Local 167, International Molders & Allied Workers' Union ex rel. Group of Aggrieved Workers v. Marshall

643 F.2d 26, 2 I.T.R.D. (BNA) 1416, 1981 U.S. App. LEXIS 19534
CourtCourt of Appeals for the First Circuit
DecidedMarch 5, 1981
DocketNo. 80-1138
StatusPublished
Cited by42 cases

This text of 643 F.2d 26 (Local 167, International Molders & Allied Workers' Union ex rel. Group of Aggrieved Workers v. Marshall) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Local 167, International Molders & Allied Workers' Union ex rel. Group of Aggrieved Workers v. Marshall, 643 F.2d 26, 2 I.T.R.D. (BNA) 1416, 1981 U.S. App. LEXIS 19534 (1st Cir. 1981).

Opinion

COFFIN, Chief Judge.

In November, 1979 the Crane Company closed the foundry it had operated since 1942 at Indian Orchard, Massachusetts. The foundry had produced steel castings used to make steam and water valves. Believing that the closing was due to import competition, representatives of the foundry workers applied to the Secretary of [27]*27Labor for a certification of group eligibility to apply for benefits under the trade adjustment assistance provisions of the Trade Act of 1974, 19 U.S.C. §§ 2271-2322. The Secretary determined, after investigation, that increased imports had not “contributed importantly” to the closing of the foundry and therefore denied certification. The foundry workers, through their collective bargaining representative, Local 167, International Molders and Allied Workers’ Union, AFL-CIO, petition for review of that decision, claiming that it was based on faulty methodology and questionable data. We conclude that the Secretary’s decision is supported by substantial evidence and therefore affirm.

Under the worker adjustment assistance program, workers injured by import competition may receive benefits such as unemployment compensation, job search and relocation allowances, training, and other employment services. See generally Fortin v. Marshall, 608 F.2d 525, 525-26 (1st Cir. 1979); Usery v. Whitin Machine Works, Inc., 554 F.2d 498, 500 (1st Cir. 1977). To apply for benefits, a group of workers must first obtain a certification of group eligibility from the Secretary of Labor. The Secretary is required to certify a group of workers if he determines that three statutory criteria are met. We are concerned here only with the Secretary’s negative determination of the third criterion:1

“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.” 19 U.S.C. § 2272(3).

The key phrase “contributed importantly” is defined in § 2272 to mean “a cause which is important but not necessarily more important than any other cause.”

Local 167 attacks both the methodology and the data relied upon by the Secretary to evaluate whether increasing imports “contributed importantly” to the foundry closing. First, petitioner objects to the Secretary’s focus upon Crane customers who decreased their purchases of Crane products and increased their purchases of imports. Petitioner argues that this approach fails to detect more subtle forms of import substitution, as would occur if a customer decreased both imports and domestic purchases, while increasing the import share of its reduced total purchase requirements. Petitioner also contends that the data relied upon by the Secretary was incomplete because it was derived from a survey of fewer than all of Crane’s customers, and unreliable because it was based, in part, upon the unverified representations of the Crane Company. Before considering these points, we first describe the Secretary’s investigation and its results.

The OTAA Investigation

The Office of Trade Adjustment Assistance [OTAA] is the body within the Department of Labor charged with responsibility for investigating petitions for certification of group eligibility for worker adjustment assistance. 29 C.F.R. § 90.12 (1980). The investigation in this case occurred in two distinct phases. After receiving the foundry workers’ petition, the OTAA published a Notice of Investigation, 44 Fed.Reg. 62378 (1979) , inviting requests by interested parties for a public hearing. When no hearing request was received, the OTAA proceeded to evaluate the petition based upon information supplied by the Crane Company and available trade data. In this first phase of its investigation the OTAA limited itself to the market for steel castings — the product made at the Indian Orchard foundry. The OTAA concluded that steel castings imports had not “contributed importantly” to the closing of the foundry and, on January 4, 1980, published a Notice of Negative Determination to that effect. 45 Fed.Reg. 1164 (1980) .

[28]*28Several months later, counsel for Local 167 sought administrative reconsideration of this decision. The OTAA deemed the request for reconsideration untimely, but agreed to reopen its original investigation to evaluate import competition in the market for valves, since the first phase of the investigation had revealed that most of the steel castings produced at the Indian Orchard foundry were used to manufacture valves at the Crane Company’s Indian Orchard machine shop. The second phase of the investigation treated the foundry and machine shop as an integrated unit, and thus the “appropriate subdivision” of the firm for certification purposes. 19 U.S.C. § 2272. After examining valve import competition, the OTAA concluded that neither valve nor casting imports had contributed importantly to the foundry closing. A final Notice of Negative Determination was published in the Federal Register on May 23, 1980, 45 Fed.Reg. 35043 (1980);

In both phases of its investigation the OTAA employed a two-stage analysis, looking at the impact of import competition on the industry as a whole and on the individual firm. The object of the first stage is to determine possible indirect effects of import competition.'on the firm by examining the extent of import penetration industry-wide, as well as the recent trend in import purchases, both absolutely, in comparison to import levels in past years, and relatively, in comparison to domestic production and consumption. The second stage of the investigation is designed to determine whether customers of the firm in question have reduced their purchases of domestic products while increasing their purchases of imports. The OTAA gathers this information by submitting a questionnaire to a sample of firm customers.

The combined OTAA investigation reached the following results with respect to steel castings and valves.

A. Steel Castings

Based on the available data, the OTAA study showed that steel casting imports increased steadily in recent years both absolutely and relative to domestic shipments. Measured in absolute terms, imports increased in value 279.6 percent from 1975 to 1979. Part of this increase was due to inflation, but imports had also captured an increasing share of the American market; the ratio of imports to domestic shipments grew 155.5 percent over the same period. In the years immediately preceding the foundry closing, the import ratio decreased slightly from 1977 to 1978,2 but then almost doubled from 1978 to 1979.

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643 F.2d 26, 2 I.T.R.D. (BNA) 1416, 1981 U.S. App. LEXIS 19534, Counsel Stack Legal Research, https://law.counselstack.com/opinion/local-167-international-molders-allied-workers-union-ex-rel-group-of-ca1-1981.