Petition for Writ of Certiorari — William King, Individually and on Behalf of Others Similarly Situated as a Class, et al., Petitioners v. United States

Supreme Court briefJan 15, 2026

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No. 25-___

In the Supreme Court of the United States

WILLIAM KING, et al.

Petitioners,

UNITED STATES,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

PETITION FOR WRIT OF CERTIORARI

JASON H. KIM

NOAH A. MESSING

SCHNEIDER WALLACE

Counsel of Record

COTTRELL KIM LLP

MESSING & SPECTOR LLP

2000 Powell Street

250 Park Avenue, 7th Floor

Suite 1400

New York, NY 10177

Emeryville, CA 94608

(212) 960-3720

(415) 421-7100

nm@messingspector.com

jkim@schneiderwallace.com

Additional counsel on inside front cover

PHILLIP SPECTOR

MESSING & SPECTOR LLP

145 West Ostend Street

Suite 600

Baltimore, MD 21230

(202) 277-8173

ps@messingspector.com

Counsel for Petitioners

QUESTION PRESENTED

In 2014, Congress created a process for solvent,

private pension plans to rewrite the binding agreements that govern their obligations to pay money to

retirees, widows, and widowers. To reduce these

vested pension rights, pension plans needed government approval. Petitioners’ pension plan sought and

obtained this authorization. The plan’s trustees then

rewrote the agreement under which Petitioners had

earned a pension. This rewriting of the agreement

lowered each Petitioner’s vested pension payment by

more than $1,000 per month.

Lower courts are divided over the legal standard

that determines whether a government violates the

Takings Clause when it effects an appropriation of

monetary rights. Prior to the decision below, the D.C.

Circuit, Eleventh Circuit, and the highest state court

in Massachusetts had held that a per se takings rule

applies to seizures of monetary rights as long as the

right to payment is “linked to a specific, identifiable

property interest.” By contrast, the Ninth Circuit,

Sixth Circuit, and the highest state court in Michigan

had taken the narrower view that a per se rule applies

to alleged takings of monetary rights only if the money

in question is drawn from a “specific fund.” Below, the

Federal Circuit created an even-stricter, entirely

novel, third test: It held that a per se takings rule applies only when the party asserting a taking of a monetary right also has a property interest in the “underlying assets” that will be used to pay the amount

owed.

Under the Takings Clause, does a per se rule apply

when a government authorizes one private party to

appropriate another party’s vested right to payment

of money?

LIST OF ALL PARTIES

The parties to the judgment from which review is

sought are Petitioners William King, Stephen Dardzinski, and the Estate of Anthony Gugliuzza, on behalf of themselves and all others similarly situated.

On August 29, 2022, the Court of Federal Claims

certified the following class pursuant to RCFC 23:

Any person (whether a participant, beneficiary, or other individual) who received one or more pension payments

from the New York State Teamsters

Conference Pension and Retirement

Fund (the “Fund”) on or after October 1,

2017 unless either (1) that person was an

“Active Participant” as of October 1,

2017 or (2) all pension payments that

were received by that person since October 1, 2017 were reduced by 0% relative

to the sum the recipient would have been

entitled to receive if the Defendant had

not authorized the Fund, in or around

September 2017, to reduce certain pension benefits under the Kline-Miller

Multiemployer Pension Reform Act of

2014.

Although the class was certified, the court deferred

the class opt-in process until summary judgment was

resolved, and the case was dismissed before that process took place.

Respondent is the United States.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED……………….…….

LIST OF ALL PARTIES…………………….…..

TABLE OF AUTHORITIES……………….…...

OPINIONS BELOW…………………………..…

JURISDICTION……………………………….....

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED……………….….…

INTRODUCTION……………………….……….

STATEMENT OF THE CASE………….……...

A. Factual Background…………….……….

1. ERISA…………………………….…....

2. MPRA……………………………….….

3. The Fund’s MPRA Applications…....

4. Petitioners……………………….….…

B. Legal Background…………………..……

1. Court of Federal Claims Proceedings………………………………..……

2. Federal Circuit Proceedings…….….

REASONS FOR GRANTING THE PETITION………………………………………….…....

I. The Decision Below Compounds an Existing

Split Among the Federal Circuits and State

Courts of Last Resort About When Governments

May

Appropriate

Monetary

Rights……………………………………………...

A. Test One: “Linked to a Specific, Identifiable Property Interest” (D.C. Circuit,

Eleventh Circuit, Supreme Judicial

Court of Massachusetts)…………….….

B. Test Two: “Specific Fund” (Ninth Circuit, Sixth Circuit, the Michigan Supreme Court)……………………….……

C. Test Three: “Underlying Assets” (Federal Circuit)………………………….…..

II. The Decision Below Conflicts With the

Precedents of This Court…………....................

III. The Decision Below Will Disrupt a Wide

Range of Contractual Relationships at the

Center of the U.S. Economy……………….……

IV. This Case Presents an Ideal Vehicle for

Resolving This Conflict…………………….……

CONCLUSION……………………………..…….

APPENDIX A: Opinion of the United States

Court of Appeals for the Federal Circuit

(Aug. 18, 2025)………………………………..…..

APPENDIX B: Memorandum Opinion of the

United States Court of Federal Claims (Apr.

28, 2023)…………………………………………..

36a

APPENDIX C: Statutory and Regulatory

Provisions Involved……………………………... 116a

TABLE OF AUTHORITIES

Page(s)

CASES

AFT Michigan v. State of Michigan,

866 N.W.2d 782 (Mich. 2015) ............................. 17

Application of Filippini,

202 P.2d 535 (Nev. 1949) .................................... 17

Ballinger v. City of Oakland,

24 F.4th 1287 (9th Cir. 2022) ............................. 17

Brown v. Legal Foundation of Washington,

538 U.S. 216 (2003) ............................. 2, 17, 19, 22

CCA Assocs. v. United States,

667 F.3d 1239 (Fed. Cir. 2011) ........................... 26

Cedar Point Nursery v. Hassid,

594 U.S. 139 (2021) ............................................. 13

Central Laborers’ Pension Fund v. Heinz,

541 U.S. 739 (2004). ........................................ 6, 24

Citizens Bank of Maryland v. Strumpf,

516 U.S. 16 (1995) ............................................... 21

Dugan v. Rank,

372 U.S. 609 (1963) ............................................. 24

Equitable Life Assurance Soc. v. Brown,

213 U.S. 25 (1909) ............................................... 22

Fitchburg Gas & Elec. Light Co. v. Dep’t of

Pub. Utilities,

7 N.E.3d 1045 (Mass. 2014) ................................ 17

King v. United States,

165 Fed. Cl. 613 (2023) ......................................... 1

King v. United States,

151 F.4th 1348 (Fed. Cir. 2025)............................ 1

Koontz v. St. Johns River Water Management,

570 U.S. 595 (2013) ......................15, 16, 18, 19, 22

Landgraf v. USI Film Prods.,

511 U.S. 244 (1994) ............................................. 24

Loretto v. Teleprompter Manhattan CATV

Corp.,

458 U.S. 419 (1982) ......................................... 2, 13

Lynch v. United States, 292 U.S. 571 (1934) ........... 23

McCarthy v. City of Cleveland,

626 F.3d 280 (6th Cir. 2010) ......................... 15, 18

People v. Shirokow,

605 P.2d 859 (Cal. 1980) ..................................... 23

Swisher Int’l, Inc. v. Schafer,

550 F.3d 1046 (11th Cir. 2008) ........................... 17

Tyler v. Hennepin County,

598 U.S. 631 (2023) ............................................... 4

Valancourt Books, LLC v. Garland,

82 F.4th 1222 (D.C. Cir. 2023) ........................... 16

Webb’s Fabulous Pharmacies, Inc. v. Beckwith,

449 U.S. 155 (1980) ......................... 2, 4, 17, 19, 22

STATUTES, RULES AND REGULATIONS

28 U.S.C. § 1491(a) ..................................................... 1

28 U.S.C. § 1254(1) ..................................................... 1

29 U.S.C. § 1002(19) ................................................... 7

29 U.S.C. § 1053(a). .................................................... 6

29 U.S.C. § 1085(e)(9) ................................................. 1

29 U.S.C. § 1085(e)(9)(A) ............................................ 9

29 U.S.C. § 1085(e)(9)(B)(iii) ...................................... 9

29 U.S.C. § 1085(e)(9)(C)(i) ........................................ 8

29 U.S.C. § 1085(e)(9)(G)............................................ 8

29 U.S.C. § 1085(e)(9)(G)(i) ........................................ 8

29 U.S.C. § 1085(e)(9)(G)(iii) ...................................... 8

vii

29 U.S.C. § 1085(e)(9)(H) ........................................... 8

29 U.S.C. § 1085(e)(9)(H)(ii) ....................................... 8

29 U.S.C. § 1085(e)(9)(H)(v) ....................................... 8

29 U.S.C. § 1085(e)(9)(H)(vi) ...................................... 8

29 U.S.C. § 1085(e)(9)(I)(iii) ....................................... 9

29 U.S.C. § 1432 ....................................................... 11

29 U.S.C. § 1432(k)(1) .............................................. 11

29 U.S.C. § 1432(k)(2) .............................................. 11

IRS Notice 2021-38, I.R.B. 2021-30 (July 26, 2021) 11

Pub. L. No. 113-235, 128 Stat. 2130 (2014) ............... 7

Special Financial Assistance by PBGC,

87 Fed. Reg. 40968 (July 8, 2022). ..................... 11

MISCELLANEOUS

Michael Gruson, The U.S. Jurisdiction over Transfers of U.S. Dollars Between Foreigners and over

Ownership of U.S. Dollar Accounts in Foreign

Banks, 2004 Colum. Bus. L. Rev. 721, 756

(2004) ................................................................... 21

PETITION FOR WRIT OF CERTIORARI

Petitioners William King, Stephen Dardzinski,

and the Estate of Anthony Gugliuzza, respectfully

submit this petition for a writ of certiorari to review

the judgment of the United States Court of Appeals

for the Federal Circuit.

OPINIONS BELOW

The decision of the Federal Circuit is published at

King v. United States, 151 F.4th 1348 (Fed. Cir. 2025)

and reproduced in Petitioners’ Appendix (Pet. App.

1a). The Court of Federal Claims’s decision dismissing

the case is published at King v. United States, 165

Fed. Cl. 613 (2023) and reproduced at Pet. App. 36a.

JURISDICTION

The Court of Federal Claims had jurisdiction over

this case under 28 U.S.C. § 1491(a). That court

granted the United States’ motion for summary judgment on April 20, 2023. Petitioners filed a timely appeal to the Federal Circuit. On August 18, 2025, a

panel of the Federal Circuit affirmed the Court of Federal Claims’ summary judgment ruling. This Court

has jurisdiction under 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Fifth Amendment to the U.S. Constitution

provides, in relevant part, “nor shall private property

be taken for public use, without just compensation.”

U.S. Const. amend. V.

The relevant provisions of the Kline-Miller Multiemployer Pension Reform Act of 2014 (“MPRA”) are

codified at 29 U.S.C. § 1085(e)(9), and set forth in the

Appendix to this Petition at 116a.

INTRODUCTION

In 2014, Congress inserted a provision into an appropriations bill, without debate, that authorized solvent pension plans to rewrite contracts under which

they owed money to retirees, widows, and widowers

whose rights to payment had vested years earlier.

Perhaps this was a wise policy choice, perhaps not.

But either way, the approach that Congress chose suffered from a constitutional defect: Congress allowed

one private party to eliminate another’s vested right

to payment. And that is a taking of property under the

Fifth Amendment. The pension agreement expressly

prohibited the fund’s trustees from reducing these

vested rights to a monthly annuity payment. Yet Congress allowed the trustees to ignore this binding

agreement and rewrite how much money the pension’s trust fund would pay each month to Petitioners,

other retirees, and many hundreds of widows and widowers.

The United States had no right to take this property interest. It cannot seize for itself money that is

being held for someone else. See Webb’s Fabulous

Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980). The

per se taking test applies when a government requires

one person’s money to be given to some other, favored

third party. Brown v. Legal Foundation of Washington, 538 U.S. 216 (2003) (applying per se test in Takings Clause case where a state government required

that interest from IOLTA accounts be turned over to

a private legal-aid group); see also Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 432

n.9 (1982) (“A permanent physical occupation authorized by state law is a taking without regard to whether

the State, or instead a party authorized by the State,

is the occupant.”). In short, the United States effected

the seizure of one group’s property interest—a vested

right to payment from a specific trust fund. This petition asks the Court to review whether this practice

comports with the Takings Clause.

The current litigation arose after the United

States, in 2017, authorized Petitioners’ pension fund

to cut their vested pensions by more than $1,000 per

month (a 29% reduction). In 2018, Plaintiffs filed a

Takings Clause claim in the Court of Federal Claims

(“CFC”). The case was eventually resolved on summary judgment. Across two opinions, the CFC held:



Petitioners had a property interest related to

their vested pension. CFC Dkt. No. 148 at 2

(“The plaintiffs have identified a constitutionally cognizable property interest in receiving

their vested pension benefits without any reduction in the amount of their monthly benefits.”).



Petitioners’ pension fund eliminated this right.

Pet. App. 67a (“The plaintiffs lost a contractual

right to a specific level of pension benefits.”).



Petitioners’ pension agreement prohibited the

trustees from reducing vested pension rights

unless the fund was already insolvent, but the

Fund was solvent. CFC Dkt. No. 148 at 25-27.



The United States could be held liable for authorizing one private party to seize the vested

property interests of another. Id. at 40-43.

But the CFC found no taking. The CFC took the

view that the per se takings framework was inappropriate in this case, as the seized pension benefits

“were not transferred to a new, intervening third

party; rather, they remained part of the trust estate.”

Pet. App. 83a. Applying the laxer regulatory takings

test, the CFC concluded there was no taking.

On appeal to the Federal Circuit, Petitioners explained that among its analytic problems, the CFC’s

reasoning ran afoul of holdings of this Court finding a

per se taking where the assets in question had remained in one place, without switching hands from

one party to another. See, e.g., Tyler v. Hennepin

County, 598 U.S. 631 (2023); Webb’s, 449 U.S. at 15864. Perhaps for this reason, the Federal Circuit abandoned the reasoning of the CFC. It instead affirmed

on a wholly different, and wholly novel, rationale.

The Federal Circuit assumed the CFC was correct

that Petitioners had a cognizable property interest in

their right to pension payments of specific amount.

But the Federal Circuit then announced an entirely

new rule of law: The per se test will no longer apply

where a plaintiff has a vested contractual right to

make a demand for payment but does not have a property interest in the “underlying assets” that will be

used to pay the contractually mandated sums. Pet.

App. 3a, 16a, 25a. The Federal Circuit then used this

new rule to affirm the dismissal of the case.

The Federal Circuit’s “underlying assets” rule exacerbates an existing split among the federal circuits

and state courts of last resort about when the per se

rule applies, in Takings Clause cases, to government

takings of monetary rights. The rule also is incompatible with multiple decisions of this Court. And the rule

will disrupt settled property rights, applying (without

any apparent limiting principle) to a wide range of

commercial relationships—banking transactions,

bond coupons, insurance payouts, credit-card obligations, energy contracts, and water rights, to name a

few—that lie at the heart of the U.S. economy.

In short, this published Federal Circuit opinion—

now binding precedent in a circuit that hears nearly

all takings claims against the federal government—

injects great uncertainty into a wide array of economic

transactions and greatly expands governmental

power to reallocate vested monetary rights.

This Court should grant this Petition, review this

improvident opinion, and resolve the division among

the lower courts about when the per se test applies to

governmental appropriations of monetary rights.

STATEMENT OF THE CASE

A. Factual Background

The New York State Teamsters Conference Pension & Retirement Fund is a private pension fund that

was established in 1954. The Fund is a multiemployer

pension plan, meaning that multiple, private companies contribute money into a single trust fund, which

is invested for the benefit of retirees and workers. No

governmental actor puts money into the fund; that

money is paid into the fund by private companies

based on the work the pension participants complete.

From the Fund’s earliest days, vesting was one of

the main features of the pension plan. Each retiree

who has earned a vested pension acquires a contractual right under the Fund’s plan documents (set up as

a trust, governed by a binding agreement) to receive a

pension of a specific amount monthly—measurable to

the penny—until he or she dies. Likewise, their surviving spouse receives a pension (typically of a smaller

amount) until he or she dies.

1. ERISA

By the time that Congress enacted the Employee

Retirement Income Security Act of 1974 (ERISA), the

Fund had already provided an entire generation of

workers with vested rights and irreducible payments.

Through ERISA, Congress sought to ensure that all

private, multiemployer plans provided employees

with just such a path. ERISA achieved this goal

through “minimum vesting requirements,” which

mandate that “[e]ach pension plan shall provide that

an employee’s right to his normal retirement benefit

is nonforfeitable” at either a particular age or after a

specific number of years of work. 29 U.S.C. § 1053(a).

As explained by this Court, section 1053(a) “regulates

vesting,” which is “the process by which an employee’s

already-accrued pension account becomes irrevocably

his property.” Central Laborers’ Pension Fund v.

Heinz, 541 U.S. 739, 749 (2004). To be clear: ERISA

set certain rules for how quickly a pension needed to

vest, but the vesting took place under the private pension-plan agreements. Since vesting already existed

(pre-ERISA) for the Fund’s participants, section

1053(a) merely mandated what the Fund was already

doing: giving workers a path to a vested pension.

After the enactment of ERISA, Plaintiffs’ Fund

continued to provide workers with a path toward a secure pension, consistent with ERISA’s minimum vesting requirements. The Fund’s plan documents provide

that a participant’s benefits have vested when the

participant “has (a) met the minimum service requirements of Section 5.04(a) and has acquired a non-forfeitable right to a pension benefit under the Plan, or

(b) attained Normal Retirement Age.” CFC Dkt. No.

