Petition for Writ of Certiorari — APA Transportation Transportation Corp. v. Teamsters Local Union No. 560 (No. 08-812)

F

| og- §120EC 23 2008

a SE THE CI ERK

me Court, U.S.

a Supreme Ee D

ee

In The

Supreme Court of the United States

APA TRANSPORTATION CORPORATION,

Petitioner,

¥.

TEAMSTERS LOCAL UNION NO. 560, et al.,

Respondents.

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Third Circuit

PETITION FOR WRIT OF CERTIORARI

KEITH R. McMurpy

Counsel of Record

THEODORE M. EISENBERG

On the Brief

Fox RoTHsScHILD LLP

100 Park Avenue, Suite 1500

New York, New York 10017

(212) 878-7900

Counsel for Petitioner

December 23, 2008

Becker Gallagher - Cincinnati, OH - Washington, D.C. - 800.890.5001

1

QUESTIONS PRESENTED

1. Whether the Third Circuit’s erroneous

construction of the “faltering company” exception

under the Workers Adjustment Retraining Notification

Act, 29 U.S.C. §2102(b)(1), renders the exception

illusory, thereby precluding employers from obtaining

essential financing, and requiring premature business

closings that damage the economy and precipitate job

loss?

2. Whether the Third Circuit’s granting of

summary judgment without considering evidence of

“actively seeking ... business” expunges statutory

language and fundamentally misconstrues the breadth

of the statutory exception?

3. Whether the Third Circuit’s summary judgment

determination usurps the fact finder’s function, and

forecloses Petitioner’s right to present material facts in

its defense?

li

RULE 14.1(b) STATEMENT

A list of all parties to the proceeding in the court

whose judgment is the subject of this petition is as

follows:

Defendant-Appellee and Petitioner: APA Transport

Corp.

Plaintiffs-Appellants and Respondents: Teamsters

Local Union No. 560, Teamsters Local Union No. 470,

Brian Campbell, John Cronin, Jr., Andrew Imperatore

and Richard Yurchisin.

RULE 29.6 CORPORATE DISCLOSURE

Pursuant to Rule 29.6 of the Rules of the United

States Supreme Court, there is no parent or publicly

held company owning 10% or more the stock of the

Petitioner.

ill

TABLE OF CONTENTS

QUESTIONS PRESENTED .................... i

RULE 14.1(b) STATEMENT ................. il

RULE 29.6 CORPORATE DISCLOSURE ....... li

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Tete CF BAT EE ooo cet cence ones Vv

