United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial & Service Workers International Union, Local 2911 v. United States Secretary of Labor

Slip Op. 08-45
UNITED STATES COURT OF INTERNATIONAL TRADE
UNITED STEEL, PAPER AND :
FORESTRY, RUBBER, :
MANUFACTURING, ENERGY, ALLIED :
INDUSTRIAL AND SERVICE WORKERS:
INTERNATIONAL UNION, LOCAL : Before: Richard K. Eaton, Judge
2911, :
: Court No. 04-00492
Plaintiff,:
:
v. :
:
UNITED STATES SECRETARY :
OF LABOR, :
:
Defendant.:
:
OPINION AND ORDER
[United States Department of Labor’s final negative determination
denying plaintiff’s application for trade adjustment assistance
remanded.]
Dated: April 30, 2008
Stewart and Stewart (Terence P. Stewart), for plaintiff.
Jeffrey S. Bucholtz, Acting Assistant Attorney General;
Jeanne E. Davidson, Director; Patricia M. McCarthy, Assistant
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Claudia Burke), for defendant.
Eaton, Judge: This matter is before the court following
remand. The primary remaining issue is whether the United States
Department of Labor’s (“Labor” or the “Department”) justification
for denying plaintiff United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers
Court No. 04-00492 Page 2
International Union, Local 2911’s (“ISU”)1 request to extend
Weirton Steel Corporation’s (“Weirton”) Trade Adjustment
Assistance (“TAA”) eligibility certification was lawful. See
Letter Dated Sept. 24, 2004 from Labor to Mr. Terence P. Stewart,
Suppl. Admin. R. (“SR”) at 16-17 (the “Denial Letter”); Notice of
Determinations Regarding Eligibility to Apply for Worker
Adjustment Assistance and NAFTA Traditional Adjustment
Assistance, 67 Fed. Reg. 22,112 (Dep’t of Labor May 2, 2002) (the
“2002 Certification”).
In Independent Steelworkers Union v. United States Secretary
of Labor, 30 CIT __, Slip Op. 06-171 (Nov. 17, 2006) (not
reported in the Federal Supplement) (“Steelworkers”), this court
held that it possessed jurisdiction to review Labor’s denial of
plaintiff’s request to extend the duration of its 2002 group
eligibility certification. The court, however, reserved judgment
on the legal and factual justification for the denial pending
Labor’s assembly and submission of a complete administrative
record relating to the amendment request. See id. at __, Slip
1
During the pendency of this action, the court granted
plaintiff’s consent motion to be substituted in this action as
plaintiff. See United Steel, Paper and Forestry, Rubber, Mfg.,
Energy, Allied Indus. and Serv. Workers Int’l Union, Local 2911
v. United States Sec’y of Labor, Court No. 04-492, July 13, 2007
(order substituting party and amending caption). At all times
pertinent to this motion and the development of the facts
relevant to this litigation, however, plaintiff was known as
Independent Steelworkers Union. Therefore, for purposes of
convenience, the court refers to plaintiff as “ISU.”
Court No. 04-00492 Page 3
Op. 06-171 at 3, 30-31. Accordingly, the court now examines
Labor’s reasons for the denial.
Plaintiff contends that Labor’s denial of its request to
extend the 2002 Certification inadequately addressed prior
instances where TAA eligibility certifications had been amended
to extend their expiration dates. See Pl.’s Rule 56.1 Motion for
J. Agency R. (“Pl’s Br.”) 24-26. Plaintiff thus maintains that,
given the record before it, “the Department failed in its
obligation to articulate a satisfactory explanation for its
action.” Pl.’s Br. 28.
Labor asserts that it properly denied plaintiff’s amendment
request. The Department’s primary argument is that it granted
past extensions only where production at the workers’ plant
ultimately ceased. See Denial Letter, SR at 16-17; see also
Def.’s Motion for Leave to Respond to Pl.’s Suppl. Citations and
Resp. to Pl.’s Suppl. Citations (“Def.’s Resp. Pl.’s Suppl.
Cit.”) 2-3. Labor claims that an extension of Weirton’s
certification would be against its established policy because
production at the Weirton plant was continued by its purchaser
(albeit without those workers now seeking TAA benefits).
While the court has previously found that jurisdiction lies
with 28 U.S.C. § 1581(d)(1) (2000) and 19 U.S.C. § 2395(c) or,
alternatively, 28 U.S.C. § 1581(i)(4), for the purposes of this
opinion, jurisdiction is assumed only under the latter provision.
See 28 U.S.C. § 1581(i)(4) (stating that the Court has residual
Court No. 04-00492 Page 4
jurisdiction over “administration and enforcement” of, among
other determinations, any final determination by Labor concerning
the eligibility of workers for TAA benefits); see also
Steelworkers, 30 CIT at __, Slip Op. 06-171 at 21-30.
