Court Opinion

ID: 817684
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:56:57.309112+00
Date Added: 2024-06-11T09:00:35.358074
License: Public Domain

Slip Op. 09 - 14

              UNITED STATES COURT OF INTERNATIONAL TRADE

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FORMER EMPLOYEES OF WARP PROCESSING           :
CO., INC.,
                                              :
                              Plaintiffs,
                                              :
                     v.                           Court No. 08-00179
                                              :
UNITED STATES DEPARTMENT OF LABOR,
                                      :
                         Defendant.
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                              Memorandum & Order

[Motion for voluntary remand to defendant
 regarding plaintiffs’ eligibility for
 trade-adjustment assistance granted.]
                                                  Dated:    February 20, 2009

     Steptoe & Johnson LLP (Joel             D.   Kaufman   and   Michael    T.
Gershberg) for the plaintiffs.

     Michael F. Hertz, Deputy Assistant Attorney General; Jeanne E.
Davidson, Director, Patricia M. McCarthy, Assistant Director,
Commercial Litigation Branch, Civil Division, U.S. Department of
Justice (Christopher L. Krafchek) for the defendant.

          AQUILINO, Senior Judge:            This action pursuant to 19

U.S.C. §2395 and 28 U.S.C. §1581(d) has been brought by former

employees of Warp Processing Co., Inc. of Exeter, Pennsylvania,

seeking judicial review of the Negative Determinations Regarding

Eligibility     To    Apply   for   Worker   Adjustment      Assistance     And

Alternative Trade Adjustment Assistance (Feb. 19, 2008) of the
Court No. 08-00179                                          Page 2

Employment and Training Administration (“ETA”), U.S. Department of

Labor, No. TA-W-62,655, and of its subsequent Notice of Negative

Determination Regarding Application for Reconsideration (March 18,

2008).   Upon the filing of the ETA administrative record (“AR”),

answer to the complaint, and motion by the plaintiffs for judgment

on that record, comes now the Defendant’s Consent Motion for

Voluntary Remand “to enable Labor to state with greater clarity and

accuracy the bases for its determination in a way that would

facilitate this Court’s review.”

                                   I

          Suffice it to state that such review, albeit limited to

date, leads to the conclusion that defendant’s motion is well-

taken.   Whatever the impact of increased imports from China and

other countries on domestic textile manufacturing, “adversely

affected secondary workers” shall be certified as eligible to apply

for trade adjustment assistance (“TAA”) benefits if the Secretary

of Labor determines that

          (1) a significant number or proportion of the
     workers in the workers’ firm or an appropriate
     subdivision of the firm have become totally or partially
     separated, or are threatened to become totally or
     partially separated;

          (2) the workers’ firm (or subdivision) is a supplier
     or downstream producer to a firm (or subdivision) that
     employed a group of workers who received a certification
     of eligibility under subsection (a) of this section, and
     such supply or production is related to the article that
Court No. 08-00179                                           Page 3

     was the basis for such certification (as defined in
     subsection (c)(3) and (4)[1] of this section); and

            (3) either –

                 (A) the workers’ firm is a supplier and the
            component parts it supplied to the firm (or
            subdivision) described in paragraph (2) accounted
            for at least 20 percent of the production or sales
            of the workers’ firm; or

                 (B) a loss of business by the workers’ firm
            with the firm (or subdivision) described in
            paragraph (2) contributed importantly to the
            workers’ separation or threat of separation
            determined under paragraph (1).

19 U.S.C. §2272(b).

                                  A

            According to ETA’s Negative Determinations herein, the

agency’s investigation revealed that foregoing subsection 3 had not

been met:

          Petitioners allege that job losses were due to their
     firm losing business as a supplier firm, producing
     components for trade certified firms. The investigation
     revealed the subject firm did supply component parts
     utilized by customers engaged in textile manufacturing;
     however, workers at these textile manufacturing firms
     have not received a primary certification making them
     eligible to apply for adjustment assistance.

