Former Employees of Independent Steel Castings Co. v. United States Department of Labor

Slip. Op. 07 – 108
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________
)
FORMER EMPLOYEES OF ) Before: The Hon. Richard W.
INDEPENDENT STEEL CASTINGS ) Goldberg, Senior Judge
COMPANY, INC., )
Plaintiffs, ) Court No. 06-00338
)
v. ) PUBLIC VERSION
)
UNITED STATES DEPARTMENT )
OF LABOR, )
Defendant. )
________________________________)
OPINION
[Labor’s determination regarding ATAA eligibility is remanded.]
Dated: July 10, 2007
Joyce Goldstein & Associates (Joyce Goldstein and Gina
Fraternali) for the Plaintiffs.
Peter D. Keisler, Assistant Attorney General; Jeanne E.
Davidson, Director; Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Tara J. Kilfoyle), for the Defendant.
GOLDBERG, Senior Judge: Independent Steel Castings Company
(“ISCCO”), based in New Buffalo, Michigan, produced steel,
aluminum and bronze mold and cast products. The plant closed on
May 27, 2005. On March 2, 2006, thirty-nine former employees of
ISCCO (“Plaintiffs”) filed a petition with the U.S. Department
of Labor (“Labor”) for Trade Adjustment Assistance (“TAA”) and
Alternative TAA (“ATAA”), pursuant to 19 U.S.C. §§ 2271-2273,
2318.
Court No. 06-00338 Page 2
On July 14, 2006, Labor certified Plaintiffs as eligible to
apply for TAA benefits but denied their eligibility to apply for
ATAA benefits, citing a failure to satisfy one of the ATAA group
eligibility criteria. On July 17, 2006, Plaintiffs sent Labor a
request for reconsideration of Labor’s negative determination
with regard to ATAA group eligibility. This request was also
denied.
Plaintiffs filed a complaint with this Court on October 6,
2006, and subsequently filed a motion, pursuant to USCIT Rule
56.1, for judgment upon the agency record. Plaintiffs seek the
reversal of Labor’s negative determination regarding ATAA
eligibility and Labor’s denial of the motion for
reconsideration. They argue that Labor’s conclusions are not
supported by substantial evidence and ask the Court to order
Labor to certify Plaintiffs as eligible to apply for ATAA. In
the alternative, Plaintiffs ask the Court to remand the case
back to Labor with instructions to conduct a more thorough
investigation. In response, Labor argues that this Court lacks
authority to order Labor to certify Plaintiffs as eligible for
ATAA benefits, and, moreover, that there is substantial evidence
to support Labor’s conclusions.
This Court has jurisdiction under 28 U.S.C. § 1581(d)(1).
Because this Court finds that Labor’s conclusions regarding
Plaintiffs’ ATAA group eligibility are not supported by
Court No. 06-00338 Page 3
substantial evidence, this action is remanded to Labor for
further proceedings consistent with this opinion.
I. BACKGROUND
A. Relevant Legal Framework
TAA and ATAA are government programs designed to assist
workers who have become unemployed due to the effects of
international trade. See Former Employees of Int’l Bus. Machs.
Corp. v. U.S. Sec’y of Labor, 29 CIT __, __, 403 F. Supp. 2d
1311, 1314 (2005). The goal of these programs is to help trade-
affected workers quickly reenter the workforce. See U.S. Gov.
Accounting Office, TAA: Reforms Have Accelerated Training
Enrollment, but Implementation Challenges Remain, GAO–04–1012,
Sept. 2004, at 25 (“GAO Report 04–1012”). The ATAA program was
created specifically for older TAA-certified workers for whom
retraining may not be appropriate. Former Employees of BMC
Software, Inc. v. U.S. Sec’y of Labor, 30 CIT __, __, 454 F.
Supp. 2d 1306, 1310 n.5 (2006). It provides a wage subsidy for
such workers who quickly obtain reemployment at a lower wage
than what they previously earned. See U.S. Gov. Accounting
Office, TAA: Most Workers in Five Layoffs Received Services, but
Better Outreach Needed on New Benefits, GAO–06–43, Jan. 2006, at
9.
For an individual worker to receive benefits under ATAA,
(1) the worker group must be certified as ATAA-eligible, and (2)
Court No. 06-00338 Page 4
the worker must be individually certified as ATAA-eligible. See
19 U.S.C. § 2318 (Supp. IV 2004). Labor considers three
criteria to determine whether to grant group certification under
the ATAA. See ATAA Program: Training and Employment Guidance
Letter Interpreting Federal Law (“Guidance Letter”), 69 Fed.
