Former Employees of Quality Fabricating, Inc. v. United States Secretary of Labor

United States Court of Appeals for the Federal Circuit
05-1486
FORMER EMPLOYEES OF QUALITY FABRICATING, INC.,
Plaintiff-Appellee,
v.
UNITED STATES SECRETARY OF LABOR,
Defendant-Appellant.
Adam H. Gordon, Collier Shannon Scott, PLLC, of Washington, DC, argued for
plaintiff-appellee. With him on the brief was John B. Brew.
Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, argued for defendant-appellant. With
him on the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen,
Director, and Patricia M. McCarthy, Assistant Director. Of counsel on the brief was
Gary E. Bernstecker, Attorney, Office of the Solicitor, United States Department of
Labor, of Washington, DC.
Appealed from: United States Court of International Trade
Judge Evan J. Wallach

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United States Court of Appeals for the Federal Circuit
05-1486
FORMER EMPLOYEES OF QUALITY FABRICATING, INC.,
Plaintiff-Appellee,
v.
UNITED STATES SECRETARY OF LABOR,
Defendant-Appellant.
___________________________
DECIDED: May 24, 2006
___________________________
Before NEWMAN, RADER, and PROST, Circuit Judges.
RADER, Circuit Judge.
The United States Court of International Trade ordered the Department of
Labor (Labor) to notify former employees of Quality Fabricating, Inc. (Quality)
that they qualify for secondarily-affected worker benefits, to explain these
benefits to the former Quality employees, and to provide the court with status
updates demonstrating Labor’s compliance with the court’s order. Former
Employees of Quality Fabricating, Inc. v. U.S. Dep’t of Labor, No. 02-00522 (Ct.
Int’l Trade 2005) (Order). Because the Court of International Trade lacks
jurisdiction to review Labor’s determinations with respect to secondarily-affected
worker benefits, this court vacates the Order and remands with instructions to
dismiss.

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I.
On June 28, 2001, several former Quality employees filed a petition with
Labor seeking unemployment benefits stemming from Quality’s loss of business
with firms that either shifted production to Mexico or Canada, or lost sales
because of increased imports from Mexico or Canada. The former Quality
employees sought unemployment benefits under one of two programs:
(1) benefits as “primarily-affected workers” under the North American Free Trade
Agreement-Transitional Adjustment Assistance program (NAFTA-TAA); or
(2) benefits as “secondarily-affected workers” under the Job Training Partnership
Act (JTPA) or its successor, the Workforce Investment Act (WIA). From a former
employee’s perspective, these programs provide substantially identical benefits.
Nonetheless, these programs apply to different categories of workers.
Before losing employment, primarily-affected workers had employers that
were “directly affected” by increased imports from or shifts of production to other
countries. The federal government provides benefits targeting primarily-affected
workers under various Transitional Adjustment Assistance programs dating back
to at least the Trade Act of 1974, codified at 19 U.S.C. § 98. See Hampe v.
Butler, 364 F.3d 90, 91 (3d Cir. 2004) (describing the unemployment benefits
provided under the Trade Act of 1974).
NAFTA provides a specific program, the NAFTA-TAA program, for those
primarily-affected workers affected by shifts in production to or increased imports
from Canada and Mexico. See 19 U.S.C. § 2331 (1993). The Trade Act of 2002
combined the benefits programs under NAFTA-TAA and the Trade Act of 1974
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and expanded those programs to expressly provide for benefits to “adversely
affected secondary workers.” See Pub. L. No. 107-210, Div. A, Title I, § 123(a),
116 Stat. 944 (2002); 19 U.S.C. § 2272(b) (2002). In this case, the primarily-
affected worker benefits under the NAFTA-TAA program fall within that Trade Act
program.
In contrast to primarily-affected workers, before losing employment,
secondarily-affected workers had employers that were “indirectly-affected” by
increased imports from or shifts of production to other countries. These
secondarily-affected workers had worked for employers that supplied materials
and/or components to a primary firm. Unlike primarily-affected workers,
secondarily-affected workers did not receive unemployment benefits under the
Trade Act of 1974. Instead, the Statement of Administrative Action (SAA) gave
Labor the authority to provide secondarily-affected worker benefits under the
JTPA. See H.R. Doc. No. 103-159, at 672 (1993) (“[T]hrough administrative
action, the Secretary of Labor will use existing authority under . . . the Job
Training Partnership Act . . . to provide assistance to workers in secondary firms
that supply or assemble products produced by firms that are directly affected.”)