PETITION FOR A WRIT OF CERTIORARI ..... 1

oe ke a er re ee 1

CEE, hv ed Aan kes SRR AK 1

STATUTORY PROVISIONS INVOLVED ....... 2

STATEMENT OF THE CASE ....-2 eee scenes 2

REASONS TO GRANT THE PETITION ........ 4

I. The Third Circuit’s Determination that APA

was not Actively Seeking Capital on the

Operative Date Renders the Faltering

Company Exception a Nullity. ........... 9

Il. The Third Circuit Failed to Consider

Evidence of Actively Seeking Business, as

Opposed to Capital, thereby Improperly

Rendering that Portion of the Statutory

PUMOOUCIONS G TUMIET. on ce te ees eens 17

1V

Ill.The Third Circuit Improperly Granted

Summary Judgment in Favor of the

Plaintiffs Despite Material Facts that Were

Se aS d'0-d-5'c Sha e's bc dee OR 18

ea yaa aad sae 22

APPENDIX

Appendix A: Third Circuit Opinion (August 29,

ee re eee ae NS eae la

Appendix B: Third Circuit Order Amending

Opinion (October 27, 2008) .............. 40a

Appendix C: District Court Judgment

Oe ge ee) | ee 44a

Appendix D: District Court Memorandum

Opinion (December 7, 2006) ............. 47a

Appendix E: Third Circuit Decision - Sur

Petition for Rehearing En Banc (October 6,

oe 5 oes Vee ee eae ees 9la

Vv

TABLE OF AUTHORITIES

Cases

American Tobacco Co. v. Patterson,

456 US. 63, 102 S. Ct. 1534 (1982) ........ 16

Anderson v. Liberty Lobby, Inc.,

re sk i egy sda e eee caen 19

Austen v. Archway Cookies, LLC,

No. 08-12323 (Bankr. D. Del. filed

RE 6 FE ee a en 5

Berenshteyn v. Lehman Brothers Holdings, Inc.,

08-01654 (Bankr. S.D.N_Y. filed

IE. Gre inc oe eae Wok kw a eo ee aoe 5

Bergman v. Thelen LLP,

No. 08-cv-5322 (N.D. Cal. filed

IS or oh am wipe doe ane tas §

Celotex v. Catrett,

ee Wee Ue CIE ovc on eds cee se wwecuwcen 19

Covington v. City of New York,

ei ee Fe yee tae) ee 19

Curry et al. v. MRS Management Co., Ine. et al.,

No. 08-cv-02194 (N.D. Tex. filed

SS Se I eae ae a ue bo Oe es 5

Demarest v. Manspeaker,

498 U.S. 184, 1111S. Ct. 599 (1991) ........ 16

vi

Evcco Leasing Corp. v. Ace Trucking,

828 F’.2a 188 (Sd Cir. 1987) ..... 2... ae 16

Guippone v. BH S & B Holdings, LLC,

No. 08-01747 (Bankr. 8.D.N.Y. filed Nov. 20,

BEE gS ieee ai Tt eh ar 5

Harris v. Provident Life & Accident,

DR Ee CE, BE) oc ce cease 19

In re: Kaiser Aluminum Corporation,

456 F.3d 328 (Sd Cir. 2006) ............... 16

Kratzel v. Bill Heard Enterprises, Inc.,

No. 08-80154 (Bankr. N.D. Ala. filed

EI ee 5

Lexington Ins. Co. v. W. Pa. Hosp.,

423 F.5d O46 (oe Uir. 2005) .... 1... ccc 18

M.A. ex rel E.S. v. State-Operated Sch. Dist. of

Newark,

o66 © .20 Soo (30 Cif. 2008) ...........2 2s 16

Matsushita Electronic Industries Co. v. Zenith

Radio Corp.,

Bak Ee ee Ce 19

McCoy v. Value City Holdings, Inc.,

No. 08-01648 (Bankr. S.D.N.Y. filed Oct. 29,

Satna SANS Br, LLIN Ot le a es 5

Moore v. City of Philadelphia,

461 F.30 331 Gd Car. 2006) ..... 2... eee: 18

vil

NBT Bank Nat'l Ass’n v. First Nat'l Cmty. Bank,

393 F.3d 404 (3d Cir. 2004)

Pearson v. Land South Adventures, LLC,

No. 08-cv-02395 (M.D. Fla. filed

Dec. 2, 2008)

Reeves v. Sanderson Plumbing Products,

530 U.S. 133, 120 S. Ct. 2097 (2000)

Rosenberg v. XM Ventures,

274 F.3d 1387 (3d Cir. 2001)

Statutes

28 U.S.C. §1254(1)

28 U.S.C. §1331

28 U.S.C. §3101(c)

28 U.S.C. §11332

29 U.S.C. §1001 et seq.

29 U.S.C. §82101-2109

29 U.S.C. §2101(b)(1)

29 U.S.C. §§2102-2109

29 U.S.C. §2102(b)(1)

Rules

were cd, Pee. TA iv. F. . ws oe kc ek ec eees

Vil

supreme Court Rule 19.6 2... csc ccebeccusvces 1

Regulations

Be NEe we BPE) vcs vaaseesstnehe nent wi

Pe er ie Don 0040 we eee 9

Other Authorities

134 CONG. REC. S8686-01 ................. 14

Webste:’s Third New International Dictionary

CR 6656 en oS ea ee eee 15

1

PETITION FOR A WRIT OF CERTIORARI

APA Transport Corp. (“APA”) petitions for a writ of

certiorari to review the opinion and judgment of the

United States Court of Appeals for the Third Circuit.

OPINIONS BELOW

The Opinion of the U.S. Court of Appeals for the

Third Circuit, dated August 29, 2008, is officially

reported at 541 F.3d 233, and is reproduced at la-37a.

The Memorandum Opinion and Order of the U.S.

District Court for the District of New Jersey, dated

December 7, 2006, is unofficially reported at 2006 WL

3534029 and 2006 U.S. Dist. LEXIS 88437 and is

reproduced at 47a-90a.

JURISDICTION

The Judgment of the U.S. Court of Appeals for the

Third Circuit was entered on August 29, 2008. A

Petition for Rehearing was timely submitted on

September 19, 2008, and denied on October 6, 2008.

This petition is timely under 28 U.S.C. §3101(c) and

Supreme Court Rule 13.3 because it is being filed

within 90 days of the date of the denial of the Petition

for Rehearing. This Court has jurisdiction pursuant to

28 U.S.C. §1254(1).

Federal jurisdiction was invoked in the original

action to the District Court under 29 U.S.C. §§2101-

2109, 28 U.S.C. §1331, 28 U.S.C. §11332 and 29 U.S.C.

§1001 et seq.

2

STATUTORY PROVISIONS INVOLVED

The relevant statutory provisions are 29 U.S.C.

