# Former Employees of Invista, S.A.R.L. v. U.S. Secretary of Labor

> United States Court of International Trade · June 28, 2010 · 714 F. Supp. 2d 1320

URL: https://www.frixlaw.com/law-library/cases/817767

## Case

- **Full name:** FORMER EMPLOYEES OF INVISTA, S.A.R.L., Plaintiffs, v. U.S. SECRETARY OF LABOR, Defendant
- **Court:** United States Court of International Trade
- **Decided:** June 28, 2010
- **Citations:** 714 F. Supp. 2d 1320; 34 Ct. Int'l Trade 781; 34 C.I.T. 781; 32 I.T.R.D. (BNA) 1645; 2010 Ct. Intl. Trade LEXIS 75
- **Precedential status:** Published
- **Opinion:** Opinion by Ridgway
- **Judges:** Tony West
- **Cited by:** 3 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/817767

## Opinion text

Slip Op. 10-73

UNITED STATES COURT OF INTERNATIONAL TRADE

__________________________________________

FORMER EMPLOYEES OF INVISTA, S.A.R.L., :

Plaintiffs, :

v. : Court No. 07-00160

U.S. SECRETARY OF LABOR, :

Defendant. :
__________________________________________

[Granting Plaintiffs’ application for attorneys’ fees and expenses under the Equal Access to Justice
Act]

Dated: June 28, 2010

Ruskin Moscou Faltischek, P.C. (Thomas A. Telesca), for Plaintiffs.

Tony West, Assistant Attorney General; Jeanne E. Davidson, Director, Commercial
Litigation Branch, Civil Division, U.S. Department of Justice.

OPINION

RIDGWAY, Judge:

In this action, former employees of the Chattanooga, Tennessee plant operated by Invista,

S.a.r.l. (“the Workers”) contested the determinations of the U.S. Department of Labor denying their

petition for certification of eligibility for trade adjustment assistance (“TAA”) and alternative trade

adjustment assistance (“ATAA”). The determinations at issue included the Labor Department’s

original denial of the Workers’ petition, as well as the agency’s denial of the Workers’ request for

reconsideration, and the agency’s negative determination following a voluntary remand. See 72 Fed.
Court No. 07-00160 Page 2

Reg. 7907, 7909 (Feb. 21, 2007) (notice of denial of petition); 72 Fed. Reg. 15,169 (March 30, 2007)

(notice of denial of request for reconsideration); 73 Fed. Reg. 32,739 (June 10, 2008) (notice of

negative determination on voluntary remand, or “Remand Determination”).

Invista I reviewed the Workers’ challenge to the Labor Department’s negative Remand

Determination (i.e., the negative determination in the voluntary remand proceeding), and remanded

this matter to the agency for a second time. See Former Employees of Invista, S.a.r.l. v. U.S. Sec’y

of Labor, 33 CIT ____, 626 F. Supp. 2d 1301 (2009) (“Invista I”). As a result of the investigation

in the course of the second remand, the Labor Department granted the Workers’ Petition, amending

the agency’s 2004 TAA/ATAA certification of Invista workers to cover the Workers at issue here.

See Notice of Revised Determination on Remand, 74 Fed. Reg. 51,195 (Oct. 5, 2009) (“Second

Remand Determination”); Supplemental Administrative Record (“Second Supplemental

Administrative Record”). That determination was sustained in Invista II. See Former Employees

of Invista, S.a.r.l. v. U.S. Sec’y of Labor, 33 CIT ____, 657 F. Supp. 2d 1359 (2009) (“Invista II”).1

1
The administrative record in this action consists of three parts – the initial Administrative
Record, which the Labor Department filed after this action was commenced; the Supplemental
Administrative Record, which was filed after the agency’s negative determination on remand; and
a second Supplemental Administrative Record (the “Second Supplemental Administrative Record”),
which was filed with the Second Remand Determination.

Expressing concern that much of the information in the administrative record that had been
designated “confidential” by the Labor Department in fact was not confidential, Invista II instructed
the Labor Department to review and resubmit the entire administrative record, including specific
justification (with citations to appropriate legal authority, and supported by the requisite factual
showings) for each proposed redaction. See Invista II, 33 CIT at ____ n.1, 657 F. Supp. 2d at 1360-
61 n.1. The Government has now made that submission. See Defendant’s Filing Pursuant to the
Court’s October 9, 2009 Order. Although the merits of some of the Government’s arguments
concerning confidentiality are questionable, the resubmitted administrative record itself complies
with the instructions in Invista II. In addition, the Government advises that it is working to identify
“ways that [the Labor Department’s] Trade Adjustment Assistance (‘TAA’) procedures for obtaining
Court No. 07-00160 Page 3

Now pending before the Court is Plaintiffs’ Application for Fees and Other Expenses

Pursuant to the Equal Access to Justice Act, seeking an award in the sum of $13,463.20,2 which the

Government opposes. See Plaintiffs’ Memorandum of Law in Support of Equal Access to Justice

Act Application (“Pls.’ EAJA Application”); Defendant’s Response to Plaintiffs’ Application for

Attorney Fees and Expenses (“Def.’s Response”).

For the reasons set forth below, Plaintiffs’ Application for Fees and Other Expenses must

be granted.

I. Background

As Invista II noted, “[t]his should have been a relatively easy case for the Labor Department.

The agency previously certified former Invista employees who did the same jobs at the same plant

as the Workers at issue here.” See Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1361 (citing Invista

I, 33 CIT at ____, 626 F. Supp. 2d at 1305). The only significant issue which the Labor Department

had to resolve in this case was whether the termination of these Workers was “attributable to the

basis for [the 2004 TAA/ATAA] certification” – that is, whether the termination of these Workers

and filing confidential information in Court proceedings may be improved in the future.” Id. at 2.

Even as resubmitted, however, all three parts of the record include confidential business
information. Therefore, both public and confidential versions of all three parts of the record have
been filed with the court. References herein to the public version of the initial Administrative
Record (as resubmitted) are noted as “A.R. ____”; references to the public version of the
Supplemental Administrative Record (as resubmitted) are noted as “S.A.R. ____”; and references
to the public version of the Second Supplemental Administrative Record (as resubmitted) are noted
as “S.S.A.R. ____.” There are no cites to the confidential record herein.
2
As discussed in section II.B below, this figure does not include a cost of living adjustment.
Court No. 07-00160 Page 4

was “attributable to” the 2004 shift of production to Mexico.3 See, e.g., Weirton Steel Corporation,

Weirton, WV: Negative Determination on Remand, 73 Fed. Reg. 52,066, 52,068 (Sept. 8, 2008)

(“Weirton Steel”) (articulating standard for amendment of TAA/ATAA certification to extend period

of coverage to include worker separations occurring after expiration date of original TAA/ATAA

certification).4 The Labor Department nevertheless required “four bites at the apple” to conduct the

thorough investigation mandated by statute, delaying for more than two and a half years the

Workers’ certification for the TAA/ATAA benefits to which the Labor Department ultimately

determined they are entitled. See Invista II, 33 CIT at ____, ____, 657 F. Supp. 2d at 1361, 1364-65

(citations omitted).

As detailed in Invista I and Invista II, the plaintiff Workers in this case are former employees

of the Nylon Apparel Filament Fibers Group at Invista’s Chattanooga, Tennessee plant. At the time

of their termination on January 31, 2007, they processed orders for apparel fiber in support of

apparel fiber production at an Invista plant in Mexico. Apparel fiber had previously been

manufactured at the Chattanooga plant, until domestic production ceased and all such production

3
In its Response, the Government repeatedly states that the issue before the Labor
Department was whether “plaintiff’s jobs . . . were . . . shifted to Mexico.” See Def.’s Response at
15; see also id. at 12 (same); id. at 13 (same). However, the Government simply has it wrong. As
discussed in greater detail below, no one ever contended that the plaintiff Workers’ jobs had shifted
to Mexico. Instead, the issue in this case was whether the termination of these Workers in early
2007 was “attributable to” the 2004 shift of production to Mexico, so as to warrant the amendment
of the agency’s 2004 TAA/ATAA certification to cover the Workers here.
4
For further explanation of the Labor Department’s practice of amending TAA/ATAA
certifications, see generally United Steel, Paper and Forestry, Rubber, Mfg., Energy, Allied Indus.
and Service Workers v. U.S. Sec’y of Labor, 33 CIT ____, ____, 2009 WL 1175654 at * 3-8 (2009)
(“Steelworkers II”); see also Invista I, 33 CIT at ____ & n.5, 626 F. Supp. 2d at 1309 & n.5 (citing
various cases involving requests to amend certifications to extend certification period).
Court No. 07-00160 Page 5

was shifted to a facility in Mexico in 2004. Since the 2004 shift of production, only nylon

performance filament fiber (“performance fiber”) has been produced at the Chattanooga plant. See

generally Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1305; Invista II, 33 CIT at ____, 657 F. Supp.

2d at 1361.

The 2004 shift of production to Mexico led to widespread layoffs of production workers and

support personnel at the Chattanooga plant. At that time, Invista management filed a petition for

TAA and ATAA benefits on behalf of the terminated workers, which the Labor Department granted.

Specifically, the Labor Department’s 2004 certification certified as eligible for TAA and ATAA all

Invista workers “engaged in employment related to the production of,” inter alia, apparel fiber “who

became totally or partially separated from employment on or after June 7, 2003, through two years

from the date of certification [i.e., two years from August 20, 2004].” See generally Invista I, 33

CIT at ____, 626 F. Supp. 2d at 1305-06 (quoting 69 Fed. Reg. 54,320, 54,321 (Sept. 8, 2004))

(emphasis added); Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1361.

The Workers at issue here survived the 2004 layoffs, and continued their work at the

Chattanooga site in support of apparel fiber production, even after that production shifted to Mexico.

However, on November 14, 2006 – a mere three months after the Labor Department’s 2004

TAA/ATAA certification expired – the Workers were notified that they were being terminated

effective January 31, 2007. See generally Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306; Invista

II, 33 CIT at ____, 657 F. Supp. 2d at 1361.

Shortly thereafter, Invista’s Chattanooga Plant Manager filed the TAA/ATAA petition at

issue here, on behalf of the Workers. In the TAA/ATAA Petition, Invista’s Plant Manager attested,

under oath, that the Workers’ terminations were “a continuation of the shift in production to Mexico
Court No. 07-00160 Page 6

as described in [the 2004 TAA/ATAA certification] that expired August 20, 2006.” See A.R. 2;

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306; Invista II, 33 CIT at ____, 657 F. Supp. 2d at

1362. The Plant Manager further explained that – notwithstanding the 2004 shift of production to

Mexico – “all orders [for apparel fiber had] continued to be processed from the United States” up

to the time of the filing of the 2006 TAA/ATAA Petition, but that, for the future, all such work was

being transferred to “CSR’s [i.e., Customer Service Representatives] located in South America.”

See A.R. 2; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306 (citation omitted); Invista II, 33 CIT

at ____, 657 F. Supp. 2d at 1362. The TAA/ATAA Petition also noted that several of the subject

Workers were age 50 or older, that their skills were “not easily transferable,” and that “[c]ompetitive

conditions within the industry are adverse.” See A.R. 2; Invista I, 33 CIT at ____, 626 F. Supp. 2d

at 1306; Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1362.

The Labor Department denied the Workers’ TAA/ATAA Petition. See generally Invista I,

33 CIT at ____, 626 F. Supp. 2d at 1306 (citing 72 Fed. Reg. at 7909 (denying TAA/ATAA Petition

on grounds that “[t]he workers’ firm does not produce an article as required for certification”));

Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1362. The Labor Department found that “domestic

production of an article within . . . [Invista’s] Nylon Apparel Filament Fibers Group [had] ceased

more than one year [before]” the Workers’ termination, and that the petitioning Workers thus “were

not in support of domestic production within the requisite one year period” – an allusion to 29

C.F.R. § 90.2, which concerns cases involving allegations of “increased imports” (not “shift of

production” cases such as the case at bar). See A.R. 31 (emphasis added); 29 C.F.R. § 90.2 (2006)5;

5
All citations to regulations are to the 2006 edition of the Code of Federal Regulations.
Court No. 07-00160 Page 7

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306; Invista II, 33 CIT at ____, 657 F. Supp. 2d at

1362. The Labor Department therefore concluded that the Workers could not be “considered import

impacted or affected by a shift in production of an article”; and, because the agency determined that

the Workers were not eligible for TAA, the Workers’ petition for ATAA was also denied. See A.R.

31-32; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306; Invista II, 33 CIT at ____, 657 F. Supp.

2d at 1362. At no time in the course of its initial investigation did the Labor Department consider

amending the 2004 TAA/ATAA certification to extend the period of coverage to include the

Workers at issue here.

The Workers requested that the Labor Department reconsider its denial of their TAA/ATAA

Petition, underscoring that they had “missed the opportunity of receiving . . . [TAA and ATAA]

benefits by less than 3 months,” and emphasizing that they would have been covered by the 2004

TAA/ATAA certification – and thus would have been eligible for TAA/ATAA benefits – if only

Invista management had notified the Workers of their impending terminations “in August, versus

November of 2006.” See A.R. 35-38; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1306-07; Invista

II, 33 CIT at ____, 657 F. Supp. 2d at 1362. Significantly, echoing a point made by Invista’s

Chattanooga Plant Manager in the TAA/ATAA Petition, the Workers’ Request for Reconsideration

stated that their layoffs were, in effect, the culmination of the 2004 shift of production of apparel

fiber to Mexico – the “direct result of the . . . apparel machines going to Mexico, the loss of textile

manufacturing in the U.S. the bigger picture.” See A.R. 36; Invista I, 33 CIT at ____, 626 F. Supp.

