Petition for Writ of Certiorari — K. Wendell Lewis, et al., Petitioners v. Pension Benefit Guaranty Corporation

APPENDIX

ia

TABLE OF CONTENTS

Page

APPENDIX

A

–

Judgment

with

Unpublished Disposition (D.C. Cir. Dec. 7,

2020) ..........................................................................1a

APPENDIX B – Memorandum Opinion

Granting

Pension

Benefit

Guaranty

Corporation’s

Motion

for

Summary

Judgment and Denying Plaintiffs’ Motion for

Summary Judgment (D.D.C. June 11, 2018) ...........7a

APPENDIX C – Order Granting Pension

Benefit Guaranty Corporation’s Motion for

Summary Judgment on Counts II through V

and Dismissing Count VI of the First

Amended Complaint (D.D.C. June 11, 2018) .........92a

APPENDIX D – Order Entering Final

Judgment and Dismissing Count I of the

First Amended Complaint (D.D.C. Aug. 29,

2019) ........................................................................94a

APPENDIX E – Order Denying Petition for

Rehearing En Banc (D.C. Cir. Feb. 4, 2021) ..........96a

APPENDIX F – Relevant Statutory and

Regulatory Provisions .............................................98a

APPENDIX G – List of Parties to the

Proceedings............................................................120a

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 19-5261

September Term, 2020

FILED ON: DECEMBER 7,

2020

K. WENDELL LEWIS, ET AL.,

APPELLANTS

v.

PENSION BENEFIT GUARANTY CORPORATION,

APPELLEE

_______

Appeal from the United States District Court

for the District of Columbia

(No. 1:15-cv-01328)

_______

Before: HENDERSON and WALKER, Circuit Judges,

and GINSBURG, Senior Circuit Judge.

JUDGMENT

We heard this appeal on the record from the

United States District Court for the District of

Columbia and the parties’ briefs and arguments. We

fully considered the issues and determined that a

published opinion is unnecessary. See D.C. Cir. R.

36(d).

We AFFIRM the district court’s judgment.

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*

*

*

After Delta Air Lines went bankrupt in 2005, it

entered into an agreement to end its pension plan,

which terminated on September 2, 2006. At that

point, the Pension Benefit Guaranty Corporation

(PBGC) became the plan’s trustee under the

Employee Retirement Income Security Act. The

Pilots in this case, who retired from Delta, later

challenged several decisions PBGC made.

The district court dismissed one count of the

Pilots’ Amended Complaint (Count VI), and it

granted summary judgment to PBGC on the

remaining counts (Counts II-V). Lewis v. PBGC, 314

F. Supp. 3d 135 (D.D.C. 2018). Because we agree

with that decision’s well-reasoned approach to the

merits of the Pilots’ claims, we affirm.1

*

*

*

As an initial matter, we disagree with the Pilots’

argument against deferring to how PBGC

interprets ERISA’s ambiguous provisions.

In Davis v. PBGC, “[w]e [saw] no reason to

depart from the usual deference we give to an

agency interpreting its organic statute.” 571 F.3d

1288, 1293 (D.C. Cir. 2009) (Davis I). We thus

deferred in Davis I “to the PBGC’s authoritative

and reasonable interpretations of ambiguous

provisions of ERISA.” Id.

Four years later, in a later stage of the same

litigation, we declined to say “whether the PBGC is

entitled to [Chevron] deference . . . when it acts as

1 We have jurisdiction, 28 U.S.C. § 1291, and our review of the

district court is de novo. Western Surety Co. v. U.S. Engineering

Construction, LLC, 955 F.3d 100, 104 (D.C. Cir. 2020).

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the trustee in an involuntary retirement plan

termination.” Davis v. PBGC, 734 F.3d 1161, 1167

(D.C. Cir. 2013) (Davis II).

The Pilots argue that Davis I isn’t binding

because Davis II called it into question. But Davis

II meant only what it said: “Regardless of the

standard of deference, the Pilots’ claims relating to

the PBGC’s interpretation of the statute and

regulations must fail.” Id. In other words, even if

this Court hadn’t deferred to PBGC in Davis II, the

outcome of Davis II would have been the same. See

id. And, although we decided Davis I in reviewing a

preliminary-injunction decision, Davis I remains

binding precedent. See Mahoney v. Babbitt, 113

F.3d 219, 222 (D.C. Cir. 1997).

*

*

*

Count II: According to the Pilots, when PBGC

allocated the pension plan’s assets, PBGC should

have considered the nearly $2 billion that other

pilots received when the pension plan terminated.

See JA 125-27. But that money never became a

pension plan asset. See id. at 883, 126 ¶ 77; see also

id. at 960. In other words, no one was entitled to

that money “under the plan terms.” PBGC v. LTV

Corp., 496 U.S. 633, 638 (1990) (citing 29 U.S.C. §§

1301(a)(8), 1322(a) & (b)). And ERISA requires

PBGC to calculate benefits based only on what

beneficiaries are entitled to “under the plan terms.”

Id.; see also 29 U.S.C. § 1344(a) (“the plan

administrator shall allocate the assets of the plan”).

Count III: The Pilots say that PBGC

misinterpreted the phrase “in effect” as “payable”

when it decided what benefits were “in effect” at

least five years before the pension plan’s

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termination. But Davis I expressly held that

PBGC’s interpretation of “in effect” as “payable”

was a reasonable interpretation of ambiguous text.

571 F.3d at 1293.

That matters here because the Pilots point to an

increased compensation limit on benefits that did

not become payable to them until July 1, 2002. 2

Because that date was not five years before the

pension plan terminated on September 2, 2006,

PBGC was correct when it did not consider the

increased compensation limit.

The Pilots argue in their reply brief that Delta

did not properly promulgate the amendment

cementing this July 1, 2002 date. But because the

Pilots did not raise that argument in their opening

brief to this Court, they forfeited it. World Wide

Minerals, Ltd. v. Republic of Kazakhstan, 296 F.3d

1154, 1160 (D.C. Cir. 2002).

Count IV: The Pilots claim PBGC illegally

excluded certain benefits “in effect” at least 5 years

before the plan terminated. JA 138-44; see 29

U.S.C. § 1344(a)(3)(A).3 But those benefits did not

increase the Pilots’ pension checks until July 1,

2002. 4 To be sure, those benefits increased the

See JA 399 (“The Earnings taken into account in determining

benefit accruals of an Employee in any Plan Year beginning

after June 30, 2002 shall not exceed $200,000, as adjusted for

cost-of-living increases in accordance with Section 401(a)(17)(B)

of the [Internal Revenue] Code.”).

3 PBGC argues that the Pilots waived their Count IV and

Count V(B) arguments by not raising them at the

administrative level. Appellee Br. at 45-46, 53. We assume

without deciding that the Pilots did not waive these arguments

by failing to raise them before the PBGC Appeals Board.

4 JA 402 (“With respect to Participants whose Annuity Starting

Date was before July 1, 2001, the increased 415 limit described

2

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pension checks of other pilots — i.e., pilots who

were not eligible to retire by July 1, 2001. 5 But

those (active) pilots are not these (retired or

eligible-to-retire) Pilots.

Count V: After the pension plan terminated,

PBGC recovered money from Delta. PBGC defined

the value of that money based on what it was worth

on the date the plan terminated. JA 144-50. That’s

less than what it was worth a month later when

PBGC recovered it (because a dollar today is more

valuable today than it is tomorrow).

The Pilots argue PBGC should not have

calculated the value of the recovery based on the

termination date. And they are right that ERISA

doesn’t require PBGC’s approach. 29 U.S.C. §

1322(c)(3)(C)(i). But ERISA also does not prohibit

it. Id. And the Pilots have not shown that using the

termination date for the recovery’s value was

“unreasonable.”

in Section 12.11(a)(i) shall be effective for annuity payments

made on or after July 1, 2002.”); see also id. (“provided,

however, that such increase shall only be applied to the

annuity payments made from this Plan to former participants

on or after July 1, 2002.”).

5 5 See JA 402 (“This amendment shall be effective beginning

with the limitation year starting on July 1, 2001 for those

Employees whose Annuity Starting Date is on or after July 1,

2001.”); see also id. (“Benefit increases resulting from the

increase in the limit of Section 415(b) of the [Internal Revenue

Code under the Economic Growth and Tax Relief Reconciliation

Act of 2001] shall be provided to all current and former

participants (with benefits limited by Section 415(b)) who have

an accrued benefit under the Plan immediately prior to July 1,

2001 (other than an accrued benefit resulting from a benefit

increase solely as a result of the increases in limitations under

Section 415))”).

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Count VI: The Pilots say PBGC violated the

Administrative Procedure Act. JA 150-51. But that

claim is duplicative of the Pilots’ ERISA claims. See

JA 97. In this case, ERISA “provides an adequate

alternative remedy, barring APA review.” Gulf

Coast Maritime Supply, Inc. v. United States, 867

F.3d 123, 131 (D.C. Cir. 2017) (cleaned up).

*

*

*

This disposition is unpublished. See D.C. Cir. R.

36(d). We direct the Clerk to withhold this mandate

until seven days after resolution of a timely

petition for rehearing or for rehearing en banc. See

Fed. R. App. P. 41(b); D.C. Cir. R. 41(a)(1).

FOR THE COURT:

Mark J. Langer, Clerk

BY:

/s/

Michael C. McGrail

Deputy Clerk

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APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

K. WENDELL LEWIS,

et al.,

Plaintiffs,

v.

PENSION BENEFIT

GUARANTY

CORPORATION

Defendant.

)

)

)

)

)

)

)

)

)

)

)

Civil Action No. 15-1328

(RBW)

[FILED June 11, 2018]

MEMORANDUM OPINION

The plaintiffs, approximately 1,700 former Delta

Air Lines, Inc. (“Delta”) pilots, initiated this action

against the defendant, the Pension Benefit Guaranty

Corporation (the “Corporation” or the “PBGC”),

challenging

the

Corporation’s

benefits

determinations

regarding

the

Delta

Pilots

Retirement Plan (the “Pilots Plan” or “Plan”) under

the Employment Retirement Income Security Act

(the “ERISA”), 29 U.S.C. § 1303(f) (2012). See First

Amended Complaint (“Am. Compl.”) ¶¶ 1–14, 73–

150. 1 Currently pending before the Court are the

The plaintiffs also assert a claim for breach of fiduciary duty,

see Am. Compl. ¶¶ 63–72, and a claim under the Administrative

Procedure Act (“APA”), 5 U.S.C. §§ 701–06 (2012), see id. ¶¶

151–56. The Court earlier denied the Corporation’s motion to

dismiss the plaintiffs’ claim for breach of fiduciary duty, but

granted the Corporation’s motion to certify the issue for

interlocutory appeal. See Lewis v. PBGC, No. 15-1328 (RBW),

2017 WL 7047932, at *1–4 (D.D.C. Jan. 23, 2017) (Walton, J.).

1

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Plaintiffs’ Motion for Summary Judgment (“Pls.’

Mot.”) and the Pension Benefit Guaranty

Corporation’s Cross-Motion for Summary Judgment

and Opposition to the Plaintiffs’ Motion for

Summary Judgment (“Def.’s Mot.”). Upon careful

consideration of the parties’ submissions,2 the Court

concludes for the reasons that follow that it must

Resolution of that issue is currently pending before the District

of Columbia Circuit. See Lewis v. PBGC, No. 17-5068 (D.C. Cir.

filed Apr. 12, 2017). As for the plaintiffs’ APA claim, the

plaintiffs explain in their briefing that they only brought this

claim “in the alternative, in case the Corporation was to

argue . . . that the . . . APA . . . should govern their claims.”

Plaintiffs’ Reply in Support of Their Motion for Summary

Judgment and in Opposition to Defendant’s Cross-Motion for

Summary Judgment (“Pls.’ Reply”) at 42. Both parties agree,

however, “that [the p]laintiffs’ claims should be governed by

[the] ERISA.” Id.; see also Pension Benefit Guaranty

Corporation’s Memorandum in Support of Its Cross-Motion for

Summary Judgment and in Opposition to the Plaintiffs’ Motion

for Summary Judgment (“Def.’s Mem.”) at 45 (claiming that the

plaintiffs’ APA claim “is simply a restatement of their ERISA

claims”). The Court therefore dismisses the plaintiffs’ APA

claim as duplicative. See 5 U.S.C. § 704 (limiting judicial review

of agency action pursuant to the APA to “final agency action for

which there is no other adequate remedy in a court”); see also

Davis v. PBGC, 864 F. Supp. 2d 148, 167 (D.D.C. 2012)

(dismissing the plaintiffs’ APA claim at the summary judgment

stage because the plaintiffs “concede[d] that . . . [the APA claim]

was brought solely as a protective claim, in case the PBGC

sought to argue that this case was not cognizable under [the]

ERISA”), aff’d, 734 F.3d 1161 (D.C. Cir. 2013).

2 In addition to the filings already identified and the

Administrative Record (“AR”), the Court considered the

following submissions in rendering its decision: (1) the

Plaintiffs’ Memorandum in Support of Motion for Summary

Judgment (“Pls.’ Mem.”); and (2) the Pension Benefit Guaranty

Corporation’s Reply Memorandum in Support of Its CrossMotion for Summary Judgment (“Def.’s Reply”).

9a

deny the plaintiffs’

Corporation’s motion.

motion

and

grant

the

I. BACKGROUND

A.

Statutory Background

The ERISA, a “comprehensive and reticulated

statute,” Nachman Corp. v. PBGC, 446 U.S. 359, 361

(1980), was enacted in part to “ensure that

employees and their beneficiaries would not be

deprived of anticipated retirement benefits by the

termination of pension plans before sufficient funds

[had] been accumulated in the plans,” PBGC v. R.A.

Gray & Co., 467 U.S. 717, 720 (1984). “The PBGC

administers and enforces Title IV of [the] ERISA,”

PBGC v. LTV Corp., 496 U.S. 633, 637 (1990), which

“created the [PBGC] and a termination insurance

program to protect employees against the loss of

‘nonforfeitable’ benefits upon termination of pension

plans that lack sufficient funds to pay such benefits

in full,” Nachman, 446 U.S. at 361 n.1; see also 29

U.S.C. § 1302(a)(2) (providing that the Corporation’s

purpose is to, inter alia, “provide for the timely and

uninterrupted payment of pension benefits to

participants and beneficiaries under plans to which

[Title IV] applies”). As the Supreme Court has

explained:

When a plan covered under Title IV

terminates with insufficient assets to

satisfy its pension obligations to the

employees, the PBGC becomes trustee of

the plan, taking over the plan’s assets and

liabilities. The PBGC then uses the plan’s

assets to cover what it can of the benefit

obligations. The PBGC then must add its

own funds to ensure payment of most of

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the remaining “nonforfeitable” benefits,

i.e., those benefits to which participants

have earned entitlement under the plan

terms as of the date of termination. [The]

ERISA does place limits on the benefits

[the] PBGC may guarantee upon plan

termination, however, even if an employee

is entitled to greater benefits under the

terms of the plan. In addition, benefit

increases resulting from plan amendments

adopted within five years of the

termination are not paid in full.

LTV Corp., 496 U.S. at 637–38 (internal citations

omitted). When the Corporation becomes a plan

trustee, it becomes a fiduciary of the plan, see 29

U.S.C. § 1342(d)(3), and must “discharge [its]

duties . . . solely in the interest of the participants

and beneficiaries and . . . for the exclusive purpose

of: (i) providing benefits to participants and their

beneficiaries; and (ii) defraying reasonable expenses

of administering the plan,” id. § 1104(a)(1)(A).

1. Compensation

Limits

and

Qualified

Benefit

A provision of the tax code limits the “annual

compensation of each employee” that an ERISAqualified pension plan may “take into account” in

calculating that employee’s benefits under the plan

(the “compensation limit”). See I.R.C. § 401(a)(17)

(2012); see also AR 15 (“The IRC § 401(a)(17)

limit . . . caps the amount of earnings a plan may use

to calculate benefits under a tax-qualified plan . . . ”).

On June 7, 2001, Congress increased the

compensation limit to $200,000 in the Economic

Growth and Tax Relief Reconciliation Act of 2001

(the “EGTRRA”). See Pub. L. No. 107-16, § 611(c)(1),

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115 Stat. 38, 97 (2001); see also I.R.C. § 401(a)(17).

Congress provided that the increased compensation

limit applied to plan years beginning after December

31, 2001. See Pub. L. No. 107-16, § 611(i)(l), 115

Stat. at 100. An IRS notice setting effective dates for

the increased compensation limit, issued September

17, 2001, further provided:

In the case of a plan that uses annual

compensation for periods prior to the first

plan year beginning on or after January 1,

2002, to determine accruals or allocations for

a plan year beginning on or after January 1,

2002, the plan is permitted to provide that

the $200,000 compensation limit applies to

annual compensation for such prior periods

in determining such accruals or allocations.

I.R.S. Notice 2001-56, 2001-2 C.B. 277.

Another provision of the tax code limits the

annual benefit payments that a plan can make to a

participant or beneficiary (the “qualified benefit

limit”). See I.R.C. § 415(b). The EGTRRA increased

the qualified benefit limit to $160,000. See Pub. L.

No. 107-16, § 611(a)(l), 115 Stat. at 96; see also

I.R.C. § 415(b).3 Congress provided that the increase

3 The EGTRRA also provided cost-of-living adjustments to the

qualified benefit limit that would occur in subsequent years.

See Pub. L. No. 107-16, § 611(a)(4), 115 Stat. at 96; see also

I.R.C. § 415(d). Although the plaintiffs initially challenged the

Corporation’s determination of these cost-of-living adjustments

in Claim Four of their First Amended Complaint, see Am.

Compl. ¶ 115 (“The PBGC also erred in excluding the

Congressional cost-of-living adjustments to the [q]ualified

[b]enefit [l]imit.”), they appear to have abandoned that

challenge, as they do not raise the issue at all in their motion

for summary judgment, see generally Pls.’ Mot.; see also Pls.’

Reply. As a result, the Court need not address the issue.

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to the qualified benefit limit applied to plan years

ending after December 31, 2001. See Pub. L. No.

107-16, § 611(i)(l), 115 Stat. at 100.

2. Priority Categories

The ERISA establishes six categories, in

descending order of priority, to which the

Corporation must allocate a terminated plan’s assets

upon its termination. See 29 U.S.C. § 1344(a)(1)–(6).

The first two priority categories (“PCs”), which

concern benefits “derived from the participant[s’]

mandatory contributions,” id. § 1344(a)(2), are not

relevant in this case because the Plan “never

required mandatory employee contributions,” AR

877. Therefore, the highest priority category relevant

in this case is PC3, which includes benefits for pilots

who were retired or eligible to retire “as of the

beginning of the [three]-year period ending on the

termination date of the plan, . . . based on the

provisions of the plan (as in effect during the [five]year period ending on such date) under which such

benefit would be the least.” 29 U.S.C. § 1344(a)(3)(A),

(B).