§2102(b)(1) of the Workers Adjustment Retraining

Notification Act (“WARN”), 29 U.S.C. §§2102-2109,

and are reproduced at 93a-95a.

STATEMENT OF THE CASE

This case arises from the shut-down of APA, and

the permanent lay-off of its workforce. Plaintiffs are

unions representing their employee members, and

individuals representing a class of non-union

employees, all of whom are alleged to be aggrieved

employees under WARN.

Plaintiffs allege a violation of the 60-day WARN

notice period. 3a. APA asserts the affirmative defense

of a faltering company, which entitled APA to provide

reduced notice of closure, based on its demonstrated

search for additional financing and _ additional

business. 4a.

APA was a regional trucking business that had

operated since 1947. In 1996, APA entered into a Loan

and Security Agreement with Transamerica Business

Capital Corporation (“Transamerica”). The loan

provided a revolving credit arrangement with a $40

million limit, secured by the real property, equipment

and accounts receivable of APA. The agreement had an

expiration date of February 28, 2002. APA had

previously defaulted on loan covenants in 1999 and

2000, and had executed agreements, whereby the

defaults were waived and/or the toan agreement was

amended, so as to maintain a financing arrangement.

3

On October 24, 2001, pursuant to APA’s request,

Transamerica met with APA to discuss the additional

financing of its operations. 6a. On November 8, 2001,

during the pendency of the financing request,

Transamerica notified APA of a default in the loan

agreement. The parties were able to work out the

issues, and on December 10, 2001, Transamerica and

APA agreed to a Fifth Waiver and Amendment of the

Loan Agreement to cure the default.

Discussions continued, and on January 2, 2002,

after curing the default, APA offered mortgages on two

properties as collateral for an additional five to six

million dollars of capital above the $40,000,000 limit.

On February 13, 2002, Transamerica notified APA by

letter that it would not provide additional financing,

and that the loan_agreement would therefore

terminate on February 28, 2002.

The day after Transamerica denied additional

financing, APA sent a WARN notice, expressly relying

on the faltering company exception, to Teamster Local

Unions 560 and 470 and to its non-union employees.

APA ceased operations on February 20, 2002.

On December 7, 2006, the District Court granted

summary judgment in favor of APA, on four issues,

specifically that: (1) APA had met each criterion of the

faltering company exception, including actively seeking

capital at the time a WARN notice would have been

required (December 20, 2001), (2) union benefit funds

are not aggrieved employees within the meaning of

WARN, (3) APA was the only employer of the affected

employees, and (4) APA’s notices were sufficiently

specific to meet WARN requirements.

4

Plaintiffs appealed to the Third Circuit. On August

28, 2008, the Third Circuit affirmed the District Court

entry of summary judgment on all counts, except the

faltering company exception. The Third Circuit held

that, as a matter of law: (1) APA failed to demonstrate

that it actively sought capital on December 20, 2001,

and (2) APA’s meeting to discuss financing with its

chief lender, Transamerica, on October 24, 2001 was

insufficient to meet the actively seeking standard.

The Third Circuit not only reversed the District

Court’s grant ofsummary judgment, but instructed the

District Court to enter summary judgment in favor of

the Plaintiffs.

APA petitions this Court for review of the Third

Circuit’s decision that APA did not satisfy the faltering

company exception to the 60-day WARN notification

requirement.

REASONS TO GRANT THE PETITION

This is a case of first impression, interpreting the

faltering company exception under WARN, and in

particular the construction of the actively seeking

capital requirement within that exception. 29 U.S.C.

§2102(b)(1). This case is of national significance in that

the Third Circuit has so narrowly construed this

exception as to render it a nullity. Accordingly,

employers, which would otherwise be able to raise

additional capital or obtain additional financing, will

be compelled to provide a p-emature WARN notice,

which will preclude refimancing and result in

premature closings. This result is destructive of the

rights of labor and management, and is contrary to the

manifest intent of WARN to provide an opportunity for

5

refinancing, and thereby augment the economic

security of workers.

Although there is no current conflict in the circuits

(given that this is a case of first impression), the

antagonistic statutory constructions of the Third

Circuit and the District Court presage an inevitable

circuit conflict. Given the significant impact of the

faltering company exception in this faltering economy,

it is imperative that this Court establish a uniform

standard to define employer obligations.’ Employer

refinancing occurs under stressful conditions, in an

abbreviated time frame, within a framework of

extraordinary confidentiality constraints. This Court’s

guidance is essential! for the statutory exception to be

rationally applied.

The Third Circuit sets forth two reasons for its

decision. The first rationale is that WARN, on its face,

requires a discrete written request for financing

exactly 60 days prior to the date the employer actually

closes. 35a-36a.

