[Federal Register Volume 70, Number 234 (Wednesday, December 7, 2005)]
[Notices]
[Pages 72857-72858]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-6991]



[[Page 72857]]

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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-52,050]


Merrill Corporation, St. Paul, MN; Notice of Negative 
Determination on Reconsideration on Remand

    The United States Court of International Trade (USCIT) remanded to 
the Department of Labor for further investigation Former Employees of 
Merrill Corporation v. Elaine Chao, U.S. Secretary of Labor, Court No. 
03-00662 (issued July 28, 2005).
    The Department's initial negative determination for the workers of 
Merrill Corporation (hereafter ``Merrill'') was issued on July 22, 
2003. The Notice was published in the Federal Register on July 10, 2003 
(68 FR 43373). The determination was based on the finding that workers 
did not produce an article within the meaning of section 222 of the 
Trade Act of 1974. The Department determined that the subject worker 
group was not engaged in the production of an article, but rather 
engaged in activities related to document management services.
    The plaintiffs did not seek administrative reconsideration by the 
Department but sought judicial review by the USCIT on September 9, 
2003, asserting that Merrill produces an article (documents) and that 
the workers are engaged in this production.
    On April 2, 2004, the Department issued a Notice of Negative 
Determination on Remand for workers of the subject facility. The 
determination was based on the finding that the subject company does 
not produce an ``article'' within the meaning of the Trade Act of 1974. 
The Notice was published in the Federal Register on April 16, 2004 (69 
FR 20645).
    On July 28, 2005, the USCIT remanded the matter to the Department, 
directing the Department to determine whether
    (1) Plaintiffs were engaged in ``production'' of printed matter or 
other articles; (2) the volume of articles produced by Plaintiffs; (3) 
Merrill's customers contracted for the production of printed matter; 
(4) sales or production (or both) have decreased; (5) there has been or 
is likely to be an increase in imports of articles like or directly 
competitive with Merrill's articles; (6) any increase in imports 
contributed importantly to Plaintiffs' separation from Merrill and to 
its decline in sales or production; and (7) there was a shift in 
production to a foreign country of articles like or directly 
competitive with Merrill's articles, and if so, to what country.
    For purposes of determining workers' eligibility to apply for Trade 
Adjustment Assistance (TAA), the relevant period is the complete 
twelve-month period prior to the petition date. Because the petition 
date is June 10, 2003, the scope of the investigation is confined to 
June 2002 through May 2003.
    During the second remand investigation, the Department contacted 
the company to request information about the subject facility and 
affiliated domestic print facilities and requested information from the 
plaintiffs. Further, the Department provided the Plaintiff an 
opportunity to respond to the Department's preliminary findings. Supp. 
AR at 59-63.
    According to Merrill, the company derives revenue from document 
management services and commercial and business forms printing. A 
company official also stated that the financial documents are 
customized and owned by the client, that composed documents are printed 
pursuant to clients' requests, that the printing is done at an off-site 
facility, and that print jobs are transmitted electronically from the 
subject facility to the off-site printing facilities. Supp. AR at 10-
11, 36.
    In a September 2, 2005 letter, the plaintiffs confirmed the unique 
and customized nature of the documents but contradicted Merrill's 
assertion that printing was not done at the subject facility. Supp. AR 
at 15-17.
    The Department sought clarification from the subject company and 
was informed that the printing facility at Merrill, St. Paul, Minnesota 
had closed by May 2001 and that Merrill had several domestic printing 
facilities during the relevant period. Supp AR at 36, 50-51.
    Since no production took place at the subject facility during the 
relevant period, the Department investigated whether the subject 
workers supported production at an affiliated, domestic production 
facility during June 2002 through May 2003, whether sales and/or 
production declined at that production facility, and whether increased 
imports during the relevant period contributed importantly to those 
declines.
    As previously stated, composed documents were transmitted 
electronically from the subject facility to off-site printing 
facilities when customers requested physical copies of their financial 
documents. Supp AR at 11, 17 The expanded investigation revealed that 
production at all five printing facilities decreased during June 2002 
through May 2003 from June 2001 through May 2002 levels. Supp. AR at 
58.
    After completing its investigation, the Department concludes that 
the workers should not be certified for TAA benefits. The plaintiffs 
claim they are eligible for benefits because Merrill shifted production 
to India. The Department has determined that the workers created 
electronic documents for printing and filing with the Securities and 
Exchange Commission (SEC). It is undisputed that Merrill sent that 
responsibility to India. The Department has consistently determined, 
however, that electronic creations are not ``articles'' for the 
purposes of the Trade Act unless they are embodied in a physical 
medium. See, e.g., Former Employees of Dendrite International, 70 FR 
212247-3 (April 25, 2005); Former Employees of Gale Group, Inc., 70 FR 
6732-1 (February 8, 2005). Therefore, the workers do not produce an 
article themselves.
    In its letter of November 7, 2005, the plaintiffs argue that the 
important issue is whether Merrill, not the workers themselves, creates 
an article. Supp. AR at 61. In order for the Department to certify in a 
case where the workers allege a shift of production, however, there 
must be a shift of production of an article. In the present case, the 
only job shifted was the creation of electronic files, which, as 
discussed above, is not the production of an article.
    Because the data entry function formerly done by the workers was 
the only function transferred to India, and because the financial 
reports were delivered to the United States via electronic transmission 
only, then there was no shift of production of an article, as required 
by the Trade Act. See Former Employees of Murray Engineering v. Chao, 
358 F. Supp.2d 1269, 1272 n.7 (``the language of the Act clearly 
indicates that the HTSUS governs the definition of articles, as it 
repeatedly refers to ``articles'' as items subject to a duty''); HTS, 
General Note 3(I) (exempting ``telecommunications transmissions'' from 
``goods subject to the provisions of the [HTSUS]'').
    Furthermore, under the Department's interpretation of ``like or 
directly competitive,'' (29 CFR 90.2) ``like'' articles are those 
articles which are substantially identical in inherent or intrinsic 
characteristics and ``directly competitive'' articles are those 
articles which are substantially equivalent for commercial purposes 
(essentially interchangeable and adapted to the same uses), even though 
the articles may not be substantially identical in their inherent or 
intrinsic characteristics.

