                                          Slip Op. 13- 85

                 UNITED STATES COURT OF INTERNATIONAL TRADE




FORMER EMPLOYEES OF
WEATHER SHIELD
MANUFACTURING, INC.,                                 Before: Judith M. Barzilay, Senior Judge

                  Plaintiff,                         Court No. 10-00299
                                                     Public Version
                  v.

U.S. SECRETARY OF LABOR,

                  Defendant.




[Plaintiffs’ motion for judgment on the agency record is denied and the Department of Labor’s
remand results are sustained.]

                                                                           Dated: July 1, 2013


Cassidy Levy Kent (USA) LLP (James R. Cannon, Jr.) and Williams Mullen, PC (Dean A.
Barclay and J. Forbes Thompson) for Plaintiff Former Employees of Weather Shield
Manufacturing, Inc.

Stuart F. Delery, Acting Assistant Attorney General; Jeanne E. Davidson, Director; Patricia M.
McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States
Department of Justice (Antonia R. Soares) for Defendant United States; Vincent Costantino,
Office of the Solicitor, United States Department of Labor, of Counsel.


                                           OPINION

       This matter comes before the court upon Plaintiffs’ motion for judgment on the agency

record filed pursuant to USCIT R. 56.1. The case returns to the court for the fourth time

following the U.S. Department of Labor’s (“Labor”) negative determination on remand. See
Court No. 10-00299                                                                             Page 2


Weather Shield Manufacturing, Inc. Corporate Office, Medford, WI: Notice of Negative

Determination on Third Remand, 78 Fed. Reg. 775 (Dep’t of Labor Jan. 4, 2013) (“Remand

Results”). Plaintiffs are former administrative support employees of Weather Shield

Manufacturing, Inc. (“Weather Shield”), a producer of doors and windows, who challenge

Labor’s decision denying their application for Trade Adjustment Assistance (“TAA”) under

Section 222 of the Trade Act of 1974, as amended by the Trade and Globalization Adjustment

Assistance Act of 2009, 19 U.S.C. § 2272. Labor has again determined that Plaintiffs are

ineligible for TAA benefits for the 2008 to 2009 period, and Plaintiffs maintain that this

determination is not supported by substantial evidence. The court has jurisdiction pursuant to 28

U.S.C. § 1581(d). For the reasons set forth below the court sustains Labor’s determination.

                                   STANDARD OF REVIEW

       Findings of fact made by Labor during TAA investigations “if supported by substantial

evidence, shall be conclusive.” 19 U.S.C. § 2395(b). “Although substantial evidence must be

more than a ‘mere scintilla,’ it is ‘something less than the weight of the evidence, and the

possibility of drawing two inconsistent conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by substantial evidence.’” Former

Employees of Barry Callebaut v. Chao, 357 F.3d 1377, 1381 (Fed. Cir. 2004) (quoting Consolo

v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966)). Rather, the role of the court is to “merely vet

the determination,” and to affirm where that determination “is reasonable and supported by the

record as a whole . . . .” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir.

2006) (quotation omitted).
Court No. 10-00299                                                                               Page 3


                                            DISCUSSION

        The TAA program provides a range of benefits to workers who have lost their jobs due to

increased imports or shifts in production to a foreign country. See 19 U.S.C. § 2272. Under the

statute, Labor must first determine whether a “significant number or proportion of the workers in

such workers’ firm have become totally or partially separated or are threatened to become totally

or partially separated” from employment. See 19 U.S.C. § 2272(a)(1). That requirement is

satisfied here.

        Once the separation element has been satisfied, Labor must then determine if one of two

other provisions of the statute are satisfied. See 19 U.S.C. §§ 2272(a)(2)(A) & (B). Under §

2272(a)(2)(A), Labor must determine whether: (1) “sales or production, or both, of such firm

have decreased absolutely;” (2) “imports of articles . . . like or directly competitive with articles

produced . . . by such firm have increased;” and (3) that increase in imports “contributed

importantly to such workers’ separation or threat of separation and to the decline in the sales or

production of such firm.” 19 U.S.C. § 2272(a)(2)(A)(i) - (iii).

        Under § 2272(a)(2)(B), Labor will investigate whether (1) “there has been a shift by such

workers’ firm to a foreign country in the production of articles . . . like or directly competitive

with articles which are produced . . . by such firm;” or the firm “acquired from a foreign country

articles . . . that are like or directly competitive with articles which are produced . . . by such

firm;” and (2) this shift “contributed importantly to such workers’ separation or threat of

separation.” 19 U.S.C. § 2272(a)(2)(B)(i) - (ii).