165-1, at 339. The term “non-forfeitable” is statutorily

defined as a claim to a benefit under the pension plan

“which is unconditional, and which is legally enforceable against the plan.” 29 U.S.C. § 1002(19). A formula in the pension agreement determined the size of

the lifelong monthly annuity payment that each retiree and, if they were married, their surviving spouse

would receive. Fed. Cir. Dkt. No. 32, at 4919. The plan

documents provide that the “normal form of benefit

payment shall be a Life Annuity,” which it defines as

“provid[ing] monthly payments for the life of the Pensioner.” Id. at 4921.

2. MPRA

On December 9, 2014, Representatives Kline (RMN) and Miller (D-CA) offered a legislative package,

during a lame-duck session, that sought to empower

the Department of Treasury to authorize cuts of

vested pensions already in pay status. Referred to by

the acronym “MPRA,” the legislation was titled the

Kline-Miller Multiemployer Pension Reform Act of

2014. No hearings were held, and no committee report

analyzed the bill. Fed. Cir. Dkt. No. 32, at 11750. Two

days later, MPRA passed the House after being

slipped into a massive spending bill. Id. at. 11743-46.

After another two days, the Senate approved the legislation. MPRA cleared Congress without substantive

floor debates in either chamber of Congress. On December 16, 2014, President Obama signed the bill.

Pub. L. No. 113-235, 128 Stat. 2130, 2773-2822 (2014).

As one Treasury official later acknowledged during

his deposition, MPRA became law “in the dead of

night.” Fed. Cir. Dkt. No. 32, at 5466-67.

Under MPRA, Congress empowered the Department of Treasury to authorize private pension funds

to reduce vested pensions. Treasury’s 30(b)(6) depo-

nent admitted during the litigation below that “reducing benefits that are in pay status is something that

has not happened before MPRA.” Id. at 5559.

Pension cuts under MPRA involve six key steps.

First, a fund that purports to be in “critical and

declining” status submits an application that must

specify the size of the proposed cuts that the fund’s

trustees want to impose and show that the cuts are

projected to prevent the fund’s eventual insolvency. 29

U.S.C. § 1085(e)(9)(C)(i), (G)(i). MPRA bars any pension cuts for people who are over the age of 80 or disabled. Id. § 1085(e)(9)(D)(ii), (iii).

Second, the Secretary of the Treasury must review the MPRA application, aided by the Pension

Benefit Guaranty Corporation (PBGC) and the Department of Labor. Id. § 1085(e)(9)(G). The Secretary

must approve or reject the proposal within 225 days.

Id. § 1085(e)(9)(G)(iii).

Third, if an application receives Treasury approval, Treasury runs an election in which plan participants vote on the proposed cuts. Id. §

1085(e)(9)(H). Under MPRA, however, every nonvoter is treated as having voted to approve the cuts.

Id. § 1085(e)(9)(H)(ii). This voting mechanism exists

nowhere else in federal law.

Fourth, even if a vote is unsuccessful, Treasury

must assess whether the applicant is “systemically

important,” which occurs if the fund’s insolvency

would expose PBGC, a federal agency that insures private pensions, to more than $1 billion (indexed to inflation)

insurance

obligations.

Id.

1085(e)(9)(H)(ii), (v). If a fund is systemically important, Treasury must approve the MPRA application regardless of the vote’s outcome. Id.

Fifth, Treasury issues a “final authorization” to

the applicant to cut vested benefits. Id. §

1085(e)(9)(H)(vi). MPRA bars retirees whose pensions

are cut from enforcing their right to payment. Id. §

1085(e)(9)(I)(iii).

Sixth and last, trustees rewrite the contract that

granted retirees and beneficiaries their vested rights

(i.e., the plan documents). Id. § 1085(e)(9)(A). Put differently, an agreement that prohibits reducing vested

pensions is rewritten to reduce vested pensions.

Thereafter, that fund sends reduced pension payments to participating retirees and surviving spouses.

A pension plan that applies under MPRA and receives approval from Treasury to reduce its benefits is

immunized from liability for any reduction in benefits

resulting from the approved MPRA application. Id. §

1085(e)(9)(B)(iii).

3. The Fund’s MPRA Applications

The Fund’s trustees in this case submitted an

MPRA application on August 31, 2016, and then a revised application on May 15, 2017. The revised application proposed cutting pensions by 29% for retirees,

widows, and widowers but just 18% for active members. Half of the trustees are appointed by active union members. Half are appointed by the businesses

that employ them. None of the trustees are selected

by retirees, widows, or widowers. The Secretary of the

Treasury approved the trustees’ proposed pension

cuts on August 2, 2017.

Treasury then ran a voting process. The PBGC already had informed Treasury that the Fund would

likely be “systemically important”—that is, large

enough to allow Treasury to override any adverse

MPRA vote. Of those who voted, 71 percent rejected

the cuts, and 29 percent approved them. Despite this

lopsided result, Treasury treated the measure as succeeding, because MPRA requires counting non-votes

as “Yes” votes. CFC Dkt. No. 148, at 6.

Following the vote, the Secretary of the Treasury

issued a “final authorization” for the Fund to reduce

its benefit payments by the amounts that had been requested by the application. Fed. Cir. Dkt. No. 32, at

5291. The Fund’s trustees then inserted an amendment into the Plan that reduced the size of each Plaintiff’s vested pension. The pension cuts began on October 1, 2017.

4. Petitioners

Petitioners are William King, Stephen Dardzinski, and the Estate of Anthony Gugliuzza. King,

Dardzinski, and Gugliuzza were already retired when

the pension cuts took effect and when this lawsuit was

filed. Each of them earned a vested pension by working fulltime at UPS for more than 20 years. Each had

his monthly vested pension cut by 29%—more than

$1,000 per month.

B. Legal Background

1. Court of Federal Claims Proceedings

On July 31, 2018, Petitioners filed a Class Action

Complaint against the United States seeking just

compensation for the taking of their vested pensions

under the Takings Clause.

Following an unsuccessful motion to dismiss by

the United States, and a year-and-a-half of discovery,

the parties cross-moved for summary judgment.

On March 11, 2021, while the motions were pending, Congress enacted The American Rescue Plan Act

of 2021 (“ARPA”). ARPA created a process for certain

private pension funds, including Plaintiffs’ Fund, to

apply to receive “Special Financial Assistance”

(SFA)—a bailout. 29 U.S.C. § 1432. To obtain funding

under ARPA, any fund that had obtained authorization under MPRA to cut vested benefits would need to

partly unwind those pension cuts in two ways. First,

the fund would need to restore pensions prospectively

to pre-MPRA levels. Id. § 1432(k)(1). Second, a fund

receiving SFA would need to provide compensation

(termed “Make Up Payments”) to “participants or beneficiaries in pay status” in an amount “equal to the

amount of benefits previously suspended” under

MPRA. Id. § 1432(k)(2).

On March 26, 2021, the Court of Federal Claims

stayed the litigation while the United States promulgated regulations under ARPA. Those regulations

eventually would include two provisions relevant to

the damages claim of Petitioners and various potential classmembers. First, the regulations provided

that any participant who had passed away before

bailout funds were paid out would not be treated as in

“pay status.” This meant that many potential Class

Members would not receive a complete Make Up Payment or, in many instances, any Make Up Payment.

Special Financial Assistance by PBGC, 87 Fed. Reg.

40968, 40991 (July 8, 2022). Second, the regulations

provided that no adjustment for interest would be permitted for Make Up Payments. IRS Notice 2021-38,

I.R.B. 2021-30, at 5 (July 26, 2021).

The Fund submitted an application for SFA on

January 28, 2022; withdrew it; and then submitted a

revised application on July 21, 2022. The PBGC approved the revised application on November 18, 2022.

On December 8, 2022, the Fund received SFA totaling

$963 million.

The Fund later would confirm that it applied

three relevant calculations pursuant to the above regulations. First, if a participant died before the SFA

was received by the Fund, but the participant had no

surviving beneficiary, then “no make-up payment will

be made to that participant or his/her estate.” Fed.

Cir. Dkt. No. 32, at 12596. Second, if a participant

died before the SFA was received, and the participant

had a surviving spouse (widow or widower), then no

make-up payment will be made to the surviving

spouse for the period between October 2017 and the

participant’s death. Id. at 12597. Finally, no participant or beneficiary would receive interest as part of

their Make Up Payment. Id. at 12596.

Thus, more than 1,100 potential class members—

widows, widowers and estates—received either no

Make Up Payment, or a Make Up Payment that was

smaller than the amount by which their pension

rights had been reduced. Further, none of the potential class members received interest to compensate

them for the five-year delay between when their pensions were taken and when, if applicable, they received Make Up Payments.

After the conclusion of the stay, the United States

filed again for summary judgment on two questions:

whether Plaintiffs had a cognizable property interest,

and whether the United States could be liable given

that it did not take Plaintiffs’ property for itself. On

April 8, 2022, the CFC denied the United States’ motion. CFC Dkt. No. 148. The CFC issued a published

opinion holding that Plaintiffs had an enforceable

property interest in “receiving their unreduced and

vested pension benefits.” Id. at 48. The CFC also held

that Petitioners’ agreement with the pension fund categorically prohibited the trustees from reducing

vested pension rights. Id. at 25-27. Finally, the CFC

held that the United States could potentially be liable

under the Takings Clause for authorizing one private

party to appropriate another private party’s property.

Id. at 40-43 (relying on this Court’s third-party Takings Clause precedents in cases such as Loretto and

Cedar Point Nursery v. Hassid, 594 U.S. 139 (2021)).

In other words, the CFC correctly held that the United

States could not evade liability on the basis that someone else wound up with Plaintiffs’ property. The CFC

did not address, however, whether Plaintiffs’ claims

were governed by the per se taking test.

On June 24, 2022, Plaintiffs moved to certify a

class. The CFC granted that motion, certifying a class

consisting of: “Any person (whether a participant,

beneficiary, or other individual) who received one or

more pension payments from the New York State

Teamsters Conference Pension and Retirement Fund

on or after October 1, 2017,” unless that person was

an active participant at the time of the cuts or their

pension was not cut under MPRA. The CFC also

named Plaintiffs William King, Stephen Dardzinski,

and Anthony Gugliuzza as Class Representatives.

Pet. App. 60a.

On December 23, 2022, Plaintiffs filed a motion

for summary judgment, arguing that the litigation is

governed by the per se test and that, under that test,

the United States took Plaintiffs’ vested pensions (and

the payments arising out of those pensions). The

United States cross-moved for summary judgment.

On April 20, 2023, the CFC denied Plaintiffs’ motion and granted the United States’ cross-motion. The

CFC took the view the per se test is inappropriate because Petitioners’ pension benefits “were not transferred to a new, intervening third party; rather, they

remained part of the trust estate.” Pet. App. 83a.

Thus, it held that the Penn Central regulatory taking

test governed the litigation. Applying that test, the

CFC then held that Plaintiffs could not demonstrate a

regulatory taking. Pet. App. 91a-112a. The CFC entered judgment for Defendants.

2. Federal Circuit Proceedings

Plaintiffs filed a timely notice of appeal to the U.S.

Court of Appeals for the Federal Circuit. The appeal

focused on whether the CFC had erred by declining to

apply the per se taking test.

The Federal Circuit affirmed the decision below,

but on a different basis than the CFC. The Federal

Circuit assumed the CFC was correct that Petitioners

have a property interest in their right to unreduced

vested pension benefits. Pet. App. 17a-18a (The

United States did not challenge this conclusion on appeal.) However, the Federal Circuit held that the per

se test is inapplicable because Petitioners possess

“only a contract right to demand payment from the

Plan, not a specific, identifiable property interest in

the Plan’s underlying assets.” Pet. App. 26a. Finding

the per se test unavailable in such circumstances, the

Federal Circuit applied the Penn Central regulatory

takings framework. Under that standard, it found no

taking. Pet. App. 34a.

REASONS FOR GRANTING THE PETITION

Courts below have adopted three, inconsistent approaches on the question of when and whether the per

se test applies to takings of monetary rights by government actors. The decision below deepened this

split by announcing the third of these tests—a new

rule of law that no other circuit or state court of last

resort has adopted.

The decision below also conflicts with multiple

holdings of this Court. Additionally, the decision augers wide-ranging consequences for financial relationships central to the Nation’s economy. And this case

presents a clean vehicle for resolving these questions.

Postponing review would invite the United States

and other government actors to plumb the limits of

the newfound power that the Federal Circuit provided

to literally rewrite binding agreements about money

to favor one party and harm another. This Court

should grant the Petition.

The Decision Below Compounds an Existing

Split Among the Federal Circuits and State

Courts of Last Resort About When Governments May Appropriate Monetary Rights.

For decades, the law has been unsettled as to how

the Takings Clause should apply to monetary takings.

See, e.g., McCarthy v. City of Cleveland, 626 F.3d 280,

284 (6th Cir. 2010) (observing that “courts of appeals

have differed in their analytical approaches” for when

and how a law that acts on a sum of money implicates

the Takings Clause).

This Court’s decision in Koontz v. St. Johns River

Water Management Dist. furnished some meaningful

guidance. 570 U.S. 595 (2013). The plaintiff in Koontz

was a property owner who sought a permit to develop

a portion of his land that included protected wetlands;

the government informed him that he could have a

permit if he paid for costly improvements to land

miles away. This Court held that this payment-obligation was an impermissible exaction. The Koontz Court

distinguished earlier cases involving personal monetary liabilities or mere obligations to pay money, explaining that the per se rule would apply where the

government “commands the relinquishment of funds

linked to a specific, identifiable property interest such

as a bank account or parcel of real property.” Id. at

614 (emphasis added).

The opinion in Koontz brought much-needed clarity to the state of Takings Clause jurisprudence in the

context of land-use exactions. But uncertainty persisted on how the Takings Clause—and the reasoning

of Koontz—applied to takings of monetary rights outside of the specific setting of exactions.

By the time the Federal Circuit heard this case,

federal courts of appeals and state courts of last resort

had divided into two competing camps on this question.

And now, as a result of the decision below, the

lower courts are splintered into three camps.

a. Test One: “Linked to a Specific,

Identifiable Property Interest” (D.C.

Circuit, Eleventh Circuit, Supreme

Judicial Court of Massachusetts)

The first camp adheres to a strict reading of

Koontz—namely that a compelled relinquishment of

money that is “linked to a specific, identifiable property interest” effects a per se taking. See Valancourt

Books, LLC v. Garland, 82 F.4th 1222, 1234-35 (D.C.

Cir. 2023) (finding a per se taking where a federal law

imposed fines unless copies of a copyrighted work

were deposited in the Copyright Office, because the

law was a “demand for money” that was “linked to a

specific, identifiable property interest” in the copyrighted works under Koontz) (quotations omitted);

Swisher Int’l, Inc. v. Schafer, 550 F.3d 1046, 1055 n.6

(11th Cir. 2008) (reading this Court’s holdings involving appropriations of money as involving “specific,

identifiable, property interests which were invaded by

the governmental action”); Fitchburg Gas & Elec.

Light Co. v. Dep’t of Pub. Utilities, 7 N.E.3d 1045, 1055

(Mass. 2014) (“[A]n obligation to pay money is not a

per se taking where the obligation does not affect or

operate on a specific, identified property interest.”).

b. Test Two: “Specific Fund” (Ninth

Circuit, Sixth Circuit, the Michigan

Supreme Court)

The second camp takes the view that the connection of a taking of money to a specific property interest

alone is insufficient to give rise to a per se taking.

Drawing on this Court’s precedent in cases such as

Brown and Webb’s, these courts also require that the

money in question be located in a “specific fund.” See

Ballinger v. City of Oakland, 24 F.4th 1287, 1294,

1297 (9th Cir. 2022) (holding that there was no per se

taking where city required landlords to provide relocation payments to departing tenants, because although “[w]e cannot deny that the relocation fee here

is linked to real property,” the law does not “seize a

sum of money from a specific fund”) (quotations omitted); McCarthy, 626 F.3d at 284-85 (“a law must act

on a specific fund of money” to effect a per se taking);

AFT Michigan v. State of Michigan, 866 N.W.2d 782,

794 (Mich. 2015) (“It is possible, nonetheless, for the

government to undertake a constitutional taking that

requires compensation when it asserts control over a

discrete and identifiable fund of money, such as a deposit account.”).

These two competing approaches—one applying

the per se rule when the government appropriates

monetary rights that are linked to a specific and identifiable property interest, and the other adding the

condition that the money must also be contained in a

specific fund—reflected the state of the law at the time

the Federal Circuit considered this case.

Petitioners’ claims in this case satisfied both of

these tests. The appropriation of monetary rights here

was linked to a specific property interest (the vested

right to an unreduced pension). And so the per se test

would be used under Test One. Moreover, the money

that Petitioners had a vested contractual right to receive is drawn from a specific fund (the pension fund).

Thus, the per se test would apply under Test Two. But

the Federal Circuit did not adhere to either test.

c. Test Three: “Underlying

(Federal Circuit)

Assets”

Eschewing all existing precedent, the Federal Circuit fashioned a third test on the question presented

by this Petition.

Here is what the Federal Circuit said about Koontz

in its opinion in this case:

Koontz was analyzed as a physical taking because a water district demanded

that the claimant either deed a conservation easement to the government, or “pay

to replace culverts on one parcel or fill in

ditches” on “District-owned land several

miles away.” Id. at 601–02. Critically,

the claimant in Koontz owned the affected property, unlike plaintiffs here,

who have no ownership right in the

funds of the Plan. Koontz thus lends no

support to plaintiffs because they possess

only a contract right to demand payment

from the Plan, not a specific, identifiable

property interest in the Plan’s underlying

assets.

Pet. App. 26a (emphasis added).

