Retail Clerks International Union, Local 149F v. Donovan

10 Ct. Int'l Trade 308
CourtUnited States Court of International Trade
DecidedApril 29, 1986
DocketCourt No. 81-11-01604
StatusPublished

This text of 10 Ct. Int'l Trade 308 (Retail Clerks International Union, Local 149F 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
Retail Clerks International Union, Local 149F v. Donovan, 10 Ct. Int'l Trade 308 (cit 1986).

Opinion

Memorandum Opinion and Order

Re, Chief Judge:

In this action, plaintiff, Retail Clerks International Union, Local 149F — Footwear Division, on behalf of the former employees of Prestige Shoe Company (Prestige), seeks review of a final determination by the Secretary of Labor which denied certification of eligibility under the worker adjustment assistance program of the Trade Act of 1974, tit, II, § 221-249, 284, 19 U.S.C. § 2271-2321, 2395 (1982 & Supp. 1 1983). The Secretary determined that the plaintiffs petition failed to satisfy the third eligibility requirement of section 222 of the Trade Act of 1974. 19 U.S.C. § 2272(3) (1982). Specifically, the Secretary found that the workers were not eligible for assistance because an increase in imports did not contribute importantly to Prestige’s decline in sales or production, and, thus, to the separation from employment of Prestige’s workers.

Plaintiff contests the Secretary’s determination. Plaintiff contends that the Secretary’s reliance on a customer survey, and the failure to take any testimony from Prestige officials or attorneys, renders the Secretary’s decision arbitrary and unsupported by substantial evidence. In essence, plaintiff challenges the nature and extent of the Secretary’s investigation.

After reviewing the administrative record and all pleadings and contentions, the Court holds that the Secretary’s denial of certification is supported by substantial evidence, and is in accordance with the law. Hence, the determination of the Secretary is affirmed.

Administrative Proceedings

On August 29, 1980, plaintiff filed a petition with the Office of Trade Adjustment Assistance (OTAA) for certification of eligibility to apply for trade adjustment assistance benefits pursuant to section 221(a) of the Trade Act of 1974, 19 U.S.C. § 2271(a) (1982). The OTAA published a notice of the filing of the petition, and initiated an investigation. 45 Fed. Reg. 62,580 (1980).

The OTAA’s investigation disclosed that all of the employees of Prestige were engaged in employment related to the production of women’s casual shoes. These employees performed various tasks, [310]*310such as designing, cutting, assembling, and packaging the shoes. Prestige produced some component parts, such as heels and soles, and purchased the remaining parts from independent suppliers. The shoes produced were primarily made of leather and vinyl uppers with rubber bottoms, and were assembled by a cementing process. The company was a wholly owned subsidiary of Frier Industries, Incorporated, but operated independently from other Frier Industries subsidiaries. It ended production of women’s shoes on July 31, 1981.

The OTAA’s investigation included a report on the women’s nonrubber footwear industry. This report disclosed that imports of these goods fluctuated, with a net increase of 0.2 percent between 1976 and 1980. There was, however, a decline of 20.1 percent in imports of that type of footwear in 1980 compared to 1979. The OTAA investigation further revealed that domestic production decreased 2.4 percent between the years 1979 and 1980, due mainly to a reduced demand for women’s nonrubber footwear.

On the basis of information supplied by the president of Prestige, the OTAA found that "virtually all” of Prestige’s decline in sales between 1979 and 1980 was attributable to decreases in purchases by one major customer. A confidential survey disclosed that this customer had decreased its imports of women’s footwear in 1980 compared to the previous year, while increasing its purchases of domestically produced shoes.

Based on these findings, the Secretary concluded that imports of women’s footwear did not contribute importantly to the downturn in Prestige’s sales, and the resulting separation of the firm’s employees. Consequently, the Secretary denied plaintiffs petition for certification. 46 Fed. Reg. 42,542 (1981).

Plaintiff then sought administrative reconsideration of the Secretary’s negative determination. Its claim was largely based on the fact that the Company had ceased its operations since the certification request was made, and that the Secretary had failed to inquire into the company’s reasons for having ceased operations. The union asserted that Company officials had told workers in June 1981 that the Company had lost a substantial amount of business from a major customer as a result of imports. This was the same customer the OTAA had surveyed in its investigation.

In dismissing plaintiff’s application for reconsideration, the OTAA explained that the request provided no new information which would furnish a basis for certifying the former employees of Prestige for assistance. The OTAA noted that the survey of Prestige’s main customer revealed not only that this customer had decreased its imports but also that it had increased its domestic purchases of women’s footwear. Based on these findings, the Secretary found no new grounds for reconsideration.

On November 25,1981, plaintiff commenced this action by filing a letter complaint seeking judicial review of the Secretary’s final de[311]*311termination. This action is now before the Court on the plaintiffs motion for judgment on the administrative record.

Discussion

Under section 222 of the Trade Act of 1974, 19 U.S.C. § 2272 (1976), the Secretary is to certify a group of workers as eligible to apply for adjustment assistance if it is determined:

(1) that 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,
(2) that sales or production, or both, of such firm or subdivision have decreased absolutely, and
(3) 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.

Trade Act of 1974 § 222, 19 U.S.C. § 2272 (Supp. 1 1983).

The Secretary has interpreted section 222(3) of the Trade Act of 1974 in a uniform and consistent manner. Under this interpretation, trade adjustment assistance is authorized for workers if it can be established that an important causal nexus exists between increased imports and the workers’ separation from employment. Abbott v. Donovan, 6 CIT 92, 101, 570 F. Supp. 41, 49 (1983). The term "contributed importantly” refers to the causal nexus, and suggests a direct and substantial relationship between increased imports and the decline in sales and production. See Estate of Finkel v. Donovan, 9 CIT 374, 382, 614 F. Supp. 1245 1251 (1985); Abbott v. Donovan, 8 CIT 237, 240, 596 F. Supp. 472, 475 (1984).

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Related

United States v. Carlo Bianchi & Co.
373 U.S. 709 (Supreme Court, 1963)
Cherlin v. Donovan
585 F. Supp. 644 (Court of International Trade, 1984)
Abbott v. Donovan
570 F. Supp. 41 (Court of International Trade, 1983)
Abbott v. Donovan
596 F. Supp. 472 (Court of International Trade, 1984)
Woodrum v. Donovan
544 F. Supp. 202 (Court of International Trade, 1982)
Estate of Finkel v. Donovan
614 F. Supp. 1245 (Court of International Trade, 1985)

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10 Ct. Int'l Trade 308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/retail-clerks-international-union-local-149f-v-donovan-cit-1986.