' Following the Third Circuit’s decision in this case, there have

been numerous lawsuits filed, alleging violations of WARN notice

requirement. See Curry et al. v. MRS Management Co., Inc. et al,

No. 08-cv-02194 (N.D. Tex. filed Dec. 10, 2008); Pearson v. Land

South Adventures, LLC, No. 08-cv-02395 (M.D. Fla. filed Dec. 2,

2008); Bergman v. Thelen LLP, No. 08-cv-5322 (N.D. Cal. filed

Nov. 24, 2008); Guippone v. BH S & B Holdings, LLC, No. 08-

01747 (Bankr. S.D.N_Y. filed Nov. 20, 2008); Berenshteyn v.

Lehman Brothers Holdings, Inc., 08-01654 (Bankr. S.D.N_Y. filed

Nov. 4, 2008); McCoy v. Value City Holdings, Inc., No. 08-01648

(Bankr. S.D.N.Y. filed Oct. 29, 2008); Austen v. Archway Cookies,

LLC, No. 08-12323 (Bankr. D. Del. filed Oct. 6, 2008); Kratzel v.

Bill Heard Enterprises, Inc., No. 08-80154 (Bankr. N.D. Ala. filed

Oct. 3, 2008).

6

The Third Circuit errs in requiring proof of formal

employer action to obtain financing exactly sixty days

prior to the date of shutdown — a manifest

impossibility unless the employer was prescient, had

pre-determined the date of shutdown, or there were a

fortuitous correlation of dates.

As discussed by the District Court, the faltering

company exception cannot be rationally construed to

require a party to predict the future. Nevertheless, the

Third Circuit concludes that the plain language of the

statute requires that employers have such prophetic

abilities, and that this incongruity must be taken up

with the Congress, not the Court. 34a.

By viewing the refinancing process as a series of

discrete and disconnected acts, rather than a

continuum of conduct towards the goal of obtaining

refinancing, the Third Circuit disregards the reality of

the refinancing process, and defeats the purpose of the

exception. The Third Circuit’s parsing of the statute is

premised on a peculiar view of actively seeking. If, for

example, APA had made a written request for

financing on December 9 — according to the Third

Circuit -- that request would have no continuing

validity on December 10, because the specific act did

not occur that day. Contrary to the Third Circuit’s

construction, logic and experience mandate that what

is actively sought on day 1, continues to be actively

sought on day 2, unless nullified by an intervening

event. .

The Third Circuit’s decision is premised on a

virtual impossibility: namely, that APA had to take a

formal action on December 20. The Third Circuit

ignores the earlier December 10” Waiver and

7

Amendment to the Loan Agreement, finds the January

2 tender of properties to be thirteen days late, and

thereby fails to address the continuum of specific steps

which precede and follow the operative December 20

date.

The Court’s second rationale is that even if formal

action were not required exactly sixty days before

shutdown (December 20), the October 24 meeting

between APA and Transamerica was insufficient, as a

matter of law, to meet the standard of actively seeking

capital. The Third Circuit’s error is threefold: (1) the

October 24 meeting was sufficient, (2) the October 24

meeting must be viewed contextually, in connection

with the amended loan agreement, executed between

Transamerica and APA on December 10, and the

tender of properties by APA on January 2, and (8) if

these actions were deemed insufficient on the skeletal

record of the summary Judgment proceeding, a hearing

should have been ordered.

The employer’s conduct must be reviewed in the

context of its financial relationships, to determine if it

was actively seeking capital at the time the WARN

notice would have otherwise been required. APA

executives had ongoing discussions with APA’s lender,

Transamerica, over a period of months (which spanned

the WARN notification date), to secure additional

financing, to cure a prior default, and to offer

additional property to secure the requisite financing.

Moreover, APA had a long course of dealing with

Transamerica, as Transamerica had _ provided

financing to APA for many years, had a security

interest in APA’s property, equipment and receivables,

and was the most viable source of additional financing,

8

given the history and Transamerica’s_ security

interests.

The Third Circuit views the specifics of the

APA/Transamerica relationship, and their course of

dealing, as immaterial. The Court thereby deprives

APA of a hearing, to develop a full factual record of the

parties’ financial transactions, including the

continuum of APA’s actions during the critical period

following the September 11 World Trade Center

bombing through January 2, 2002. These facts are

material to obtaining a full understanding of the

extent of APA’s efforts to obtain additional financing

from Transamerica, as well as through other sources.

The District Court found that APA’s showing, as a

matter of law, fell within the faltering company

exception. The Third Circuit not only vacated that

decision, but found AF’A’s factual showing insufficient

as a matter of law, without consideration of the

“actively seeking...business” component of the

statutory exception, and without providing APA with

the opportunity to develop the factual record.