(SAA); H.R. Rep. 103-361, at 92-93 (1993) reprinted in 1993 U.S.C.C.A.N. 2552,
2642-43 (“The Secretary of Labor will use existing authority under the [JTPA]
program to provide similar assistance to workers in secondary firms that supply
or assembly products directly affected by the NAFTA.”). At the heart of the
present appeal, the parties dispute whether the SAA and the NAFTA
Implementation Act, codified at 19 U.S.C. § 3311, created a secondarily-affected
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worker benefits program that was incorporated into the Trade Act of 2002 along
with the NAFTA-TAA program.
In June, 2001, several former Quality employees filed a petition seeking
benefits either as primarily-affected workers or as secondarily-affected workers.
After investigation, Labor certified the employees as a secondarily-affected
worker group that qualified for benefits under the JTPA / WIA. However, upon
publication of findings in the Federal Register, Labor denied the petition as a
whole, meaning that the group did not qualify either as primarily-affected or
secondarily-affected. See Notice of Determinations Regarding Eligibility To
Apply for Worker Adjustment Assistance and NAFTA Transitional Adjustment
Assistance, 67 Fed. Reg. 35,142 (Dep’t of Labor May 17, 2002). Thereafter, one
of the former Quality employees sent a letter of complaint to the Court of
International Trade requesting an appeal of Labor’s negative determination.
While the case was pending before the Court of International Trade, Labor
discovered that it had not published notice in the Federal Register of the
secondarily-affected worker benefits certification. Accordingly, Labor published
that notice for the first time. See Quality Fabricating, Inc., North Huntington, PA;
Affirmative Finding Regarding Qualification as a Secondarily-Affected Worker
Group Pursuant to the Statement of Administrative Action Accompanying the
North American Free Trade Agreement (NAFTA) Implementation Act, 68 Fed.
Reg. 53,397 (Dep’t of Labor, Sept. 10, 2003). Labor claims to have also
provided other forms of notice both before and after discovering the error in the
Federal Register. For instance, Labor claims to have faxed a copy of its
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determination to the state coordinator in Pennsylvania. At trial, however, Labor
could not lay a proper foundation for this evidence. Believing proper notice had,
at that point, been given for the secondarily-affected worker certification and
noting that benefits as secondarily-affected workers were substantially identical
to benefits as primarily-affected worker benefits, Labor moved to dismiss the
case as moot. Alternatively, Labor moved to dismiss the case for lack of
jurisdiction because the Court of International Trade’s jurisdiction under
28 U.S.C. §§ 1581(d)(1), (i)(4) encompasses only disputes under the Trade Act.
Labor asserts that the Trade Act did not incorporate the SAA program for
secondarily-affected workers.
The trial court disagreed with Labor on both grounds. The Court of
International Trade instead asserted jurisdiction to review the secondarily-
affected worker benefits issue because the SAA and NAFTA-TAA programs are
part of a unified program that falls within the court’s particular expertise in trade
matters. Former Employees of Quality Fabricating, Inc. v. U.S. Dep’t of Labor,
343 F. Supp. 2d 1272, 1279 (Ct. Int’l Trade 2004) (Trial Court Decision). The
trial court also found that the notice issue was not moot because, even with
republication in the Federal Register, Labor had not provided proper notice under
its own internal procedures. Id. at 1287. Thus, the trial court ruled for the former
Quality employees on the merits and ordered Labor to “exercise all reasonable
efforts” to identify the eligible employees, to explain these benefits to the former
employees, and to provide the court with status updates demonstrating its
compliance with the Order. Order, slip op. at 1-2. The present appeal followed.
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II.
This court reviews decisions of the Court of International Trade about
jurisdiction without deference. Xerox v. United States, 423 F.3d 1356, 1359
(Fed. Cir. 2005) (citations omitted). In general, “[t]he United States, as
sovereign, is immune from suit save as it consents to be sued.” Awad v. United
States, 301 F.3d 1367, 1372 (Fed. Cir. 2002) (quoting United States v.
Sherwood, 312 U.S. 584, 586 (1941)). Only an express statute suffices to waive
the sovereign immunity of the United States. West v. Gibson, 527 U.S. 212, 217
(1999); Yancheng Baolong Biochem. Corp. v. United States, 406 F.3d 1377,
1382 (Fed. Cir. 2005) (explaining that waivers of sovereign immunity must be
“unequivocally expressed” in statutory language) (quoting Lane v. Pena, 518
U.S. 187, 192 (1996)). A waiver statute may assign specific causes of action to
specific courts as a condition of consent. See Humane Soc’y. of United States v.
Clinton, 236 F.3d 1320, 1328 (Fed. Cir. 2001); Quality Tooling, Inc. v. United
States, 47 F.3d 1569, 1576-77 (Fed. Cir. 1995); NEC Corp. v. United States, 806
F.2d 247, 249 (Fed. Cir. 1986). Thus, this court must determine whether a
statute unequivocally granted a waiver for adjudication of Labor’s eligibility
determinations with respect to secondarily-affected worker groups in the Court of
International Trade.