That is, under the rule newly announced by the

Federal Circuit in this case, it is not enough that the

money in question is linked to a specific, identifiable

property interest (here, the property interest in an unreduced vested pension). And it is not enough that the

money is drawn from a specific fund (here, the pension

fund). Now, the plaintiff also must have an ownership

right or some other property interest in the “underlying assets” of the fund in question that will pay them

the money they earned and to which they are contractually entitled.

This additional condition—which is found nowhere in Koontz or any other cases of this Court—is

an entirely new requirement. No court has ever announced such a rule before. And it leaves in disarray

the application of the Takings Clause to government

takings of monetary rights.

A taking of monetary rights can arise in different

forms. A government might take money that a party

currently possesses—as with the exacted money in

Koontz. That same government might take money

that a party once possessed but to which it now has a

legal right—as with the deposited money in Brown. It

might also take money that a party never possessed

but to which it nonetheless has a legal right—as with

the interest in Brown, 538 U.S. at 221-22; the deposited money in Webb’s, 449 U.S. at 157, 161; or the surplus proceeds in Tyler, 598 U.S. at 645-46.

This Court has barred takings of these monetary

rights broadly—requiring only that the money in

question be “linked to a specific, identifiable property

interest.” Koontz, 570 U.S. at 614. Petitioners submit

that is a sensible rule, and one this Court should af-

firm when a party has a vested right to receive payment. The “specific fund” test of the Sixth and Ninth

Circuits narrows this rule unnecessarily—although

Petitioners still prevail under this test. But the Federal Circuit’s new “underlying assets” test runs roughshod over this jurisprudence—collapsing the per se

framework in cases involving money, and leaving the

circuits splintered. Reviewing the opinion below

would clarify when governments may seize vested

rights to payments of money and other monetary

rights.

II.

The Decision Below Conflicts With the

Precedents of This Court.

The Federal Circuit’s new test also clashes with a

number of the holdings of this Court.

As just explained, the Federal Circuit took the

view that there can be no per se taking when a party

has a property interest1 in a vested contractual right

to make a demand on a pool of “underlying assets,”

unless the party also has a property interest in those

assets. The Federal Circuit repeated this “underlying

assets” test throughout its opinion. See, e.g., Pet. App.

3a (“[I]t is important to understand that the right to

receive pension benefits is more in the nature of a contract than a trust and, most importantly, the pension

beneficiary does not have a property interest in the

assets held by the trust underlying the pension

plan”);2 Pet. App. 17a (“No plan member has a claim

1 The Court of Federal Claims held that Plaintiffs had “identified

a cognizable property interest in receiving their unreduced and

vested pension benefits at a level contractually promised by the

Teamsters Fund plan agreement,” CFC Dkt. No. 148 at 16, and

the Federal Circuit assumed this was accurate for purposes of its

opinion, Pet. App. at 17a-18a.

2 The opinion did not explain why trust principles do not apply.

to any particular asset that composes a part of the

plan’s general asset pool.”) (quotations omitted); Pet.

App. 26a (plaintiffs “possess only a contract right to

demand payment from the Plan, not a specific, identifiable property interest in the Plan’s underlying assets.”); Pet. App. 26a (concluding there is no physical

taking because “plaintiffs do not hold a property interest in the underlying assets of the Plan, only a contractual right” to draw from those assets).

But the trait on which the Federal Circuit’s test

pivots—the existence of a contractual right to make a

demand on a pool of assets without any other interest

in the underlying assets—describes a number of commercial transactions where this Court previously has

found a per se taking. The Federal Circuit’s rule is not

consistent with these precedents.

Bank Transactions. When a depositor places

money in their bank account, they enjoy a contractual

right to make a “demand” on the bank assets for that

money, but they do not have an ownership interest or

claim to any particular stack of bills in the bank’s

vault, much less the entire reserves of the bank. Citizens Bank of Maryland v. Strumpf, 516 U.S. 16, 21

(1995) (bank account does not consist of “money belonging to the depositor and held by the bank”; it “consists of nothing more or less than a promise to pay,

from the bank to the depositor”); Michael Gruson, The

U.S. Jurisdiction over Transfers of U.S. Dollars Between Foreigners and over Ownership of U.S. Dollar

Accounts in Foreign Banks, 2004 Colum. Bus. L. Rev.

721, 756 (2004) (“Under U.S. law it is a long-standing

principle that if a customer deposits money with a

bank, the title to the money passes to the bank . . . .

[T]he depositor receives a contract claim against the

bank for an amount equal to the account balance”)

(quotations omitted) (alteration in original).

And yet this Court has left little doubt that it is a

per se taking for the government to seize (or authorize

a private party to seize) funds in a bank account (or

the contractual right to receive interest on such

funds). Koontz, 570 U.S. at 614 (“[W]hen the government commands the relinquishment of funds linked to

a specific, identifiable property interest such as a

bank account . . . a per se takings approach is the

proper mode of analysis under the Court’s precedent”)

(emphasis added) (quotations and alterations omitted); Brown, 538 U.S. at 235 (government authorizing

transfer of interest out of private bank account is evaluated under the per se taking test); Webb’s, 449 U.S.

at 162 (government’s retention of interest from a

pooled interpleader fund deposited in a bank account

was a per se taking).

In spite of these precedents, the Federal Circuit’s

“underlying assets” rule would exempt seizures of

money from bank accounts from the per se rule.

Insurance Payouts. When a policyholder purchases coverage from an insurance company, they do

not enjoy a property interest in the underlying assets

or surplus of the insurer—they simply possess a claim

on the company if the conditions in the insurance policy are met. See Equitable Life Assurance Soc. v.

Brown, 213 U.S. 25, 47 (1909) (policyholder had no

right “to compel the distribution of the surplus fund in

other manner . . . or in any other amounts than that

provided for in the contract of insurance”); see generally Ashurst v. Preferred Life Assurance Society, 209

So.2d 403, 414-15 (Ala. 1968) (policyholders “did not

have a divisible and vested interest in the surplus” of

an insurer—instead, the “property interests of the appellants, as policyholders, is that stated in their contracts”). Even so, this Court has made clear that it is

a per se taking for the government to seize the right to

insurance payouts. See Lynch v. United States, 292

U.S. 571, 579 (1934) (holding that the voiding of war

risk insurance policies was an unconstitutional taking

because “valid contracts are property” and “[r]ights

against the United States arising out of a contract

with it are protected by the Fifth Amendment”). The

Federal Circuit’s “underlying assets” holding conflicts

with this Court’s holding in Lynch.

Water Rights. The Federal Circuit’s “underlying

assets” rule is not even obviously confined to money.

By its terms, the Federal Circuit rule would seem to

apply to any contract where a plaintiff has a right to

make a demand on a pool of assets, but has no interest

in the underlying assets themselves. See, e.g., Pet.

App. 26a (no per se taking because “plaintiffs do not

hold a property interest in the underlying assets of the

Plan, only a contractual right”); Pet. App. 27a n.14 (no

per se taking because “the Plan documents at issue

here do not give the plaintiffs a property right in the

assets of the Fund itself”).

This test describes many non-monetary assets.

One example is water rights. A contractual right to

water does not confer a right of ownership to the

river—or any particular molecules of water therein.

See People v. Shirokow, 605 P.2d 859, 864 (Cal. 1980)

(“Both riparian and appropriative rights are usufructuary only and confer no right of private ownership in

the watercourse.”); Application of Filippini, 202 P.2d

535, 537 (Nev. 1949) (“When we speak of the owner of

a ‘water right’ we use the term in its accepted sense;

that is to say, that the owner of a water right does not

acquire a property in the water as such, at least while

flowing naturally, but a right gained to use water beneficially which will be regarded and protected as real

property.”). But yet again, this Court has recognized

that the government’s diversion of such water rights

can give rise to a per se taking. See, e.g., Dugan v.

Rank, 372 U.S. 609, 611, 625 (1963) (stating that

where the U.S. dammed a river upstream from farmers and diverted it to public irrigation and utility projects, the U.S. has “taken the water rights” of the

farmers, and this was an “appropriation of property

for which compensation should be made”).

Accordingly, the opinion below runs afoul of a

number of precedents where this Court has found a

per se taking in the circumstances the Federal Circuit

describes. And the tensions with this Court’s jurisprudence do not stop there. This Court’s past observations about what happens when a right vests also appear to conflict with the opinion below. This Court defined “vesting” as “the process by which an employee’s

already-accrued pension account becomes irrevocably

his property.” Heinz, 541 U.S. at 749. If the decision

below stands, “irrevocably” should be struck from

Heinz. See Landgraf v. USI Film Prods., 511 U.S. 244,

266 (1994) (“The Fifth Amendment’s Takings Clause

prevents . . . government actors . . . from depriving

private persons of vested property rights except for a

public use and upon payment of just compensation.”)

(quotations omitted) (emphasis added).

III.

The Decision Below Will Disrupt a

Wide Range of Contractual Relationships at the Center of the U.S. Economy.

The Federal Circuit’s new “underlying assets” test

affords governments broad new rights to reallocate

money and monetary rights.

Above, we provided examples of a few of the contractual relationships that would come within the

“underlying assets” test—bank transactions, insurance policies, water rights. Others abound. These include:



bonds (where one party has a contractual right

to coupons but no property interest in the bond

issuers’ underlying assets)



annuities (where a party prepays a lump sum

for a right to future payments until they die;

plaintiffs do not have any interest in the underlying assets of the company underwriting

their annuity)



credit card payments (a credit card issuer will

have a contractual right to receive payments

from its customers but no property interest in

those consumers’ savings accounts)



wages and stock options (employees may have

a contractual right to compensation for their

already-performed labor, even though they

have no interest in their employer’s underlying

assets that will be used to make those payments).



energy and mineral contracts (a trader might

pay for rights to buy energy or oil at a particular rate but lacks any ownership or property

interest in the underlying electrical grid or oil

fields).

Removing the protections provided by the per se

rule from all of these transactions carries significant

implications. The Federal Circuit will instead use the

Penn Central regulatory taking framework when assessing government seizures of such rights. Generally, courts decline to recognize regulatory takings

where the government takes less than 50 percent of

the value of the parcel. See CCA Assocs. v. United

States, 667 F.3d 1239, 1246 (Fed. Cir. 2011) (“Like the

government, we are aware of no case in which a court

has found a taking where diminution in value was less

than 50 percent.”) (quotations omitted); see also Pet.

App. 31a (citing this same rule in the opinion below).

By consigning to the regulatory takings paradigm any

takings claim where the plaintiff lacks an ownership

or other prior interest in the “underlying assets,” the

Federal Circuit has empowered the U.S. government

to plunder at least 50 percent of Americans’ bank accounts, at least 50 percent of their bond coupons, and

at least 50 percent of their right to receive private student-loan repayments—all in the name of promoting

the public good.

Plaintiffs made this very point throughout the

case—that through the United States’ proposed, narrow readings of the per se rule, the United States was

laying claim to a staggering authority to seize at least

50 percent of the proceeds from the extraordinary array of commercial relationships that arise out of contract. The United States never denied the point. When

the Federal Circuit panel pressed counsel for the

United States on precisely this question in oral argument—asking whether the rule the United States was

proposing would entitle the government to unfailingly

seize up to 50 percent of a wide range of assets without

just compensation under the Takings Clause—they

once again could offer no clear limiting principle.3

Nonetheless, the Federal Circuit gave the United

States this sweeping authority.

Even apart from its substantive effects, the uncertainty engendered by this sweeping new “underlying

Oral

Arg.

24:16

25:45,

available

https://www.cafc.uscourts.gov/oral-arguments/231956_03062025.mp3 (“[I]t seems like there is no line”) (Stark, J.).

assets” rule will inflict harm on settled economic relationships. The Federal Circuit is home to the vast majority of takings cases involving the federal government. Absent review, the rule invites the United

States to seize or negate a wide range of private, contractually created monetary rights. Is there a limiting

factor to the “underlying assets” rule that might yet

emerge? If so, the Federal Circuit has not shared it.

If anything, the Federal Circuit has done the opposite. At the end of its analysis about whether the per

se test applies to Petitioners’ claims, the Federal Circuit tips its hand as to just how far its rule might

reach. There, the Federal Circuit raises the question

of whether the taking of a contractual right might

“never be the basis for a meritorious takings claim.”

Pet. App. 27a n.14 (emphasis in original). The opinion

walks up to that brink, but ultimately pulls back:

“[W]e are not called upon in this case to decide that

broad question.” Id. But the fact that the complete exclusion of contractual rights from the per se rule is

within sight of the Federal Circuit speaks volumes

about the sweep of its reasoning—and invites the

United States to appropriate and reallocate monetary

rights in other contexts.

The Takings Clause aims to stabilize property

rights, not to empower Congress and other government actors to impose financial ruin on disfavored

parties and a windfall on favored parties by redistributing income that vested contractual rights have already allocated. The Federal Circuit’s rule is corrosive

to the stability of those rights. The opinion below does

not require a showing of an emergency for the government to plunder vested monetary rights. It does not

require the procedural safeguards of a bankruptcy

process. It simply vests the United States with broad,

alarming, new powers to appropriate and redistribute

vested, valuable monetary rights in order to promote

its conception of the greater good.

The Federal Circuit’s test would authorize any

employer having a tough quarter or wishing to claw

back its stock to seek special dispensation from Congress to negate their contractual duty to pay their

workers—or to rewrite agreements that already provided vested grants of stock options to former workers.

And the Federal Circuit’s test would allow voters to

prevail upon Congress to negate the vested rights of

credit card issuers to payments they are owed, shifting hundreds of billions of dollars from lenders to borrowers. One can understand why the United States

might covet such powers. The Founders, however,

would be aghast. The Fifth Amendment removes such

policies—and shields such vested contractual rights—

from the realm of legislative fiat.

IV.

This Case Presents an Ideal Vehicle for

Resolving This Conflict.

The present case offers a superb vehicle to resolve

these questions of law.

There are no procedural obstacles in the case. The

case is ripe—Petitioners and potential members of the

already certified class continue to be denied just compensation for this taking to this day, and any further

litigation would just be about the quantum of damages. The case reaches this Court on a final judgment

in the lower courts, and the issue was fully preserved

in the lower court. There are no alternate grounds to

uphold the judgment below. In fact, the Court of Federal Claims already had ruled in Plaintiffs’ favor on

whether there was a property interest and authorization (of a third party) sufficient for government action,

and the United States did not challenge those holdings on appeal. The legal question that the Federal

Circuit addressed and that now comes before this

Court is the only question as to liability remaining in

the case: Does the per se test apply when governments

authorize a third-party to rewrite binding agreements

to eliminate or reduce vested rights to payments?

In short, the Federal Circuit has issued a sweeping decision that deepens an existing split among

lower courts, conflicts with this Court’s jurisprudence,

invites Congress to reallocate the benefits of a wide

range of financial and commercial relationships, and

offers a clean vehicle through which to resolve these

questions. Delay in resolving these questions would

preserve the existing uncertainty in the lower courts

and invite governments to experiment with their

broad, newfound power to reallocate monetary rights.

CONCLUSION

For the foregoing reasons, this Court should grant

the Petition for Writ of Certiorari.

DATED: January 15, 2026

Respectfully submitted,

NOAH A. MESSING

Counsel of Record

MESSING & SPECTOR LLP

250 Park Avenue, 7th Floor

New York, NY 10177

(212) 960-3720

nm@messingspector.com

PHILLIP SPECTOR

MESSING & SPECTOR LLP

145 West Ostend Street

Suite 600

Baltimore, MD 21230

(202) 277-8173

ps@messingspector.com

JASON H. KIM

SCHNEIDER WALLACE

COTTRELL KIM LLP

2000 Powell Street

Suite 1400

Emeryville, CA 94608

(415) 421-7100

jkim@schneiderwallace.com

APPENDIX

APPENDIX TABLE OF CONTENTS

Page

APPENDIX A: Opinion of the United States

Court of Appeals for the Federal Circuit

(April 8, 2022) ............................................................ 1a

APPENDIX B: Memorandum Opinion of the

United States Court of Federal Claims

(April 28, 2023) ........................................................ 36a

APPENDIX C: Statutory and Regulatory

Provisions Involved ............................................... 116a

APPENDIX A

United States Court of Appeals

for the Federal Circuit

___________________

WILLIAM KING, STEPHEN DARDZINSKI, ON

BEHALF OF THEMSELVES AND ON BEHALF

OF A CLASS OF OTHERS SIMILARLY SITUATED, ESTATE OF ANTHONY GUGLIUZZA, BY

ITS PERSONAL REPRESENTATIVE, ANTHONY A. GUGLIUZZA,

Plaintiffs-Appellants

UNITED STATES,

Defendant-Appellee

___________________

2023-1956

___________________

Appeal from the United States Court of Federal

Claims in No. 1:18-cv-01115-RAH, Judge Richard A.

Hertling.

___________________

Decided: August 18, 2025

NOAH A. MESSING, Messing & Spector LLP,

New York, NY, argued for plaintiffs-appellants. Also

represented by PHILLIP SPECTOR, Baltimore, MD.

GEOFFREY M. LONG, Commercial Litigation

Branch, Civil Division, United States Department of

Justice, Washington, DC, argued for defendant-appellee. Also represented by BRIAN M. BOYNTON, ERIC

P. BRUSKIN, PATRICIA M. MCCARTHY.

Before DYK, CHEN, and STARK, Circuit Judges.

DYK, Circuit Judge.

In this takings case, pensioners of a multiemployer retirement fund covered by the Employee Retirement Income Security Act of 1974 (“ERISA”) appeal on behalf of themselves and a certified class of

similarly situated individuals from a decision of the

U.S. Court of Federal Claims (“Claims Court”) granting summary judgment in favor of the government.

The Claims Court concluded that Congress’s enactment of the Multiemployer Pension Reform Act of

2014 (“MPRA”), and the resulting reduction of plaintiffs’ pension benefits, did not constitute a taking under the Fifth Amendment. We conclude that the legislation was not a physical taking and plaintiffs did not

prove it was a regulatory taking, so we affirm the decision of the Claims Court.