     1
       Section 2272(c)(3) of Title 19, U.S.C. defines “downstream
producer” as “a firm that performs additional, value-added
production processes for a firm or subdivision, including a firm
that performs final assembly or finishing” and (c)(4) defines a
“supplier” as “a firm that produces and supplies directly to
another firm (or subdivision) component parts for articles that
were the basis for a certification of eligibility”.
Court No. 08-00179                                           Page 4

AR, p. 112.     Without any supplementation of the administrative

record, ETA’s negative determination regarding the petitioners’

application for reconsideration explains that the investigation

revealed that Warp’s only customer was Brawer Brothers, Inc.      See

id. at 142. That determination also reports that the agency

considered three companies, which the petitioners claimed to have

been supplied with component products by Warp and which had

currently TAA-certified worker groups.   The agency found that such

certifications in re Cortina Fabrics and Guilford Mills, Inc. had

expired prior to the period at issue in this matter.   As for Native

Textiles, Inc., while its workers were certified as eligible to

apply for benefits under 19 U.S.C. §2272(a) during the relevant

period, ETA found that circumstance to be

      irrelevant because the subject firm did not conduct
      business with that company during the relevant period and
      because warped synthetic fiber is not a component part of
      the warp knit synthetic tricot fabric produced by Native
      Textiles.

Id.

                                 II

            In an action such as this, the Secretary of Labor’s

findings of fact are conclusive, if supported by substantial

evidence.    However, the court, “for good cause shown, may remand

the case to such Secretary to take further evidence, and . . . make
Court No. 08-00179                                                    Page 5

new or modified findings of fact”.          19 U.S.C. §2395(b).   Moreover,

since the governing Trade Act of 1974 is remedial legislation, the

Secretary is “obliged” to conduct an investigation with the utmost

regard for the interests of the petitioning workers.            E.g., Abbott

v. Donovan, 7 CIT 323, 327-28, 588 F.Supp. 1438, 1442 (1984).

                                        A

              As the court reads the administrative record, such as it

is, there is actually a finding by ETA of failure to satisfy 19

U.S.C. §2272(b)(2), supra, as opposed to (b)(3), per its report

that the

        investigation revealed the subject firm did supply
        component parts utilized by customers engaged in textile
        manufacturing; however, workers at these textile
        manufacturing firms have not received a primary
        certification making them eligible to apply for
        adjustment assistance.

AR, p. 112.      Although not stated, the record does indicate that

Brawer Brothers, Inc. did not employ a group of workers who

received a certification of eligibility under 19 U.S.C. §2272(a)

during the relevant period of investigation.              See id. at 55.

However, there is not sufficient evidence on the record to support

a finding that Brawer Brothers, Inc. was Warp Processing Co.’s only

customer.      Cf. Former Employees of General Elec. Corp. v. U.S.

Dep’t    of   Labor,   14   CIT   608   (1990)(no   deference    is   due   to

determinations based on inadequate investigations).
Court No. 08-00179                                                Page 6

           This view appears to be shared now by the parties.        See

Defendant’s Consent Motion for Voluntary Remand, p. 3:

     . . . [P]laintiffs refer[] to supplemental evidence
     allegedly showing that Warp and Brawer Bros. may have
     operated as one entity. A remand would enable Labor to
     place this information on the record and determine the
     scope of the relationship between Warp and Brawer Bros.

Whether or not Warp was a downstream producer for Native Textiles,

Inc., a product of which was warp knit synthetic tricot fabric,

evidence currently on the record does not provide the dispositive

answer.   With regard to ETA’s survey of Brawer Brothers’ customers,

there appears only to have been an inquiry into whether there were

increased imports, and not whether that firm’s customers were

certified within the meaning of 19 U.S.C. §2272(b)(2), supra.

                                   III

           In view of the foregoing, defendant’s motion for remand

should be, and it hereby is, granted.         On remand, ETA should

supplement the record in this matter as necessary to reach a

determination supported by substantial evidence.           Specifically,

before    deciding   eligibility   for   adjustment   or     alternative

adjustment assistance, the defendant is directed to determine the

relationship between Warp Processing Co., Inc. and Brawer Brothers,

Inc.; to determine the degree, if any, Native Textiles, Inc. was or
Court No. 08-00179                                          Page 7

is a customer of Warp Processing Co., Inc.; to determine the

degree, if any, the firms on the lists provided by petitioner Keith

Thieman (AR, p. 75) and the firms presumably provided by Brawer

Brothers, Inc. as a listing of its Major Declining Customers (id.

at 102) were or are customers of Warp Processing Co., Inc.; and, in

that regard, to determine if any workers of customers of Warp

Processing Co., Inc. were certified as eligible under 19 U.S.C.

§2272(a) to apply for adjustment assistance at a relevant time.

           The defendant may have until May 22, 2009 to carry out

this remand and report the results thereof.     The plaintiffs may

file any comments thereon on or before June 19, 2009.

           So ordered.

Dated:   New York, New York
         February 20, 2009

                                  /s/ Thomas J. Aquilino, Jr.
                                          Senior Judge