Reg. 60,904, 60,904-05 (Dep’t of Labor Oct. 13, 2004). These
three criteria are:
(I) Whether a significant number of workers in the
workers’ firm are 50 years of age or older.
(II) Whether the workers in the workers’ firm possess
skills that are not easily transferable.
(III) The competitive conditions within the workers’
industry.
19 U.S.C. § 2318(a)(3)(A)(ii). Then, to be individually
eligible for ATAA benefits, the worker must, inter alia, be at
least fifty years of age and obtain reemployment not more than
twenty-six weeks after the date of separation from the
adversely-affected employment. Id. § 2318(a)(3)(B)(ii)–(iii).
B. Labor’s Investigation
On July 14, 2006, Labor published its determinations in the
Federal Register certifying Plaintiffs as eligible to apply for
TAA benefits, but denying their eligibility to apply for ATAA
benefits. Notice of Determinations Regarding Eligibility to
Apply for Worker Adjustment Assistance and Alternative Trade
Adjustment Assistance (“Notice of Determinations”), 71 Fed. Reg.
Court No. 06-00338 Page 5
40,156, 40,157 (Dep’t of Labor July 14, 2006). The denial of
ATAA eligibility was based on Labor’s determination that one of
the ATAA criteria, whether the workers in the workers’ firm
possess skills that are not easily transferable, had not been
satisfied. Id. On July 17, 2006, Plaintiffs sent Labor a
request for administrative reconsideration of Labor’s negative
determination, pursuant to 29 C.F.R. § 90.18(c). In support of
their request for reconsideration, and in an attempt to provide
Labor with “facts not previously considered,” id., Plaintiffs
submitted assorted statistics showing unemployment rates in New
Buffalo and the surrounding parts of Michigan. On July 31,
2006, Labor sent Plaintiffs a letter denying their application
for administrative reconsideration. In that letter, Labor
bolstered its determination that the Plaintiffs possess skills
that are easily transferable by divulging that during Labor’s
initial investigation, an ISCCO company official had revealed
that each of the separated workers in question had been offered
positions at another foundry in the area. Pls.’ Mot. App. A 99
(Letter from Linda G. Poole, Certifying Officer, Department of
Labor, Division of Trade Adjustment Assistance, to Thomas C.
Carey, Associate General Counsel, International Union, United
Automobile, Aerospace and Agriculture Implement Workers of
America (July 31, 2006)) (“Letter from Labor”).
Court No. 06-00338 Page 6
The confidential administrative record later revealed that
[ ]. Labor issued its negative determination with regard to the
Plaintiffs’ ATAA eligibility.
II. STANDARD OF REVIEW
Based on the record, Labor’s findings of fact are
conclusive if supported by substantial evidence. See 19 U.S.C.
§ 2395(b) (Supp. IV 2004). Under the substantial evidence
standard, the court is “not free to substitute its judgment for
that of the agency . . . .” Int’l Bus. Machs., 29 CIT at __,
403 F. Supp. 2d at 1324. On the other hand, substantial
evidence is more than a “mere scintilla,” e.g., Former Employees
of Chevron Prods. Co. v. U.S. Sec’y of Labor, 27 CIT 1135, 1143,
279 F. Supp. 2d 1342, 1349 (2003) (quotation marks omitted), and
“must do more than create a suspicion of the existence of the
fact to be established . . . .” SSIH Equip. S.A. v. U.S. Int’l
Trade Comm’n, 718 F.2d 365, 382 (Fed. Cir. 1983) (quotation
marks omitted). Furthermore, all rulings based on the agency’s
findings of fact must not be arbitrary and capricious, but
rather the result of reasoned analysis. See Former Employees of
Gen. Elec. Corp. v. U.S. Dep’t of Labor, 14 CIT 608, 611 (1990).
“Courts have not hesitated to set aside agency determinations
which are the product of perfunctory investigations.” Int’l
Bus. Machs., 29 CIT at __, 403 F. Supp. 2d at 1315.
Court No. 06-00338 Page 7
III. DISCUSSION
The issue before the Court is whether Labor’s finding that
Plaintiffs’ skills are easily transferable is supported by
substantial evidence.
Plaintiffs contend that Labor’s finding of fact is not
supported by substantial evidence by arguing that (1) a job
offer does not constitute substantial evidence that workers’
skills are easily transferable, (2) [ ] statements are
unreliable and therefore do not constitute substantial evidence,
and (3) Labor cannot rely on [ ] that Plaintiffs’ skills are
easily transferable because this is a legal conclusion.