PC3 benefits are comprised of the following two

categories:

(A) in the case of the benefit of a participant

or beneficiary which was in pay status

as of the beginning of the [three]-year

period ending on the termination date of

the plan, to each such benefit, based on

the provisions of the plan (as in effect

during the [five]-year period ending on

such date) under which such benefit

would be the least, [and]

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(B) in the case of a participant’s or

beneficiary’s benefit (other than a

benefit described in subparagraph (A))

which would have been in pay status as

of the beginning of such [three]-year

period if the participant had retired

prior to the beginning of the [three]-year

period and if his benefits had

commenced (in the normal form of

annuity under the plan) as of the

beginning of such period, to each such

benefit based on the provisions of the

plan (as in effect during the [five]-year

period ending on such date) under

which such benefit would be the least.

For purposes of subparagraph (A), the

lowest benefit in pay status during a

[three]-year period shall be considered the

benefit in pay status for such period.

Id. § 1344(a)(3)(A)–(B). “These provisions exclude

certain benefits from [PC3] based on whether (1)

they were in pay status (i.e., actually being paid) or

could have been in pay status (if an individual had

retired) within three years of the date of the plan

termination and (2) the provisions of the plan

creating them were ‘in effect’ within the five-year

period prior to plan termination.” Davis v. PBGC,

734 F.3d 1161, 1165 (D.C. Cir. 2013) (“Davis II”).

The other PC relevant to this case is PC5, which

includes “all other nonforfeitable benefits under the

plan,” 29 U.S.C. § 1344(a)(5), that are not

guaranteed by the Corporation, see id. §

1344(a)(4)(A), and has two sub-categories. The first

subcategory, PC5(a), constitutes vested benefits as

of five years prior to the plan’s termination. See id. §

14a

1344(b)(4)(A) (defining PC5(a) benefits as those

“under the plan as in effect at the beginning of the

[five]-year period ending on the date of plan

termination”). The second subcategory, PC5(b),

constitutes all other vested benefits that went into

effect on a later date, which cannot be funded unless

all benefits in PC5(a) are funded, see id. §

1344(b)(4)(B) (stating that PC5(b) benefits “shall be

determined” only “[i]f the assets available for

allocation under [PC5(a)] are sufficient to satisfy in

full th[ose] benefits”).

3. Recovery Benefits

Benefits that are neither funded by the

terminated plan’s assets nor guaranteed by the

Corporation may be funded, to the extent possible,

by funds recovered by the Corporation from a plan’s

contributing sponsor. See id. §§ 1322(c); 1362(a)–(b);

see also Allied Pilots Ass’n v. PBGC, 334 F.3d 93,

95–96 (D.C. Cir. 2003) (“If the terminated plan lacks

sufficient funds to satisfy existing obligations to

employees, thus requiring the PBGC to use its own

funds to pay benefits, the PBGC has authority to

recover ‘the total amount of the unfunded benefit

liabilities’ from the plan’s sponsor and members of

the sponsor’s ‘controlled group,’ i.e., entities that

belong to the same corporate family as the

sponsor . . . .” (citation omitted)). When the

Corporation recovers unfunded benefit liabilities, see

29 U.S.C. § 1362(b)(1)(A), it is required to share a

portion of those recoveries under the priority

allocation scheme set forth in § 1344(a), see id. §

1322(c). The statute designates how the Corporation

should calculate the portion of the recovery funds

available for payment to participants and

beneficiaries:

it

must

“multiply[]—(A)

the

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outstanding amount of benefit liabilities under the

plan (including interest calculated from the

termination date), by (B) the applicable recovery

ratio.” Id. § 1322(c)(2). For plans where “the

outstanding amount of benefit liabilities exceeds

$20,000,000,” like the Plan in this case, the statute

defines “recovery ratio” as the ratio of

(i) the value of the recoveries of the

[C]orporation [for a single-employer

plan terminated under a distress

termination] to

(ii) the amount of unfunded benefit liabilities

under such plan as of the termination

date.

Id. § 1322(c)(3)(C).

4. Benefit Determinations and Appeals

The District of Columbia Circuit has summarized

how the Corporation handles benefit determinations

and appeals of those determinations as follows:

The PBGC makes initial determinations

“with respect to allocation of assets under [29

U.S.C. § 1344].” 29 C.F.R. § 4003.1(b)(4).

They are issued in writing and must “state

the reason for the determination.” Id. §

4003.21. “Any person aggrieved by an initial

determination . . . may file an appeal,” id. §

4003.51, to be considered by the PBGC

Appeals Board, which is composed of three

PBGC officials, id. § 4003.2. In a written

appeal, appellants can request to appear

before the Board and present witnesses to

testify before the Board. Id. § 4003.54. The

Board has discretion to reject such requests.

Id. § 4003.55(b). A decision issued by the

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Appeals Board “constitutes the final agency

action by the PBGC with respect to the

determination which was the subject of the

appeal.” Id. § 4003.59(b).

Davis II, 734 F.3d at 1166 (alterations in original).

B.

Factual Background

The plaintiffs in this case, former Delta pilots (or

their beneficiaries), are participants or beneficiaries

under the Plan, which is a single-employer, taxqualified deferred benefit plan. Lewis v. PBGC, 197

F. Supp. 3d 16, 19 (D.D.C. 2016) (Walton, J.). The

relevant facts regarding the Plan and the

Corporation’s actions taken with respect to the Plan

are set forth below.

1. The Plan’s Compensation Limit

On June 21, 2001, two weeks after the EGTRRA

was passed, see Pub. L. No. 107-16, § 611(c)(1), 115

Stat. at 38, Delta and the “pilots in the service of

Delta[,] . . . as represented by the Air Line Pilots

Association, International” (the “ALPA”), signed the

Pilots Working Agreement (the “PWA”), a collective

bargaining agreement that updated the Plan, see AR

3411– 12. The PWA provides that any statutory

increase to the compensation limit “will be effective

for the . . . [Plan] as of the earliest date that the

increased [q]ualified [p]lan [l]imits could have

become legally effective for that Plan, had that Plan

not been collectively bargained,” AR 3697, and that

the provision “will be effective on September 1,

2001,” AR 3695.

On June 27, 2003, Delta signed the Fourth

Amendment to the Delta Pilots Retirement Plan As

Amended and Restated Effective July 1, 1996 (the

“Fourth Amendment”). See AR 244, 251. The Fourth

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Amendment, which states that it is “[e]ffective July

1, 2002, or such other effective date as may be

provided in a provision below,” explains that its

purpose is “to reflect certain provisions of . . . [the]

EGTRRA,” and that it “is intended as good faith

compliance with the requirements of [the] EGTRRA

and is to be construed in accordance with [the]

EGTRRA and guidance issued thereunder.” AR 244.

To that end, the Fourth Amendment adds the

following paragraph to the Plan:

The Earnings taken into account in

determining benefit accruals of an Employee

in any Plan Year beginning after June 30,

2002 shall not exceed $200,000 . . . In

determining benefit accruals of [retired

e]mployees . . . in Plan Years beginning after

June 30, 2002, the annual compensation

limit provided in this paragraph for Plan

Years beginning before July 1, 2002 shall be

$200,000, or, if greater, the annual

compensation limit in effect under Section

401(a)(17) of the Code for that Plan

Year . . . .

AR 245.

2. The Plan’s Qualified Benefit Limit

The PWA provision governing the qualified

benefit limit also governs the compensation limit,

and states that any statutory increase to the

qualified benefit limit “will be effective for the . . .

[Plan] as of the earliest date that the increased

[q]ualified [p]lan [l]imits could have become legally

effective for that Plan, had that Plan not been

collectively bargained,” AR 3697, and that the

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provision “will be effective on September 1, 2001,”

AR 3695.

The Fourth Amendment amended the Plan to

incorporate the EGTRRA’s increase in the qualified

benefit limit as follows:

Benefit increases resulting from the increase

in the limit of Section 415(b) of the [Tax]

Code under [the] EGTRRA shall be provided

to all current and former participants (with

benefits limited by Section 415(b)) who have

an accrued benefit under the Plan

immediately prior to July 1, 2001 (other than

an accrued benefit resulting from a benefit

increase solely as a result of the increases in

limitations under Section 415)); provided,

however, that such increase shall only be

applied to the annuity payments made from

this Plan to former participants on or after

July 1, 2002.

AR 248. The Fourth Amendment also provided

that it

shall be effective with the [Plan] year

starting on July 1, 2001 for those Employees

whose Annuity Starting Date is on or after

July 1, 2001. With respect to [p]articipants

whose Annuity Starting Date was before

July 1, 2001, the increased 415 limit . . .

shall be effective for annuity payments made

on or after July 1, 2002.

AR 248.

19a

3. Bankruptcy Proceedings and Letter of

Agreement #51

In September 2005, Delta filed for Chapter 11

bankruptcy in the United States Bankruptcy Court

for the Southern District of New York (the

“Bankruptcy Court”). AR 6. Thereafter, the

Corporation determined that the Plan had

insufficient assets to cover its guaranteed benefit

liabilities as of the proposed date of the Plan’s

termination. AR 7. In the course of the bankruptcy

proceedings, Delta negotiated with the ALPA

regarding the Plan’s termination and the benefits

that non-retired Delta pilots (the “Active Pilots” )

would receive, which resulted in the execution of

Letter of Agreement #51. See AR 932. Upon approval

by the Bankruptcy Court, Letter of Agreement #51

would modify the PWA by requiring Delta to issue

$650 million in senior unsecured notes to the ALPA

(the “ALPA Notes”), “[i]n the event the . . . Plan is

terminated,” AR 968, for the ALPA’s distribution

among its members, see AR 971 (noting that

“[d]istribution mechanics, eligibility and allocation

[of the ALPA Notes] among such pilots or pilot

accounts [would] be determined by [the] ALPA”).

Letter of Agreement #51 also provided the ALPA

with a “general non-priority unsecured claim . . . in

the amount of $2.1 billion (the ‘ALPA Claim’),” AR

967, to be allocated among the Active Pilots by the

ALPA’s Delta Master Executive Council, see AR

966–67.

The Corporation objected to Delta’s motion for

the Bankruptcy Court to authorize the execution of

Letter of Agreement #51 on the grounds that the

agreement would violate the ERISA. See AR 1050.

The Corporation’s objections were based on its

20a

position that the ALPA Notes and the ALPA Claim

(collectively, the “ALPA Payments”) were intended

“to replace unfunded benefits under the Pilots Plan

by using the proceeds to fund follow-on retirement

plans and other payments or distributions to pilots.”

AR 1049. The Corporation argued that the ALPA

Notes were intended to serve as replacement

payments for Plan benefits because Letter of

Agreement #51 “provides to the [A]ctive [P]ilots $650

million in notes if and only if the Pilots Plan

terminates,” AR 1064, and “the ALPA claim is

clearly intended to make up for some portion of the

[A]ctive [P]ilots’ pension benefits lost as a result of

the Pilots Plan termination” because Letter of

Agreement #51 permits the proceeds of the ALPA

Claim (as well as the ALPA Notes) to be received “as

retirement benefits—i.e., on a pre-tax and taxdeferred basis,” AR 1068.

The Corporation objected to the execution of

Letter of Agreement #51 because the ALPA

Payments would violate the “ERISA’s explicit

statutory provision assigning the claim for a pension

plan’s total underfunding exclusively to [the] PBGC,

and . . . [would] establish[] a follow-on arrangement

to replace benefits under the Pilots Plan that may be

abusive of the pension insurance system.” AR 1049–

50. The Corporation explained in its objections that

the total amount of unfunded guaranteed benefits

that it can pay to beneficiaries “depends on the

amount [it] recovers for unfunded benefit liabilities

from the plan sponsor and its controlled group.” AR

1053. And, if Letter of Agreement #51 were executed,

the Active Pilots “would recover [u]nfunded

[n]onguaranteed [b]enefits from both the employer,”

in the form of the ALPA Payments, and from the

Corporation once it became Plan trustee upon the

21a

Plan’s termination, which would constitute an

improper double recovery that “would be distributed

contrary to the [ERISA] statutory scheme.” AR 1064.

The

Bankruptcy

Court

overruled

the

Corporation’s objections to Letter of Agreement #51,

finding no “sufficient basis . . . to reach the

conclusion that [Letter of Agreement #51] infringes

any provision of law or any legal ruling by a Court,”

AR 453, and authorized Delta and the ALPA to

execute Letter of Agreement #51, see AR 1091,

1093. The Corporation initially noted an appeal of

the Bankruptcy Court’s ruling, see AR 1099–1102,

but subsequently dismissed that appeal, AR 1153,

after entering into a settlement agreement with

Delta, AR 1105. In that settlement agreement, the

Corporation received a “prepetition, general, nonpriority unsecured claim against Delta . . . in the

amount of $2.2 billion.” AR 1105; see also AR 1126,

1130.

4. The

Corporation’s

Allocations

Benefit Determinations

and

In December 2006, Delta and the Corporation

executed an agreement appointing the Corporation

as the Plan trustee and terminating the Plan as of

September 2, 2006. See AR 5436– 38. The

Corporation

valued

the

Plan’s

assets

at

approximately $1.984 billion and its liabilities at

approximately $4.552 billion. See AR 848, 877. The

Corporation also allocated the “plan liabilities by

priority category” pursuant to the ERISA’s statutory

scheme. See AR 877; see also 29 U.S.C. § 1344(a).

The

Corporation’s

allocations

and

benefit

determinations that are the subject of the plaintiffs’

claims in this case are explained in further detail

below.

22a

a. The Increased Compensation Limit

The Corporation determined that the increased

compensation limit established by the EGTRRA in

2001, which was incorporated into the Plan through

the PWA in 2001 and the Fourth Amendment in

2003, see AR 15, did not apply to its calculations of

the plaintiffs’ PC3 benefits because the increased

compensation limit did not go into effect until the

plan year beginning on July 1, 2002, see AR 13–14

(“Since the plan year for the Pilots Plan began on

July 1 and ended on June 30, [the] $200,000 limit

went into effect on July 1, 2002 (i.e., the first day of

the plan year beginning after December 31, 2001).”),

and the Plan terminated less than five years later,

on September 2, 2006, see AR 2. Accordingly,

because the ERISA requires a benefit to be in effect

for five years prior to the date of the plan’s

termination in order to qualify as a PC3 benefit, see

29 U.S.C. § 1344(a)(3), the Corporation determined

that the increased compensation limit did not apply

to its calculations of the plaintiffs’ PC3 benefits, see

AR 16 (“[T]he benefit amount in PC3 is based on the

plan provisions ‘in effect’ during the five years

before the plan’s termination date ‘under which such

benefit would be the least.’” (quoting 29 U.S.C. §

1344(a)(3))).

b. The Increased Qualified Benefit Limit

The Corporation also determined that although

the PWA incorporated the EGTRRA’s increased

qualified benefit limit into the Plan on July 1, 2001,

more than five years prior to the Plan’s termination,

the PWA did so only for pilots who were active at

that time, i.e., pilots “who had not retired or

separated from service prior to . . . July 1, 2001.” AR

22. However, for participants who retired before

23a

July 1, 2001, the Plan was not amended to

incorporate the qualified benefit limit increase until

the adoption of the Fourth Amendment in June

2003, which was less than five years prior to the

Plan’s termination. See AR 29–30. As a result, the

Corporation applied the increased qualified benefit

limit only for its calculations of the Active Pilots’

PC3 benefits, and not for the plaintiffs’ PC3

benefits. See AR 30.

c. The Recovery Benefits

The “PBGC determined that the total value of its

recoveries [from Delta] under the settlement was

$1,279,506,423 as of May 3, 2007 (approximately

[eight] months after [the Plan’s termination]).” AR

42. But, “[t]o reflect interest, [the] PBGC discounted

th[at] value . . . by $50,501,683, resulting in a§ . . .

recovery value of $1,229,004,740.” AR 43. The

Corporation allocated $240,263,310 to the Plan’s

assets, which “significantly increased the funded

PC3 benefits that [the] PBGC pa[id] to PC3-eligible

participants and beneficiaries . . . , which include[d]

the [plaintiffs],” and allocated $988,741,430 to its

unfunded benefit liabilities funds. AR 46.

For the unfunded benefit liabilities funds, the

Corporation calculated the recovery ratio, i.e., “the

percentage of the [P]lan’s otherwise unfunded

benefits that bec[a]me funded due to [the]

[unfunded benefit liabilities] recovery,” which was

38.51%. AR 47. The Corporation then multiplied the

value of the Plan’s unfunded benefit liabilities, as of

the date of the Plan’s termination, by the recovery

ratio to arrive at a total figure of $681,259,882,

which was used “to pay otherwise unfunded

nonguaranteed benefits.” See AR 47. That amount

funded the remainder of the Plan’s PC3 benefit

24a

liabilities, see AR 49 n.137, and almost 52% of the

PC5(a) benefit liabilities, see AR 50. “[T]here were

no remaining funds to allocate to [ ] PC5(b).” AR 50.

The Corporation determined that the increased

compensation and qualified benefit limits, which it

had already determined could not be applied to the

plaintiffs’ PC3 benefits, belonged in the PC5(b)

category because those increases were not “in effect”

for the full five-year period prior to the Plan’s

termination, as required for inclusion in PC5(a). See

AR 48. Consequently, because there were no

remaining funds to allocate to PC5(b), the

Corporation was unable to pay these increases. See

AR 48.

5. The Appeals Board’s Decision

After the Corporation issued final benefit

determinations for the Plan’s participants and

beneficiaries, see AR 2, the plaintiffs filed a

consolidated appeal with the PBGC Appeals Board

raising thirteen issues, see AR 1, 3. On September

27, 2013, the Appeals Board issued its final agency

decision. See AR 1. The Appeals Board’s conclusions

that are relevant to the plaintiffs’ claims in this case

are set forth below.

a. The ALPA Payments

The plaintiffs argued before the Appeals Board

that the Corporation should have taken into account

the ALPA Payments that the Active Pilots received

pursuant to Letter of Agreement #51 by construing

those payments as received pension benefits under

the Plan. See AR 35–36, 40–41. The Appeals Board

disagreed, reasoning that “[t]he ALPA Payments

were not made from Plan assets and, thus, they were

never funds that ‘[left] the Plan just before [the]

25a

PBGC assumed its role as statutory trustee.’” AR 36

(second alteration in original) (citation omitted).

Therefore, the Appeals Board concluded that the

“PBGC [wa]s not required to take the ALPA

Payments into account in allocating the Plan’s assets

and [the] PBGC’s recoveries.” AR 36. As justification

for its position, the Appeals Board explained:

[The] ERISA does not require [the] PBGC to

account for the ALPA Payments for purposes

of allocating the Pilots Plan’s assets and

[the] PBGC’s recoveries to the Plan’s benefit

liabilities. [29 U.S.C. § 1344(a)] provides that

[the] PBGC, upon plan termination, “shall

allocate the assets of the plan (available to

provide benefits) among the participants and

beneficiaries of the plan.” [29 U.S.C. §

1322(c)] provides for [the] PBGC to allocate a

portion of its recoveries under [29 U.S.C. §

1362] to benefit liabilities that are neither

funded by plan assets nor guaranteed by

[the] PBGC. The ALPA Payments were never

Plan assets, nor were they funds that [the]

PBGC recovered under Title IV of [the]

ERISA.

. . . Rather, the ALPA Payments are funds

that were transferred directly from Delta to

[the] ALPA pursuant to a court-approved

collective

bargaining

agreement.