This Court should grant certiorari to construe the

faltering company exception, consistent with WARN’s

intent, so that employers will not be precluded from

reliance on this exemption at a time of unprecedented

economic turmoil.

9

I. The Third Circuit’s Determination that APA

was not Actively Seeking Capital on the

Operative Date Renders the Faltering

Company Exception a Nullity.

The WARN Act requires that an employer not effect

a plant closing or shutdown until 60 days after notice

is given to affected employees. There is, however, an

exception to that restriction. An employer may order

the shutdown or closing before the conclusion of the

60-day period if:

[AJs of the time that notice would have been

required the employer was actively seeking

capital or business which, if obtained, would

have enabled the employer to avoid or postpone

the shutdown and the employer reasonably and

in good faith believed that giving the notice

required would have precluded the employer

from obtaining the needed capital or business.

29 U.S.C. §2102(b)(1). (Emphasis added.) The

exception is to be narrowly construed, and is an

affirmative defense. The only aspect of the exception

that is at issue, is the actively seeking capital

requirement, and_ specifically, the temporal

requirement that the capital must be sought as of the

time that notice would have been required.* The

Department of Labor WARN regulations provide at 20

C.F.R. § 639.9(a)(1) that:

* As set forth below, the Third Circuit’s excising of the “actively

seeking...business” component to the falte: ing company exception

is also at ‘sue, in light of the Court’s failure to order a trial to

develop a factual accord.

10

An employer must have been actively seeking

capital or business at the time that 60-day

notice would have been required. That is, the

employer must have been seeking financing or

refinancing through the arrangement of loans,

the issuance of stocks, bonds, or other methods

of internally generated financing; or the

employer must have been seeking additional

money, credit, or business through any other

commercially reasonable method. The employer

must be able to identify specific actions taken to

obtain capital or business.

(Emphasis added.) The Third Circuit erroneously

conflates the specific actions referenced at the end of

the regulation with the statutory actively seeking

capital requirement (as of the date that notice would

have been due). 34a. The statute, however, does not

use the term specific actions, and the regulation does

not require that the specific actions occur on the date

notice was otherwise due. Specific actions are

necessary to demonstrate active seeking, but need not

themselves occur on the critical date. Rather, specific

actions which occurred before and/or after the critical

date (December 20), may, as here, demonstrate that

active seeking occurred on that date.

The District Court found no precedent for the

“precise requirement” that specific actions must occur

exactly 60 days before the eventual shutdown. The

District Court cautioned that even if such precedent

existed, it should be approached with “great

trepidation.” 78a. The District Court reasoned that:

Simply put, to require such precision from an

employer would effectively eliminate any

1]

practical application of the “faltering business”

exception as it would require said employer to

read the minds of the financial institutions or

institutions from which it seeks financing.

78a. The District Court cited APA’s situation as a

textbook example of why such a construction was

untenable. 78a-79a.

As referenced by the District Court, APA’s

“financial straits ... significantly worsened after the

tragic events of September 11, 2001, and APA “met

with Transamerica on October 24, 2001 to request

additional funds.” Moreover, based on the unrebutted

testimony of Transamerica representative,

Christopher Norrito, the Court found that, at the time

of the October 24" meeting, Transamerica had:

[Rleceived a communication from ... APA

Transport in which they indicated that they’re

seeking additional monies from Transamerica.

79a. Moreover, according to Mr. Norrito, at that time,

Transamerica wanted to keep APA “afloat,” not “pull

the plug” and was considering “pour|[ing] more money

into APA.” 80a.

The District Court also found that “there was no

basis to anticipate a closure date of February 20,

2002,” and “thereby not reasonable to insist that

Defendant APA Transport take specific, actual and

literal steps on December 20, 2001 when they had

taken said steps on October 24, 2001.” 82a.

Moreover, APA worked through the balance of 2001

to cure prior defaults on the existing loan agreement

12

with Transamerica, which was a prerequisite to

obtaining additional financing. On December 10, 2001,

APA and Transamerica executed a Waiver and Fifth

Amendment to the Loan Agreement, thereby avoiding

default, and reaffirming that the underlying loan

would remain in place. Negotiating this new

agreement was a condition precedent to APA obtaining

additional financing, and it occurred ten days before

the operative date of December 20. This loan

agreement was followed by the tender of mortgages on

two additional properties on January 2, 2002 to secure

additional financing.

