Slip. Op. 00-88
UNITED STATES COURT OF INTERNATIONAL TRADE
Before: Judge Judith M. Barzilay
____________________________________
:
FORMER EMPLOYEES OF ALCATEL
TELECOMMUNICATIONS CABLE, :
Plaintiff, : Court No. 98-03-00540
Public version
v. :
HERMAN, SECRETARY OF LABOR, :
Defendant. :
____________________________________
[Plaintiffs’ motion to certify employees for trade adjustment assistance denied; case remanded to
Department of Labor for findings as to imports of like or directly competitive products.]
Decided: July 27, 2000
Wiley, Rein & Fielding, (Eileen P. Bradner,) Timothy C. Brightbill, C. Russell Clause for Plaintiff.
David W. Ogden, Acting Assistant Attorney General; David M. Cohen, Director; Velta A.
Melnbrencis, Assistant Director; (Henry Felix,) Trial Attorney, Commercial Litigation Branch, Civil
Division, Department of Justice; Gary Bernstecker, Office of the Solicitor, Department of Labor, of
counsel, for Defendant.
OPINION
BARZILAY, JUDGE:
I. INTRODUCTION
Before the court is Pls.’ Mot. for J. on the Agency R. (“Pl.’s Mot.”) contesting the Secretary
of the United States Department of Labor’s (“Labor” or “Department”) denial of Plaintiff’s petition for
trade adjustment assistance (“TAA”) under section 221(a) of the Trade Act of 1974, as amended by
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the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418).1 Plaintiffs claim: (1) Labor’s
denial of the TAA petition was unsupported by substantial evidence; (2) Labor’s investigation violated
Plaintiffs’ due process rights; and (3) Plaintiffs are entitled to receive TAA benefits because they meet
all of the statutory criteria for trade adjustment assistance. They ask this court to certify Plaintiffs as
eligible to receive trade adjustment assistance.
For the reasons set forth in the following opinion, the court holds that the Secretary’s negative
determination regarding the petition for trade adjustment assistance is unsupported by substantial
evidence and arbitrary and capricious.2 Plaintiffs’ motion for judgment on the agency record, asking the
court to certify the workers for TAA is therefore denied; however, the case is remanded for further
findings as to whether Alcatel had increased imports of articles like or directly competitive with articles
produced by the company’s United States facilities.3
II. BACKGROUND
In October 1997, Alcatel Telecommunications Cable (“Alcatel”), a manufacturer of optical
fiber for use in telephone cables, announced that it would close its manufacturing facility located in
Roanoke, Virginia (“Roanoke facility”), and that over 150 employees would be laid off due to a loss of
customers and revenue.4 On October 23, 1997, three employees filed a TAA petition with the
1
19 U.S.C. § 2271, et. seq. (1994).
2
See infra Part III for a discussion of the appropriate standard of review.
3
The court need not consider Plaintiffs’ due process claim at this time, nor will it order Labor to
certify Plaintiffs as eligible for assistance.
4
The Supplemental Administrative Record, Business Confidential Information (“Supp.
Conf. AR”) in this case states that Alcatel’s closing of the Roanoke plant was said to affect
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Department of Labor (“first petition”). Id. Approximately seven weeks after receiving the first petition,
the Department, pursuant to 19 U.S.C. § 2271(a), published a notice in the Federal Register that it
was initiating an investigation of the petition. See Investigations Regarding Certifications of
Eligibility to Apply for Worker Adjustment Assistance, 62 Fed. Reg. 65095 (Dec. 10, 1997).
Labor initiated the investigation on November 17, 1997. See Def.’s Opp. to Pls.’ Mot. for J. Upon
the Agency R. (“Def.’s Opp.”) at 3. Thereafter, the Department issued an undated investigative
report based on Alcatel’s responses to a U.S. Department of Labor Confidential Data Request issued
to Alcatel by the Virginia Employment Commission to determine worker eligibility for NAFTA
Transitional Adjustment Assistance (“NAFTA-TAA”) benefits, which addressed mainly the effects of
Mexican and Canadian imports. See Pls.’ Mem. at 4; Def.’s Opp. at 3; Supp. Conf. AR at 9-14.