Furthermore, the ALPA Payments did not

change the pension liabilities owed by the

Pilots Plan to its participants and

beneficiaries as of the Pilots Plan’s

termination date.

AR 41 (footnotes omitted); see also AR 41 n.116

(“The mere fact that a participant received a

26a

payment from a source outside of a PBGC-trusteed

plan does not establish that a pension liability under

the terminated plan has been reduced or

extinguished.”).

b. The Increased Compensation Limit

The plaintiffs argued before the Appeals Board

that the Corporation should have applied the

increased compensation limit in its calculations of

their PC3 benefits because it “was incorporated into

the Pilots Plan’s provisions more than [five] years

before the Pilots Plan terminated (i.e., before

September 2, 2001).” AR 12–13. The Appeals Board

disagreed, stating that the Corporation’s regulation

provides that a plan provision is “in effect” under 29

U.S.C. § 1344(a)(3)(A) “on the later of the date on

which it is adopted or the date it becomes effective,”

29 C.F.R. § 4044.13(b)(6) (2017), and it “becomes

effective” on the date that it becomes “payable,” see

id. § 4044.13(b)(3)(i); see also AR 16. And, “[b]enefit

increases that were [in] effect[] throughout the

[five]-year period” are included in PC3. See AR 17

(quoting 29 C.F.R. § 4044.13(a)). Therefore, the

Appeals Board explained, “a benefit increase cannot

be ‘in effect’ for purposes of PC3 before the date on

which the increase becomes operative[,] . . . even if

the plan provision that provided for the increase has

an earlier ‘stated’ effective date.” AR 16. “Thus, if a

benefit increase does not go into effect (i.e., is not

payable) until after [five years before the plan’s

termination] and if a participant’s payable PC3

benefit amount would be lower based on the plan

provisions that were in effect before the increase,

then the increase is not included in the participant’s

PC3 benefit.” AR 17.

27a

The Appeals Board concluded that the

Corporation correctly applied its regulation to the

Plan as follows: (1) the adoption date of the Plan

provision incorporating the increased compensation

limit was June 21, 2001, the date the PWA was

signed, see AR 245; see also AR 3412, 3697; (2) the

PWA’s stated effective date for the increased

compensation limit was September 1, 2001, see AR

3695, 3697; and (3) the increased compensation limit

became payable on July 1, 2002, because the Plan

incorporated the $200,000 limit “for purposes of

‘determining benefit accruals of an [e]mployee in any

[p]lan [y]ear beginning after June 30, 2002,’” AR 17

(quoting AR 245). Therefore, the Appeals Board

affirmed that the increased compensation limit was

“in effect” on July 1, 2002, because that was the date

when any increase in benefits would become

payable. See AR 17. And, because that date occurred

after five years before the Plan’s termination, those

increased benefits could not be included in PC3. See

AR 17. The Appeals Board noted that another

member of this Court had “upheld [the] PBGC’s

interpretation of [the] ERISA’s PC3 provisions as a

‘permissible construction of the statute,’” AR 18

(citing Davis v. PBGC, 864 F. Supp. 2d 148, 157

(D.D.C. 2012)), which the Circuit subsequently

affirmed after the Appeals Board’s decision was

issued, see Davis II, 734 F.3d at 1168 (“The

statutory phrase ‘in effect’ . . . is ambiguous, and the

PBGC has interpreted it . . . to mean ‘payable.’”).

Thus, the Appeals Board affirmed the Corporation’s

conclusion that the increased compensation limit

should not be applied to the calculations of the

plaintiffs’ PC3 benefits. See AR 18.

28a

c. The Increased Qualified Benefit Limit

The plaintiffs further argued before the

Appeals Board that, although the Corporation

“correctly determined” that the PWA constituted a

Plan amendment that was adopted and effective

five years prior to the Plan’s termination, the

Corporation erred in concluding “that the increased

[qualified benefit] limit under the PWA applied ‘only

for those pilots who were active at the time the [ ]

PWA was signed.’” AR 28 (citation omitted). The

Appeals Board disagreed, stating that “based on

[the] ERISA, [the] PBGC regulations, and the Pilots

Plan’s provisions, [ ] [the] PBGC applied the

appropriate [qualified benefit] limits when it

determined PC3 benefits for the [plaintiffs] and for

the [A]ctive [P]ilots.” AR 23.

The Appeals Board reasoned that the PWA did

not amend the Plan for retired pilots because the

PWA: (1) is defined as “the basic collective

bargaining agreement between Delta Air Lines, Inc.

and the air line pilots in the service of Delta Air

Lines, Inc.[,] as represented by the Air Lines Pilots

Association International,” AR 28; (2) “states that it

‘cover[s] the pilots in the employ of the Company,’”

AR 28 (alteration in original); and (3) “defines ‘Pilot’

as ‘an employee of Delta Air Lines, Inc. whose name

appears on the Delta Air Lines Pilots’ System

Seniority List,’” AR 28. The Appeals Board noted

that “the law does not presume that a collective

bargaining agreement covers retired employees,” AR

29 (“To the contrary, the Supreme Court has found

that, ‘[s]ince retirees are not members of the

bargaining unit, the bargaining agent is under no

statutory duty to represent them in negotiations

with the employer.” (quoting Allied Chem. & Alkali

29a

Workers of Am. v. Pittsburgh Plate Glass Co., 404

U.S. 157, 181 n.20 (1971))), and “found insufficient

evidence to establish that [the] ALPA was

representing the interests of retired pilots when it

negotiated [the] PWA,” AR 29.

The Appeals Board pointed to the Fourth

Amendment as further support for its conclusion

that the PWA did not apply to retired pilots. See AR

29. It concluded that, under the Fourth Amendment,

the qualified benefit limit increases were effective

for Active Pilots as of July 1, 2001, but were not

effective for retired pilots until July 1, 2002, see AR

25, because “the Fourth Amendment provides that

benefit increases resulting from [the] EGTRRA’s

amendment of the [qualified benefit] limit are

effective on different dates depending on the

employee’s Annuity Starting Date (‘ASD’),” AR 25

n.69. The Plan defines an employee’s ASD as “the

first day of the first period for which a retirement

benefit is paid as an annuity,” and therefore,

according to the Appeals Board, “a pilot’s ASD is on

or after his or her retirement date.” AR 25 n.69.

Because the Fourth Amendment provides that the

qualified benefit limit increases “were effective July

1, 2001 for employees with ASDs ‘on or after July 1,

2001,’” i.e., for Active Pilots, “and were effective on

July 1, 2002 for employees with ASDs ‘before July 1,

2001,’” i.e., for retired pilots, AR 25 n.69, the

Appeals Board found that “the Fourth Amendment’s

establishment of different effective dates for the two

groups of participants is significant with respect to

the Board’s resolution of [PC3 benefits],” AR 25–26.

As the Appeals Board recognized, “[t]he Fourth

Amendment explicitly provides for different effective

dates for the [qualified benefit] limit increase

depending upon the ASD,” and therefore, “is wholly

30a

consistent with the PWA only if . . . the PWA does

not amend the [qualified] benefit limit for retired

pilots,” because “[o]therwise, there would be a clear

conflict between the ‘earliest effective date’ language

in the PWA and the delayed effective date for the

retired pilots in the Fourth Amendment.” AR 29.

Based on these reasons, the Appeals Board

concluded that the “PBGC correctly determined that

the retired pilots are not entitled to have their PC3

benefits computed based on the [increased qualified

benefit] limit under [the] EGTRRA” because the

“Fourth Amendment, which provided the [qualified

benefit] limit increase to the retired pilots, was

adopted on June 27, 2003,” and provided that “the

retired pilots could not receive payments based on

the increased [qualified benefit] limit . . . until July

1, 2002.” AR 30. Due to the fact that both of these

dates were less than five years before the Plan’s

termination, AR 30, the Appeals Board found that,

“[f]or the retired pilots, the plan provision that

provides the lowest annuity benefit payable during

the five-year period before [the Plan’s termination],”

as required by Corporation regulation, “is the

benefit provision in effect between September 1,

2001[,] and June 30, 2002.” AR 30.

d. The Recovery Funds

The plaintiffs argued before the Appeals Board

that the “PBGC made an error of ‘simple arithmetic’

when it allocated the funds it recovered from Delta

and related entities after Plan termination.” AR 42.

The Appeals Board found no error, explaining that

the Corporation properly discounted the value of its

recovery as of May 3, 2007, which was

$1,279,506,423, by $50,501,683, to reflect the value

31a

of its recovery as of the date of the Plan’s

termination. See AR 43.

The plaintiffs also argued that the Corporation

incorrectly allocated the compensation and qualified

benefit limit increases to PC5(a) instead of to PC5(b).

See AR 42; see also AR 48 (“The [plaintiffs’ a]ppeal

contends that [the] PBGC’s [§ 1322(c)] allocation was

improper because it did not accord priority within

PC5 to [the compensation] and [qualified benefit]

limit increases.”). The Appeals Board disagreed,

concluding “that the same rules governing when a

plan provision or amendment is ‘in effect’ for

purposes of determining the PC3 benefit and

applying the phase-in limit should be applied in

assigning benefits to the PC5 subcategories.” AR 51.

II. ANALYSIS

A. The Applicable Standard of Review

As an initial matter, the parties disagree as to

what standard the Court should apply in reviewing

the Corporation’s determinations of the plaintiffs’

benefits under the Plan. The plaintiffs argue that

the standard of review should be de novo because

“[a] court reviews an ERISA fiduciary’s ‘statutory

and legal conclusions de novo,’” Pls.’ Mem. at 12

(quoting Brown v. Cont’l Airlines, Inc., 647 F.3d 221,

226 (5th Cir. 2011)), and that the Court should not

apply the two-step process the Supreme Court

adopted in Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984),

or any other “form of administrative-law type of

deference,” see id. The Corporation argues in

response that “[b]oth the Supreme Court and the

[District of Columbia] Circuit have made clear” that

the Chevron framework applies to its interpretations

32a

of the ERISA. Def.’s Mem. at 12–13 (first citing

Mead Corp. v. Tilley, 490 U.S. 714, 722, 726 (1989);

then citing LTV Corp., 496 U.S. at 650–51; then

citing Beck v. Pace Int’l Union, 551 U.S. 96, 104

(2007); and then citing Davis v. PBGC, 571 F.3d

1288, 1293 (D.C. Cir. 2009) (“Davis I”)).

1. Whether

Applies

the

Chevron

Framework

The law in this Circuit is clear that the Chevron

framework

applies

to

the

Corporation’s

interpretations of the ERISA. At least eight different

Supreme Court and District of Columbia Circuit

opinions support this conclusion.4 See Beck, 551 U.S.

4 In

addition, several decisions authored by members of this

Court have held that the Chevron framework applies to the

Corporation’s interpretations of the ERISA. See, e.g., PBGC v.

Asahi Tec Corp., 979 F. Supp. 2d 46, 70 (D.D.C. 2013) (“Under

Chevron step two, the Court finds [the] PBGC’s interpretation

to be reasonable.”); Quality Auto. Servs., LLC v. PBGC, 960 F.

Supp. 2d 211, 217 (D.D.C. 2013) (“Thus, far from being

‘manifestly contrary to the statute,’ [the] PBGC’s interpretation

represents a reasonable reading of the statute.” (quoting

Chevron, 467 U.S. at 844)); Vanderkam v. PBGC, 943 F. Supp.

2d 130, 145 (D.D.C. 2013) (“[The] PBGC’s interpretation is a

permissible construction of the statute and should be accorded

deference under Chevron [s]tep [t]wo.”); Davis v. PBGC, 864 F.

Supp. 2d at 155 (“[T]he Court will apply Chevron deference to

those claims in which [the p]laintiffs challenge [the] PBGC’s

interpretations of ambiguous ERISA provisions.”); Brown v.

PBGC, 821 F. Supp. 26, 31 (D.D.C. 1993) (“The Court has found

that the [d]efendant’s interpretation of [the] ERISA’s

substantial owner restrictions is consistent with the plain

language of the statute. However, assuming arguendo that an

ambiguity exists in the statute, the Court would nonetheless

have to reject the [p]laintiff’s interpretation of [the] ERISA.

When an agency interprets an ambiguous statutory provision,

the second prong of Chevron . . . mandates that the Court

uphold an agency’s decision under that provision so long as

that interpretation is a reasonable one.”); see also Rettig v.

33a

at 97 (“The Court has traditionally deferred to the

PBGC when interpreting [the] ERISA.”); LTV Corp.,

496 U.S. at 648 (“Here, the PBGC has interpreted

[29 U.S.C. § 1347] as giving it the power to base

restoration decisions on the existence of follow-on

plans. Our task, then, is to determine whether any

clear congressional desire to avoid restoration

decisions based on successive pension plans exists,

and, if the answer is in the negative, whether the

PBGC’s policy is based upon a permissible

construction of the statute.”); Tilley, 490 U.S. at 722

(applying Chevron deference to the Corporation’s

interpretation of the ERISA provision at issue, as

expressed in its amicus brief); Page v. PBGC, 968

F.2d 1310, 1313–14 (D.C. Cir. 1992) (“Our initial

question, as instructed by the Supreme Court’s 1984

leading decision in Chevron, is whether Congress

PBGC, 744 F.2d 133, 140–41, 150, 155 (D.C. Cir. 1984)

(employing the Chevron framework, but determining that the

Corporation’s interpretation of the statute was not reasonable

under step two because it “d[id] not represent ‘a reasonable

accommodation of conflicting policies . . . committed to the

agency’s care by the statute’” (second alteration in original)

(quoting Chevron, 467 U.S. at 845)); Fisher v. PBGC, 151 F.

Supp. 3d 159, 167–69 (D.D.C. 2016) (declining to decide

whether “the Appeals Board’s decision would ordinarily

warrant Chevron deference” because “it is clear that the

Appeals Board’s decision in this case does not. An agency’s

unreasoned adjudication of a question of law does not warrant

deference of any sort,” and in that case, “[t]he Appeals Board’s

decision suggests that the PBGC read[] the statute to permit

such a result[, b]ut the decision does not explain why” (internal

citations and quotation marks omitted)); Ass’n of Flight

Attendants–CWA, AFL–CIO v. PBGC, No. 05-1036 (ESH),

2006 WL 89829, at *7 (D.D.C. Jan. 13, 2006) (employing the

Chevron framework, but “conclud[ing] that [the] PBGC’s

reliance on the Agreement in deciding to terminate the [ ] Plan

is not a ‘permissible construction’ of § 1342(a)(4)” under step

two (quoting Chevron, 467 U.S. at 842–43)).

34a

had a specific intent regarding the matter at

hand. . . . If it appears, however, that ‘Congress did

not actually have an intent’ regarding the statutory

construction question at issue, we will uphold a

reading by [the Corporation,] the agency entrusted

with the statute’s administration[,] if the agency’s

reading ‘represents a reasonable accommodation of

conflicting policies [Congress] committed to the

agency’s care.’” (fourth alteration in original)

(quoting Chevron, 467 U.S. at 845)); Rettig v. PBGC,

744 F.2d 133, 141 (D.C. Cir. 1984) (“We are initially

confronted with the familiar task of reviewing an

agency’s construction of the statute it is charged

with implementing, a task which of course we

undertake with due deference to the agency’s

congressional mandate and expertise.” (citing

Chevron, 467 U.S. at 837)); Belland v. PBGC, 726

F.2d 839, 843 (D.C. Cir. 1984 (“[The] PBGC’s

interpretation of [the] ERISA is entitled to great

deference.”); see also Deppenbrook v. PBGC, 778

F.3d 166, 172 (D.C. Cir. 2015) (“Had the PBGC

Appeals Board offered its statutory interpretation in

its

decision-letter

to

Deppenbrook,

that

interpretation would likely be subject to the two-step

Chevron framework.”); Boivin v. U.S. Airways, Inc.,

446 F.3d 148, 156 (D.C. Cir. 2006) (“The pilots

concede that the PBGC’s interpretations of the

relevant statutory and regulatory provisions are

entitled to judicial deference, and that we must

uphold them if they are reasonable.”).

The plaintiffs argue that of the three Supreme

Court cases cited above—Beck, LTV Corp., and

Tilley—“two [LTV Corp. and Tilley] . . . are outdated,

the third [Beck] . . . is inapposite, and all . . . are

distinguishable on their facts.” Pls.’ Reply at 3; see

also id. at 3–4 (“The Corporation nowhere

35a

acknowledges the sea change that took place in the

field of administrative law when the Supreme Court

decided United States v. Mead Corp., 533 U.S. 218

(2001).”). 5 According to the plaintiffs, the Supreme

Court decided in Mead Corp. that “informal agency

decisions, such as the informal adjudication at issue

here, would no longer be presumptively entitled to

Chevron deference.” Id. at 4.

The Court disagrees with the plaintiffs’

assertion that LTV Corp. and Tilley are no longer

good law after Mead Corp., and that Beck does not

apply here. In Mead Corp., the Supreme Court held

that “a tariff classification ruling by the United

States Customs Service . . . ha[d] no claim to judicial

deference under Chevron, there being no indication

that Congress intended such a ruling to carry the

force of law.” 533 U.S. at 221. Instead, the Court

“h[e]ld that under Skidmore v. Swift & Co., 323 U.S.

134 (1944), the ruling is eligible to claim respect

according to its persuasiveness.” Id. The Court

explained that

administrative

implementation

of

a

particular statutory provision qualifies for

Chevron deference when it appears that

Congress delegated authority to the agency

generally to make rules carrying the force of

law, and that the agency interpretation

claiming deference was promulgated in the

The plaintiffs do not address the Circuit’s decisions in

Belland, Deppenbeck, or Boivin at all, see Pls.’ Mem. at iii– vi

(not listing these cases in the Table of Authorities); Pls.’ Reply

at iii–vii (same), and mention Rettig only in their discussion of

Claim 5 of the First Amended Complaint, see Pls.’ Reply at 37.

The plaintiffs’ argument regarding the Circuit’s decisions in

Page, Davis I, and Davis II are explored infra.

5

36a

exercise of that authority. Delegation of such

authority may be shown in a variety of ways,

as by an agency’s power to engage in

adjudication

or

notice-and-comment

rulemaking, or by some other indication of a

comparable congressional intent.

Id. at 226–27; see also id. at 230 (“It is fair to assume

generally that Congress contemplates administrative

action with the effect of law when it provides for a

relatively formal administrative procedure tending

to foster the fairness and deliberation that should

underlie a pronouncement of such force.”). The Court

noted that “as significant as notice-and-comment

rulemaking is in pointing to Chevron authority, the

want of that procedure [ ] does not decide the

[question], for we have sometimes found reasons for

Chevron

deference

even

when

no

such

administrative formality was required and none was

afforded.” Id. at 230–31; see also id. at 231 (“The fact

that the tariff classification here was not a product

of such formal process does not alone, therefore, bar

the application of Chevron.”). The Court in Mead

Corp. found that the statute itself “g[a]ve no

indication that Congress meant to delegate authority

to Customs to issue classification rulings with the

force of law,” id. at 231–32, and therefore concluded

that “to claim that [such] classifications have legal

force is to ignore the reality that [forty-six] different

Customs offices issue 10,000 to 15,000 of them each

year,” id. at 233. Therefore, “Mead Corp. . . . requires

that, for Chevron deference to apply, the agency

must have received congressional authority to

determine the particular matter at issue in the

particular manner adopted.” City of Arlington, Tex.

v. FCC, 569 U.S. 290, 306 (2013).