For the following reasons, Labor’s negative determination
embodied in its Denial Letter is remanded.
BACKGROUND
The procedural history and factual background of this matter
need not be repeated in their entirety for purposes of this
opinion. See generally Steelworkers, 30 CIT __, Slip Op. 06-171.
Nevertheless, a recapitulation of the salient events preceding
and following Steelworkers is warranted.
Weirton was a steel producer. Faced with “serious
difficulties due to import surges” and financial hardship, the
ISU, on Weirton’s behalf, successfully petitioned Labor in mid-
2001 for eligibility of the Weirton workers to apply for TAA
benefits.2 Pl.’s Br. 3-4 (citations omitted). The resulting
2
The group eligibility requirements for TAA benefits are
as follows:
(a) In general
A group of workers (including workers in any
agricultural firm or subdivision of an
agricultural firm) shall be certified by the
Secretary as eligible to apply for adjustment
assistance under this part pursuant to a
petition filed under section 2271 of this
(continued...)
Court No. 04-00492 Page 5
2
(...continued)
title if [Labor] determines that--
(1) 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; and
(2)(A)(i) the sales or production, or both,
of such firm or subdivision have decreased
absolutely;
(ii) imports of articles like or directly
competitive with articles produced by such
firm or subdivision have increased; and
(iii) the increase in imports described in
clause (ii) contributed importantly to such
workers’ separation or threat of separation
and to the decline in the sales or production
of such firm or subdivision; or
(B)(i) there has been a shift in production
by such workers’ firm or subdivision to a
foreign country of articles like or directly
competitive with articles which are produced
by such firm or subdivision; and
(ii)(I) the country to which the workers’
firm has shifted production of the articles
is a party to a free trade agreement with the
United States;
(II) the country to which the workers’ firm
has shifted production of the articles is a
beneficiary country under the Andean Trade
Preference Act, African Growth and
Opportunity Act, or the Caribbean Basin
Economic Recovery Act; or
(III) there has been or is likely to be an
increase in imports of articles that are like
or directly competitive with articles which
are or were produced by such firm or
(continued...)
Court No. 04-00492 Page 6
2002 Certification found all Weirton workers who became totally
or partially separated from employment on or after July 3, 2000
eligible to apply for TAA cash benefits. See 2002 Certification,
67 Fed. Reg. at 22,113. The 2002 Certification was to remain in
effect for two years from the date of certification, and thus was
to expire on April 23, 2004. See 19 U.S.C. § 2291(a). In May
2003, however, approximately one year prior to the 2002
Certification’s expiration, Weirton filed for Chapter 11
bankruptcy. See Pl.’s Br. 7; see also Weirton Steel Corp.
Voluntary Pet. Chapter 11 Bankr., AR at 188-89. Thereafter,
Weirton officials agreed to sell the company’s assets——but not
the company itself——to its competitor International Steel Group
(“ISG”). See Pl.’s Br. 8. To complete the sale, Weirton
retained some of its workers to maintain the plant and ensure a
smooth transition of the facilities to the new owners.3 See
2
(...continued)
subdivision.
19 U.S.C. § 2272. See also 19 U.S.C. §§ 2271, 2273.
3
At oral argument, plaintiff’s counsel explained
plaintiff’s characterization of why workers were kept on at the
plant, and why steel production continued, as follows:
If you just idle, cold idle a steel mill,
it’s hugely expensive to start it back up.
You have to keep the furnaces going and while
you’re doing that you make steel, and that
preserves the assets for the new owners that
are going to come in and take over the place
a few weeks later. So yes, it is accurate
(continued...)
Court No. 04-00492 Page 7
Letter Dated Sept. 14, 2004 from Mr. Terence P. Stewart to Labor,
SR at 12-15 (the “Stewart Letter”).
On March 9, 2004, the ISU filed a new petition with Labor
seeking TAA re-certification for Weirton’s workers based on facts
present during a 2002 - 2003 investigatory period. See Weirton
Steel Corp. Petition for TAA Dated Mar. 9, 2004 (the “2004
Petition”), AR at 2-40. Labor filed a negative determination
with respect to this petition on June 2, 2004, finding that
Weirton workers failed to meet the statutory requirements for
certification. That is, Labor found that during the 2002–2003
investigatory period: (1) under 19 U.S.C. § 2272(a)(2)(A)(iii),
increased steel imports did not contribute importantly to the
worker separations, and, (2) under § 2272(a)(2)(B)(i), steel
imports had not led Weirton to shift its production to a foreign
country. See Weirton Steel Corp., Weirton, WV; Negative
Determination Regarding Eligibility To Apply for Worker
Adjustment Assistance and Alternative Trade Adjustment Assistance
(Dep’t of Labor May 14, 2004), AR at 101–03 (the “Negative
3
(...continued)
that steel production continued. But we
characterize, and the company Weirton
characterizes what was going on at that time
to winding down its steel production
operations before transferring to new
ownership, new management.
