Petition for Writ of Certiorari — MFN Partners, LP, et al., Petitioners v. New York State Teamsters Conference and Retirement Fund, et al.

Supreme Court briefFeb 13, 2026

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No. 25-___

IN THE

Supreme Court of the United States

————

MFN PARTNERS, LP, ET AL.,

Petitioners,

NEW YORK STATE TEAMSTERS CONFERENCE AND

RETIREMENT FUND, ET AL.

Respondents.

————

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Third Circuit

————

PETITION FOR WRIT OF CERTIORARI

————

GEORGE W. HICKS, JR.

KIRKLAND & ELLIS LLP

1301 Pennsylvania Ave., N.W.

Washington, D.C. 20004

(202) 389-5000

george.hicks@kirkland.com

DEREK L. SHAFFER

Counsel of Record

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

555 13th St. NW, Ste. 600

Washington, D.C. 20004

(202) 538-8000

derekshaffer@

quinnemanuel.com

[Additional Counsel Listed On Inside Cover]

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D.C. 20002

PATRICK J. NASH, P.C.

SHIRLEY CHAN

KIRKLAND & ELLIS LLP

333 W. Wolf Point Plaza

Chicago, IL 60654

(312) 862-2000

Counsel for PetitionersDebtors and Debtors

in Possession

ERIC WINSTON

BEN ROTH

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

865 S. Figueroa St., 10th Fl.

Los Angeles, CA 90017

(213) 443-3000

NICHOLAS J. CALUDA

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

700 Louisiana St., Ste. 3900

Houston, TX 77002

(713) 221-7000

SAM HEAVENRICH

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

295 5th Ave., 9th Fl.

New York, NY 10016

(212) 849-7000

Counsel for Petitioners MFN

Partners, LP and Mobile

Street Holdings, LLC

QUESTIONS PRESENTED

1. Whether the Pension Benefit Guaranty Corporation (PBGC) can—through the auspices of imposing

“reasonable conditions” on multiemployer pension

plans (MEPPs) under 29 U.S.C. § 1432(m)(1)—direct

MEPPs to exclude certain plan assets from the unfunded-vested-benefits formula in 29 U.S.C. § 1393(c)

when calculating an employer’s withdrawal liability,

even though that statutory formula expressly includes

plan assets as an input.

2. Whether MEPPs can calculate a withdrawing

employer’s allocable unfunded vested benefits and annual withdrawal-liability payments through methods

that deviate from statutory requirements without obtaining the PBGC’s approval.

PARTIES TO THE PROCEEDING

Petitioners MFN Partners, LP and Mobile Street

Holdings, LLC were claim objectors in the bankruptcy

court and appellants in the Third Circuit.

Petitioners Yellow Corporation and its affiliated

debtors and debtors in possession (collectively, Yellow) were claim objectors in the bankruptcy court and

appellants in the Third Circuit. The affiliated debtors

and debtors in possession are: Express Lane Services,

Inc.; New Penn Motor Express LLC; Roadway Express

International, Inc.; Roadway LLC; Roadway Next Day

Corporation; USF Bestway Inc.; USF Dugan Inc.; USF

Holland International Sales Corporation; USF Holland LLC; USF RedStar LLC; USF Reddaway Inc.;

Yellow Freight Corporation; Yellow Logistics, Inc.;

YRC Association Solutions, Inc.; YRC Enterprise Services, Inc.; YRC Freight Canada Company; YRC Inc.;

YRC International Investments, Inc.; YRC Logistics

Inc; YRC Logistics Services, Inc.; YRC Mortgages,

LLC; and YRC Regional Transportation, Inc.

Respondents Central States, Southeast and Southwest Areas Pension Fund, Pension Benefit Guaranty

Corporation, New York State Teamsters Conference

and Retirement Fund, Freight Drivers and Helpers

557 Pension Fund, Management Labor Pension Fund

Local 1730, Mid Jersey Trucking Industry and Teamsters Local 701 Pension and Annuity Fund, Road Carriers Local 707 Pension Fund, Teamsters Local 617

Pension Fund, and Trucking Employees of North Jersey Pension Fund were claimants in the bankruptcy

court and appellees in the Third Circuit.

iii

RULE 29.6 DISCLOSURE STATEMENT

MFN Partners, LP is a limited partnership and investment vehicle that is exempt from registration under the Investment Company Act of 1940, as amended

(the “1940 Act”) and whose securities are not registered under the Securities Act of 1933, as amended

(the “Securities Act”). MFN Partners Management,

LP is the investment manager that provides investment advisory services to MFN Partners, LP. MFN

Partners Management, LP is an SEC-registered investment advisor. Interests in MFN Partners, LP are

offered pursuant to applicable exemptions from registration under the Securities Act and 1940 Act, and investors in MFN Partners, LP are generally “qualified

purchasers” as defined in the 1940 Act, and include,

among others, charitable and not-for-profit organizations, university endowments, high net worth individuals, trusts and other entities. No publicly held

corporation owns 10% or more of MFN Partners, LP.

Mobile Street Holdings, LLC is a wholly owned

subsidiary of MFN Partners, LP. No publicly held corporation owns 10% or more of Mobile Street Holdings,

LLC.

Yellow was a publicly traded company prior to

these bankruptcy proceedings. USF Holland LLC and

New Penn Motor Express LLC are wholly owned subsidiaries of Yellow Corporation. YRC Inc. (d/b/a YRC

Freight) is a wholly owned subsidiary of Roadway

LLC, which is a wholly owned subsidiary of Yellow

Corporation. USF Reddaway Inc. is a wholly owned

subsidiary of YRC Regional Transportation, Inc.,

which is a wholly owned subsidiary of Yellow Corporation. There are no other parent corporations. No

publicly held company owns more than 10% of Yellow’s stock. For completeness of disclosure, however,

MFN Partners (through MFN Partners, LP, MFN

Partners GP, LLC, MFN Partners Management, LP,

MFN Partners Management LLC, Farhad Nanji, and

Michael F. DeMichele) and the U.S. Department of

Treasury each own 10% or more of Yellow’s stock, but

those entities are not publicly held companies.

RELATED PROCEEDINGS

United States Bankruptcy Court (Bankr. D. Del.):

In re Yellow Corp., No. 23-bk-11069-CTG (Dec. 2,

2024)

United States District Court (D. Del.):

In re Yellow Corp., No. 1:24-mc-00619-JLH (case

pending)

International Brotherhood of Teamsters v. Yellow

Corp., No. 1:24-cv-1024-JLH (Jan. 9, 2025)

Pension Benefit Guaranty Corp. v. Yellow Corp.,

No. 1:24-cv-350-JLH (Sep. 16, 2024)

In re Yellow Corp., No. 1:25-cv-307-JLH (case

pending)

In re Yellow Corp., No. 1:25-cv-377-JLH (case

pending)

United States Court of Appeals (3rd Cir.):

In re Yellow Corp., No. 25-1421 (Sept. 16, 2025)

TABLE OF CONTENTS

Page

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

PARTIES TO THE PROCEEDING ........................... ii

RULE 29.6 DISCLOSURE STATEMENT ............... iii

RELATED PROCEEDINGS ....................................... v

TABLE OF AUTHORITIES.................................... viii

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

OPINIONS BELOW .................................................... 4

JURISDICTION .......................................................... 4

STATUTORY

AND

REGULATORY

PROVISIONS INVOLVED .............................. 5

STATEMENT .............................................................. 5

Statutory Background ........................... 5

The PBGC Regulations .......................... 8

Yellow And Its Reentry In

NY/WPA Teamsters ............................. 11

Proceedings Below ............................... 12

REASONS FOR GRANTING THE PETITION ....... 16

The Third Circuit’s PBGC-Regulations

Holding Warrants This Court’s Review ......... 16

The PBGC-Regulations Holding

Creates And Deepens Several

Circuit Splits ........................................ 16

The PBGC-Regulations Holding Is

Wrong ................................................... 21

vii

II.

III.

The Validity Of The PBGC

Regulations

Exceptionally

Important And Cleanly Presented ...... 26

The Third Circuit’s Alternative-Method

Holding Warrants This Court’s Review ......... 30

The Alternative-Method Holding

Implicates A Circuit Conflict

Before This Court................................. 30

The Alternative-Method Holding

Is Wrong ............................................... 33

Whether MEPPs Can Adopt

Alternative Calculation Methods

Without The PBGC’s Approval Is

Exceptionally

Important

Question

That

Cleanly

Presented.............................................. 36

Alternatively, The Court Should Hold

This Petition For M & K And Then GVR ...... 37

CONCLUSION .......................................................... 38

viii

TABLE OF AUTHORITIES

Page(s)

Cases

Advoc. Health Care Network v. Stapleton,

581 U.S. 468 (2017) .............................................. 24

Ali v. Fed. Bureau of Prisons,

552 U.S. 214 (2008) .............................................. 35

Bay Area Laundry & Dry Cleaning Pension Tr.

Fund v. Ferbar Corp. of Cal.,

522 U.S. 192 (1997) .......................................... 6, 26

Biden v. Texas,

597 U.S. 785 (2022) .............................................. 24

Bd. of Trs. of Bakery Drivers Local 550 & Industry

Pension Fund v. PBGC,

136 F.4th 26 (2d Cir. 2025) ......................... 2, 17-18

Brasil v. Sec’y, Dep’t of Homeland Sec.,

28 F.4th 1189 (11th Cir. 2022) ............................ 19

Cent. States v. Cent. Transp., Inc.,

472 U.S. 559 (1985) .............................................. 36

China Unicom (Americas) Operations Ltd. v. FCC,

124 F.4th 1128 (9th Cir. 2024) ............................ 20

CIGNA Corp. v. Amara,

563 U.S. 421 (2011) .............................................. 24

Concrete Pipe & Prods. of Cal., Inc. v. Constr.

Laborers Pension Tr. for S. Cal.,

508 U.S. 602 (1993) ................................ 5, 7, 26, 33

Connolly v. PBGC,

475 U.S. 211 (1986) .......................................... 6, 26

Great-W. Life & Annuity Ins. Co. v. Knudson,

534 U.S. 204 (2002) .............................................. 24

Greene v. Fisher,

565 U.S. 34 (2011) ................................................ 37

TABLE OF AUTHORITIES – continued

Page(s)

Jama v. ICE,

543 U.S. 335 (2005) .........................................19-20

Laborers Health & Welfare Tr. Fund For N. Cal.

v. Advanced Lightweight Concrete Co.,

484 U.S. 539 (1988) .......................................... 6, 26

LaRue v. DeWolff, Boberg & Assocs., Inc.,

552 U.S. 248 (2008) .............................................. 24

Lawrence ex rel. Lawrence v. Chater,

516 U.S. 163 (1996) .............................................. 37

Loper Bright Enterprises v. Raimondo,

603 U.S. 369 (2024) ............................... 1, 16-17, 22

M & K Emp. Sols., LLC v. Trs. of the IAM Nat’l

Pension Fund,

145 S. Ct. 2871 (2025) .......................... 4, 24, 26, 30

MCI Telecommunications Corp. v. AT&T Corp.,

512 U.S. 218 (1994) .........................................22-23

In re MCP No. 185,

124 F.4th 993 (6th Cir. 2025) .............................. 20

Mertens v. Hewitt Assocs.,

508 U.S. 248 (1993) .......................................... 5, 24

Milwaukee Brewery Workers’ Pension Plan v.

Joseph Schlitz Brewing Co.,

513 U.S. 414 (1995) ....................................... 6-7, 26

Nachman Corp. v. PBGC,

446 U.S. 359 (1980) .......................................... 5, 24

Nat’l Ret. Fund v. Metz Culinary Mgmt., Inc.,

946 F.3d 146 (2d Cir. 2020) ................................. 30

PBGC v. R.A. Gray & Co.,

467 U.S. 717 (1984) ....................................... 5-6, 26

Ragsdale v. Wolverine World Wide, Inc.,

535 U.S. 81 (2002) ................................................ 22

TABLE OF AUTHORITIES – continued

Page(s)

Rest. L. Ctr. v. U.S. Dep’t of Lab.,

120 F.4th 163 (5th Cir. 2024) .............................. 20

Sheppard v. Riverview Nursing Ctr., Inc.,

88 F.3d 1332 (4th Cir. 1996) ................................ 19

Solar Energy Indus. Ass’n v. FERC,

2025 WL 2599488 (D.C. Cir. Sept. 9, 2025) ........ 20

Stutson v. United States,

516 U.S. 163 (1996) .........................................36-37

Trustees of IAM Nat’l Pension Fund v. M & K

Emp. Sols., LLC,

92 F.4th 316 (D.C. Cir. 2024) .............................. 30

United States v. Gonzalez,

520 U.S. 1 (1997) .................................................. 34

Utility Air Regul. Grp. v. EPA,

573 U.S. 302 (2014) .............................................. 23

V.O.S. Selections, Inc. v. Trump,

149 F.4th 1312 (Fed. Cir. 2025)........................... 20

Yoo v. United States,

43 F.4th 64 (2d Cir. 2022) .................................... 19

Statutes

Deficit Reduction Act of 1984,

Pub. L. No. 98-369, 98 Stat. 494............................ 7

§ 558(b)(2), 98 Stat. 899.................................... 7

Multiemployer Pension Plan Amendments Act of

1980,

Pub. L. No. 96-364, 94 Stat. 1208.......................... 6

§ 4241(b)(9), 94 Stat. 1251................................ 7

Multiemployer Pension Reform Act of 2014,

Pub. L. No. 113-235, Division O, 128 Stat.

2773 ........................................................................ 7

TABLE OF AUTHORITIES – continued

Page(s)

Pension Protection Act of 2006,

Pub. L. No. 109-280, 120 Stat. 780........................ 7

American Rescue Plan Act of 2021,

Pub. L. No. 117-2, 135 Stat. 4................................ 8

§ 9704, 135 Stat. 190-99 ................................... 8

5 U.S.C.

§ 706(2)(A) ............................................................ 16

§ 706(2)(C) ............................................................ 16

28 U.S.C.

§ 158(d) ................................................................. 14

§ 1254(1) ................................................................. 4

29 U.S.C.

§ 1002(37)(A) .......................................................... 5

§ 1383(a) ............................................................... 12

§ 1391..................................................... 4, 16, 30-34

§ 1391(b) ........................................................... 7, 32

§ 1391(b)(2)(E)(i) .................................................. 30

§ 1391(b)(2)(E)(ii)(I) ......................................... 8, 33

§ 1391(c)(2) ....................................................... 7, 32

§ 1391(c)(3) ....................................................... 7, 32

§ 1391(c)(4) ....................................................... 7, 32

§ 1391(c)(5)(A) ......................................... 3, 7, 30-35

§ 1393(c).................i, 1-3, 7, 9, 13, 15, 19, 21, 23-25

§ 1393(c)(B)........................................................... 10

§ 1399(c)(1)(B) ...................................................... 36

§ 1399(c)(1)(C)(i) ............................................... 8, 35

§ 1399(c)(7) ................................................... 3, 8, 35

§ 1400(a) ....................................................... 3, 8, 35

§ 1401.................................................................... 29

§ 1432(f)-(j) ............................................................. 8

§ 1432(l) ............................. 1-3, 10, 13-15, 18-21, 24

xii

TABLE OF AUTHORITIES – continued

Page(s)

§ 1432(m)(1).......... i, 1-2, 8, 10, 13-15, 20-23, 25-26

Regulations

29 C.F.R.

§ 4211.1(a) .............................................................. 7

§ 4262.16(g)(2)(viii) .......................................... 9, 22

§ 4262.16(g)(2)(ix)-(xii) ......................................... 10

§ 4262.16(g)(2)(xiii) ........................................ 10, 22

§ 4262.16(g)(2)(xvi)............................................... 10

Special Financial Assistance by PBGC

87 Fed. Reg. 40968 (July 8, 2022) .............. 9-10, 18

Special Financial Assistance by PBGC—

Withdrawal Liability Condition Exception

88 Fed. Reg. 4900 (Jan. 26, 2023) ....................... 11

Other Authorities

Alternative, Merriam-Webster Online Dictionary .... 34

Asset, Barron’s Dictionary of Business and

Economics Terms (5th ed. 2012) ......................... 21

Asset, Black’s Law Dictionary (12th ed. 2024) ......... 21

Central States Pension Fund: Message from the

Board of Trustees ............................................28-29

H.R. 1319,

117th Cong. (as engrossed in House, March 3,

2021) ................................................................. 9, 28

Letter from Sen. Hawley to PBGC

(July 28, 2022) ................................................ 11, 28

PBGC, FY 2024 Annual Report (Nov. 2024) ............ 29

PBGC Approves SFA Application For UNITE

HERE Fund (Jan. 15, 2025) .................................. 8

xiii

TABLE OF AUTHORITIES – continued

Page(s)

Shapiro, et al., Supreme Court Practice

(11th ed. 2019)...................................................... 37

PETITION FOR WRIT OF CERTIORARI

This petition poses questions of exceptional importance concerning fundamental aspects of ERISA’s

meticulous statutory scheme. The questions involve

several circuit splits, one of which is already before

the Court. And at bottom, they are about (1) correcting agency overreach that defies Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024); and (2)

reaffirming that Congress’s clear statutory commands

control over freewheeling determinations regarding

how best to further a statute’s purpose.