BACKGROUND

This case involves Congressional action in 2014

authorizing restructuring of pension benefits to prevent future shortfalls by reducing the benefits of current beneficiaries. This involved an amendment to

ERISA that had the effect of making ERISA’s definition of insolvency more closely resemble that in the

Bankruptcy Code. The central question is whether

such an intervention results in a physical Fifth

Amendment taking of the disadvantaged employees’

pension rights, or whether the legislation must be analyzed as a regulatory taking pursuant to the test set

forth in the Supreme Court’s decision Penn Central

Transportation Co. v. City of New York, 438 U.S. 104

(1978).

At the outset, it is important to understand that

the right to receive pension benefits “is more in the

nature of a contract” than a trust and, most importantly, the pension beneficiary does not have a

property interest in the assets held by the trust underlying the pension plan. See, e.g., Thole v. U.S. Bank

N.A., 590 U.S. 538, 540, 542–43 (2020) (noting that

pensioners under a defined-benefit plan “are legally

and contractually entitled to receive th[e] same

monthly payments for the rest of their lives” but “possess no equitable or property interest in the plan [assets themselves]”).

Before assessing how the MPRA changed ERISA

to allow reduction of benefits owed by potentially insolvent multiemployer pension plans, it is helpful to

understand the history of pension benefits and the

types of past actions designed to deal with actual or

potential insolvency. In general, prior to ERISA,

there were three types of retirement plans that provided defined benefits in the form of monthly payments to retirees—those offered as annuities by private insurance companies, single-employer definedbenefit plans, and defined-benefit plans (like the one

here) created by multiemployer pension funds. All

three kinds of plans were susceptible to the risk that

the companies contributing to retirement trusts (or

paying annuities), or the trusts themselves, would experience financial difficulties that resulted in an inability to pay the promised benefits.

Before the enactment of ERISA in 1974, there was

no comprehensive federal regulatory framework for

employer-provided pension plans. See Nachman

Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359,

361 (1980). Rather, in the case of financial difficulties,

the right to receive annuity benefits was governed by

the Bankruptcy Code, state insurance law, or state

contract law.

For single-employer pension plans, financially

troubled employers burdened by significant pension

liabilities could declare bankruptcy under the Bankruptcy Code’s definition of insolvency if their current

liabilities exceeded assets. The Bankruptcy Code defined (and still defines) insolvency as an entity’s “financial condition such that the sum of such entity’s

debts is greater than all of such entity’s property, at a

fair valuation,” with some exemptions not relevant

here. 11 U.S.C. § 101(32)(A). Stated differently,

“[i]nsolvency is determined by whether assets exceed

liabilities, and not . . . whether the debtor was able to

pay its debts as they become due.” 2 Collier on Bankruptcy ¶ 101.32 (16th ed. 2012).

Where a company faced insolvency so defined because its liabilities (including pension liabilities) exceeded the company’s assets, the Code permitted either the liquidation of the company (Chapter 7) or a

restructuring of the company’s debts (Chapter 11).

Under either approach, the pensioners, through the

trustees of their plans, effectively held only unsecured

claims in bankruptcy. The end result was that many

plans were terminated, and pensioners had their benefits reduced on a pro rata basis, if they received them

at all.1 See, e.g., 120 Cong. Rec. 4,280 (1974) (statement of Rep. Ray Madden) (“Over the years, when employers, corporations, or industries closed operations,

moved to new locations, failed under bankruptcy or

fired employees, they escaped their obligation to carry

out their pension or retirement contracts.”); see also

id. at 4,288 (statement of Rep. Mario Biaggi) (“When

a company effectively goes out of business all of its assets and commitments go into the general fund of

bankruptcy and are lost to the worker. He receives no

pension payments.”).2

A similar situation arose when private insurance

companies that provided annuities became insolvent.

Such entities were and are ineligible to seek federal

bankruptcy protection. See 11 U.S.C. § 109(b), (d). Instead, they were and are heavily regulated by state

law and may be liquidated in state court when they

become insolvent. See Sims v. Fidelity Assurance

Ass’n, 129 F.2d 442, 448–49 (4th Cir. 1942), aff’d, 318

U.S. 608 (1943); see also S. Rep. No. 95.989 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5817, 6275. For

these purposes, the states generally defined and define insolvency to cover both the situation where an

insurance company’s liabilities exceed its assets (the

definition in the Bankruptcy Code),3 or where the

1 Even where an employer did not seek bankruptcy protection,

employers frequently avoided pension obligations to employees

by operation of contract law and the terms of their respective

plan documents. See Norman Stein, Raiders of the Corporate

Pension Plan, 5 Am. J. Tax Pol’y 117, 136–40 (1986).

2 Shortly after ERISA was enacted, Congress amended the Bankruptcy Code to provide priority status to certain unsecured

claims for fringe benefits, including pension payments. Howard

Delivery Serv. v. Zurich Am. Ins. Co., 547 U.S. 651, 654 (2006).

3 See, e.g., N.Y. Ins. Law § 1309(a) (2025) (defining insolvency in

part as “not having sufficient assets to rein-sure all outstanding

company lacks the ability to pay its debts as they become due in the regular course of business (similar to

the definition adopted by ERISA, as discussed below).4 In cases of liquidation, annuitants frequently

saw their monthly payments reduced significantly. A

prominent example of this was the liquidation of the

Executive Life Insurance Company of New York

(“ELNY”) in 2012. See In re. Exec. Life Ins. Co. of New

York, 959 N.Y.S.2d 513, 514–15 (App. Div. 2013). As

part of the liquidation, “ELNY’s assets were to be distributed on a pro rata basis to payees of ELNY annuities.” Id. This had the effect of reducing the benefits

of “approximately 15% of payees[,] . . . some by significant percentages.” Id.

risks with other solvent authorized assuming insurers after paying all accrued claims owed”); Fla. Stat. Ann. § 631.011(14)

(2025) (defining insolvency in part as occurring when “all the assets of the insurer, if made immediately available, would not be

sufficient to discharge all its liabilities”); Ky. Rev. Stat. § 304.33030(12) (2025) (defining insolvency as occurring when an insurer’s “assets do not exceed its liabilities plus the greater of”

statutorily required capital and surplus or issued capital stock);

see also Cal. Ins. Code § 985(a)(1) (2025) (defining insolvency as

occurring when an insurer’s assets do not exceed the sum of its

liabilities as required by Section 36 of the California Insurance

Code).

4 See, e.g., N.Y. Ins. Law § 1309(a) (2025) (defining insolvency in

part as occurring when “an authorized insurer is unable to pay

its outstanding lawful obligations as they mature in the regular

course of business”); Fla. Stat. Ann. § 631.011(14) (2025) (defining insolvency in part as occurring when “the insurer is unable

to pay its debts as they become due in the usual course of business”); Cal. Ins. Code § 985(a)(2) (2025) (defining insolvency in

part as an “inability of the insurer to meet its financial obligations when they are due”); Ky. Rev. Stat. § 304.33-030(12) (2025)

(defining insolvency in part as occurring when “the insurer is unable to pay its debts or meet its obligations as they mature”).

Multiemployer plans existed before ERISA. As

Congressional reports made clear when considering

the Multiemployer Pension Plan Amendments Act of

1980, “[p]rior to ERISA, trustees in a [multiemployer]

plan experiencing a serious drain on assets because of

large numbers of retirees and contribution base declines could avoid insolvency by reducing benefits.” H.

Rep. No. 96-869, pt. 1, at 60 (1979); see also id. at 54

(“[P]lan trustees had the flexibility to control escalating costs by deferring funding, tightening vesting or

eligibility rules, or in extreme cases, reducing benefits.”).

With the enactment of ERISA, Congress created a

“comprehensive and reticulated” regulatory scheme to

protect benefits offered by single-employer and multiemployer pension plans. Nachman Corp., 446 U.S.

at 361.

ERISA required covered retirement plans to “provide that an employee’s right to his normal retirement

benefit is nonforfeitable upon the attainment of normal retirement age.” 29 U.S.C. § 1053(a). A “nonforfeitable” benefit was “a claim . . . to that part of an

immediate or deferred benefit under a pension plan

which [arose] from the participant’s service, which

[was] unconditional, and which [was] legally enforceable against the plan.” Id. § 1002(19). By making such

claims “nonforfeitable,” ERISA protected against the

loss of pension benefits for those employees who

switched or lost their jobs before drawing on their pensions, see Alessi v. Raybestos-Manhattan, Inc., 451

U.S. 504, 512 (1981), a phenomenon that frequently

occurred before the statute’s enactment, see S. Rep.

No. 93-383, at 45–46 (1976), as reprinted in 1976

U.S.C.C.A.N. 4889, 4929–30.

A part of ERISA’s protections of pension benefits

was known as the “anti-cutback rule,” which provided

that “[t]he accrued benefit of a participant under a

plan may not be decreased by an amendment of the

plan.” 29 U.S.C. § 1054(g)(1); see also Cent. Laborers’

Pension Fund v. Heinz, 541 U.S. 739, 744 (2004). The

anti-cutback rule contained two exceptions, the first

of which existed with the initial enactment of ERISA

and permitted benefit reductions in the event of a

“substantial business hardship” of the employer or

employers contributing to the plan (a situation not

present here). 29 U.S.C. § 1082(d)(2); see also Employee Retirement Income Security Act of 1974, Pub.

L. 93-406 § 303, 88 Stat. 829, 872. The second exception was added to ERISA by amendment in 1980 and

permitted the sponsor of a multiemployer pension

plan to reduce benefits if the plan became “insolvent.”

See Multiemployer Pension Plan Amendments Act of

1980, Pub. L. 96-364 sec. 104, § 4245, 94 Stat. 1208,

1259 (codified at 29 U.S.C § 1054(g)(1); id. §

1441(d)(1); id. § 1426(a)).

As originally enacted and as modified in 1980,

ERISA did not utilize the Bankruptcy Code’s definition of insolvency. Instead, ERISA defined insolvency

as occurring when “the plan’s available resources are

not sufficient to pay benefits under the plan when due

for the plan year.” 29 U.S.C. § 1426(b)(1). This definition was significantly narrower than the definition of

the term in the Bankruptcy Code, as it did not focus

on the long-term shortfall of a plan’s assets compared

to its liabilities. The result was that a plan with a

long-term shortfall was still permitted, indeed required, to pay current benefits, exacerbating that

long-term shortfall. Thus, current beneficiaries of a

fiscally troubled plan would continue to receive full

benefits, such that the resources of the plan were further depleted, at the expense of future beneficiaries.5

In 2014, Congress became concerned about the fiscal health of many of the nation’s multiemployer pension plans, which were projected to have liabilities exceeding assets, such that they would be unable to pay

benefits due in future plan years. See Pension Benefit

Guar. Corp., 2014 Projections Report 5–6 (2015); U.S.

Chamber of Comm., The Multiemployer Pension Plan

Crisis 3–4, 14 (2017). This had two potential consequences. It threatened the financial stability of the

PBGC, and (as relevant here) it threatened the stability of plans whose payment obligations were in excess

of the PBGC’s guaranteed amounts.

Congress enacted the MPRA to amend ERISA and

to provide an expanded statutory exception to the

anti-cutback rule. The relevant amendments had the

effect of more closely aligning the definition of insolvency for purposes of the anti-cutback rule to the term

5 Another component of ERISA was the establishment of the Pen-

sion Benefit Guaranty Corporation (“PBGC”), which provides

statutorily guaranteed minimum payments to participants of insolvent plans. The PBGC guarantee does not fully protect the future beneficiaries. If a plan becomes insolvent, a portion of the

unfunded vested benefits of the plan are guaranteed by the

PBGC, an entity whose funding is largely made up of premiums

paid by employers contributing to ERISA-covered pension plans.

See 29 U.S.C. § 1305(a). But ERISA does not provide that the

PBGC guarantees the entirety of a plan’s pension liabilities; the

statute sets a maximum insured benefit amount for each pensioner whose plan becomes insolvent (under ERISA’s definition).

Id. § 1322a(c). If a pensioner’s benefit level under their plan documents exceeds the PBGC’s statutory maximum payment,

ERISA requires the plan sponsor to reduce the benefits owed to

match the statutory limit (when the plan becomes insolvent). Id.

§§ 1441(a), (d)(1); see also id. § 1322a(c).

10a

as it appears in the Bankruptcy Code, although the

statutory definition of “insolvency” in ERISA had not

been changed. The MPRA also had the effect of allocating a plan’s shortfall to apply more broadly across

current and future beneficiaries.

As relevant here, the MPRA empowers administrators of plans that are deemed to be in “critical and

declining” status to amend their respective plans to

“suspend benefits” to avoid long-term shortfalls. 29

U.S.C. § 1085(e)(9)(A). Broadly speaking, a plan is in

“critical and declining status” if it meets statutory criteria delineating an assets-to-liabilities ratio and “is

projected to become insolvent” under ERISA’s definition—i.e., is unable to pay benefits as they became

due—“during the current plan year or any of the 14

succeeding plan years.” Id. § 1085(b)(6). This new

“suspension of benefits” allows for “the temporary or

permanent reduction of any current or future payment obligation of the plan to any participant or beneficiary under the plan.” Id. § 1085(e)(9)(B)(i). These

changes thus permitted the reallocation of the shortfall burden across all plan beneficiaries (with some

narrow exceptions, e.g., those over 80 or disabled),

while continuing to protect pension benefits to the

maximum extent possible.

Before imposing any benefit suspensions under

the MPRA, plan sponsors are required to satisfy certain conditions. Benefit reductions are not permitted

unless it is established that the plan is in critical and

declining status and will experience insolvency within

the specified time period. Id. § 1085(e)(9)(C)(ii). Plan

administrators seeking to suspend benefits are obligated to apply to the U.S. Department of the Treasury

(“Treasury”) for approval, and to assure Treasury that

“all reasonable measures to avoid insolvency have

11a

been taken (and continue to be taken during the period of the benefit suspension).” Id. Applications must

also specify the amount of benefit reductions, which

will be “equitably distributed across the participant

and beneficiary population, taking into account factors” such as “[a]ge and life expectancy,” “[l]ength of

time in pay status,” the amount and type of benefit,

and the history of prior benefit increases and reductions. Id. § 1085(e)(9)(D)(vi). Benefits are not permitted to be “reduced below 110 percent of the monthly

benefit” guaranteed by the PBGC and cannot apply to

any participant over the age of 80 or disabled at the

time of suspension. Id. § 1085(e)(9)(D). Any benefit reduction is required to be “reasonably estimated to

achieve, but not materially exceed, the level . . . necessary to avoid insolvency.” Id. § 1085(e)(9)(D)(iv).

The MPRA also requires a vote by plan participants before any benefit reductions became effective.

If Treasury approves an application, Treasury conducts a vote, and if a majority of plan participants and

beneficiaries do not vote to reject the proposed suspension, Treasury must authorize it. See id. §

1085(e)(9)(H).6 Plan administrators then implement

the approved suspension by amending the plan documents. See id. § 1085(e)(9)(A).

6 Plaintiffs correctly point out that the MPRA requires counting

non-votes as “Yes” votes in favor of the proposed suspension. Appellants’ Br. 14. The statute also provides that even when a majority of participants and beneficiaries (including non-voters)

vote to reject a suspension, Treasury may still permit it. See 29

U.S.C. § 1085(e)(9)(H)(v)(I).

12a

Here, the New York State Teamsters Conference

Pension & Retirement Fund (“Plan”) is a private multiemployer defined-benefit plan established in 1954.

The Plan consists of a plan document and its amendments, as well as a trust agreement. Under the Plan,

participating employers contribute to the “Trust Estate,” which is administered by the Plan’s trustees.

Pensioners hold rights to receive payments from the

Trust Estate as provided in the Plan documents. See

J.A. 12894 (Trust Agreement ¶ 5); J.A. 12811 (Plan

Document § 9.06).

The Plan delineates schedules for employees’ accrual of benefits and vesting. See J.A. 12779 (Plan

Document Art. 5). A participant’s benefits are “vested”

when the participant “has (a) met the minimum service requirements . . . and has acquired a non-forfeitable right to a pension benefit under the Plan, or (b)

attained Normal Retirement Age.” J.A. 12769 (Plan

Document § 2.70). An “accrued benefit” is “the

monthly pension benefit, payable in normal form, that

would be payable upon the retirement of the Participant as of the date of reference.” J.A. 12762 (Plan Document § 2.01). The “normal form” of payment is a life

annuity, which “provides monthly payments for the

life of the Pensioner.” J.A. 12794 (Plan Document §§

6.01– .02).

The Plan empowers the trustees to amend the

Plan’s terms but provides that: “[i]n no event . . . shall

any modification or amendment of the provisions of

the Plan . . . have the effect of decreasing a Participant’s Accrued Benefit in violation of [the anti-cutback rule of ERISA].” J.A. 12813 (Plan Document §

13a

10.01). The Plan thus incorporated by reference

ERISA’s anti-cutback rule and its exceptions.

In addition to incorporating ERISA’s insolvency

exception to the anti-cutback rule, the Plan expressly

warned that in the event of the Plan’s termination,

such as due to insolvency, participants could expect to

receive benefits only “to the extent [the Plan was]

funded as of [the] date” of termination. J.A. 12813

(Plan Document § 10.03).

After enactment of the MPRA, in May 2017, the

Plan trustees here determined that if the Plan continued to make benefits payments at current levels, it

would become insolvent in 2026; that is, within less

than 14 years. To avoid this, the trustees filed with

Treasury an application under the MPRA to reduce

the benefits of retirees by 29 percent and to reduce the

benefits of actively employed participants by 18 percent. The proposal was adopted after a majority of participants did not vote to disapprove the amendments.

In July 2018, plaintiffs filed a class action complaint against the government in the Claims Court.