According to Alcatel’s responses to the Confidential Data Request, [
approximately [ ] workers. Supp. Conf. AR at 7. Alcatel’s Mem. of Law in Supp. of Pls.’ Mot. for
J. Upon the Agency R. (“Pls.’ Mem.”) indicates that “215 employees would be laid off due to a loss
of customers and revenue.” Pls.’ Mem. at 3. The actual number is thus unclear. For purposes of this
case, it is important to note that the entire Roanoke plant was closed, and all workers employed at that
plant lost their jobs.
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] Supp. Conf. AR at 11-12.
On December 9, 1997, Labor issued a Negative Determination Regarding Eligibility to
Apply for Worker Adjustment Assistance. Id. at 15-16. In its determination, the Secretary
concluded that criterion three of the group eligibility requirements of the Trade Act of 1974 had not
been met. 5 Id. at 15. The Secretary of the Department found:
Alcatel Cable closed the Roanoke plant and has transferred all production from
Roanoke, Virginia to another Alcatel optical fiber manufacturing facility located within
the U.S. . . . After careful review, I determine that all workers of Alcatel Cable,
Roanoke, Virginia are denied eligibility to apply for adjustment assistance under Section
223 of the Trade Act of 1974.
Id. at 16. On December 10, 1997, Labor published notice in the Federal Register that a petition for
trade adjustment assistance had been filed and an investigation commenced. See 62 Fed. Reg. 65095.
On December 11, 1997, the Department sent letters announcing its negative determination to Alcatel
and to the three petitioning workers. See Supp. Conf. AR. at 19-22. Notice of the determination was
published in the Federal Register on January 6, 1998, in accordance with 19 U.S.C. § 2273 (1994).
See Notice of Determinations Regarding Eligibility to Apply for Worker Adjustment Assistance
and NAFTA Transitional Adjustment Assistance, 63 Fed. Reg. 577 (Jan. 6, 1998). The
Department did not provide actual notice regarding the first petition to any other former employees at
any time.
On December 8, 1997, Joan K. Saunders and two other former Alcatel employees filed a
petition (“second petition”) on behalf of the same worker group, stating that the shifting of production
to an Alcatel affiliate in Brazil had caused the closure of the Roanoke plant and the loss of the Roanoke
5
As will be later discussed in detail, the third criterion of 19 U.S.C. §2272(a)(3) (1994) is that
increases of imports of articles like or directly competitive with articles produced by the firm or
appropriate subdivision have contributed importantly to the separations of the workers and to the
absolute decline in sales or production.
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employees’ jobs. See Administrative Record (“AR”) at 6. The Department launched no investigation
of the allegations in Ms. Saunders’ petition, despite her claim that production was being outsourced to
an Alcatel plant in Brazil. Rather, by form letter dated January 14, 1998, the Department informed Ms.
Saunders that it had denied her petition based on a “recently issued negative determination covering the
same worker group” listed on her petition, i.e. former employees of Alcatel’s Roanoke facility. See AR
at 7.
Appearing pro se and by letter dated February 14, 1998, Ms. Saunders requested judicial
review of the Secretary’s determination. See Def.’s Opp. at 8. The Clerk of the United States Court
of International Trade accepted the letter as fulfilling in principle the requirements of the summons and
complaint for the commencement of a civil action under 28 U.S.C. § 1581(i) (1994) to challenge
Labor’s denial of her petition. On April 17, 1998, Defendant filed a motion to dismiss for lack of
jurisdiction, asserting that Plaintiffs’ complaint was untimely under 28 U.S.C. §1581(d)(1), because
Plaintiffs had failed to file their petition for judicial review within the sixty-day period of limitations
mandated by 19 U.S.C. §2395(a) (1994). Plaintiff responded pro se to Defendant’s motion to
dismiss, and Counsel was appointed for petitioners by this court on July 28, 1998. Thereafter, the
court denied Defendant’s motion to dismiss, holding that the sixty-day limitations period under
§2395(a) was not applicable, and that the action had been timely and properly commenced within the
two-year limitations period under 28 U.S.C. §1581(i).