In 1980, Congress sought to improve upon the judiciary’s ability to handle
increasingly complex international trade litigations by replacing the outdated
United States Customs Court with a full Article III trial court, the Court of
International Trade. See Customs Courts Act of 1980, Pub. L. No. 96-417, 94
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Stat. 1727 (codified primarily at scattered sections of 19 and 28 U.S.C.).
Congress intended for this newly formed court to reflect:
The re-emphasis and clarification of Congress’ intent that the
expertise and national jurisdiction of the Court of International
Trade . . . be exclusively utilized in the resolution of conflicts and
disputes arising out of the tariff and international trade laws,
thereby eliminating the present jurisdictional conflict between [the
Court of International Trade] and the federal district . . . courts.
Gregory C. Sisk, The Trial Courts Of The Federal Circuit: Diversity By Design,
13 Fed. Cir. B.J. 241, 254 (2003) (quoting H.R. Rep. No. 96-1235, at 28 (1980),
reprinted in 1980 U.S.C.C.A.N. 3729, 3739). Because NAFTA is, in effect, a
body of trade law (specifically regulating trade between the United States,
Canada and Mexico), the statutes implementing NAFTA vested the Court of
International Trade with considerable jurisdiction over litigations arising under
NAFTA, including Labor’s trade adjustment assistance certifications for primarily-
affected workers. See 28 U.S.C. § 1581(d) (vesting the Court of International
Trade with exclusive jurisdiction over Labor’s adjustment assistance
determinations under the Trade Act); 19 U.S.C. § 2331(c)(2) (1993) (stating that
persons petitioning for NAFTA-TAA benefits who are denied affected worker
status under the subsection should be automatically evaluated for benefits under
the Trade Act of 1974); see also Former Employees of Sonoco Prods. Co. v.
Chao, 372 F.3d 1291 (Fed. Cir. 2004) (reviewing denied petitions for benefits
under NAFTA-TAA); Former Employees of Barry Callebaut v. Chao, 357 F.3d
1377 (Fed. Cir. 2004) (same). The relevant jurisdictional provisions for the Court
of International Trade do not, however, waive sovereign immunity nor grant that
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court jurisdiction to review the determination, administration, and enforcement of
all trade adjustment assistance certifications by Labor.
Section 1581(d) authorizes the Court of International Trade to review “any
final determination of the Secretary of Labor under section 223 of the Trade Act
of 1974 with respect to the eligibility of workers for adjustment assistance under
such Act.” Similarly, section 1581(i)(4) limits the court’s review to Labor’s
administration and enforcement of Trade Act determinations under § 1581(d).
Thus, 28 U.S.C. §§ 1581(d), (i)(4) only authorize the trial court to review Labor’s
actions here if secondarily-affected worker benefits under the SAA fall within the
scope of the Trade Act as amended by the NAFTA Implementation Act.
In this regard, nothing in the NAFTA Implementation Act provides
secondarily-affected worker benefits under the Trade Act. Rather, 19 U.S.C.
§ 3311 simply approves the NAFTA with Canada and Mexico, and the SAA
proposed to implement the agreement. 1 There is no mention of secondarily-
affected worker benefits in § 3311 at all. Thus, some other statute must provide
1 The Omnibus Trade and Competitiveness Act of 1988, codified at
19 U.S.C. § 2903, and section 151 of the Trade Act of 1974, codified at 19 U.S.C.
§ 2191, required the President to submit a statement of administrative action to
Congress because the North American Free Trade Agreement was negotiated
using fast track provisions under these acts. See Cindy G. Buys, An
“Authoritative” Statement of Administrative Action: A Useful Political invention Or
A Violation Of The Separation Of Powers Doctrine?, 7 N.Y.U. J. Legis. & Pub.
Pol’y 73, 80 (2003) (describing the relationship between SAAs and trade
agreements, including NAFTA, that are established under the fast track
provisions of U.S. trade law). Specifically, section 2903 required the President:
(B) after entering into the agreement [to submit] a document to the House
of Representatives and to the Senate containing a copy of the final
legal text of the agreement, together with—
(i) a draft of an implementing bill, [and]
(ii) a statement of any administrative action proposed to
implement the trade agreement . . . .
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the necessary waiver for adjudication of the secondarily-affected worker benefits
issue in the Court of International Trade to be proper.