The named plaintiffs are pensioners with vested benefit rights under the Plan currently receiving payments.7 Plaintiffs alleged that the MPRA, as applied

to them through the Plan administrators, amounted

to an uncompensated physical taking in violation of

the Fifth Amendment because the amended Plan favored future beneficiaries at the expense of current

beneficiaries, allegedly transferring plaintiffs’ prop-

7 One named plaintiff, Mr. Gugliuzza, died during the pendency

of this appeal; his estate has substituted as an appellant in his

stead.

14a

erty interests to the Plan for the benefit of other participants. See J.A. 78 ¶ 7 (“[T]he government shift[ed]

a specific pool of money from a specific account from

plaintiffs to other private citizens.”).

In 2021, nearly three years after plaintiffs filed

suit, Congress passed the American Rescue Plan Act

of 2021 (“ARPA”), Pub. L. 117-2, 135 Stat. 4, which in

relevant part provided financial assistance to struggling pension plans, so those plans could issue “makeup” payments to pensioners whose benefits had been

reduced pursuant to the MPRA. The make-up payments restored the pensioners’ benefits to their respective levels prior to the MPRA, and included reimbursement payments for the reductions that occurred

earlier, but the payments did not include interest on

the reductions for the time they were in place. 29

U.S.C. § 1432(k). Make-up payments also were not

provided to pensioners (or their estates) who died before their respective plans received financial assistance. In July 2022, the Plan trustees applied for financial assistance under the ARPA. The Plan received more than $963 million in assistance, which

was projected to ensure the Plan’s solvency until 2051.

Make-up payments were distributed to all eligible

plan participants by March 1, 2023.8 While the makeup payments authorized by the ARPA would reduce

any damages due to plaintiffs if a taking were established, they do not impact whether there was a taking

in the first instance. See Ark. Game & Fish Comm’n v.

8 In the interim, the Claims Court also certified a proposed class.

J.A. 10471. The government suggests that the class exists in

name only, as “no one opted into the class before the entry of

judgment,” and “no class notice was undertaken.” Appellee’s Br.

16. For present purposes, we assume that the class was properly

certified.

15a

United States, 568 U.S. 23, 33 (2012) (“Once the government’s actions have worked a taking of property,

‘no subsequent action by the government can relieve

it of the duty to provide compensation for the period

during which the taking was effective.’” (citation omitted)); accord Hendler v. United States, 952 F.2d 1364,

1376 (1991).

The parties cross-moved for summary judgment.

The Claims Court held that plaintiffs possessed “a

specific cognizable property interest in receiving their

unreduced and vested pension benefits.” King v.

United States, 159 Fed. Cl. 450, 491 (2022) (King I). In

a later decision, the Claims Court declined to apply

the physical takings analysis, concluding that plaintiffs’ claims were properly analyzed as a regulatory

taking. King v. United States, 165 Fed. Cl. 613, 640

(2023) (King II). Applying the Penn Central test, the

court held that no regulatory taking occurred because

the MPRA did not unduly interfere with plaintiffs’ investment-backed expectations, the diminution in the

value of plaintiffs’ property was insufficient, and the

character of the government action counseled against

finding that a taking had occurred. See id. at 648–49.

The Claims Court entered judgment in favor of the

government. See id. at 650.

Plaintiffs appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

We review determinations of summary judgment

de novo. See Ellamae Phillips Co. v. United States, 564

F.3d 1367, 1371 (Fed. Cir. 2009). “Summary judgment

is appropriate where there is no genuine dispute as to

any material fact and the moving party is entitled to

judgment as a matter of law.” Id. (quoting Arko Exec.

Servs., Inc. v. United States, 553 F.3d 1375, 1378 (Fed.

16a

Cir. 2009)). The parties agree that there is no material

factual dispute.9

The Fifth Amendment prohibits the government

from taking private property “for public use, without

just compensation.” U.S. Const. amend. V. We apply a

two-part test to determine “whether governmental action constitutes a taking,” in which we first consider

whether the claimant has identified a cognizable

property interest and, if so, whether that interest has

been taken. Hearts Bluff Game Ranch, Inc. v. United

States, 669 F.3d 1326, 1329 (Fed. Cir. 2012). A taking

may be either physical or regulatory, with a different

standard applied to each at the second step in the

analysis.

We begin by considering whether plaintiffs have

“a cognizable Fifth Amendment property interest” in

their pension benefits. Id. In undertaking this assessment, we look to “‘existing rules or understandings’

and ‘background principles’ derived from an independent source such as state, federal, or common law.”

Am. Pelagic Fishing Co. v. United States, 379 F.3d

1363, 1376 (Fed. Cir. 2004) (quoting Lucas v. S.C.

Coastal Council, 505 U.S. 1003, 1030 (1992)).

It is well established that contracts and the rights

they secure may be considered “property for purposes

of the Takings Clause.” A & D Auto. Sales, Inc. v.

Plaintiffs insist that MPRA’s authorization of reduction of

vested benefits under ERISA is “unprecedented.” The government disputes this point. See, e.g., Oral Arg. at 39:29–40:36.

While there may be a genuine dispute on this fact question, it is

not material to our analysis because the government actions here

survive the applicable regulatory takings test even if they are

unprecedented.

17a

United States, 748 F.3d 1142, 1152 (Fed. Cir. 2014);

see also Am. Bankers Ass’n v. United States, 932 F.3d

1375, 1385 (Fed. Cir. 2019). It is also established that

defined-benefit pension plans are contractual in nature. In Alessi, the Supreme Court explained that under ERISA, a vested pensioner holds a “claim to the

benefit” provided by his retirement plan, “rather than

the benefit itself.” 451 U.S. at 512 (emphasis added)

(quoting Nachman, 446 U.S. at 371). “[N]o plan member has a claim to any particular asset that composes

a part of the plan’s general asset pool.” Hughes Aircraft Co. v. Johnson, 525 U.S. 432, 440 (1999). In

Thole, the Court again reiterated that, although

vested pensioners are “legally and contractually entitled to receive th[e] same monthly payments for the

rest of their lives,” 590 U.S. at 540, they “possess no

equitable or property interest in the plan,” id. at 543.

The fact that employees’ rights under a plan are

vested simply means that they became vested contract

rights, which have been earned by working for a specified number of years, and which the employer cannot

eliminate. Stated differently, the contract right is

“nonforfeitable,” such that under ERISA, plan administrators may not refuse to honor benefits that a pensioner has earned because the pensioner lost or

changed jobs before retirement. The fact that the contract right is vested vis-à-vis the employer says nothing about whether government action (as opposed to

employer action) to modify that contract right

amounts to a taking.

We assume, without deciding, that the plaintiffs

have identified a cognizable contract right under the

Plan documents, which constitutes property for purposes of a takings analysis, see A&D, 748 F.3d at 1152,

though they do not hold a property interest in the assets of the Plan itself. The Claims Court concluded

18a

that the plaintiffs “identified a cognizable property interest in receiving their unreduced and vested pension

benefits at a level contractually promised by the

Teamsters Fund plan agreement.” King II, 165 Fed.

Cl. at 626. While the government disagrees with this

holding, it “has not appealed the finding of a cognizable interest.” Appellee’s Br. 17; see also id. at 20–30.

In light of our conclusion that there was no taking

here, we assume that the Claims Court correctly articulated plaintiffs’ protected property interest.

We next consider whether the identified property

interest has been “taken” within the meaning of the

Fifth Amendment. See Hearts Bluff, 669 F.3d at 1329.

The government may effectuate a taking either by acquiring a property interest for itself or a third party,

or by “impos[ing] regulations that restrict an owner’s

ability to use his own property.” Cedar Point Nursery

v. Hassid, 594 U.S. 139, 148 (2021).

We apply different analyses depending on the

character of the government action. A physical occupation or appropriation of property by the government

for itself (or by transferring the property interest to a

third party) is the paradigmatic taking and is “assess[ed] . . . using a simple, per se rule: The government must pay for what it takes.” Id. Where, however,

the government imposes a regulation burdening a

claimant’s right to use property, the question becomes

whether the regulation “goes too far,” that is, whether

there has been a regulatory taking. Pennsylvania

Coal Co. v. Mahon, 260 U.S. 393, 415 (1922). Answering that question entails “balancing factors such as

the economic impact of the regulation, its interference

with reasonable investment-backed expectations, and

19a

the character of the government action.” Cedar Point,

594 U.S. at 148.

Plaintiffs contend they have suffered a physical

taking because they possess a “right to unreduced

benefits under their vested pensions,” Appellants’ Br.

53 (quoting J.A. 10327), and plaintiffs’ contract rights

were modified in order to benefit other plan beneficiaries.10 Even assuming (without deciding) that this

10 This argument was clarified at oral argument:

Q. What is the taking here? Was it ordered that the contract

right be transferred to somebody else? Is it transferred to the

government? What is the alleged taking? ....

A. They had a vested right to receive a pension of a specific

size from a specific source . . .

Q. My question is where was the transfer, was the government transferring that to a third party, was it taking it for itself?

What is the alleged taking?

A. The government authorized the pension fund to appropriate that and the fund did so. It quite literally deleted the language from the contract . . . . It was the appropriation of property.

The word transfer, doesn’t, . . . as a practical matter, that’s what

happened. ....

Q. So, it’s not an argument that the government took the

property for itself, it’s that it ordered a transfer of the property

to the pension fund.

A. It authorized the pension fund to appropriate the property, and the fund did exactly that.

Oral Arg. at 2:32–4:15.

Plaintiffs originally argued in part that the MPRA transferred their interest in the Plan to benefit the PBGC, but the fact

“[t]hat the solvency of a pension trust fund may ultimately redound to the benefit of the PBGC . . . is merely incidental to the

primary congressional objective of protecting covered employees

and beneficiaries of pension trusts like the Plan,” and does not

give rise to a physical taking. Concrete Pipe & Prods. of Cal., Inc.

v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 644

(1993).

20a

is a correct articulation of plaintiffs’ protected contract right, we disagree that this resulted in a physical

taking.

Physical or intangible personal property on the

one hand, and third-party contract rights on the other,

are treated quite differently for takings purposes.11

The Supreme Court has held that the federal government has broad authority to adopt regulations modifying the rights and obligations under third-party contracts without running afoul of constitutional prohibitions. This has been recognized with respect to employment contracts, see, e.g., United States v. Darby,

312 U.S. 100, 117 (1941), purchase and sale contracts,

see, e.g., Addyston Pipe & Steel Co. v. United States,

175 U.S. 211, 227 (1899), lease agreements, see, e.g.,

Bowles v. Willingham, 321 U.S. 503, 517 (1944), and

others.12

11 This is not a case where the plaintiffs held a vested contract

right with the government that was later repudiated by the government. See Piszel v. United States, 833 F.3d 1366 (Fed. Cir.

2016); see also Robert Meltz, Cong. Rsch. Serv., R42635, When

Congressional Legislation Interferes with Existing Contracts: Legal Issues 13–14 (2012) (“Congress has greater constitutional

freedom to impair private contract rights than contractual obligations of the federal government.”); Kevin R. Garden, Fifth

Amendment Takings of Rights Arising from Agreements with the

Federal Government, 29 Pub. Cont. L.J. 187, 205–09 (2000) (collecting cases).

12 See also NL Indus., Inc. v. United States, 839 F.2d 1578, 1579

(Fed. Cir. 1988) (no taking where presidential moratorium on operation of nuclear plant resulted in “frustration of a business by

loss of a customer”); 767 Third Ave. Assocs. v. United States, 48

F.3d 1575, 1581 (Fed. Cir. 1995) (“An additional reason for affirming the trial court’s decision is that the Supreme Court has

held that no taking occurs when, as occurred in this case, expectations under a contract are merely frustrated by lawful government action not directed against the takings claimant.”); Nat’l

21a

A prominent example of this principle in the takings context is found in Omnia Commercial Co. v.

United States, 261 U.S. 502 (1923), where the Supreme Court concluded that the government did not

commit a taking when it requisitioned a steel company’s “entire production of steel plate for the year

1918, and directed the company not to comply with the

terms of appellants’ contract.” Id. at 507. While recognizing that “[t]he contract . . . was property within

the meaning of the Fifth Amendment,” the Court explained that “[t]here are many laws and governmental

operations which injuriously affect the value of or destroy property . . . for which no remedy is afforded.”

Id. at 508– 09. In Omnia, the government did not

“take” the appellants’ contract right within the meaning of the Fifth Amendment; instead, it imposed upon

the steel company an obligation “to deliver its product

to the government,” which had the effect of “render[ing] impossible” appellants’ contract with the

company. Id. at 511. The contract was “not appropriated but ended.” Id.

Similarly, in Louisville & Nashville Railroad Co.

v. Mottley, 219 U.S. 467 (1911), the Court concluded

that no taking occurred where a federal law prohibiting free passenger transport by common carriers had

the effect of invalidating a contract for free life-time

transport held by the claimants. Id. at 472, 484. So

too, in Norman v. Baltimore & Ohio Railroad Co., 294

U.S. 240 (1935), the Court rejected a claim that a joint

resolution from Congress invalidating so-called “gold

clauses” requiring the payment of debts only in gold

constituted a taking of creditors’ property interest in

“express stipulations for gold payments.” Id. at 291,

Mining Ass’n v. Babbitt, 172 F.3d 906, 917 (D.C. Cir. 1999) (rejecting argument that “interference with contract rights is a

[physical] taking”).

22a

307. The Court concluded that “[t]here is no constitutional ground for denying to the Congress the power

to expressly prohibit and invalidate contracts although previously made, and valid when made, when

they interfere with the carrying out of policy it is free

to adopt.” Id. at 309–10. As Justice Holmes recognized

in Pennsylvania Coal, “[g]overnment hardly could go

on if to some extent values incident to property could

not be diminished without paying for every such

change in the general law.” 260 U.S. at 413.

Not surprisingly, and of crucial relevance to the

issue before us today, these principles have been extended to contract rights relating to pension plans.

In Connolly v. Pension Benefit Guaranty Corp.,

475 U.S. 211 (1986), the Court rejected a facial challenge to amendments to ERISA that imposed withdrawal liability on employers who left a multiemployer pension plan before the plan’s termination and

thus increased the employers’ contractual obligations.

Id. at 223–24. The Court dismissed the employer’s argument that Congress’s imposition of withdrawal liability constituted an uncompensated taking because it

nullified “the terms of its contract from any liability

beyond the specified contributions to which it had

agreed.” Id. at 223. Relying on its earlier decision in

Norman, the Court explained:

Contracts, however express, cannot fetter the

constitutional authority of Congress. Contracts may create rights of property, but when

contracts deal with a subject matter which lies

within the control of Congress, they have a

congenital infirmity. Parties cannot remove

their transactions from the reach of dominant

constitutional power by making contracts

about them.

23a

Id. at 223–24 (quoting Norman, 294 U.S. at 307–08).

The Court further rejected the employer’s physical

takings argument because, if accepted, it would mean

“the Taking Clause is violated whenever legislation

requires one person to use his or her assets for the

benefit of another,” a proposition foreclosed by “the

propriety of the governmental power to regulate.” Id.

at 223; see also id. at 224 (“[T]he fact that legislation

disregards or destroys existing contractual rights does

not always transform the regulation into an illegal

taking.” (citation omitted)). One additional consideration critical to the Court’s analysis was that, through

the imposition of withdrawal liability, the government

“ha[d] taken nothing for its own use.” Id. at 224. The

Court nonetheless considered whether a taking had

occurred under a regulatory takings analysis. See id.

at 224– 25.

Similarly, in Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust for

Southern California, 508 U.S. 602 (1993), the Court

rejected an as-applied challenge brought by an employer that was assessed withdrawal liability under

ERISA’s amendments. Id. at 605, 642. Drawing upon

Connolly, the Court reiterated that the nullification of

contract rights did not constitute an uncompensated

per se taking, and that “[i]f the regulatory statute is

otherwise within the powers of Congress . . . its application may not be defeated by private contractual provisions.” Id. at 642 (quoting Connolly, 475 U.S. at

223–24). Following Connolly, the Court analyzed the

employer’s takings claim under the regulatory takings

framework. See id. at 643–47.

Plaintiffs suggest that Connolly and Concrete Pipe

are inapplicable here because Congress “authorized

the pension fund to appropriate” money owed to each

24a

pensioner and to transfer those funds to other beneficiaries. Oral Arg. at 3:26–30. They contend that five

“controlling cases” support their position: Cedar Point

Nursery v. Hassid, 594 U.S. 139 (2021); Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155

(1980); Brown v. Legal Foundation of Washington, 538

U.S. 216 (2003); Louisville Joint Stock Land Bank v.

Radford, 295 U.S. 555 (1935); and Armstrong v.

United States, 364 U.S. 40 (1960).

We are unpersuaded. Those cases all involved the

government’s appropriation of specific physical or intangible property for its own use or the use of others,

not the modification of contractual obligations owed

by third parties. Cedar Point involved a California

law that mandated physical access to commercial

farms for third parties (labor organizations) so that

they could engage in union organizing “for three hours

per day, 120 days per year.” 594 U.S. at 149. The Supreme Court determined that the law effected a physical taking of the landowner’s right to exclude others

from the real property. Id.

In Webb’s, a Florida law allowed a county court to

claim for itself the interest earned on principal sums

deposited with the court in connection with an interpleader action. 449 U.S. at 157–59. The Supreme

Court held that the county’s assertion of a right to

claim the interest deposited in the interpleader account was a physical taking, because the principal in

the account was indisputably private property belonging to the creditor claimants, id. at 160–61, and the

“general rule is that any interest on an interpleaded

and deposited fund follows the principal and is to be

allocated to those who are ultimately to be the owners

of that principal.” Id. at 162.

25a

Similarly, in Brown, the Supreme Court found a

physical taking where a state regulatory scheme required attorneys to deposit client funds into separate

interest-bearing accounts and to transfer the interest

made in those accounts to a state-established nonprofit, concluding that the claimants’ interest “was

taken for a public use when it was ultimately turned

over to the [nonprofit].” 538 U.S. at 224– 25, 235.