37a

The Court is not persuaded that, after Mead

Corp., the Chevron framework no longer applies to

the Corporation’s its interpretations of the ERISA

made through its benefit determinations. Notably,

the Supreme Court’s decision in Beck was issued six

years after Mead Corp., and in that case, the

Supreme Court chose, once again, to defer to the

Corporation’s interpretations of the ERISA as

articulated in an amicus brief. See Beck, 551 U.S. at

103–04. In Beck, the Court, was tasked to decide

whether merger was “a permissible form of plan

termination under [the] ERISA.” Id. at 102

(emphasis removed). The Court noted that, in order

“[t]o affirm the [decision below], [it] would have to

decide that merger is a permissible method” of plan

termination under the statute, id. at 103–04, and it

“would have to do that over the objection of the

PBGC, which . . . t[ook] the position that [the

applicable statutory provision] does not permit

merger as a method of termination because (in its

view) merger is an alternative to (rather than an

example of) plan termination,” id. at 104. The Court

noted that it has “traditionally deferred to the

PBGC when interpreting [the] ERISA, for ‘to

attempt to answer these questions without the

views of the agencies responsible for enforcing [the]

ERISA, would be to embar[k] upon a voyage without

a compass.’” Id. (first quoting Tilley, 490 U.S. at

722, 725–26; then citing LTV Corp., 496 U.S. at 648,

651).

The plaintiffs argue that in Beck, “the Court did

not grant (or even discuss) Chevron deference[,

which, according to the plaintiffs,] is unsurprising

given that Beck, unlike Tilley, was issued after the

Court’s landmark decision in . . . Mead Corp.” Pls.’

Reply at 5. Although the plaintiffs are correct that

38a

the Court did not actually use the word “Chevron” in

its discussion of the deference it afforded to the

Corporation’s interpretations of the ERISA, in the

Court’s view, the Supreme Court’s statement in Beck

that “[w]e have traditionally deferred to the PBGC

when interpreting [the] ERISA,” see 551 U.S. at 104,

is a reference to the Chevron framework, see Cuomo

v. Clearing House Ass’n, LLC, 557 U.S. 519, 525

(2009) (“Under the familiar Chevron framework, we

defer to an agency’s reasonable interpretation of a

statute it is charged with administering.”), and thus

shows that the Supreme Court continues to apply

the Chevron framework to the Corporation’s

statutory

interpretations

of

the

ERISA.

Furthermore, the Supreme Court in Beck, an opinion

decided after Mead Corp., cited approvingly Tilley

and LTV Corp. in support of its decision that it

would continue to defer to the Corporation’s

statutory interpretations of the ERISA. See id.

Consequently, the Court is convinced that the

Chevron framework continues to apply to the

Corporation’s statutory interpretations of the

ERISA, even after the Supreme Court’s decision in

Mead Corp.6

6 The

plaintiffs argue that that “[w]hile some interpretations

offered through informal means may still warrant Chevron

deference, it is well settled that those offered through amicus

briefs (as in Tilley) do not.” Pls.’ Reply at 5. As an initial

matter, whether the Chevron framework applies to the

Corporation’s views as expressed in an amicus brief is not the

issue in this case because the Corporation’s views were

expressed through the Appeals Board’s decision. In any event,

the decisions that the plaintiffs cite in support for the

purportedly “well settled” proposition (that the Chevron

framework does not apply to an agency’s statutory

interpretation as stated in an amicus brief) are decisions from

the Second, Ninth, and Sixth Circuits, see id., none of which

39a

Notwithstanding the precedent discussed above,

the plaintiffs assert four additional reasons why the

Chevron framework does not apply to the

Corporation’s statutory interpretations of the ERISA

under the facts of this case. The Court will consider

each reason in turn.

i. Whether the Appeals Board’s Decision

Was a Policy Matter

First, the plaintiffs argue that because “the legal

interpretations of [the] ERISA at issue here directly

affect thousands of participants in this Plan and, as

a matter of precedent, thousands more in other

plans,” the Appeals Board’s decision constitutes a

“‘policy matter’ that stands to ‘have a significant

impact’ on Title IV’s ‘stakeholders,’” and, as a result,

“is reserved to the Corporation’s Board of Directors,

and cannot be delegated.” Pls.’ Mem. at 12–13

(citation omitted). According to the plaintiffs,

because the Appeals Board, and not the Board of

Directors, issued the decision here, under the

Circuit’s decision in Page, “the Corporation failed to

‘engage in decision-making of the character required

by the Corporation’s regulations,’ in order to make

Chevron deference appropriate.” Id. at 13 (quoting

Page, 968 F.2d at 1315).

In Page, as the Court noted above, the Circuit,

employing the two-part Chevron analysis, concluded

“that Congress did not ‘precisely address’ the issue

before [the Circuit]” under step one, and therefore

considered under step two whether “the PBGC’s

constitute binding authority on this Court. Moreover, in the

Supreme Court’s decision in Beck, which was issued six years

after Mead Corp., the Supreme Court deferred to the

Corporation’s interpretations of the ERISA as expressed in an

amicus brief. See Beck, 551 U.S. at 103–04.

40a

interpretation of the original [statutory provision]

[was] a reasonable one in view of the policies that

underlie [the] ERISA.” 968 F.2d at 1315. The Circuit

“conclude[d] that the PBGC did not engage in

decisionmaking of the character required by the

Corporation’s

regulations,”

namely,

the

Corporation’s bylaws precluding the Board of

Directors from delegating a “[f]inal decision on any

policy matter that would materially affect the rights

of a substantial number of employees or covered

participants and beneficiaries.” Id. (citing 29 C.F.R. §

2601.3(b)(5)).7 The Circuit decided that the matter at

issue in Page, “whether unlawful vesting terms

retained in a plan could eliminate the PBGC’s

obligation to guarantee benefits,” id. at 1314,

constituted a policy matter under the bylaws

because “thousands of plans, and hence a significant

number of participants covered under Title I, [we]re

potentially

affected

by

the

Corporation’s

interpretation of [the statutory provision] as

originally enacted,” id. at 1316. Therefore, because

the Corporation’s Board of Directors had not issued a

final decision on the matter, the Circuit remanded

the case to the district court “to invite the Board [of

Directors’] first-instance decision.” Id.

Upon review of Page, the Court agrees with the

Corporation, see Def.’s Mem. at 14, that Page is

distinguishable from the circumstances here. In

Page, the Circuit was assessing a Corporation

7 29 C.F.R. § 2601.3(b)(5) no longer exists, as the Corporation’s

bylaws are now located in 29 C.F.R. part 4002. The regulation

analogous to the earlier version, now 29 C.F.R. §

4002.1(a)(3)(v), provides that the Board of Directors “may not

delegate . . . [a]pproval of any policy matter (other than

administrative policies) that would have a significant impact on

the pension insurance program.”

41a

decision that would “potentially affect[]” “thousands

of plans.” See 968 F.2d at 1316; see also id. at 1311

(explaining that the plans at issue “had not been

amended prior to termination to reflect the

mandatory vesting provisions set out in [the] ERISA

Title I”). Here, on the other hand, the plaintiffs

challenge the Corporation’s conclusions with regard

to a single plan.

Furthermore, the Court is not convinced by the

plaintiffs’ argument, see Pls.’ Reply at 7, that the

large number of participants and beneficiaries that

stand to be impacted by the Corporation’s decision

here, see Am. Compl. ¶ 1, transforms the

Corporation’s benefits determinations under the

Pilots’ Plan into a policy matter under the bylaws.

The plaintiffs have not identified, see Pls.’ Mem. at

12–13; Pls.’ Reply at 6–8, nor could the Court locate,

a single case, other than Page, in which a court

determined that a decision made by the Corporation

constituted a policy decision that, under the bylaws,

could only be made by the Corporation’s Board of

Directors. Accordingly, the Court concludes that the

Corporation’s benefits determinations here do not

constitute a non-delegable policy matter under 29

C.F.R. § 4002.1(a)(3)(v), and therefore, the holding

in Page does not preclude the Court from applying

the Chevron framework in this case.8

8 The

plaintiffs also argue that the Appeals Board’s decision

“illustrates overtly how the Corporation uses its appeals

decisions to make and extend policy.” Pls.’ Reply at 7. The

plaintiffs note that the Appeals Board cited its prior decision in

Davis, and argue that, “if affirmed here, the Corporation will

cite its legal determinations in this case as precedent for future

decisions.” Id. Therefore, according to the plaintiffs, “[w]hat the

Corporation is up to is incremental policy-making through

informal adjudication . . . and is owed no deference by the

42a

ii. Whether

the

Chevron

Framework Applies to the

Corporation’s Interpretations of

the ERISA as Trustee

Second, the plaintiffs argue that “the

Corporation’s interpretations concerning the asset

allocation process were undertaken by the

Corporation in its fiduciary role as statutory

trustee, not as Title IV regulator or even

guarantor, and thus they fall outside the scope of

Chevron deference,” Pls.’ Mem. at 13, because

they did not constitute an exercise of authority to

“make rules carrying the force of law” delegated to

it by Congress, see id. (quoting Fogo de Chao

(Holdings) Inc. v. DHS, 769 F.3d 1127, 1136–37

(D.C. Cir. 2014)); see also Pls.’ Reply at 4 (same).

The Corporation argues that in Davis I, the

Circuit “expressly rejected” the plaintiffs’

argument that the Corporation’s asset allocation

decisions as trustee do not merit Chevron

deference, and therefore, the Court should reject

that argument here. See Def.’s Mem. at 15.

courts (in light of its own regulations and Page), absent

approval by the Board of Directors.” Id. The Court is not

persuaded that the Appeals Board’s reliance on its prior

decisions, without the Board of Directors’ approval, makes the

Chevron framework inapplicable. To the contrary, it would be

arbitrary and capricious for the Appeals Board to not consider

its precedent. See Friedman v. Sebelius, 686 F.3d 813, 828

(D.C. Cir. 2012) (“The [agency’s] decision . . . was arbitrary and

capricious with respect to [the determination at issue] because

it failed to explain its departure from the agency’s own

precedents.”); see also Williams Gas Processing–Gulf Coast Co.

v. FERC, 373 F.3d 1335, 1341 (D.C. Cir. 2004) (“[W]e will not

countenance an agency’s departure from its precedent without

explanation . . . .”).

43a

In Davis I, the plaintiffs, retired U.S. Airways

pilots and their beneficiaries (the “U.S. Airways

pilots”), appealed the district court’s denial of their

motion for a preliminary injunction “to prohibit the

PBGC

from

implementing

its

benefits

determinations while the[ir] suit [challenging those

determinations] [wa]s pending.” 571 F.3d at 1290. In

that case, like here, “the PBGC was appointed to

serve as trustee of the [U.S. Airways pilots’]

retirement plan,” id. at 1291, and, also like here, the

U.S. Airways pilots argued that Chevron deference

“should not apply . . . when the PBGC is acting as

trustee rather than guarantor,” id. at 1293. The

Circuit rejected the U.S. Airways pilots’ argument,

concluding:

We see no reason to depart from the usual

deference we give to an agency interpreting

its organic statute. The pilots point out that

a private party serving as trustee would not

receive Chevron-deference, but this point

proves nothing. Unlike a private trustee, the

PBGC has unique experience and “practical

agency expertise” in interpreting [the]

ERISA. The PBGC is therefore “better

equipped” to interpret [the] ERISA than

courts, and it is for this reason we defer to

the PBGC’s authoritative and reasonable

interpretations of ambiguous provisions of

[the] ERISA.

Id. (quoting LTV Corp., 496 U.S. at 651).

Thereafter, the district court entered summary

judgment to the Corporation regarding the U.S.

Airways pilots’ plan, which a different Circuit

panel affirmed in Davis II. See 734 F.3d at 1164.

44a

In Davis II, the Circuit determined that it “need

not resolve the parties’ contentions regarding

whether the PBGC is entitled to deference

pursuant to Chevron . . . when it acts as the trustee

in an involuntary retirement plan termination,”

because in that case, “[r]egardless of the standard

of deference, the [U.S. Airways p]ilots’ claims

relating to the PBGC’s interpretation of the statute

and regulations must fail.” Id. at 1167. As a result,

the Circuit also declined to “decide whether the

decision in Davis [I], regarding the Pilots’ request

for a preliminary injunction, is the law of the case

on the standard of review.” Id. (citing Sherley v.

Sebelius, 689 F.3d 776, 783 (D.C. Cir. 2012)).

Regarding the Davis II decision, the Corporation

contends that “[a]lthough the D.C. Circuit held . . .

that it ‘need not’ resolve the level of deference to

apply [to the Corporation], it did not reject or modify

the earlier holding in [Davis I].” Def.’s Mem. at 13

n.7; see also Def.’s Reply at 4–5 (same). The

plaintiffs disagree, contending that the standard of

review is still an open question, despite the Circuit’s

ruling in Davis I, because “[r]ulings involving

challenges to preliminary injunctions, when not

made after the full briefing on the merits typical of

an ordinary appeal, are not stare decisis.” Pls.’ Mem.

at 13 n.7 (first citing Va. Petroleum Jobbers Ass’n v.

Ped. Power Comm’n, 259 F.2d 921, 925 (D.C. Cir.

1958); then citing Nat’l Org. for Women, Wash., D.C.

Chapter v. Social Sec. Admin., 736 F.2d 727, 744

n.154 (D.C. Cir. 1984) (Robinson, J., concurring)); see

also Pls.’ Reply at 6 (same).

The Court is required to adhere to the Circuit’s

decision in Davis I and apply the Chevron

framework to the Corporation’s asset allocation

45a

determinations for two reasons. First, the two cases

the plaintiffs cite in support of their position do not

actually state that the doctrine of stare decisis does

not apply to a decision resolving a motion for a

preliminary injunction. In Petroleum Jobbers, the

petitioner filed, among other motions, a motion for a

stay to enjoin proceedings pending before the

Federal Power Commission. See 259 F.2d at 923.

The Circuit declined to grant the petitioner’s motion,

and twice noted that its rulings were “[w]ithout

prejudice to a contrary showing at the time the court

[were to] hear[] th[e] case on the merits.” Id. at 925;

see also id. at 926 (“Again, without prejudice to a

later contrary showing by [the] respondent”). But

nowhere in its opinion did the Circuit state that the

principles of stare decisis would not apply to its

decision. See generally id. Likewise, in Nat’l Org. for

Women, the Circuit in a per curiam opinion affirmed

the district court’s issuance of a preliminary

injunction barring the release of certain documents

pursuant to a FOIA request. See 736 F.2d at 728. In

a concurring opinion, Judge Robinson stated that he

would have preferred to

remand the appealed phases of these cases to

the District Court with instructions to

remand in turn to [the agency] the question

of release of information exempt under FOIA

but unaffected by the Trade Secrets Act. [He]

would further instruct the court to afford

[the agency] an opportunity to revise its factfinding procedures in such manner as it may

desire. [He] would affirm the District Court’s

rulings in all other respects, and let the

preliminary injunction remain in force

subject to the court’s further order. This

disposition of these appeals, of course, would

46a

leave the parties at liberty to litigate the

merits fully, free of any preclusion or

limitation by the determinations leading to

that injunction.

Id. at 744 (emphasis added) (Robinson, J.,

concurring). In a footnote, Judge Robinson noted

that “[t]he decision of a trial or appellate court

whether to grant or deny a preliminary injunction

does not constitute the law of the case for the

purposes of further proceedings and does not limit or

preclude the parties from litigating the merits.” Id.

at 744 n.154 (emphasis added) (quoting Berrigan v.

Sigler, 499 F.2d 514, 518 (1974)). Therefore,

Petroleum Jobbers and Nat’l Org. for Women stand

for the proposition that the Circuit’s rulings

regarding motions for a preliminary injunction or to

stay proceedings in a case do not constitute the law

of the case, nor do they preclude the parties from

litigating the merits of the issue in future

proceedings in that case. See Nat’l Org. for Women,

736 F.2d at 744 & n.4; Petroleum Jobbers, 259 F.2d

at 925. They do not, however, stand for the position

that the Circuit’s rulings on such motions have no

precedential value or stare decisis impact. See Nat’l

Org. for Women, 736 F.2d at 744 & n.4; Petroleum

Jobbers, 259 F.2d at 925.

Indeed, the Circuit has clearly distinguished

between the doctrines of law of the case or

preclusion and stare decisis. In Mahoney v.

Babbitt, 113 F.3d 219 (D.C. Cir. 1997), the Circuit

declined to vacate its prior order issuing an

injunction pending the resolution of an appeal on

the grounds of mootness, see id. at 220. The Circuit

stated:

47a

While it is generally accepted that a mooted

judgment should not preclude the litigants in

future litigation, preclusion is not the same

thing as stare decisis, and it is not selfevident that the precedential effects of a

mooted judgment should be any less

persuasive than if the mooting events had

not occurred. Preclusion is normally based on

a decision as to the controversy between the

litigating parties. Precedent ordinarily is not.

Precedent, more often than not, is drawn

from cases not involving either of the parties

for or against whom the precedent is offered.

As one commentator has pointed out, there is

no particular reason to assume that a

decision, later mooted, is any less valid as

precedent than any other opinion of a court.

“So long as the court believed that it was

deciding a live controversy, its opinion was

forged and tested in the same crucible as all

opinions.”

Id. at 222 (emphasis added) (quoting 13A Wright &

Miller, Federal Practice & Procedure § 3533.10 (2d

ed. 1984)). Applying these principles to the case at

bar, although the Circuit’s ruling in Davis I

regarding Chevron deference did not preclude the

parties in that case from further litigating that

issue in subsequent proceedings, nor did it

preclude a subsequent panel from declining to

decide that issue upon review of the district court’s

decision on the merits, the Davis I ruling

regarding Chevron deference still has precedential

value.

Second, even if the Davis I opinion were not

binding on this Court, which obviously it is, the

48a

Court would still reach the same conclusion

regarding the standard of review applicable here as

the Circuit did in that case. The Circuit decided in

Davis I that Chevron deference is applicable to the

Corporation’s asset allocation determinations

undertaken as trustee because “the PBGC has

unique experience and ‘practical agency expertise’

in interpreting [the] ERISA. The PBGC is therefore

‘better equipped’ to interpret [the] ERISA than

courts, and it is for this reason [this Court will also]

defer to the PBGC’s authoritative and reasonable

interpretations of ambiguous provisions of [the]

ERISA.” 571 F.3d at 1293 (quoting LTV Corp., 496

U.S. at 651).9

9 The Court notes that even though a trustee that is not the

Corporation would not receive Chevron deference, that does

not necessarily mean that such a trustee’s conclusions would

be reviewed de novo. As the Circuit has explained,

[i]n Firestone Tire & Rubber Co. v. Bruch, 489 U.S.