2d at 1307 (citations omitted); Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1362.

Notwithstanding the statements in the Workers’ Request for Reconsideration linking their

termination to Invista’s 2004 shift of production, the Labor Department again gave no consideration
Court No. 07-00160 Page 8

to amending the 2004 TAA/ATAA certification to extend the period of coverage to include the

Workers here. Instead, the Labor Department denied the Workers’ Request for Reconsideration,

with no further investigation whatsoever. See 72 Fed. Reg. at 15,169. The Labor Department

acknowledged the Workers’ claim that their termination was “a direct result of the same shift in

production to Mexico . . . which resulted in workers certification for TAA in 2004.” See A.R. 45;

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307 (citations omitted); Invista II, 33 CIT at ____, 657

F. Supp. 2d at 1362-63. However, the Labor Department stated that, pursuant to agency regulations,

it only “considers production that occurred one year prior to the date of the petition” – once again

alluding to 29 C.F.R. § 90.2 (even though, on its face, the referenced provision of the regulation is

limited to cases involving “increased imports,” and has nothing to do with “shift of production”

cases like this). See A.R. 46; 29 C.F.R. § 90.2; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307

(citation omitted); Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363. The Labor Department

concluded that, because the Chattanooga plant had ceased production of apparel fiber in 2004, the

Workers’ TAA/ATAA Petition was “outside of the relevant period.” See A.R. 46; Invista I, 33 CIT

at ____, 626 F. Supp. 2d at 1307 (citation omitted); Invista II, 33 CIT at ____, 657 F. Supp. 2d at

1363.

This action followed. The Workers sought judgment on the agency record, arguing, inter

alia, that the Labor Department had denied the Workers’ TAA/ATAA Petition based on the

agency’s determination that the Workers “were not in support of domestic production within the

requisite one year period,” but that the agency had failed to identify the authority for any such

asserted one-year limitation. See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307 (citations

omitted); Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363. In addition, the Workers faulted the
Court No. 07-00160 Page 9

Labor Department for “fail[ing] to adequately consider the relevancy of the prior [TAA/ATAA]

certification.” See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307 (citation omitted); Invista II,

33 CIT at ____, 657 F. Supp. 2d at 1363.

Conceding that, by its express terms, the one-year limitation set forth in 29 C.F.R. § 90.2

applies only in cases where layoffs result from “increased imports,” the Government sought – and

was granted – a voluntary remand to permit the Labor Department to consider in the first instance

the relevance of 29 C.F.R. § 90.2’s “one-year rule” in “shift of production” cases such as this. See

29 C.F.R. § 90.2 (defining “increased imports” by reference to a “representative base period” which

is “one year consisting of the four quarters immediately preceding the date which is twelve months

prior to the date of the petition”); Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307 (citations

omitted); Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363.

In its Negative Determination on Remand (the determination at issue in Invista I), the Labor

Department abandoned its reliance on the one-year time limitation in 29 C.F.R. § 90.2. Instead, the

Labor Department denied the Workers’ TAA/ATAA claims based on the agency’s determination

that the Workers’ terminations “[were] not related to the shift of production of apparel nylon

filament to Mexico in 2004,” but, rather, were the result of “a business decision to improve the

efficiency of . . . [Invista’s] customer service organization.” See 73 Fed. Reg. at 32,739; Invista I,

33 CIT at ____, 626 F. Supp. 2d at 1307; Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363.6

6
In light of its conclusion that “the shift of production to a foreign country was not a cause
of the workers’ separations,” the Labor Department reserved judgment as to “the impact of the fact
that no production took place at the subject firm during the twelve month period prior to the filing
of the petition.” See 73 Fed. Reg. at 32,740; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307-08;
Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363.
Court No. 07-00160 Page 10

The principal evidence supporting the Labor Department’s finding was the conclusory

statement of an Invista lawyer, who attributed the Workers’ termination not to “the decision made

in 2004 to stop production of Nylon Apparel at the Chattanooga Site,” but rather to “a business

decision to improve the efficiency of the customer service organization.” See S.A.R. 18; see also

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1309-10. Although the statement of the Invista lawyer

was in direct conflict with other evidence already on the record – including, most notably, the sworn

statement of Invista’s Chattanooga Plant Manager – the Labor Department made no attempt to

reconcile the inconsistency. Compare, e.g., A.R. 2 (Invista Plant Manager’s sworn statement

attesting that the Workers’ terminations were “a continuation of the [2004] shift in production to

Mexico”) with S.A.R. 18 (unsworn statement of Invista lawyer, asserting that Workers’ separations

were not attributable to 2004 shift of production). Nor did the Labor Department articulate any

rationale for its decision to credit the statement on which it relied and to disregard the other,

conflicting record evidence. Because the Labor Department determined that the Workers were not

eligible for TAA, their petition for ATAA was denied as well. See 73 Fed. Reg. at 32,740; Invista

I, 33 CIT at ____, 626 F. Supp. 2d at 1308; Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1363.

The Workers’ renewed challenge to the Labor Department’s denial of their TAA/ATAA

Petition was the subject of Invista I. Invista I addressed in detail the Labor Department’s affirmative

obligation to investigate TAA/ATAA claims “with the utmost regard for the interests of the

petitioning workers.” See generally Invista I, 33 CIT at ____, ____, 626 F. Supp. 2d at 1304-05,

1308 (citing Local 167, Int’l Molders and Allied Workers’ Union, AFL-CIO v. Marshall, 643 F.2d

26, 31 (1st Cir. 1981); Former Employees of BMC Software, Inc. v. U.S. Sec’y of Labor, 30 CIT
Court No. 07-00160 Page 11

1315, 1321, 454 F. Supp. 2d 1306, 1312 (2006) (“BMC I”) (collecting additional cases)).7 Invista

I explained that, in a case such as this, where there is a potentially relevant prior TAA/ATAA

certification, the Labor Department must consider the possibility of doing what it has done in other,

similar cases – that is, the Labor Department must consider amending the prior certification to

extend coverage to the new group of petitioning workers. See Invista I, 33 CIT at ____, 626 F.

Supp. 2d at 1309; see also Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1364.

Invista I observed that the administrative record in this case was replete with evidence

supporting the Workers’ claim that their terminations were “attributable to the basis for [the original,

i.e., the 2004] certification” – that is, the 2004 shift of apparel fiber production to Mexico; and,

moreover, that the evidence to the contrary (including, in particular, the statement of the Invista

lawyer) was “not only scant, but also weak.” See Invista II, 33 CIT at ____, 657 F. Supp. 2d at

1364; Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1309-10 (quoting Weirton Steel, 73 Fed. Reg.

at 52,068). As Invista I noted, the Labor Department’s own standards required the Workers’

certification if there was a “causal nexus” between the 2004 shift of production and their

terminations, notwithstanding the fact that the terminations occurred more than two years after the

original 2004 TAA/ATAA certification (and thus after the original 2004 TAA/ATAA certification

7
See also, e.g., Former Employees of Warp Processing Co. v. U.S. Dep’t of Labor, 33 CIT
____, ____, 2009 WL 424491 at * 2 (2009) (underscoring agency obligation to conduct TAA
investigations with “the utmost regard” for interests of petitioning workers); Former Employees of
Welex, Inc. v. U.S. Sec’y of Labor, 32 CIT ____, ____, ____, ____, 2008 WL 7020688 at * 2, 9,
13 (2008) (same); Former Employees of Elec. Mobility Corp. v. U.S. Sec’y of Labor, 32 CIT ____,
____, 2008 WL 7020689 at * 5 (2008) (same); Former Employees of Fairchild Semi-Conductor
Corp. v. U.S. Sec’y of Labor, 32 ____, ____, 2008 WL 1765519 at * 3 (2008) (same); Chen v. Chao,
32 CIT ____, ____, 587 F. Supp. 2d 1292, 1298 (2008) (same); Former Employees of Joy Techs.,
Inc. v. U.S. Sec’y of Labor, 31 CIT 1835, 1842, 523 F. Supp. 2d 1369, 1377 (2007) (same).
Court No. 07-00160 Page 12

had expired). See id., 33 CIT at ____, 626 F. Supp. 2d at 1311 (quoting Weirton Steel, 73 Fed. Reg.

at 52,068); see also id., 33 CIT at ____, 626 F. Supp. 2d at 1309.

Invista I therefore remanded this matter to the Labor Department for a second time, with

instructions requiring the agency to “thoroughly and independently investigate the facts of the case,

and – based on that investigation – . . . [to] consider all legal theories under which the petitioning

Workers might be eligible for certification, including the possible amendment of the 2004

TAA/ATAA certification.” See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311; see also Invista

II, 33 CIT at ____, 657 F. Supp. 2d at 1364.

Remarkably, in the second remand proceeding, it took just a single phone call between the

Labor Department and a senior representative of Invista to confirm what Invista’s Chattanooga Plant

Manager and the Workers themselves had been telling the agency for more than two and a half years

– that is, that the Workers’ termination was a direct (albeit delayed) result of Invista’s 2004 shift of

apparel fiber production to Mexico (which, in turn, was the basis for the Labor Department’s 2004

TAA/ATAA certification of the Workers’ former Invista colleagues). See Invista II, 33 CIT at ____,

657 F. Supp. 2d at 1364 (citing S.S.A.R. 45, 69-71 (documenting Aug. 21, 2009 phone call)). As

a result of that phone conversation, the Labor Department reversed its three prior denials and granted

the Workers’ TAA/ATAA Petition, extending the agency’s 2004 certification of eligibility to apply

for both TAA and ATAA to cover the Workers here. See 74 Fed. Reg. 51,195-96; Invista II, 33 CIT

at ____, 657 F. Supp. 2d at 1364-65.
Court No. 07-00160 Page 13

II. Analysis

Under the Equal Access to Justice Act (“EAJA”):

[A] court shall award to a prevailing party other than the United States fees and other
expenses . . . incurred by that party in any civil action . . . , including proceedings for
judicial review of agency action, brought by or against the United States . . . , unless
the court finds that the position of the United States was substantially justified or that
special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A) (2000).8 Thus, although the court retains a measure of discretion as to

the size of the award, under the EAJA “a trial court must award attorney’s fees where: (i) the

claimant is a ‘prevailing party’; (ii) the government’s position was not substantially justified; (iii)

no ‘special circumstances make an award unjust’; and (iv) the fee application is timely submitted

and supported by an itemized statement.” Libas, Ltd. v. United States, 314 F.3d 1362, 1365 (Fed.

Cir. 2003) (citations omitted) (emphasis added) (also noting “the imperative language” of EAJA

statute); accord Hubbard v. United States, 480 F.3d 1327, 1331 (Fed. Cir. 2007) (acknowledging

“mandatory” nature of EAJA award); Brickwood Contractors, Inc. v. United States, 288 F.3d 1371,

1379 (Fed. Cir. 2002) (same).9

The Government here does not dispute that the Workers were “prevailing parties.” Nor does

8
Except as otherwise indicated, all statutory citations are to the 2000 edition of the United
States Code.
9
The Government effectively reverses the applicable standard, asserting that “[t]he EAJA
allows an award of attorney fees and other expenses to a prevailing party only if the Court
determines that the position taken by the Government was not substantially justified . . . .” See
Def.’s Response at 8 (emphasis added). However, to prevail here, the Workers are not required to
prove that the Government’s position was not “substantially justified.” Rather, the Government
must prove that its position was “substantially justified.” See, e.g., Libas, 314 F.3d at 1365
(citations omitted). If the Government fails to carry that burden, the trial court “must award
attorney’s fees . . . .” Libas, 314 F.3d at 1365 (citations omitted) (emphasis added).
Court No. 07-00160 Page 14

the Government argue either that there are “special circumstances” that would render an award

unjust,10 or that the Workers’ application for fees and expenses was untimely or excessive. The

Government’s opposition to the Workers’ request for an award of fees and expenses thus rests

entirely on its contention that the United States’ position was “substantially justified,” both at the

agency level and in litigation. See generally Def.’s Response at 1 (explaining that Government

“challenge[s] neither plaintiffs’ prevailing party status, nor the reasonableness of the amount of fees

they seek,” and bases its opposition to an award of fees and expenses solely on its position that “the

Government’s position in this matter was substantially justified”).

As discussed in greater detail below, the United States’ position at the administrative level,

at a minimum, was not “substantially justified.” The Workers are therefore entitled to an award of

attorneys’ fees and expenses under the EAJA.

A. Whether the Government’s Position Was “Substantially Justified”

The Government bears the burden of proving that its position was “substantially justified.”

See, e.g., Libas, 314 F.3d at 1365 (citations omitted); Doty v. United States, 71 F.3d 384, 385 (Fed.

Cir. 1995) (citations omitted). To be “substantially justified,” the Government’s position must be

10
The EAJA’s “special circumstances” exception to an award of fees and expenses serves as
a “‘safety valve’ [which] helps to insure that the Government is not deterred from advancing in good
faith the novel but credible extensions and interpretations of the law that often underlie vigorous
enforcement efforts. It also gives the court discretion to deny awards where equitable considerations
dictate an award should not be made.” Devine v. U.S. Customs Service, 733 F.2d 892, 895-96 (Fed.
Cir. 1984) (quoting H.R. Rep. No. 1418, 96th Cong., 2d Sess. 11, reprinted in 1980 U.S.C.C.A.N.
4984, 4990). See, e.g., Taylor v. United States, 815 F.2d 249, 252 (3d Cir. 1987) (explaining that
“special circumstances” provision permits consideration of traditional equitable principles in
determining whether fee award is warranted); Oguachuba v. Immigration & Naturalization Service,
706 F.2d 93, 98 (2d Cir. 1983) (same).
Court No. 07-00160 Page 15

“justified in substance or in the main – that is, justified to a degree that could satisfy a reasonable

person.” Pierce v. Underwood, 487 U.S. 552, 565 (1988). That a party other than the Government

prevailed in an action does not establish that the Government’s position was not substantially

justified. Luciano Pisoni Fabbrica Accessori Instrumenti Musicali v. United States, 837 F.2d 465,

467 (Fed. Cir. 1988).