Radford concerned a federal bankruptcy law that

prevented mortgagees from foreclosing upon defaulting mortgagors for a period of five years, at the end of

which the mortgagor could “pay into court the appraised price of the property” after which the court

would, “by an order, turn over full possession and title

of said property to the debtor.” 295 U.S. at 576–78. In

holding that there was a taking, the Court observed

that “the position of a secured creditor, who has rights

in specific property, differs fundamentally from that

of an unsecured creditor, who has none,” id. at 588,

and held that the new law took “without compensation, and [gave to the debtor] rights in specific property which are of substantial value,” id. at 601–02.

Similarly, Armstrong involved the destruction of

liens in physical property. 364 U.S. at 42. The government compelled a ship-building contractor to transfer

to it “the hulls and all materials held for future use in

building the boats,” pursuant to a contract. Id. at 46.

Suppliers of the materials and supplies possessed, under state law, materialmen’s liens secured by the

ships or supplies until they received payment. See id.

at 44. The transfer of title to the government had the

effect of a “total destruction . . . of all value of these

liens, which constitute[d] compensable property.” Id.

at 48. This was a taking “because the Government for

its own advantage destroyed the value of the liens . . .

. for a public use.” Id.

26a

The unifying thread across these cases is that the

government appropriated specific, identifiable property interests—whether real property or personal

property—for its own or a third party’s use. That is

not what occurred with the enactment of the MPRA or

its application to the Plan. As discussed earlier, the

plaintiffs do not hold a property interest in the underlying assets of the Plan, only a contractual right, making them akin to unsecured creditors. See Thole, 590

U.S. at 543; Radford, 295 U.S. at 588 (“[T]he position

of a secured creditor, who has rights in specific property, differs fundamentally from that of an unsecured

creditor, who has none.”). The modification of those

contract rights does not appropriate specific rights in

the funds of the Plan (because plaintiffs have no such

property rights) and, thus, is not a physical taking.

Plaintiffs additionally rely on the Supreme

Court’s decision in Koontz v. St. Johns River Management District, 570 U.S. 595 (2013), which held that the

government commits a physical taking whenever it

“commands the relinquishment of funds linked to a

specific, identifiable property interest such as a bank

account or parcel of real property.” Id. at 613–14.

Koontz was analyzed as a physical taking because a

water district demanded that the claimant either deed

a conservation easement to the government, or “pay to

replace culverts on one parcel or fill in ditches” on

“District-owned land several miles away.” Id. at 601–

02. Critically, the claimant in Koontz owned the affected property, unlike plaintiffs here, who have no

ownership right in the funds of the Plan. Koontz thus

lends no support to plaintiffs because they possess

only a contract right to demand payment from the

Plan, not a specific, identifiable property interest in

the Plan’s underlying assets.

27a

In short, the MPRA modified the third-party contract rights of the plaintiffs in such a way as to extend

the longevity of their Plan’s ability to pay benefits.13

It did not appropriate a specific, identifiable property

interest for the benefit of the government or a third

party. Under the MPRA, “the United States has taken

nothing for its own use.” Connolly, 475 U.S. at 224. In

effect, the MPRA broadened the definition of insolvency under ERISA, allowing the administrators of

especially troubled plans to restructure a plan’s contractual obligations to some beneficiaries to stave off

the further diminishment of the plan’s assets. Thus,

the Claims Court did not err in declining to apply the

physical takings analysis to plaintiffs’ claims.14

Even though we hold that there is no physical taking here, this does not mean that the government enjoys unfettered discretion to modify contractual rights

without takings liability. Instead, its action in enacting the MPRA is precisely the kind of legislative intervention that has historically been analyzed under the

regulatory, not physical, takings analysis by the Supreme Court, our court, and other courts. See, e.g.,

13 In fact, as the Claims Court found, at least some members of

the plaintiff class themselves derived some benefit from the reductions in that such measures assured that they would continue

to receive benefits for a longer period rather than steer the Plan

into insolvency. King II, 165 Fed. Cl. at 646.

14 Our holding that there has been no physical taking does not

mean that government action with respect to third-party contract rights can never be a physical taking. Like the government,

we are aware of no case that has held that a protected property

interest in the form of a contractual can never be the basis for a

meritorious per se takings claim. See Oral Arg. at 34:00–35:45.

Particularly because the Plan documents at issue here do not

give the plaintiffs a property right in the assets of the Fund itself,

we are not called upon in this case to decide that broad question.

28a

Connolly, 475 U.S. at 224–28; Concrete Pipe, 508 U.S.

at 643–47.15 We now turn to that analysis.

In considering whether the reduction of plaintiffs’

pension benefits under the MPRA constituted a regulatory taking, we are guided by “three factors which

have ‘particular significance’” to this inquiry: “(1) ‘the

economic impact of the regulation on the claimant’; (2)

‘the extent to which the regulation has interfered with

distinct investment-backed expectations’; and (3) ‘the

character of the governmental action.’” Connolly, 475

U.S. at 225 (quoting Penn Central, 438 U.S. at 124).16

15 See also A&D, 748 F.3d at 1149, 1153 (applying regulatory tak-

ings analysis to claims arising from government-induced termination of franchise agreements as a condition for financial assistance to third parties); Buffalo Tchrs. Fed’n v. Tobe, 464 F.3d

362, 374 (2d Cir. 2006) (holding that a state’s “interference with

appellants’ contractual right to a wage increase . . . . falls into the

category of a regulatory, not physical, taking”); Cent. States, Se.

& Sw. Areas Pension Fund v. Midwest Motor Express, Inc., 181

F.3d 799, 808 (7th Cir. 1999) (applying regulatory takings analysis to claim that earlier ERISA amendment providing for employer withdrawal liability was an uncompensated taking).

16 Plaintiffs argue in passing that the benefit reductions consti-

tute a “categorical” taking of the kind recognized in Lucas because the benefit reductions have deprived them of “the beneficial use of the entire relevant parcel,” which plaintiffs define as

the 29 percent of accrued benefits that have been reduced. Appellants’ Br. 52–53 (quoting Norman v. United States, 429 F.3d

1081 (Fed. Cir. 2005)). Plaintiffs previously conceded, see King

II, 165 Fed. Cl. at 640 n.10, that this argument is foreclosed by

Norman, which held that a categorical taking may be found under Lucas only when “the owner is deprived of all beneficial use

of the ‘parcel as a whole,’” 429 F.3d at 1091, but now suggest that

A&D left open the possibility that Lucas would apply to intangible property. Appellants’ Br. 52.

29a

We turn first to the alleged economic impact,

which requires plaintiffs to “show ‘serious financial

loss’ from the regulatory imposition in order to merit

compensation.” Cienega Gardens v. United States, 331

F.3d 1319, 1340 (Fed. Cir. 2003) (quoting Loveladies

Harbor, Inc. v. United States, 28 F.3d 1171, 1177 (Fed.

Cir. 1994)). In doing so, we must “compare the value

that has been taken from the property with the value

that remains in the property.” Keystone Bituminous

Coal Ass’n v. DeBenedictis, 480 U.S. 470, 497 (1987).

Stated differently, plaintiffs must “show what use or

value [their] property would have but for the government action.” A&D, 748 F.3d at 1157.

Plaintiffs argue that the economic impact suffered

by class members supports a regulatory taking because the pension reductions were “devastating” to affected pensioners, such that “[t]he [Plan’s] own actuaries predicted that, wholly apart from the financial

impact, the cuts would shorten retirees’ lives,” and

“Treasury itself criticized the ‘severity’ and ‘harshness’ of the cuts.” Appellants’ Br. 57 (internal citation

omitted). Plaintiffs assert that the Claims Court

We decline plaintiffs’ invitation to reassess the application

of Lucas for two reasons. First, as we have explained, the benefit

reductions pursuant to the MPRA did not eliminate all “beneficial use” of plaintiffs’ contract rights. Norman, 429 F.3d at 1091.

Plaintiffs continued to receive pension benefits, albeit at a reduced amount, and the MPRA did not extinguish their rights to

demand payment from the Plan. Second, the Supreme Court has

expressly cautioned against “shoehorn[ing]” takings claims into

the Lucas analysis by defining the property interest at issue as

that property which has been “taken in its entirety.” Concrete

Pipe, 508 U.S. at 643–44.

30a

failed to appreciate these impacts by narrowly focusing on the numerical diminution in value, which was

29 percent of the pensioners’ vested benefits.

We see no error in focusing on the amount of the

reduction rather than the impact on individual claimants, as takings jurisprudence is solely concerned

with the effects of government action on a claimant’s

property, see, e.g., Murr v. Wisconsin, 582 U.S. 383,

397–99 (2017), rather than the hardship faced by individual claimants. With that focus we cannot agree

that the economic loss here was so severe as to support

a taking. Plaintiffs’ benefits were reduced by 29 percent for an approximately five-year period. The size

of the true diminution is likely even less once the

value of plaintiffs’ contract rights is assessed in light

of the value they would have enjoyed absent government action, which would have been significantly reduced when the Plan would have become insolvent in

2026. A&D, 748 F.3d at 1157.17

In any event, even if we accept the plaintiffs’ calculations, the alleged economic loss here does not support a conclusion that a regulatory taking has occurred. Although the Supreme Court and this court

have eschewed any rigid formula for what percentage

of reduced value may suffice to establish severe economic harm, courts have consistently declined to find

regulatory takings where the diminution in value

17 According to calculations performed by plaintiffs’ expert, the

present value of the diminution in value for the named plaintiffs

was not 29 percent, but closer to 10 percent. See J.A. 3323–27.

Even that number may be an inaccurate appraisal of the true

value of plaintiffs’ contract rights because it includes the statutorily guaranteed payments funded by the PBGC in the event of

insolvency, so the calculation of the value of plaintiffs’ contractual rights absent the MPRA was overstated. See id.

31a

matched or exceeded that alleged here. As our predecessor court recognized in Jengten v. United States,

657 F.2d 1210 (Ct. Cl. 1981), the Supreme Court concluded that no taking occurred in Euclid v. Ambler Realty Co., 272 U.S. 365 (1926), where a zoning regulation reduced the value of the subject property by 75

percent, and concluded the same in Hadachek v. Sebastian, 239 U.S. 394 (1915), where the diminution in

value was 87.5 percent. Jengten, 657 F.2d at 1213; see

also Concrete Pipe, 508 U.S. at 645 (diminution of 46

percent insufficient); see also CCA Assocs. v. United

States, 667 F.3d 1239, 1246 (Fed. Cir. 2011) (“[W]e are

aware of no case in which a court has found a taking

where diminution in value was less than 50 percent.”

(internal quotation marks and citation omitted)).

Turning to the degree of interference upon plaintiffs’ expectations, we apply “an objective . . . inquiry

into what, under all the circumstances, the [plaintiffs]

should have anticipated.” Cienega Gardens, 331 F.3d

at 1346. In Commonwealth Edison Co. v. United

States, 271 F.3d 1327 (Fed. Cir. 2001) (en banc), we

identified three factors relevant to a determination of

whether plaintiffs possess reasonable expectations

that their property interests would be unaffected by

subsequent government regulation. “First, [were] the

[plaintiffs] operating in a highly regulated industry?

Second, did the [plaintiffs] know of the problem at the

time [they] engaged in the activity? Third, in light of

the regulatory environment at the time of the activities, could the possibility of the [government action]

have been reasonably anticipated?” Id. at 1348.

Where these three factors are satisfied, plaintiffs lack

32a

a reasonable expectation to be free of the challenged

government conduct. See id.18

We disagree with the Claims Court and the plaintiffs that the Commonwealth Edison factors favor the

plaintiffs. “Pension plans [have been] the objects of

legislative concern long before the passage of ERISA

in 1974.” Connolly, 475 U.S. at 226. Multiemployer

pension plans are heavily regulated under ERISA.

The anti-cutback rule is itself a legislative creation.

ERISA had always permitted similar benefits reductions in at least some circumstances. See Employee

Retirement Income Security Act §§ 302(c)(8), 303, 88

Stat. 872–73. The Claims Court correctly recognized

that the MPRA simply “altered the pre-existing regulations pertaining to the ‘anti-cutback rule’” to expand

the circumstances when benefits reductions could be

statutorily authorized. King II, 165 Fed. Cl. at 646. So

too, over the decades, Congress has consistently

sought to guard against plan insolvency through legislative amendments.19 Although the details of these

prior interventions differ from those included in the

MPRA, they share a common purpose—to bolster the

18 Although initially formulated in connection with a due process

claim, we have held that the test for reasonable expectations in

Commonwealth Edison applies with equal force to the Penn Central regulatory takings analysis. See Appolo Fuels, Inc. v. United

States, 381 F.3d 1338, 1349 n.5 (Fed. Cir. 2004).

19 Examples include Congress imposing withdrawal liability on

contributing employers, see Multiemployer Pension Plan Amendments Act of 1980, Pub. L. 96-364, 94 Stat. 1208, strengthening

funding for underperforming plans and providing authority for

the PBGC to enforce minimum funding standards, see Retirement Protection Act of 1994, Pub. L. 103-465, 108 Stat. 4809, and

modifying the funding rules for multiemployer defined-benefit

plans, see Pension Protection Act of 2006, Pub. L. 109-280, 120

Stat. 780.

33a

financial stability of multiemployer pension plans and

prevent the insolvency of those plans. In light of Congress’s persistent activity in this area and the purposes behind those acts, we are not persuaded that the

MPRA has unduly interfered with plaintiffs’ expectations.

Finally, we consider the character of the government action. Loveladies Harbor, 28 F.3d at 1176. “The

Supreme Court has recognized that the nature of the

government’s action is ‘critical’ in the determination

of whether a taking has occurred.” Atlas Corp. v.

United States, 895 F.2d 745, 757 (Fed. Cir. 1990)

(quoting Keystone, 480 U.S. at 488). This inquiry requires us to weigh the “private and public interests.”

Keystone, 480 U.S. at 492 (quoting Agins v. Tiburon,

447 U.S. 225, 260–61 (1980)). A “substantial public

purpose” of a statute will weigh against the finding of

a taking, Penn Central, 438 U.S. at 127, and “[t]here

is little doubt that it is appropriate to consider the

harm-preventing purpose of a regulation in the context of the character prong,” Rose Acre Farms, Inc. v.

United States, 559 F.3d 1260, 1281 (Fed. Cir. 2009).

The MPRA advanced a substantial public purpose: protecting failing multiemployer pension plans,

like the Plan here, from insolvency defined as liabilities exceeding assets. 29 U.S.C. § 1085(e)(9)(A). This

benefit was not bestowed generally on the public but

instead on future and current plan beneficiaries, including plaintiffs, by ensuring that the Plan would remain viable decades into the future. In light of the

scale of the problem addressed in the MPRA—the

likely collapse of many of the nation’s largest multiemployer pension plans, including the Plan here—

the “harm-preventing purpose” of the MPRA decidedly weighs against the finding of a regulatory taking.

Rose Acre Farms, 559 F.3d at 1281. This factor further

34a

disfavors plaintiffs because the reductions experienced by plaintiffs were designed to be narrowly tailored to ensure solvency of the Plan. See 29 U.S.C. §

1085(e)(9)(D)(iv) (providing that benefit reductions

under the MPRA must be “reasonably estimated to

achieve, but not materially exceed, the level . . . necessary to avoid insolvency”). This plainly constituted

a “method . . . reasonably designed to attain” the Congressional objective. Loveladies Harbor, 28 F.3d at

1176. The legislative enactment effectively conforms

ERISA’s definition of insolvency more nearly to how

the term is used in the Bankruptcy Code. The reallocation of claims to a limited pool of funds was well

“within the power of Congress to impose” under a

longstanding regulatory scheme, ERISA, which has

for decades “adjust[ed] the benefits and burdens of

economic life to promote the common good.” Connolly,

475 U.S. at 224–25.

Under these circumstances, we conclude that the

three Penn Central factors weigh in favor of the government, and that there was no regulatory taking.

CONCLUSION

We have considered the remainder of plaintiffs’

arguments and do not find them persuasive. We agree

with the Claims Court that the “plaintiffs present a

very sympathetic claim; they did everything right,

worked hard, and provided for their retirements.

They did nothing wrong and yet, through no fault of

their own, suffered a significant loss to their retirement earnings for several years” because the pool of

assets to pay their claims was insufficient. King II,

165 Fed. Cl. at 649. They did not, however, suffer a

taking in violation of their constitutional rights.

Therefore, we affirm the judgment of the Claims

Court.

35a

AFFIRMED

36a

APPENDIX B

In the United States Court of Federal Claims

No. 18-1115

Filed: April 28, 2023

FOR PUBLICATION*

WILLIAM KING, ANTHONY

GUGLIUZZA, STEPHEN DARDZINSKI,

et al.,

Plaintiffs,

UNITED STATES,

Defendant.

Noah A. Messing, Messing & Spector LLP, New York,

NY, for the plaintiffs, with Phillip M. Spector and Jason H. Kim, of counsel.

Geoffrey M. Long, Commercial Litigation Branch,

Civil Division, U.S. Department of Justice, Washington, DC, for the defendant.

* Pursuant to the protective order in this case, the Court initially

filed this opinion under seal on April 20, 2023, and directed the

parties to review the opinion and propose redactions of confidential or proprietary information. The parties have proposed no redactions. Accordingly, the Court hereby releases in full the memorandum opinion of April 20, 2023.