Withdrawal liability is a charge imposed on employers exiting an underfunded multiemployer pension plan (MEPP) based on the plan’s unfunded vested

benefits, i.e., its underfunding. For decades, Congress

has prescribed a straightforward formula for calculating unfunded vested benefits: unfunded vested benefits equal vested benefits minus plan assets. See 29

U.S.C. § 1393(c). In the American Rescue Plan Act of

2021 (ARPA), Congress neither changed that formula

nor authorized the PBGC to change that formula. But

Congress did give billions of dollars in “special financial assistance” (SFA Funds) to certain struggling

MEPPs. ARPA provided that these SFA Funds “may”

be used by MEPPs to pay plan benefits and expenses.

29 U.S.C. § 1432(l). And ARPA gave the PBGC the

ability to impose “reasonable conditions” on these

MEPPs specifically relating to the allocation of plan

assets and withdrawal liability. Id. § 1432(m)(1).

Invoking that “reasonable conditions” authority,

the PBGC issued two regulations that fundamentally

change Section 1393(c)’s unfunded-vested-benefits

formula: the Phase-In Regulation and the No-

Receivables Regulation (collectively, the PBGC Regulations). These regulations prohibit MEPPs from

counting SFA Funds as plan assets when calculating

unfunded vested benefits. By reducing MEPPs’ plan

assets, the PBGC Regulations increase exiting employers’ withdrawal liability. This correspondingly

grants MEPPs a double recovery—as they are paid

both directly with SFA Funds and indirectly with inflated contributions from employers.

In the decision below, the Third Circuit upheld the

PBGC Regulations as “reasonable conditions” under

Section 1432(m)(1). That holding, however, elevated

the PBGC’s preference for how to use SFA Funds over

clear statutory text. When Congress said SFA Funds

“may” be used to pay plan benefits and expenses in

Section 1432(l), the PBGC transmogrified that to

mean the funds must go “only” to those purposes and

never for calculating corresponding withdrawal liability. By elevating the PBGC’s policy preferences over

what Congress actually said, the court erred.

The court also split from the Second Circuit’s decision in Board of Trustees of Bakery Drivers Local 550

& Industry Pension Fund v. PBGC, 136 F.4th 26 (2d

Cir. 2025), petition for cert. filed, 2025 WL 3681858

(U.S. Dec. 12, 2025) (No. 25-701). There, the Second

Circuit faced similar policy assertions from the PBGC

about which MEPPs should be eligible for SFA Funds

under ARPA. Unlike the Third Circuit, the Second

Circuit faithfully applied Loper Bright and refused to

displace clear statutory text in deference to agency

priorities. The Third Circuit should have done likewise. It should have held what this Court and many

others have held: “May” means “may,” not “shall.”

That error cascaded into others. Having prioritized the PBGC’s preference above statutory text, the

court then upheld the regulations because they furthered that preference. Never mind that the regulations jarringly amend Section 1393(c)’s unfundedvested-benefits formula. According to the Third Circuit, that general formula must yield to ARPA’s specific policy embodied in the court’s (mis)interpretation

of Section 1432(l).

The resulting perversity is stark. Take this case,

which arises from Petitioner Yellow’s bankruptcy.

Due to the PBGC Regulations, MEPPs that took SFA

Funds (SFA MEPPs) greatly inflated their withdrawal-liability claims against Yellow. These artificially inflated claims leave little money for Yellow’s

other creditors and stockholders. Among those disadvantaged are MEPPs that did not receive SFA Funds;

the PBGC, which has its own creditor claim; and the

U.S. Treasury, which is Yellow’s second largest equity

holder. As Senator Hawley stated when protesting

the PBGC Regulations, significant regulatory change

to the withdrawal-liability framework should be effectuated “in the halls of Congress, not pushed through

by administrative fiat.”

That is not all. The Third Circuit committed another certiorari-worthy error by allowing two SFA

MEPPs to deviate from the statutorily prescribed

method for calculating the unfunded vested benefits

allocable to Yellow and Yellow’s annual withdrawalliability payments. Such deviations require the

PBGC’s approval as an “alternative method” of calculation under 29 U.S.C. § 1391(c)(5)(A). See also id.

§§ 1399(c)(7), 1400(a). Yet the plans never obtained

such approval. That should have been dispositive.

But the Third Circuit instead disregarded Section

1391(c)(5)(A) in favor of its view of the statute’s purpose because doing so made “good sense.”

By invoking purpose-based vagaries while discounting statutory text, the Third Circuit’s decision

implicates a circuit split that this Court has already

agreed to resolve. See M & K Emp. Sols., LLC v. Trs.

of the IAM Nat’l Pension Fund, 145 S. Ct. 2871 (2025).

The issue in M & K, like here, is whether MEPPs must

follow Section 1391’s statutory prescription for how to

calculate withdrawal liability even when deviating

from that prescription may allegedly serve broader

purposes.

The Court should grant certiorari on both questions presented. At the very least, this Court should

hold this petition pending its resolution of M & K and

then grant, vacate, and remand (GVR) this case

should the outcome of M & K bear on the issues presented here or the decision below.

OPINIONS BELOW

The Third Circuit’s opinion affirming the bankruptcy court’s grant of summary judgment to Respondents (App.1a-25a) is reported at 152 F.4th 491.

The bankruptcy court’s opinion granting partial summary judgment to Respondents (App.29a-72a) is not

reported but is available at 2024 WL 4925124.

JURISDICTION

The judgment of the Third Circuit was entered on

September 16, 2025. Justice Alito extended the time

to file a petition until February 13, 2026. This Court

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

STATUTORY AND REGULATORY

PROVISIONS INVOLVED

The pertinent statutory and regulatory provisions

are reproduced in the appendix to this petition. See

App.90a-152a.

STATEMENT

A. Statutory Background

1. In 1974, Congress passed the Employee Retirement Income Security Act (ERISA), a “comprehensive

and reticulated statute” that was the product of extensive congressional study. Nachman Corp. v. PBGC,

446 U.S. 359, 361 (1980); see Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993) (“enormously complex

and detailed statute”).

As part of ERISA, Congress created the PBGC, a

federal corporation, to serve as a backstop by guaranteeing employees’ defined benefits if a pension plan

failed. PBGC v. R.A. Gray & Co., 467 U.S. 717, 720

(1984). The PBGC’s backstop covered both single employer pension plans and MEPPs. Id. As relevant

here, a MEPP is an employee benefit plan to which

multiple employers are required to contribute and

that is maintained by at least one collective bargaining agreement between multiple employers and one or

more labor unions. 29 U.S.C. § 1002(37)(A).

2. ERISA’s original scheme required employers to

shoulder some of the financial burden needed to rescue a failing MEPP, but only if they had contributed

to a plan in the five years preceding the plan’s termination. Concrete Pipe & Prods. of Cal., Inc. v. Constr.

Laborers Pension Tr. for S. Cal., 508 U.S. 602, 608

(1993). This incentivized employers to withdraw from

a “financially shaky” plan early and avoid the later

risk of “having to bear alone the entire cost of keeping

the shaky plan afloat.” Milwaukee Brewery Workers’

Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S.

414, 416-17 (1995).

Soon after enacting ERISA, Congress became concerned about the large number of MEPPs “experiencing extreme financial hardship.” R.A. Gray, 467 U.S.

at 721. Worried that an exodus of employers and subsequent plan terminations would “forc[e] the PBGC to

assume obligations in excess of its capacity,” id., Congress amended ERISA in the Multiemployer Pension

Plan Amendments Act of 1980 (MPPAA). Pub. L. No.

96-364, 94 Stat. 1208.

MPPAA requires withdrawing employers to pay a

“proportionate share” of a MEPP’s underfunded benefits. R.A. Gray, 467 U.S. at 725. This new withdrawal-liability charge “transformed what was only a

risk (that a withdrawing employer would have to pay

a fair share of underfunding) into a certainty.” Milwaukee Brewery Workers’ Pension Plan, 513 U.S. at

417. It also relieved other employers and the PBGC

from the burden of covering the underfunding attributable to the withdrawal. Connolly v. PBGC, 475

U.S. 211, 215-17 (1986).

3. MPPAA sets forth a “complex scheme” for calculating withdrawal liability. Bay Area Laundry &

Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of

Cal., 522 U.S. 192, 196 (1997); see Milwaukee Brewery

Workers’ Pension Plan, 513 U.S. at 417 (“detailed set

of rules”); Laborers Health & Welfare Tr. Fund For N.

Cal. v. Advanced Lightweight Concrete Co., 484 U.S.

539, 545 (1988) (“elaborate provision”). Three steps

bear emphasizing.

First, a plan calculates its “unfunded vested benefits”—i.e., its underfunding. A plan’s unfunded vested

benefits equal the “value of nonforfeitable benefits under the plan” (vested benefits that the plan owes to its

participants) minus the “value of the assets of the

plan.” 29 U.S.C. § 1393(c); see Concrete Pipe, 508 U.S.

at 610. Because MPPAA requires that withdrawing

employers pay their “fair share of a plan’s underfunding,” Milwaukee Brewery Workers’ Pension Plan, 513

U.S. at 417, a crucial question is how underfunded (if

at all) a given plan is.

Between its passage in 1980 and the present, Congress amended MPPAA several times. See, e.g., Multiemployer Pension Reform Act of 2014, Pub. L. No.

113-235, Division O, 128 Stat. 2773; Pension Protection Act of 2006, Pub. L. No. 109-280, 120 Stat. 780;

Deficit Reduction Act of 1984, Pub. L. No. 98-369,

sec. 558(b)(2), 98 Stat. 494, 899. Yet Congress never

modified MPPAA’s basic formula for calculating unfunded vested benefits. The same longstanding formula persists to this day: unfunded vested benefits

equal non-forfeitable benefits minus plan assets.

Compare 29 U.S.C. § 1393(c), with § 4241(b)(9), 94

Stat. at 1251.

Second, a share of those unfunded vested benefits

is allocated to the withdrawn employer through one of

four statutory methods, 29 U.S.C. § 1391(b), (c)(2),

(c)(3), (c)(4). Although plans can deviate from those

four methods, “any other alternative method[s]” are

permissible only “subject to the approval of the

[PBGC].” Id. § 1391(c)(5)(A); see also 29 C.F.R.

§ 4211.1(a) (2025) (same). Under the presumptive

method at issue, an employer’s share of unfunded

vested benefits is based on the contributions the employer was “required to [make] under the plan.” 29

U.S.C. § 1391(b)(2)(E)(ii)(I).

Third, once allocable unfunded vested benefits are

calculated, final adjustments are made. One of those

adjustments requires calculating an employer’s annual-payment schedule. That calculation requires using the actual contributions that “the employer had an

obligation to contribute under the plan.” 29 U.S.C.

§ 1399(c)(1)(C)(i). Changes to this calculation also require PBGC approval. Id. §§ 1399(c)(7), 1400(a).

B. The PBGC Regulations

1. In the mid-2010s, many MEPPs fell into a deep

financial hole. In response, Congress passed ARPA.

Pub. L. No. 117-2, 135 Stat. 4. Section 9704 of ARPA

provides SFA Funds to certain MEPPs that qualify as

“financially troubled.” 135 Stat. at 190-99. At present, the federal government has distributed about

$70.9 billion in SFA Funds to 109 plans with over 1.3

million participants. Press Release, PBGC, PBGC Approves SFA Application For UNITE HERE Fund (Jan.

15, 2025).1 Over half of that amount ($35.8 billion)

went to Respondent Central States, Southeast and

Southwest Areas Pension Fund (Central States).

App.11a.

2. ARPA tasked the PBGC with processing SFA

applications and distributing SFA Funds. 29 U.S.C.

§ 1432(f)-(j). Congress also authorized the PBGC to

https://perma.cc/E4R7-C5V2.

issue regulations imposing “reasonable conditions on

an eligible [MEPP] that receives special financial assistance.” Id. § 1432(m)(1). Reasonable conditions imposed under Section 1432(m)(1) could relate to a host

of relevant issues, including the “allocation of plan assets,” and “withdrawal liability.” Id.

Notably, one proposed version of ARPA would have

provided that, for 15 years after they were distributed,

SFA Funds could not be counted as plan assets when

calculating an employer’s withdrawal liability. H.R.

1319, 117th Cong. § 9704(b), at 578-79 (as engrossed

in House, March 3, 2021). But that provision never

received a vote in the Senate. The Senate parliamentarian ruled that it violated the Byrd rule, which prevents the Senate from considering matters extraneous

to the budget during the reconciliation process.

App.37a-38a.

3. In 2022, the PBGC published a final rule with

multiple regulations related to distributing and using

SFA Funds. Special Financial Assistance by PBGC,

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

Two of those regulations are at issue here. Both

amend Section 1393(c)’s formula for calculating unfunded vested benefits and thus fundamentally alter

Congress’s method for determining an employer’s

withdrawal liability.

First, the Phase-In Regulation provides that, when

determining a MEPP’s unfunded vested benefits, SFA

Funds do not immediately and fully count as plan assets. 29 C.F.R. § 4262.16(g)(2)(viii) (2025). That is, if

a MEPP received $100 million in SFA Funds, it cannot

simply add $100 million to the “assets of the plan” input of the unfunded-vested-benefits formula. See 29

U.S.C. § 1393(c)(B). Rather, the Phase-In Regulation

directs that SFA Funds be incrementally considered

in the unfunded-vested-benefits formula, starting

from the year when SFA Funds are first received. 29

C.F.R. § 4262.16(g)(2)(ix)-(xii). The rate of this increase is determined by the number of years it would

take a specific plan to exhaust its SFA Funds, as projected in its SFA Funds application. See id.; see also

id. § 4262.16(g)(2)(xvi) (providing examples).

Second, the No-Receivables Regulation provides

that SFA Funds do not count as plan assets during the

period between when the funds are awarded and

when they are paid. Id. § 4262.16(g)(2)(xiii). So if a

MEPP’s unfunded vested benefits were determined in

the middle of that period, SFA Funds would not impact the calculation, and an employer’s withdrawal liability would be higher than it statutorily should be.

The upshot of these two regulations is to prevent

SFA Funds from counting as plan assets (either in

part or in whole) in the unfunded-vested-benefits formula and thus the calculation of withdrawal liability.

The PBGC claimed authority to issue these regulations through Section 1432(m)(1) as “reasonable

conditions” on MEPPs relating to withdrawal liability.

87 Fed. Reg. at 40996-97. According to the PBGC, the

regulations were reasonable because they ensure that

SFA Funds are not “used to subsidize employer withdrawals rather than to make benefit payments and

pay plan expenses”—supposedly the exclusive and

“only” purpose of SFA Funds. Id. at 40993-94, 4099697, 41001 (emphasis added). The PBGC claimed that

this exclusive focus was reflected in 29 U.S.C.

§ 1432(l). 87 Fed. Reg. at 40994, 40996-97. But

Section 1432(l) in fact states that SFA Funds “may be

used by an eligible [MEPP] to make benefit payments

and pay plan expenses,” not that they must be used

“only” for those purposes. (emphasis added).

The PBGC also rejected Senator Hawley’s comment raising separation-of-powers concerns. The Senator warned that the PBGC was attempting to do

through administrative regulations what Congress

had not done legislatively. Letter from Sen. Hawley

to PBGC (July 28, 2022).2 As Senator Hawley warned,

massive regulatory changes like those imposed in the

PBGC Regulations that “will have sweeping impacts

on American businesses should be deliberated in the

halls of Congress, not pushed through by administrative fiat.” Id.

The PBGC rejected Senator Hawley’s warnings.

On its account, the PBGC Regulations were reasonable conditions that “reflect[] the authority Congress

delegated to the PBGC to oversee the SFA program

and ensure that SFA is preserved for the payment of

benefits and expenses.” Special Financial Assistance

by PBGC—Withdrawal Liability Condition Exception,

88 Fed. Reg. 4900, 4902 (Jan. 26, 2023).

Yellow And Its Reentry In NY/WPA

Teamsters

Yellow was one of the world’s largest trucking companies. It participated in many MEPPs. Two of those

were the Respondents New York State Teamsters

Conference Pension & Retirement Fund and the

Western Pennsylvania Teamsters and Employers

https://perma.cc/H99Q-MHMN.

Pension Fund (collectively, NY/WPA Teamsters). Yellow reentered these MEPPs in 2013.

In the reentry agreements, NY/WPA Teamsters allowed Yellow to pay reduced contribution rates.

App.12a.