The District Court noted that APA took additional

specific steps after October 24, and did not view as

determinative the fact that these actions, which

surrounded December 20, did not occur exactly on

December 20. The District Court concluded that for

APA to provide notice of termination to employees

prior to receiving a decision on the loan “would not

only have been premature, but also, would have

diminished APA Transport’s chances of obtaining a

loan at that time.” 82a.

By contrast, the Third Circuit: (1) found the

meeting between APA and Transamerica to discuss

additional financing on October 24 (58 days before the

peremptory date of December 20), insufficient as a

matter of law, (2) ignored the loan agreement executed

by APA.and_Transamerica on December 10 (10 days

before the peremptory date), and (3) found that the

January 2 tender of two properties (13 days after the

peremptory date) occurred too late.

The Third Circuit determined that the October 24,

2001, meeting did not constitute a “formal request for

13

financing.” 28a. In so doing, the Court nullified the

testimony of Mr. Norrito, concerning active

consideration given to additional financing on October

24. The Court ignored Mr. Norrito’s testimony that at

the time of the October 24 meeting to discuss

financing, Transamerica had _ received a

communication from APA _ seeking additional

financing. 35a. Based on this unrebutted testimony,

APA is entitled to summary judgment.®

The Court creates a “formality requirement” that is

not to be found in the statute or regulation. The Court

places undue weight on the manner in which the

question of additional financing arose, as opposed to

whether the financing was sought. The Court thereby

establishes a dubious distinction in which critical

refinancing, that the employer desires, and which

would save the employer, is found to have been

actively considered, but not actively sought.

The Court also ignores the course of dealing

between the parties. The Court erroneously relies on

the absence of an APA application for refinancing,

when such application was not required by

Transamerica of APA in light of their relationship.

36a. The Court’s imposition of its own normative

‘The Third Circuit takes exception to the District Court’s reliance

on Mr. Norrito’s testimony as conclusive in the context of

summary judgment, even though the testimony was not disputed

with regard to the key point at issue. 35a, 79a-82a. Moreover,

having found Mr. Norrito’s testimony not dispositive, the Third

Circuit fails to consider the import of the testimony, despite its

manifest significance in terms of APA’s reliance on the October 24

interchange, in support of its contention that it was actively

seeking capital as of that date.

14

practices in connection with the parties’ negotiations

is not appropriate. The error is magnified by the

Court’s decision that summary judgment should be

granted for Plaintiffs, without the benefit of additional

fact-finding concerning APA’s multi-year history of

obtaining, renewing and changing financing

arrangements with Transamerica.

Moreover, rather than considering the relationship

between the events of October 24, December 10 and

January 2 to inform its view of whether active seeking

occurred on December 20, the Court ignores the

common thread, and views each event in isolation.

Thus, for the Court, the significance of the January 2

tender of property is only that it did not occur thirteen

days earlier. Nor does the Court acknowledge the

manifest connection between the loan agreement of

December 10, which cured the prior default, and APA’s

request for additional financing. Rather, the Court

concludes that “there was no affirmative attempt by

APA Transport after that [October 24, 2001] meeting

io actually secure that financing.” 25a. This conclusion

is manifest error.

The Third Circuit relies on the Conference Report

issued when Congress passed the WARN Act, and

specifically that: “an employer must prove the specific

steps it had taken, at or shortly before the time notice

would have been required.” 134 CONG. REC. S8686-

O1. 29a. (Emphasis added.) This construction is

directly contrary to the Third Circuit’s conclusion that

15

the specific action must occur on the operative date.

34a.*

Contrary to the Third Circuit’s conclusion, APA did

take specific steps: the request for financing that

Norrito attested to, the October 24 meeting to discuss

the financing, the December 10 Loan Agreement to

cure the default (ten days before the operative date).

Indeed, the term step is telling, in that it makes clear

that the act does not encompass the entire

undertaking. Rather, a step is one movement forward

in a progression of movements along a common path.

It is, according to Webster’s Third New International

Dictionary 22 (1993), “a stage in a process,” ... “an

action, proceeding, or measure often occurring as part

of a scries.”

The Third Circuit mischaracterizes APA’s conduct

as “waiting for Transamerica to offer additional

financing.” 28a-29a. That is due to the Court’s viewing

of each step in the refinancing process without regard

to the staircase by which the steps are defined. In so

doing, the Court mandates that “actively” seeking

financing requires some specific action beyond that

contemplated by the statute, or by the parties engaged

in the transaction.

* The Third Circuit’s reliance on the “unforeseeable business

circumstances” exception — as demonstrating that Congress was

not concerned with foreseeability in connection with the faltering

company exception — is inapposite, as the conditions envisioned by

the two exceptions are unrelated. Moreover, in each case, notice

is required once the closing is foreseeable. In the former case,

notice is required as soon as practicable after the unforeseen event

occurs, in the latter case, after the financing is rejected.