37a

MEMORANDUM OPINION

HERTLING, Judge

In this certified class action, the plaintiffs are

vested participants and beneficiaries in a pension

plan. They allege that the United States, acting

through the Department of the Treasury (“Treasury”),

in consultation with the Department of Labor (“Labor”) and the Pension Benefit Guaranty Corporation

(“PBGC”), violated the takings clause of the fifth

amendment of the U.S. Constitution in October 2017

by authorizing a 29-percent cut to their pension benefits under the Multiemployer Pension Reform Act of

2014 (“MPRA”). The plaintiff class members who

were still alive in December 2022 saw their pension

benefits restored under the American Rescue Plan Act

of 2021 (“ARPA”) and received lump-sum make-up

payments without interest in the amount that had

been withheld from them. The plaintiffs maintain

their suit for interest on the amounts withheld while

the benefit cuts were in effect and because the estates

of the participants and beneficiaries who died between

October 2017 and December 2022 have received reduced or no make-up payments.

The parties cross-move for summary judgment

under Rule 56 of the Rules of the Court of Federal

Claims (“RCFC”). The cross-motions present two issues: (1) whether the plaintiffs’ claims are more appropriately resolved as a classic physical taking or under the more flexible regulatory-takings test provided

in Penn Central Transportation Co. v. City of New

York, 438 U.S. 104 (1978); and (2) the application of

the appropriate takings test. This case has important

implications for the constitutional limits on the ability

of Congress and regulators to address the problem of

multiemployer-pension-plan insolvency.

38a

The physical-takings test is inapplicable to the

plaintiffs’ claims because the federal government has

neither appropriated the plaintiffs’ property nor occupied it. Accordingly, the regulatory-takings test provides the applicable measure for the plaintiffs’ claims.

Under the Penn Central factors, the plaintiffs have

not demonstrated that a regulatory taking occurred.

The defendant therefore has not violated the takings

clause of the fifth amendment. The plaintiffs’ motion

for summary judgment is denied, and the defendant’s

motion for summary judgment is granted.

I. BACKGROUND

This summary of the legal and factual background

does not constitute findings of fact but is simply a recitation of the parties’ representations. The facts underlying the parties’ arguments are not in dispute.

When appropriate, this summary reiterates the

background detailed in the opinion on the previous

round of summary judgment motions, King v. United

States, 159 Fed. Cl. 450, 456-60 (2022). Neither party

has challenged any aspect of the background sections

of that opinion.

A. ERISA

The Employee Retirement Income Security Act

(“ERISA”) was enacted in 1974. Under ERISA, “[e]ach

pension plan shall provide that an employee’s right to

his normal retirement benefit is nonforfeitable upon

the attainment of normal retirement age . . . .” 29

U.S.C. § 1053(a).1 A “normal retirement benefit” is

1 Many of the statutes cited in this section were amended in De-

cember 2022. Consolidated Appropriations Act, 2023, Pub. L.

No. 117-328, 136 Stat. 4,459 (2022). The amendments do not apply to the substance of the provisions quoted.

39a

statutorily defined as “the greater of the early retirement benefit under the plan, or the benefit under the

plan commencing at normal retirement age.” Id. §

1002(22). A plan participant reaches “normal retirement age” under the terms of the plan or at the later

of “the time a plan participant attains age 65, or . . .

the 5th anniversary of the time a plan participant

commenced participation in the plan.” Id. § 1002(24).

ERISA also defines the term “nonforfeitable”:

The term “nonforfeitable” when used with respect to a pension benefit or right means a

claim obtained by a participant or his beneficiary to that part of an immediate or deferred

benefit under a pension plan which arises

from the participant’s service, which is unconditional, and which is legally enforceable

against the plan.

Id. § 1002(19).

Under ERISA, pension benefits are generally protected by the “anti-cutback” rule. The “anti-cutback”

rule forbids pension plans from reducing plan participants’ accrued benefits unless a statutory exception

applies. Section 1054(g)(1) of Title 29 of the U.S. Code

provides: “The accrued benefit of a participant under

a plan may not be decreased by an amendment of the

plan, other than an amendment described in section

1082(d)(2) or 1441 of this title.” See also 26 U.S.C. §

411(d)(6) (providing functionally identical language).

Section 1082(d)(2) permits a plan administrator to

apply to Treasury to reduce accrued benefits as “necessary because of a temporary substantial business

hardship . . . or a substantial business hardship (as so

determined) in the case of a multiemployer plan,” provided certain conditions are met regarding the timing

40a

of the reduction of accrued benefits and the unavailability or inadequacy of other options available to the

fund. Although § 1082(d)(2) was amended in 2014, a

prior version of the section also permitted pension

funds to reduce accrued benefits when facing a “substantial business hardship,” so long as other criteria

were also satisfied. 29 U.S.C. § 1082(d)(2) (enacted

Dec. 23, 2008, and effective until Apr. 6, 2014).

Section 1441(d)(1) provides: “In any case in which

benefit payments under a plan which is insolvent . . .

exceed the resource benefit level, any such payments

which are not basic benefits shall be suspended, in accordance with this subsection, to the extent necessary

to reduce the sum of such payments and such basic

benefits to the greater of the resource benefit level or

the level of basic benefits” guaranteed by the PBGC, a

government agency that insures pension funds.2 The

PBGC may pay a guaranteed benefit to the participants and beneficiaries of an insolvent pension fund,

but the level of benefits would be lower than if the

fund were solvent. Id. §§ 1322a(c), 1322a(d).

A plan found in violation of the “anti-cutback” rule

risks losing its qualified tax status under the Internal

Revenue Code’s minimum vesting requirements. See

26 U.S.C. § 411(a). Participants may also have a

cause of action against a pension fund to recover benefits due under the terms of the plan or to enjoin a

plan amendment that violates the “anti-cutback” rule.

See 29 U.S.C. § 1132(a).

B. The Fund

2 The phrase “resource benefit level” is defined as “the level of

monthly benefits determined . . . to be the highest level which

can be paid out of the plan’s available resources.” 29 U.S.C. §§

1426(b)(2), 1441(d)(2)(B).

41a

The New York State Teamsters Conference Pension and Retirement Fund (“the Teamsters Fund”)

was established in 1954, 20 years before ERISA was

enacted. (Pls.’ App., ECF 165-1, at 329.) The Teamsters Fund is a multiemployer pension plan, defined

in ERISA as a plan “to which more than one employer

is required to contribute,” and “which is maintained

pursuant to one or more collective bargaining agreements between one or more employee organizations

and more than one employer.” 29 U.S.C. § 1301(a)(3).

Approximately 78 percent of the Teamsters Fund’s

annual receipts come from a single employer, United

Parcel Service (“UPS”). (ECF 165-6 at 1843.)

The Teamsters Fund plan agreement provides

that the “general administration of the plan and the

responsibility for carrying out the provisions [of the

plan] are placed in the Trustees and shall be constituted in accordance with the terms of the Trust Agreement.” (Def.’s App., ECF 169-1 at 61.) Eight trustees

serve the Teamsters Fund; four are selected by the unions holding collective bargaining agreements with

contributing employers, and four are selected by employers contributing to the plan. (Id. at 146.) The

plan empowers the trustees to demand employer contributions, invest funds, and pay pension and retirement benefits. (Id. at 142-43, 145-46.) The corpus of

money and property held by the trustees of the Teamsters Fund is the “Fund Estate,” to which participants

and beneficiaries have limited access. (Id. at 143, 14546.) Participants in the Teamsters Fund pension plan

may not receive parts of the employer contributions

instead of pension benefits, and they can neither assign nor sell their pension benefits. (Id. at 145-46.)

The Teamsters Fund plan documents lay out the

definitions and entitlements of active participants in

the plan—i.e., participants who are still employed by

42a

a contributing employer and continue to earn their

pension benefits; vested participants of the plan, who

are usually retired and receiving their monthly pension benefits; and beneficiaries of the plan, who are

usually the surviving spouses of deceased vested participants when a survivorship benefit applies.

The Teamsters Fund plan provides a schedule for

workers to accrue benefits and for those benefits to

vest. (ECF 165-1 at 349-63, 374-79.) An “active participant” in the plan is usually an active employee “on

whose behalf a Contributing Employer is required to

make contributions to the Plan.” (ECF 169-1 at 13.)

A participant ceases to become active when the participant incurs a break in service, retires, or becomes

disabled. (See id.) The plan defines “accrued benefit”

in the case of an active participant as “that portion of

the Participant’s prospective monthly benefit . . . that

has been earned or accrued to the date of reference, as

computed pursuant to the provisions of the Plan.”

(Id.)

The plan defines “vested” as meaning that a participant “has (a) met the minimum service requirements . . . and has acquired a non-forfeitable right to

a pension benefit under the Plan, or (b) attained Normal Retirement Age.” (ECF 165-1 at 339.) A participant attains “Normal Retirement Age” at the age of 65

with five years of service credits, on the fifth anniversary of a date the participant commenced participation in the plan before a break in service, or in some

cases at the age of 64. (ECF 169-1 at 18.) The “normal

form of benefit payment” is a life annuity, which “provides monthly payments for the life of the Pensioner.”3

3 Other forms of payment described in the plan agreement in-

clude a five-year certain annuity, ten-year certain annuity, and

43a

(Id. at 45.) The plan also allows participants to elect

a survivor annuity if the participant is married upon

retirement. (Id. at 45-46.) The plan defines “accrued

benefit,” in the case of a participant who has reached

normal retirement age, as “the monthly pension benefit, payable in the normal form, that would be payable upon the retirement of the Participant as of the

date of reference.” (Id. at 13.)

Since its establishment, the Teamsters Fund has

advertised that “[a]ll pensions are payable for life

without reduction.” (ECF 165-1 at 4.) The Teamsters

Fund has also explained in informational materials

sent to participants and beneficiaries that “[a] ‘vested’

benefit is non-forfeitable and, therefore, cannot later

be curtailed or eliminated.” (Id. at 234.)

Despite that representation, at least as early as

1963, plan documents provided how funds would be

allocated if the Teamsters Fund were “terminated.”

(Id. at 17-18.) Plan participants would be entitled to

“shares” according to age and pension credits, but “[i]f

the funds of the Plan are insufficient to provide in full

for the shares” due to plan participants, “each share .

. . as to which the funds are insufficient shall be reduced pro [ ] rata.” (Id.) Further, the trustees would

have discretion as to the method of distribution of

those shares: “The Board of Trustees may require that

all shares be withdrawn in cash or in immediate or

deferred annuities or other periodical payments as

they may determine.” (Id.)

The Teamsters Fund plan agreement has been

amended repeatedly since its inception in 1954. (ECF

social security leveling option. Other forms of payment are not

at issue in this case. (ECF 169-1 at 45-47.)

44a

169-1 at 10.) The agreement was “amended and completely restated” on January 1, 1976, to comply with

ERISA. (Id.) The agreement was amended again in

1978, 1990, and 1997 due to mergers with other pension funds. (Id.) The agreement was also amended in

2000 due to additional mergers and to “comply with

changes required by recent legislation.” (Id. at 11.)

The agreement was amended again in 2004, 2010, and

2015. (Id.) In sum, the agreement was amended “on

several . . . occasions by action of the Trustees to incorporate technical changes requested by the Internal

Revenue Service and to comply with changes required

by continuing legislation.” (Id. at 10.) The trustees

intend “that the Plan operate in accordance with the

applicable provisions of the [Internal Revenue] Code,

ERISA, and regulations issued thereunder.” (Id. at

12.)

C. The Named Plaintiffs

The three class representatives are retired employees of UPS and vested participants in the Teamsters Fund.

As of the time the plaintiffs filed their pending

motion for summary judgment, William King is 74

years old and worked to earn his pension for 30 years,

27 of those years at UPS. (ECF 165-3 at 930.) The

pension was a primary reason Mr. King worked at

UPS. (Id. at 1055.)

Mr. King believed that once his pension benefit

vested, it could not be reduced. (Id. at 1056.) Mr. King

declined an alternative job offer based, in significant

part, on his expectation of receiving a pension upon

retirement. (Id.) Mr. King also refrained from searching for other job positions. (Id.)

45a

Stephen Dardzinski is currently 73 years old and

accrued his pension by working at UPS from 1989 until 2011. (Id. at 871.) Mr. Dardzinski accepted a job

at UPS because of a small raise relative to his prior

position and the pension benefits; those benefits made

the trade-off of needing to work a night shift at UPS

(working from 6:00 p.m. to approximately 2:30 a.m.)

worthwhile. (Id. at 1026.) Like Mr. King, Mr. Dardzinski also did not expect his pension benefits to be

reduced. (Id. at 1027.)

Anthony Gugliuzza is currently 79 years old and

began earning his pension at UPS in 1971, before

ERISA was enacted. (Id. at 921.) He worked for UPS

for 30 years and retired in 2001. (Id.) Like the other

class representatives, Mr. Gugliuzza had the subjective expectation that he would receive his vested pension benefit at an unreduced level for the rest of his

life. (Id. at 1046.)

D. The MPRA

The PBGC’s multiemployer program “insures the

benefits of more than 10 million workers and retirees

in 1,400 plans. When multiemployer plans fail, PBGC

provides financial assistance so the plans can pay benefits at no more than PBGC’s statutory multiemployer

benefit guarantee level.” PBGC Reports Record Deficit of $62 Billion in 2014, 20 Pension & Benefits Week

Newsletter 47, 2014 WL 6491783 (Nov. 24, 2014). In

2014, the PBGC’s insurance program faced a recordbreaking deficit of $62 billion “due largely to the declining financial condition of multiemployer plans.”

Id. The PBGC projected that, absent legislative intervention, it faced a more than 50-percent chance of becoming insolvent by 2022 and a 90-percent chance of

becoming insolvent by 2025. Id. If the PBGC were to

46a

become insolvent, it would only be able to pay a fraction of the statutorily guaranteed level of basic benefits to participants of insolvent multiemployer pension

plans, a level that is already a fraction of what vested

pension plan participants receive when a plan is financially sound. Id.

In December 2014, Congress passed the MPRA.

According to the PBGC, the aim of the MPRA was to

“provide[ ] new options for troubled multiemployer

plans to avoid insolvency.” Pension Benefit Guaranty

Corporation: PBGC Paid Nearly $6 Billion in Pension

Benefits to Retirees in FY 2015, PBGC Press Release

No. 15-12, 2015 WL 7249945 (Nov. 17, 2015); see also

160 Cong. Rec. H9264 (daily ed. Dec. 11, 2014) (statement of Rep. King) (the MPRA was enacted to give

trustees of “troubled” pension plans “additional tools

to maintain the solvency of the plans”).

The MPRA provided a new, additional statutory

exception to ERISA’s “anti-cutback” rule. The MPRA

permitted solvent pension funds that were in “critical

and declining” status to, “by plan amendment, suspend benefits” of plan participants to avoid insolvency. 29 U.S.C. § 1085(e)(9)(A).4 The MPRA defined

a “suspension of benefits” as “the temporary or permanent reduction of any current or future payment obligation of the plan to any participant or beneficiary under the plan, whether or not in pay status at the time

of the suspension of benefits.” Id. § 1085(e)(9)(B)(i).

Before a pension fund could suspend benefits under

4 The Internal Revenue Code contained an identical provision at

26 U.S.C. § 432(e)(9)(A). For consistency, the Court cites the provisions in 29 U.S.C. § 1085(e)(9), but the same language could be

found in 26 U.S.C. § 432(e)(9).

47a

the MPRA, the MPRA required the completion of five

steps.

First, a pension fund had to apply to the Secretary

of the Treasury for approval of its plan to reduce pension benefits. Id. § 1085(e)(9)(G)(i). A fund’s application had to specify the size of the proposed cuts and

demonstrate that the cuts are projected to prevent insolvency. Id. § 1085(e)(9)(C)(i). The MPRA imposed

conditions on a pension fund’s proposed reduction of

benefits.

The plan sponsor (i.e., the trustees) had to demonstrate that “all reasonable measures to avoid insolvency have been taken (and continue to be taken during the period of the benefit suspension).” Id. §

1085(e)(9)(C)(ii). The plan sponsor could take into account factors such as “[c]urrent and past contribution

levels,” “[c]ompetitive and other economic factors facing contributing employers,” the “impact of benefit

and contribution levels on retaining active participants and bargaining groups under the plan,” the “impact of past and anticipated contribution increases

under the plan on employer attrition and retention

levels,” and “[m]easures undertaken by the plan sponsor to retain or attract contributing employers.” Id.

Furthermore, the suspensions “shall be equitably

distributed across the participant and beneficiary

population, taking into account factors, with respect

to participants and beneficiaries and their benefits,”

including:

(I) Age and life expectancy.

(II) Length of time in pay status.

(III) Amount of benefit.

(IV) Type of benefit: survivor, normal retirement,

early retirement.

48a

(V) Extent to which participant or beneficiary is

receiving a subsidized benefit.

(VI) Extent to which participant or beneficiary has

received post-retirement benefit increases.

(VII) History of benefit increases and reductions.

(VIII) Years to retirement for active employees.

(IX) Any discrepancies between active and retiree

benefits.

(X) Extent to which active participants are reasonably likely to withdraw support for the plan, accelerating employer withdrawals from the plan and increasing the risk of additional benefit reductions for

participants in and out of pay status.

(XI) Extent to which benefits are attributed to service with an employer that failed to pay its full withdrawal liability.

Id. § 1085(e)(9)(D)(vi).

The suspension of benefits under the MPRA was

prohibited for anyone who was over the age of 80 or

disabled at the date of suspension.

Id. §§

1085(e)(9)(D)(ii), 1085(e)(9)(D)(iii). Participants or

beneficiaries between the ages of 75 and 80 faced

lesser reductions than participants or beneficiaries

under the age of 75. Id. § 1085(e)(9)(D)(ii). The proposed suspensions could not reduce benefits below 110

percent of the benefit level guaranteed by the PBGC.

Id. § 1085(e)(9)(D)(i). The proposed suspensions had

to be “reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency.” Id. § 1085(e)(9)(D)(iv).

Second, Treasury would consult with the PBGC

and Labor to review the application.