In this action, Ms. Saunders claims that (1) the former workers of Alcatel’s Roanoke facility
are entitled to TAA benefits; (2) the Department’s negative determination regarding eligibility to apply
for TAA benefits was based on insufficient evidence; (3) the Department should have investigated the
allegations in her petition rather than relying on the first negative determination; and (4) Labor’s failure
Court No. 98-03-00540 Page 6
to provide her actual notice of the 10-day period in which to request a hearing on the first petition
deprived her of due process.
III. STANDARD OF REVIEW
Cases contesting the denial of trade adjustment assistance are generally filed under 28 U.S.C.
§1581(d); this court must uphold a determination by the Department of Labor if it is supported by
substantial evidence and is otherwise in accordance with law. See 19 U.S.C. § 2395(b); Woodrum v.
Donovan, 5 CIT 191, 193, 564 F. Supp. 826, 828 (1983), aff’d 737 F.2d 1575 (Fed. Cir. 1984).
“Substantial evidence has been held to be more than a ‘mere scintilla,’ but sufficient enough to
reasonably support a conclusion.” Former Employees of Swiss Industrial Abrasives v. United
States, 17 CIT 945, 947, 830 F. Supp. 637, 639-40 (1993) (citing Ceramerica 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)). In evaluating the evidence underlying Labor’s conclusions, the court may consider only the
administrative record before it. See 28 U.S.C. § 2640(c) (1994); International Union v. Reich, 22
CIT —, —, 20 F. Supp. 2d 1288, 1292 (1998).
Defendants observe that 28 U.S.C. § 2640(e) provides, “[i]n any civil action not specified in
this section, the Court of International Trade shall review the matter as provided in section 706 of title
5.” Def.’s Opp. at 14. Although a TAA case, this particular action was accepted by the court as filed
under 28 U.S.C. § 1581(i). As section 2640 does not specify the standard of review for civil actions
filed under 28 U.S.C. §1581(i), the court reviews the motion under 5 U.S.C. §706 (1994). In
reviewing an agency action under this statute, the court must “hold unlawful and set aside agency action,
findings, and conclusions found to be – (A) arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law. . . .” 5 U.S.C. § 706(2)(A). Not surprisingly, the court has found no
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precedent regarding how the arbitrary and capricious standard should be applied in a TAA dispute.
The court must therefore follow the general guidance of the Supreme Court:
The scope of review under the “arbitrary and capricious” standard is narrow and a
court is not to substitute its judgment for that of the agency. Nevertheless, the agency
must examine the relevant data and articulate a satisfactory explanation for its action
including a “rational connection between the facts found and the choice made.” In
reviewing that explanation, we must “consider whether the decision was based on a
consideration of the relevant factors and whether there has been a clear error of
judgment.”
Motor Vehicle Mfr.’s Ass’n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983) (citations
omitted). The arbitrary and capricious standard of review is narrower than the substantial evidence
standard, and the court will therefore remand Labor’s negative determination only if it finds that
the agency has relied on factors which Congress has not intended it to consider,
entirely failed to consider an important aspect of the problem, offered an explanation
for its decision that runs counter to the evidence before the agency, or is so
implausible that it could not be ascribed to a difference in view or the product of
agency expertise.
Id.
IV. DISCUSSION
A. The court must examine Plaintiffs’ substantive claims regarding the first petition
in order to determine the reasonableness of Labor’s refusal to conduct an
investigation pursuant to the second petition.
Upon receipt of a properly filed and verified petition, the Director of the Office of Trade
Adjustment Assistance “shall initiate, or order to be initiated, such investigation as he determines to be
necessary and appropriate.” 29 CFR §90.12 (1995). In this case, the Secretary summarily denied
the second petition as duplicative of the first petition, without conducting a separate investigation.