16

It is well settled that “[t]he role of the courts in

interpreting a statute is to give effect to Congress’s

intent.” Rosenberg v. XM Ventures, 274 F.3d 137, 141

(3d Cir. 2001). See also M.A. ex rel E.S. v. State

~Operated Sch. Dist. Of Newark, 344 F.3d 335, 348 (3d

Cir. 2003) (holding in matters of statutory

interpretation, it would be inappropriate to “squint

myopically” at a phrase in isolation rather than in

context of the “text and structure” as a whole).

Statutes must be interpreted “to receive a sensible

construction, limiting application so as not to lead to

injustice and oppression.” Evcco Leasing Corp. v. Ace

Trucking, 828 F.2d 188, 195 (3d Cir. 1987). The overall

guiding principle should be that “statutes should be

interpreted to avoid untenable distinctions and

unreasonable results wherever possible.” American

Tobacco Co. v. Patterson, 456 U.S. 63, 71, 102 S. Ct.

1534, 1538 (1982). A basic tenet of statutory

construction is that courts should interpret a law to

avoid absurd or bizarre results. In re: Kaiser

Aluminum Corporation, 456 F.3d 328, 338 (3d Cir.

2006), citing Demarest v. Manspeaker, 498 U.S. 184,

191, 1115S. Ct. 599 (1991).

The Third Circuit’s formalistic reading is based on

untenable distinctions, which lead to an irrational

result that nullifies Congressional intent. Congress

enacted an exception to serve as an exception, and not

to be a nullity.

17

II. The Third Circuit Failed to Consider

Evidence of Actively Seeking Business, as

Opposed to Capital, thereby Improperly

Rendering that Portion of the Statutory

Exception a Nullity.

The District Court granted summary judgment in

favor of APA based solely on its specific actions to

obtain additional financing through Transamerica.

Therefore, it had no need to decide whether APA had

been actively seeking business. The Third Circuit, in

vacating the District Court’s decision, and awarding

summary judgment in favor of Plaintiffs, did not look

beyond the scope of the District Court’s determination.

Accordingly, it failed to consider evidence in connection

with the seeking of additional business, and limited its

decision to refinancing through Transamerica.

In so doing, the Third Circuit ignored the express

language of WARN, which references actively seeking

“business” as an alternative to actively seeking capital.

29 U.S.C. §2101(b)(1). This distinction is also set forth

in the enabling regulations, which provide that the

faltering company exception applies to employers

“seeking additional money, credit or business through

any commercially reasonable method.” 20 C.F.R.

§ 639.0(a)(1).

There is record evidence of APA’s attempts to

develop additional business, separate and apart from

requesting refinancing through Transamerica. 79a.

However, the complete record of these additional

efforts was never developed because it was extraneous

to the District Court’s decision. The issuance of a

summary judgment by the Third Circuit, without

development of the factual record in this regard, is

18

manifest error, and has the effect of contracting the

faltering company exception to exclude the “additional

... business” language. The exception is not, however,

limited to financing, but to a broader range of business

initiatives that could avoid or postpone the closing.

This is a matter of first impression, as no Circuit

Court has considered the scope of the seeking business

component of the faltering company exception. The

Third Circuit erred in excising this component of the

exception from the statute, and restricting the judicial

inquiry to refinancing.

Iii. The Third Circuit Improperly Granted

Summary Judgment in Favor of the

Plaintiffs Despite Material Facts that Were

in Dispute.

It is well settled that the standard of review of a

District Court’s decision granting summary judgment

is plenary. NBT Bank Nat’] Ass’n v. First Nat’] Cmty.

Bank, 393 F.3d 404, 409 (3d Cir. 2004). It is also well

established that the reviewing Court must apply the

same standard for granting summary judgment

employed by the District Court and view the facts in

the light most favorable to the non-moving party.

Moore v. City of Philadelphia, 461 F.3d 331, 340 (3d

Cir. 2006). Summary Judgment is only appropriate

where “drawing all reasonable inferences in favor of

the nonmoving party, there is no genuine issue as to

any material fact and... the moving party is entitled

to judgment as a matter of law.” Lexington Ins. Co. v.

W. Pa. Hosp., 423 F.3d 318, 322 n. 2 (3d Cir. 2005).

Therefore, in order to grant summary judgment for the

Plaintiffs in this matter, the Third Circuit must view

all of the evidence in a light most favorable to APA,

19

and must then conclude that there are no genuine

issues as to any material fact.