Id. §

1085(e)(9)(G)(i). No later than 30 days after receiving

49a

the application, Treasury, PBGC, and Labor are required to publish notice in the Federal Register “soliciting comments from contributing employers, employee organizations, and participants and beneficiaries of the plan for which an application was made and

other interested parties.” Id. § 1085(e)(9)(G)(ii).

Treasury had to approve or reject the application

within 225 days of submission of the application; otherwise, the application would be deemed approved.

Id. § 1085(e)(9)(G)(iii). Treasury was required to approve the application unless the application was

“clearly erroneous.” Id. § 1085(e)(9)(G)(v).

Third, if the application is approved, Treasury,

the PBGC, and Labor had to administer an election in

which plan participants vote on the proposed reductions. Id. § 1085(e)(9)(H)(i). For the proposal to be

rejected, an actual majority of all plan participants

had to vote to reject the cuts. Id. § 1085(e)(9)(H)(ii).

Plan participants who did not cast a vote were counted

as voting to approve the proposed reductions. Id.

Even if the majority of all plan participants voted to

reject the cuts, Treasury could override the vote if it

determined that the proposed reductions were “systematically important,” i.e., the PBGC would be exposed to more than $1 billion in insurance obligations

if the pension plan were to become insolvent. Id. §

1085(e)(9)(H)(v).

Fourth, Treasury, the PBGC, and Labor had to issue a final authorization for the suspension within

seven days of the vote. Id. § 1085(e)(9)(H)(vi). For the

fifth and final step, the pension fund would amend its

plan documents to implement the suspension of benefits. Id. § 1085(e)(9)(A).

A pension plan that applied under the MPRA and

received approval from Treasury to reduce its benefits

50a

would be immunized from liability for any reduction

in benefits resulting from the approved MPRA application. Id. § 1085(e)(9)(B)(iii). “A participant or beneficiary affected by a benefit suspension . . . shall not

have a cause of action” under the MPRA. Id. §

1085(e)(9)(I)(iii).

E. Approval of the Teamsters Fund’s MPRA

Application

The Teamsters Fund submitted its first MPRA application to reduce the amount it paid to plan participants on August 31, 2016. (ECF 165-6 at 1848.)

Treasury identified concerns regarding some of the

application’s actuarial assumptions. (ECF 165-2 at

496.) Treasury encouraged the Teamsters Fund to

withdraw its application and resubmit it, offering to

expedite its consideration of the resubmission. (Id. at

526, 551.) The Teamsters Fund subsequently withdrew its application. (Id. at 562.)

The Teamsters Fund submitted a revised application on May 15, 2017. (Id. at 638.) The Teamsters

Fund projected that it was likely to become insolvent

during 2026, but the suspension of benefits under the

MPRA would postpone the projected insolvency until

2049. (ECF 169-1 at 266.) In its revised application,

the Teamsters Fund proposed an 18-percent cut to the

accrued benefits of plan participants still actively employed and a 29-percent cut to the benefits of retirees.5

(ECF 165-2 at 640.) Treasury approved the application on August 3, 2017. (Id. at 698-99.)

Treasury proceeded to hold an election among

Teamsters Fund plan participants. Participants and

5 The cuts to active employees took effect through the recalcula-

tion of their adjusted monthly benefits that would be due to those

employees upon retirement. (See ECF 169-1 at 134.)

51a

beneficiaries were given approximately three weeks to

vote by mail, phone, or internet. (ECF 165-2 at 710.)

Materials sent to voters provided in bold that if eligible voters did not vote or their vote was not received

prior to the close of voting, they would be treated as

though they had voted to approve the benefit reduction. (ECF 165-7 at 2030.) The voting materials explained that the Teamsters Fund “would run out of

money beginning in 2027 if the benefit reduction does

not happen.” (Id.) The voting materials also explained that even if a majority of the participants and

beneficiaries voted to reject the proposed benefit reductions, benefits might still be reduced. (Id.) This

point was made because, regardless of the outcome of

the vote, the PBGC had advised Treasury that the

Teamsters Fund would likely qualify as “systematically important”—i.e., big enough to permit Treasury

to override any adverse MPRA vote. (ECF 165-6 at

1853.)

Of the Teamsters Fund’s 34,636 eligible participants who received a ballot, only 40 percent voted.6

(ECF 165-2 at 724-25.) Of those who voted, 71 percent

rejected the proposed reductions, and 29 percent approved them. (Id.) Treasury treated the outcome of

the election as approval of the proposed reductions because, pursuant to the MPRA, the 60 percent of plan

participants who did not vote were counted as voting

to approve the proposed reductions. (Id.)

6 Treasury sent ballots to 35,173 eligible voters, but 388 ballots

were not mailed because the Teamsters Fund could not provide

an address for the voters, and 149 ballots were returned to the

vote administrator as undeliverable. (ECF 165-2 at 724.) Those

ballots were not counted as approving the proposed benefit reductions.

52a

Following the vote, Treasury issued a final authorization for the Teamsters Fund to reduce its benefit payments by the amounts that had been requested by the application, approved by Treasury, and

ratified by the vote of plan participants. (Id. at 72829.) With technical assistance and recommended edits from Treasury, the Teamsters Fund then amended

its plan documents to implement the reductions. (Id.

at 754-59.)

An amended provision of the plan agreement explains: “Notwithstanding any other provision of this

Plan to the contrary, effective October 1, 2017, all Affected Participants . . . shall have their pension benefit

reduced in accordance with the provisions of Article

18.” (ECF 169-1 at 133.) Article 18, titled the “Pension Preservation Plan,” reduces the monthly pension

benefits of active participants by 18 percent and the

monthly pension benefits of non-active (i.e., retired)

participants by 29 percent. (Id. at 133-34.)

F. Reduction of the Plaintiffs’ Benefits

The reduction in pension benefits became effective

on October 1, 2017. (Id.) Between October 2017 and

December 2022, the monthly pension benefits paid to

the three named plaintiffs reflected a 29-percent reduction in their pre-MPRA benefits.

The plaintiffs suffered personal hardships during

that period related to the suspension of their benefits,

including relying on dwindling savings, forgoing necessary medical care, scrimping on food, and falling behind on mortgage payments and other bills. Approximately 1,100 of the class members died before their

benefits were restored.

G. The ARPA

53a

In March 2021, Congress enacted the American

Rescue Plan Act of 2021 (“ARPA”), Pub. L. 117-2, 135

Stat. 4. The ARPA requires the PBGC to “provide special financial assistance to an eligible multiemployer

plan under this section, upon the application of a plan

sponsor of such a plan for such assistance.” 29 U.S.C.

§ 1432(a)(1).7 The financial assistance is appropriated

from funds for Treasury instead of the PBGC’s existing multiemployer fund. Id. § 1305(i). Multiemployer

plans that suspended benefits under the MPRA are

eligible for the special financial assistance. Id. §

1432(b)(1)(B).

Under the ARPA, Treasury and the PBGC “shall

ensure that an eligible multiemployer plan that receives special financial assistance . . . reinstates any

benefits that were suspended under section 1085(e)(9)

of this title . . . .” Id. § 1432(k)(1). A fund receiving

special financial assistance shall “provide[ ] payments

equal to the amount of benefits previously suspended

under section 1085(e)(9) . . . of this title to any participants or beneficiaries in pay status as of the effective

date of the special financial assistance, payable, as determined by the eligible multiemployer plan.” Id. §

1432(k)(2). The payment can be made in a lump sum

within three months of receipt of special financial assistance or in monthly installments over a period of

five years. Id. These reimbursement payments do not

include any interest for the suspended benefits. Id.

The amount of special financial assistance a fund

receives must be sufficient for the fund to pay participants’ and beneficiaries’ unreduced benefits until

2051:

7 The Internal Revenue Code contains a functionally similar pro-

vision at 26 U.S.C. § 432(k).

54a

The amount of financial assistance provided

to a multiemployer plan eligible for financial

assistance under this section shall be such

amount required for the plan to pay all benefits due during the period beginning on the

date of payment of the special financial assistance payment under this section and ending

on the last day of the plan year ending in 2051,

with no reduction in a participant’s or beneficiary’s accrued benefit as of March 11, 2021,

except to the extent of a reduction in accordance with section 1085(e)(8) of this title

adopted prior to the plan’s application for special financial assistance under this section,

and taking into account the reinstatement of

benefits required under subsection (k).

Id. § 1432(j)(1).

Under the ARPA, make-up payments are required

to be made only to “participants or beneficiaries in pay

status” when the special financial assistance becomes

effective. Id. § 1432(k). Accordingly, the PBGC has

issued a regulation providing whether and how makeup payments would be paid to the beneficiaries or estates of participants who died before special financial

assistance was received:

Because a participant who died before the

[special financial assistance (“SFA”)] is paid is

not in pay status as of the effective date of the

SFA, no make-up payments are made for reductions that applied to that participant and,

accordingly, make-up payments are limited to

the total amount of benefits that would have

been paid to the beneficiary in the absence of

the suspension but that were not paid to the

55a

beneficiary because of the suspension. However, if a participant dies after the SFA is paid

to the plan but before all of the make-up payments are paid to the participant, the unpaid

portion of the make-up payments must be

made to the participant’s beneficiary.

Special Financial Assistance by PBGC, 87 Fed. Reg.

40,968 (July 8, 2022) (to be codified at 29 C.F.R. pt.

4262).

H. Restoration of the Plaintiffs’ Benefits

The Teamsters Fund submitted its first application for special financial assistance on January 28,

2022. (ECF 165-7 at 1991.) The Teamsters Fund

withdrew its application on May 26, 2022, to revise

the application and re-filed it on July 21, 2022. (Id. at

1992, 1994.)

The PBGC approved the revised application on

November 18, 2022. (Id. at 1985.) The Teamsters

Fund received more than $963 million in special financial assistance from Treasury on December 8,

2022. (Id. at 1985-86.)

The Teamsters Fund restored monthly benefit

payments to pre-MPRA suspension levels beginning

on January 1, 2023. (Id. at 2005-12.) Participants

and beneficiaries received any make-up payment to

which they were entitled under the ARPA by March 1,

2023. (Id.)

No participant or beneficiary received interest as

part of the make-up payment. (Id. at 2014.) Beneficiaries of participants who died before December 8,

2022, received reduced make-up payments, and estates of participants who died before December 8,

2022, without beneficiaries received no make-up payments. (Id. at 2014-15.) The plaintiffs estimate that

56a

more than 1,100 estates will have a claim for principal

because they received reduced or no make-up payments. (ECF 164 at 11-12.)

II. PROCEDURAL HISTORY

Much of the relevant procedural history is recounted in the previous opinion on the defendant’s

motion for summary judgment, King, 159 Fed. Cl. 450.

A. First Round of Summary Judgment

Mr. King, Mr. Gugliuzza, and Mr. Dardzinski filed

suit on behalf of themselves and all others similarly

situated on July 31, 2018, which was approximately

ten months after the plaintiffs’ benefits were suspended under the MPRA and three years before the

ARPA was enacted. (ECF 1.) The defendant moved

to dismiss the plaintiffs’ claims under RCFC 12(b)(1)

and 12(b)(6). (ECF 7.) After holding oral argument

on the defendant’s motion, that motion to dismiss was

converted into a motion for summary judgment to be

briefed after discovery regarding the defendant’s alleged liability. (ECF 21.)

The case was transferred to the undersigned on

December 17, 2019. (ECF 36; ECF 37.) The parties

proceeded with discovery.

The defendant filed a motion for summary judgment on January 22, 2021. (ECF 99.) The plaintiffs

responded to the defendant’s motion and cross-moved

for summary judgment on March 6, 2021. (ECF 105.)

On March 11, 2021, Congress enacted the ARPA.

The following day, the defendant moved to vacate the

schedule for summary-judgment briefing and to stay

the proceedings. (ECF 109.) The plaintiffs opposed

the motion. (ECF 110.) Following oral argument on

the defendant’s motion, on March 26, 2021, the proceedings were stayed until July 30, 2021. (ECF 114.)

57a

Following the expiration of that stay, the plaintiffs argued that the ARPA did not fully moot their

claims even if the Teamsters Fund received special financial assistance because no participant or beneficiary would receive interest, and participants and

beneficiaries who died would receive supposedly incomplete or no make-up payments. (See ECF 120.)

The Court requested that the defendant choose

any discrete legal issues that were ripe for consideration on a motion for summary judgment even before

the Teamsters Fund applied for relief under the

ARPA. (See ECF 125 at 7:8-15.) The parties’ previous

cross-motions for summary judgment were denied as

moot. (ECF 123.)

B. Second Round of Summary Judgment

On September 27, 2021, the defendant moved for

summary judgment on two specific grounds: (1) that

the plaintiffs do not have a constitutionally cognizable

property interest in their entitlement to unreduced

pension benefits; and (2) that no government action

gave rise to a taking. (ECF 126.) The plaintiffs crossmoved for summary judgment on the grounds: (1) that

the plaintiffs had a cognizable property interest in

their contractual entitlement to receive a specific

amount of pension benefits for life; and (2) that the

government’s authorization of the Teamsters Fund

under the MPRA, the government’s coercion of the

Teamsters Fund to apply under the MPRA, or the government’s agency relationship with the Teamsters

Fund gave rise to a taking. (ECF 128.)

The cross-motions were fully briefed, and the

Court held oral argument on the motions. After oral

argument, the Court ordered supplemental briefing

on the applicability of the doctrine of Omnia Commercial Co. v. United States, 261 U.S. 502 (1923), to the

58a

plaintiffs’ claims. (ECF 132.) The parties filed supplemental briefs accordingly. (ECF 139; ECF 140;

ECF 142; ECF 143.) A decision was initially issued

under seal and published without redactions on April

8, 2022.

In that ruling, the plaintiffs were found to have

identified a cognizable property interest in receiving

their unreduced and vested pension benefits at a level

contractually promised by the Teamsters Fund plan

agreement. King, 159 Fed. Cl. at 462-77.

In analyzing whether sufficient government action gave rise to a taking, however, the Court was

“constrained by the present stage of litigation . . . because no decision has yet been made as to whether the

per se physical-takings test or the more flexible regulatory-takings test should apply to this case.” Id. at

477. “Given the enactment of the ARPA and its potential impact on the plaintiffs’ pensions, the defendant has reserved that issue for a later stage in the litigation.” Id. In analyzing whether sufficient government action had given rise to a taking, the parties had

relied on different types of caselaw—the defendant relied on regulatory-takings cases, while the plaintiffs

relied on physical-takings cases. The Court therefore

addressed only the issue of “whether the plaintiffs

have successfully demonstrated that the government

acted in a manner that could potentially give rise to a

taking, depending on the applicable test, or whether

the defendant has successfully demonstrated that the

government did not act in a way that could ever constitute a taking, no matter which test is applied to the

plaintiffs’ claims.” Id.

The Court held that Omnia, 261 U.S. 502, did not

defeat the plaintiffs’ claims. 159 Fed. Cl. at 485. The

Court also held that under the physical-takings test,

59a

“government authorization to a third party to seize a

plaintiff’s property may give rise to a taking.” Id. at

487. That holding “does not mean that the plaintiffs

have demonstrated government action sufficient to

give rise to a physical taking.” Id. “The issue of the

appropriate test is reserved and remains to be resolved.” Id.

The Court held, however, that the plaintiffs could

demonstrate neither an agency relationship between

the Teamsters Fund and the government nor coercion

by the government of the Teamsters Fund. Id. at 487491.

Because of the ongoing evolution of the regulatory

landscape under the ARPA, the Court reserved for

later evaluation the character of the government’s action and whether precedent required that the plaintiffs’ claims be analyzed under the physical-takings

test or regulatory-takings test. Id. at 492-93.

C. Class Certification

After denying the defendant’s motion for summary judgment, discovery was reopened for the purpose of addressing class certification. (ECF 150.) The

plaintiffs filed a motion for class certification on June

24, 2022. (ECF 154.) The defendant did not oppose

the plaintiffs’ motion but identified a class-related legal issue regarding whether the plan participants who

did not vote or voted to approve the MPRA suspensions could maintain a claim for a taking. (ECF 156.)

After holding a status conference on the plaintiffs’

motion to certify a class, the plaintiffs’ motion to certify a class was granted. King v. United States, No.

18-1115, 2022 WL 3716442, at *6 (Fed. Cl. Aug. 29,

2022). The following class was certified pursuant to

RCFC 23:

60a

Any person (whether a participant, beneficiary, or other individual) who received one or

more pension payments from the New York

State Teamsters Conference Pension and Retirement Fund (the “Fund”) on or after October 1, 2017 unless either (1) that person was

an “Active Participant” as of October 1, 2017

or (2) all pension payments that were received

by that person since October 1, 2017 were reduced by 0% relative to the sum the recipient

would have been entitled to receive if the Defendant had not authorized the Fund, in or

around September 2017, to reduce certain

pension benefits under the Kline-Miller Multiemployer Pension Reform Act of 2014.

Id. The Teamsters Fund’s data indicate that there are

10,893 potential class members. (ECF 164 at 11 n.7.)

Mr. King, Mr. Gugliuzza, and Mr. Dardzinski were

designated as representatives of the class. King, 2022

WL 3716442, at *6. Messing & Spector LLP and

Schneider Wallace Cottrell Konecky LLP were appointed as class counsel. The parties were instructed

to propose definitions for subclasses according to

whether and how participants voted in the election

administered by Treasury. Id.

The plaintiffs responded with definitions for four

proposed subclasses. (ECF 159 at 3-4.) The plaintiffs

noted potential logistical issues related to opting into

the subclasses: there are no records of how each individual voted, and many class members may not remember how they voted or may have died in the intervening time period. (Id.) The plaintiffs suggested deferring a decision on their motion to certify subclasses

until after a decision on summary judgment was

reached. (Id. at 13-15.)

61a

After holding a status conference on the plaintiffs’

proposed subclasses and their suggestion to address

summary judgment before any decision on the scope

of the four subclasses was made, the Court stayed

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