Transcript of Oral Argument at 23, Court No. 04-00492 (July 28,
2005).
Court No. 04-00492 Page 8
Determination”); Notice of Determinations Regarding Eligibility
To Apply for Worker Adjustment Assistance, 69 Fed. Reg. 31,134,
31,135 (Dep’t of Labor June 2, 2004) (notice).
Thereafter, on July 23, 2004, Labor denied plaintiff’s
request for administrative reconsideration of the Negative
Determination. See Weirton Steel Corp., Weirton, WV; Notice of
Negative Determination Regarding Application for Reconsideration
(Dep’t of Labor July 23, 2004), AR at 195-97 (the
“Reconsideration Denial”); Weirton Steel Corp., Weirton, WV;
Notice of Negative Determination Regarding Application for
Reconsideration, 69 Fed. Reg. 47,184 (Dep’t of Labor Aug. 4,
2004) (notice).
On September 14, 2004, having failed to secure benefits by
way of a re-certification, the ISU wrote Labor to “formally
request that [Labor] amend the [2002] TAA certification to change
its expiration date from April 23, 2004, to May 18, 2004, so as
to include all workers of Weirton Steel who were adversely
affected by increased imports.” See Stewart Letter, SR at 12-15.
The Stewart Letter details the circumstances that Weirton
believed justified an amendment to extend the 2002 Certification.
Specifically, it recounts that the 2002 Certification’s
expiration date of April 23, 2004 “came just a few weeks before
substantially all of the production assets of Weirton Steel
Corporation were acquired out of bankruptcy” by ISG, and that on
Court No. 04-00492 Page 9
May 18, 2004 “Weirton ceased to exist as a producer of steel and
[that its remaining] employees were permanently separated from
the company.”4 See Stewart Letter, SR at 13. It is those
workers who remained with the company for the three to four weeks
after the 2002 Certification expired, but before Weirton’s sale
was completed, that are the subject of Weirton’s request to
extend the 2002 Certification. Stewart Letter, SR at 13-14.
According to plaintiff, the remaining workers “were engaged
in preserving Weirton’s assets and facilities and preparing them
for the sale to ISG.”5 Stewart Letter, SR at 14. Plaintiff
maintained that only an amendment of the 2002 Certification
“would ensure that all the workers of Weirton Steel who were
adversely affected by increased imports are included under [the
2002] Certification and eligible for needed assistance.” Stewart
Letter, SR at 14.
In addition, the Stewart Letter stated that it was
plaintiff’s “understanding that the Department has previously
amended TAA certifications to extend the period of eligibility
4
The Stewart Letter notes that Weirton “spent several
years trying to stave off bankruptcy,” which involved “workforce
reductions,” and then submitted a re-organization plan to the
bankruptcy court “which called for eliminating an additional 950
jobs.” See Stewart Letter, SR at 13.
5
The Stewart Letter recounts Weirton’s attempt to file a
new petition in 2004 and Labor’s Negative Determination and
Reconsideration Denial, since sustained by this court in
Steelworkers. See Stewart Letter, SR at 14; Steelworkers, 30 CIT
at __, Slip Op. 06-171 at 31.
Court No. 04-00492 Page 10
where workers have been retained beyond the original expiration
date of a certification.” Stewart Letter, SR at 14, n. 5 (citing
O/Z-Gedney Co., Div. of EGS Elec. Group, Terryville, CT; Amended
Certification Regarding Eligibility To Apply for Worker
Adjustment Assistance, 69 Fed. Reg. 43,454 (Dep’t of Labor July
20, 2004) (“O/Z-Gedney”); Wiegand Appliance Div., Emerson
Electric Co., Vernon, AL; Amended Certification Regarding
Eligibility To Apply for Worker Adjustment Assistance, 58 Fed.
Reg. 50, 198 (Dep’t of Labor Aug. 20, 2003) (“Wiegand”)).
By letter dated September 24, 2004, Labor denied the ISU’s
amendment request for two reasons. The first was that the facts
presented here were distinguishable from the facts of the two
cases cited in plaintiff’s amendment request (O/Z-Gedney and
Wiegand), because here production at the plant continued whereas
in the other instances “workers were retained to assist with the
plant closure after production had ceased.” See Denial Letter,
SR at 16 (emphasis added). The second was that, after a “full
and careful investigation for the relevant period,”6 Labor
determined that workers’ separation from the company was not due
6
The Denial Letter references plaintiff’s 2004 Petition
and thus the court assumes that Labor’s second reason relates to
the denial of plaintiff’s application for re-certification and
not to its application to extend the period of eligibility under
the 2002 Certification. It appears, therefore, that Labor
conducted no separate investigation relating to the amendment
request and consequently made no findings as to whether the
workers were adversely affected by imports.