In determining whether substantial justification exists, a court is to weigh not only “the

position taken by the United States in the civil action, [but also] the action or failure to act by the

agency upon which the civil action is based,” taking into consideration the “totality of the

circumstances.” 28 U.S.C. § 2412(d)(2)(D); Kelly v. Nicholson, 463 F.3d 1349, 1355 (Fed. Cir.

2006); Doty, 71 F.3d at 385-86 (citations omitted); Chiu v. United States, 948 F.2d 711, 715 (Fed.

Cir. 1991) (“trial courts are instructed to look at the entirety of the government’s conduct and make

a judgment call” as to “the government’s overall position”); Essex Electro Eng’rs, Inc. v. United

States, 757 F.2d 247, 253 (Fed. Cir. 1985) (articulating “totality of the circumstances” standard).

Reaching a determination on substantial justification requires that a court reexamine the legal

and factual circumstances of a case through the EAJA “prism” – “a different perspective than that

used at any other stage of the proceeding.” Luciano Pisoni, 837 F.2d at 467; Libas, 314 F.3d at 1366

(quoting United States v. Hallmark Constr. Co., 200 F.3d 1076, 1080 (7th Cir. 2000)). Nevertheless,

“the court’s merits reasoning may be quite relevant to the resolution of the substantial justification

question.” F.J. Vollmer Co., Inc. v. Magaw, 102 F.3d 591, 595 (D.C. Cir. 1996). And strong

language criticizing the Government’s position in an opinion discussing the merits of a key issue

is evidence in support of an award of fees. See Marcus v. Shalala, 17 F.3d 1033, 1038 (7th Cir. 1994)

(cited in Golembiewski v. Barnhart, 382 F.3d 721, 724 (7th Cir. 2004)). “[A] string of losses can be
Court No. 07-00160 Page 16

indicative” as well. Pierce v. Underwood, 487 U.S. at 569.

Moreover, in evaluating the existence of substantial justification, a trial court is entitled to

take into consideration “insights not conveyed by the record, into such matters as whether particular

evidence was worthy of being relied upon, or whether critical facts could easily have been verified

by the Government.” Pierce v. Underwood, 487 U.S. at 560; see also Hensley v. Eckerhart, 461

U.S. 424, 437 (1983) (noting propriety of deference to trial court’s “superior understanding of the

litigation”) (quoted in Comm’r, Immigration & Naturalization Service v. Jean, 496 U.S. 154, 161

(1990)); Libas, 314 F.3d at 1366 n.1 (in determining substantial justification, trial court may

consider “not only the actual record,” but also “for example, any insights which [it] may have

gleaned from settlement conferences or other pretrial activities that are not conveyed by the actual

record”) (citing Pierce v. Underwood, 487 U.S. at 560).11

1. The Role of the Labor Department in TAA Cases

The “substantial justification” analysis in this action cannot be conducted in a vacuum. The

justification for the Government’s position instead must be analyzed in the context of the trade

adjustment assistance (“TAA”) statute, and the special duties and obligations that the Labor

11
Accord Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1256, 1257 (10th Cir. 2005) (noting
that trial court enjoys “the benefit of a degree of familiarity with trial court proceedings [the
appellate court] cannot hope to match,” and that trial court has an “inherent advantage in passing
on a fee request given its familiarity with the proceedings below”); Interfaith Community
Organization v. Honeywell Int’l, 426 F.3d 694, 718 (3d Cir. 2005) (deferring to trial court’s “far
greater understanding of the deadlines it imposed and the complexity of the underlying litigation”);
Lyden v. Howerton, 731 F. Supp. 1545, 1553 (S.D. Fla. 1990) (noting, in analysis of “substantial
justification,” that “[o]ftentimes, as here, the published record of the case does not reveal the full
aura and nuances of the litigation. Although the court finds that the public record justifies finding
the government without substantial justification in both law and fact, the history, procedure, and the
historical context, specifically within this court’s knowledge, buttresses this conclusion.”).
Court No. 07-00160 Page 17

Department owes to workers in its administration of that statute. See generally BMC I, 30 CIT at

1315-22, 454 F. Supp. 2d at 1307-13 (summarizing policy underpinnings, legislative history, and

practical implications of TAA).

The TAA laws are remedial legislation,12 designed to assist workers who have lost their jobs

as a result of increased import competition from – or shifts in production to – other countries, by

helping those workers “learn the new skills necessary to find productive employment in a changing

American economy.” Former Employees of Chevron Prods. Co. v. U.S. Sec’y of Labor, 26 CIT

1272, 1273, 245 F. Supp. 2d 1312, 1317 (2002) (quoting S. Rep. No. 100-71, at 11 (1987)).

The TAA program entitles eligible workers to receive benefits which may include

employment services (such as career counseling, resume-writing and interview skills workshops,

and job referral programs), vocational training, job search and relocation allowances, income support

payments (known as “Trade Readjustment Allowance” or “TRA” payments), and a Health Insurance

Coverage Tax Credit. See generally 19 U.S.C. § 2272 et seq. (2000 & Supp. II 2002). In addition,

one of the newer features is the wage insurance benefit for older workers, known as Alternative

12
See, e.g., Former Employees of Sonoco Prods. Co. v. Chao, 372 F.3d 1291, 1301 (Fed. Cir.
2004) (Mayer, C.J., dissenting) (emphasizing “remedial” nature of TAA statute); UAW v. Marshall,
584 F.2d 390, 396 (D.C. Cir. 1978) (noting “general remedial purpose” of TAA statute, and that
“remedial statutes are to be liberally construed” to effectuate their intended purpose); Fortin v.
Marshall, 608 F.2d 525, 526, 529 (1st Cir. 1979) (same); Usery v. Whitin Machine Works, Inc., 554
F.2d 498, 500, 502 (1st Cir. 1977) (highlighting “remedial” purpose of TAA statute); BMC I, 30 CIT
at 1320-21 & n.9, 454 F. Supp. 2d at 1311 & n.9 (collecting additional cases) (explaining that TAA
laws are “remedial legislation” to be “construed broadly to effectuate their intended purpose”); see
also Fairchild Semi-Conductor Corp., 32 CIT at ____, 2008 WL 1765519 at * 3 (same); Chen v.
Chao, 32 CIT at ____, 587 F. Supp. 2d at 1301 (noting “remedial purpose” of TAA statute); Welex,
32 CIT at ____, 2008 WL 7020688 at * 2 (stating that TAA laws are “remedial legislation and, as
such, are to be construed broadly”); Former Employees of Merrill Corp. v. United States, 31 CIT
415, 426, 483 F. Supp. 2d 1256, 1266 (2007) (explaining that “courts liberally construe the TAA
provisions of the Trade Act to effectuate legislative intent”).
Court No. 07-00160 Page 18

Trade Adjustment Assistance (“ATAA”). ATAA allows eligible workers age 50 or older, for whom

retraining may not be appropriate, to accept reemployment at a lower wage and receive a wage

subsidy. See, e.g., Invista I, 33 CIT at ____ n.2, 626 F. Supp. 2d at 1304 n.2; BMC I, 30 CIT at

1318 n.5, 454 F. Supp. 2d at 1309 n.5.13

TAA benefits historically have been viewed as the quid pro quo for U.S. national policies

of free trade. See generally BMC I, 30 CIT at 1316, 454 F. Supp. 2d at 1307-08 (and authorities

cited there). As UAW v. Marshall explains, “much as the doctrine of eminent domain requires

compensation when private property is taken for public use,” the trade adjustment assistance laws

similarly reflect the country’s recognition “that fairness demand[s] some mechanism whereby the

national public, which realizes an overall gain through trade readjustments, can compensate the

particular . . . workers who suffer a [job] loss.” UAW v. Marshall, 584 F.2d 390, 395 (D.C. Cir.

1978). Absent TAA programs that are adequately funded and conscientiously administered,14 “the

13
See generally Former Employees of Independent Steel Castings Co. v. U.S. Dep’t of Labor,
31 CIT 1172 (2007) (and authorities cited there) (discussing policy underpinnings of, and eligibility
criteria for, ATAA; noting, inter alia, that ATAA wage subsidy “is clearly designed to encourage
older workers who might have difficulty finding reemployment that utilizes their existing skill-sets
to quickly reenter the labor market by accepting lesser-paying jobs”).
14
BMC I quoted a Wall Street Journal article which emphasized the importance of
conscientious implementation of the TAA program:

Calling attention to workers hurt by trade is uncomfortable for free traders. They
prefer to focus on benefits of low-cost imports and high-paying export jobs. But the
only way to persuade the public and politicians not to erect barriers to globalization
and trade is to equip young workers to compete and protect older workers who are
harmed. Creating programs with a few votes in Congress, and then botching the
execution, doesn’t help.

David Wessel, “Aid to Workers Hurt by Trade Comes in Trickle,” Wall Street Journal, Aug. 11,
2005, at A2 (emphasis added) (quoted in BMC I, 30 CIT at 1370 n.84, 454 F. Supp. 2d at 1355
Court No. 07-00160 Page 19

costs of a federal policy [of free trade] that confer[s] benefits on the nation as a whole would be

imposed on a minority of American workers” who lose their jobs due to increased imports and shifts

of production abroad. Id.15

The TAA laws also have been compared to veterans’ benefits statutes:

The purpose of the [TAA statute] is to distribute benefits to American workers whose
jobs have been shipped overseas, while the purpose of the [veterans’ benefits laws]
. . . is to distribute benefits to veterans who have been injured during service. Both
are remedial acts designed to provide much needed aid.

Former Employees of Sonoco Prods. Co. v. Chao, 372 F.3d 1291, 1301 (Fed. Cir. 2004) (Mayer,

C.J., dissenting).

The analogy is an apt one. “[M]uch as Congress has charged the U.S. Department of

Veterans Affairs . . . (‘VA’) with caring for those who have risked life and limb for our freedom, so

too Congress has entrusted to the Labor Department the responsibility for providing training and

other re-employment assistance to those who have paid for our place in the global economy with

their jobs.” BMC I, 30 CIT at 1370, 454 F. Supp. 2d at 1355 (footnote omitted); compare, e.g., 38

U.S.C. § 5103A (captioned “Duty to assist claimants,” obligating VA to “make reasonable efforts

to assist a claimant in obtaining evidence necessary to substantiate the claimant’s claim” for

n.84).
15
Indeed, in introducing TAA in 1962, President Kennedy justified the program in moral
terms:
Those injured by [trade] competition should not be required to bear the full brunt of
the impact. Rather, the burden of economic adjustment should be borne in part by
the federal government . . . [T]here is an obligation to render assistance to those who
suffer as a result of national trade policy.

BMC I, 30 CIT at 1318, 454 F. Supp. 2d at 1309 (citation omitted).
Court No. 07-00160 Page 20

veterans’ benefits)16 with 29 C.F.R. § 90.12 (Labor Department is obligated to “marshal all relevant

facts” in making its TAA determinations).17

16
See generally Karnas v. Derwinski, 1 Vet. App. 308, 313 (1991) (“duty-to-assist” and
“benefit-of-the-doubt” doctrines embodied in VA law “spring from a general desire to protect and
do justice to the veteran who has, often at great personal cost, served our country”), overruled on
other grounds, Kuzma v. Principi, 341 F.3d 1327, 1328-29 (Fed. Cir. 2003).

See also Littke v. Derwinski, 1 Vet. App. 90, 91-92 (1991) (characterizing “VA’s duty to
assist the veteran in developing the facts pertinent to his or her claim” as the “cornerstone of the
veterans’ claims process,” and emphasizing that “[t]he ‘duty to assist’ is neither optional nor
discretionary”); Godwin v. Derwinski, 1 Vet. App. 419, 425 (1991) (once veteran presents plausible
claim, burden shifts to VA to assist veteran in developing “all relevant facts, not just those for or
against the claim”); Murincsak v. Derwinski, 2 Vet. App. 363, 370 (1992) (same); 38 C.F.R. §
3.103(a) (VA Statement of Policy, which acknowledges: “Proceedings before VA are ex parte in
nature, and it is the obligation of VA to assist a claimant in developing the facts pertinent to the
claim and to render a decision which grants every benefit that can be supported in law while
protecting the interests of the Government.”).

As Littke correctly observes:

By assisting the claimant in developing pertinent facts, from whatever source, . . . the
VA will more adequately fulfill its statutory and regulatory duty to assist the veteran.
A well developed record will ensure that a fair, equitable and procedurally correct
decision on the veteran’s claim for benefits can be made.