        In its previous remand order, the court directed Labor to provide a fuller explanation for a

downward adjustment in Weather Shield’s 2008 sales data, and to further investigate whether

Weather Shield’s customers were purchasing imports. Following issuance of that order, Labor
Court No. 10-00299                                                                             Page 4


sent a number of emails to Weather Shield requesting that it explain why its 2008 sales were

adjusted downward from [[                 ]] to [[               ]]. Supplemental Updated

Administrative Record (“SUAR”) 32-34. This adjustment was material because 2009 sales were

[[             ]], so the new 2008 sales number turned a decrease in sales during the 2008-2009

period into an increase. Brandon Brunner, Weather Shield’s corporate counsel, responded that

the original higher 2008 number had included intercompany sales and the lower number was

adjusted to reflect net sales to customers only. Id. at 32.

       Because 19 U.S.C. § 2272(a)(2)(A)(i) contemplates an award of TAA if either sales or

production have decreased, Labor also requested production data from Weather Shield for the

relevant period. Id. at 35-38. After receiving several follow-up requests from Labor, Brunner

responded that he “had requested these numbers and will provide them shortly. This request is

not as easily provided as you may think and is taking the efforts of several people running

several different quires [sic] of our electronic data.” Id. at 35. Brunner followed up the next day

stating that Weather Shield had manufactured [[               ]] window and door units in 2008 and

[[         ]] in 2009. Id. at 41. Noting that these numbers reflected a [[             ]] decrease in

production during the same period that Weather Shield reported a [[               ]] sales increase,

Labor asked Weather Shield to explain the “contradictory pattern” evidenced by this data. Id. at

40. Labor did not receive an immediate response to this inquiry and so it sent a follow-up email

with a reminder that this information was necessary to conclude the investigation. Id. At that

point, Brunner responded that he did not know the answer to the question, and was unable to

divert resources to the request. Id.

       Upon receiving this response from Brunner, Labor reiterated the importance of the

requested information to the remand investigation, and issued to Weather Shield a subpoena
Court No. 10-00299                                                                           Page 5


warning letter. Id. at 46-47. The letter provided a deadline by which Weather Shield was to

explain the inconsistent sales and production data, and stated that if Weather Shield failed to

provide an explanation, Labor would issue a subpoena in order to obtain it. Id. at 47. When

Weather Shield failed to provide an explanation by the deadline, Labor issued a subpoena citing

19 U.S.C. §§ 2272(d)(3)(B) & 2321 and 29 C.F.R. 90.14(a). 1 At that point, Weather Shield

submitted a letter to Labor saying that the production numbers previously reported were

incorrect, and that production had actually increased from [[         ]] units in 2008 to

[[       ]] units in 2009. Id. at 81. Labor received two sets of comments from Plaintiffs

challenging the sales and production data Weather Shield provided. Id. at 382-86, 467-69;

Remand Results, 78 Fed. Reg. at 777-78. Ultimately, however, Labor found the information

provided by Weather Shield reliable, and the company’s increased sales and production between

2008 and 2009 formed a basis for the Remand Results’ negative determination.

       Plaintiffs argue that Labor’s determination cannot be sustained because Weather Shield

never explained why it changed its production numbers, and the agency should have investigated

the change further. Additionally, Plaintiffs call into question the accuracy of Weather Shield’s

production data by relying on the company’s closure of its Greenwood, WI manufacturing

facility in 2009. Id. at 15. “One would expect,” Plaintiffs argue, a plant closure to lead to a

decrease in production, yet Weather Shield reported an increase and Labor failed to inquire

further into this “apparent contradiction.” Pl. Br. 16. Regarding the sales data, Plaintiffs point

out that the original 2008 and 2009 sales numbers were reported at the same time. Plaintiffs

argue that it is therefore “logical to assume” that the numbers were based on the same type of


1
 These provisions establish Labor’s authority to issue subpoenas during TAA investigations, and
to petition the U.S. District Courts for an order requiring compliance should a party refuse to
obey the subpoena.
Court No. 10-00299                                                                              Page 6


data, and that if the 2008 number was adjusted downward after excluding intercompany sales the

2009 number may merit a similar adjustment. Pl. Br. 18. Because Labor failed to inquire into

this possibility, Plaintiffs argue that the court cannot sustain the Remand Results as supported by

substantial evidence.

       After reviewing the record, the court concludes that Labor’s determination regarding

Weather Shield’s increased sales and production is supported by substantial evidence. Upon

providing the adjusted production numbers, Brunner informed Labor that the numbers originally

provided were incorrect and that he was providing corrected numbers. Id. at 81. Likewise,

Brunner informed Labor that the 2008 sales numbers were adjusted downward because the

original numbers included intercompany sales. Id. at 32. Accordingly, Labor was not faced with

a record containing unaddressed or unexplained contradictions. While Weather Shield’s

explanations were not extensive, they did provide a basis according to which Labor could weigh

Weather Shield’s adjusted numbers. See Former Employees of Marathon Ashland Pipe Line,

LLC v. Chao, 370 F. 3d 1375, 1385 (Fed. Cir. 2004) (“[Labor] is entitled to base an adjustment

assistance eligibility determination on statements from company officials if [Labor] reasonably

concludes that those statements are creditworthy and are not contradicted by other evidence.”).