101, 115 (1989), the Supreme Court held that “a

denial of benefits challenged under [29 U.S.C.] §

1132(a)(1)(B) is to be reviewed under a de novo

standard unless the benefit plan gives the

administrator or fiduciary discretionary authority to

determine eligibility for benefits or to construe the

terms of the plan.” In this latter category of cases, the

standard of review—variously described by the Court

as “arbitrary and capricious” and “abuse of discretion”

review—is plainly deferential.”

Wagener v. SBC Pension Benefit Plan—Non Bargained Prgm.,

407 F.3d 395, 402 (D.C. Cir. 2005). In other words, the level of

deference a plan trustee is afforded depends on the terms of the

plan, see id., and is not, as the plaintiffs argue, necessarily

always de novo, see Pls.’ Mem. at 12; see also Pls.’ Reply at 17

n.6. The plaintiffs do not raise any argument regarding the

level of discretion that the Plan affords a trustee in its briefing

before this Court, see generally Pls.’ Mem.; Pls.’ Reply, nor did

they do so in their appeal below, see generally AR 560–617, and

49a

The plaintiffs also argue that the fact that the

Corporation’s asset allocation determinations were

made in its capacity as trustee

is especially relevant here, as [the p]laintiffs

have plausibly alleged that, rather than in

the detached environment of a regulator, the

Corporation, in its capacity as trustee,

engaged in various conduct that resulted in

the

Corporation

earn[ing]

massive

investment returns off of assets that should

have been timely allocated to the plaintiffs.

Pls.’ Mem. at 13–14 (second alteration in original)

(internal quotation marks and citation omitted); see

also Pls.’ Reply at 14 (same). Although it may be true

that any assets that the Corporation retained

instead of allocating to the plaintiffs could yield a

return to the Corporation, that is true in every case

in which the Corporation is appointed as trustee. See

Piech v. PBGC, 744 F.2d 156, 161 (D.C. Cir. 1984)

(“The dual role of trustee and guarantor, a role that

Congress has specifically authorized for the PBGC,

undoubtedly has some built-in potential for a conflict

of interest.”). And because the plaintiffs do not

provide any specific evidence of self-interested bias

or misconduct that influenced the benefits

determinations about which they disagree, see Pls.’

Mem. at 13–14,10 the Court finds that the plaintiffs

have not plausibly alleged any misconduct by the

therefore, the Court need not consider this issue, see Nuclear

Energy Inst., Inc. v. EPA, 373 F.3d 1251, 1297 (D.C. Cir. 2004)

(“It is a hard and fast rule of administrative law, rooted in

simple fairness, that issues not raised before an agency are

waived and will not be considered by a court on review.”).

The plaintiffs’ challenges regarding the Administrative

Record are discussed infra.

10

50a

Corporation that would warrant the Court’s

departure from its conclusion that the Chevron

framework applies in this case.

iii. Whether the Appeals Board’s Decision

Is Too Informal for the Chevron

Framework to Apply

Third, the plaintiffs argue that “the informal

nature of the Appeals Board’s decision places it

outside of Chevron’s scope.” Id. at 14. According to

the plaintiffs, “the absence of formal procedures

‘weighs against the application of Chevron

deference,’” Pls.’ Reply at 9 (quoting Fogo de Chao,

769 F.3d at 1137), and therefore, the Court should

examine the factors that the Supreme Court set

forth in Barnhart v. Walton, 535 U.S. 212 (2002), in

assessing whether the Chevron framework applies,

specifically: “the interstitial nature of the legal

question, the related expertise of the [a]gency, the

importance of the question to administration of the

statute, the complexity of that administration, and

the careful consideration the [a]gency has given the

question over a long period of time,” Barnhart, 535

U.S. at 222.

In Fogo de Chao, the Circuit declined for the

following reasons to apply the Chevron framework to

a decision by the Department of Homeland Security’s

Administrative Appeals Office denying a L-1B visa

to one of the restaurant’s churrasqueiro chefs. See

769 F.3d at 1130, 1135–37. First, the Circuit

concluded that the agency’s regulation “largely

parrot[ed], rather than interpret[ed], the key

statutory language,” and thus merited no deference.

Id. at 1136. Second, the Department “openly

conceded at oral argument” that the Appeals Office’s

ruling was “non-precedential,” and that, as a result,

51a

its “interpretation of the statutory language” did not

merit Chevron deference. See id. Therefore, the

Circuit concluded that “the expressly nonprecedential nature of the Appeals Office’s decision

conclusively confirm[ed] that the Department was

not exercising through the Appeals Office any

authority it had to make rules carrying the force of

law.” Id. at 1137. Third, the decision “w[as] the

product of informal adjudication within the [United

States Citizenship and Immigration] Service[s],

rather than a formal adjudication or notice-andcomment rulemaking,” id. at 1136, nor was it

“marked by the qualities that might justify Chevron

deference in the absence of a formal adjudication or

notice-and-comment rulemaking,” id. at 1137.

The Court finds that Fogo de Chao does not

compel the conclusion that the Chevron framework

does not apply here because the three bases for the

Circuit’s conclusion in Fogo de Chao simply do not

apply to the circumstances in this case. First, the

plaintiffs do not argue that any Corporation

regulation merely parroted the ERISA statute, see

generally Pls.’ Mem.; Pls.’ Reply, and therefore, the

first basis for the ruling in Fogo de Chao is

inapposite, see 769 F.3d at 1136. Second, unlike the

Department in Fogo de Chao, see id., the

Corporation has not conceded here that its decision

is not precedential, see generally Def.’s Mem.; Def.’s

Reply, and therefore, would merit no Chevron

deference on that basis. Third, unlike the

Department’s decision in Fogo de Chao, the Court

concludes that the Appeals Board’s decision here,

although also an informal adjudication, was

“marked by the qualities that might justify Chevron

deference in the absence of a formal adjudication or

52a

notice-and-comment rulemaking.” See 769 F.3d at

1137 (citing Barnhart, 535 U.S. at 222).

Moreover, applying the Barnhart factors, the

Court is convinced that the Corporation’s decision

here merits Chevron deference. Again, in Barnhart,

the Supreme Court set forth five factors for courts to

consider in determining whether an agency’s action

merits Chevron deference: “the interstitial nature of

the legal question, the related expertise of the

[a]gency, the importance of the question to

administration of the statute, the complexity of that

administration, and the careful consideration the

[a]gency has given the question over a long period of

time.” 535 U.S. at 222. “There is no denying the

complexity of the statutory regime under which the

[Corporation]

operates,

the

[Corporation’s]

expertise[,] or the careful craft of the scheme it

devised to reconcile various statutory provisions.”

Mylan Labs., Inc. v. Thompson, 389 F.3d 1272, 1280

(D.C. Cir. 2004); see also Tilley, 490 U.S. at 726

(“For a court to attempt to answer these questions

without the views of the agenc[y] responsible for

enforcing [the] ERISA, would be to ‘embar[k] upon a

voyage without a compass.’” (second alteration in

original) (quoting Ford Motor Credit Co. v. Milhollin,

444 U.S. 555, 568 (1980))). And the administrative

record in this case makes clear that the Corporation

and its Appeals Board carefully considered several

complex questions regarding the administration of a

complex, 178-page Plan, see AR 114–292, in

accordance with both the statute and the

Corporation’s own regulations. The Appeals Board’s

decision is a seventy-nine-page, single-spaced

document, see AR 1–79, which resolved thirteen

discrete and complex issues raised in an appeal that

involved a record “consist[ing] of more than 2,000

53a

total pages,” AR 3. In short, the thorough nature of

the Appeals Board’s decision clearly supports the

position that the Chevron framework applies, and

indeed, courts have afforded the Corporation

Chevron deference for statutory interpretations far

less exhaustive. See, e.g., Quality Auto. Servs., LLC

v. PBGC, 960 F. Supp. 2d 211, 217, 221 (D.D.C.

2013) (concluding that the Corporation’s statutory

interpretation of the ERISA in its “two-page

determination” “represent[ed] a reasonable reading

of the statute”).

Lastly, the two cases that the plaintiffs cite as

support for their proposition that the Chevron

framework does not apply, see Pls.’ Mem. at 14

(first citing Sun Capital Partners III v. New

England Teamsters & Trucking Indus. Pension

Fund, 724 F.3d 129, 140 (1st Cir. 2013); then citing

GCIU–Emp’r Ret. Fund v. Quad/Graphics, Inc., 250

F. Supp. 3d 551, 566 (C.D. Cal. 2017)), are not only

not binding on this Court, but in any event are also

distinguishable.

In Sun Capital, the First Circuit considered

“important issues of first impression as to

withdrawal liability for the pro rata share of

unfunded vested benefits to a multiemployer pension

fund of a bankrupt company.” 724 F.3d at 132. The

plaintiffs, “two private equity funds, [ ] sought a

declaratory judgment against” the defendant, “a

struggling portfolio company,” “which brought into

the suit other entities related to the equity funds.”

Id. The Corporation was not a party to the litigation,

but filed an amicus brief in support of the defendant.

See id. at 133. The Corporation “ha[d] not adopted

regulations defining or explaining the meaning” of

the statutory terms at issue, and “[t]he only

54a

guidance [the First Circuit] ha[d] from the PBGC

[wa]s a 2007 appeals letter, defended in its amicus

brief.” Id. at 139. In its amicus brief, the Corporation

did “not assert that its 2007 letter [wa]s entitled to

deference under Chevron,” rather, it “claim[ed]

entitlement to deference under Auer v. Robbins, 519

U.S. 452 (1997).” Id. at 140. The First Circuit

disagreed that Auer deference was warranted

because, under Christopher v. SmithKline Beecham

Corp., “such deference is inappropriate where

significant monetary liability would be imposed on a

party for conduct that took place at a time when that

party lacked fair notice of the interpretation at

issue.” Id. (citing 567 U.S. 142, 156 (2012)). Further,

the First Circuit determined that “even if

Christopher was not an impediment to Auer

deference, the anti-parroting principle would be . . .

[, and t]he PBGC[’s] regulations ma[d]e no effort to

define” the statutory terms at issue. Id. at 141.

Therefore, because the First Circuit’s decision

concerned whether or not to apply Auer deference,

not Chevron deference, and the First Circuit

determined that Auer deference was inappropriate

for two circumstances not present here, the Court

concludes that Sun Capital is distinguishable.

In GCIU, the United States District Court for the

Central District of California reviewed an appeal of

an arbitration decision regarding “withdrawal

liability under . . . [the] ERISA . . . and the

Multiemployer Pension Plan Amendments Act of

1980.” 250 F. Supp. 3d at 554. The defendant, an

employer

that

“ceased

contributing

to

a

multiemployer pension plan,” id., “argue[d] that the

[c]ourt should defer to an opinion letter written by

the . . . Corporation [ ] that concluded that the

[twenty]-year payment cap should be applied before

55a

the partial withdrawal credit,” id. at 564. The court

concluded that the opinion letter did not merit

Chevron deference because “agency opinion letters

do not warrant [such] deference,” id. at 565 (citing

Christensen v. Harris Cty., 529 U.S. 576, 587

(2000)), and because “there is no ambiguity under

the [statute] as to whether the [twenty]-year

payment cap should be applied before the partial

withdrawal credit,” id. at 566; see also id. (“The

PBGC’s contrary conclusion cannot supersede

unambiguous statutory language.”). The district

court also “conclude[d] that the opinion letter

carrie[d] little or no added persuasive force under

Skidmore” because it “d[id] not address the myriad

arguments

that

cut

strongly

against

its

interpretation, and the PBGC d[id] not appear to

rely on any specialized knowledge or expertise in

reaching its conclusion.” Id.

The

Court

concludes

that

GCIU

is

distinguishable for two reasons. First, in that case,

the Corporation was not a party to the suit, nor was

either party seeking judicial review of a Corporation

decision. See id. at 554. Second, the Corporation

opinion letter in that case was a two-page letter,

written by the Acting Director of the Corporation’s

Legal Department more than thirty years before the

GCIU decision was issued, responding to a “request

for the PBGC’s opinion concerning [a provision] of

[the] ERISA.” See Arbitration Record at 626–27,

GCIU–Emp’r Ret. Fund v. Quad/Graphics, Inc., No.

16-3391 (C.D. Cal. Aug. 17, 2016), ECF No. 21-9.

Therefore, the Corporation’s “uncited, conclusory

assertions of law in a short, informal document that

does not purport to set policy for future

[Corporation] determinations,” see Fox v. Clinton,

684 F.3d 67, 78 (D.C. Cir. 2012), is unlike the

56a

Appeals Board’s decision in this case, which “was

offered in an ‘exhaustive [adjudicative] decision,’ in

which the agency . . . ‘was acting pursuant to an

express delegation from Congress’ . . . [and]

addressing ‘precisely the sort of complex, interstitial

questions that the [agency] deserves deference to

address,’” id. at 77–78 (first and final alterations in

original) (quoting Menkes v. DHS, 637 F.3d 319,

326, 331–32 (D.C. Cir. 2011)). Accordingly, the

Court concludes that the Appeals Board’s decision is

not too informal for the Chevron framework to

apply.11

11 The

Court located a third case in which a court concluded

that the Chevron framework did not apply to the Corporation’s

actions, see In re UAL Corp. (Pilots’ Pension Plan

Termination), 468 F.3d 444 (7th Cir. 2006), but concludes that

it too is distinguishable from the circumstances here. In In re

UAL Corp., the Corporation filed an adversary complaint in the

United Airlines bankruptcy proceedings, see id. at 447–48,

pursuant to its authority under 29 U.S.C. § 1342, which

“requires the PBGC to initiate litigation,” id. at 450. The

Seventh Circuit determined that the Corporation did not merit

Chevron deference for its actions under § 1342, which “requires

the PBGC to initiate litigation,” because that section “gives the

resolution of” whether “the Letter Agreement between United

and the ALPA exposed the [PBGC’s] insurance fund to an

‘unjustified increase’ in liability” “to the judiciary; [thus,] the

PBGC participates as a litigant, not as the decision-maker.” Id.

at 450–51. Here, the Corporation is not seeking Chevron

deference for any action it took as a litigant under § 1342, but

rather for its benefit determinations, as affirmed by the

Appeals Board’s comprehensive decision. See Sara Lee Corp. v.

Am. Bakers Ass’n Ret. Plan, 512 F. Supp. 2d 32, 38 (D.D.C.

2007) (“The provision at issue in United Airlines, however,

actually interprets a different provision of [the] ERISA, 29

U.S.C. § 1342, which pertains to lawsuits initiated by [the]

PBGC, where [it] acts as an ordinary litigant, as opposed to

actions, such as this one, that challenge the agency’s

determinations pursuant to § 1303.”).

57a

iv. Whether the Administrative Record Is

Facially Flawed

Fourth, the plaintiffs argue that “the Appeals

Board’s decision is inconsistent with the qualities of

an agency determination deserving of Chevron

deference because it relies upon a facially flawed

administrative record.” Pls.’ Mem. at 14. According

to the plaintiffs, “by relying upon an outdated and

discredited evaluation of the Plan’s assets, the

Corporation’s action is not only due no deference, but

is, on its face, arbitrary and capricious.” Id. at 15. In

response, the Corporation rejects the factual

predicate of the plaintiffs’ argument, i.e., that the

administrative record is flawed. See Def.’s Mem. at

17 (“[The] PBGC did not, as the [plaintiffs] assert,

‘acknowledg[e] that its initial valuation efforts were

flawed.’” (first alteration in original) (quoting Pls.’

Mem. at 8 n.5)). Although the Corporation

acknowledges that it “initiated a reevaluation of the

Plan’s assets,” it asserts that “this was not because

of any known flaw in the initial valuation for this

Plan, but rather, in an abundance of caution due to

certain flaws identified in other cases in which the

initial valuation was performed by the same

contractor.” Id. According to the Corporation, it

issued its determination while the re-evaluation was

pending in order to “avoid[] delaying the [plaintiffs’]

benefit determinations, while preserving their right

to challenge any later adjustment to their benefits.”

Id. at 17–18. And the Corporation argues that even if

its determination “cannot be sustained on the

administrative record, the remedy [ ] is not to

eliminate the applicable deference,” but rather “to

remand to the agency for additional investigation or

explanation.” Id. at 18 (quoting Cty. of Los Angeles

v. Shalala, 192 F.3d 1005, 1023 (D.C. Cir. 1999).

58a

The Court is not persuaded that the Corporation’s

reliance on the initial evaluation of the Plan’s assets

would

render

the

Corporation’s

statutory

interpretations of [the] ERISA ineligible for Chevron

deference. To the extent that the plaintiffs argue that

the Corporation’s reliance on the initial evaluation

was arbitrary and capricious, the Court rejects that

argument because the plaintiffs have not suffered

any prejudice as a result of that reliance because the

re-evaluation has since been completed. See Olson v.

Clinton, 602 F. Supp. 2d 93, 103–04 (D.D.C. 2009)

(“When a plaintiff alleges that an agency’s decision

suffers from procedural flaws that render its decision

‘arbitrary and capricious,’ he must show that

procedural errors existed and that prejudice resulted

from these errors.” (citing Carstens v. Nuclear

Regulatory Comm’n, 742 F.2d 1546, 1558 (D.C. Cir.

1984))). The new “value of the [P]lan assets is about

one-half of 1% (0.5%) higher than in the initial

evaluation,” “6,000 of the 13,000 participants” will

receive a benefit increase, “[t]he average increase in

monthly benefits is less than four dollars, “95% of

[which will be] less than ten dollars per month,” and

“[p]articipants who receive a revised benefit

determination will be able to appeal the new

determination.” Delta Pilot Retirement Plan’s Asset

Re-evaluation Questions and Answers, Pension

Benefit

Guaranty

Corporation,

https://www.pbgc.gov/about/faq/delta-asset-re-eval-qa

(last visited Mar. 23, 2018).12 And the Court agrees

with the Corporation that it “may base its defense of

12 The

Court takes judicial notice of the publicly available

information on the Corporation’s website. See, e.g., Seifert v.

Winter, 555 F. Supp. 2d 3, 11 n.5 (D.D.C. 2008) (Walton, J.)

(collecting cases that allow the taking of judicial notice of

information published on government websites).

59a

the [plaintiffs’] benefit determinations only on the

documents that the agency considered,” and

therefore, “[a]ny attempt to substitute the agency’s

later asset-re-evaluation would not demonstrate the

‘careful consideration’ . . . but rather, violate bedrock

precepts of administrative law.” Def.’s Reply at 10;

see also Fla. Power & Light Co. v. Lorion, 470 U.S.

729, 743–44 (1985) (“‘[T]he focal point for judicial

review should be the administrative record already

in existence, not some new record made initially in

the reviewing court.’ The task of the reviewing court

is to apply the appropriate APA standard of review, 5

U.S.C. § 706, to the agency decision based on the

record the agency presents to the reviewing court.”