Should Yellow withdraw, however,

NY/WPA Teamsters were permitted to calculate Yellow’s allocable unfunded vested benefits and annual

withdrawal-liability payment using contribution

rates that Yellow would have otherwise been required

to pay. App.12a. NY/WPA Teamsters never sought or

received PBGC approval to use the alternative scheme

that the reentry agreements adopt. App.23a.

D. Proceedings Below

1. In 2023, following a threatened strike by the

International Brotherhood of Teamsters, Yellow

ceased operations and filed for Chapter 11 bankruptcy. App.5a. Accordingly, Yellow was deemed to

have involuntarily withdrawn from all MEPPs. See

29 U.S.C. § 1383(a).

In the Chapter 11 proceedings, the SFA MEPPs

filed proofs of claim for withdrawal liability totaling

approximately $6.5 billion. App.11a. Those same

plans had previously received $41.1 billion in SFA

Funds, App.11a, leaving only small amounts of unfunded vested benefits. Had the PBGC Regulations

not altered the statutory formula for calculating unfunded vested benefits, those plans’ withdrawal-liability claims would have plummeted.

The biggest beneficiary of the PBGC Regulations

was Central States. Because Yellow involuntarily

withdrew in 2023, Central States calculated its unfunded vested benefits as of the end of its last full plan

year (2022). Its $35.8 billion in SFA Funds had been

awarded on December 5, 2022—before the 2022 plan

year ended—and paid out on January 12, 2023—just

after the 2022 plan year ended. App.11a. Because the

award and payment of funds sat on different sides of

the 2022 plan-year closing, the No-Receivables Regulation allowed Central States artificially to exclude almost $36 billion in SFA Funds from the unfundedvested-benefits calculation. App.11a.

As for NY/WPA Teamsters, their withdrawal-liability claims totaled over $1 billion. C.A. SA31, 42.

NY/WPA Teamsters used the presumptive method to

calculate Yellow’s allocable unfunded vested benefits,

which requires using the rates Yellow actually contributed. See supra pp. 7-8; see also C.A. SA39, 72.

Under their agreements with Yellow, however, they

used much higher contribution rates, not Yellow’s actual, lower contribution rates. App.22a-23a. They did

the same when calculating Yellow’s annual-payment

schedule. App.70a-71a.

2. Petitioner MFN, Yellow’s largest pre-petition

shareholder, joined with Yellow to object to the SFA

MEPPs’ withdrawal-liability claims. After summaryjudgment briefing, the bankruptcy court upheld the

PBGC Regulations and found NY/WPA Teamsters’

use of the higher contributions did not violate

MPPAA. App.44a-64a, 69a-72a.

The bankruptcy court recognized that the arguments against the PBGC Regulations were “particularly colorable,” but it ultimately rejected them.

App.73a. By analogizing to Congress’s power to attach conditions on federal funds under the Spending

Clause, the bankruptcy court held that the PBGC

Regulations were “reasonable conditions on” MEPPs

under 29 U.S.C. § 1432(m)(1). App.48a-49a, 74a-78a,

81a-85a. Faced with the tension between Section

1393(c)’s unfunded-vested-benefits formula and the

PBGC Regulations, the bankruptcy court also held

that 29 U.S.C. § 1432(l) prevented SFA Funds from

being used to reduce an employer’s withdrawal liability. App.51a-52a. Regarding NY/WPA Teamsters, the

court concluded that the plans could use the higher

contributions both when calculating Yellow’s allocable

unfunded vested benefits and its annual payments because Yellow had agreed “to treat [its] withdrawal liability claims in this manner.” App.69a-72a.

MFN and its subsidiary Petitioner Mobile Street

(which by then held nearly $200 million in general unsecured claims) moved for reconsideration. The bankruptcy court denied that motion.

App.79a-89a.

Recognizing the “public importance” and “very high”

stakes of this case, the bankruptcy court certified its

order for direct appeal under 28 U.S.C. § 158(d). C.A.

JA80. The Third Circuit granted permission.

3. The Third Circuit proceeded to affirm. The

court began by stating that Petitioners’ “strongest argument” was that ARPA “did not grant the PBGC the

regulatory authority to change the statutory formula

for [the] withdrawal-liability calculation.” App.14a15a. Yet it was ultimately “not convinced.” App.15a.

Agreeing with the PBGC and the bankruptcy court,

the Third Circuit interpreted Section 1432(l) as mandating that SFA Funds be used “only ‘to make benefit

payments and pay plan expenses,’” App.15a (quoting

29 U.S.C. § 1432(l)), even though the statute does not

use such exclusive language.

This interpretation of Section 1432(l) led the court

to uphold the PBGC Regulations as “reasonable conditions” on MEPPs related to the ‘“allocation of plan

assets’”—that is, the SFA Funds. App.15a (quoting 29

U.S.C. § 1432(m)(1)). The court recognized that, absent the regulations, SFA Funds would lower employers’ withdrawal liability because the funds would

naturally count as assets in Section 1393(c)’s unfunded-vested-benefits formula. App.15a. According

to the court, however, this would contravene the “statutorily mandated purpose” of Section 1432(l).

App.15a. It thus upheld the regulations because they

“fill[ed] this gap” between Section 1432(l)’s purpose

and how SFA Funds would be used absent the regulations. App.15a. The court brushed aside the acknowledged conflict between the PBGC Regulations and

Section 1393(c)’s unfunded-vested-benefits formula by

asserting that Section 1432(l)’s “specific policy” controls over Section 1393(c)’s general formula. App.16a.

The court then recognized as “forceful” the argument that the PBGC Regulations “are actually conditions on the employers, not the plans,” as Section

1432(m)(1) requires. App.20a. But the court nonetheless upheld the regulations as conditions directed at

the plans, and maintained, in any event, that employers had no “claim” to SFA Funds because the regulations merely preserved the “status quo.” App.20a-21a

(quotation omitted).

Separately, the court agreed with Petitioners that

the contractual provisions allowing NY/WPA Teamsters to use higher contributions than Yellow actually

contributed “seem[] to run headlong into the statutory

requirement that any other alternative method for determining an employer’s withdrawal liability must be

approved by the PBGC.” App.24a (quotation omitted).

But it then held that no approval was needed because

it “makes good sense” to allow employers to waive

withdrawal-liability limitations without such approval. App.25a. After all, the court reasoned,

MPPAA’s purpose is to “ensure the solvency of”

MEPPs. App.24a.

REASONS FOR GRANTING THE PETITION

The Court should grant certiorari because the

Third Circuit’s decision implicates multiple circuit

splits, including one already before this Court. The

decision below is also wrong—both in upholding the

PBGC Regulations and in allowing NY/WPA Teamsters to deviate from Section 1391’s requirements

without obtaining the PBGC’s approval. Both errors

raise issues of exceptional importance.

The Third Circuit’s PBGC-Regulations

Holding Warrants This Court’s Review

The

PBGC-Regulations

Holding

Creates And Deepens Several Circuit

Splits

In Loper Bright, this Court ended the practice of

reflexively deferring to agency interpretations of statutes, instead mandating that lower courts “exercise

their independent judgment.” 603 U.S. at 412. In exercising that judgment, lower courts must “interpret

statutes, no matter the context, based on the traditional tools of statutory construction, not individual

policy preferences.” Id. at 403. Agency regulations or

actions contravening plain statutory text must therefore be set aside as “not in accordance with law” and

in “excess of statutory … authority.” 5 U.S.C.

§ 706(2)(A), (C); see Loper Bright, 603 U.S. at 391.

The circuit courts have diverged over how to implement Loper Bright’s directives—particularly in interpreting ARPA.

Some have adhered to clear

statutory text notwithstanding the PBGC’s nebulous

concerns about statutory purpose and practical effects. Others, like the Third Circuit, have taken the

opposite approach.

1. The Second Circuit followed the former path in

Board of Trustees of Bakery Drivers Local 550 & Industry Pension Fund v. PBGC, 136 F.4th 26 (2d Cir.

2025), petition for cert. filed, 2025 WL 3681858 (U.S.

Dec. 12, 2025) (No. 25-701). There, a terminated

MEPP applied for SFA Funds. Id. at 27-28. The

PBGC rejected the MEPP’s application because the

MEPP had been terminated. Id. at 28. In defending

that denial, the PBGC asserted that “permitting terminated plans to apply for SFA funding would severely challenge PBGC’s ability to process the

applications of all eligible plans within the tight statutory deadlines.” Id. at 31 (quotation omitted).

The Second Circuit was unmoved by the PBGC’s

invocation of purpose and policy. Although the court

recognized the practical “difficulties” that allowing

terminated MEPPs to seek SFA Funds may cause the

PBGC, the court held that it “is Congress’s job to craft

policy and ours to interpret the words that codify it.”

Id. (quotation omitted). Because “the words that Congress chose to codify eligibility for SFA do not support

a per se exclusion of terminated plans,” the court

deemed the terminated plan eligible for SFA Funds.

Id. Simply put, the court began and ended with the

“text of the SFA statute,” id. at 29-31—just as Loper

Bright commands.

2. In contrast, by upholding the PBGC Regulations, the Third Circuit split from both the Second Circuit’s approach to ARPA in Bakery Drivers and this

Court’s decision in Loper Bright. It did so by elevating

an atextual purpose espoused by the PBGC over clear

statutory text.

In interpreting Section 1432(l), the Third Circuit

stated that Congress issued SFA Funds in ARPA “only

for recipient plans ‘to make benefit payments and pay

plan expenses.’”

App.15a (quoting 29 U.S.C.

§ 1432(l)). In the court’s view, this was ARPA’s “goal,”

“purpose,” and “specific policy.” App.15a-16a. This

echoes the PBGC’s long-held view regarding Section

1432(l) and ARPA’s purpose. See 87 Fed. Reg. at

40994, 40996-97, 41001.

But there is a problem: Neither the word “only”

nor any similar word appears in the determinative

sentence of Section 1432(l). Instead, Section 1432(l)

states that SFA Funds “may be used by an eligible

multiemployer plan to make benefit payments and

pay plan expenses.” (emphasis added). That language is permissive, not mandatory. Congress of

course knew how to use mandatory language. The

rest of Section 1432(l) provides that MEPPs “shall”

segregate SFA Funds from other plan assets and that

they “shall” invest SFA Funds in certain investment

instruments. (emphasis added). At bottom, the Third

Circuit dressed up the PBGC’s preferred view of

ARPA and transformed that into a statutory command, even though the text says something entirely

different. That approach diverges from the Second

Circuit’s refusal to read atextual limitations into

ARPA. See Bakery Drivers, 136 F.4th at 30-31.

Nor is that all. By interpreting Section 1432(l) as

it did, the Third Circuit created a separate split on the

meaning of “may,” which “customarily connotes discretion.” See Jama v. ICE, 543 U.S. 335, 346 (2005).

That “connotation is particularly apt where, as here,

‘may’ is used in contraposition to the word ‘shall’” in

nearby statutory language. Id. Multiple circuits have

faithfully applied this rule. See, e.g., Yoo v. United

States, 43 F.4th 64, 74 (2d Cir. 2022) (“The Supreme

Court has cautioned against ignoring contexts in

which Congress’s use of the permissive ‘may’ contrasts

with the legislators’ use of a mandatory ‘shall’ in the

very same section.” (quotation omitted)); Brasil v.

Sec’y, Dep’t of Homeland Sec., 28 F.4th 1189, 1193

(11th Cir. 2022) (similar); Sheppard v. Riverview

Nursing Ctr., Inc., 88 F.3d 1332, 1338 (4th Cir. 1996)

(similar). Contrary to those cases, however, the Third

Circuit concluded that “may” confers no discretion and

instead creates a “statutorily mandated purpose” to

use SFA Funds “only” to pay plan benefits and expenses. App.15a.

Worse still, the Third Circuit used its atextual and

purpose-driven interpretation of Section 1432(l) to

justify regulations that alter the statutorily prescribed formula for calculating unfunded vested benefits in Section 1393(c). Before the PBGC Regulations,

that formula set unfunded vested benefits equal to

vested benefits minus plan assets. Under the PBGC

Regulations, however, that formula now reads: unfunded vested benefits equal vested benefits minus

plan assets excluding billions of dollars in SFA Funds.

Even before Loper Bright, statutes could not be

amended via agency regulations. Statutes certainly

cannot be so amended after it.

But the Third Circuit seemed quite comfortable allowing the PBGC to amend Section 1393(c)’s formula.

On its account, that general formula must yield to

ARPA’s alleged “specific policy” in Section 1432(l) to

use SFA Funds “only” to pay plan benefits and expenses. App.16a (quotation omitted). Because the

PBGC Regulations purportedly advanced that “specific policy,” they were “reasonable conditions” related

to the “allocation of plan assets” under Section

1432(m)(1). App.15a-17a (quotation omitted).

Ultimately, by allowing the PBGC’s view of Section

1432(l)’s purpose to trump standard statutory construction, the Third Circuit gave short shrift to two

clear statutory provisions. This interpretive misstep

contravenes Loper Bright and splits from the Second

Circuit’s holding in Bakery Drivers.

3. The divergence between the Second and Third

Circuits in interpreting ARPA is part of a larger pattern. In interpreting other statutes after Loper

Bright, some courts, like the Second, Fifth, and Sixth

Circuits, have struck down or set aside agency actions

contravening the statutory text. See, e.g., Rest. L. Ctr.

v. U.S. Dep’t of Lab., 120 F.4th 163, 174 (5th Cir. 2024)

(striking down DOL rule as “inconsistent with the

FLSA’s text”); In re MCP No. 185, 124 F.4th 993, 1001

(6th Cir. 2025) (setting aside FCC order because the

agency “misread[]” statutory text); see also V.O.S. Selections, Inc. v. Trump, 149 F.4th 1312, 1318 (Fed. Cir.

2025) (setting aside Executive Orders imposing worldwide tariffs because the IEEPA conferred no such

powers), cert. granted, No. 25-250, 2025 WL 2601020

(U.S. Sept. 9, 2025). Others, like the Third, Ninth,

and D.C. Circuits, have upheld agency actions that

went beyond or contravened statutory text. See, e.g.,

China Unicom (Americas) Operations Ltd. v. FCC, 124

F.4th 1128 (9th Cir. 2024); id. at 1159 (Bea, J., dissenting) (noting how “the majority does not adhere to

the plain text of the Act”); Solar Energy Indus. Ass’n

v. FERC, 2025 WL 2599488 (D.C. Cir. Sept. 9, 2025);

id. at *11 (Walker, J., concurring in part and dissenting in part) (noting the majority’s construction “adds

an atextual limit that Congress didn’t adopt”).

The PBGC-Regulations

Wrong

Holding

The PBGC Regulations amend—by administrative

fiat—Section 1393(c)’s unfunded-vested-benefits formula. Nothing in ARPA authorizes this administrative overstep.

Contrary to the Third Circuit’s

conclusion, the PBGC Regulations are not “reasonable

conditions on” MEPPs related to the “allocation of

plan assets.” 29 U.S.C. § 1432(m)(1). Indeed, it is

never reasonable for an agency to defy Congress’s

clear statutory prescription.

1. Ever since MPPAA was enacted, the statute has

prescribed a simple formula for calculating unfunded

vested benefits: unfunded vested benefits equal

vested benefits minus plan assets.

29 U.S.C.

§ 1393(c).

And SFA Funds are plan assets by any plausible

understanding. The definition of “asset” is noncontroversial: “anything owned that has value” or “property

that can be used for payment of debts.” Asset, Barron’s Dictionary of Business and Economics Terms

(5th ed. 2012); see Asset, Black’s Law Dictionary (12th

ed. 2024) (“An item that is owned and has value.”).

That encompasses SFA Funds—billions of dollars sitting on SFA MEPPs’ balance sheets. Confirming the

point, Congress itself categorized SFA Funds as plan

assets in ARPA by providing that SFA Funds and

earnings thereon “shall be segregated from other plan

assets.” 29 U.S.C. § 1432(l) (emphasis added).

Despite all that, the PBGC Regulations allow SFA

MEPPs to apply a different formula to calculate unfunded vested benefits. The regulations do so by excluding SFA Funds from the definition of “plan assets”

at different points in time. The Phase-In Regulation

first requires that SFA MEPPs fully exclude SFA

Funds before adding them back into the unfundedvested-benefits calculation over time. 29 C.F.R.

§ 4262.16(g)(2)(viii). And the No-Receivables Regulation requires SFA MEPPs to fully exclude SFA Funds

that have been awarded—and are accordingly listed

on their balance sheets as receivables—but not yet actually paid. Id. § 4262.16(g)(2)(xiii). Because the

PBGC Regulations amend Congress’s formula, they

are not “reasonable conditions” under Section

1432(m)(1) as a matter of law.

That conclusion is straightforward. An agency

“may not exercise its authority in a manner that is inconsistent with the administrative structure that

Congress enacted into law.” Ragsdale v. Wolverine

World Wide, Inc., 535 U.S. 81, 91 (2002) (quotation

omitted); see Loper Bright, 603 U.S. at 392 (similar).

This Court has long so held.

For example, in MCI Telecommunications Corp. v.

