Chapman v. Donovan

9 Ct. Int'l Trade 545
CourtUnited States Court of International Trade
DecidedOctober 25, 1985
DocketCourt No. 86-1-00049
StatusPublished

This text of 9 Ct. Int'l Trade 545 (Chapman v. Donovan) is published on Counsel Stack Legal Research, covering United States Court of International Trade primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chapman v. Donovan, 9 Ct. Int'l Trade 545 (cit 1985).

Opinion

Memorandum Opinion and Order

DiCarlo, Judge:

Plaintiff, formerly a chemical processes operator at the Duolite International, Inc. (Duolite) plant at Redwood City, [546]*546California, challenges the determination of the Secretary of Labor (Labor) that workers at the plant are ineligible for trade adjustment assistance under section 223 of the Trade Act of 1974 (the Act), 19 U.S.C. §2273 (1982).

After reviewing the administrative record and the arguments of the parties, the Court holds that Labor’s denial of certification is not supported by substantial evidence, and the case is remanded for further consideration in accordance with this opinion.

On September 6, 1984, plaintiff and two co-workers petitioned for certification of eligibility to apply for trade adjustment assistance benefits on behalf of twenty-one chemical workers (petitioners), approximately a quarter of the total workforce at the Redwood City plant. Labor published a notice in the Federal Register stating that it had received a petition and instituted an investigation. 49 Fed. Reg. 39,395 (1984).

The petition was denied on December 21,1984, 49 Fed. Reg. 49,733 (1984). Labor found that the workers were not eligible for assistance because an increase in imports did not contribute importantly to reduced production at the Redwood City plant and to the workers’ separation from employment as required for certification of eligibility to apply for trade adjustment assistance by section 222(3) of the Act, 19 U.S.C. § 2272(3) (1982).1 The notice of Labor’s determination stated in pertinent part:

Petitioners allege that increased imports by Duolite contributed importantly to the separation of workers at the Redwood City plant. Imports from Duolite’s facility in France increased substantially in January through May 1984 compared to the same period in 1983. However, production at Redwood City did not decline during this period.
In May 1984 Diamond Shamrock Corporation, Duolite’s parent company, completed negotiations with a major international chemical manufacturer for the sale of Duolite’s Redwood City plant and the Duolite plant located in France.
Subsequent to taking over the Redwood City facility, the new firm restructured the production schedule resulting in the separation of several workers in June 1984.
Imports of surface-active agents are negligible. Imports were less than two percent in relation to domestic production in 1982. Although 1983 domestic production figures are not yet available, trade and industry sources indicate that imports remained at less than two percent in relation to domestic production.

49 Fed. Reg. 49,733.

Plaintiff brought this action pro se to challenge the denial. His summons and complaint consist of the following holograph at the end of a copy of Labor’s determination:

[547]*547Sir
According to your 2% imports in 1982 & % the plant was lay off in 1984 Would 4% shut down the plant? Somebody gave you the wrong information

Appeal Requested

The question before the Court is whether Labor’s determination that imports did not contribute importantly to petitioners’ separation from employment is supported by substantial evidence on the record. The Court concludes that it is not.

Section 284(b) of the Act, 19 U.S.C. § 2395(b) (1982), provides that "[t]he findings of fact by the Secretary * * * if supported by substantial evidence, shall be conclusive” on the Court. "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). See Consolo v. Federal Maritime Commission, 383 U.S. 607, 620 (1966); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951). There is also the "further requirement that the rulings made on the basis of those findings be in accordance with the statute and not be arbitrary or capricious, and for this purpose the law requires a showing of reasoned analysis.” Internationa l Union, United Automobile, Aerospace and Agricultural Implement Workers of America v. Marshall, 584 F.2d 390, 396 n.26 (D.C. Cir. 1978).

The Court finds Labor’s determination flawed in two respects. First, the record does not indicate the relevance of the negligble level of imports of "surface-active agents” into the United States in 1982, on which Labor relied in its determination. According to the record, the Redwood City plant produced ion-exchange resins, used in water treatment facilities. Workers are entitled to trade adjustment assistance if "increases of imports of articles like or directly competitive with articles produced by such workers’ firm or an appropriate subdivision thereof were a substantial cause of such total or partial separation, or threat thereof, and of such decline in sales or production.” 19 U.S.C. § 2272(3). 29 CFR § 90.2 (1985) defines "like or directly competitive” as "substantially identical” or "substantially equivalent for commercial purposes.” There is nothing in the record which indicates whether "surface active agents” are "substantially identical” or "substantially equivalent for commercial purposes” to ion-exchange resins.

More fundamentally, by considering only 1982 data on national imports of "surface active agents,” Labor ignored the dramatic increase in ion-exchange resin imports from a Duolite plant in France in the first five months of 1984. The record indicates that sales of the Duolite products in the United States declined 27% from 1982 to 1983, but increased 58.1% in the first five months of 1984 over the same period in 1983. This increase was entirely attributable to imports from Duolite’s French plant. These imports increased [548]*548176.4% in the first five months of 1984 over the similar period the previous year. Production at the Redwood City plant was about the same in the first five months of 1984 as in the same period in 1983, after declining 31.1% from 1982 to 1983. Thus, even if national imports of "like or directly competitive” products were negligible, the Redwood City workers may be entitled to adjustment assistance if imports from the French plant "contributed importantly” to their separation.2

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9 Ct. Int'l Trade 545, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chapman-v-donovan-cit-1985.