(alteration in original) (first quoting Camp v. Pitts,

411 U.S. 138, 142 (1973); then citing Citizens to

Preserve Overton Park v. Volpe, 401 U.S. 402

(1971))). Accordingly, the Court concludes that the

Corporation’s decision to re-audit the Plan’s assets, a

decision which the plaintiffs themselves requested in

their appeal, see AR 1, and to issue new, appealable

benefit determinations based on the re-audit, does

not render the Chevron framework inapplicable to

this matter.13

13 In

their reply, the plaintiffs assert a fifth reason why the

Corporation’s benefits determinations should not be afforded

Chevron deference: “The fact that Congress clearly did not

intend to provide the Corporation with deference when serving

in a trustee capacity allocating assets under 29 U.S.C. §

1344(a) is further evidenced by contrasting the language there

with that of § 1344(f).” Pls.’ Reply at 15. According to the

plaintiffs, the language in § 1344(f), which states that the

Corporation’s determinations of the value of certain recovery

payments “shall be binding unless shown by clear and

convincing evidence to be unreasonable,” id. (quoting 29 U.S.C.

§ 1344(f)(4)), “stands in stark contrast to that of § 1344(a),”

where Congress “declined to include the ‘clear and convincing’

60a

2. The Applicable Standards of Review

For all of the reasons stated above, the Court

concludes that the Chevron framework applies. With

respect to questions of statutory interpretation of the

ERISA, the Court will first consider “whether

Congress has directly spoken to the precise question

at issue,” and, if “the intent of Congress is clear”

from the statute’s language, “that is the end of the

matter; for the [C]ourt, as well as the agency, must

give effect to the unambiguously expressed intent of

Congress.” Chevron, 467 U.S. at 842–43. However, if

the statute is ambiguous, the Court shall defer to the

Corporation’s construction of the statute. See id.

Deference is due “not only because Congress has

delegated law-making authority to the [Corporation],

but also because that agency has the expertise to

produce a reasoned decision.” Vill. of Barrington, Ill.

standard later articulated in § 1344(f),” id. at 15–16. As an

initial matter, “[j]udges in this District have repeatedly held

that arguments may not be raised for the first time in a party’s

reply.” Nytes v. Trustify, Inc., 297 F. Supp. 3d 191, 202 (D.D.C.

2018) (Walton, J.) (collecting cases). In any event, Congress’s

decision to not add a “clear and convincing evidence” standard,

or any other standard, suggests that Congress intended courts

to apply the default “arbitrary and capricious” standard that is

typical of judicial review of agency actions. See, e.g., United

Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. &

Serv. Workers Int’l Union, AFL–CIO–CLC, ex rel. Participants

& Beneficiaries of Thunderbird Mining Co. Pension Plan v.

PBGC, 707 F.3d 319, 323 (D.C. Cir. 2013) (“[The] ERISA

permits plan participants who are ‘adversely affected’ by an

action of the [Corporation] to bring suit against the agency in

district court, 29 U.S.C. § 1303(f), but the statute does not

specify the standard of judicial review. In such a case, a court

generally must apply the ‘arbitrary or capricious’ standard of

the Administrative Procedure Act, 5 U.S.C. § 706(2)(A).” (citing

Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461, 496–

97, (2004))).

61a

v. Surface Transp. Bd., 636 F.3d 650, 660 (D.C. Cir.

2011). And the Court must accept the Corporation’s

interpretation of its own regulations unless plainly

erroneous or inconsistent with the regulation itself.

See Auer, 519 U.S. at 461; see also Boivin, 446 F.3d

at 154 (noting that courts “owe substantial

deference” to the Corporation’s “interpretation of its

own regulations”).

In regards to the standard of review for all other

actions of the Corporation challenged by the

plaintiffs, the Court concludes that Claims Two

through Four must be resolved under the arbitrary

and capricious standard of review14 because they are

brought pursuant to 29 U.S.C. § 1303(f), see Am.

Compl. ¶ 14, and “§ 1303(f) . . . does not specify the

[applicable] standard of judicial review. [And i]n

such a case, a court generally must apply the

‘arbitrary and capricious’ standard of the

Administrative Procedure Act, 5 U.S.C. § 706(2)(A),”

United Steel, Paper & Forestry, Rubber, Mfg.,

Energy, Allied Indus. & Serv. Workers Int’l Union,

AFL–CIO–CLC, ex rel. Participants & Beneficiaries

of Thunderbird Mining Co. Pension Plan v. PBGC,

707 F.3d 319, 323 (D.C. Cir. 2013); see also id. at 324

(“In the administrative context, we generally review

an agency’s application of an undisputed legal

14 The

parties do not dispute, see Pls.’ Mem. at 35; see also

Def.’s Mem. at 39, that Congress has designated the standard

of review for Claim Five, which challenges the Corporation’s

calculations of benefits under § 1322(c): “Determinations under

this subsection shall be made by the [C]orporation[, . . . and]

shall be binding unless shown by clear and convincing evidence

to be unreasonable,” 29 U.S.C. § 1322(c)(4).

62a

standard to a particular set of facts under a

deferential standard.”).15

To determine whether the Corporation’s actions

were “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law,” 5 U.S.C. §

706(2)(A), the Court “is not to substitute its

judgment for that of the agency,” Motor Vehicle

Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto.

Ins. Co., 463 U.S. 29, 43 (1983). And, when an

agency action depends on a “high level of technical

expertise,” the Court must “defer to ‘the informed

discretion of the responsible federal agenc[y].”’

Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 377

(1989) (quoting Kleppe v. Sierra Club, 427 U.S. 390,

412 (1976)). But, the Corporation must still

articulate a “factual basis” that permits the Court to

“conclude that the PBGC has reached its decision on

the basis of a reasonable accommodation of the

policies underlying [the] ERISA.” Rettig, 744 F.2d at

156.

To uphold the Corporation’s actions, the Court

must be satisfied that the Corporation “examine[d]

the relevant [issues] and articulate[d] a satisfactory

explanation for its action including a ‘rational

connection between the facts found and the choice

made.’” State Farm, 463 U.S. at 43 (quoting

Burlington Truck Lines v. United States, 371 U.S.

15 Other members of this Court have agreed that arbitrary and

capricious review applies to challenges to the Corporation’s

determinations brought pursuant to § 1303(f). See, e.g., Maher

v. PBGC, 271 F. Supp. 3d 296, 300, 302 (D.D.C. 2017),

reconsideration denied, No. 16-1646 (KBJ), 2017 WL 7689634

(D.D.C. Dec. 1, 2017), appeal docketed, No. 18-5036 (D.C. Cir.

Feb. 12, 2018); Burmeister v. PBGC, 943 F. Supp. 2d 83, 87–88

& n.4 (D.D.C. 2013); David v. PBGC, 864 F. Supp. 2d at 155;

Sara Lee Corp., 512 F. Supp. 2d at 37–38.

63a

156, 168 (1962)). Although the Court must conduct a

“searching and careful” review, Citizens to Preserve

Overton Park, 401 U.S. at 416, the Corporation’s

actions are “entitled to a presumption of regularity,”

id. at 415, and the Court “will not second guess an

agency decision or question whether the decision

made was the best one,” C & W Fish Co. v. Fox, 931

F.2d 1556, 1565 (D.C. Cir. 1991). Rather, the Court

must uphold the Corporation’s decision “so long as

[it] ‘engaged in reasoned decisionmaking and its

decision is adequately explained and supported by

the record.’” Clark Cty. v. FAA, 522 F.3d 437, 441

(D.C. Cir. 2008) (quoting N.Y. Cross Harbor R.R. v.

STB, 374 F.3d 1177, 1181 (D.C. Cir. 2004)).

B. Claim Two

In Claim Two, the plaintiffs argue that the

Corporation improperly valued the Plan’s liabilities

and allocated Plan assets by not taking into account

the ALPA Payments that the Active Pilots received

from Delta pursuant to Letter of Agreement #51. See

Am. Compl. ¶ 74; see also Pls.’ Mem. at 15 (“[The

p]laintiffs allege that the Corporation violated [the]

ERISA by performing § 1344 allocations for

unfunded Plan benefits without factoring in that the

Active Pilots had already been compensated for

those unfunded nonguaranteed pension benefits

through the Replacement Payments (i.e., the

payments deriving from the ALPA Notes and [the]

ALPA Claim).”). According to the plaintiffs, “[t]he

Corporation’s allocation decision means that the

Active Pilots will be compensated twice for the same

‘unfunded’ Plan benefits, at the [p]laintiffs’ expense

(because the funds that would otherwise go to [the

p]laintiffs’ benefits go [to] the Active Pilots, leaving

[the p]laintiffs’ benefits unfunded).” Pls.’ Mem. at 15.

64a

The plaintiffs set forth two reasons why the

Corporation should have taken the ALPA Payments

into account, which the Court will address in turn.

1. The Corporation’s Objections to Letter of

Agreement #51

First, the plaintiffs point out that the

Corporation took the same position in its opposition

to Letter of Agreement #51 in the Bankruptcy Court

that the plaintiffs take now; namely, “that the

Active

Pilots[’]

[u]nfunded

[n]onguaranteed

[b]enefits [w]ere [f]unded by the [ALPA] Payments.”

Id. at 16. According to the plaintiffs, because the

Bankruptcy Court declined to resolve the factual

issue as to whether the ALPA Payments were

intended to replace Plan benefits, the Bankruptcy

Court’s approval of Letter of Agreement #51 “did not

undermine the Corporation’s determination” on this

issue. See id. at 18–19.

The plaintiffs are correct that the Corporation

argued before the Bankruptcy Court that “Delta and

[the] ALPA intend[ed] to use the [ALPA Payments]

to replace unfunded benefits under the Pilots Plan

by using the proceeds to fund follow-on retirement

plans and other payments or distributions to pilots,”

AR 1049; see also AR 1053, 1064, 1069, and that the

Bankruptcy Court explicitly declined to make

findings of fact regarding the purpose of the ALPA

Payments, instead denying the Corporation’s

objection to Letter of Agreement #51 as a matter of

law, see AR 446–54. However, the Court agrees with

the Corporation, see Def.’s Mem. at 23 (stating that

the Corporation’s initial objection to the ALPA

Payments “has no effect on the allocation of the

Plan’s assets or the reasonableness of [the] PBGC’s

statutory construction”), that its opposition to the

65a

ALPA Payments in Bankruptcy Court is irrelevant

to the issue of whether the Corporation is required,

under the ERISA and the Corporation’s regulations,

to consider the ALPA Payments as part of its

valuation and allocation decisions. 16 Instead, to

resolve this question, the Court must look at the

statute and the regulations themselves.17

In fact, the Corporation’s position in Bankruptcy Court

actually suggests the opposite. In its opposition to Letter of

Agreement #51 filed with the Bankruptcy Court, the

Corporation argued that the Active Pilots would receive a

double recovery precisely because the Corporation would not be

able to take the ALPA Payments into account in its benefit

determinations. See AR 1064 (“Participants would recover

[u]nfunded [n]onguaranteed [b]enefits from both the employer

and [the] PBGC, and the bankruptcy estate would be paying

the same claim twice—once to participants and once to [the]

PBGC.”).

17 The plaintiffs also argue that the Appeals Board “concede[d]

that [the] ERISA does not prohibit [it] from taking the [ALPA]

Payments into account,” Pls.’ Mem. at 20, when it stated in its

decision that the “ERISA does not require [the] PBGC to

account for the ALPA Payments for purposes of allocating the

Pilots Plan’s assets and [the] PBGC’s recoveries,” AR 41.

According to the plaintiffs, the Appeals Board did not state

“that [the] ERISA prohibits such an accounting,” and thus, “the

legal issue turns on whether the Corporation’s construction of

the statute is consistent with [the] ERISA’s purposes.” Pls.’

Mem. at 20; see also id. at 20–21 (describing the ERISA’s

purposes as favoring retirees). The Corporation disputes that it

conceded

anything,

claiming

that

the

plaintiffs’

characterization of the Appeals Board’s statement that the

Corporation “is not required to take the ALPA Payments into

account” as a concession that the ERISA permits such an

accounting is “hair-splitting.” Def.’s Mem. at 24. The Court

agrees with the Corporation that it did not concede, at the

administrative level, that the ERISA permits the Corporation

to take the ALPA Payments into account in its determination of

benefits. In any event, even if that point had been conceded

below, the Court must still consider the legal issue on the

16

66a

2. PC5 Benefits

As noted earlier, supra at 5, PC5 benefits are “all

other nonforfeitable benefits under the plan,” 29

U.S.C. § 1344(a)(5), that are not guaranteed by the

Corporation, id. § 1344(a)(4)(A). The plaintiffs argue

that the ERISA’s definition of a nonguaranteed,

nonforfeitable benefit “does not address specifically

whether such entitlement can be extinguished when

the benefit is funded from a source outside the

plan,” Pls.’ Mem. at 20, and therefore, given the

ERISA’s purpose to protect employees’ retirement

income security, the Corporation should have

interpreted the statute liberally to allow it to factor

in the ALPA Payments paid to the Active Pilots, see

id. at 20–21; see also Pls.’ Reply at 22–23 (same).

The Corporation argues in response that it would

have been “inconsistent with the statute” for it to

factor in the ALPA Payments, which were “monies [

] not held by the Plan, not used by the Plan to pay

Plan benefits, and not recovered by [the] PBGC.”

Def.’s Mem. at 21; see also Def.’s Reply at 13–14

(same). The Court agrees with the Corporation.

The ERISA defines “nonforfeitable benefit,” “with

respect to a plan,” as

a benefit for which a participant has

satisfied the conditions for entitlement under

the plan or the requirements of this chapter

(other than submission of a formal

application, retirement, completion of a

required waiting period, or death in the case

of a benefit which returns all or a portion of a

merits. See Cohen v. Bd. of Trs. of Univ. of the Dist. of

Columbia, 819 F.3d 476, 483 (D.C. Cir. 2016) (noting the

“weighty preference in favor of deciding cases on their merits”).

67a

participant’s

accumulated

mandatory

employee

contributions

upon

the

participant’s death), whether or not the

benefit may subsequently be reduced or

suspended by a plan amendment, an

occurrence of any condition, or operation of

this chapter or Title 26.

29 U.S.C. § 1301(a)(8).

In the Court’s view, the statute is unambiguous

under Chevron step one, considering that it defines

a nonforfeitable benefit as a benefit “under a

pension plan or under ‘requirements of this chapter,’

that is, Chapter 18 of Title 29 [of the United States

Code]. Chapter 18, in turn, encompasses the

ERISA.” Deppenbrook v. PBGC, 950 F. Supp. 2d 68,

77 (D.D.C. 2013) (Walton, J.) (quoting 29 U.S.C. §

1301(a)(8)), aff’d, 788 F.3d 166 (D.C. Cir. 2015). In

other words, the statute explicitly limits

nonforfeitable benefits to those to which a

participant is entitled under a plan, “as opposed to

under other statutes or documents.” Id. Because the

ALPA Payments were never incorporated into the

Plan, but rather were part of a distinct agreement

made between Delta and the ALPA, see AR 932–72

(Letter of Agreement #51), the Court agrees with

the Corporation that it was not permitted, under

the statute, to factor the ALPA Payments into its §

1344 allocations, the purpose of the ERISA

notwithstanding. See Belland, 726 F.2d at 844

(noting that “the principle that remedial statutes

are to be liberally construed to effectuate their

purpose . . . ‘does not give the judiciary license, in

interpreting a provision, to disregard entirely the

plain meaning of the words used by Congress’”

68a

(quoting Symons v. Chrysler Corp. Loan Guarantee

Bd., 670 F.2d 238, 241 (D.C. Cir. 1981))).

Nor is the Court persuaded by the plaintiffs’

argument that the Corporation “take[s] account of

such non-plan funding in other contexts,” as

evidenced by its regulation concerning obligations

pursuant to an insurance contract. See Pls.’ Mem. at

20; see also Pls.’ Reply at 23 (same). That regulation

provides that “an irrevocable commitment by an

insurer to pay a benefit, which commitment is in

effect on the date of the asset allocation, is not

considered a plan asset, and a benefit payable under

such a commitment is excluded from the allocation

process.” 29 C.F.R. § 4044.3(a). According to the

plaintiffs, the fact that the Corporation takes into

account obligations pursuant to an insurance

contract demonstrates that “plainly the statute does

not forbid the[] consideration” of payments from

outside the plan, Pls.’ Reply at 23, and the

Corporation’s decision to not factor in the ALPA

Payments when it would factor in obligations

pursuant to an insurance contract “establishe[s] that

[the] agency[’s] action is arbitrary [because] the

agency offers insufficient reasons for treating similar

situations differently,” id. (quoting Shalala, 192 F.3d

at 1022).

The Court agrees with the Corporation that

the circumstances addressed in 29 C.F.R. §

4044.3(a) are distinguishable from the ALPA

Payments because in the case of insurance

payments, “the pension benefit becomes an

obligation of the insurance company when it issues

a contract; it is no longer an obligation of the plan,”

while in the case of the ALPA payments, “the Plan’s

obligations to pay benefits were never reduced by

69a

the ALPA payments.” Def.’s Mem. at 25; see also

Def.’s Reply at 15 (arguing that the plaintiffs’

“analogy to irrevocable insurance contracts, i.e.,

annuities bought by a plan that transfer payment

responsibility to an insurer, is inapposite . . .

[because t]he purchase of such a contract satisfies

the participant’s benefits under the plant. It does

not provide additional benefits” (citing Beck, 551

U.S. at 1096)). Rather, the ALPA Claim is a

“general non-priority unsecured claim under section

502 of the Bankruptcy Code . . . in the amount of

$2.1 billion,” which the ALPA Delta Master

Executive Council allocated among the pilots, see

AR at 966–67, while the ALPA Notes were issued by

Delta to the ALPA “[i]n the event that the . . . Plan

[ ] terminated,” AR 968, with the ALPA determining

“[d]istribution mechanics, eligibility, and allocation

among [ ] pilots,” AR 971. Therefore, because the

ALPA payments were never Plan assets, nor did

they extinguish any Plan obligations, the

Corporation properly declined to take these

payments into account in its § 1344 allocation.

C. Claim Three

In Claim Three, the plaintiffs challenge the

Corporation’s determination that the Plan provision

incorporating the increased compensation limit was

not “in effect” five years prior to the Plan’s

termination on September 2, 2006, and therefore,

did not apply to the Corporation’s calculations of the

plaintiffs’ PC3 benefits. See Am. Compl. ¶¶ 89–91.

As explained earlier, supra at 4–5, under the

ERISA, benefits only qualify for PC3 status if “the

provisions of the plan creating them were ‘in effect’

within the five-year period prior to plan

termination.” Davis II, 734 F.3d at 1165 (quoting 29

70a

U.S.C. § 1344(a)(3)(A)). The Corporation has

promulgated

a

regulation

interpreting

the

requirement that a benefit be “in effect” in order to

qualify for PC3 status to mean that the benefit must

be “the lowest annuity benefit payable under the

plan provisions at any time during the [five]–year

period ending on the termination date.” 29 C.F.R. §

4044.13(b)(3)(i).

In Davis II, the U.S. Airways pilots challenged

the Corporation’s determination that a certain

benefit increase was not included in PC3. See 734

F.3d at 1167. The plan provision there creating that

benefit increase “was adopted on December 4, 1997,

had an ‘effective date’ of January 1, 1998, and

allowed [certain U.S. Airways] pilots . . . to elect to

receive the benefit between March 1, 1998 and April

30, 1998. Those who elected to receive the benefit

could not receive it before May 1, 1998.” Id. The U.S.