Plaintiffs claim that by failing to conduct an investigation, Labor “violat[ed] its obligation to investigate
every petition it receives.” Pls.’ Mem. at 29-30. In response, Defendant postulates, “[t]o suggest
Court No. 98-03-00540 Page 8
that the Department had an obligation to investigate an entirely duplicative petition for trade
adjustment assistance benefits filed on the heels of a completed investigation regarding the eligibility of
the same worker group is simply not logical.” Def.’s Opp. at 16.
The court cannot agree with Plaintiffs’ contention that the Department must investigate every
petition it receives, including those duplicative of previously-filed petitions. Indeed, “[i]t is well-settled
law that the nature and extent of an investigation are matters resting within the sound discretion of
administrative officials.” Former Employees of VTC Inc. v. Reich, 17 CIT 1433, 1437, 1993 WL
541685, at *3, (Dec. 30, 1993) (citations omitted). Limits on Labor’s discretion do, however, exist.
“[N]o deference is due to determinations based on inadequate investigations.” Former Employees of
Hawkins Oil and Gas, Inc., v. United States Secretary of Labor, 17 CIT 126, 130, 814 F. Supp.
1111, 1115 (1993) (citations omitted). Therefore, it is not per se unreasonable or inadequate for
Labor to deny a petition without investigation, based on the fact that the petition is entirely duplicative
of a previously filed petition. This is not to validate Defendant’s blanket statement that investigation of
a duplicative petition is illogical. Rather, the court must evaluate, on a case by case basis, whether or
not denial of the second petition was reasonable under the particular circumstances at hand.
Defendant claims that because Plaintiffs are before the court pursuant to its jurisdiction under
28 U.S.C. §1581(i) rather than §1581(d)(1), Plaintiffs are allowed to challenge only the
“administration and enforcement of the procedures employed by the Secretary of Labor in arriving at
the determination to deny Plaintiffs’ petition” and that “[a]s a consequence, any challenge to the
merits of the Secretary’s negative determination regarding the First Petition is necessarily outside the
scope of this litigation, as well as untimely.” Def.’s Opp. at 17. The court disagrees.
Court No. 98-03-00540 Page 9
The court cannot strictly defer to Labor’s actions without undertaking a review of the
investigation, merely because Plaintiffs could not timely file their petition for TAA under §1581(d)(1),
“which would necessarily entail a review of the Department’s investigation and ultimate decision-
making process.” Def.’s Opp. at 18. If the second petition was duplicative of the first, as Defendant
contends, it would have involved the same petitioners as well as the same matters to be investigated.
Clearly, the petitioners before the court in this case are different from those who filed the first petition,
although all are former Alcatel employees. In order to determine whether the matter to be
investigated is the same, the court must review the first petition. Moreover, the court must assess the
investigation conducted pursuant to the first petition, as it was the only one carried out for the benefit
of the Alcatel workers. Only then can the court properly assess whether the investigation under the
first petition was sufficiently adequate to deny the second petition.
B. The Secretary’s negative determination regarding the eligibility of Alcatel
employees for TAA benefits was unsupported by substantial evidence and
arbitrary and capricious.
The trade adjustment assistance program allows workers whose job losses are attributable to
import competition to receive unemployment compensation, training, job search, relocation
allowances, and other employment services. See 19 U.S.C. §§ 2291-2298 (1994); Former
Employees of Linden Apparel Corp. v. United States, 13 CIT 467, 467, 715 F. Supp. 378, 379
(1989). Section 221(a) of the Trade Act of 1974 provides:
(a) The Secretary shall certify a group of workers . . . as eligible to apply for adjustment
assistance under this subpart if he determines - -
(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,
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(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.
(b) For purposes of subsection (a)(3) of this section - -
(1) the term “contributed importantly” means a cause which is important but not
necessarily more important than any other cause.
19 U.S.C. §2272. “It is settled law that plaintiffs must meet all three requirements of section 222 of
the Trade Act to be entitled to relief.” Former Employees of CSX Oil and Gas Corp. v. United
States, 13 CIT 645, 649, 720 F. Supp. 1002, 1006 (1989). The Department determined that
Plaintiffs were separated from employment due to a domestic transfer of production, and had failed to
satisfy the third requirement that increased imports contribute importantly to the workers’ separations.