       The question then becomes whether Labor reasonably concluded that Brunner’s

statements were creditworthy, and the court concludes that it did. First, after gathering the

information set forth above during several months of email and letter correspondence, Labor

issued an Affirmation of Information. Id. at 176-78. The Affirmation requested that a

representative of Weather Shield affirm a number of statements if true, including the following:

       Weather Shield window and door sales in 2008 total [[                  ]] (U.S.
       dollars).
Court No. 10-00299                                                                            Page 7


       Weather Shield window and door sales in 2009 total [[                   ]] (U.S.
       dollars).

       Weather Shield window and door production in 2008 total [[               ]] (units).

       Weather Shield window and door production in 2009 total [[               ]] (units).

Id. at 177. The Affirmation then stated that the signer understood that

       providing false information is a Federal offense (18 U.S.C. § 1001) and is a
       violation of the Trade Act (19 U.S.C. § 2316). By signing the below, I agree to
       the following statement:
       “Under penalty of law, I declare that to the best of my knowledge and belief
       the information I have provided in this document is true, correct, and
       complete.”

Id. at 178 (emphasis in original). After writing “Yes” under each of the statements above,

Brunner signed the Affirmation. Labor determined that it was reasonable to rely on information

provided subject to such penalties, and the court concludes that this reliance was reasonable. See

Former Employees of Barry Callebaut, 357 F.3d at 1383 (finding that a statement that an

affidavit is signed “subject to punishment” for supplying false information is indicia that the

affidavit is sufficiently “trustworthy to constitute substantial evidence”).

       That Labor was reasonable in relying on the sales and production data provided by

Weather Shield is bolstered by the fact that while Plaintiffs raise questions regarding Labor’s

determination, they point to no evidence in the record contradicting the evidence on which Labor

relied. The closest they come is in arguing that the 2009 Greenwood, WI plant closure is

inconsistent with increased production, or that the 2009 sales data may warrant the same

downward adjustment the 2008 data did. While these may have been legitimate avenues of

inquiry for Labor to undertake, the agency’s failure to do so did not render the inquiries it did

undertake, and the evidence upon which it relied, so infirm as to fail the substantial evidence

standard. Former Employees of Barry Callebaut, 357 F.3d at 1381.
Court No. 10-00299                                                                           Page 8


        Additionally, these were not the first proceedings in which Labor investigated Weather

Shield. In fact, Brunner had been Weather Shield’s primary representative in previous

proceedings in which separated workers were awarded TAA, see Weather Shield Manufacturing,

Inc., Corporate Office, Medford, WI; Notice of Revised Determination on Remand, 75 Fed. Reg.

51,851 (Dep’t of Labor Aug. 23, 2010), and this prior experience gave Labor no reason to

question his credibility. Def. Br. 20. Moreover, while Weather Shield and Brunner were not

responsible for providing the benefits that would have accompanied an award of TAA, they are

the ones that would suffer the penalties of responding untruthfully to Labor. Labor reasonably

considered this while weighing the information provided. Remand Results, 78 Fed. Reg. at 778.

Taking all of these facts together, the court concludes that it was reasonable for Labor to rely on

the sales and production data provided during the investigation, and that Labor’s determination

that TAA was unavailable under 19 U.S.C. § 2272(a)(2)(A) because of the increase in Weather

Shield’s sales and production was supported by substantial evidence.

        Labor also addressed the issue of imports during its remand investigation. In the

previous remand order, the court expressed concern that Labor had not sufficiently investigated

whether [[      ]], a customer of Weather Shield, was sold imports by its other suppliers. On

remand, Labor engaged in an extensive survey, SUAR 241-93, 475-77, during which it contacted

all of [[      ]] suppliers and determined the size of those suppliers, whether the suppliers’

sales to [[      ]] increased or decreased during the relevant period, and the extent to which

those sales consisted of imports. Remand Results, 78 Fed. Reg. at 779. The information

gathered revealed that most of the suppliers did not sell imports to [[       ]]. Moreover, even

though some suppliers did sell [[         ]] imported goods, those goods accounted for less than

2% of the company’s non-Weather Shield purchases in 2008 and 2009. SUAR 477, 522. The
Court No. 10-00299                                                                               Page 9


court is satisfied that substantial evidence supported the conclusion Labor reached based upon

this information, namely that increased imports did not contribute importantly to the relevant

worker separations.