Labor contends that there is substantial evidence to
support its conclusion that Plaintiffs’ skills are easily
transferable to other positions in the local commuting area. In
support of this, Labor argues that (1) it conducted a reasonable
investigation and, (2) it properly relied upon the factual
statements of a knowledgeable company official in reaching its
determination.
Due to the nature of the TAA programs, Labor is “obligated
to conduct [its] investigation with the utmost regard for the
interest of the petitioning workers.” BMC Software, 30 CIT at
__, 454 F. Supp. 2d at 1312 (quotation marks omitted). The
second criterion for ATAA group eligibility—that the workers’
skills are not easily transferable to other employment—prevents
Court No. 06-00338 Page 8
workers who obtain new employment requiring similar skills from
receiving wage insurance benefits under ATAA. See GAO Report
04–1012 at 26. Labor’s own guidelines provide instructions on
how to gather evidence for this criterion:
For criterion 2, the necessary information will . . .
be obtained through telephone communication with the
appropriate company official at the subject firm.
Specifically, the company official will be asked to
confirm that the worker group for whom a petition has
been filed possesses job skills that are not easily
transferable to other employment, with a focus on what
skills the worker possesses. Should the company
official be unable to provide information as to
whether the skills are easily transferable, the state
. . . will be asked to furnish the assessment.
Guidance Letter, 69 Fed. Reg. at 60,905 (emphasis added).
In addition to requiring non-transferability of skills at
the group certification level, one of the requirements of
individual ATAA eligibility is that the workers must obtain new
employment within twenty-six weeks of separation. 19 U.S.C. §
2318(a)(3)(B)(ii). In other words, while the program requires
workers to find reemployment quickly, it only covers those who
quickly find reemployment requiring different skills. See
Guidance Letter, 69 Fed. Reg. at 60,905 (“Under the ATAA
program, workers in an eligible worker group who are at least 50
years of age and who obtain different, full-time employment
within 26 weeks of separation from adversely-affected employment
at wages less than those earned in the adversely-affected
employment [will be eligible for ATAA benefits].” (emphasis
Court No. 06-00338 Page 9
added)). As such, the program’s wage subsidy is clearly
designed to encourage older workers who might have difficulty
finding reemployment that utilizes their existing skill-sets to
quickly reenter the labor market by accepting lesser-paying
jobs.
In this case, Labor appears to have lost sight of the
purpose of this criterion and, particularly, the evidence
required to satisfy it.1 [ ]. While [ ] provided ample room for
assumptions as to the skills of the workers and the types of
jobs that were offered, nothing [ ], or anywhere else in the
record, provides information regarding the actual skills of the
petitioning workers that would assist a Labor investigator in
assessing whether this criterion has been satisfied.
1
It should be mentioned that Plaintiffs appear to have similarly
lost sight of the purpose of this criterion. The evidence that
Plaintiffs proffered in their application for reconsideration of
the initial negative determination regarding ATAA group
eligibility spoke only to unemployment statistics in the area
surrounding New Buffalo. See Pls.’ Mot. App. A 87–88 (Letter
from Thomas C. Carey, Associate General Counsel, International
Union, United Automobile, Aerospace and Agriculture Implement
Workers of America, to Edward Tomchick, Program Manager,
Division of Trade Adjustment Assistance, United States
Department of Labor, Attach. B–D (July 17, 2006)). As Labor
noted in its denial of the request for reconsideration, general
unemployment figures speak neither to the skills that the
Plaintiffs possess nor to the skills required by jobs
potentially available to Plaintiffs. See Pls.’ Mot. App. A 99
(Letter from Labor).
Court No. 06-00338 Page 10
Moreover, [ ].2 Labor “cannot simply adopt as its own the
legal conclusions of employers . . . . Rather, the agency must
reach its own conclusions, based on its own thoughtful,
thorough, independent analysis of all relevant record facts.”
Int’l Bus. Machs., 29 CIT at ___, 403 F. Supp. 2d at 1331.
Indeed, “it is Labor’s responsibility, not the responsibility of
the company official, to determine whether a former employee is
eligible for benefits.” Former Employees of Federated Merch.
Group v. United States, Slip. Op. 05–16, 2005 WL 290015, at *6
(CIT Feb. 7, 2005). [ ] cannot, without more, constitute
substantial evidence that the Plaintiffs’ skills are easily
transferable.