Court No. 04-00492 Page 11
to an increase in imports. This second reason was apparently a
reference to the 2004 Petition for re-certification. See Denial
Letter, SR at 16.
In Steelworkers, plaintiff sought judicial review of Labor’s
Negative Determination and Reconsideration Denial concerning its
2004 Petition, as well as the denial of plaintiff’s amendment
request embodied in Labor’s September 14, 2004 Denial Letter.
The court sustained Labor’s Negative Determination and
Reconsideration Denial resulting from plaintiff’s 2004 Petition,
but denied Labor’s motion to dismiss Count IV of plaintiff’s
complaint (seeking review of the denial of the amendment request)
for lack of subject matter jurisdiction. See Steelworkers, 30
CIT at __, Slip Op. 06-171 at 31. The court, however, reserved
judgment on the substantive issues surrounding plaintiff’s
amendment request “until such time as Labor assembles and submits
the administrative record for the requested extension.” Id. at
__, Slip Op. 06-171 at 3. Accordingly, Steelworkers remanded the
matter to Labor “with instructions to assemble and submit to the
court the administrative record regarding plaintiff’s amendment
claim . . . .” Id. at __, Slip Op. 06-171 at 31.
On remand, Labor compiled a Supplemental Administrative
Record and filed it with the court on January 29, 2007. The
record consists solely of: (1) the September 14, 2004 Stewart
Letter (SR at 12-15); (2) Labor’s responsive Denial Letter of
Court No. 04-00492 Page 12
September 24, 2004 (SR at 16-17); and, (3) the January 24, 2007
Declaration of Linda G. Poole, Program Analyst in Labor’s
Employment and Training Administration, Division of TAA (SR at 1-
11, with accompanying exhibits (the “Poole Declaration”)). The
Poole Declaration sets forth, what is represented to be, Labor’s
policy on amending TAA certifications to extend their coverage
periods and seeks to explain Labor’s amendment that extended
benefits in the investigation AII Technologies, Inc., El Paso,
TX, 68 Fed. Reg. 43,757 (Dep’t of Labor July 24, 2003) (“AII
Technologies”). See Poole Declaration, SR at 1-2.
On February 9, 2007, plaintiff filed a motion to strike the
Poole Declaration from the Supplemental Administrative Record.
See Mot. Strike Doc. 1 From Suppl. Admin. R. (“Pl.’s Mot.
Strike”). Plaintiff argued that the Poole Declaration was a
“post hoc rationalization” of Labor’s denial, because it was
dated almost two-and-one-half years after the agency action, and
thus could not have been considered by Labor in its
decisionmaking process. See Pl.’s Mot. Strike 3. In opposition,
Labor argued that the court’s Steelworkers decision “expressly
raised the question whether Labor had a policy of refusing to
extend certifications” and that the Poole Declaration addressed
both the existence of that policy and distinguished the specific
extensions raised by plaintiff. See Def.’s Opp. Mot. Strike.
Doc. One From Suppl. Admin. R. (“Def.’s Opp. Mot. Strike”) 1-3.
Court No. 04-00492 Page 13
On April 11, 2007, the court denied plaintiff’s motion to
strike. See Indep. Steelworkers Union v. United States Sec’y of
Labor, Court No. 04-00492 (Apr. 11, 2007) (order). The court
concluded:
Ms. Poole’s declaration may be included in
the record. Although it is dated long after
Labor’s final determination was made and so
was not before Labor at the time of its
decision, the declaration sheds light on what
is described therein as Labor’s “policy with
respect to extension of certifications.” It
does not appear to be a post hoc
rationalization but rather a good faith
effort to describe her understanding of
Labor’s administration of the trade
adjustment program during 2005.
Id. at 1-2 (citation omitted).
STANDARD OF REVIEW
In cases under 28 U.S.C. § 1581(i), this Court applies the
default standard of review set forth in the Administrative
Procedure Act (“APA”) and therefore will “hold unlawful and set
aside agency action, findings, and conclusions found to be . . .
arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law . . . .” See 5 U.S.C. § 706(2); see also
Former Employees of Alcatel Telecomm. Cable v. Herman, 24 CIT
655, 658-59, Slip Op. 00-88 at 6-7 (2000). “The scope of review
under [the] arbitrary and capricious standard is narrow.”