AT&T Corp., 512 U.S. 218 (1994), this Court struck

down FCC regulations purporting to eliminate the

statutory command in Section 203 of the Communications Act that “[e]very common carrier ... shall ... file”

tariffs for certain carriers. Id. at 224 (quotation omitted). The FCC’s basis for doing so was a separate provision empowering it to “modify any requirement” in

Section 203. Id. (quotation omitted). This Court recognized that a regulation giving the agency some discretion to “modify” a statute does not grant the agency

license to enact a “fundamental revision of the statute.” Id. at 231. What the FCC had in mind “may well

[have been] a better regime,” but it is “not one that

Congress established.” Id. at 234.

Likewise, in Utility Air Regulatory Group v. EPA,

573 U.S. 302 (2014), the Court rejected the EPA’s efforts to “rewrite clear statutory terms to suit its own

sense of how the statute should operate.” Id. at 328.

There, the EPA changed the statutory threshold requirement for certain permitting from “100 or 250

tons per year of a relevant pollutant” to “100,000 tons

per year for greenhouse gases.” Id. at 325. The Court

held that the EPA had no authority to “replace [Congress’s] numbers with others of its own choosing.” Id.

at 326.

When amplified through Loper Bright, both MCI

and Utility Air provide an unmistakable blueprint for

addressing the PBGC’s claimed regulatory authority:

The agency’s authority to issue “reasonable conditions” related to the “allocation of plan assets” and

“withdrawal liability” under Section 1432(m)(1) does

not give the PBGC license to fundamentally amend

Section 1393(c)’s prescribed formula for calculating

unfunded vested benefits—a formula that Congress

has repeatedly declined to amend.

2. The Third Circuit thought differently. It allowed the PBGC—through the PBGC Regulations—to

override Section 1393(c)’s plain text. And it did so in

service of ARPA’s supposed purpose of ensuring that

SFA Funds are used “only … ‘to make benefit payments and pay plan expenses.’” App.15a (quoting 29

U.S.C. § 1432(l)). As explained, however, Section

1432(l) does not state that SFA Funds can be used

“only” to pay plan benefits and expenses. (Indeed, this

logic fails on its own terms, as the PBGC Regulations

permit SFA Funds to count as assets over time.) Rather, Section 1432(l) states that SFA Funds “received

under this section and any earnings thereon may be

used by an eligible multiemployer plan to make benefit payments and pay plan expenses.” 29 U.S.C.

§ 1432(l) (emphasis added). And ‘“may’ means ‘may.”’

Biden v. Texas, 597 U.S. 785, 807 (2022). It is permissive, not mandatory. See supra p. 19. By concluding

otherwise, the Third Circuit erred.

ERISA is “an enormously complex and detailed

statute.” Mertens, 508 U.S. at 262; see Nachman

Corp., 446 U.S. at 361; see also LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 258 (2008). In wading through such a complex scheme, courts should be

“especially reluctant to tamper” with express statutory prescription. Great-W. Life & Annuity Ins. Co. v.

Knudson, 534 U.S. 204, 209 (2002) (quotation omitted). This Court has thus consistently rejected attempts by courts or others to stray from ERISA’s clear

text. See, e.g., Advoc. Health Care Network v. Stapleton, 581 U.S. 468, 475-77 (2017); CIGNA Corp. v.

Amara, 563 U.S. 421, 435-36 (2011). And this Court

is set to potentially do so again in a pending case involving deviations from the plain text of the

withdrawal-liability provisions. M & K Emp. Sols.,

145 S. Ct. 2871.

The Third Circuit ignored this Court’s warnings.

Instead, it amended Section 1432(l)’s “may” to a

“shall” and then used that counter-textual gloss to justify the PBGC Regulations—regulations that amend

Section 1393(c)’s unfunded-vested-benefits formula.

App.14a-17a. The decision below should thus be reversed as the latest attempt to deviate from ERISA’s

plain text.

3. Beyond that fundamental error concerning Section 1393(c)’s formula, the Third Circuit further erred

by holding that the PBGC Regulations meet Section

1432(m)(1)’s requirement that the regulations be “conditions on” MEPPs. App.20a-21a. They are not; they

are conditions on employers. By excluding SFA Funds

from the unfunded-vested-benefits formula, the

PBGC Regulations directly modify participating employers’ statutory rights to have unfunded vested benefits (and thus withdrawal liability) calculated as

prescribed by Congress.

In rejecting this point, the Third Circuit did not defend the bankruptcy court’s strained analogy to Congress’s Spending Clause power. App.21a n.5; see

App.48a-49a, 74a-78a, 81a-85a. Instead, the Third

Circuit observed that MEPPs, not employers, calculate withdrawal liability. App.20a. But that is beside

the point. Changing the contours of the correct calculation does not alter the rights of MEPPs performing

it; it affects the rights of employers who are bound by

the calculation. Moreover, it would follow, at most,

that the PBGC Regulations are conditions on MEPPs

and employers. In that instance, the regulations still

stray beyond Section 1432(m)(1)’s limited authority.

Perhaps recognizing this problem, the Third Circuit claimed that the PBGC Regulations do not affect

employers at all because they merely maintain the

“status quo.” App.21a. On its account, before ARPA,

SFA Funds had no impact on employers’ withdrawal

liability; the PBGC Regulations ensure that remains

so. App.21a. But this misapprehends the relevant

status quo. Once Congress passed ARPA, the status

quo was that SFA Funds—indisputably plan assets—

would count as plan assets in the unfunded-vestedbenefits formula. Far from maintaining that state of

affairs, the PBGC Regulations upend it by arbitrarily

excluding SFA Funds from the unfunded-vested-benefits calculation—even in an instance, like this, where

Central States has received billions of dollars of federal funding to rectify the supposedly “unfunded” deficit. The PBGC has no power to drastically change the

statutorily prescribed treatment of employers under

the auspices of imposing “conditions on” MEPPs. 29

U.S.C. § 1432(m)(1).

The Validity Of The PBGC Regulations

Exceptionally

Important

And

Cleanly Presented

1. The proper calculation of withdrawal liability

carries profound consequences. Accordingly, this

Court has repeatedly taken cases raising issues about

calculating withdrawal liability, including this Term.

See, e.g., M & K Emp. Sols., 145 S. Ct. 2871; Bay Area

Laundry & Dry Cleaning, 522 U.S. 192; Milwaukee

Brewery Workers’ Pension Plan, 513 U.S. 414; Concrete Pipe, 508 U.S. 602; Laborers Health and Welfare,

484 U.S. 539; Connolly, 475 U.S. 211; R.A. Gray, 467

U.S. 717.

The PBGC Regulations strike at the core of that

vital, recurring, high-stakes calculation. By changing

the withdrawal-liability framework, the regulations

impose sweeping, massive economic impact on American businesses, American employees, and ultimately

the American government itself—as this case illustrates.

Yellow was one of the largest trucking companies

in the world and participated in multiple MEPPs. In

bankruptcy, the SFA MEPPs filed claims asserting

withdrawal liability stemming from Yellow’s involuntary withdrawal from the plans due to bankruptcy.

App.11a-12a. The biggest SFA MEPP, Central States,

had already been awarded $35.8 billion in SFA Funds

and had received them earlier in 2023. App.11a. Under the PBGC Regulations, those funds were excluded

from qualifying as plan assets in calculating Yellow’s

withdrawal liability. App.11a-12a. The result was to

artificially inflate the withdrawal liability relative to

the actual economic reality facing the SFA MEPPs—

which now have little (if any) unfunded vested benefits due to the SFA Funds.

This windfall is perverse and antithetical to how

ERISA and bankruptcy law are meant to work. Resources are scarce for Yellow and for all its stakeholders. Even though the SFA MEPPs took billions of

dollars in SFA Funds to shore up their books, the

PBGC Regulations enable those SFA MEPPs to cannibalize Yellow’s estate, leaving precious little for the

MEPPs that did not take U.S. taxpayer dollars, along

with hundreds of other creditors.

To make matters worse, the U.S. Treasury is the

second largest holder of equity in Yellow, owning approximately 30% of its stock. C.A. JA0868. By leveraging the PBGC Regulations to massively inflate their

claims, the SFA MEPPs will wipe out the U.S. Treasury’s otherwise valuable stake in Yellow. Likewise,

the PBGC itself has a nine-figure claim against Yellow, Bankr. Claim No. 19837, but it too will recover

much less because of the SFA MEPPs’ inflated claims.

The economic impacts are seismic. To the extent

they are rightful, they should be imposed by Congress,

not the PBGC. Yet Congress ventured and then abandoned a proposal to do exactly what the PBGC Regulations do. The House version of ARPA contained a

provision that would have excluded SFA Funds from

the calculation of unfunded vested benefits for 15

years. See H.R. 1319 § 9704(b), at 578-79 (Engrossed

in House, March 3, 2021). The Senate parliamentarian, however, struck that provision under the Byrd

rule. App.37a-38a. If Congress could not pass a

sweeping change to the calculation of withdrawal liability through ARPA, then the PBGC cannot—by

brute administrative force—harness ARPA to enact

that same change. As Senator Hawley explained

when urging the PBGC to “change course,” regulations like the PBGC Regulations with “sweeping impacts on American businesses should be deliberated

in the halls of Congress, not pushed through by administrative fiat.” Hawley, supra. The separation of

powers demands no less.

2. The PBGC Regulations’ impact and the Third

Circuit’s choice to uphold them is not limited to this

case.

Withdrawal liability is an important consideration

for employers when they decide whether to enter,

stay, or exit a MEPP. The PBGC Regulations impact

more than $70 billion in disbursed funds. See supra

p. 8. That affects a huge number of employers. Central States alone has approximately 1,000 contributing employers representing nearly 35,000 active

participants in a variety of industries. Central States

Pension Fund: Message from the Board of Trustees. 3

As of November 2024, there were over 1,300 MEPPs

with over 11 million participants. PBGC, FY 2024 Annual Report 39 (Nov. 2024).4 The PBGC Regulations

impact all those plans and participants.

3. This case is an ideal vehicle to decide whether

the PBGC Regulations are unlawful. There are no relevant disputes of fact, and, in any event, the unlawfulness of the PBGC Regulations is a purely legal

issue that depends on only a handful of statutory provisions. Nor does any arguable waiver or forfeiture

pose an obstacle to this Court’s review.

Additional percolation is unnecessary. The parties

have extensively briefed the issue (with over twenty

submissions before the Third Circuit and the bankruptcy court). And while this case arose from a claims

dispute in bankruptcy court, a typical disagreement

over withdrawal liability would be required to go

through a lengthy arbitration proceeding followed by

judicial review, see 29 U.S.C. § 1401, resulting in inordinate delay. This Court can and should take this

https://perma.cc/2LMN-H26R.

https://perma.cc/L6Z9-CY8F.

opportunity to vindicate Congress’s statutory text in

the face of contrary agency rulemaking.

II.

The Third Circuit’s Alternative-Method

Holding Warrants This Court’s Review

The Third Circuit separately nullified MPPAA’s

requirement that within the withdrawal-liability

framework, “any other alternative method” of calculating an employer’s allocable unfunded vested benefits needs the PBGC’s approval. See 29 U.S.C.

§ 1391(c)(5)(A). That holding implicates a circuit split

already before this Court. And the Court’s intervention is exceptionally important, as the Third Circuit’s

decision is not only incorrect but creates perverse incentives that Congress could not have intended.

The

Alternative-Method

Holding

Implicates A Circuit Conflict Before

This Court

1. In M & K, this Court is set to resolve a circuit

conflict between the Second and D.C. Circuits over

how to calculate withdrawal liability under Section

1391 by determining whether Section 1391’s text controls over general invocations of statutory purpose.

See 145 S. Ct. 2871.

In National Retirement Fund v. Metz Culinary

Management, Inc., 946 F.3d 146 (2d Cir. 2020), the

Second Circuit needed to decide which actuarial assumptions applied to calculate an employer’s withdrawal liability. Id. at 148-50. The court looked to

Section 1391 to supply the answer. And Section 1391

states that withdrawal liability must be computed “as

of the end of the plan year preceding the plan year in

which

the employer

withdraws,”

i.e.,

the

measurement date.

See, e.g., 29 U.S.C.

§ 1391(b)(2)(E)(i). The Second Circuit followed that

straightforward language: The actuarial assumptions

on the measurement date control. Metz, 946 F.3d at

152. Nothing in Section 1391 suggests that “the date

of withdrawal or sometime later” should apply. Id. at

148.

Yet in Trustees of IAM National Pension Fund v.

M & K Employee Solutions, LLC, 92 F.4th 316 (D.C.

Cir. 2024), cert. granted, 145 S. Ct. 2871 (2025), the

D.C. Circuit rejected that plain reading of Section

1391. The court concluded that plans need not “use

the [actuarial] assumptions and methods in effect on

the relevant measurement date when calculating

withdrawal liability.” Id. at 322 (quotation omitted).

Instead, the court held that “an actuary may base

their assumption[s] on information after the measurement date so long as those assumptions are ‘as of’ the

measurement date.” Id. (quotation omitted). To reach

that conclusion, the court relied on MPPAA’s general

purpose of “protect[ing plans] and their beneficiaries.”

Id. at 323. In other words, because the court thought

its atextual rule furthered MPPAA’s supposed purpose of helping plans over employers, it ignored Section 1391’s plain commands.

2. The Third Circuit’s alternative-method holding

concerns neighboring provisions of Section 1391 addressing the contribution used to calculate withdrawal liability. At bottom, the court committed the

same error as the D.C. Circuit in M & K: It elevated

its view of MPPAA’s general purpose over Section

1391’s plain text.

Initially, the Third Circuit agreed that the text of

Section 1391 “suggests withdrawal liability is calculated using an employer’s actual contribution rates for

a time period before the withdrawal.” App.23a (citing

29 U.S.C. § 1391). It also agreed that any deviation

from that actual contribution “run[s] headlong into

the statutory requirement that ‘any other alternative

methods for determining an employer’s’ withdrawal liability must be approved by the PBGC.” App.24a

(quoting 29 U.S.C. § 1391(c)(5)(A)).

Yet the Third Circuit nonetheless affirmed

NY/WPA Teamsters’ use of contributions that were

higher than Yellow’s actual contributions. App.22a25a. Despite the statutory text stating otherwise, it

held that “employers may waive limitations on their

withdrawal liability without approval as an alternative method.” App.25a (quotation omitted). MPPAA,

the court stated, “establishes a withdrawal liability

floor, rather than a withdrawal liability ceiling.”

App.23a (quotation omitted).

None of that is in any statutory text. MPPAA, as

the court admitted, requires the PBGC’s approval for

“any other alternative method,” not just those that decrease withdrawal liability. The court ignored that

plain text because the “flexibility” of its new rule made

“good sense” to its own sense of justice. App.25a. It is

hard to find a more purposive and policy-driven analysis. And like the D.C. Circuit in M & K, that analysis

conflicts with the Second Circuit’s application of Section 1391’s plain text.

The Alternative-Method Holding Is

Wrong

1. Section 1391 sets out four permissible methods

for a MEPP to calculate a withdrawing employer’s allocable unfunded vested benefits. See 29 U.S.C.

§ 1391(b), (c)(2), (c)(3), (c)(4). If a MEPP uses “any

other alternative method for determining an employer’s allocable share of unfunded vested benefits,”

then such a method is permissible only “subject to the

approval of the [PBGC].” Id. at § 1391(c)(5)(A).

NY/WPA Teamsters purported to use Section

1391(b)’s presumptive method. See supra p. 13. Under that method, NY/WPA Teamsters needed to calculate Yellow’s allocable unfunded vested benefits by

using the contributions that Yellow was “required to

[make] under the plan[s],” i.e., Yellow’s actual contributions in the relevant time period. 29 U.S.C.

§ 1391(b)(2)(E)(ii)(I); see Concrete Pipe, 508 U.S. at

610 (holding that under the presumptive method, “the

proportion of total employer contributions to the plan”

is used). NY/WPA Teamsters did not do that.

App.22a-23a. Under Yellow’s reentry agreements

with NY/WPA Teamsters, Yellow contributed to the

plans at reduced rates. App.22a. Yet the plans did

not use those lower rates—i.e., the rates Yellow actually paid—they used much higher rates. App.22a-23a.

Because these higher contribution rates deviated

from the presumptive method’s requirements,

NY/WPA Teamsters used an “alternative method”

that needed the PBGC’s approval under Section

1391(c)(5)(A). NY/WPA Teamsters never sought that

approval. App.23a. Using the higher rates thus violates Section 1391.

2. The Third Circuit rejected that straightforward

conclusion. It emphasized that the same contracts allowing lower rates also mandated higher rates if Yellow withdrew from the plans. App.22a-25a. It faulted

Yellow for offering “no good reason” why it should not

hold “Yellow to its end of the bargain.” App.25a. But

Yellow plainly pointed to a “good reason”: Section

1391(c)(5)(A)’s plain text. That NY/WPA Teamsters

did not comply with that provision by failing to seek

the PBGC’s approval is not Yellow’s fault, nor is it a

reason to concoct a new statutory scheme to hold Yellow to its bargain.