Littke, 1 Vet. App. at 92. The same can be said of the Labor Department in TAA cases.
17
See also, e.g., Woodrum v. Donovan, 4 CIT 46, 55, 544 F. Supp. 202, 208-09 (1982) (“the
[TAA statute] requires the Secretary of Labor to conduct an investigation of each properly filed
petition”); Former Employees of IBM Corp., Global Services Division v. U.S. Sec’y of Labor, 29
CIT 951, 955, 387 F. Supp. 2d 1346, 1351 (2005) (rejecting Labor Department’s argument that
because the workers did not allege certain facts, agency was not obligated to make further inquiry,
and holding that – to the contrary – “it is incumbent upon Labor to take the lead in pursuing the
relevant facts”) (emphasis added); Former Employees of Hawkins Oil & Gas, Inc. v. U.S. Sec’y of
Labor, 17 CIT 126, 129, 814 F. Supp. 1111, 1114 (1993) (Labor Department “has an affirmative
duty to investigate” whether petitioning workers are eligible for TAA benefits) (citations omitted)
(emphasis added); Former Employees of Sun Apparel of Texas v. U.S. Sec’y of Labor, 28 CIT 1389,
1399 (2004) (“Labor is under a mandatory duty to ‘conduct an investigation into each properly filed
petition’”) (citation omitted) (emphasis added); Former Employees of Ameriphone, Inc. v. United
States, 27 CIT 1161, 1167, 288 F. Supp. 2d 1353, 1359 (2003) (Labor Department “has an
Court No. 07-00160 Page 21

And just as veterans’ benefits programs are designed to be extraordinarily “veteran-friendly”

and “pro-claimant,”18 so too Congress designed TAA as a remedial program, recognizing that

petitioning workers would be (by definition) traumatized by the loss of their livelihood; that some

might not be highly-educated; that virtually all would be pro se; that none would have any mastery

of the complex statutory and regulatory scheme; and that the agency’s process would be largely ex

parte. Congress certainly did not intend the TAA petition process to be adversarial. Nor did

Congress intend to cast the Labor Department as a “defender of the fund,”19 sitting passively in

judgment, ruling “thumbs up” or “thumbs down” on whatever evidence the pro se petitioning

workers might manage to present. Cf. Former Employees of IBM Corp., Global Services Division

v. U.S. Sec’y of Labor, 29 CIT 951, 956, 387 F. Supp. 2d 1346, 1351 (2005) (emphasizing that

petitioning workers cannot reasonably be expected to have knowledge of the “sometimes esoteric

affirmative obligation to conduct its own independent ‘factual inquiry into the nature of the work
performed by the petitioners’”); Chevron, 26 CIT at 1284-85, 245 F. Supp. 2d at 1327-28 (same).
18
See Hodge v. West, 155 F.3d 1356, 1362-63 (Fed. Cir. 1998) (emphasizing that the courts
“have long recognized that the character of the veterans’ benefit statutes is strongly and uniquely
pro-claimant”; noting that “Congress itself has recognized and preserved the unique character and
structure of the veterans’ benefits system,” and highlighting legislative history reflecting
Congressional intent to maintain “historically non-adversarial system of awarding benefits to
veterans”); Kelly v. Nicholson, 463 F.3d at 1353 (referring to veterans’ benefits system as “uniquely
pro-claimant”).
19
Compare 38 C.F.R. § 3.103(a) (“it is the obligation of VA . . . to render a decision which
grants every benefit that can be supported in law while protecting the interests of the Government”)
(emphasis added); Barrett v. Nicholson, 466 F.3d 1038, 1044 (Fed. Cir. 2006) (emphasizing that
“[t]he government’s interest in veterans cases is not that it shall win, but rather that justice shall be
done, that all veterans so entitled receive the benefits due to them”) (citation omitted).
Court No. 07-00160 Page 22

criteria” for TAA certification).20

Quite to the contrary, the Labor Department is charged with an affirmative obligation to

proactively and thoroughly investigate all TAA claims filed with the agency – and, in the words of

the agency’s own regulations, to “marshal all relevant facts” before making its determinations. See

29 C.F.R. § 90.12.21 Moreover, both “[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]

20
See also Lady Kelly, Inc. v. U.S. Sec’y of Agriculture, 30 CIT 186, 190, 427 F. Supp. 2d
1171, 1175 (2006) (noting that, in authorizing TAA programs, “Congress has erected an
administrative regime to disburse benefits to a class of sympathetic plaintiffs with relatively little
sophistication in matters of federal litigation”); Lady Kelly, Inc. v. U.S. Sec’y of Agriculture, 30 CIT
82, 84, 414 F. Supp. 2d 1298, 1300 (2006) (observing “the lack of legal sophistication of many TAA
plaintiffs”).

Compare Akles v. Derwinski, 1 Vet. App. 118, 121 (1991) (rejecting as absurd and
inconsistent with agency’s “duty to assist” the VA’s argument that a claimant should be obligated
to “specify with precision the statutory provisions or the corresponding regulations under which he
is seeking benefits”; contrary to agency’s contention, claimants should not be required “to develop
expertise in laws and regulations on veterans benefits before receiving any compensation”)
(emphasis added).
21
Indeed, 29 C.F.R. § 90.12 is captioned “Investigation.” See also 19 U.S.C. § 2271(a)
(requiring Labor Department to give notice of initiation of agency “investigation”); Woodrum v.
Donovan, 4 CIT at 55, 544 F. Supp. at 208-09 (noting that “the [TAA statute] requires the Secretary
of Labor to conduct an investigation of each properly filed petition”). The definition of
“investigation” – a “detailed examination” or “a searching inquiry,” “an official probe” – further
underscores the nature of the research and analysis which the Labor Department is required to
undertake. See, e.g., BMC I, 30 CIT at 1334-35 n.29, 454 F. Supp. 2d at 1324 n.29 (quoting
Webster’s Third New International Dictionary (Unabridged) 1189 (2002)); accord, Welex, 32 CIT
at ____ & n.15, 2008 WL 7020688 at * 9 & n.15 (same). As BMC I pointed out:

The bottom line . . . is that Congress has mandated that the Labor Department
“investigate” workers’ TAA claims – not that those claims be, for example, merely
“considered,” or “evaluated,” or “reviewed.”

BMC I, 30 CIT at 1334-35 n.29, 454 F. Supp. 2d at 1324 n.29.
Court No. 07-00160 Page 23

investigation with the utmost regard for the interest of the petitioning workers.” Local 167, Int’l

Molders and Allied Workers’ Union, AFL-CIO v. Marshall, 643 F.2d at 31 (emphasis added); see

also Stidham v. U.S. Dep’t of Labor, 11 CIT 548, 551, 669 F. Supp. 432, 435 (1987) (citing Abbott

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

Employees of Int’l Business Machines Corp. v. U.S. Sec’y of Labor, 29 CIT 1360, 1362, 403 F.

Supp. 2d 1311, 1314 (2005) (“IBM I”) (quoting Stidham); Former Employees of Computer Sciences

Corp. v. U.S. Sec’y of Labor, 29 CIT 426, 433, 366 F. Supp. 2d 1365, 1371 (2005).

Thus, while the Labor Department is vested with considerable discretion in the conduct of

its investigation of trade adjustment assistance claims, that discretion is by no means without

bounds. Instead, “there exists a threshold requirement of reasonable inquiry.” Former Employees

of Hawkins Oil & Gas, Inc. v. U.S. Sec’y of Labor, 17 CIT 126, 130, 814 F. Supp. 1111, 1115

(1993); see also, e.g., Former Employees of Electronic Data Sys. Corp. v. U.S. Sec’y of Labor, 29

CIT 1334, 1339, 408 F. Supp. 2d 1338, 1342-43 (2005); Former Employees of Merrill Corp. v.

United States, 31 CIT 415, 423, 483 F. Supp. 2d 1256, 1264 (2007); Former Employees of Joy

Techs., Inc. v. U.S. Sec’y of Labor, 31 CIT 1835, 1841, 523 F. Supp. 2d 1369, 1376 (2007); Former

Employees of Welex, Inc. v. U.S. Sec’y of Labor, 32 CIT ____, ____, 2008 WL 7020688 at * 2

(2008); Former Employees of Fairchild Semi-Conductor Corp. v. U.S. Sec’y of Labor, 32 CIT ____,

____, ____, 2008 WL 1765519 at * 3, 5 (2008).

Of course, the statute does not entitle every petitioning worker to be certified as eligible to

apply for TAA/ATAA benefits.22 However, every worker is entitled to a thorough agency

22
See generally United Glass & Ceramic Workers v. Marshall, 584 F.2d 398, 400 (D.C. Cir.
1978) (quoting legislative history explaining that job losses are not covered by TAA if they “would
Court No. 07-00160 Page 24

investigation of his or her claim – an investigation in which the Labor Department “marshal[s] all

relevant facts,” and an investigation which the agency conducts with “the utmost regard” for the

petitioning workers’ interests. See, e.g., Former Employees of Ameriphone, Inc. v. United States,

27 CIT 1611, 1618, 288 F. Supp. 2d 1353, 1359-60 (2003); 29 C.F.R. § 90.12.23 The courts

therefore have not hesitated to set aside agency determinations that were the product of perfunctory

investigations. See generally BMC I, 30 CIT at 1321-22 & n.10, 454 F. Supp. 2d at 1312-13 & n.10

(cataloguing sampling of opinions criticizing Labor Department’s handling of TAA cases); see also

Welex, 32 CIT at ____, 2008 WL 7020688 at * 2; Joy Techs., 31 CIT at 1842, 523 F. Supp. 2d at

1376.

2. The Government’s Position at the Administrative Level

The Government maintains that the Labor Department’s position at the administrative level

was substantially justified because it “was reasonably based upon evidence in the administrative

record as it existed at the time, as well as controlling precedent” from the Court of Appeals. Def.’s

Response at 6-7. According to the Government, an award of fees and expenses is not warranted

because – the Government asserts – the Labor Department “examined the evidence before it,

applied what it considered to be the appropriate legal standard, and provided an analysis based upon

have occurred regardless of the level of imports, e.g., those resulting from domestic competition,
seasonal, cyclical, or technological factors”).
23
Cf. UAW v. Marshall, 584 F.2d at 397-98 (remanding case to Labor Department,
emphasizing that “[e]ven if a more detailed inquiry does not change the result in this case, the class
of those seeking or considering adjustment assistance will be afforded (1) a description of the
circumstances that the [agency] believes mandate the choice of the plant as the appropriate
subdivision and (2) an explanation why [the agency] holds that opinion.”).
Court No. 07-00160 Page 25

the facts and law as it understood them.” See Def.’s Response at 7. However, the Government fails

to address a number of salient points.

a. The Agency’s Failure to Consider Amending the 2004 TAA/ATAA Certification

As a threshold matter, the Labor Department repeatedly failed even to consider – much less

investigate – the theory under which the Workers here were ultimately certified. In other words,

although Invista’s Plant Manager and the Workers themselves emphasized from the outset that the

terminations at issue were attributable to the 2004 shift of production to Mexico, and although the

agency had a practice of amending TAA/ATAA certifications in circumstances comparable to the

situation here, the Labor Department nevertheless repeatedly failed to consider the possibility of

amending the 2004 TAA/ATAA certification to extend coverage to the Workers in this case – first

in the agency’s initial investigation, then again in the agency’s consideration of the Workers’

Request for Reconsideration, and once more in the course of the first remand (i.e., the voluntary

remand). See, e.g., A.R. 2 (Plant Manager’s sworn statement attesting that the Workers’

terminations were “a continuation of the [2004] shift in production to Mexico”); Invista I, 33 CIT

at ____ & n.5, 626 F. Supp. 2d at 1309 & n.5 (citing sampling of cases where TAA/ATAA

certifications were amended in comparable situations).24

24
See also Steelworkers II, 33 CIT at ____, 2009 WL 1175654 at * 4-8 (discussing agency’s
history and practice of, and criteria for, amending TAA/ATAA certifications); 29 C.F.R. § 90.17(f)
(stating that, “[u]pon reaching a determination that the certification of eligibility should be
continued, the certifying officer shall promptly publish in the Federal Register a summary of the
determination with the reasons therefor”); United Steel, Paper and Forestry, Rubber, Mfg., Energy,
Allied Indus. and Service Workers v. U.S. Sec’y of Labor, 32 CIT ____, ____, 2008 WL 1899990
at * 8 (2008) (“Steelworkers I”) (noting filing of list of “eleven cases in which Labor [had] amended
the expiration date of worker certifications,” and surveying range of facts in those cases).
Court No. 07-00160 Page 26

Only after the agency was specifically instructed to do so did the Labor Department finally

consider amending the prior TAA/ATAA certification – and it was on that basis that the agency

ultimately certified the Workers. See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311 (remanding

matter to agency with instructions to, inter alia, “consider all legal theories under which the

petitioning Workers might be eligible for certification, including the possible amendment of the

2004 TAA/ATAA certification”); 74 Fed. Reg. 51,195 (Second Remand Determination, certifying

Workers for TAA/ATAA). Nowhere has either the Labor Department or the Government sought

to explain why the agency failed for so long to consider amending the 2004 TAA/ATAA

certification until expressly ordered to do so by the court.

b. The Agency’s Reliance on the One-Year Limitation in 29 C.F.R. § 90.2

The Labor Department and the Government are similarly silent on the Labor Department’s

repeated invocation of the one-year limitation in 29 C.F.R. § 90.2, the regulation on which the

agency relied in denying the Workers’ TAA/ATAA Petition, as well as their subsequent Request

for Reconsideration. See 72 Fed. Reg. 7907, 7909 (Feb. 21, 2007) (notice of denial of petition); 72

Fed. Reg. 15,169 (March 30, 2007) (notice of denial of request for reconsideration); 29 C.F.R. §

90.2 (specifying one-year limitation applicable in TAA/ATAA cases involving allegations of

“increased imports”). However, the pertinent provision of that regulation is expressly and

In Steelworkers II, the Labor Department stated that it “has and continues to amend the
expiration date of certifications when the facts of the case show that the later worker separations
[i.e., the terminations occurring after the expiration of the original certification] are attributable to
the basis for [the original] certification (the increased imports or shift of production to a foreign
country).” Steelworkers II, 33 CIT at ____, 2009 WL 1175654 at * 4 (emphasis added). The agency
elaborated: “[I]f the [original] certification was based on a shift of production, the petitioning worker
group must show that the same shift of production (same article, same country, etc.) was the basis
for their separations.” Id., 33 CIT at ____ n.4, 2009 WL 1175654 at * 4 n.4.
Court No. 07-00160 Page 27

unequivocally limited – on its face – to cases where layoffs result from “increased imports.” See

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1307 (summarizing history of case, including

Government’s request for voluntary remand); 29 C.F.R. § 90.2 (specifying one-year limitation

applicable in TAA/ATAA cases involving allegations of “increased imports”). Neither the Labor

Department nor the Government has ever sought to argue that the agency was somehow justified in

relying on that provision of the regulation in “shift of production” cases such as this. Nor could they

credibly do so.25

In its response to the Workers’ EAJA Application, the Government takes the position that

such an award is not appropriate if the agency’s “position at the administrative level[] had a

reasonable basis in both law and fact.” See Def.’s Response at 9-10 (emphases added). Assuming

that is in fact a fair statement of the applicable standard, the Government has not made – and cannot

make – the requisite showing. As outlined above, there is no dispute that the Labor Department

twice rejected the Workers’ claims based on an agency regulation which was, on its face, patently

inapplicable to the facts of this case, while, at the same time, the agency failed over and over again

to even consider (much less investigate) the possibility of amending the prior TAA/ATAA

certification to extend coverage to the Workers here – the legal theory under which the Workers

were ultimately certified. Given these two flagrant legal errors, there simply can be no claim that

there was “a reasonable basis in . . . [the] law” for the Labor Department’s position at the

administrative level in this case. These grounds alone would warrant a determination that the United

States’ position was not substantially justified.