Cathedral Candle Co. v. United States Int’l Trade Comm’n, 27 CIT
1541, 1545, 285 F. Supp. 2d 1371, 1375 (2003) (citations and
Court No. 04-00492 Page 14
quotations omitted). Under this standard, “the court (1) must
consider whether the decision was based on a consideration of
relevant factors and whether there has been a clear error of
judgment, and (2) analyze whether a rational connection exists
between the agency’s factfindings and its ultimate action.” See
Consol. Fibers, Inc. v. United States, 32 CIT __, __, Slip Op.
08-2 at 17 (Jan. 10, 2008) (citations omitted); see also
Cathedral Candle Co., 27 CIT at 1545, 285 F. Supp. 2d at 1375(reasoning that if this standard is met, “the Court will not
substitute its own judgment for that of the agency”). Further,
the APA provides that, “[t]o the extent necessary to decision and
when presented, the reviewing court shall decide all relevant
questions of law, interpret constitutional and statutory
provisions, and determine the meaning or applicability of the
terms of an agency action.” 5 U.S.C. § 706.
DISCUSSION
I. Plaintiff’s Arguments
Plaintiff maintains that Labor’s denial is flawed in several
respects. First, plaintiff argues that Labor failed in its
attempt to distinguish, from the facts of this case, two prior
instances where it amended the expiration dates of
certifications, i.e., O/Z-Gedney and Wiegand. See Pl.’s Br. 25
(citations omitted). Labor’s Denial Letter noted that, in those
Court No. 04-00492 Page 15
two cited instances, “workers were retained to assist with the
plant closure after production had ceased. That is not the case
for workers at Weirton Steel. Production of steel products at
the Weirton, West Virginia plant continued during the period
relevant to the investigation.” Denial Letter, SR at 16.
Plaintiff further argues that Labor’s Denial Letter is
unlawful because it did not reference Labor’s “standard” to
encompass all workers “adversely affected by increased imports”
and failed to explain the phrase “period relevant to the
investigation.” See Pl.’s Br. 25-26 (quotations and citations
omitted). Plaintiff notes that, in the absence of a standard
enunciated in the statute or the regulations, in ruling on
expiration date amendment requests, Labor has consistently
applied the “standard” that it seeks “to include . . . all
workers . . . who were adversely affected by increased imports.”
See Pl.’s Br. 26 (citing AII Technologies, 68 Fed. Reg. at
43,757).
Plaintiff additionally argues that Labor did not offer an
adequate explanation for its determination or demonstrate a
“rational connection” between the facts found and the decision
rendered. Pl.’s Br. 27.
The several hundred worker separations that
occurred after April 23[,2004] were, like
those that occurred earlier, due in large
part to imports; the chain of causation . . .
was unbroken. These terminations would have
happened earlier but for the efforts of the
Court No. 04-00492 Page 16
Company to avoid bankruptcy and liquidation
though a variety of restructuring plans, all
of which ultimately failed to save the
company but did preserve some value of the
assets for sale.
Pl.’s Br. 27. Plaintiff claims that those workers who remained
with Weirton for the several weeks following the 2002
Certification’s expiration were, like their counterparts who
received benefits, separated from the company as a result of
being “adversely affected by increased imports in the earlier
time period.” Pl.’s Br. 27-28. In plaintiff’s view, Labor’s
failure to reference this information in its Denial Letter
rendered its determination unlawful. See Pl.’s Br. 28.
II. Labor’s Arguments
Labor’s brief primarily asserts jurisdictional arguments,7
however, its arguments for denying plaintiff’s amendment request
are contained both in (1) Labor’s response to plaintiff’s motion
to strike the Poole Declaration from the record and (2) Labor’s
response to plaintiff’s supplemental citations.
In seeking to include the Poole Declaration in the
7
Labor’s decision not to file the administrative record
relating to plaintiff’s request to amend the 2002 Certification
underscores the notion that Labor’s first responsive brief does
not address this issue in any appreciable fashion. See Def.’s
Resp. 16, n. 2. Labor’s reply brief in further support of its
motion to dismiss, too, does not address the substance of its
denial, but makes only jurisdictional arguments. See Def.’s
Reply Pl.’s Resp. Def.’s Mot. Dismiss Count IV Compl.
Court No. 04-00492 Page 17
Supplemental Administrative Record, Labor claimed that the
declaration “completes Labor’s initial explanation” of the
“policy” behind its denial and asserts its belief that the policy
was considered in reaching its determination. See Def.’s Opp.
Mot. Strike 3, 5 (stating that “Labor directly addressed its
policy in its denial of ISU’s request” and “[t]herefore, Labor’s
policy regarding requests for extensions is a matter that was
considered in reaching the conclusion in this determination”)
(internal citation omitted).