        Plaintiffs appear satisfied as well because they do not challenge this conclusion here.

Rather, Plaintiffs argue that Labor failed to sufficiently investigate evidence that Weather Shield

received imported door parts from a supplier named [[             ]]. In support, Plaintiffs submitted

ship manifest data showing that [[         ]] was the consignee on ten shipments of door parts from

Taiwan in 2008 that were ultimately delivered to Weather Shield. Id. at 386. Plaintiffs argue

that this information may show a “shift . . . to a foreign country in the production of articles . . .

like or directly competitive with articles which are produced . . . by such firm” thus qualifying

the Plaintiffs for TAA eligibility under 19 U.S.C. § 2272(a)(2)(B). The court notes that this is a

different basis for eligibility than has been asserted by Plaintiffs up to this point. However, given

the nature of the TAA statutory regime, the court finds that it is appropriate to consider whether

Plaintiffs are entitled to relief under this provision. See Former Employees of Invista, S.A.R.L. v.

U.S. Secretary of Labor, 34 CIT __, 714 F. Supp. 2d 1320, 1336 (2010). (“[B]ecause of the ex

parte nature of the certification process, and the remedial purpose of the [TAA] program, the

agency is obligated to conduct [its] investigation with the utmost regard for the interest of the

petitioning workers.”) (quotation omitted).

        After receiving this information, Labor inquired into whether Weather Shield imported

doors or windows during the relevant period. SUAR 84. Brunner responded saying that

Weather Shield had not, but stated that he was unsure whether its suppliers had. Id. To aid in

Labor’s investigation, Brunner supplied a list of Weather Shield’s top twenty vendors and their

contact information. Id. at 105. Brunner also stated that the items purchased from [[           ]] were
Court No. 10-00299                                                                              Page 10


not complete door units, but [[            ]] which were then placed into door frames manufactured

by Weather Shield. Id. at 142. In other words, according to Brunner the [[              ]] purchased

from [[        ]] and the door frame manufactured by Weather Shield, were assembled into “door

units” which were then sold by Weather Shield. Id.

          Additionally, the Affirmation of Information covered imports as well, and in it Brunner

affirmed the following statements:

          Weather Shield did not import finished windows in 2008.

          Weather Shield did not import finished windows in 2009.

          Weather Shield did not import finished doors in 2008.

          Weather Shield did not import finished doors in 2009.

          In 2008, no entity which is part of the Schield Family Companies entered into
          contracts to bring into the U.S.A. either finished windows, finished doors, or
          articles that are like or directly competitive with either finished windows or
          finished doors.

          In 2009, no entity which is part of the Schield Family Companies entered into
          contracts to bring into the U.S.A. either finished windows, finished doors, or
          articles that are like or directly competitive with either finished windows or
          finished doors.

Id. at 177-78. Finally, Labor conducted its own search seeking to turn up evidence of imports

similar to the [[       ]] imports, and the search retuned no results. Id. at 481-82, 485-88.

          As an initial matter, the court notes that both Brunner and Labor focus on the fact that the

goods received from [[        ]] were [[        ]], which are not “like or directly competitive with”

the completed door units sold by Weather Shield. See, e.g., id. at 84, 178. However, it is not

correct to focus only on completed door units because TAA eligibility can be found if a company

shifts production to, or acquires from, a foreign country articles “like or directly competitive

with” those produced by the company. There is no requirement that the shift in production, or
Court No. 10-00299                                                                           Page 11


foreign acquisition, involve only articles “like” those produced by the company for final sale.

Accordingly, if Weather Shield produced [[           ]] itself, TAA eligibility could be impacted if

Weather Shield shifted production to, or acquired from, a foreign country [[           ]] “like” the

ones it produces.

       However, the evidence on the record indicates that Weather Shield does not produce [[

       ]]. When questioned on this point, Brunner stated that Weather Shield purchased the [[

]] from [[          ]], incorporated them into Weather Shield-manufactured door frames, and

then sold the completed door units. Id.142. The parts imported in ten shipments in 2008 by [[

]], namely [[            ]], were not “like or directly competitive with” items produced by

Weather Shield, namely door frames and completed door units. Moreover, Labor’s own search

turned up no other similar goods imported and ultimately destined for Weather Shield. The court

therefore concludes that Labor sufficiently investigated this matter after Plaintiff submitted

evidence of the 2008 imports, and that it reasonably concluded that no shift in production, or

acquisition of foreign articles, contributed importantly to Plaintiffs’ separation.

                                          CONCLUSION

       Labor’s Remand Results are supported by substantial evidence and otherwise in accord

with the law and shall be sustained.




Dated: July 1, 2013                                            /s/ Judith M. Barzilay
       New York, NY                                          Judith M. Barzilay, Senior Judge