Plaintiffs claim that the Department’s negative determination was not based on substantial evidence
for three reasons: (1) the Department erred by limiting the investigation to the issue of whether
petitioners were entitled to NAFTA-TAA benefits, as opposed to general TAA benefits; (2) Labor’s
factual investigation was “woefully inadequate” in that it did not produce any information that would
allow the Department to make an informed decision regarding the separation of the Alcatel
employees; and (3) the Department denied the petitions on the basis of an erroneous belief that
Alcatel was shifting production to other U.S. facilities. See Pls.’ Mem. at 12-13. The court will
examine each of Plaintiffs’ arguments in turn.
(1) The Department’s use of a NAFTA-TAA questionnaire as the basis for its
negative determination is probative of the adequacy of the investigation, but
does not by itself demand a remand or judicial certification of the workers as
eligible for TAA.
Plaintiffs assert that the questionnaire upon which the Department’s negative determination
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was based addressed only NAFTA-TAA issues, and therefore “did not pose the questions necessary
in order to assess petitioners’ eligibility for TAA benefits.” Pls.’ Mem. at 13. [
] Supp Conf. AR at 11-12.
Plaintiffs claim that “[d]etermining that petitioners were not entitled to NAFTA-TAA benefits
was of little to no relevance to the issue of whether they were entitled to general TAA benefits.” Pls.’
Mem. at 14. Defendants do not dispute that a NAFTA-TAA questionnaire, rather than a TAA
questionnaire, was used in Labor’s investigation of the first petition for TAA benefits. Rather, Labor
claims that the NAFTA-TAA questionnaire provided all of the necessary data and critical information
for the Secretary to properly make an informed eligibility determination; therefore, the Department’s
use of the incorrect form was merely harmless error. Def.’s Opp. at 24. Plaintiffs responded that the
use of the NAFTA-TAA questionnaire was material error, because it did not elicit the relevant
information that would have revealed to the Department the loss of jobs and production to Brazil, a
non-NAFTA country. Reply to Def.’s Opp. to Pls.’ Mot. for J. Upon the Agency R. (“Pls.’
Reply”) at 2.
The court agrees with Defendants that use of the NAFTA-TAA questionnaire instead of a
general TAA questionnaire is not enough by itself to require a remand. In the NAFTA-TAA
Confidential Data Request, questions 4 and 7 relate to the third criterion for TAA, that import
substitution contribute importantly to the separation of the workers. Supp. Conf. AR at 11. Although
neither question requires that the answer be provided solely in relation to NAFTA countries, because
Court No. 98-03-00540 Page 12
the form is entitled “NAFTA Transitional Adjustment Assistance Confidential Data Request,” a
respondent may understandably presume that the entire questionnaire concerns imports from only
Mexico or Canada. Question 4 asks: “Has your company increased its imports of articles that are
like or directly competitive with articles produced by your firm?” Id. The form then provides that if
the “yes” box is checked, the company should check the box indicating whether the imports
originated in Mexico, Canada, or “other country.” Id. Alcatel checked the [
] Id. Similarly,
question 7 asks, “Have your company’s customers increased imports of articles that are like or
directly competitive with articles produced by your firm?” Id. As with question 4, the [
] Id.
The court does agree with Plaintiffs’ characterization of this investigation as cursory, based,
in part, on the use of a form clearly meant for another claim. However, as questions regarding
increased imports from other countries do appear on the NAFTA-TAA Confidential Data Request,
the court cannot agree with Plaintiffs that Labor’s use of the NAFTA-TAA questionnaire renders
“the Secretary’s chosen methodology . . . ‘so marred that [his] finding is arbitrary,’” thus providing
the good cause necessary to remand the Department’s negative determination. Pls.’ Mem. at 15
(quoting Linden, 13 CIT at 469, 715 F. Supp. at 381 (citations omitted)). The use of a NAFTA-
TAA questionnaire does not by itself render the Secretary’s decision arbitrary and capricious.
(2) The Department of Labor failed to adequately investigate whether imports from
other countries contributed importantly to petitioners’ job losses.