25
As section I above explains, the Labor Department and the Government abandoned
reliance on the one year limitation in 29 C.F.R. § 90.2 after this action was filed.
Court No. 07-00160 Page 28

c. The Record Basis for the Agency’s Determinations

Other aspects of the Government’s position are similarly lacking in merit. For example, the

Government’s constant refrain is that the Labor Department’s three negative determinations in this

matter – i.e., the agency’s initial denial of the Workers’ TAA/ATAA Petition, its denial of the

Workers’ Request for Reconsideration, and its denial following the first (voluntary) remand – were

each “reasonably based upon evidence in the administrative record as it existed at the time,” and that

the agency simply “examined the evidence before it” in reaching each of its determinations. See

Def.’s Response at 6-7 (emphasis added).26 As discussed above, however, the Labor Department’s

first two determinations were wrong as a matter of law, because they were predicated on a

regulatory provision applicable only in cases involving “increased imports.” See A.R. 31 (denying

TAA/ATAA Petition because Workers “were not in support of domestic production” of apparel fiber

26
See also, e.g., Def.’s Response at 10 (arguing that “Labor examined the evidence before
it”); id. at 11 (arguing that “Labor relied upon record evidence” to determine that Workers’
terminations were not related to 2004 shift of production to Mexico); id. at 11 n.2 (arguing that
“substantial evidence in the administrative record demonstrated that the shift of production to a
foreign country was not a cause of the workers’ separation”); id. at 12 (arguing that agency’s denial
of certification was substantially justified “based upon the record before Labor at the time”)
(emphasis in original); id. at 13 (arguing that “Labor was . . . substantially justified in relying only
upon the existing evidence in the record to make its determination”); id. at 14 (arguing that “Labor
is bound to make its decisions based upon the record before it,” and that “Labor was reasonable in
relying only upon the record evidence in making its determination”); id. at 15 (arguing that
“substantial evidence supported each of Labor’s determinations in this case,” and that agency’s
determination was reasonable based “[o]n the record before Labor at the time it made its
determination”) (emphasis in original).

The Government similarly asserts that its litigation position was substantially justified,
because it “relied upon the evidence in the administrative record in defending Labor’s
determination.” Def.’s Response at 15; see also id. at 16 (arguing that Government “contended that
Labor’s determination, based upon the record at the time, was supported by substantial evidence,”
and that Government’s contentions “constituted a reasonable litigation position, given the existing
record”).
Court No. 07-00160 Page 29

“within the requisite one year period”); A.R. 45-46 (denying Request for Reconsideration, and

affirming basis for original denial); 29 C.F.R. § 90.2. Accordingly, at least with respect to the first

two of the Labor Department’s four investigations, it is of no moment whether or not the agency’s

determinations were, as the Government claims, “based upon [the] evidence in the administrative

record as it existed at the time.” See Def.’s Response at 6-7. As a practical matter, the Labor

Department’s legal error in erroneously relying on 29 C.F.R. § 90.2 rendered any facts – i.e., the

record evidence – immaterial.27

Even more fundamentally, the Government’s assertion that the Labor Department’s

determinations were “reasonably based upon evidence in the administrative record as it existed at

the time” (see Def.’s Response at 6-7 (emphasis added)) fails to take into account the Labor

Department’s basic, affirmative obligation to investigate TAA and ATAA claims. Nowhere does

the Government recognize and address the Labor Department’s bedrock obligation in TAA/ATAA

cases to affirmatively develop the administrative record – by “marshal[ing] all relevant facts” and

“conduct[ing] [its] investigation with the utmost regard for the interest of the petitioning workers.”

See generally section II.A.1, supra (summarizing, inter alia, agency’s affirmative obligation to

proactively investigate TAA/ATAA claims); 29 C.F.R. § 90.12 (requiring agency to “marshal all

relevant facts” before making determinations in TAA/ATAA cases); Local 167, Int’l Molders and

27
Although the Government asserts broadly that “Labor’s position at the administrative level
. . . [was] reasonable at each step,” and that “the agency’s position at the administrative level . . .
[was] substantially justified” (see Def.’s Response at 8, 10), the Government actually does not
specifically defend either the Labor Department’s initial determination denying the Workers’
TAA/ATAA Petition or the agency’s denial of the Workers’ Request for Reconsideration. A review
of the substance of the Government’s argument reveals that its defense of the Labor Department
goes solely to the agency’s initial Remand Determination. See generally Def.’s Response at 10-15.
Court No. 07-00160 Page 30

Allied Workers’ Union, AFL-CIO v. Marshall, 643 F.2d at 31 (emphasis added) (recognizing

agency’s obligation to conduct TAA investigations “with the utmost regard for the interest of the

petitioning workers”).

“While ‘[t]he EAJA does not tell an agency how to handle a case,’ the agency ‘cannot

decline to conduct further inquiry and then plead [its] own failure to investigate as reason to

conclude that [its] position was substantially justified.’” Former Employees of BMC Software, Inc.

v. U.S. Sec’y of Labor, 31 CIT 1600, 1625, 519 F. Supp. 2d 1306, 1312 (2007) (“BMC II”) (quoting

Hess Mech. Corp. v. NLRB, 112 F.3d 146, 150 (4th Cir. 1997)). That is, in essence, what the

Government and the Labor Department have sought to do here, by attempting to justify the agency’s

determinations by relying on the administrative record “as it existed at the time,” without

acknowledging that the agency had an affirmative legal obligation to proactively develop that

record. The plaintiff workers in another TAA case cogently underscored this point:

[I]t is precisely Labor’s failure to investigate and form a sufficient record that is
without substantial justification. . . .

. . . If Labor could argue that its legal positions were substantially justified whenever
it evaluates what is in the record, no matter how limited or inadequate that record,
it would create a dangerous incentive for administrative agencies to engage in even
more perfunctory investigations than is already the case. . . .

This absurd result is no straw man. [The Government’s] Response admits that Labor
essentially chose to stay ignorant of facts that were clearly discoverable through a
modicum of investigation. . . .

In essence, [the Government] suggests that Labor’s legal positions were substantially
justified even though they relied on an administrative record that lacked essential,
readily-available information, because the jobless TAA petitioners were responsible
for spoon-feeding Labor . . . all relevant information.

BMC II, 31 CIT at 1625 n.27, 519 F. Supp. 2d at 1312 n.27 (emphasis and alterations in the
Court No. 07-00160 Page 31

original).

In the case at bar, the Labor Department plainly failed to properly develop the administrative

record as to the relationship between the Workers’ terminations and the 2004 shift of production to

Mexico. The Labor Department based its first two determinations on 29 C.F.R. § 90.2 and the

agency’s finding that apparel fiber had not been produced at Invista’s Chattanooga plant since

August 2004. As discussed above, the Labor Department’s erroneous application of a “one-year

rule” to these facts resulted in the wrongful denial of both the Workers’ TAA/ATAA Petition and

their Request for Reconsideration. See A.R. 31; A.R. 45-46; 29 C.F.R. § 90.2. Relying on the “one-

year rule,” the Labor Department therefore paid no heed to the existing record evidence that the

Workers’ separations were the direct result of the 2004 shift of production to Mexico (which, in turn,

had led to the 2004 TAA/ATAA certification). That evidence was not controverted. See, e.g., A.R.

2 (stating that the Workers’ separations were “a continuation of the shift in production to Mexico”

which was the subject of the 2004 certification).28 Similarly uncontroverted was record evidence

28
See also, e.g., A.R. 9 (indicating that the “workers are SI [shift-impacted]” and that “[t]he
shift impacted the workers”); A.R. 25 (stating that “[t]he shift in production to Mexico did broadly
affect workers at the Chattanooga site”); A.R. 26 (indicating that petitioning workers “were part of
the [Apparel Fibers Group] and handled sales and marketing of nylon apparel filament (a product
that has not been made at the Chattanooga site since August 2004 and is made at the company’s
facility in Mexico),” and explaining that the petitioning workers “did not perform sales or marketing
functions for the [Performance Fibers Group]”); A.R. 27 (stating that petitioning workers
“performed sales and marketing for the [Apparel Fibers Group]” and had supported the workers who
were covered by the 2004 TAA/ATAA certification); A.R. 35 (disputing Labor Department’s
determination that Workers “cannot be considered import impacted”; stating that Workers were
“kept on to work while the plant was in transition,” till shift of production to Mexico was complete);
A.R. 36 (stating that the Workers’ terminations are “a continuation of the original issue” – i.e., the
shift of production to Mexico; emphasizing that “[a]ll the apparel people were let go. This is a direct
result of the Type 95 apparel machines going to Mexico, the loss of textile manufacturing in the U.S.
the bigger picture”); A.R. 37-38 (stating that Workers’ terminations are “a continuation of the
original issue,” i.e., “the apparel machines going down to Mexico”).
Court No. 07-00160 Page 32

establishing that the Workers were being replaced by personnel in South America. See, e.g., A.R.

2 (stating that “[t]he Customer Service Representatives (CSR’s) losing their job[s] are being

replaced by CSR’s located in South America”).29

When the Labor Department’s request for a voluntary remand was granted (and the agency

abandoned its reliance on 29 C.F.R. § 90.2 and the fact that production of apparel fibers had ceased

at the Chattanooga facility more than one year before the Workers’ terminations), the Labor

Department assertedly sought to focus for the first time on the relationship between the Workers’

termination and the 2004 shift of production to Mexico. However, rather than analyzing and further

developing the existing ample and uncontroverted record evidence on that point (summarized

above), the Labor Department instead opted to premise its remand determination largely on the

negative response of an Invista lawyer30 to a single question which was framed in terms of the

“ultimate fact” to be determined by the agency: “Was the business decision to reorganize the

Customer Service Organization [which led to the separation of the Workers here] the result of the

29
See also A.R. 3 (explaining that Workers “are being replaced by Customer Service
Representatives who are located in South America”); A.R. 21 (stating that “all of the Apparel
Customer Service Representatives jobs are going away”); A.R. 29 (noting that Invista official stated
that the Workers’ positions “were outsourced to Brazil”); A.R. 36 (explaining that, although
signatory Worker “was downsized, . . . there were people hired in Brazil to do [her] work”); A.R.
37 (stating that Worker was informed that her job “was being split up; part of it going to Brazil”);
A.R. 38 (indicating that, although signatory Worker “was downsized, . . . there were people hired
in Brazil to do [the] jobs” that she and her co-Workers had previously done).
30
The Government refers broadly to this source as “management at Invista,” although her title
is “Senior Counsel, Labor and Employment.” Compare Def.’s Response at 11, and S.A.R. 6.
Neither the Labor Department nor the Government offers any explanation as to why the agency did
not accord “management” weight to the statement of the Chattanooga Plant Manager, who – unlike
the senior staff attorney here – was clearly part of the ranks of Invista “management,” and who
attested under oath that the Workers’ termination was “a continuation of the [2004] shift in
production to Mexico.” See A.R. 2.
Court No. 07-00160 Page 33

shift of production [to Mexico] two years earlier?” See S.A.R. 17-18; 73 Fed. Reg. at 32,739-40.31

In short, notwithstanding its obligations to conduct its investigation with “the utmost regard”

for the interests of the Workers and to “marshal all relevant facts” in reaching its determination on

the Workers’ TAA/ATAA Petition, the Labor Department ignored all other (previously

uncontroverted) evidence of the causal relationship between the Workers’ termination and the 2004

shift of production to Mexico, and instead chose to rely on the Invista lawyer’s conclusory response

to a single question as a basis for denying the Workers’ claims yet again. See 73 Fed. Reg. at

32,739-40 (concluding that Invista’s “shift of nylon apparel filament production to Mexico was not

31
In contrast to the information provided by others (summarized in the text and in notes 28
and 29 above), which indicated that the Workers’ terminations indeed were attributable to the 2004
shift of production to Mexico (and, further, that employees in Brazil and elsewhere had taken over
the Workers’ jobs), the Invista lawyer stated:

The decision to reorganize the customer service organization was not connected to
the decision made in 2004 to stop production of Nylon Apparel at the Chattanooga
Site. It was a business decision to improve the efficiency of the customer service
organization. The Apparel Nylon customer service work was being performed at
four locations, Canada, South America, Wilmington, and Chattanooga. The
customer service work was consolidated to two (2) locations; Wilmington, Delaware,
and at the Apparel Nylon Site in Paulinia, Brazil.