But the Third Circuit held otherwise. Even though

the court admitted the critical statutory premises—

that Section 1391 requires using the actual contribution rates and that using the higher rates here required the PBGC’s approval, see supra p. 32—it

nonetheless failed to invalidate NY/WPA Teamsters’

decision to use the higher rates. Instead, it invented

its own rule that “employers may waive limitations on

their withdrawal liability without approval as an alternative method.” App.25a (quotation omitted). It

did so because that made “good sense” under Yellow’s

contracts. App.25a.

That rule has no basis in the text of Section 1391.

See supra p. 32. And the two supposed textual reasons

that the court gave betray further disregard of statutory text.

First, the court asserted that changing the contribution rates was not “a completely different method,”

just an “accounting change.” App.24a. But the words

“completely different method” do not appear in Section 1391. Instead, Section 1391(c)(5)(A) requires

approval for “any other alternative method.” Something is “alternative” when it is “different from the

usual or conventional,” not completely different. See

Alternative, Merriam-Webster Online Dictionary.5

Likewise, “the word ‘any’ has an expansive meaning,

that is, ‘one or some indiscriminately of whatever

kind.’” Ali v. Fed. Bureau of Prisons, 552 U.S. 214,

219 (2008) (quoting United States v. Gonzalez, 520

U.S. 1, 5 (1997)). Using higher rates than Yellow’s actual contribution rates is not usual or conventional

under the presumptive method; it therefore qualifies

as “any other alternative method” under Section

1391(c)(5)(A).

Second, the court held that the PBGC’s approval

was unnecessary because (1) by statute, the PBGC

must approve methods that “would not significantly

increase the risk of loss to the plan,” and (2) agreements to increase withdrawal liability do not do so.

App.24a (quoting 29 U.S.C. § 1391(c)(5)(A)). But this

nullifies the statutory requirement to seek the

PBGC’s approval by assuming that the PBGC would

grant that approval. That cannot be right.6

https://perma.cc/UVS7-AYRG.

By affirming the bankruptcy court, the Third Circuit also

implicitly allowed NY/WPA Teamsters to use the higher contribution rates to calculate Yellow’s annual payments. That separately deviates from 29 U.S.C. § 1399(c)(1)(C)(i), which requires

using the actual contributions. NY/WPA Teamsters never

sought the PBGC’s approval for that deviation in violation of Sections 1399(c)(7) and 1400(a).

Whether MEPPs Can Adopt Alternative

Calculation Methods Without The

PBGC’s Approval Is An Exceptionally

Important Question That Is Cleanly

Presented

By transforming MPPAA into a withdrawal-liability floor that MEPPs can contract around, the Third

Circuit has opened the door to mischief that threatens

to throw off perverse, far-flung effects.

When it comes to withdrawal liability, employers

depend on the certainty that Congress’s precise, rigid

guardrails create. Among other things, it helps them

determine whether they should enter MEPPs. But if

plans can contract around those guardrails, as the

Third Circuit allowed, that certainty disappears. In

its place now lurk dangerous risks.

Under the court’s ruling, MEPPs can now adopt

rules increasing withdrawal liability and force employers to either accept such rules with their next collective-bargaining agreement or withdraw. In fact,

many collective bargaining agreements already have

standard language binding employers to any “contract” term that the MEPPs adopt. So MEPPs may

already be able to bind employers to rules that increase future withdrawal liability. See, e.g., Cent.

States v. Cent. Transp., Inc., 472 U.S. 559, 562 (1985)

(explaining that employer’s collective bargaining

agreement bound it to a MEPP’s trust agreement).

With the stroke of a pen, MEPPs can, for example,

eliminate the twenty-year cap on annual withdrawalliability payments, even though MPPAA prohibits

that. See 29 U.S.C. § 1399(c)(1)(B).

With such risk now possible, employers are better

served by withdrawing before such rules are adopted.

Indeed, the mere threat that plans could do such a

thing will irreparably harm the MEPP system. This

Court’s intervention is needed to restore certainty to

the withdrawal-liability framework. And for the same

reasons as was true for the PBGC Regulations, see supra pp. 29-30, this case presents the ideal vehicle to

do so.

III.

Alternatively, The Court Should Hold This

Petition For M & K And Then GVR

This Court “regularly hold[s] cases that involve the

same issue as a case on which certiorari has been

granted and plenary review is being conducted in order that (if appropriate) they may be ‘GVR’d’ when the

case is decided.” Stutson v. United States, 516 U.S.

163, 181 (1996) (Scalia, J., dissenting) (emphasis

omitted); see Shapiro, et al., Supreme Court Practice,

§ 6.31(E) (11th ed. 2019) (explaining that the Court

holds petitions “presenting questions that will be—or

might be—affected by its ruling” in another case). A

GVR is correspondingly proper when this Court’s recent decisions reveal “a reasonable probability that

the decision below rests upon a premise that the lower

court would reject if given the opportunity for further

consideration.” Greene v. Fisher, 565 U.S. 34, 41

(2011); Lawrence ex rel. Lawrence v. Chater, 516 U.S.

163, 167 (1996).

If the Court does not grant this petition outright,

it should at least hold it pending this Court’s M & K

decision. As explained, M & K is another case in

which this Court will address withdrawal liability and

how to calculate it.

Ultimately, the question

presented there and the two questions presented here

boil down to the same fundamental conflict: Whether

the text of provisions governing withdrawal liability

controls over assertions of policy and purpose. Should

this Court affirm text over purpose in M & K, then it

should GVR in this case to allow the Third Circuit to

re-assess withdrawal liability in light of the supremacy of the clear statutory language.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

GEORGE W. HICKS, JR.

KIRKLAND & ELLIS LLP

1301 Pennsylvania Ave., N.W.

Washington, DC 20004

(202) 389-5000

george.hicks@kirkland.com

PATRICK J. NASH, P.C.

SHIRLEY CHAN

KIRKLAND & ELLIS LLP

333 W. Wolf Point Plaza

Chicago, IL 60654

(312) 862-2000

DEREK L. SHAFFER

Counsel of Record

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

555 13th St. NW, Ste. 600

Washington, D.C. 20004

(202) 538-8000

derekshaffer@

quinnemanuel.com

ERIC WINSTON

BEN ROTH

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

Counsel for Petitioners-Debtors 865 S. Figueroa St., 10th Fl.

and Debtors in Possession

Los Angeles, CA 90017

(213) 443-3000

NICHOLAS J. CALUDA

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

700 Louisiana St., Ste. 3900

Houston, TX 77002

(713) 221-7000

SAM HEAVENRICH

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

295 5th Ave., 9th Fl.

New York, NY 10016

(212) 849-7000

Counsel for Petitioners MFN

Partners, LP and Mobile Street

Holdings, LLC

February 13, 2026

APPENDIX

APPENDIX TABLE OF CONTENTS

Page

APPENDIX A: Opinion, U.S. Court of Appeals

for the Third Circuit (September 16, 2025) ....

APPENDIX B: Order Relating to SFA MEPP

Litigation Motions for Summary Judgment

and Motions to Reconsider, U.S. Bankruptcy

Court for the District of Delaware (December

2, 2024) .............................................................

26a

APPENDIX C: Amended Memorandum Opinion

on Summary Judgment Motions re: Withdrawal Liability, U.S. Bankruptcy Court for

the District of Delaware (November 5, 2024) .

29a

APPENDIX D: Preliminary Observations, U.S.

Bankruptcy Court for the District of Delaware

(October 29, 2024) ............................................

73a

APPENDIX E: Memorandum Opinion re:

Motion for Reconsideration, U.S. Bankruptcy

Court for the District of Delaware (November

12, 2024) ...........................................................

79a

APPENDIX F: 29 U.S.C. § 1391 ........................

90a

APPENDIX G: 29 U.S.C. § 1393 ....................... 105a

APPENDIX H: 29 U.S.C. § 1432 ....................... 107a

APPENDIX I: 29 C.F.R. § 4262.16 .................... 118a

APPENDIX A

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

————

No. 25-1421

————

IN RE: YELLOW CORPORATION, et al.,

Debtors

MFN PARTNERS LP; MOBILE STREET

HOLDINGS LLC; YELLOW CORPORATION

Appellants

————

On Appeal from the United States Bankruptcy Court

for the District of Delaware

(Bankruptcy Court No. 23-11069)

Bankruptcy Judge: Honorable Craig T. Goldblatt

————

Argued June 25, 2025

Before: SHWARTZ, MONTGOMERY-REEVES, and

AMBRO, Circuit Judges

(Opinion filed: September 16, 2025)

————

Shirley Chan

Kirkland & Ellis

333 W Wolf Point Plaza

Chicago, IL 60654

George W. Hicks, Jr. [ARGUED]

Kirkland & Ellis

1301 Pennsylvania Avenue NW

Washington, DC 20004

Laura D. Jones

Peter J. Keane

Pachulski Stang Ziehl & Jones

919 N Market Street

P.O. Box 8705, 17th Floor

Wilmington, DE 19801

Counsel for Appellant Yellow Corporation

Nicholas J. Caluda

Quinn Emanual Urquhart & Sullivan

700 Louisiana Street

Suite 3900

Houston, TX 77002

L. Katherine Good

Maria Kotsiras

Potter Anderson & Corroon

1313 N Market Street

6th Floor

Wilmington, DE 19801

Derek Shaffer [ARGUED]

Quinn Emanuel Urquhart & Sullivan

1300 I Street NW

Suite 900

Washington, DC 20005

Eric D. Winston, Esq.

Quinn Emanuel Urquhart & Sullivan

865 S Figueroa Street

10th Floor

Los Angeles, CA 90017

Counsel for Appellants MFN Partners, LP

and Mobile Street Holdings, LLC

Samuel I. Levin

Edward J. Meehan [ARGUED]

Groom Law Group Chartered

1701 Pennsylvania Avenue NW

Suite 1200

Washington, DC 20006

William D. Sullivan

Sullivan Hazeltine Allinson

919 N Market Street

Suite 420

Wilmington, DE 19801

Counsel for Appellees New York State

Teamsters Conference and Retirement

Fund; Road Carriers Local 707 Pension

Fund; Management Labor Pension Fund

Local 1730; Mid Jersey Trucking Industry

and Teamsters Local 701 Pension and

Annuity Fund; Teamsters Local 617 Pension

Fund; Trucking Employees of North Jersey

Pension Fund; Freight Drivers and Helpers

557 Pension Fund; Teamsters Local

641Pension Fund

Brad R. Berliner [ARGUED]

Andrew J. Herink

Daniel E. Sullivan

Central States Funds Law Department

8647 W Higgins Road

8th Floor

Chicago, IL 60631

William A. Hazeltine

Sullivan Hazeltine Allinson

919 N Market Street

Suite 420

Wilmington, DE 19801

Counsel for Appellees Central States and

Southeast and Southwest Areas Pension

Fund

Emily J. Allender

John Ginsberg

Benjamin T. Kelly

Kartar Khalsa

Rebecca L. Stark

Stephanie Thomas

Andrew P. Walker [ARGUED]

Pension Benefit Guaranty Corporation

Office of Chief Counsel

445 12th Street SW

Washington, DC 20024

Counsel for Appellee Pension Benefit

Guaranty Corp.

————

OPINION OF THE COURT

————

AMBRO, Circuit Judge

Yellow Corporation, 1 once one of the nation’s

largest trucking companies, went out of business and

filed for bankruptcy in 2023. As part of that

winddown, it withdrew from several pension plans

that secured retirement benefits for Yellow’s union

workforce. In the bankruptcy, those plans came

looking for what they believed they were owed, filing

claims against the estate for Yellow’s withdrawal

liability—what it must pay to the plans for its early

exit. Of course, Yellow and the plans disagree on the

amount of that liability. And here we are.

Mine-run bankruptcy disputes are about money,

but this one is mostly about administrative law. In

the midst of the COVID-era economic downturn,

Congress granted billions in cash to struggling

pension plans through the American Rescue Plan Act

of 2021 (ARPA). But the money came with a catch—

Congress charged a federal agency, the Pension

Benefit Guaranty Corporation (PBGC), with the task

of promulgating regulations that would impose

“reasonable conditions” on how the pension plans

would account for and use that money.

We consider two of those regulations in this appeal.

Their upshot is this: The money Congress granted to

Throughout this opinion, unless the distinction is relevant,

we use “Yellow” to refer to Yellow Corporation, its 23 affiliated

debtor entities, and creditors MFN Partners and Mobile Street

Holdings, who filed the primary brief challenging the regulations, and whose arguments were joined in full by Yellow.

the plans does not fully count in calculating what

Yellow owes to the plans upon its untimely exit. A

bigger deficit to fill, a bigger bill to pay. In the

Bankruptcy Court, Yellow argued those regulations

flouted the statutory scheme that normally governs

withdrawal-liability calculations, impermissibly inflating the amount it owes the plans. After the Bankruptcy Court upheld the regulations, we granted a

petition for direct appeal of its order on these novel

issues. Now, we affirm that order.

I. BACKGROUND

Two storylines blend together in this appeal: ARPA

and the bankruptcy of Yellow. First, for some context

on our dispute, we go back to the enactment of the

Employee Retirement Income Security Act of 1974

(ERISA), 29 U.S.C. § 1001 et seq., the early days of

the PBGC, and the subsequent enactment of the

Multiemployer Pension Plan Amendments Act of

1980 (MPPAA), id. § 1381 et seq.

A. ERISA created the PBGC to insure

pension funds, and the MPPAA sets

out the withdrawal-liability framework underlying this appeal.

Congress enacted ERISA in 1974 to protect

retirees’ pension benefits. Among the main purposes

of this “comprehensive and reticulated statute was to

ensure that employees and their beneficiaries would

not be deprived of anticipated retirement benefits by

the termination of pension plans before sufficient

funds have been accumulated in the plans.” PBGC v.

R.A. Gray & Co., 467 U.S. 717, 720 (1984) (quotation

omitted).

To serve that purpose, Congress established the

PBGC. A federal agency and corporation, it operates

“a plan termination insurance program” that “collects

insurance premiums from covered pension plans

and provides benefits to participants in those plans

if their plan terminates with insufficient assets”

to cover what the participants are owed. Id. As

detailed below, Congress gave the PBGC wide regulatory authority to achieve this goal. It may issue

“regulations as may be necessary to carry out the

purposes” of ERISA. 29 U.S.C. § 1302(b)(3). As

relevant here, those purposes include “encourag[ing]

the continuation and maintenance of voluntary private pension plans” while “provid[ing] for the timely

and uninterrupted payment of pension benefits to

participants and beneficiaries.” Id. § 1302(a)(1)–(2).

The PBGC insures both single-employer and

multiemployer pension plans (MEPPs). R.A. Gray,

467 U.S. at 720. Here, our concern is just the latter:

employee benefit plans to which multiple employers

contribute through collective bargaining agreements

with labor unions. 29 U.S.C. § 1002(37)(A).

At first, ERISA and the PBGC created a kind of

moral hazard in MEPPs. When an employer

withdrew from a plan, the remaining employers in

the MEPP would be responsible for making up the

shortfall. Realizing this would increase their burden,

other employers would also withdraw, leading to a

run-on-the-bank-type spiral as more and more

employers withdrew. The financial burden then

would fall on the PBGC to fill the gap.

As a remedy, Congress enacted the MPPAA to

impose withdrawal liability on employers that left

MEPPs. If an employer chose to leave, then it—

rather than the employers remaining in the pension

plan and the PBGC—would be on the hook for the

departing employer’s portion of the shortfall. Peick v.

PBGC, 724 F.2d 1247, 1267–68 (7th Cir. 1983). By

expanding on the initial grant of authority under

ERISA, the MPPAA gave the PBGC additional

authority relating to withdrawal liability, including

the power to prescribe “actuarial assumptions” for

calculating that liability. 29 U.S.C. § 1393(a).

Under the MPPAA framework still operative today,

a withdrawing employer is responsible for its proportional share of a plan’s “unfunded vested benefits.”

29 U.S.C. § 1381(b)(1). The formula for calculating a

plan’s unfunded vested benefits is deceptively simple:

the value of the pension benefits vested (and thus

owed) minus “the value of the assets of the plan.” Id.

§ 1393(c). In other words, the unfunded vested

benefits are the difference between the plan’s vested

benefits and the plan’s assets. We say “deceptively”

simple because the definition of a plan “asset,” and

the ways statutes and regulations interact to form

that definition, are the core questions here.