Plaintiffs claim that had Labor focused on an analysis of whether petitioners were eligible for
TAA benefits, “it would have determined that the Alcatel workers were entitled to such benefits by
Court No. 98-03-00540 Page 13
virtue of the company outsourcing to its non-U.S. plants a majority of the production previously
performed in Roanoke.” Pls.’ Mem. at 15. According to Plaintiffs, because the Department did not
focus on TAA benefits, it conducted an inadequate determination based on incomplete and inaccurate
data. Id. Furthermore, “the Department did not conduct a field investigation, or confer on the
telephone or in writing with any employees or other sources regarding the veracity of Alcatel’s
claims.” Id. at 16. Additionally, Plaintiffs claim, the Department did not investigate news reports,
examine Alcatel’s corporate structure, or verify Alcatel’s assertions regarding its domestic production
and lack of imports. See id. at 16, 17.
Defendant initially responds that the court is required to give substantial deference to Labor’s
methodology.6 Defendant asserts that the investigation into Alcatel’s claims was adequate and that it
was reasonable for the Secretary to base her negative determination upon the results of that
investigation. Def.’s Opp. at 25. According to the Department, “plaintiffs rely upon a series of
unsupported, outside the record documents and statements,” which should not be considered by the
court. Id. at 24. Had Plaintiffs wished to submit such information for consideration, “the appropriate
time . . . would have been in connection with a request for reconsideration of the Secretary’s denial of
the Second Petition, . . . and not during the judicial review process in this Court.” Id. at 25 (citing
Pauling v. Reich, 20 CIT 358, 361, 930 F. Supp. 618, 621 (1996)).
Although Labor generally enjoys broad discretion in managing TAA investigations, the court
owes no deference to determinations based on inadequate investigations. See Hawkins, 17 CIT at
6
See supra Part IV, Section A.
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130, 814 F. Supp. at 1115. Rather, the “rulings made on the basis of those findings [must] be in
accordance with the statute and not be arbitrary and capricious, and for this purpose the law requires
a showing of reasoned analysis.” Int’l Union v. Marshall, 584 F. 2d 390, 396 n. 26 (D.C. Cir.
1978). “In this regard, courts have observed that ‘because of the ex-parte nature of the certification
process, and the remedial purpose of the trade adjustment assistance program, the Secretary is
obliged to conduct his investigation with the utmost regard for the interests of the petitioning
workers.’” Stidham v. U.S. Department of Labor, 11 CIT 548, 551, 669 F. Supp. 432, 435
(1987) (citations omitted).
While only permitted to consider information contained within the administrative record,7 if
good cause is shown the court may order a remand pursuant to 19 U.S.C. § 2395(b). The Secretary
of Labor may be required to take further evidence when the agency’s investigation is so impaired that
the Secretary’s finding could not be based on substantial evidence. See Linden, 13 CIT at 469, 715
F. Supp. at 381; Swiss Industrial, 17 CIT at 947, 830 F. Supp. at 640 (quoting Local 116 v. U.S.
Secretary of Labor, 16 CIT 490, 492, 793 F. Supp. 1094, 1096 (1992)(citations omitted)).
Indeed, this court has remanded cases to the Department of Labor when investigations were so inept
as to provide such a scant administrative record that an affirmation of Labor’s determination would
have been as arbitrary as the investigation itself. See Local 116, 16 CIT at 493, 793 F. Supp. at
1096 (“In accordance with this standard of review, this Court cannot in good conscience affirm a
determination on the basis of the administrative record in the case at hand.”). It is therefore soundly
7
See 28 U.S.C. §2640(c); International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America, UAW Local 1283 v. Reich, 22 CIT —, —, 20 F.
Supp.2d 1288, 1292 (1998) (“The Court decides an adjustment assistance case based on the
administrative record before it.”).
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within the court’s judicial authority to remand an investigation that falls below the “threshold
requirement of reasonable inquiry,” and demand further evidence and investigation if necessary.
Hawkins, 17 CIT at 130, 814 F. Supp. at 1115.