S.A.R. 18.

The Government insists that “Labor’s reliance upon these facts [as set forth by Invista’s
lawyer] was reasonable, and based upon the record before Labor at the time, Labor’s determination
that plaintiffs were ineligible for TAA was substantially justified.” See Def.’s Response at 11-12
(emphasis in the original). By its use of emphasis in the quoted sentence, the Government implicitly
acknowledges that the Labor Department later reversed its position, and determined that the
Workers’ terminations were in fact attributable to the 2004 shift of production to Mexico. However,
the Government fails to acknowledge that there was ample evidence on point which was already on
the record at the time that Invista’s lawyer gave her conflicting statement. And certainly the
Government cites no authority which would suggest that the Labor Department was free to simply
turn a blind eye to that earlier, contrary evidence.
Court No. 07-00160 Page 34

a factor in the subject workers’ separations”).

Incredibly, even now, the Government maintains that there was “no record evidence, at the

time, to contradict [the] statement [of the Invista lawyer].” See Def.’s Response at 13; see also id.

at 12 (asserting that, at the time that the Invista lawyer made her statement, “it was not contradicted

by any other evidence”). As discussed at some length herein, the statement of the Invista lawyer was

squarely contradicted by much of the other record evidence on point – including, in particular, the

sworn statement of Invista’s Chattanooga Plant Manager. See A.R. 2. If – as the Government says

– “Labor found no record evidence, at the time, to contradict [the] statement [of the Invista lawyer]”

(see Def.’s Response at 13), then the agency simply was not looking. Cf. Joy Techs., 31 CIT at

1839-41, 1843, 1846, 523 F. Supp. 2d at 1375-76, 1378, 1379-80 (criticizing agency for failing to

recognize as “record evidence” statements submitted by petitioning workers addressing, inter alia,

facts surrounding shift of production to Mexico).32

32
It is frankly difficult to know what to make of the Government’s outlandish assertion that,
at the time that the Invista lawyer made her statement, “it was not contradicted by any other
evidence.” See Def.’s Response at 12. The Government fails even to acknowledge, much less seek
to explain, the patent conflict between the statement of the Invista lawyer and the statement of
Invista’s Chattanooga Plant Manager. Compare S.A.R. 18 (statement of Invista lawyer that
Workers’ terminations were “not connected to the decision made in 2004 to stop production of
Nylon Apparel at the Chattanooga Site,” but were instead the result of “a business decision to
improve the efficiency of the customer service organization”) and A.R. 2 (sworn statement of
Invista’s Chattanooga Plant Manager that Workers’ terminations were “a continuation of the [2004]
shift in production to Mexico”).

It is also worth noting that the administrative record indicates that the Labor Department
never sought to contact Invista’s Chattanooga Plant Manager to follow up on his statement, made
under oath, that the Workers’ terminations were “a continuation of the [2004] shift in production to
Mexico.” A.R. 2. The Invista Plant Manager’s statement was unambiguous and unequivocal; and,
as discussed elsewhere herein, it was corroborated by other statements of the Workers and other
Invista representatives. If the Labor Department did not understand the gist of those statements, the
agency was duty-bound to inquire further. Petitioning workers in TAA/ATAA cases have no
Court No. 07-00160 Page 35

In any event, the Labor Department made no attempt to confront the Invista lawyer with the

ample record evidence tying the Workers’ terminations to the 2004 shift of production to Mexico.

The Invista lawyer thus had no opportunity to refine or clarify her statement to the agency; and the

Labor Department had no basis for reconciling her statement with the numerous earlier statements

to the contrary. Similarly, the Labor Department made no effort to use the statement of the Invista

lawyer to confront those who had earlier given the agency statements linking the Workers’

separations to the 2004 shift of production. Those individuals therefore had no opportunity to refine

or clarify their statements, and the Labor Department had no basis for reconciling their statements

with the conflicting statement given by the Invista lawyer. See generally Invista I, 33 CIT at ____

n.6, 626 F. Supp. 2d at 1310 n.6 (criticizing agency for failure to “confront sources with conflicting

information provided by others,” thereby “depriving [the sources] of the opportunity to clarify

discrepancies, and diminishing the usefulness of the information elicited by the agency”).33

In short, not only did the Labor Department fail to state on the record any rationale for

privileging the single, conclusory statement made by the Invista lawyer over the numerous

obligation to “spoon feed” the Labor Department and serve up evidence “on a silver platter.” See,
e.g., Former Employees of IBM Corp., Global Services Division v. U.S. Sec’y of Labor, 29 CIT at
956, 387 F. Supp. 2d at 1351 (rejecting Labor Department’s argument that, because petitioning
workers did not allege certain facts, agency was not obligated to make further inquiry; holding that,
to the contrary, because petitioning workers cannot reasonably be expected to have knowledge of
the “sometimes esoteric criteria” for TAA certification, “it is incumbent upon Labor to take the lead
in pursuing the relevant facts”); BMC II, 31 CIT at 1625 n.27, 519 F. Supp. 2d at 1312-13 n.27
(rejecting notion that “jobless TAA petitioners were responsible for spoon-feeding Labor”) (internal
quotation marks and citation omitted).
33
See also, e.g., Welex, 32 CIT at ____, 2008 WL 7020688 at * 9 (criticizing agency for
failure to confront sources with contrary information, depriving sources of opportunity to clarify
inconsistencies and discrepancies in record); Elec. Mobility Corp., 32 CIT at ____, 2008 WL
7020689 at * 5 (same).
Court No. 07-00160 Page 36

statements to the contrary given by other individuals, but – in fact – the administrative record is

devoid of anything on which the agency could have based such a statement of rationale. In

TAA/ATAA investigations, the Labor Department is obligated to develop a proper record by

seeking to reconcile conflicting evidence on key points before the agency reaches a determination

on petitioning workers’ claims. See Welex, 32 CIT at ____, 2008 WL 7020688 at * 9-11 (faulting

agency for its failure to identify and resolve discrepancies and inconsistencies in record evidence);

Former Employees of Elec. Mobility Corp. v. U.S. Sec’y of Labor, 32 CIT ____, ____, 2008 WL

7020689 at * 4-6 (2008) (same); BMC I, 30 CIT at 1335-39, 454 F. Supp. 2d at 1324-28 (same).34

Further, contrary to the Government’s implication, no agency is free to pick and choose, willy-nilly,

the evidence on which it will rely to reach a key determination without offering at least some

explanation of the basis for its decision to credit certain information over other conflicting evidence

in the administrative record. See generally Invista I, 33 CIT at ____ n.6, 626 F. Supp. 2d at 1310

n.6 (criticizing “the agency’s failure to explain why it credited some sources of information and

rejected other information”); Former Employees of Int’l Business Machines Corp. v. U.S. Sec’y of

Labor, 31 CIT 463, 508-10, 483 F. Supp. 2d 1284, 1324-26 (2007) (“IBM II”) (emphasizing that,

in reaching TAA/ATAA determination, “substantial evidence” standard requires agency to take into

34
See also, e.g., Former Employees of Tyco Electronics v. U.S. Dep’t of Labor, 27 CIT 685,
694, 264 F. Supp. 2d 1322, 1330 (2003) (indicating that agency should take steps to “resolve any
inconsistencies” between information provided by petitioning workers and that provided by
employer); Former Employees of Tyco Electronics v. U.S. Dep’t of Labor, 28 CIT 1571, 1576,
1584, 1588-89, 350 F. Supp. 2d 1075, 1081, 1087, 1091 (2004) (awarding attorneys’ fees and
expenses under EAJA, finding Government’s litigation position not “substantially justified,” based,
inter alia, on Government’s reliance in litigation on record where agency had failed to “resolve the
seemingly contradictory information provided by [the employer]” and had failed to “resolve any
inconsistencies” in record evidence).
Court No. 07-00160 Page 37

consideration all evidence that “fairly detracts” from its determination) (discussing Consol. Bearings

Co. v. United States, 412 F.3d 1266, 1269 (Fed. Cir. 2005); Gerald Metals, Inc. v. United States, 132

F.3d 716, 720 (Fed. Cir. 1997)); Inter-Neighborhood Hous. Corp. v. NLRB, 124 F.3d 115, 122 (2d

Cir. 1997) (finding lack of substantial justification where, in declining to investigate further, agency

investigator must have concluded that a witness was lying and falsifying documents, but where

administrative record included “no basis for such conclusions”).

Moreover, it is manifestly clear that there is no reason why the Labor Department could not

have earlier obtained the information on which it ultimately based its certification of the Workers

here. The evidence which caused the agency to reverse course (and thus to certify the Workers) was

information supplied in an August 2009 phone conversation between agency staffers and Invista’s

former Chief Legal Counsel for Labor and Employment (who, in 2008, had become Associate

General Counsel for Labor and Employment at a Koch “shared service organization” supporting

Invista and other Koch-affiliated companies). See S.S.A.R. 69-70. However, that conversation

simply reaffirmed what the Workers (and, indeed, several representatives of Invista, including

Invista’s Chattanooga Plant Manager) had been telling the agency all along – that is, that the

Workers’ terminations “were a direct (albeit delayed) result of the 2004 shift of apparel fiber

production to Mexico.” See Invista II, 33 CIT at ____, 657 F. Supp. 2d at 1364. Nothing in that

August 2009 phone conversation should have been a revelation to the Labor Department. Indeed,

the information provided in the phone conversation was almost entirely cumulative of other evidence

in the record, dating back to the initiation of the original investigation.35 Nowhere does either the

35
Compare, e.g., S.S.A.R. 69-70 (summarizing Aug. 21, 2009 phone conversation between
agency staff and Associate General Counsel for Labor and Employment at Koch “shared service
Court No. 07-00160 Page 38

Labor Department or the Government identify any “new information” garnered in that conversation

which the agency could not have obtained much earlier. See, e.g., Pierce v. Underwood, 487 U.S.

at 560 (explaining that, in evaluating “substantial justification,” trial court is entitled to take into

consideration “insights not conveyed by the record,” including “whether critical facts could easily

have been verified by the Government”); see also section II.A & n.11, supra (collecting additional

cases on point).36

d. The Agency’s Delegation of Authority

Invista I identified other significant flaws in the Labor Department’s investigation as well.

See generally Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1310-11. As the Government notes, for

example, Invista I criticized the Labor Department for – in essence – “delegat[ing] to the Invista

organization”), with A.R. 2 (sworn statement of Invista’s Chattanooga Plant Manager, attesting that
Workers’ termination was “a continuation of the [2004] shift in production to Mexico,” and that the
work was now being done by personnel “located in South America”), and other evidence cited in
nn.28-29 (summarizing record evidence indicating that Workers’ termination was attributable to
2004 shift of production, as well as record evidence that Workers’ customer service duties were
assumed by personnel in Brazil).
36
Indeed, it is clear beyond cavil that the Labor Department could have reached its
affirmative determination much earlier, if the agency had relied on the ample evidence in the
existing administrative record (which, after all, included not only statements by the Workers, but
also the sworn statement of a senior Invista official), rather than seeking to elicit other information
from the Invista lawyer. See, e.g., A.R. 2 (TAA/ATAA Petition, filed by Invista’s Chattanooga
Plant Manager, attesting under oath that Workers’ termination was “a continuation of the [2004]
shift in production to Mexico”); see also nn.28-29 (summarizing record evidence indicating that
Workers’ termination was attributable to 2004 shift of production, as well as record evidence that
Workers’ customer service duties were assumed by personnel in Brazil). In the alternative, the
Labor Department could have reached its affirmative determination much earlier if – after the
agency received the conflicting information from the Invista lawyer – the agency had proceeded to
further probe the matter, in an effort to reconcile the newly-created inconsistencies in the record
evidence in a timely fashion, before rendering yet another negative determination on the Workers’
claims.
Court No. 07-00160 Page 39

[lawyer] the power to decide the Workers’ TAA/ATAA petition.” See Def.’s Response at 12;

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1310. After referring to that criticism in Invista I,

however, the Government proceeds to brief an entirely different matter. In other words, in its

Response, the Government completely misses the point. Rather than arguing whether it is

permissible for the Labor Department to (in effect) base its determination in a TAA/ATAA case on

a source’s conclusory response to the “ultimate question” (which is the “delegation” concern to

which the Government briefly refers), the Government’s Response instead proceeds to argue that

the Labor Department was entitled to rely on statements made by representatives of the Workers’

former employer. That is a different issue.