There is a limit to this general “proportional share”

rule. Per the MPPAA, an employer’s total withdrawal

liability is amortized into “level annual payments”

that are roughly equal to the payments owed in the

recent years before the withdrawal. See 29 U.S.C. §

1399(c)(1)(A). But an employer’s liability is capped at

20 years’ worth of such payments—in effect, setting a

maximum amount of liability. See id. § 1399(c)(1)(B)

(“In any case in which the amortization period . . .

exceeds 20 years, the employer’s liability shall be

limited to the first 20 annual payments . . . .”). Still,

akin to the operation of an acceleration clause in a

standard loan agreement, those annual obligations

can be accelerated if the withdrawing employer

defaults on the payments. Id. § 1399(c)(5).

B. ARPA infused billions of dollars into

MEPPs and authorized the PBGC to

impose “reasonable conditions” on

MEPPs that received “special financial

assistance.”

The MPPAA helped, but did not heal, the financial

condition of MEPPs. Decades later, COVID made

things worse. To respond to the financial crises

caused by the pandemic, Congress enacted ARPA to

shore up the nation’s struggling pension system. See

generally ARPA, Pub. L. No. 117-2, § 9704, 135 Stat.

4, 190-99 (2021).

Through that law, Congress appropriated funds,

deemed “special financial assistance,” to support

MEPPs. The money would enable receiving plans to

pay full pension benefits through at least 2051. 29

U.S.C. § 1432(j)(1). To achieve this goal, Congress

instructed that the special financial assistance funds

could be used only “to make benefit payments and

pay plan expenses” and must be “segregated from

other plan assets.” Id. § 1432(l).

Congress delegated to the PBGC the authority

to solicit applications for these funds from MEPPs,

distribute the money, and issue regulations that placed “reasonable conditions on a[] . . . multiemployer

plan that receives special financial assistance,”

including conditions related to the “allocation of plan

assets” and “withdrawal liability.” Id. §§ 1432(a)(1),

(m)(1). At the same time, Congress listed several

specific areas that the PBGC could not regulate, like

plan personnel, plan governance, and the funding

of and accounting for plans in “critical” status. Id.

§§ 1432(m)(2), 1085(e)(8).

10a

After notice and comment, the PBGC promulgated

the two challenged regulations before us. 29 C.F.R.

§ 4262.16.

The Phase-In Regulation prohibits MEPPs from

fully counting special financial assistance funds as

plan assets all at once. MEPPs must instead phase in

those funds. Id. § 4262.16(g)(2)(viii). In this way, the

funds are added incrementally to the plan-assets

calculation, the rate determined by the number of

years it would take the MEPP to exhaust the special

assistance funds, as stated in the plan’s application.

Id. § 4262.16(g)(2)(ix)-(xii).

As a simple example, say a MEPP received $100

million in ARPA special financial assistance, and in

its application projected it would take five years to

exhaust the funds. The Phase-In Regulation requires

that in the first year only $20 million of those funds

are counted as plan assets. In the second year, $40

million would count, and so on. This regulation

affects withdrawal liability, as an employer that

withdrew later would calculate its liability against a

bigger base of plan assets, offsetting the amount

owed.

The

No-Receivables

Regulation

restricts

MEPPs from recognizing as an asset any awarded

special financial assistance before the funds are paid

to the plan. Id. § 4262.16(g)(2)(xiii). Like the PhaseIn Regulation, this regulation bears on withdrawal

liability, as an employer (like Yellow here) that

withdrew after the award of funds to a MEPP, but

before their actual receipt, would face withdrawal

liability that did not account for any special financial

assistance funds.

11a

The MEPPs involved in this appeal applied for

special financial assistance under ARPA between

2021 and 2022. Collectively, they were awarded $41.1

billion in special financial assistance.

C. Yellow went into bankruptcy, the

MEPPs filed proofs of claim, and we

granted a petition for direct appeal.

Unable to resolve a protracted labor dispute with

the Teamsters union, Yellow shut down in July 2023

and filed the underlying bankruptcy cases the next

month.

Eleven MEPPs are part of the dispute here. Those

eleven filed 174 proofs of claim in the bankruptcy

case, seeking a combined $6.5 billion in withdrawal

liability. For varied reasons all involving the

challenged regulations, the pension plans did not

include all the special financial assistance funding in

their determinations of Yellow’s withdrawal liability.

For example, Central States, the pension fund with

the largest proof of claim at issue, received its special

financial assistance funds in a lump-sum payment on

January 12, 2023. For its proof of claim, Central

States calculated withdrawal liability “as of the end

of the plan year preceding the plan year in which the

employer withdraws,” like the MPAA requires. 29

U.S.C. § 1391(b)(2)(E)(i). So liability was calculated

as of December 31, 2022, as Yellow withdrew upon its

2023 bankruptcy. Because Central States did not

receive its special financial assistance until January

2023, the No-Receivables Regulation barred the

inclusion of those funds—totaling $35.8 billion—as

“assets” in the calculation of withdrawal liability. 29

C.F.R. § 4262.16(g)(2)(xiii).

12a

The ten other MEPPs had received their special

financial assistance by the time they filed their proofs

of claims, so the Phase-In Regulation applied rather

than the No-Receivables Regulation. Yellow’s withdrawal liability, calculated accordingly, counted in

the balance only some of the special financial

assistance funds (those that had been “phased in”).

Separate from these regulatory questions, Yellow’s

withdrawal from the plans also raised a question

regarding how to calculate its withdrawal liability

under the statutory scheme. In relevant part, two

MEPPs—the New York Teamsters Fund and the

Western Pennsylvania Teamsters Fund—filed proofs

of claim in line with an agreement they made with

Yellow in 2013. That agreement allowed Yellow to

reenter those MEPPs (it had previously withdrawn)

and contribute to its employees’ benefits at 25% of its

usual rate, which meant diminished accruals for

those employees. But in that same contract, the plans

and Yellow agreed that if Yellow later faced withdrawal liability, it would do so at 100% of the usual

contribution rate. So those MEPPs filed proofs of

claim for withdrawal liability at the 100% rate.

After objections and motions, the parties crossmoved for summary judgment on these issues. Before

us now is the Bankruptcy Court’s Amended Memorandum Opinion and Order, which held in part:

• The Phase-In Regulation and No-Receivables

Regulations were valid exercises of the PBGC’s

statutory authority and were not otherwise

arbitrary and capricious; and

• Yellow can be held to its agreement to pay

withdrawal liability at 100% of the contribution

rate because the statutory formula for calc-

13a

ulating withdrawal liability sets a floor on an

exiting employer’s liability, not a ceiling.

In re Yellow Corp., No. 23-11069, 2024 WL 4925124,

at *7-18 (Bankr. D. Del. Nov. 5, 2024).

The Bankruptcy Court certified its order for direct

appeal, and we granted the petition to do so. Though

the novel issue of the regulations’ validity was the

basis for the certification, we take the entire order on

appeal, so we consider the statutory withdrawalcalculation issue as well. 28 U.S.C. § 158(d)(2).

II. JURISDICTION AND STANDARD OF

REVIEW

The Bankruptcy Court had core proceeding jurisdiction. 28 U.S.C. § 157(b)(2)(B). We have jurisdiction

over this direct appeal of the Bankruptcy Court’s

order under 28 U.S.C. § 158(d)(2)(A). 2

The appellants who make the main case against the PBGC

regulations, MFN Partners and Mobile Street Holdings, spend a

significant portion of their opening brief defending their standing

under the “persons aggrieved” doctrine, a prudential standing

requirement in bankruptcy appeals. Under that doctrine, parties

have appellate standing “only if they can show that ‘the order of

the bankruptcy court diminishes their property, increases their

burdens, or impairs their rights.’” In re Boy Scouts of Am., 35

F.4th 149, 157 (3d Cir. 2022) (quotation omitted). We need not

consider the doctrine’s applicability here, however, as Yellow,

which has standing unquestionably, joins in MFN’s and Mobile

Street’s challenge to the regulations. Thus, even if MFN and

Mobile Street lack standing to appeal, the issues raised in their

briefs would remain properly before us. See Dir., Off. of Workers’

Comp. Programs, U.S. Dep’t of Lab. v. Bethlehem Steel Corp.,

949 F.2d 185, 186 (5th Cir. 1991) (“Dollins, . . . pursuant to

FRAP 28(i) . . . , formally adopted the brief and argument of the

Director[, s]o the contentions . . . were clearly before us in the

form of arguments advanced, not only by the Director, but by

claimant Dollins as well.”).

14a

We review a bankruptcy court’s rulings on questions

of law de novo. In re FTX Trading Ltd., 91 F.4th 148,

152 (3d Cir. 2024).

III. ANALYSIS

Yellow argues that the regulations violate the

PBGC’s statutory authority and are arbitrary, capricious, or otherwise invalid. We first address those

challenges to the regulations before moving to the

withdrawal-liability calculation issue.

A. The Phase-In and

Regulations are valid.

No-Receivables

Yellow lobs a slew of challenges at the regulations.

As we explain, each fails.

1. The Phase-In and No-Receivables

Regulations are valid exercises of

the PBGC’s authority.

Courts must “independently interpret” statutes

granting authority to an agency to ensure the

agency’s actions are within “the boundaries of [its]

delegated authority.” Loper Bright Enters. v. Raimondo,

603 U.S. 369, 395 (2024) (citation modified). The

Loper Bright Court rejected the “fiction” that

statutory ambiguity is always a grant of authority to

an agency. Id. at 404. Even so, a “statute’s meaning

may well be that the agency is authorized to exercise

a degree of discretion.” Id. at 394. Thus, courts must

“independently identify and respect such delegations

of authority, police the outer statutory boundaries of

those delegations, and ensure that agencies exercise

their discretion” appropriately. Id. at 404.

In this context, Yellow’s strongest argument is

that ARPA did not grant the PBGC the regulatory

authority to change the statutory formula for with-

15a

drawal-liability calculation. In its view, the PBGC did

so by excluding the special financial assistance funds

from the assets considered in that calculation of

“unfunded vested benefits.” 29 U.S.C. § 1393(c).

We are not convinced. The Bankruptcy Court put it

well: “Congress has expressly granted the PBGC the

type of gap-filling authority that Loper Bright

described, both in ERISA as originally enacted in

1974 and again in the provisions of [ARPA] that are

directly at issue here.” In re Yellow Corp., 2024 WL

4925124, at *7. In fact, ARPA explicitly grants PBGC

the power to set conditions on the “allocation of plan

assets,” as it did with these regulations. 29 U.S.C.

§ 1432(m)(1).

Through ARPA, Congress issued the special financial assistance only for recipient plans “to make

benefit payments and pay plan expenses.” 29 U.S.C.

§ 1432(l). But if those funds were included as assets

under withdrawal-liability calculation, that would

necessarily mean that the funding would subsidize

the liability of employers that withdrew from the

plans. (And what savvy employer considering withdrawal would not use that opportunity to do so at a

withdrawal-liability discount?) If used this way—as

an unintentional withdrawal-liability subsidy—the

funds would clearly not be for either “benefit

payments” or “plan expenses.” Id. Congress, instead,

left it to the PBGC to fill that gap and effect the

statute’s goals. The agency did so by issuing the two

regulations to ensure that the funds are used for the

statutorily mandated purpose of being “allocat[ed]” in

ways that would comply with ARPA. 29 U.S.C.

§ 1432(m)(1).

This reading also squares with the Supreme

Court’s guidance on how to mesh later, specific

16a

statutes with earlier, broader ones. A key function of

the MPPAA was to prevent pension-plan collapse

when several employers withdrew. E.g., 29 U.S.C.

§ 1381 (establishing withdrawal liability for withdrawing employers). ARPA was meant to bolster

struggling plans, and Congress set specific uses for

the special financial assistance granted as part of

that legislation. In circumstances like this, when “the

scope of the earlier statute is broad but the

subsequent statutes more specifically address the

topic at hand,” the “specific policy embodied in a later

federal statute should control our construction of the

[earlier] statute, even though it ha[s] not been

expressly amended.” FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 143 (2000) (alterations

in original) (quoting in the second instance United

States v. Est. of Romani, 523 U.S. 517, 530–31

(1998)).

As did the Bankruptcy Court, we understand this

guidance to control our case. The statutory formula

for calculating a plan’s “unfunded vested benefits”—

from which withdrawal liability is derived—is broad.

Original to the MPPAA, it “governs the calculation of

withdrawal liability in general.” In re Yellow Corp.,

2024 WL 4925124, at *9 (emphasis in original). But

ARPA “embodied” the “specific policy,” Brown &

Williamson, 529 U.S. at 143, of granting special

assistance funds only “to make benefit payments and

pay plan expenses,” otherwise “segregat[ing]” those

funds “from other plan assets,” 29 U.S.C. § 1432(l).

We follow the principle of statutory construction

offered in Brown & Williamson and conclude that, for

calculating withdrawal liability, the more specific

17a

provisions of ARPA control

provisions of the MPPAA. 3

over

the

general

In this light, the two regulations are “reasonable

conditions” on the grant of funds to the plans, promulgated according to Congress’s grant of authority to

the PBGC in ARPA, 29 U.S.C. § 1432(m)(1).

2. The regulations are not arbitrary or

capricious.

As part of its scattershot challenge to the regulations, Yellow faults them as arbitrary or capricious. We disagree.

An agency action is “arbitrary or capricious if it is

not reasonable and reasonably explained.” Ohio v.

EPA, 603 U.S. 279, 292 (2024) (citation modified). We

thus examine whether the agency gave “a satisfactory explanation for its action including a rational

connection between the facts found and the choice

made.” Motor Vehicle Mfrs. Ass’n. of the U.S., Inc. v.

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43

(1983) (quotation omitted). We do not review these

policy-making decisions de novo, as courts are

We emphasize that we do not agree with Yellow’s argument

that ERISA’s plain language forbids the PBGC from promulgating

the regulations at issue. ERISA gave the PBGC the authority to

define “plans assets . . . by such regulations as” it “may prescribe.”

29 U.S.C. 1002(42); see also Loper Bright, 603 U.S. at 394

(explaining how Congress can “expressly delegate” that an agency

define a term). And the MPPAA likewise allowed the PBGC to

“prescribe by regulation actuarial assumptions” for calculating

unfunded vested benefits. 29 U.S.C. § 1393(a). Properly understood, then, ARPA’s express delegation to the PBGC of regulating

the “allocation of plan assets” and “withdrawal liability” relating

to special financial assistance funds follows the well-trod path

laid by ERISA and the MPPAA for delegating such power to the

PBGC.

18a

forbidden to “substitute their own judgment for that

of the agency.” FDA v. Wages & White Lion Invs., 145

S. Ct. 898, 917 (2025). We “simply ensure[] that the

agency has acted within a zone of reasonableness.”

FCC v. Prometheus Radio Project, 592 U.S. 414, 423

(2021).

As the Bankruptcy Court aptly explained, the

notice-and-comment process for the regulations was

comprehensive. “[I]ndustry stakeholders, including

employers, pension plans, actuarial firms, law firms,

individuals, and members of Congress” weighed in. In

re Yellow Corp., 2024 WL 4925124, at *13. There was

even a “listening tour.” Id. The main thrust of the

feedback was a concern “that if special financial

assistance were immediately recognized in the calculation of unfunded vested benefits[,] . . . employers

would withdraw from the pension plans—leaving

those who remain holding the bag.” Id. These concerns had weight, especially against the backdrop of

ERISA and MPPAA’s history—“avoiding a circumstance in which one employer’s withdrawal from a

troubled multiemployer plan would have a cascading

effect that would destroy the plan.” Id. The PBGC

issued these regulations to “balance the objectives”

set by Congress in the MPPAA and to fulfill ARPA’s

purpose of strengthening “struggling pension plans.”

Id.

Before us, Yellow does not challenge the breadth of

the PBGC’s reasoning or the scale of its efforts, but it

objects to the agency’s conclusions and their consequences.

In the main, it argues that the PBGC’s concern—

that an influx of funding to the plans would subsidize an employer-withdrawal death-spiral—was misplaced. But Yellow just as quickly concedes that the

19a

regulations serve “to discourage employers from

withdrawing from financially troubled MEPPs, which

might otherwise encourage additional withdrawals

and create a downward spiral.” MFN & Mobile Street

Opening Br. at 45 (quotation omitted). We agree with

the latter.

In other places, Yellow disputes certain industry

figures and estimates relied on by the PBGC, 4

but these industry figures are “predictive judgments

about the likely economic effects of a rule” that

courts, including this one, are “particularly loath to

second-guess.” Newspaper Ass’n of Am. v. Postal

Regul. Comm’n, 734 F.3d 1208, 1216 (D.C. Cir. 2013)

(quotation omitted). We are convinced that the administrative record reflects “reasonable” rulemaking,

“reasonably explained.” Ohio, 603 U.S. at 292.

Our “appropriate deference” is owed to “agency

decisionmaking,” not to Yellow’s efforts to convince us

it would have gone about the rulemaking another

way. Wages & White Lion, 145 S. Ct. at 917.

