
job search and relocation allowances, and other employment services
. . . .” Former Employees of Kleinerts, Inc. v. Herman, 23 CIT
647, 647, 74 F. Supp. 2d, 1280, 1282 (1999) (quoting Former
Employees of Parallel Corp. v. United States Sec’y of Labor, 14 CIT
114, 118, 731 F. Supp. 524, 527 (1990)). See 19 U.S.C. §§ 2295-98.
Here, the issue for Labor to consider is whether the Former
Employees qualified for assistance as adversely effected secondary
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workers under 19 U.S.C. § 2272(c). The statute has three
requirements, each of which must be satisfied, before Labor may
grant TAA. In relevant part, the Trade Act Provides:
(c) Adversely affected secondary workers
A group of workers shall be certified by the
Secretary as eligible for trade adjustment
assistance benefits under this part pursuant
to a petition filed under section 2271 of this
title if the Secretary 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 is a supplier or
downstream producer to a firm 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 or service that was the
basis for such certification (as defined in
subsection (d)(3) and (4) of this section);
and
(3) either–
(A) the workers’ firm is a supplier and
the component parts it supplied to the firm
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 described in paragraph (2)
contributed importantly to the workers’
separation or threat of separation determined
under paragraph (1).
19 U.S.C. § 2272(c).
Court No. 04-00374 Page 6
As such TAA eligibility hinges on whether the Former Employees
have satisfied the three requirements of 19 U.S.C. § 2272(c). The
first requirement is clearly satisfied since no one disputes the
Former Employees have been totally separated from employment.
Labor, however, found that the Former Employees were not downstream
producers within the meaning of the statute.
The definition of “downstream producer” is specifically set
forth in the Trade Act. It means “a firm that performs additional
. . . services directly for another firm for articles or services
with respect to which a group of workers in such other firm has
been certified under subsection (a).” 19 U.S.C. § 2272(d)(3)(A).
Labor’s interpretation of “directly for” was that there “may not be
an intervening customer or supplier.” Second Remand at 4734. The
evidence in the record shows that the Former Employees were in
contract with Delta Airlines and not directly in contract with the
TAA certified firms. Moreover, while the Former Employees may have
dealt with individuals who were employed by TAA firms, the Former
Employees served the Fort Smith Airport at the pleasure of Delta
Airlines and not at the pleasure of these other TAA certified
companies. Labor noted this in their First Remand and their Second
Remand. See First Remand at 57,519; Second Remand at 4734. As
such, Labor reasoned that since the Former Employees provided
services “directly for” Delta Airlines and not “directly for” TAA
certified firms, the Former Employees could not meet the statutory
Court No. 04-00374 Page 7
definition of “downstream producer”. See First Remand at 57, 519.
Labor’s interpretation of the “directly for” phrase within the
definition of “downstream producer” is not arbitrary and
capricious. “If Congress has explicitly left a gap for the agency
to fill, there is an express delegation of authority to the agency
to elucidate a specific provision of the statute by regulation.
Such legislative regulations are given controlling weight unless
they are arbitrary, capricious, or manifestly contrary to the
statute.” Chevron, U.S.A., Inc. v. Natural Recources Defense
Council, Inc., et al., 467 U.S. 837, 843-44 (1984). Labor’s
interpretation is reasonably construed from the clearly stated
definition in the statute.
Additionally, to qualify as adversely affected secondary
workers, the Former Employees need to show that the services they
supplied were “related to the article or service that was the
basis” for the TAA certification. See 19 U.S.C. § 2272(c)(2). The
companies which the Former Employees rely on for TAA did not engage
in airline support services as the Former Employees did. Labor
correctly noted, therefore, that it was “not necessary to survey
Delta’s customers because the articles or services those customers
produce or provide are not related to the supply of airline
customer services that the subject firm provides.” See Second
Remand at 4734. It is not necessary for Labor to investigate
every other criteria concerning the application since one of the
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statutory requirements, specifically, 19 U.S.C. § 2272(c)(2), has
not been satisfied. See Chen v. Chad, 32 CIT ___, ___, 587 F.
Supp. 2d 1292, 1296 (2008); see also Former Employees of Asarco’s
Amarillo Copper Refinery, 11 CIT at 820, 675 F. Supp. at 651
(“Plaintiffs must meet all three requirements of section 222 of the
Act before they are eligible for trade adjustment assistance.”)
Since at least one of the required elements was not satisfied, the
Former Employees are not eligible for TAA benefits.
Moreover, the record supports more than a “mere scintilla” of
evidence that the reason for the Airline’s closure of operations at
Fort Smith Airport was not due to foreign competition but directly
due to local competition, to wit: they lost a contract to renew
their services with the combined merger of Delta and Northwest
Airlines. Labor correctly noted that the Airline “had the same
opportunity to bid to win the contract to supply services at the
Fort Smith, Arkansas airport as other firms, but did not win the
contract.” Second Remand at 4734. The contract which was not
awarded to the Former Employees was connected to local competition,
not international competition. Had the Former Employees succeeded
in acquiring this contract, they may still be servicing the Fort
Smith Airport.
As such, Labor’s determination that the Former Employees are
not eligible for TAA certification is supported by substantial
evidence and is in accordance with law.
Court No. 04-00374 Page 9
CONCLUSION
Based on the foregoing the Court sustains Labor’s Notice of
Negative Determination on Remand, 75 Fed. Reg. 57,517 (Sept. 21,
2010), and the Notice of Negative Determination on Second Remand,
76 Fed. Reg. 4733 (Jan. 26, 2011) denying the Former Employees
eligibility for certification to receive TAA benefits as being
supported by substantial evidence and otherwise in accordance with
law. Judgment will be entered accordingly.
/s/ NICHOLAS TSOUCALAS
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: May 26, 2011
New York, New York