The confusion on the part of the Government leaves uncontested and intact Invista I’s

conclusion that “[t]he Labor Department erred by substituting [the Invista lawyer’s] conclusory

opinion for [the agency’s] own probing inquiry into all the relevant underlying facts concerning the

relationship between the 2004 shift in production to Mexico and the Workers’ subsequent

terminations.” See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1310. As Invista I explained, the

only real issue for decision by the Labor Department in this case was whether the Workers’

termination was “attributable to” the 2004 shift of production to Mexico (i.e., the basis for the 2004

TAA/ATAA certification). Thus, by asking the Invista lawyer whether the company’s “business

decision” to reorganize its customer service organization and terminate the Workers was “the result

of the shift of production two years earlier”:

. . . the Labor Department, in effect, asked the Invista [lawyer] . . . the “ultimate
question.” In essence, the agency delegated to the Invista representative the power
to decide the Workers’ TAA/ATAA petition. But “it is Labor’s responsibility, not
the responsibility of [a] company official, to determine whether a former employee
is eligible for [TAA/ATAA] benefits.”
Court No. 07-00160 Page 40

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1310 (quoting BMC I, 30 CIT at 1340, 454 F. Supp.

2d at 1328 (quotation omitted)). The same agency practice has been roundly condemned in a

number of other cases as well. See, e.g., BMC I, 30 CIT at 1339-41, 454 F. Supp. 2d at 1328-29

(cataloguing wide range of TAA/ATAA opinions criticizing agency for phrasing questions posed

to sources/contacts in terms of “ultimate facts,” and thereby – in effect – impermissibly delegating

the agency’s power to decide petitioning workers’ claims and abdicating agency’s responsibility to

conduct its own independent factual investigations and to reach its own independent legal

conclusions).37

e. The Agency’s Reliance on Invista’s Lawyer’s Statement

Rather than briefing the “delegation” issue which it raises, the Government invokes Court

of Appeals precedent including Barry Callebaut and Marathon Ashland Pipe Line, and argues at

some length that the Labor Department was entitled to rely on the statement of the Invista lawyer

to conclude (in the course of the voluntary remand proceeding) that the Workers were not entitled

to TAA/ATAA certification. See generally Def.’s Response at 12-13 (citing Former Employees of

Barry Callebaut v. Chao, 357 F.3d 1377 (Fed. Cir. 2004); Former Employees of Marathon Ashland

Pipe Line, LLC v. Chao, 370 F.3d 1375 (Fed. Cir. 2004)). The Government’s argument misses the

mark, in several significant respects.

37
See also, e.g., Independent Steel Castings Co., 31 CIT at 1176-77 (explaining that “Labor
‘cannot simply adopt as its own the legal conclusions of employers . . . . Rather, the agency must
reach its own conclusions, based on its own thoughtful, thorough, independent analysis of all
relevant record facts.’”) (quoting IBM I, 29 CIT at 1382, 403 F. Supp. 2d at 1331); id. (noting that
“‘it is Labor’s responsibility, not the responsibility of [a] company official, to determine whether
a former employee is eligible for benefits’”) (quoting Former Employees of Federated Merch. Group
v. United States, 29 CIT 137, 144 (2005)).
Court No. 07-00160 Page 41

First, although decisions in some other TAA/ATAA cases have criticized the Labor

Department’s tendency to accept on faith virtually anything an employer says (while discounting

or disregarding the information provided by petitioning workers), that specific criticism was not

raised in either Invista I or Invista II. Compare, e.g., Welex, 32 CIT at ____, 2008 WL 7020688 at

* 11-12 (analysis captioned “The Labor Department’s Over-Reliance on Employer-Provided

Information”); BMC I, 30 CIT at 1339-49, 454 F. Supp. 2d at 1328-37 (same); with Invista I, 33

CIT ____, 626 F. Supp. 2d 1301, and Invista II, 33 CIT ____, 657 F. Supp. 2d 1359. The

Government’s argument thus targets a “straw man.”38

Moreover, contrary to the Government’s implications, Barry Callebaut and Marathon

Ashland Pipe Line have little (if any) application here, given the circumstances of this case. As the

Government emphasizes, the Court of Appeals concluded in Barry Callebaut and Marathon Ashland

Pipe Line that the Labor Department is entitled to rely upon information provided by the former

employers of petitioning workers in TAA/ATAA cases – but only where (1) “the Secretary

reasonably concludes that [the employer’s] statements are creditworthy,” and (2) the employer’s

statements “are not contradicted by other evidence.” See Def.’s Response at 12-13 (quoting

Marathon Ashland Pipe Line, 370 F.3d at 1385 (citing Barry Callebaut, 357 F.3d at 1383)) (internal

quotation marks omitted) (alteration in original).

Neither condition is met in this case. As discussed in some detail above, the administrative

record is devoid of any explanation to support a Labor Department conclusion that the statement of

38
In other words, the focus of the “delegation” concern expressed in Invista I and Invista II
goes to the form or phrasing of questions posed by the Labor Department, rather than the identities
or affiliations of the sources to whom the questions are put.
Court No. 07-00160 Page 42

the Invista lawyer was – in the words of the Court of Appeals – “creditworthy.” And, even more

to the point (and the Government’s assertions notwithstanding), the statement of the Invista lawyer

was indisputably “contradicted by other evidence” already in the administrative record.39

The Government inexplicably asserts that, at the time it was made, the statement of the

Invista lawyer “was not contradicted by any other evidence.” See Def.’s Response at 12; see also

id. at 13 (asserting that there was “no record evidence, at the time, to contradict Invista’s

statement”). To the contrary, that statement was in direct conflict with ample existing record

evidence that the Workers’ terminations were directly attributable to the 2004 shift of production

to Mexico – including, most notably, the sworn statement of Invista’s own Chattanooga Plant

Manager. In the TAA/ATAA Petition itself, the Invista Plant Manager attested in no uncertain terms

that the Workers’ separations were “a continuation of the [2004] shift in production to Mexico”

(which, in turn, had led to the 2004 TAA/ATAA certification). See A.R. 2 (statement of Invista’s

Chattanooga Plant Manager, made under oath/affirmation, including warning of federal penalties

for, inter alia, violations of federal material false statements statute; declaring “[u]nder penalty of

law, . . . that to the best of [his] knowledge and belief the information . . . provided is true, correct

and complete”); see also id. (further attesting that the Workers “losing their job[s] are being replaced

39
It is also noteworthy that, at least in Barry Callebaut, the employer’s statements were
sworn. See Barry Callebaut, 357 F.3d at 1383 (quoting oaths included with affidavits of three
company executives). In contrast, in the case at bar, the statement of the Invista lawyer was not
made under any sort of oath or affirmation. Indeed, the sole record evidence in this case that is
under oath is the statement of Invista’s Chattanooga Plant Manager – and, as discussed elsewhere
herein, the Plant Manager stated flatly and unequivocally that the terminations of the Workers at
issue were “a continuation of the [2004] shift in production to Mexico,” and that the Workers “losing
their job[s] [were] being replaced by CSR’s [Customer Service Representatives] located in South
America.” See A.R. 2.
Court No. 07-00160 Page 43

by CSR’s [Customer Service Representatives] located in South America”).40

Under these circumstances, it is difficult enough to fathom how the Labor Department could

ignore the ample record evidence existing at the time, and – without seeking to reconcile the

contradictory accounts – simply choose to credit the conflicting statement given by the Invista

lawyer. But the repeated assertions in the Government’s Response that there was “no record

evidence, at the time, to contradict Invista’s [lawyer’s] statement” are simply baffling.

In sum, Marathon Ashland Pipe Line and Barry Callebaut afford the Labor Department and

the Government no refuge, given the circumstances of this case. See Marathon Ashland Pipe Line,

370 F.3d at 1385; Barry Callebaut, 357 F.3d at 1383. Nothing in either of those cases excuses the

Labor Department from explaining its decision to rely on certain information and to disregard other

conflicting information. Indeed, the Court of Appeals emphasized that “the Secretary [must]

reasonably conclude[] that [the employers’] statements are creditworthy.” See Def.’s Response at

12-13 (quoting Marathon Ashland Pipe Line, 370 F.3d at 1385 (citing Barry Callebaut, 357 F.3d at

1383)) (internal quotation marks omitted) (alteration in original). And, further, nothing in either of

those cases authorizes the Labor Department to rely on the statements of employers where – as here

– those statements “are . . . contradicted by other evidence” in the record. See id. (citing Barry

Callebaut, 357 F.3d at 1383).41

40
Other record evidence to the same effect is summarized in notes 28 and 29, above.
41
See also, e.g., Joy Techs., 31 CIT at 1839-41, 1843, 1844-46, 523 F. Supp. 2d at 1375-76,
1378, 1379-80 (castigating Labor Department for arguing that agency is entitled to base a TAA
determination on “unverified” statements of petitioning workers’ former employer where employer’s
statements were contradicted by other evidence in the record, and for failing to recognize as “record
evidence” statements submitted by petitioning workers).
Court No. 07-00160 Page 44

f. The Agency’s Reliance on Other Evidence

In arguing that the Labor Department was entitled to rely on the statement of the Invista

lawyer because that statement was – according to the Government – not contradicted by other

evidence (an argument that is disposed of immediately above), the Government alludes in passing

to “other record evidence that [the Labor Department] deemed creditworthy,” which the agency

cited in an effort to buttress the conclusion in its initial Remand Determination that the Workers’

terminations were not related to the 2004 shift of production to Mexico. See Def.’s Response at 13

(alluding to 73 Fed. Reg. at 32,739-40). But Invista I expressly and painstakingly addressed that

evidence. See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311. And, significantly, neither the

Labor Department nor the Government has ever called into question any aspect of that part of the

analysis in Invista I.42

42
Specifically, the Labor Department’s initial Remand Determination asserted that “two of
the four separated workers worked on a product line (Performance Materials) whose production was
not shifted to Mexico.” See 73 Fed. Reg. at 32,739. However, as Invista I explained, “the evidence
on that point . . . is in conflict and unclear (and, in any event, obviously says nothing about the
terminations of the two other workers).” See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311.

The Labor Department’s conclusion that two of the Workers were employed solely in
“Performance Materials” and had no relationship to “Apparel Fibers” (the line of production which
was shifted to Mexico in 2004) was squarely at odds with much of the record evidence – including
essentially all of the record evidence compiled up to the voluntary remand proceeding. See A.R.
1-2 (attesting that termination of four Workers – i.e., “3-Customer Service Representatives, 1-
Product Coordinator” – was “a continuation of the [2004] shift in production to Mexico”); A.R. 21
(indicating that one named Worker was “previous vacation relief,” and another named Worker was
“current vacation relief” up to date of termination); A.R. 21 (explaining that the Workers could
“relieve each other if one [was] on vacation, but they [were] not capable . . . of performing other
functions,” and that, as of the date of terminations “there [were] no job openings . . . at [the]
Chattanooga site, . . . and all of the Apparel Customer Service Representatives jobs are going
away”); A.R. 26 (stating that the petitioning Workers “were part of the Nylon Apparel Filament
Fibers Group,” and that they “did not perform sales or marketing functions for the Nylon
Performance Filament Fibers Group”); A.R. 27 (stating that the Workers “performed sales and
Court No. 07-00160 Page 45

marketing for the Nylon Apparel Filament Fibers Group,” and had worked “in support of the
production workers previously certif[ied]” under the 2004 TAA/ATAA certification); A.R. 28-29
(indicating that Workers “were engaged in” and “were responsible for sales and marketing activities
of nylon apparel filament fibers,” and that “[t]he Nylon Apparel Filament Fibers Group were not
engaged in the production of nylon performance filament fibers, nor did they support [such]
production”); A.R. 36 (noting that one named Worker “was vacation relief for the apparel sales
group,” and explaining how other workers who were originally working in Performance Fibers were
displaced to allow the company to give their jobs to more senior Apparel Fibers personnel, and were
consequently terminated as “a direct result of the . . . apparel machines going to Mexico”); S.A.R.
8 (indicating that November 2006 reorganization of Invista’s Customer Service Organization
resulted in termination of “two (2) Apparel Nylon Customer Service Representatives located at
Chattanooga, one (1) Performance Materials Customer Service Representative located at
Chattanooga, and one (1) Performance Materials Product Coordinator located at Chattanooga”);
S.A.R. 11 (indicating that named individual “supervised 2 apparel nylon customer service
representatives and 1 performance materials customer service representative at Invista’s
Chattanooga, TN facility . . . , that the work that the 2 apparel nylon customer service representatives
performed [was] split between an existing production facility in Delaware . . . and an existing
production facility in Brazil . . . , that the 2 apparel nylon customer service representatives sold
nylon yarn produced in Mexico . . . The work that was performed by the performance materials
customer service representative stayed . . . [at the Chattanooga plant] but the worker was let go as
part of the reorganization of work”); S.A.R. 18 (stating that “[t]he decision to reorganize the
customer service organization was not connected to the decision made in 2004 to stop production
of Nylon Apparel at the Chattanooga Site. It was a business decision to improve the efficiency of
the customer service organization. . . . The decision [to consolidate the customer service
organization] was made in November, 2006. In the following weeks, it was determined that two (2)
Apparel Nylon Customer Service Representatives, one (1) Performance Materials Customer Service
Representative, and [o]ne (1) Performance Materials Product Coordinator located at Chattanooga
would not be retained”); S.A.R. 19 (identifying by name the four individual Workers at issue);
S.A.R. 21 (indicating that responsibilities of named Worker included, inter alia, “servicing . . .
customers buying Invista SARL nylon Apparel yarns”); S.A.R. 22 (indicating that responsibilities
of named Worker included, inter alia, serving as “Customer Service Representative” and providing
“Vacation relief for Chattanooga based CSR [Customer Service Representative] team,” including
both “Apparel and Performance Fibers”); S.A.R. 23 (indicating that named Worker was employed
as “Customer Sales Specialist”); S.A.R. 24 (indicating that named Worker was employed as
“Product Coordinator – Nylon 2005 R.R.E.”).