To succeed, Yellow must show that the PBGC’s

decision-making was so outside the “zone of reasonableness,” Prometheus Radio Project, 592 U.S. at 423,

that it flunks our “deferential” review of agency

Yellow misquotes the PBGC as warning of “a potential surge

of employer withdrawal” up to “35% of active members” of

MEPPs receiving special financial assistance. MFN and Mobile

Street Opening Br. at 46. The relevant portion of the quoted

interim final rule does mention “a potential surge of employer

withdrawal,” Special Financial Assistance by PBGC, 86 Fed.

Reg. 36598, 36619 (July 12, 2021) (to be codified at 29 C.F.R. pts.

4000, 4262). It also displays a single benchmark scenario

premised on a 35% withdrawal rate. Id. at 36617. But it does not

predict the “potential surge” will be “35% of active members.”

Because the Federal Register does not say this, we do not

consider Yellow’s arguments premised on the fiction that it does.

20a

policymaking, Loper Bright, 603 U.S. at 392. For the

reasons noted, Yellow has not made that showing.

3. Yellow’s other arguments fail as

well.

We briefly address Yellow’s other regulatory

arguments.

(a) The regulations are not conditions on

third parties. The PBGC’s regulations are

conditions on the plans, in line with Congress’s grant

of authority. Recall that the relevant regulation says

that a “plan that receives special financial assistance

must be administered in accordance with” the

regulations. 29 C.F.R. § 4262.16(a) (emphasis added).

The Phase-In and No-Receivables Regulations then

instruct the plan how to calculate withdrawal

liability in light of the special financial assistance

funding. This is a job for the MEPPs themselves: the

relevant statutes do “not call upon the [withdrawing]

employer to propose the amount of withdrawal

liability. Rather, it places the calculation burden

on the plan’s trustees.” Bay Area Laundry & Dry

Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal.,

522 U.S. 192, 197 (1997).

The most forceful part of Yellow’s argument is that

these regulations are actually conditions on the

employers, not the plan. It contends the regulations

“directly modify participating employers’ statutory

rights to have” their withdrawal liability “calculated

in the way Congress prescribed.” MFN & Mobile

Street Opening Br. at 22. But Yellow does not

identify the source of those “rights.”

In any event, this argument gets it backward.

Every clue from the regulatory and statutory text

points us to the conclusion that ARPA and the

21a

PBGC’s regulations are directed at the plans, not the

employers. As the PBGC said in its brief to us,

Yellow’s argument “rests on” the “unfounded

assumption” that Yellow has “a claim” to the special

financial assistance funds. PBGC Answering Br. at

21. It does not. Before ARPA was passed, Yellow was

“obligated to pay withdrawal liability to” the MEPPs.

Id. These regulations “merely preserve[] the status

quo and prevent[] [ARPA] funds from being redirected to participating employers by reducing their

withdrawal liability.” Id. 5

(b) The major questions doctrine does not

apply. The major questions doctrine stands for the

following general proposition: An agency cannot take

action that results in a “transformative expansion” of

its authority—especially over issues of “vast economic

and political significance”—without express permission from Congress. West Virginia v. EPA, 597 U.S.

697, 716, 724 (2022) (quotations omitted). In those

“extraordinary cases,” we might “hesitate before concluding that Congress meant to confer such authority.” Id. at 721 (internal quotation omitted).

This is not an extraordinary case. Congress created

the PBGC to set regulations on withdrawal liability,

made clear through ARPA it did not want special

financial assistance to be used to subsidize withdrawal liability, and charged the PBGC specifically

with the task to “impose, by regulation[,] . . .

reasonable conditions” related to “withdrawal

liability” on any “eligible multiemployer plan that

The Bankruptcy Court, as a backstop, reasoned that even if

these regulations did impose conditions on third parties—that

is, employers like Yellow—Congress had power under the

Spending Clause to do so. In re Yellow Corp., 2024 WL 4925124,

at *7–8. We need not address that rationale.

22a

receives special financial assistance.” 29 U.S.C.

§ 1432(m)(1). Far from a “transformative expansion,”

this is PBGC business as usual, transacted per “clear

congressional authorization.” West Virginia, 597 U.S.

at 723–24 (quotations omitted).

Yellow plays the doctrine as a get-out-of-regulation-free card, but we decline to accept that move.

B. We affirm the Bankruptcy Court’s

order on the withdrawal liability

calculation issue as to the New York

and Western Pennsylvania Teamsters

Funds.

The regulatory issues above were the basis for our

granting this direct appeal. But another withdrawalliability-calculation issue came to us through the

operation of the direct-certification statute, by which

we exercise jurisdiction over the entire Bankruptcy

Court order, not just those novel issues favoring

certification. 28 U.S.C. § 158(d)(2). The Bankruptcy

Court ruled that the MPPAA permitted two plans,

the New York Teamsters Fund and the Western

Pennsylvania Teamsters Fund, to enforce their contract with Yellow and demand withdrawal liability

at a contractually-bargained-for rate higher than

Yellow’s actual contributions. We agree.

As background, Yellow reentered the New York

Teamsters Fund and the Western Pennsylvania

Teamsters Fund in 2013. The reentry agreements

allowed Yellow to pay reduced contribution rates for

employees, as little as 25% of what would normally

be required, leading to diminished accruals for those

employees. If Yellow withdrew from the pension

plans, both agreements allowed the plans to calculate

the withdrawal liability at the full 100% of the

23a

contribution rate. Accordingly, the Funds submitted

proofs of claim in Yellow’s bankruptcy that calculated

its liability at the 100% contribution rate.6 The relevant statutory text suggests withdrawal liability is

calculated using an employer’s actual contribution

rates for a time period before the withdrawal. See 29

U.S.C. § 1391 (setting out four ways of calculating

liability, each of which incorporates this contributionrate math). Alternative calculation methods are permissible only when a plan obtains PBGC approval,

see id. § 1391(c)(5)(A); 29 C.F.R. § 4211.23(b), but the

New York and Western Pennsylvania funds did not.

Thus here, as in the Bankruptcy Court, Yellow

challenges the 100% contribution-rate calculation as

a violation of law. But the Bankruptcy Court agreed

with the plans that “they did not need PBGC

approval” to use the 100% contribution-rate calculation because Yellow “agreed to treat [its] withdrawal liability claims in this manner.” In re Yellow

Corp., 2024 WL 4925124, at *17 (emphasis in original). The Court reasoned that the MPPAA establishes “a withdrawal liability floor, rather than a

withdrawal liability ceiling.” Id. That is because “the

MPPAA establishes mandatory liability, overriding

contracts that allowed firms to withdraw with an

effective transfer of unfunded liability to the federal

We refer to the agreement as a contract because even an

ERISA plan “is nothing more than a contract.” Mirza v. Ins.

Adm’r of Am., Inc., 800 F.3d 129, 133 (3d Cir. 2015). But we note

that the contract issue here was Yellow’s agreement to reenter

the MEPP under the terms of a rehabilitation plan. See Central

States, Se. & Sw. Areas Pension Fund v. Event Media Inc., 135

F.4th 529, 531 (7th Cir. 2025) (explaining that the Pension

Protection Act of 2006 requires MEPPs to adopt rehabilitation

plans when critically underfunded to change benefit accruals

and contributions “that would enable the plan to recover”).

24a

Treasury. It does not forbid employers from agreeing

to pay extra money to a pension trust.” Id. (quoting

Artistic Carton Co. v. Paper Indus. Union-Mgmt.

Pension Fund, 971 F.2d 1346, 1353 (7th Cir. 1992)).

And, in any event, because “the purpose of the

MPPAA is to ensure the solvency of multiemployer

plans, . . . case law has interpreted the statute

liberally to protect plans’ solvency.” Cent. States, Se.

& Sw. Areas Pension Fund v. Laguna Dairy, S. De

R.L. De C.V., 132 F.4th 672, 678 (3d Cir. 2025).

True, at first glance the contractual provision here

seems to run headlong into the statutory requirement

that “any other alternative method for determining

an employer’s” withdrawal liability must be approved

by the PBGC. 29 U.S.C. § 1391(c)(5)(A). Yellow would

have us believe so. But we do not for two reasons.

First, Yellow never reckons sufficiently with the

fact that this approval is required not for every

accounting change, but just for those that are a

“completely different method” for a plan as a whole.

Peick, 724 F.2d at 1256. Here, the contract simply

made clear that the plan’s normal contribution rate

and calculation would apply upon Yellow’s withdrawal, so we struggle to see how any such change

requiring PBGC approval occurred. Second, by

statute, any PBGC approval must be “based on its

determination that adoption of the method by the

plan would not significantly increase the risk of loss

to plan participants and beneficiaries or to the

corporation.” 29 U.S.C. § 1391(c)(5)(A). Although its

understanding of the statute is not entitled to

deference, see Loper Bright, 603 U.S. at 396, we agree

with the PBGC that agreements mandating a method

whereby an employer agrees to pay more withdrawal

liability “pose[] no such risk.” PBGC Supp. Br. at 5

25a

(citing PBGC, Opinion Letter 89-8 (Oct. 19, 1989),

1989 WL 224526).

So, bottom line, “employers may waive limitations

on their withdrawal liability . . . without approval as

an alternative method.” Artistic Carton, 971 F.2d at

1354 (emphasis added) (citing PBGC Opinion Letter

89-8). This flexibility—which results only in employers making higher withdrawal-liability payments,

not lower ones—makes good sense. Consider it here:

Yellow’s contracted-for withdrawal contribution rate

was an exchange of (a) greater solvency for the plans

in the event of its withdrawal for (b) permission for

Yellow to contribute at a lower rate.

Yellow offers no good reason why we should not

enforce its own contract against it, instead pointing

us to an array of cases in which a plan imposed,

without consent, a higher contribution rate on a

withdrawing employer’s liability calculation. Yellow

Withdrawal Br. at 15–22 (collecting cases). That is

not the case here, where Yellow contracted for this

result. We know no convincing statutory case against

holding Yellow to its end of the bargain. Seeking to

reenter these pension plans, it bargained for a

discount on its contributions by offering to pay full

freight on its withdrawal liability if the time came. It

is here.

The PBGC’s Phase-In and No-Receivables Regulations were valid exercises of its delegated authority under ARPA, and Yellow must pay the higher

withdrawal liability contracted for with the New

York and Western Pennsylvania Teamsters Funds.

Therefore, we affirm.

26a

APPENDIX B

IN THE UNITED STATES BANKRUPTCY

COURT FOR THE DISTRICT OF DELAWARE

————

Chapter 11

Case No. 23-11069 (CTG)

(Jointly Administered)

————

In re:

YELLOW CORPORATION, et al., 1

————

Debtors.

ORDER RELATING TO SFA MEPP

LITIGATION MOTIONS FOR SUMMARY

JUDGMENT AND MOTIONS TO RECONSIDER

The Court has considered: (a) certain motions for

summary judgment filed by the Debtors, SFA

MEPPs, and PBGC (the “MSJs”) [Docket Nos. 3803,

3805, 3825, 3882] and responses and objections

thereto; and (b) certain motions to reconsider (the

“Motions to Reconsider”) [Docket Nos. 4461, 4462]

and responses and objections thereto; and the Court

having held a hearing on the MSJs on August 6,

2024, and having held a hearing on the Motions to

Reconsider on October 28, 2024; the Court having

issued rulings regarding the MSJs [Docket Nos. 4326,

A complete list of each of the Debtors in these chapter 11

cases may be obtained on the website of the Debtors’ claims and

noticing agent at https://dm.epiq11.com/YellowCorporation. The

location of the Debtors’ principal place of business and the

Debtors’ service address in these chapter 11 cases is: 11500

Outlook Street, Suite 400, Overland Park, Kansas 66211.

27a

4769] and Motions to Reconsider [Docket Nos. 4771,

4846]; and the district court having jurisdiction

under 28 U.S.C. § 1334, which was referred to

this Court under 28 U.S.C. § 157 pursuant to the

Amended Standing Order of Reference from the

United States District Court for the District of

Delaware, dated February 29, 2012; and this Court

having found that venue of this proceeding in this

district is proper pursuant to 28 U.S.C. §§ 1408 and

1409; and upon all of the proceedings had before the

Court; and after due deliberation and sufficient cause

appearing therefor;

IT IS HEREBY ORDERED THAT:

1. The Central States Pension Fund’s Motion for

Partial Summary Judgment [Docket No. 3803] is

granted, for the reasons set forth in the Amended

Memorandum Opinion [Docket No. 4769].

2. The Multiemployer Pension Plans’ Motion for

Partial Summary Judgment [Docket No. 3805] is

granted, for the reasons set forth in the Amended

Memorandum Opinion [Docket No. 4769].

3. The Debtors’ Motion for Partial Summary

Judgment on SFA MEPPS’ Withdrawal Liability

Claims [Docket No. 3825] is granted in part, for the

reasons set forth in the Amended Memorandum

Opinion [Docket No. 4769].

4. The Pension Benefit Guaranty Corporation’s

Motion for Partial Summary Judgment & Opposition

to Summary Judgment for Debtors [Docket No. 3882]

is granted in part, for the reasons set forth in the

Amended Memorandum Opinion [Docket No. 4769].

Specifically, the Court determined that the PBGC

Regulations at issue were in the scope of the agency’s

expressly delegated authority, were consistent with

28a

the applicable statutory text, and were not arbitrary

or capricious.

5. The Debtors’ Motion to Reconsider in Part the

September 13, 2024 Memorandum Opinion Finding a

Withdrawal Liability Default in Advance of a

Withdrawal Liability Payment Obligation [Docket

No. 4461] is granted, for the reasons set forth in the

Amended Memorandum Opinion [Docket No. 4769]

and Order Granting Motion for Reconsideration and

Posing Further Questions for the Parties to Consider

[Docket No. 4771].

6. The MFN Partners, LP and Mobile Street

Holdings, LLC Pursuant to 11 U.S.C. § 502(j) and

Federal Rules of Bankruptcy Procedure 3008 and

9023 Requesting Reconsideration of Court’s Entry of

Partial Summary Judgment in Favor of Pension

Plans and Joining Debtor Reconsideration Motion

[Docket No. 4462] is denied, for the reasons set forth

in the Memorandum Opinion [Docket No. 4846].

7. The terms and conditions of this Order shall be

immediately effective and enforceable upon its entry.

8. For avoidance of doubt, this Order does not

constitute a final order for purposes of 28 U.S.C.

§ 158(a)(1).

9. This Court shall retain jurisdiction with

respect to all matters arising from or related to the

interpretation, implementation, or enforcement of

this Order.

Dated: December 2nd, 2024

Wilmington, Delaware

/s/Craig T. Goldblatt______________________

CRAIG T. GOLDBLATT

UNITED STATES BANKRUPTCY JUDGE

29a

APPENDIX C

IN THE UNITED STATES BANKRUPTCY

COURT FOR THE DISTRICT OF DELAWARE

————

Chapter 11

Case No. 23-11069 (CTG)

(Jointly Administered)

Related Docket Nos. 3803, 3805, 3825, 3882

————

In re:

YELLOW CORPORATION, et al.,

Debtors.

————

AMENDED MEMORANDUM OPINION

As part of the American Rescue Plan Act of 2021,

Congress authorized the Pension Benefit Guaranty

Corporation to provide billions of dollars in “special

financial assistance” to financially troubled pension

plans. 1 Congress addressed the use of these federal

funds and specified that they may be used only to

“make benefit payments and pay plan expenses.” 2

The debtors assert without contradiction that the

eleven multiemployer pension plans that are parties

29 U.S.C. § 1432. The Pension Benefit Guaranty Corporation is referred to as the “PBGC.” In citing and referring to

provisions of ERISA, this Memorandum Opinion points to the

statutory provisions as codified in titles 26 and 29 of the United

States Code.

29 U.S.C. § 1432(l).

30a

to this claims-allowance dispute collectively received

more than $40 billion in special financial assistance. 3

The debtors, who once operated one of the nation’s

largest trucking companies, shut down their business

in the summer of 2023. As a result of shutting down,

the debtors withdrew from the various multiemployer

pension plans to which they had contributed. When

an employer withdraws from a multiemployer pension plan that has “unfunded vested benefits,” ERISA

makes the withdrawing employer liable to the plan

for that employer’s share of those unfunded vested

benefits. 4 The employer’s share of unfunded vested

benefits (with certain adjustments) is generally referred to as the employer’s “withdrawal liability.”

The principal question now before the Court is

whether federal funds awarded to the plans under

the American Rescue Plan Act should count as “plan

assets” for the purposes of calculating the plans’

“unfunded vested benefits” and thus for determining

(and potentially reducing or eliminating) the debtors’

withdrawal liability. The debtors contend that the

federal funds should count. The PBGC, however,

issued two regulations designed to ensure that a

plan’s receipt of special financial assistance would

not operate to let a withdrawing employer off the

hook for withdrawal liability it would have otherwise

owed. One regulation (referred to as the “No-Receivables Regulation”) provides that American Rescue

Plan Act funds that have been awarded but not yet

paid to the plan do not count as assets of the plan. 5

D.I. 3825 at 1.

29 U.S.C. § 1381(a). The Employee Retirement Income

Security Act is referred to as ERISA.