[ ] is not instructive as to the workers’ skills because [
] fails to provide substantial evidence of skills either
possessed by the workers or required by the jobs that they were
allegedly offered.
The only evidence in the record that speaks to the
transferability of skills is that Plaintiffs worked at a steel,
aluminum and bronze mold and cast products plant, and that they
were offered jobs at a nearby “foundry.” See supra Part I.B.
Given the requirement that workers be employed within twenty-six
weeks of separation in order to be individually eligible for
ATAA benefits, 19 U.S.C. § 2318(a)(3)(B)(ii), it would be
2
[ ]
Court No. 06-00338 Page 11
inapposite if evidence of a job offer alone could disqualify a
worker group. The discovery that Plaintiffs were offered jobs
at a nearby foundry might give rise to a suspicion that they
were offered jobs similar to those that they had held at ISCCO.
However, without more information regarding the skills that the
workers possess and the skills required by the jobs that they
were allegedly offered, this evidence does not constitute
substantial evidence that the workers possess skills that are
easily transferable to other employment.
This Court is not persuaded by Plaintiffs’ assertion that
Labor is not entitled to rely on the factual statements by [ ].
Labor is “entitled to base an adjustment assistance eligibility
determination on statements from company officials if [Labor]
reasonably concludes that those statements are creditworthy and
are not contradicted by other evidence.” Former Employees of
Marathon Ashland Pipe LLC v. Chao, 370 F.3d 1375, 1385 (Fed.
Cir. 2004). First, as Labor points out, [ ]. Plaintiffs’
contention that [ ], even if true, is not significant enough of
an error to question [ ] credibility with regard to the
information relating to criterion two. Second, there is no
evidence in the record to contradict the relevant information
that [ ] provided Labor. Plaintiffs’ unemployment statistics
are too general to give Labor good cause to question the
veracity of the specific information provided by [ ].
Court No. 06-00338 Page 12
Accordingly, Labor’s failure to satisfy the requirements of 19
U.S.C. § 2318(a)(3)(A)(ii) is not due to the source of the
evidence procured, but rather its lack of substantiality.
Finally, given that further fact-finding is required to
determine the outcome of the ATAA petition, remand is the
appropriate remedy. See 19 U.S.C. § 2395(c). As such, the
Court need not address the issue of court-ordered certification
in the instant case. See Former Employees of Int’l Bus. Machs.
Corp. v. U.S. Sec’y of Labor, 31 CIT at ___, 483 F. Supp. 2d
1284, 1337 (2007) (“[I]f a case of court-ordered certification
is to have any shot at surviving on appeal, it must be a clear-
cut case where another remand would be plainly futile.”).
IV. CONCLUSION
For the foregoing reasons, this matter is hereby remanded
to Labor for reconsideration of Plaintiffs’ ATAA group
eligibility, with specific instructions to acquire more
information on criterion two. A separate order will be issued
accordingly.
/s/ Richard W. Goldberg___
Richard W. Goldberg
Senior Judge
Date: July 10, 2007
New York, New York
UNITED STATES COURT OF INTERNATIONAL TRADE
FORMER EMPLOYEES OF INDEPENDENT
STEEL CASTINGS COMPANY, INC.,
Plaintiffs, Before: Richard W. Goldberg,
Senior Judge
v.
Court No. 06-00338
UNITED STATES DEPARTMENT OF
LABOR,
Defendant,
ORDER
Upon consideration of Plaintiffs’ motion for judgment
upon the agency record and briefs in support thereof,
Defendant’s brief in opposition thereto, upon all other
papers and proceedings had herein, and upon due
deliberation, it is hereby
ORDERED that Labor’s negative determination of
Plaintiff’s ATAA eligibility is remanded; and it is further
ORDERED that Labor shall, if it is able, point to
other record evidence or conduct further investigations to
determine whether the Plaintiffs possess skills that are
not easily transferable; and it is further
ORDERED that Labor shall, within forty (40) days of
the date of this Order, issue a remand determination in
accordance with the instructions provided herein; and it is
further
ORDERED that the parties may, within twenty (20) days
of the date on which Labor issues its remand determination,
submit briefs addressing Labor’s remand determination, not
to exceed twenty (20) pages in length; and it is further
ORDERED that the parties may, within fifteen (15) days
of the date on which briefs addressing Commerce’s remand
determination are filed, submit response briefs, not to
exceed fifteen (15) pages in length.
SO ORDERED.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Date: July 10, 2007
New York, New York