The record reveals that – in reaching its first Remand Determination – the Labor Department
made no effort to reconcile the glaring inconsistencies in the evidence concerning the petitioning
Workers’ job responsibilities, their relationship (if any) to the production of apparel fiber, and the
connection (if any) between the Workers’ terminations and the 2004 shift of the production of
apparel fiber to Mexico. For example, the agency ignored evidence indicating that some of the
Court No. 07-00160 Page 46

Workers who had responsibilities related to the production of performance materials in fact also had
links to the production of apparel fiber, and thus were terminated as a result of the 2004 shift of
production of apparel fiber to Mexico. See, e.g., A.R. 21 (including, inter alia, discussion of
“vacation relief” responsibilities); A.R. 36 (discussing, inter alia, “vacation relief” responsibilities,
as well as displacement of Performance Materials personnel to create position in Performance
Materials for Apparel Fibers supervisor, to avoid termination of that supervisor). Nor did the Labor
Department offer any justification for its selective reliance on certain evidence, and its complete
disregard for contrary record evidence. In any event, the Labor Department’s eventual amendment
of the 2004 TAA/ATAA certification to cover the Workers here reflects the fact that the agency
ultimately concluded that the Workers’ terminations indeed were attributable to the 2004 shift of
production to Mexico. See 74 Fed. Reg. 51,195 (Second Remand Determination).

The second piece of ostensibly corroborating evidence cited in the Labor Department’s initial
Remand Determination was the fact that more than two years elapsed between the 2004 shift of
manufacturing operations to Mexico and the terminations of these Workers. See 73 Fed. Reg. at
32,739-40. But, as Invista I explained, “that is the very point of the Labor Department’s procedure
for amending TAA/ATAA certifications to extend the expiration period: The Labor Department has
implicitly recognized that, in certain cases, the employment of some trade-impacted workers may
extend for a time beyond the presumptive two-year period reflected in the agency’s standard
TAA/ATAA certification.” See Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311. Again, the fact
that the Labor Department finally amended the 2004 TAA/ATAA certification to cover the Workers
here demonstrates that the agency ultimately concluded that, notwithstanding the delayed timing of
the Workers’ terminations, those terminations in fact were attributable to the 2004 shift of
production to Mexico. See 74 Fed. Reg. 51,195 (Second Remand Determination).

As its third and final piece of corroborating evidence, the Labor Department noted in its
initial Remand Determination that the Workers were replaced not by personnel in Mexico, but
instead by workers in Brazil and elsewhere. See 73 Fed. Reg. at 32,739-40. But, as Invista I
explained, the Labor Department’s observation missed the point:

The gravamen of the Workers’ case is that, if production had not been shifted to
Mexico in 2004 (but rather had continued at the Chattanooga plant), the Workers
would still have their jobs supporting domestic production. Nothing in law or logic
requires that the Workers’ jobs necessarily have shifted to Mexico [the new locus of
production]. Under the Labor Department’s own standards, if there is a “causal
nexus” between the 2004 shift in production and the Workers’ terminations, they are
entitled to certification.

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1311. Once more, the fact that the Labor Department
finally amended the 2004 TAA/ATAA certification to cover the Workers here demonstrates that the
agency ultimately concluded that, although the Workers’ jobs shifted to Brazil and elsewhere, the
Court No. 07-00160 Page 47

g. The Record Basis for Invista I

The Government’s final point in support of its claim that the Labor Department’s conduct

in this matter was “substantially justified” focuses on a specific point made in Invista I. Criticizing

the Labor Department for its failure to probe the facts underpinning the Invista lawyer’s statement

that the reorganization of the company’s customer service organization and the resulting

terminations of the Workers at issue were based on “a business decision to improve . . . efficiency,”

and were wholly unrelated to the 2004 shift of production to Mexico, Invista I explained:

[T]here is a false dichotomy embodied in the Labor Department’s conclusion that the
Workers’ terminations “[were] not related to the shift in production of apparel nylon
filament to Mexico in 2004,” but were instead the result of “a business decision to
improve the efficiency of . . . [Invista’s] customer service organization.” See 73 Fed.
Reg. at 32,739-40. As a matter of pure logic, the fact that a company states that
layoffs are part of a plan to “increase efficiency,” “restructure,” or “save money”
says nothing about whether or not those layoffs are attributable to effects of
international trade. As a general principle, companies are obviously always striving
to operate in an efficient and cost-effective manner. No doubt the 2004 shift in
production was the result of a “business decision” designed to “increase efficiency,”
“restructure,” and “save money” in the manufacture of apparel fiber. But the driving
force behind that “business decision” was unquestionably foreign competition.

The Labor Department cannot premise its determinations in TAA/ATAA cases on
conclusory assertions about companies’ “business decisions” or on euphemisms such
as “enhanced competitiveness” and “increased efficiency.” For purposes of a
TAA/ATAA analysis, the relevant question as to any asserted “business decision”
is: Why? In this case, why did Invista feel the need to “improve the efficiency” of
its customer service organization, and how (if at all) was it related to the 2004 shift
in production to Mexico (or otherwise related to the pressures of foreign
competition)?

Invista I, 33 CIT at ____, 626 F. Supp. 2d at 1310-11 (citing BMC I, 30 CIT at 1338 n.32, 454 F.

Supp. 2d at 1326-27 n.32; IBM II, 31 CIT at 520-22 n.72, 483 F. Supp. 2d at 1334-35 n.72) (initial

Workers’ terminations nevertheless were attributable to the 2004 shift of production to Mexico. See
74 Fed. Reg. 51,195 (Second Remand Determination).
Court No. 07-00160 Page 48

and final alterations in the original).

In its Response, the Government focuses on the two sentences highlighted at the end of the

first paragraph quoted immediately above, and implies that Invista I unfairly criticized the Labor

Department by (in essence) looking beyond the administrative record as it then existed. See Def.’s

Response at 16 (arguing that United States’ position was “substantially justified” because

Government “relied upon the statutory standard that a review of a negative TAA determination is

based solely upon the facts in the administrative record before the Court and nothing else”); id. at

14 (same). Specifically, the Government protests that “there was nothing in the record before Labor

[at the time of the voluntary remand] to suggest that the driving force behind Invista’s decision [to

terminate the Workers] was competition from Mexico.” See Def.’s Response at 13-14. But there

are at least three problems with the Government’s position.

First and foremost, if the Government had read the relevant part of Invista I (quoted above)

carefully and completely, the Government would have realized that the excerpt on which it relies

(italicized in the quotation above) clearly refers not to the basis for the termination of the instant

Workers, but – rather – to the basis for the 2004 shift of production to Mexico. And there has never

been any doubt in this case that the 2004 shift of production was the result of foreign competition

(i.e., cheaper production costs abroad). The Labor Department’s 2004 TAA/ATAA certification was

predicated on that fact. See A.R. 5-6 (2004 TAA/ATAA certification granted based on finding of

shift of production to Mexico); 69 Fed. Reg. 54,320 (same). The question presented in this case

was the relationship, if any, between the 2004 shift of production to Mexico (which led to the 2004

TAA/ATAA certification) and the termination of the Workers here. See, e.g., Steelworkers II, 33

CIT at ____, 2009 WL 1175654 at * 4 (quoting Labor Department’s statement that it “has and
Court No. 07-00160 Page 49

continues to amend the expiration date of certifications when the facts of the case show that the later

worker separations [i.e., the terminations occurring after the expiration of the original certification]

are attributable to the basis for [the original] certification (the increased imports or shift of

production to a foreign country)” (emphasis added)).

The Government’s Response is therefore patently wrong to the extent that the Government

asserts that Invista I concluded that “the driving force” behind the termination of the Workers here

“was undoubtedly foreign competition.” See Def.’s Response at 13-14. Quite apart from the plain

text of the two sentences themselves (which, on their face, clearly address the reasons for the 2004

shift of production to Mexico, and say nothing about the reasons for the termination of these

Workers), the paragraph immediately following the highlighted passage further underscores the fact

that Invista I left open the question of the relationship, if any, between the Workers’ termination and

foreign competition, asking: “Why? In this case, why did Invista feel the need to ‘improve the

efficiency’ of its customer service organization, and how (if at all) was it related to the 2004 shift

in production to Mexico (or otherwise related to the pressures of foreign competition)?” See Invista

I, 33 CIT at ____, 626 F. Supp. 2d at 1311. The Government’s claim that Invista I looked beyond

the then-existing administrative record is thus entirely lacking in merit.

The Government’s argument is equally wrong to the extent that the Government contends

that – until the final remand, when the Labor Department certified the Workers – the record was

devoid of evidence on which the agency could have based a determination that the termination of

the Workers here was attributable to the 2004 shift of production to Mexico. See Def.’s Response

at 13-14 (asserting that, until the final remand, “there was nothing in the record before Labor to

suggest that the driving force behind Invista’s decision” to reorganize its customer service workforce
Court No. 07-00160 Page 50

and terminate the Workers was foreign competition); see also id. (arguing that the agency “was. .

. substantially justified in relying only upon the existing evidence in the record to make its

determination,” and that “Labor is bound to make its decisions based on the record before it”). Quite

to the contrary, as discussed in some detail above, there was in fact ample record evidence –

beginning with the filing of the TAA/ATAA Petition itself – to support an agency determination that

the Workers’ terminations were attributable to the 2004 shift of production to Mexico. See A.R. 2

(Invista Plant Manager attesting under oath that Workers’ termination was “a continuation of the

[2004] shift in production to Mexico”); see also nn.28-29, supra (surveying record evidence in

Administrative Record and Supplemental Record indicating that Workers’ termination was

attributable to 2004 shift of production to Mexico, and that Workers’ jobs were being filled by

workers in, among other places, Brazil).

Further, at the core of this argument by the Government is the Government’s oft-repeated

assertion that “Labor is bound to make its decisions based upon the record before it.” See Def.’s

Response at 13-14 (also arguing that the agency “was . . . substantially justified in relying only upon

the existing evidence in the record to make its determination,” and that “Labor was reasonable in

relying only upon the record evidence in making its determination”). To be sure, the Labor

Department must render its TAA/ATAA determinations based on the administrative record. But,

as discussed in detail above, it is also clear that the Labor Department has a fundamental legal

obligation to develop that record, by “marshal[ing] all relevant facts” in an agency investigation

conducted with “the utmost regard” for the interests of the petitioning workers. See, e.g., 29 C.F.R.

§ 90.12; Local 167, Int’l Molders and Allied Workers’ Union, AFL-CIO v. Marshall, 643 F.2d at

31 (emphasis added) (noting agency’s duty to conduct TAA investigations “with the utmost regard
Court No. 07-00160 Page 51

for the interest of the petitioning workers”). Particularly given the repeated and relatively egregious

nature of the shortcomings in the agency’s investigation in this case, the Labor Department cannot

justify its failure to reach a correct determination by pleading the limitations of an administrative

record that the agency itself failed to properly develop. See, e.g., Hess Mech. Corp., 112 F.3d at 150

(emphasizing that, while “[t]he EAJA does not tell an agency how to handle a case,” the agency also

“cannot decline to conduct further inquiry and then plead [its] own failure to investigate as reason

to conclude that [its] position was substantially justified”).

h. The Agency’s Reliance on Euphemisms as Rationale

Finally, although the Government’s Response mentions the matter in passing, nothing in the

Government’s Response addresses the concerns expressed in Invista I about the “false dichotomy”

reflected in the Labor Department’s first Remand Determination in this case (and in other

TAA/ATAA cases as well), by which the agency seems to assume that layoffs due to “business

decisions” aimed at “increasing efficiency” and “enhancing competitiveness” are never attributable

to foreign competition (i.e., increased imports or shifts of production abroad). See Def.’s Response

at 13 (quoting Invista I, 33 CIT ____, 626 F. Supp. 2d at 1310-11); see also 73 Fed. Reg. at 32,739

(stating, inter alia, that “[i]nformation provided by [Invista] during the remand investigation

revealed that the workers’ separations are not related to the [2004] shift of production,” but were

instead the result of “a business decision to improve the efficiency of [Invista’s] customer service

organization”).

Invista I explained, however, that the fact that workers are terminated as the result of “a

business decision to improve the efficiency” of a company by no means logically precludes a finding
Court No. 07-00160 Page 52

that the workers’ terminations were due to foreign competition (whether increased imports, or – as

here – a shift of production to a foreign country). See generally Invista I, 33 CIT at ____, 626 F.

Supp. 2d at 1310-11. Invista I therefore admonished the Labor Department that the agency “cannot

premise its determinations in TAA/ATAA cases on conclusory assertions about companies’

‘business decisions’ or on euphemisms such as ‘enhanced competitiveness’ and ‘increased

efficiency.’” Id., 33 CIT at ____, 626 F. Supp. 2d at 1310-11. Instead, the agency must probe the

reasons behind an employer’s perceived need to enhance competitiveness and increase efficiency,

to ascertain whether the company’s drive for competitiveness and efficiency (and the termination

of the workers at issue) are in fact based on the pressures of foreign competition. Id., 33 CIT at

____, 626 F. Supp. 2d at 1311.

The Labor Department’s unquestioning acceptance of the “false dichotomy” reflected in the

first Remand Determination in this case is a phenomenon that has been the subject of criticism in

other cases in the past. See, e.g., BMC I, 30 CIT at 1338 n.32, 454 F. Supp. 2d at 1326-27 n.32;

IBM II, 31 CIT at 520-22 n.72, 483 F. Supp. 2d at 1334-35 n

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/817767. Public record. Not legal advice.