Summary judgment may be appropriate if the

pleadings and discovery show there is no genuine issue

of material fact as to any material fact and that the

moving party is entitled to judgment as a matter of

law. Rule 56(c), Fed. R. Civ. P. A fact is material if it

might affect the outcome of the suit under the

governing law. Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986). An issue of fact is genuine if the

evidence is such that a reasonable jury could return a

verdict for nonmoving party. Jd. All ambiguities and

inferences should be drawn in favor of the party

opposing the motion for summary judgment.

Matsushita Electronic Industries Co. v. Zenith Radio

Corp, 475 U.S. 574, 587-88 (1986); Harris v. Provident

Life & Accident, 310 F.3d 73, 78 (2d Cir. 2002).

The moving party bears the burden of identifying

matters that it believes demonstrate the absence of a

genuine issue of material fact. Celotex v. Catrett, 477

U.S. 317, 323 (1986). Summary judgment is proper

only if, when viewing the evidence in a light most

favorable to the non-moving party, there is no genuine

issue of material fact. Covington v. City of New York,

171 F.3d 117, 121 (2d Cir. 1999). Thus, for the Third

Circuit to reverse the District Court and grant

summary judgment in favor of the Plaintiffs, there

cannot be a material issue of fact in dispute.

As set forth above, the District Court correctly

granted summary judgment in APA’s favor based on

the faltering company exception, and the Third Circuit

applied the wrong legal standard in vacating that

decision. Moreover, even applying, arguendo, the Third

20

Circuit’s standard, there are disputed material facts,

and APA is entitled to a hearing.

First, there is a factual dispute over what

documentation was required to extend the underlying

loan agreement. Specifically, there is a dispute over

whether a written request for extension was required.

The Third Circuit notes that a formal written request

was required by the loan document. 36a. The record,

however, contains testimony from Transamerica that

it was considering an extension without the formal

request. 78a-82a.

Second, there is a factual dispute over whether a

formal written request was required to obtain

additional financing. The Third Circuit found that no

formal request was made, but Transamerica

representatives testified that the only written “credit

memo” that was required was an internal document

and that at the end of 2002, “all of [its] options were

open.” 8la. Consideration was being given to

additional financing without a written request.

Third, the record is not developed in connection

with the prior course of dealing between APA and

Transamerica, which is material to understanding the

significance of the parties’ actions with respect to the

financing negotiations subsequent to September 11,

2001. The parties had ongoing financing

arrangements, which had, over the course of years,

been modified to take into account operating

conditions and other events. 82a. These events shed

light on Transamerica’s requirements and expectations

in connection with APA’s refinancing request that is

central to this litigation.

21

Fourth, the record is not developed concerning the

conduct of the parties (in connection to refinancing),

which occurred post September 11, 2001, and

particularly between October 24 and December 20. For

example, the record references APA putting together

financial statements to cure its default in connection

with the December 10 loan agreement, but there are

no specifics as to whether and what documents were

exchanged between the parties in connection with the

agreement. 7a.

Fifth, the record contains evidence of APA’s

attempts to obtain capital through the potential sale of

terminals to another trucking company that would

have generated additional income, and references to

the efforts of APA to obtain additional new business in

light of the failure of certain competitors. 7a-8a. The

District Court did not address these factual issues in

its decision because it found that the search for

commercial financing through Transamerica was

adequate proof of actively seeking capital.

As set forth above, had the District Court

determined that APA’s actions with Transamerica did

not constitute an active search for financing, it would

have had to consider the search for capital from other

sources. It also would have had to consider the efforts

of APA to increase business and develop new revenue

streams. Because the District Court’s analysis did not

require it to consider these additional efforts, the

Third Circuit was duty bound to order a trial.

In sum, assuming arguendo, that this Court does

not vacate the Third Circuit’s decision and reinstate

the decision of the District Court, a full evidentiary

hearing is required. Such a hearing would permit the

22

exploration of the factual issues set forth above, via

consideration of additional testimony and other

evidence not previously reviewed, with corresponding

analysis of credibility and sufficiency. Credibility

determinations, the weighing of the evidence and the

drawing of legitimate inferences from the facts are

jury functions. Reeves _v. Sanderson Plumbing

Products, 530 U.S. 133, 150, 120 S. Ct. 2097 (2000).

Finally, viewing the evidence in a light most

favorable to APA, it cannot be said that no reasonable

juror could find that APA met its burden of

establishing it was actively seeking capital or business.

The District Court, evaluating the same facts,

concluded that no reasonable juror could find that APA

had not met this test.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

KEITH R. MCMURDY

Counsel of Record

THEODORE M. EISENBERG

On the Brief

FOx ROTHSCHILD LLP

100 Park Avenue, Suite 1500

New York, New York 10017

(212) 878-7900

December 2908 Counsel for Petitioner