Airways pilots’ plan terminated on March 31, 2003,

see id. at 1166, and therefore, to be included in PC3,

the benefit had to be “in effect” before March 31,

1998, five years prior to the plan’s termination, see

29 U.S.C. § 1344(a)(3). The pilots argued that the

benefit was “in effect” as of the “effective date” of

January 1, 1998, and because that date was more

than five years prior to the plan’s termination, the

benefit should have been included in PC3. See 734

F.3d at 1168. But, the Circuit deferred to the

Corporation’s interpretation of the statutory

language of “in effect” to mean “payable,” id. (citing

29 C.F.R. § 4044.13(b)(3)(i)), and concluded that

“because the earliest date the benefit could be paid

was [May 1, 1998,] one month after the beginning of

the five-year period preceding the date of [p]lan

termination, the [ ] benefit could not be included in

[PC3],” id. at 1167. With the Circuit’s holding as its

71a

guidepost, the Court reiterates

relevant dates in this case.

the

following

On June 7, 2001, Congress passed the EGTRRA,

which increased the compensation limit to $200,000

for plan years beginning after December 31, 2001.

See Pub. L. No. 107-16, § 611(c)(1), (i)(l), 115 Stat. at

97, 100. Therefore, the first Plan year to which the

increased compensation limit could apply is the Plan

year that began on July 1, 2002. See AR 129

(defining the Plan’s “plan year” as “[t]he [c]ompany’s

fiscal year ending each June 30”).

The PWA provides that any statutory increase to

the compensation limit “will be effective for the . . .

[Plan] as of the earliest date that the increased

[q]ualified [p]lan [l]imits could have become legally

effective for that Plan, had that Plan not been

collectively bargained,” AR 3697, and also states that

the

provision

incorporating

the

increased

compensation limit would be effective as of

September 1, 2001, AR 3695. The IRS notice setting

effective dates for the increased compensation limit

provides that

[i]n the case of a plan that uses annual

compensation for periods prior to the first

plan year beginning on or after January 1,

2002, to determine accruals or allocations for

a plan year beginning on or after January 1,

2002, the plan is permitted to provide that

the $200,000 compensation limit applies to

annual compensation for such prior periods

in determining such accruals or allocations.

I.R.S. Notice 2001-56, 2001-2 C.B. 277. The Fourth

Amendment, whose purpose is “to reflect certain

provisions of . . . [the] EGTRRA,” and “is intended

72a

as good faith compliance with the requirements of

[the] EGTRRA and is to be construed in

accordance with [the] EGTRRA and guidance

issued thereunder,” AR 244, states that its

provisions, including the increased compensation

limit, see AR 245, are “[e]ffective July 1, 2002, or

such other effective date as may be provided in a

provision below,” AR 244. The Fourth Amendment

also provides that

[t]he Earnings taken into account in

determining benefit accruals of an Employee

in any Plan Year beginning after June 30,

2002 shall not exceed $200,000 . . . . In

determining benefit accruals of [retired]

Employees . . . in Plan Years beginning after

June 30, 2002, the annual compensation

limit provided in this paragraph for Plan

Years beginning before July 1, 2002 shall be

$200,000, or, if greater, the annual

compensation limit in effect under Section

401(a)(17) of the Code for that Plan Year . . .

AR 245 (emphasis added).

The plaintiffs make much of the IRS notice, the

PWA, and the Fourth Amendment, arguing that

under the PWA, “the Plan was obligated to make

increases to the [c]ompensation [l]imit ‘effective’

‘as of the earliest date that the increased

[q]ualified [p]lan [l]imits could have been legally

effective for that plan,” and because the IRS notice

allowed the Plan to apply the increased

compensation limit to plan years prior to July 1,

2002, the increased compensation limit was

payable, and thus in effect, for five years prior to

the plan’s termination. See Pls.’ Mem. at 31; see

also Pls.’ Reply at 30 (arguing that under the

73a

PWA, “the Plan was obligated to make increases to

the [c]ompensation [l]imit ‘effective’ ‘as of the

earliest date that . . . [they] could have become

legally effective for that Plan”).

Upon review of the EGTRRA, the PWA, the IRS

notice, and the Fourth Amendment, the Court is not

persuaded that the Corporation’s determination that

the increased compensation limit was not in effect

five years prior to the Plan’s termination on

September 2, 2006, because it was not payable until

July 1, 2002, was arbitrary or capricious. The Court

agrees with the Corporation that although the IRS

notice allowed the Plan to apply the increased

compensation limit to annual compensation for plan

years prior to the July 1, 2002 plan year, it could do

so only for the purpose of “determin[ing] accruals or

allocations for [the July 1, 2002 plan year],” see

I.R.S. Notice 2001-56, 2001-2 C.B. 277 (emphasis

added), and the Fourth Amendment applied the

increased compensation limit to plan years prior to

July 1, 2002 “only for determining benefits payable

to [p]ilots who retired after July 1, 2002,” Def.’s

Mem. at 31. The Fourth Amendment states that (1)

“[t]he Earnings taken into account in determining

benefit accruals of an Employee in any Plan Year

beginning after June 30, 2002, shall not exceed

$200,000,” and (2) “[i]n determining benefit accruals

of [retired] Employees . . . in Plan Years beginning

after June 30, 2002, the annual compensation

limit . . . for Plan Years beginning before July 1,

2002 shall be $200,000.” AR 245 (emphases added).

If the Court interpreted the Fourth Amendment

language regarding retired employees to allow the

increased compensation limit to apply to Plan years

prior to July 1, 2002, as the plaintiffs argue, that

interpretation would not only negate the first clause,

74a

which provides that the increased compensation

limit applies only for Plan years beginning on and

after July 1, 2002, see id., but it would also

contradict the EGTRRA itself, which provides that

the increased compensation limit applies to plan

years beginning after December 31, 2001, see Pub. L.

No. 107-16, § 611(c)(1), (i)(l), 115 Stat. at 97, 100.

Certainly, neither the IRS notice nor the terms of

the Plan (either the PWA or the Fourth Amendment)

can be construed in contravention of the statute

itself. See AR 244 (stating that the Fourth

Amendment “is intended as good faith compliance

with the requirements of [the] EGTRRA and is to be

construed in accordance with [the] EGTRRA and

guidance issued thereunder”); see also Davis II, 734

F.3d at 1168 (rejecting the argument that the benefit

was “in effect” as of the plan’s stated effective date).

Accordingly, the Court concludes that the

Corporation’s determination that the increased

compensation limit went into effect, i.e., became

payable, on July 1, 2002, less than five years prior to

the Plan’s termination, and thus could not be

included in the Corporation’s calculations of the

plaintiffs’ PC3 benefits, was reasonable, and not

arbitrary and capricious.18

18 The

plaintiffs claim that the Corporation conceded in an

internal memo that it “could apply [the] increased

[c]ompensation [l]imit to plan years prior to January 1, 2002,”

Pls.’ Mem. at 28, when it concluded that, “[i]n determining such

post-2001 accruals in the case of a plan that uses a final

average earnings formula, the plan may apply a $200,000 limit

to earnings from years prior to 2002,” id. (quoting AR 1235).

Again, the language in this memorandum is limited to

determinations of “post-2001 accruals,” see id. (emphasis

added), and therefore, the Corporation did not “concede” the

plaintiffs’ position.

75a

D.

Claim Four

In Claim Four, the plaintiffs challenge the

Corporation’s determination that the Plan provision

incorporating Congress’s increase to the qualified

benefit limit was in effect more than five years prior

to the Plan’s termination, and thus includable in the

Corporation’s calculations of PC3 benefits, only for

pilots who were active at the time the PWA was

signed, and not for pilots who retired before July 1,

2001. See Am. Compl. ¶¶ 114–20. The parties agree

that the PWA incorporating the increased qualified

benefit limit was in effect five years prior to the

Plan’s termination, but disagree as to whether that

provision covers all pilots or only pilots active when

the PWA was signed in 2001. See Pls.’ Mem. at 32–

33; Def.’s Mem. at 33. The plaintiffs argue that the

Corporation’s determination that the PWA provision

applied only to active, and not retired, pilots was

erroneous because the PWA “does not state that the

‘[q]ualified [p]lan [l]imits’ will be different for Plan

participants depending upon their retirement

status.” Pls.’ Mem. at 32; see also Pls.’ Reply at 32

(same).

The Corporation responds that the Fourth

Amendment provides that the qualified benefit limit

was increased for Active Pilots as of July 1, 2001,

while the increase did not go into effect for retired

pilots until July 1, 2002. See Def.’s Mem. at 34; see

also id. at 36. According to the Corporation, if the

PWA provision were read to cover pilots who were

retired when the PWA was adopted, such a reading

“would conflict with the Fourth Amendment, which

does not make the [qualified] benefit[]limit increase

effective until July 1, 2002, for this group.” Id. at 36.

Furthermore, the Corporation argues that the PWA

76a

provision only covered Active Pilots because (1) “the

PWA was an agreement between Delta and its

actively employed pilots,” id. at 35, and (2) “there is

no presumption that a collective bargaining agent

represents retirees in negotiations or that a

collective bargaining agreement covers them with

respect to retirement benefits,” id. at 36; see also

Def.’s Reply at 20–21. The Corporation notes that

the plaintiffs’ argument “that [the] ALPA

represented the retirees’ interests is especially odd

here, given the[ir] contention in Claim Two that

[the] ALPA represented the interests of [A]ctive

[P]ilots to the disadvantage of the [plaintiffs] when

negotiating [Letter of Agreement] #51.” Def.’s Mem.

at 36.

Upon review of both the PWA and the Fourth

Amendment, the Court concludes that the

Corporation’s interpretation is reasonable, and

therefore not arbitrary and capricious. The PWA

provision incorporating the increased qualified

benefit limit does not explicitly state whether it

applies only to Active Pilots. See AR 3697 (stating

that if the qualified benefit limit is increased, that

increase is effective as of the earliest date it could

have become legally effective in the absence of a

collective bargaining agreement). The Fourth

Amendment, on the other hand, explicitly

distinguishes between employees’ “annuity starting

dates,” i.e., their dates of retirement. See AR 248.

Specifically, the Fourth Amendment states that the

increased qualified benefit limit “shall be effective

beginning with the [plan] year starting on July 1,

2001[,] for those Employees whose Annuity Starting

Date is on or after July 1, 2001,” but “[w]ith respect

to Participants whose Annuity Starting Date was

before July 1, 2001, the increased [qualified benefit]

77a

limit . . . shall be effective for annuity payments

made on or after July 1, 2002.” AR 248. Because the

Corporation reviewed both provisions, and declined

to interpret the PWA provision as covering pilots

who retired before July 1, 2001, as doing so would

directly conflict with the Fourth Amendment, the

Court is satisfied that the agency “examine[d] the

relevant data and articulate[d] a satisfactory

explanation for its action including a ‘rational

connection between the facts found and the choice

made.’” State Farm, 463 U.S. at 43 (quoting

Burlington Truck Lines, 371 U.S. at 168). The Court

declines to entertain the plaintiffs’ argument that if

the PWA provision and the Fourth Amendment

conflict, the more employee-favorable document

should govern, see Pls.’ Reply at 33, because doing

so would require the Court to “question whether the

decision made was the best one,” which the Court is

not permitted to do, see C & W Fish Co., 931 F.2d at

1565. Accordingly, the Court concludes that the

Corporation’s determination that the increased

qualified benefit limit was in effect more than five

years prior to the Plan’s termination, and thus

includable in PC3, only for pilots who were active at

the time the PWA was signed, and not for pilots who

retired before July 1, 2001, was reasonable, and not

arbitrary and capricious.19

The plaintiffs also argue that the Corporation’s

determination that the PWA provision incorporating the

increased qualified benefit limit only applied to Active Pilots is

erroneous because other PWA provisions “explicitly note[]” that

they do apply to retirees. See Pls.’ Mem. at 33. The Corporation

argues in response that the plaintiffs failed to raise this

argument before the Appeals Board. See Def.’s Reply at 20.

This Court has previously noted that “[t]he District of

Columbia Circuit has consistently held that courts ‘are bound

19

78a

E. Claim Five

In Claim Five, the plaintiffs contend that the

Corporation erred “in allocating the funds it

recovered from Delta after the Plan’s termination . . .

[, which] unfairly reduced [the p]laintiffs’ share of

these funds.” Am. Compl. ¶ 130. Specifically, the

plaintiffs claim that the Corporation “added an

unlawful step to the formula set by Congress—by

reducing the amount of the recovery to the date of

Plan termination—that eliminated $55.5 million

dollars from the funds the PBGC should have put

toward pension benefits.” Id. ¶ 138; see also Pls.’

Mem. at 34 (“[T]he Corporation inappropriately

reduced the amount of funding available for PC5 by

improperly discounting the value of the recoveries

available to fund PC5 liabilities by roughly $55

million.”). They also claim that “the PBGC

to adhere to the hard and fast rule of administrative law,

rooted in simple fairness, that issues not raised before an

agency are waived and will not be considered by a court on

review,’” Veloxis Pharm. v. FDA, 109 F. Supp. 3d 104, 122

(D.D.C. 2015) (Walton, J.) (quoting Coburn v. McHugh, 679

F.3d 924, 929 (D.C. Cir. 2012)), “[a]nd the Circuit has clarified

that the standard for waiver in administrative law cases

focuses on whether the ‘specific argument’ put forth by the

plaintiff was raised before the agency . . . not merely the same

general legal issue,” id. at 123 (citing Koretoff v. Vilsack, 707

F.3d 394, 398 (D.C. Cir. 2013)). Upon review of the plaintiffs’

brief submitted to the Appeals Board, the Court agrees with

the Corporation that the plaintiffs did not raise their argument

that the PWA provision incorporating the qualified benefit

limit increase must apply to both active and retired pilots

because other subsections of the PWA explicitly apply to retired

pilots. See AR 581–84. Therefore, because the plaintiffs did not

give the Appeals Board an opportunity to consider the merits of

this specific argument at the administrative level, that

argument is waived. See Veloxis Pharm., 109 F. Supp. 3d at

123.

79a

erroneously excluded the 2001-06 increases to the

[c]ompensation [l]imit and the [q]ualified [b]enefit

[l]imit in allocating the recovered funds that were to

be distributed to the Plan’s participants and

beneficiaries under [PC5(a)].” Am. Compl. ¶ 142; see

also Pls.’ Mem. at 34 (“[T]he Corporation illegally

judged [the p]laintiffs’ unfunded non-guaranteed

benefits as being in PC5(b) (for which there is no

funding) instead of PC5(a), despite the fact that

these benefits were ‘in effect’ as of September 2,

2001.”).

As noted above, see supra at note 14, the

Corporation’s determinations of recovery benefits

“shall be binding unless shown by clear and

convincing evidence to be unreasonable,” 29 U.S.C. §

1322(c)(4). The Court will consider the plaintiff’s two

arguments in turn.

1. The Corporation’s

Recovery Benefits

Calculation

of

the

As explained above, supra at 6, the ERISA

statute designates how the trustee should calculate

the portion of the recovery funds available for

payment to participants and beneficiaries: it must

“multiply[]—(A) the outstanding amount of benefit

liabilities under the plan (including interest

calculated from the termination date), by (B) the

applicable recovery ratio,” 29 U.S.C. § 1322(c)(2). At

issue in Claim Five is how the Corporation

calculated the recovery ratio, which is prescribed by

statute as follows:

(i) the value of the recoveries of the

[C]orporation [for a single-employer plan

terminated under a distress termination]

to

80a

(ii) the amount of unfunded benefit liabilities

under such plan as of the termination

date.

Id. § 1322(c)(3)(C). The Corporation’s recovery

amount as of the valuation date was

$1,279,506,423. AR 42. “To reflect interest,

[the] PBGC discounted the value of [its]

recovery . . . by $50,501,683, resulting in a

[date of plan termination] (September 2, 2006)

recovery value of $1,229,004,740.” AR 43.

The plaintiffs argue that the Corporation’s

calculation

of

the

recovery

amount

was

unreasonable because it “employed [an] extrastatutory actuarial adjustment[] to the recovery

ratio” than actually provided by Congress. Pls.’

Mem. at 36. 20 Specifically, the plaintiffs contend

20 The

plaintiffs also assert that the Corporation made an

additional “extra-statutory actuarial adjustment[],” Pls.’ Mem.

at 36, when it discounted the recovery value from

approximately $1.285 billion to $1.279 billion “in order to

actuarially adjust these recoveries to their value as of May 3,

2007[,] the date when the PBGC received its first recovery,” id.

at 35. The plaintiffs not only did not raise any argument

regarding the approximately $5.5 million adjustment in their

brief to the Appeals Board, see AR 593–98 (section of the brief

addressing the Corporation’s alleged errors regarding its

calculation and allocation of the recovery funds), but actually

argued that $1.279 billion was the proper recovery value, see

id. 595 (“In the case of the Delta Pilots Plan, ‘the total value of

the [PBGC’s] Recovery as of the May 3, 2007 Valuation Date is

$1,279,506,423.’ Thus, according to the unambiguous language

of the statute, for purposes of calculating the [ ] amount

[available for payment to participants and beneficiaries], the

recovery ratio should have utilized this recovery amount.” (first

alteration in original) (internal citations omitted)). Moreover,

the plaintiffs argue for the first time in their reply that the

Corporation’s “decision to impose an extra-statutory discount to

all recoveries is a ‘policy matter’ that stands to ‘have a

81a

that the Corporation’s decision to “reduce[] the

recovery amount by . . . $50 million (approximately)

to reflect its value on the date of Plan termination,”

id. at 35, was unreasonable because Congress

explicitly directed the Corporation to calculate the

ratio’s denominator as of the Plan’s termination

date, but Congress did not direct the Corporation to

factor that date into the numerator, see id. at 36; see

also Pls.’ Reply at 35. And therefore, according to

the plaintiffs, the “Corporation’s decision to discount

both parts of the ratio by the termination date

violated

th[e]

cardinal

rule

of

statutory

construction” that presumes that Congress

“intentionally and purposely” “include[d] particular

language in one section of a statute but omit[ted] it

in another section of the same Act.” Pls.’ Mem. at 36

(quoting Russello v. United States, 464 U.S. 16, 23

(1983)); see also Pls.’ Reply at 36 (same).

The Corporation argues in response that “[t]he

Appeals Board’s conclusion that, in determining

monies allocable to participants’ benefits, [the]

PBGC must discount its recoveries to the Plan’s

termination date is entirely reasonable, and easily

passes the ‘clear and convincing’ standard under the

significant impact’ on Title IV’s ‘stakeholders,’” Pls.’ Reply at 36

(quoting 29 C.F.R. § 4002.3(a)(3)(v)), and, according to the

Corporation’s own regulations, this determination “may only be

made by the Corporation’s Board of Directors, and cannot be

delegated or, if delegated, no deference adheres to the

Corporation’s decision under Page,” id. As previously explained,

see supra at note 19, because the plaintiffs did not give the

Appeals Board an opportunity to consider the merits of either

of these arguments, they are waived. See Veloxis Pharm., 109

F. Supp. 3d at 123; see also Nytes, 297 F. Supp. 3d at 202

(“Judges in this District have repeatedly held that arguments

may not be raised for the first time in a party’s reply.”