In responding to plaintiff’s list of alleged analogous
citations, Labor elaborated:
[T]he situations addressed by the amendments
that extended the time period for coverage of
certain workers are not the same as the
situation upon which plaintiff based its
request to extend the time for an elapsed
certification. Here, the undisputed facts
are that the company was not closing,8 it was
being sold to a new owner who continued to
operate the business . . . .
Def.’s Resp. Suppl. Citations 2.
Put another way, Labor finds the facts here distinguishable
from prior cases because Weirton’s facility was never fully shut
8
This statement appears to be at odds with the facts.
According to the Stewart Letter and as represented by counsel at
oral argument, the company was indeed closing, and it was only
the manufacturing facility (described as Weirton’s “assets and
facilities”) that was sold to ISG to continue steel production
operations. See Stewart Letter, SR at 13-14; see also supra, n.
3. Weirton continued producing steel in a limited capacity in
order to preserve the production assets for the plant’s new
owner, ISG.
Court No. 04-00492 Page 18
down, as production continued in some limited capacity until the
plant was turned over to ISG which continued production. Thus,
the fact that Weirton’s plant was sold, but never closed, was the
cornerstone of Labor’s denial.
III. Labor Failed Adequately to Explain its Decision
“A fundamental requirement of administrative law is that an
agency set forth its reasons for decision.” Tourus Records, Inc.
v. DEA, 259 F.3d 731, 737 (D.C. Cir. 2001) (quotations omitted).
A necessary corollary of this requirement is that the agency’s
reasoning is presented in a logical fashion “such that a court
may follow and review its line of analysis, its reasonable
assumptions, and other relevant considerations.” Int’l Imaging
Materials, Inc. v. United States Int’l Trade Comm’n, 30 CIT __,
Slip Op. 06-11 at 13 (2006) (not reported in the Federal
Supplement) (quotations omitted). “Explanation is necessary . .
. for this court to perform its statutory review function.” Id.at __, Slip Op. 06-11 at 13. This court “must know what a
decision means before the duty becomes ours to say whether it is
right or wrong.” Atchinson, T. & S.F. Ry. Co. v. Wichita Bd. of
Trade, 412 U.S. 800, 807 (1973) (quotations omitted).
Labor’s Denial Letter gives two reasons justifying its
refusal to extend the 2002 Certification. See Denial Letter, SR
at 16. The first is that the O/Z Gedney and Wiegand
Court No. 04-00492 Page 19
certifications cited by plaintiff as precedent for its claim are
distinguishable from the facts presented here. Specifically,
Labor states that, unlike here, both earlier certifications
involved situations where “workers were retained to assist with
the plant closure after production had ceased.” Denial Letter,
SR at 16 (emphasis added). The second reason is that Labor
“conducted a full and careful investigation” relative to
Weirton’s 2004 Petition for re-certification, which resulted in a
negative determination, and therefore that Labor concluded that
the relevant Weirton workers were not adversely impacted by
increases in imports.9 Denial Letter, SR at 16.
With respect to the first argument, Labor has set forth a
purported factual distinction between this matter and those
others cited by plaintiff. Labor’s Denial Letter, however, fails
9
Labor now maintains that it lacks authority to extend the
2002 Certification beyond April 23, 2004 and that it exceeded its
authority in the past when extending expiration dates. See
Def.’s Resp. Suppl. Citations 1-2. Labor’s purported lack of
authority was not raised in its Denial Letter, but rather first
raised at oral argument, and then in its supplemental briefs.
Labor’s position is unpersuasive as this ground was not invoked
by Labor in its Denial Letter in the first instance, but rather
was first invoked before the court. “The courts may not accept
appellate counsel’s post hoc rationalizations for agency action .
. . . For the courts to substitute their or counsel’s discretion
for that of the [agency] is incompatible with the orderly
functioning of the process of judicial review.” See Burlington
Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69 (1962)
(quotation omitted). Indeed, the Denial Letter seems to say
that, had Weirton’s facts been as those in O/Z Gedney and
Wiegand, the extension would be within the precedent and thus
presumably approved. See Denial Letter, SR at 16.
Court No. 04-00492 Page 20
to explain why this factual distinction matters. According to
Labor, the end result for the workers in O/Z Gedney and Wiegand
is that they were separated from their jobs. Denial Letter, SR
at 16. The evidence here indicates that, within three to four
weeks of the 2002 Certification’s expiration, all of Weirton’s
workers lost their jobs. Stewart Letter, SR at 13. In the O/Z
Gedney and Wiegand cases the manufacturing facilities were
seemingly closed. Here, the facility was sold to another
corporation, but never fully shut down. The Department seems to
suggest that it is significant that the facility was kept in
operation after its transfer to ISG. Labor fails, however, to
say why this fact is significant. For the court, the salient
facts in the O/Z Gedney and Wiegand line of investigations and
Weirton are the same. That is, in each case (1) the company’s
workers were found eligible for benefits; (2) certain workers
were retained for some time after the expiration of the
certification; and, (3) the jobs of those workers were then
terminated.