In the case at bar, an examination of the administrative record reveals no more than an
inadequate investigation lacking detail, and certainly not one conducted with utmost regard for the
workers. See Stidham, 11 CIT at 551, 669 F. Supp. at 435 (citations omitted). The court therefore
holds that the Department has failed to make a reasonable inquiry into the claims of Alcatel’s former
employees, and remands the case to Labor to take further evidence. See Swiss Industrial, 17 CIT
at 949, 830 F. Supp. at 641.
First, Labor based its negative determination on Alcatel’s responses to a questionnaire
designed not for TAA petitions, but for NAFTA-TAA requests. [
] Conf. Supp. AR at 11. Plaintiffs
claim, and Defendant does not dispute, that the Department relied on nothing more than the NAFTA-
TAA questionnaire in making its determination. Pls.’ Mem. at 17.
Second, Labor did nothing to verify the accuracy of Alcatel’s responses to the questions in
that Confidential Data Request. This court has previously held that “failure to verify information
obtained . . . via telephone conversations or other correspondence [is] unreasonable.” Local 116, 16
CIT at 494, 793 F. Supp. at 1097. Yet the Department did not conduct a field investigation, confer
on the telephone or in writing with employees or other sources regarding the legitimacy of Alcatel’s
claims, or examine publicly-available news reports in which an Alcatel spokesperson conceded that
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production at the Roanoke facility was being transferred overseas. Pls.’ Mem. at 16-17.
Third, in its final determination, the Department merely submitted, with no known
investigation, that imports did not contribute importantly to worker separation. Conf. Supp. AR. at
17-18. In an attempt to bolster its suggestion, Defendant repeats this conclusion in its response brief:
“the Department found that plaintiffs were separated from employment due to a domestic transfer of
production. . . . In addition, the administrative record contains no evidence that this transfer of
production was related to import penetration.” Def.’s Opp. at 20. As noted earlier, an administrative
determination is arbitrary and capricious if the agency has “entirely failed to consider an important
aspect of the problem. . . .” Motor Vehicle Mfr.’s Ass’n, 463 U.S. at 43. Regarding trade
adjustment assistance matters, this court has stated,
[A] proper investigation of petitioners’ allegations in the case at bar would seek to
determine which imported products petitioners allege caused their displacement, and
would then ascertain whether these articles were like or directly competitive with
articles produced at the . . . plant. Finally, the proper investigation would have
determined if these imports “contributed importantly” to the petitioners’ displacement.
Swiss Industrial, 17 CIT at 948, 830 F. Supp. at 640. Examination of the administrative record in
this case reveals an utter lack of investigation into whether or not increases of imports of articles like
or directly competitive with articles produced by Alcatel contributed importantly to the workers’
separation. The Department entirely failed to consider whether the former Alcatel employees met the
third criterion for TAA. See Supp. Conf. AR at 17-18.
An unsupported conclusion simply does not suffice as a proper investigation. Indeed, the
court agrees with Plaintiffs that “[i]t was the sheer inadequacy of the investigation that left this
administrative record so barren; as such, Defendant cannot now use it to justify a flawed finding.”
Pls.’ Reply Br. at 3. The Department’s investigation did not meet the threshold requirement of
reasonableness; Labor’s denial of the petition was arbitrary and capricious and unsupported by
substantial evidence. The court therefore remands the case for a thorough investigation of whether
imports of like or directly competitive products contributed importantly to the workers’ job losses.
See 19 U.S.C. § 2272(a)(3). The court will not demand that Labor consider specific documentation,
public news reports, or other material upon remand. However, in its remand determination to the
court, Labor must provide evidence and explanation that it has made a reasonable and adequate
inquiry into whether increased imports of like or directly competitive products contributed importantly
to the separation of the employees.
V. CONCLUSION
For the foregoing reasons, the court remands Labor’s negative determination for further
investigation into whether like or directly competitive products contributed importantly to the
separation of the Roanoke employees. Judgment will be entered for Plaintiffs accordingly.
Dated: _____________ _____________
New York, NY Judith M. Barzilay
Judge