(collecting cases)).

82a

statute.” Def.’s Mem. at 39–40. From the

Corporation’s perspective, “to reflect interest, [it]

had to discount the value of its recovery to

September 2, 2006,” the date of the Plan’s

termination, because the ERISA defines the value of

its recoveries, which make up the numerator of the

recovery ratio, in terms of their value as of the

Plan’s termination date. See id. at 40.

Upon review of the statute, the Court concludes

that the Corporation’s decision to value its recoveries

as of the date of the Plan’s termination passes

muster under the clear and convincing standard. 29

U.S.C. § 1362, which establishes the liability of an

employer upon the termination of a single-employer

plan, has two categories of liability: liability to the

Corporation, see id. § 1362(b), and liability to the §

1342 trustee, see id. § 1362(c). The first category, the

liability to the Corporation, is described as “the total

amount of the unfunded benefit liabilities (as of the

termination date) to all participants and

beneficiaries under the plan, together with interest

(at a reasonable rate) calculated from the

termination date in accordance with regulations

prescribed by the [C]orporation.” Id. § 1362(b)(1)(A)

(emphasis added). The second category, the liability

to the § 1342 trustee, which in this case is also the

Corporation, is described, in relevant part, as

the sum of the shortfall amortization

charge . . . with respect to the plan (if any)

for the plan year in which the termination

date occurs, plus the aggregate total of

shortfall amortization installments (if any)

determined for succeeding plan years . . . and

[ ] the sum of the waiver amortization

charge . . . with respect to the plan (if any)

83a

for the plan year in which the termination

date occurs, plus the aggregate total of

waiver amortization installments (if any)

determined for succeeding plan years . . . ,

together with interest (at a reasonable rate)

calculated from the termination date in

accordance with regulations prescribed by

the [C]orporation.

Id. § 1362(c) (emphasis added). Returning to the

recovery ratio, the numerator is defined as “the

value of the recoveries of the [C]orporation under

section 1362, 1363, or 1364 of this title in connection

with such plan.” Id. § 1322(c)(3)(C)(i). Because the

“recoveries . . . under section 1362,” id., the section

relevant in this case, are both defined in terms of

their value as of the date of the Plan’s termination,

see id. § 1362(b)(1)(A), (c), the Court concludes that

the Corporation’s determination to adjust the

recovery value to reflect its value as of the date of

the Plan’s termination is reasonable. Although the

plaintiffs are correct that Congress did not explicitly

state that the numerator of the recovery ratio should

be valued as of the date of a plan’s termination, as it

did with the denominator, see Pls.’ Mem. at 36,

Congress did define the components of the

numerator of the recovery ratio in terms of their

value as of the date of a plan’s termination in other

provisions of the statute. Thus, the Corporation

reasonably construed these statutory provisions

together to determine that the numerator of the

recovery ratio must be calculated as of the date of a

plan’s termination. See Motion Picture Ass’n of Am.,

Inc. v. FCC, 309 F.3d 796, 801 (D.C. Cir. 2002)

(“Statutory provisions in pari materia are construed

together to discern their meaning.” (citing

84a

Erlenbaugh v. United States, 409 U.S. 239, 244

(1972))).

2. The Corporation’s

Recovered Funds

Allocation

of

the

Next, similar to their arguments in Claims Three

and Four, the plaintiffs argue that the Corporation

erred in not applying the increased compensation

and qualified benefit limits in its calculation of the

plaintiffs’ PC5(a) benefits, which include benefits “in

effect at the beginning of the [five]-year period

ending on the date of plan termination,” 29 U.S.C. §

1344(b)(4)(A), “because the statutory language [ ] ‘in

effect’ is even more favorable to [the p]laintiffs under

PC5(a) than under PC3,” Pls.’ Mem. at 37.

The ERISA provision regarding PC3 benefits

provides that “in the case of benefits payable as an

annuity, the plan administrator shall allocate the

assets of the plan (available to provide benefits)

among the participants and beneficiaries in the

following order”:

(A) in the case of the benefit of a participant

or beneficiary which was in pay status as

of the beginning of the [three]-year period

ending on the termination date of the

plan, to each such benefit, based on the

provisions of the plan (as in effect during

the [five]-year period ending on such

date) under which such benefit would be

the least, [and]

(B) in the case of a participant’s or

beneficiary’s benefit (other than a benefit

described in subparagraph (A)) which

would have been in pay status as of the

beginning of such [three]-year period if

85a

the participant had retired prior to the

beginning of the [three]-year period and if

his benefits had commenced (in the

normal form of annuity under the plan)

as of the beginning of such period, to each

such benefit based on the provisions of

the plan (as in effect during the [five]year period ending on such date) under

which such benefit would be the least.

For purposes of subparagraph (A), the lowest

benefit in pay status during a [three]-year

period shall be considered the benefit in pay

status for such period.

29 U.S.C. § 1344(a)(3) (emphasis added).

The ERISA provision regarding PC5 benefits

provides that the administrator shall allocate “all

other nonforfeitable benefits under the plan,” id. §

1344(a)(5), but then provides that, “if the assets

available for allocation under [PC5] are not

sufficient to satisfy in full the benefits of individuals

described in that paragraph,”

(A) . . . [E]xcept as provided in subparagraph

(B), the assets shall be allocated to the

benefits of individuals described in such

paragraph (5) on the basis of the benefits

of individuals which would have been

described in such paragraph (5) under the

plan as in effect at the beginning of the

[five]-year period ending on the date of

plan termination.

(B) If the assets available for allocation under

subparagraph (A) are sufficient to satisfy

in full the benefits described in such

subparagraph (without regard to this

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subparagraph), then for purposes of

subparagraph (A), benefits of individuals

described in such subparagraph shall be

determined on the basis of the plan as

amended by the most recent plan

amendment effective during such [five]year period under which the assets

available for allocation are sufficient to

satisfy in full the benefits of individuals

described in subparagraph (A) and any

assets remaining to be allocated under

such subparagraph shall be allocated

under subparagraph (A) on the basis of

the plan as amended by the next

succeeding plan amendment effective

during such period.

Id. § 1344(b)(4) (emphasis added). Therefore,

PC5(a) includes vested benefits as of five years

prior to the plan’s termination, see id. §

1344(b)(4)(A), while PC5(b) includes all other

vested benefits that went into effect on a later date,

which cannot be funded unless all benefits in

PC5(a) are funded, see id. § 1344(b)(4)(B).

The plaintiffs challenge “the Corporation’s

decision to apply [to] PC5(a) ‘the same rules

governing when a plan provision or amendment is in

effect for purposes of determining the PC3 benefit,’”

Pls.’ Mem. at 38 (quoting AR 51), because the

statutory language for PC3 and PC5(a) is “materially

different,” id. (comparing 29 U.S.C. § 1344(a)(3)

(focusing on the language “under which such benefit

would be the least”), with id. § 1344(b)(4)(A)

(focusing on when the plan provision went into

effect)); see also Pls.’ Reply at 38 (“The PC3 language

expressly incorporates language referencing when

87a

benefit amounts were in pay status, under which

such benefits would be the least, while the PC5(a)

statute focuses solely on when a plan provision is in

effect.”). The plaintiffs note that “while the

Corporation has promulgated rules relating to when

a benefit is ‘in effect’ under PC3, there is no PC5

regulation discussing when a benefit is in effect to

guide the Court’s inquiry.” Pls.’ Mem. at 38. In the

plaintiffs’ view, the differences in the statutory

language “are significant because the emphasis [for

PC5(a)] is placed entirely on the effectiveness of the

plan provision, eliminating any reference to whether

the benefit was in pay status during the five year

period, or the amount of such benefit.” Pls.’ Reply at

39. They further argue that their interpretation is

more consistent with the “ERISA’s asset allocation

scheme[, which] favors the benefits of a plan’s

retirees before those of its active participants.” Pls.’

Mem. at 40.

The Corporation responds that “[t]he Appeals

Board reasonably concluded that the same rules

governing when a plan provision . . . is ‘in effect’ for

purposes of determining the PC3 benefit . . . should

be applied to the PC5[a] subcategor[y],” and noted

that the Appeals “Board cited similar language in

these statutory provisions.” Def.’s Mem. at 42. The

Corporation notes that the Appeals Board

determined that the fact “that the PC5[(a)] provision

does not include the phrase ‘under which such

benefit would be the least,’ as does the PC3

provision,” was irrelevant because “PC5 covers the

portion of a participant’s nonforfeitable benefit that

is not already assigned to the higher priority

categories.” Id. And, the Corporation argues that the

statutory differences between PC3 and PC5(a) “do

not eliminate the requirement that a benefit

88a

increase be ‘in effect’ five years before the

termination date.” Def.’s Reply at 23. In response to

the plaintiffs’ argument that the policy underlying

the ERISA is to prioritize retirees over active

participants, the Corporation agrees that “[t]his is

certainly true for PC3, and is the reason why it

comes before PC4. But[, the Corporation argues

that] nothing in the statute suggests that within

other priority categories, the benefits of retirees

have a higher status than those of active

participants.” Def.’s Mem. at 43.

In Davis II, the Circuit concluded that “[t]he

statutory phrase ‘in effect’ in § 1344(a)(3)(A) is

ambiguous.” 734 F.3d at 1168. Therefore, the issue

the Court must resolve here is whether, under

Chevron step two, the Corporation’s decision to

interpret the phrase “in effect” for PC5(a) the same

way it interprets the phrase “in effect” for PC3 is

reasonable. The Court concludes that it is.

As the Appeals Board noted, it chose to interpret

the words “in effect” in the PC5(a) provision the

same way it interprets the words “in effect” in the

PC3 provision given the “ERISA’s statutory

structure regarding the benefits that [the] PBGC

pays.” AR 51. It noted that the statute that

“establishes the PC5 subcategories[] is similar to

[the] ERISA’s PC3 and phase-in limit provisions

because the provisions each contain a [five]-year

look-back period based upon when a plan provision

or amendment is ‘effective’ or ‘in effect.” AR 51.

Although the plaintiffs are correct that the statutory

provisions in § 1344(a)(3) and § 1344(b)(4)(A) are not

identical, it still remains that Congress chose not to

define the words “in effect” under either provision,

and it used the same five-year period under both

89a

provisions. See 29 U.S.C. § 1344(a)(3), (b)(4)(A). So,

even assuming the plaintiffs’ interpretation is

plausible, the Corporation’s decision to apply the

same definition of the words “in effect” to both the

PC3 and PC5(a) provisions is entirely reasonable.

See PBGC v. Asahi Tec Corp., 979 F. Supp. 2d 46, 72

(D.D.C. 2013) (“In sum, both parties have made

reasonable and compelling arguments regarding the

proper interpretation of [an ERISA provision] . . . .

They have pointed to various sections of [the]

ERISA . . . to support their positions. The Court has

wrestled with the question and has been unable to

distill a clear answer from the text of the statute.

Under those circumstances, the law requires the

Court to defer to the agency’s interpretation.”); see

also Am. Council on Educ. v. FCC, 451 F.3d 226, 234

(D.C. Cir. 2006) (“We cannot set aside the [agency’s]

reasonable interpretation of the Act in favor of an

alternatively plausible (or even better) one.”

(collecting cases)). Therefore, the plaintiffs have

failed to demonstrate “by clear and convincing

evidence” that the Corporation’s determinations

regarding the plaintiffs’ recovery benefits were

unreasonable. See 29 U.S.C. § 1322(c)(4).21

21 The

plaintiffs also challenge the Corporation’s definition of

the words “in effect,” arguing that the Corporation’s allegation

that its interpretation is “consistent with the ‘ordinary

meaning of the term effective’ as being synonymous with the

term ‘operative.’” See Pls.’ Mem. at 38–39 (quoting AR 302).

Because the plaintiffs cite the Corporation’s interpretation of

the words “in effect” to mean “payable,” as explained in the

Appeals Board decision in the U.S. Airways case, see AR 302,

which was ultimately upheld as reasonable by the Circuit in

Davis II, see 734 F.3d at 1167–68, the Court need not further

consider how the Corporation has chosen to define the term “in

effect.” The plaintiffs also argue that the Corporation’s

interpretation of the words “in effect” is unreasonable because

90a

III. CONCLUSION

For the foregoing reasons, the Court concludes

that the Chevron framework applies in this matter,

and that the arbitrary and capricious standard of

review applies to Claims Two through Four of the

plaintiffs’ First Amended Complaint. The Court

finds that the plaintiffs have failed to establish any

arbitrary, capricious, or unlawful agency action

based on the administrative record that was properly

before the Corporation at the time it rendered its

decision, and thus it must enter summary judgment

in favor of the Corporation on Claims Two through

Four. The Court must also enter summary judgment

in favor of the Corporation on Claim Five because

the plaintiffs have failed to show by clear and

convincing

evidence

that

the

Corporation’s

determinations regarding the plaintiffs’ recovery

benefits were unreasonable. Finally, the Court must

dismiss Claim Six, the plaintiffs’ APA claim, because

it is duplicative of the plaintiffs’ claims brought

pursuant to the ERISA. Accordingly, the Court will

deny the plaintiffs’ motion for summary judgment

and grant the Corporation’s motion for summary

judgment.

“the benefits of the Active Pilots that the Corporation placed

ahead of [the p]laintiffs’ benefits do not satisfy the

Corporation’s ‘operative’ definition of ‘in effect.’” Pls.’ Reply at

40 (citing Pls.’ Mem. at 39). Once again, because the plaintiffs

failed to raise this argument before the Appeals Board, see AR

597–98 (arguing in their administrative brief that the

Corporation “erroneously applied [compensation and qualified

benefit] limits when allocating recovered funds” solely on the

basis of the differences in the statutory provisions for PC3 and

PC5(a)), the Court need not consider it, see Veloxis Pharm., 109

F. Supp. 3d at 123.

91a

SO ORDERED this 11th day of June, 2018.22

REGGIE B. WALTON

United States District Judge

22 The Court will contemporaneously issue an Order consistent

with this Memorandum Opinion.

92a

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

K. WENDELL LEWIS,

et al.,

Plaintiffs,

v.

PENSION BENEFIT

GUARANTY

CORPORATION

Defendant.

)

)

)

)

)

)

)

)

)

)

)

Civil Action No. 15-1328

(RBW)

[FILED June 11, 2018]

ORDER

In accordance with the Memorandum Opinion

issued on this same day, it is hereby

ORDERED that the Plaintiffs’ Motion for

Summary Judgment, ECF No. 99, is DENIED. It is

further

ORDERED that Pension Benefit Guaranty

Corporation’s Cross-Motion for Summary Judgment

and Opposition to the Plaintiffs’ Motion for

Summary Judgment, ECF No. 101, is GRANTED. It

is further

ORDERED that summary judgment is entered

in favor of Pension Benefit Guaranty Corporation on

Counts Two through Five of the plaintiffs’ First

Amended Complaint. It is further

93a

ORDERED that Count Six of the First Amended

Complaint is DISMISSED.

SO ORDERED this 11th day of June, 2018.

REGGIE B. WALTON

United States District Judge

94a

APPENDIX D

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

K. WENDELL LEWIS,

et al.,

Plaintiffs,

v.

PENSION BENEFIT

GUARANTY

CORPORATION

Defendant.

)

)

)

)

)

)

)

)

)

)

)

Civil Action No. 15-1328

(RBW)

[FILED Aug. 29, 2019]

ORDER

Upon consideration of the Consented Motion by

Plaintiffs to Dismiss Claim One and for Entry of

Final Judgment, ECF No. 114, and in light of the

United States Supreme Court’s denial of the

plaintiff’s petition for a writ of certiorari on June 17,

2019, see Plaintiffs’ Status Report at 1 (June 24,

2019), ECF No. 113, it is hereby

ORDERED that the stay imposed by this Court

on February 4, 2019, pending resolution of the

plaintiffs’ petition for a writ of certiorari, see Order

at 1 (Feb. 4, 2019), ECF No. 110, is LIFTED. It is

further

ORDERED that the Consented Motion by

Plaintiffs to Dismiss Claim One and for Entry of

Final Judgment, ECF No. 114, is GRANTED. It is

further

95a

ORDERED that Count One of the plaintiffs’

First Amended Complaint is DISMISSED WITH

PREJUDICE. It is further

ORDERED that this Order, in combination with

the Court’s previous Order granting summary

judgment in favor of the defendant on Counts Two

through Five of the plaintiffs’ First Amended

Complaint and dismissing Count Six of the plaintiffs’

First Amended Complaint, see Order at 1 (June 11,

2018), ECF No. 106, constitutes the Court’s final

judgment in this case. It is further

ORDERED that this case is CLOSED.

SO ORDERED this 29th day of August, 2019.

REGGIE B. WALTON

United States District Judge

96a

APPENDIX E

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 19-5261

September Term, 2020

1:15-CV-01328-RBW

FILED ON: FEBRUARY 4,

2021

K. Wendell Lewis, et al.,

Appellants

v.

Pension Benefit Guaranty Corporation,

Appellee

BEFORE: Srinivasan, Chief Judge; Henderson,

Rogers, Tatel, Garland*, Millett, Pillard,

Wilkins, Katsas, Rao, and Walker,

Circuit Judges; and Ginsburg, Senior

Circuit Judge

ORDER

Upon consideration of appellants’ petition for

rehearing en banc, and the absence of a request by

any member of the court for a vote, it is

ORDERED that the petition be denied.

Per Curiam

97a

FOR THE COURT:

Mark J. Langer, Clerk

BY:

/s/

Kathryn D. Lovett

Deputy Clerk

*Circuit Judge Garland did not participate in this

matter.

98a

APPENDIX F

29 U.S.C. §1002. Definitions

*

*

*

(16)(A) The term “administrator” means-(i) the person specifically so designated by the

terms of the instrument under which the plan is

operated;

(ii) if an administrator is not so designated, the

plan sponsor; or

(iii) in the case of a plan for which an

administrator is not designated and a plan

sponsor cannot be identified, such other person as

the Secretary may by regulation prescribe.

(B) The term “plan sponsor” means (i) the employer

in the case of an employee benefit plan established

or maintained by a single employer, (ii) the employee

organization in the case of a plan established or

maintained by an employee organization, (iii) in the

case of a plan established or maintained by two or

more employers or jointly by one or more employers

and one or more employee organizations, the

association, committee, joint board of trustees, or

other similar group of representatives of the parties

who establish or maintain the plan, or (iv) in the

case of a pooled employer plan, the pooled plan

provider.

*

*

*

99a

29 U.S.C. §1104. Fiduciary duties

*

*

*

(a) Prudent man standard of care

(1) Subject to sections 1103(c) and (d), 1342,

and 1344 of this title, a fiduciary shall discharge

his duties with respect to a plan solely in the

interest of the participants and beneficiaries and(A) for the exclusive purpose of:

(i) providing benefits to participants and

their beneficiaries; and

(ii) defraying reasonable

administering the plan;

expenses

of

(B) with the care, skill, prudence, and

diligence under the circumstances then

prevailing that a prudent man acting in a like

capacity and familiar with such matters would

use in the conduct of an enterprise of a like

character and with like aims;

(C) by diversifying the investments of the

plan so as to minimize the risk

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