As to its second reason, the Department’s apparent
references to its re-certification investigation are wholly
irrelevant to the separate issue of whether it should grant an
extension to the 2002 Certification. In other words, there does
not appear to be any connection between the denial of the March
9, 2004 application for re-certification (which would have re-
Court No. 04-00492 Page 21
certified Weirton workers as eligible to apply for benefits for
up to two years from the date of certification) and the process
resulting in the decision not to extend the 2002 Certification
(which would have made Weirton workers eligible to apply for
benefits up through and including May 18, 2004). Nor is there
any evidence that Labor conducted any investigation under 19
U.S.C. §§ 2271 and 2272 when making its determinations to extend
the period of certification in other cases. See O/Z Gedney, 69
Fed. Reg. at 43,454; Wiegand, 68 Fed. Reg. at 50,198. This
court, therefore, particularly in light of Labor’s reference to
an “investigation,” cannot say that Labor has “articulate[d] a
satisfactory explanation for its action including a rational
connection between the facts found and the choice made.” See
Former Employees of Chevron Prods. Co. v. United States Sec’y of
Labor, 27 CIT 1135, 1143, 279 F. Supp. 2d 1342, 1349 (2003)
(internal citations and quotations omitted).
The inadequacy of Labor’s explanation is amplified by the
cases cited by plaintiff in its list of supplemental citations,
as requested by the court at oral argument. See Pl.’s Suppl.
Citations Cert. Amendments (“Pl.’s Suppl. Cit.”). Plaintiff
cites eleven cases in which Labor amended the expiration date of
worker certifications. The court’s review of these matters
reveals that, in recent years, Labor has amended certification
periods to cover workers who remained employed beyond the
Court No. 04-00492 Page 22
original expiration date in a wide variety of circumstances.
For instance, Labor has extended benefits to workers on both
a prospective basis (i.e., where the amendment was made before
the workers were separated from the company but after the date of
their planned separation was known) and retroactive basis (i.e.,
where the amendment was made after the workers were separated
from the company). Compare Motorola, Inc. Pers. Commc’ns Sector,
Harvard, IL; Amended Certification Regarding Eligibility To Apply
for Worker Adjustment Assistance, 68 Fed. Reg. 17,675 (Dep’t of
Labor Apr. 10, 2003) (on April 10, 2003, extending a
certification set to expire on April 13, 2003, until August 15,
2003), with Carlisle Engineered Prods., Erie, PA; Amended
Certification To Apply for Worker Adjustment Assistance, 69 Fed.
Reg. 6,693 (Dep’t of Labor Feb. 11, 2004) (“Carlisle”) (on
February 11, 2004, extending the certification that previously
expired on January 29, 2004, until May 31, 2004).
Labor has also extended certification periods without
regard to whether the extension benefitted a single worker or
multiple workers. Compare Cooper Wiring Devices--Georgetown, SC;
Amended Certification Regarding Eligibility To Apply for Worker
Adjustment Assistance, 69 Fed. Reg. 52,311 (Dep’t of Labor Aug.
25, 2004) (one worker), with Wolverine Worldwide, Inc.,
Kirksville, MO; Amended Certification Regarding Eligibility To
Apply for Worker Adjustment Assistance, 68 Fed. Reg. 6,216 (Dep’t
Court No. 04-00492 Page 23
of Labor Feb. 6, 2003) (one worker) (“Wolverine”), with Carlisle,
69 Fed. Reg. at 6,693 (unspecified amount of multiple workers).
Likewise, Labor has amended certification periods regardless of
whether the petition was brought by the employer or by a state
agency. Compare O/Z Gedney, 69 Fed. Reg. at 43,454 (noting that
the amendment request was made by a “company official”), with
Wolverine, 68 Fed. Reg. 6,217 (noting that the amendment request
was made by “the company and the State agency”), and Lomac LLC,
Muskegon, MI; Amended Certification Regarding Eligibility To
Apply for Worker Adjustment Assistance, 69 Fed. Reg. 46,573(Dep’t of Labor Aug. 3, 2004) (noting that the amendment request
was made solely by a “state agency representative”).
Furthermore, and most significantly, although Labor now
argues that it only grants extensions where production at the
workers’ plant ultimately ceases, plaintiff cites two situations
where it is unclear whether the plant in question ultimately
closed. See Wiegand, 68 Fed. Reg. at 50,198; AII Technologies,
68 Fed. Reg. at 43,757. In these cases, Labor’s published
Federal Register notices indicate only that the “company closed,”
but do not state whether the production facility itself closed,
or perhaps remained operational under different ownership, as is
the case here. In sum, the court’s review of those matters cited
by plaintiff provides little guidance as to the criteria by which
Labor assesses amendment requests.