[[Page 72858]]

    During the remand investigation, the Department confirmed that the 
material created by the workers and produced at the Merrill printing 
facilities is unique to each order. Supp. AR at 10-11, 36. No two 
orders for one customer are alike because the material captures legal 
and financial information which is unique unto itself. Similarly, one 
customer's order cannot be intrinsically similar to another customer's. 
Accordingly, there are no articles which are ``like'' or ``directly 
competitive'' to any single ``article'' created by Merrill because each 
electronic file is a unique document which is created for the sole 
purpose of satisfying a specific customer's particular need at a 
particular point in time. Thus, there are no articles which are 
essentially interchangeable or can be adapted to the same use as a 
Merrill document, and there are no articles ``like or directly 
competitive'' with any Merrill ``article.'' See Former Employees of 
Murray Engineering, Inc. v. Chao, 2005 WL 1527642 (CIT 2005) (articles 
that are ``neither interchangeable with nor substitutable'' for the 
petitioner's designs are not considered directly competitive.) (citing 
Machine Printers & Engravers Ass'n v. Marshall, 595 F.2d 860, 862 (DC 
Cir. 1979)). Since there are no articles which are like or directly 
competitive with those produced by the subject company, there cannot be 
any imports, much less increased imports. Therefore, neither section 
222(a)(2)(A) nor section 222(a)(2)(B) of the Trade Act, as amended, has 
been satisfied.
    The plaintiffs argue that the Department's interpretation ignores 
the fact that the workers' jobs were shifted to India. Supp. AR at 62. 
In fact, the Department recognizes that the workers' jobs were shifted 
overseas. The Trade Act, however, does not provide benefits to every 
person whose job was shifted overseas. First, there must be the shift 
of production of an ``article,'' which did not occur here. Supp. AR at 
65 Second, the Trade Act requires, in a case such as this one, that 
there be an increase of imports of articles ``like or directly 
competitive'' to the articles whose production was shifted overseas. 
The plaintiffs argue that the ``process'' shifted overseas was 
identical to the ``process'' that had been done in the United States. 
Supp. AR at 62. However, it is not enough for the process to be ``like 
or directly competitive.'' As discussed above, each individual 
electronic document transmitted to the United States is inherently 
unlike and not competitive with any other electronic transmission.
    The Department's investigation has demonstrated that some of 
Merrill's customers ask that the SEC filings be placed on a physical 
medium. For those customers, Merrill delivered the electronic creations 
of the plaintiffs to an in-house printer who puts the SEC filing in 
book form. Therefore, the plaintiffs could be viewed as supporting 
production of an article. The Department has determined, however, that 
no printing was transferred to another country. Supp. AR at 65. 
Therefore, there was no shift of production of an article.

Conclusion

    After reconsideration on remand, I affirm the original notice of 
negative determination of eligibility to apply for adjustment 
assistance for workers and former workers of Merrill Corporation, St. 
Paul, Minnesota.

    Signed at Washington, DC this 17th day of November 2005.
Elliott S. Kushner,
Certifying Officer, Division of Trade Adjustment Assistance.
 [FR Doc. E5-6991 Filed 12-6-05; 8:45 am]
BILLING CODE 4510-30-P