Turning to the SAA, the SAA explicitly distinguishes between primarily-
affected worker benefits under the NAFTA-TAA program and secondarily-
affected worker benefits under the JTPA. The SAA explains that only the
NAFTA-TAA program was incorporated into the Trade Act. Specifically, the SAA
states:
First, sections 501 through 506 of the NAFTA implementing bill
amend . . . the Trade Act of 1974 . . . to provide assistance for
workers in firms that are directly affected by imports form or shifts in
production to Mexico or Canada. Second, through administrative
action, the Secretary of Labor will use existing authority under . . .
the Job Training Partnership Act (“JTPA”) . . . to provide assistance
to workers in secondary firms that supply or assemble products
produced by firms that are directly affected.
H.R. Doc. No. 103-159 at 672 (emphasis added). Thus, the SAA explicitly states
that secondarily-affected worker benefits fall under the JTPA (succeeded by the
WIA). Id. Primarily-affected worker benefits, on the other hand, fall under the
Trade Act. See 19 U.S.C. § 2331(c)(2) (1993); Former Employees of Chevron
Prods. Co. v. U.S. Sec’y of Labor, 279 F. Supp. 2d 1342, 1345 n.2 (Ct. Int’l Trade
2003) (“[T]he NAFTA-TAA statute requires that—where petitioning workers are
found to be ineligible for NAFTA-TAA benefits—the Labor Department is to
automatically evaluate their eligibility for benefits under the TAA statute.”) Thus,
the SAA does not place secondarily-affected worker benefits within the Trade Act
along with the primarily-affected worker benefit program.
Because the SAA separates the secondarily-affected worker and
primarily-affected worker programs and the NAFTA Implementation Act does not
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incorporate the secondarily-affected worker program into the Trade Act, no
statute waives immunity nor authorizes suit in the Court of International Trade
with respect to Labor’s determinations on secondarily-affected worker benefits.
Indeed, the trial court concedes that neither the SAA nor the NAFTA
Implementation Act, on their faces, grant jurisdiction over the secondarily-
affected worker benefits claim. Trial Court Decision, 343 F. Supp. 2d at 1278.
Without an express waiver of immunity and consent to suit in the Court of
International Trade, the trial court lacks authority to proceed further.
This court recognizes that the NAFTA Implementation Act provides judicial
review of NAFTA-TAA claims under the Trade Act in the Court of International
Trade. This court also recognizes that Labor administers and enforces both
primary and secondary claims, often in one combined petition. These aspects of
trade law and policy, however, do not constitute an express statutory waiver of
sovereign immunity and grant of jurisdiction to the Court of International Trade.
Neither this court nor the trial court has authority to create a single coherent trade
related program for both primarily- and secondarily-affected workers. Moreover,
neither this court nor the trial court may create a unitary plan for judicial review of
both programs in a single forum absent express statutory authorization.
28 U.S.C. §§ 1581(d), (i)(4) do not provide that authority.
As previously discussed, the SAA separated the primarily-affected worker
benefit program under the Trade Act from the secondarily-affected worker benefit
program under the JTPA, and the NAFTA Implementation Act did not incorporate
the secondarily-affected worker benefit program into the Trade Act. Thus, no
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statute requires Labor to administer a single all inclusive benefits program
subject to the trial court’s jurisdiction. Even if Labor finds administrative
efficiency in handling claims for both forms of benefits in one unified petition with
one unified investigation, administrative convenience does not create an express
statutory waiver for jurisdiction.
For the aforementioned reasons, the Court of International Trade did not
possess jurisdiction to consider Labor’s determination on secondarily-affected
worker benefit eligibility. As for primarily-affected worker benefits, the trial court
specifically confirmed that the employees disclaimed any intent to seek primary
certification. Because the primarily-affected worker benefit claim was no longer
a part of the case when the trial court issued its Order, the trial court did not have
any jurisdiction over any part of the case.
IV.
In a final note, the Court of International Trade, under 28 U.S.C.
§ 2643(c)(2), has no authority to “grant an injunction or issue a writ of mandamus
in any civil action commenced to review a final determination of the Secretary of
Labor.” Here, the trial court’s Order directed Labor to take specific steps to notify
the employees, explain the benefits to the employees, and report back with
status updates. Further, the trial court apparently extended its Order to reach
federal government agencies and resources beyond Labor by directing utilization
of all available “government resources” to locate and provide notice to affected
employees. See Order, slip op. at 2. However, given the lack of jurisdiction in
the Court of International Trade over this case, this court need not reach the
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question of whether there is any basis upon which the Order of the Court directed
to the Secretary could possibly be sustained.
V.
For the reasons stated, this court concludes that the Court of International
Trade lacks jurisdiction to review Labor’s determinations with respect to
secondarily-affected worker benefit eligibility. The Order of the trial court is
hereby vacated, and the case is remanded with instructions to dismiss for lack of
jurisdiction.
COSTS
Each party shall bear its own costs.
VACATED and REMANDED
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