Court No. 04-00492 Page 24
Additionally, in this instance Labor relies on its “policy”
not to extend certifications under plaintiff’s circumstances.
But, this reference to its policy does not allow this court, in
hindsight, to “follow and review its line of analysis, its
reasonable assumptions, and other relevant considerations.”
Int’l Imaging Materials, Inc., 30 CIT at __, Slip Op. 06-11 at 13
(quotations omitted). The court’s review of the citations
provided by plaintiff demonstrates that Labor has had a clear
policy of extending certifications. See generally Pl.’s Suppl.
Cit.; see also Poole Declaration, SR at 1-2. Indeed, Labor has
cited no case where it turned down an application for an
extension. See generally Def.’s Resp.; Def.’s Resp. Pl.’s Suppl.
Cit.; Def.’s Opp. Mot. Strike.
It is well-settled that “[a]n agency is obligated to follow
precedent, and if it chooses to change, it must explain why.”
M.M. & P. Mar. Advancement, Training, Educ. & Safety Program v.
Dep’t of Commerce, 729 F.2d 748, 755 (Fed. Cir. 1984). Although
an agency may modify its policies even absent a statutory change,
it must always justify the reason for making the change. See
Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.
Cir. 1970) (“[A]n agency changing its course must supply a
reasoned analysis indicating that prior policies and standards
are being deliberately changed, not casually ignored, and if an
agency glosses over or swerves from prior precedents without
Court No. 04-00492 Page 25
discussion it may cross the line from the tolerably terse to the
intolerably mute.”) (footnotes omitted).
Here, Labor has failed to supply the court with any
justification or explanation of its claimed evolving policy
regarding amendments under the circumstances presented here, let
alone a “reasoned analysis.” See British Steel PLC v. United
Stated, 127 F.3d 1471, 1475 (Fed. Cir. 1997); Atchinson, T. &
S.F. Ry. Co., 412 U.S. at 807-08 (“Whatever the ground for [an
agency’s] departure from prior norms . . . it must be clearly set
forth so that the reviewing court may understand the basis of the
agency’s action and so may judge the consistency of that action
with the agency’s mandate.”). Moreover, Labor did not “explain
its application of the law to the found facts,” which reveal
that, though production did not cease at the Weirton plant, the
Weirton workers were all separated from the company within weeks
of April 23, 2004. See In re Sang Su Lee, 277 F.3d 1338, 1342
(Fed. Cir. 2002). Labor’s actions were thus arbitrary and
capricious, an abuse of discretion, and not in accordance with
law, and, therefore, a further remand is warranted. See Motor
Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43-44 (1983) (reasoning that an action is
arbitrary and capricious when the agency “entirely failed to
consider an important aspect of the problem, [and] offered an
explanation for its decision that runs counter to the evidence”).
Court No. 04-00492 Page 26
CONCLUSION
Based on the foregoing, the court remands this case to
Labor. On remand, Labor is ordered to: (1) clarify the basis of
and fully explain any decision it reaches; (2) establish the
facts upon which it makes its determination and state precisely
why it is, or is not, significant that the Weirton plant did not
close; (3) clearly explain why, if it all, the Weirton workers
who lost their jobs after April 23, 2004, should be treated
differently than those who lost their jobs prior to that date;
(4) set forth its current and past policy regarding amendments to
the expiration date of certifications; (5) explain how this case
is different, if at all, from previous cases where it extended
worker certifications; (6) set forth all steps, if any, taken to
change its policy with respect to extensions, including any
measures taken to notify the public, and the dates on which all
such steps were undertaken; (7) set forth the criteria upon which
it makes any determination to extend or not to extend the subject
certification; and (8) explain why its determination is in accord
with the remedial nature of the TAA statute.
Remand results are due August 28, 2008. Comments to the
remand results are due September 29, 2008. Replies to such
Court No. 04-00492 Page 27
comments are due October 13, 2008.
/s/ Richard K. Eaton
Richard K. Eaton
Dated: April 30, 2008
New York, New York
ERRATUM
United Steel, Paper and Forestry, Rubber, Mfg., Energy, Allied
Indus. and Serv. Workers Int’l Union, Local 2911 v. United States
Sec’y of Labor, Court No. 04-492, Slip Op. 08-45 (Apr. 30, 2008).
Page 1: “J. Daniel Stirk and Sarah V. Stewart” are added after
the name “Terence P. Stewart” as counsel for plaintiff.
May 12, 2008