29 C.F.R. § 4262.16(g)(2)(xiii).

31a

The other regulation (referred to as the “Phase-In

Regulation”) provides that, for the purpose of calculating plan assets, the funds received under the

American Rescue Plan Act should be treated as if

they were received by the plans over time, even after

they are in fact paid to the plan in a lump sum. 6

In the present motions for partial summary judgment, the debtors argue that these two regulations

exceed the PBGC’s statutory authority and are

contrary to law. The Court rejects that argument.

The American Rescue Plan Act gave the PBGC

express authority to “impose, by regulation or other

guidance, reasonable conditions on an eligible multiemployer plan that receives special financial assistance relating to . . . withdrawal liability.” 7 In

addition, ERISA gives the PBGC general authority to

adopt “regulations as may be necessary to carry out

the purposes” of Title IV of ERISA, which includes

the provisions that relate to an employer’s withdrawal liability. 8 The Phase-In and No-Receivables

Regulations fall within these express grants of authority. The regulations implement Congress’s specific directive in the American Rescue Plan Act that

special financial assistance be used only to pay plan

benefits and costs. The regulations prevent such

funds from instead being used, in effect, to reduce

amounts that employers would otherwise be required

to pay upon withdrawal from a plan.

The debtors argue that the regulations cannot

properly be regarded as “reasonable conditions on

an eligible multiemployer plan that receives special

Id. § 4262.13(g)(viii).

29 U.S.C. § 1432(m).

Id. § 1302(b)(3); id. § 1393(a).

32a

financial assistance relating to . . . withdrawal

liability” because the conditions affect the withdrawal

liability of the employer, which is not the entity that

receives the federal funds. But in the analogous context of Congress’ power under the Spending Clause,

the Supreme Court has enforced similar provisions

that bind third parties, not just the party that agreed

to the terms when it accepted the federal funds. The

debtors also argue that the Phase-In Regulation is

contrary to a statutory provision that describes the

special financial assistance funds, once paid to a

plan, as an “asset.” The Court concludes, however,

that this passing use of the term “asset” cannot

prevail over the specific directive of the American

Rescue Plan Act that expressly prohibits the use of

special financial assistance for any purpose other

than paying benefits and plan expenses.

The debtors alternatively contend that the regulations are arbitrary and capricious. The administrative record, however, makes clear that the PBGC

considered the relevant factors and provided a

reasoned analysis in support of its regulatory

decision.

Finally, the debtors seek partial summary judgment on three discrete issues regarding the calculation of withdrawal liability. That liability is calculated is by determining (through a formula) a cap on

the withdrawing employer’s annual payment obligation. Under the statute, an employer’s withdrawal

liability will never exceed 20 times that annual payment, even if it would take 25 or 50 or 1,000 such

payments to repay the employer’s allocable share of

the fund’s unfunded vested benefits. A default, if one

occurred, would accelerate the payments that would

have otherwise been due over 20 years. It would not

33a

however, contrary to the arguments made by the

plans, remove the cap imposed on the employer’s

withdrawal liability, which limits that liability to no

more than 20 times the amount of the annual payments. The question of whether the debtors defaulted, however, is not properly resolved on the current

summary judgment record. The debtors are also

incorrect in arguing that there is anything in ERISA

that should relieve them of their contractual obligation to pay the New York Teamsters and the

Western Pennsylvania Teamsters more than they

might have otherwise owed in the absence of such

agreement.

Factual and Procedural Background

A. The

statutory

framework

and

regulatory

1. ERISA as amended by the Multiemployer Pension Plan Amendments Act

of 1980

Congress enacted ERISA to establish minimum

standards for pension plans in private industries.

The PBGC is a government agency, created under

ERISA, whose purpose is to ensure the stability of

the pension system, both for single-employer and

multiemployer pension plans. The PBGC is charged

by statute with the task of encouraging voluntary

private pension plans for the benefit of participants,

providing for the timely and uninterrupted payment

of benefits, and maintaining premiums (which are

paid to the pension plans) at the lowest level

consistent with carrying out these obligations. 9 The

PBGC also operates as an insurer for pension

29 U.S.C. § 1302(a)(1)-(3).

34a

benefits, guaranteeing a portion of the benefits if a

plan becomes insolvent. 10

Soon after the enactment of ERISA, Congress became concerned about multiemployer pension plans.

The structure of multiemployer pension plans created

incentives for employers to withdraw from financially

troubled plans. When an employer exits a financially

distressed plan, the remaining employers would bear

the costs of filling whatever funding shortfall the

plan faced, without the assistance of the departing

employer. This created a problem much like the paradigmatic run on a bank. Once an employer exited,

others (who did not want to be left shouldering the

departing employer’s share) would have an incentive

to do the same. And once those participants left,

whomever remained in the plan would have even

greater incentives to exit, leading to what a former

PBGC Executive Director described, in testimony

before Congress, as a “vicious downward spiral.” 11 As

the insurer of these plans, much of the cost of

withdrawal would fall upon the PBGC. 12

Congress enacted the Multiemployer Pension Plan

Amendments Act of 1980, as an amendment to

ERISA, to address these concerns. 13 The MPPAA

imposed liability on employers when they withdraw

29 U.S.C. §§ 1322, 1322(a), 1361.

See, e.g., Connolly v. PBGC, 475 U.S. 211, 216 (1986)

(quoting Pension Plan Termination Insurance Issues: Hearings

before the Subcommittee on Oversight of the House Committee

on Ways and Means, 95th Cong., 2nd Sess., 22 (1978)

(statement of Matthew M. Lind)).

29 U.S.C. § 1361.

See Connolly, 475 U.S. at 217. The Multiemployer Pension

Plan Amendments Act of 1980 is referred to as the “MPPAA.”

35a

from a multiemployer pension plan. If an employer

chose to leave, the departing employer, rather than

the employers remaining in the pension plan (and the

PBGC), would be on the hook for the departing

employer’s portion of the shortfall.14 This ensured that

employers would have incentives to stay in a plan

even if another employer were to leave.

The MPPAA sets forth a formula to calculate withdrawal liability, which is the withdrawing employer’s

portion of the pension plan’s shortfall, or “unfunded

vested benefits.” 15 Unfunded vested benefits are “the

value of nonforfeitable benefits under the plan” (or

liabilities of the plan) less “the value of the assets of

the plan.” 16

After an employer has withdrawn from a multiemployer plan, the pension plan calculates the liability and notifies the employer of the amount of

liability and the schedule for payments. 17 The statute

provides that the withdrawing employer’s proportional share of the plan’s unfunded vested benefits is

measured “as of the end of the plan year preceding

the plan year in which the employer withdraws,” and

is based upon the most recent 10 years of contributions. 18

This framework is subject to an exception. The

MPPAA requires that the proportional share be

Peick v. PBGC, 724 F.2d 1247, 1267-1268 (7th Cir. 1983).

29 U.S.C. § 1381(b)(1).

Id. § 1393(c).

Id. § 1399(b).

Id. § 1391(c)(4)(C). See also Milwaukee Brewery Workers’

Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414, 418

(1995); Central States, Se. & Sw. Areas Pension Fund v.

Safeway, Inc., 229 F.3d 605, 608 (7th Cir. 2000).

36a

amortized into level annual payments that are

roughly equal to the payments owed in recent years. 19

If the amortized payments require more than 20

years of payments, the employer’s liability is capped

at the first 20 annual payments. 20 But like a

standard acceleration provision in a loan agreement,

the employer’s obligations may be accelerated (with

the total amount becoming immediately due and

payable) if the employer defaults on its payment

obligations. 21

2. The American Rescue Plan Act

After the enactment of the MPPAA, multiemployer

pension plans continued to struggle financially,

leaving the retirements of many union workers

at risk. In the American Rescue Plan Act of 2021, a

sweeping legislative enactment that sought to respond to the financial crises caused by the pandemic,

Congress sought to shore up the nation’s faltering

pension system. The legislation included an appropriation of funds to support multiemployer pension

plans, in the form of “special financial assistance.”

Eligible pension plans could receive amounts to pay

participants’ full benefits through at least 2051. 22

These funds could only be used “to make benefit

29 U.S.C. § 1399(c)(1)(A) (“Except as provided in subparagraphs (B) . . . and in paragraph[] . . . (5), an employer shall

pay the amount determined . . . over the period of years

necessary to amortize the amount in level annual payments

. . ..”); Milwaukee Brewery Workers’ Pension Plan, 513 U.S. at

418.

29 U.S.C. § 1399(c)(1)(B) (“In any case in which the

amortization period . . . exceeds 20 years, the employer’s

liability shall be limited to the first 20 annual payments . . ..)

Id. § 1399(c)(5).

Id. § 1432(j)(1).

37a

payments and pay plan expenses” and must be

“segregated from other plan assets.” 23

Congress delegated authority to the PBGC to solicit

applications for these funds, distribute them, and

issue regulations that placed “reasonable conditions

[upon a] . . . multiemployer plan that receives special

financial assistance” including conditions “relat[ed]

to. . . withdrawal liability.” 24 In granting this authority, Congress also listed a number of specific areas

that the PBGC could not regulate. 25

This delegation added to the PBGC’s preexisting

sources of regulatory authority. Since ERISA was

first enacted in 1974, the PBGC has had the

authority to adopt “regulations as may be necessary

to carry out the purposes” of Title IV of ERISA. 26

When Congress adopted the MPPAA in 1980, it also

granted the PBGC other authority relating to withdrawal liability, including the authority to prescribe

“actuarial assumptions and methods” for determining

withdrawal liability.

As discussed above, the federal funds at issue here

were awarded pursuant to the American Rescue

Plan Act, which in relevant part authorized special

financial assistance for troubled multiemployer

pension plans. The American Rescue Plan Act was

passed as a budget reconciliation measure, which

under the Senate’s parliamentary rules meant that it

was not subject to a filibuster. The parliamentary

rules relating to budget reconciliation measures

Id. § 1432(l).

Id. §§ 1432(a)(1), 1432(m)(1).

Id. § 1432(m)(2).

29 U.S.C. § 1302(b)(3).

38a

(referred to as the “Byrd Rule”) also provide that the

legislation may only contain measures related to the

federal budget, and nothing “extraneous” thereto. 27

The House version of the American Rescue Plan Act

contained a provision that expressly provided that

funds received under the Act would not be taken into

account for the purposes of calculating withdrawal

liability, until 15 years after the funds are received. 28

The debtors contend, without contradiction from any

other party, that this provision was removed as

extraneous under the Byrd Rule. 29

As enacted, however, the American Rescue Plan

Act specified that special financial assistance may be

used only to “make benefit payments and pay plan

expenses” 30 and gave the PBGC authority to “impose,

by regulation or other guidance, reasonable conditions on an eligible multiemployer plan that receives special financial assistance relating to . . .

withdrawal liability.” 31 After notice and comment, the

PBGC promulgated the two regulations at issue here

(among other regulations). 32 The “Phase-In Regulation” directs plans to phase in the special financial

Congressional Research Service, “The Budget Reconciliation Process: The Senate’s ‘Byrd Rule’” at 5 (Sept. 28, 2022),

https://crsreports.congress.gov/product/pdf/RL/RL30862/20.

H.R. 1319 § 9704(l) (Engrossed in House, March 3, 2021).

D.I. 3852 at 8-9. Comments in the administrative record

are to the same effect. See, e.g., D.I. 3882-2 at 579 of 729.

29 U.S.C. § 1432(l).

Id. § 1432(m).

See generally, D.I. 3882-3 at 2 of 729 (listing a combined

111 public comments received in response to the SFA Interim

Final Rule and SFA Final Rule), and id. at 6-10 of 729 (listing

communications with stakeholders that pre-date the SFA

Interim Final Rule).

39a

assistance gradually, over a number of years, for

purposes of the calculation of withdrawal liability. 33

The “No-Receivables Regulation” restricts multiemployer plans from recognizing, as an asset, special

financial assistance that they have been awarded

before the funds are actually paid to the plan. 34

The pension plans that are parties to this

proceeding submitted applications to the PBGC for

special financial assistance between 2021 and 2022. 35

They were awarded, in aggregate, $41.1 billion in

financial assistance. 36 The PGBC made payments “as

soon as practicable.” The application for special

financial assistance submitted by Central States,

which is the pension fund with the largest proof of

claim at issue here, was approved by the PGBC on

December 5, 2022; Central States received those

funds as a lump sum on January 12, 2023. 37

See 29 C.F.R. § 4262.16(g)(ii) (“SFA assets excluded. The

value of the plan assets taken into account as of the end of each

determination year is the value of the assets that would

otherwise be taken into account in the absence of this provision

reduced by the amount described in paragraph (g)(2)(ix) of this

section. The value of plan assets determined under this

paragraph (g)(2)(viii) may not be less than zero.”)

See 29 C.F.R. § 4262.16(g)(2)(xiii) (“No receivable. Special

financial assistance assets must be excluded from the

determination of unfunded vested benefits until the date that

special financial assistance is paid to the plan under § 4262.12,

and no receivable shall be set up as of any earlier date in

anticipation of the plan receiving such payment.”) (emphasis in

original).

See D.I. 3825 at 11-12 n.8-18.

Id. at 12-14 n.19-37.

D.I. 1322 at 19.

40a

B. The bankruptcy

objections

case

and

claims

The debtors ceased business operations in July

2023 and filed these bankruptcy cases on August 6,

2023. 38 The 11 pension plans whose claims are now at

issue calculated the debtors’ annual payment or

prepared an annual payment schedule for the debtors

and filed 174 proofs of claim in the bankruptcy case,

seeking $6.5 billion in withdrawal liability. The

pension plans did not include special financial assistance funding in the determination of the debtors’

withdrawal liability. 39

Central States, the pension plan with the largest

proof of claim, calculated the debtors’ withdrawal

liability “as of the end of the plan year preceding the

plan year in which the employer withdraws,” or

December 31, 2022. Central States did not receive its

special financial assistance until January 2023. Since

PBGC regulation barred Central States from includeing the SFA as a “receivable,” Central States did not

include those funds as “assets” in its calculation of

withdrawal liability.

The ten other pension plans that received special

financial assistance also calculated debtors’ annual

payment or prepared an annual payment schedule for

debtors. These plans gave effect to the Phase-In

Regulation. In addition, these plans assert that the

debtors, by virtue of the bankruptcy, were in default

of their obligations. As a result, these plans contend

D.I. 1.

D.I. 3852-6 at 21 (Ciner Dep. Tr.); D.I. 3852-7 at 46, 147

Culp Dep. Tr.); D.I. 3852-8 ¶ 25 (Sekol Decl.); D.I. 3852-9 ¶ 25

(Regalbuto Decl.); D.I. 3852-10 ¶ 25 (Bullock Decl.); D.I. 3852-11

¶ 25 (Iannucci Decl.); D.I. 3852-12 ¶ 25 (Dennis Decl.).

41a

that the debtors’ withdrawal liability obligations

were accelerated. In calculating that accelerated

liability, these plans did not limit the withdrawal

liability they were seeking to 20 years of the annual

payments, but instead included the debtors’ entire

allocable share of the plans’ unfunded vested

benefits. 40

The debtors objected to all of the pension plans’

proofs of claim. The parties then submitted an agreed

scheduling order on the claims allowance issues,

anticipating a week-long trial to occur in the first

week of August 2024. 41 The pension plans then filed a

motion that was styled as a motion to compel

arbitration, but that the Court concluded was better

understood as a motion for stay relief to permit the

plans to initiate an arbitration. The Court denied the

motion. 42

Central States moved for partial summary judgment regarding the validity of the Phase-In and NoReceivables Regulations, arguing they are consistent

with the text of the American Rescue Plan Act and

ERISA. 43 The ten other pension plans that received

special financial assistance moved for summary

judgment regarding the validity of the PBGC’s

Phase-In Regulation. 44 The debtors moved for partial

summary judgment regarding the validity of the

PBGC regulations as well as on certain issues relat40

D.I. 3852 at 16-17.

D.I. 2195.

42 In re Yellow Corp., No. 23-11069, 2024 WL 1313308

(Bankr. D. Del. Mar. 27, 2024).

D.I. 3803.

D.I. 3805.

42a

ing to the calculation of withdrawal liability. 45 The

PBGC filed its own motion for summary judgment in

defense of its regulations. 46 The Unsecured Creditors’

Committee filed a statement that took no positions

regarding the validity of the PBGC regulations at

issue, but generally in support of the debtors on the

calculation issues. 47 An ad hoc group of equity holders

and an unsecured creditor joined the debtors’ motion

for partial summary judgment. 48 After full briefing on

each of the motions, the Court held oral argument on

August 6, 2024. 49 The Court issued its original

Memorandum Opinion on September 13, 2024.

Following the filing of the debtors’ motion for

D.I. 3825.

D.I. 3882.

D.I. 3998 at 3 (“The Committee submits, however, that to

the extent the Court determines that the Pension Funds have

allowed withdrawal liability claims, the Committee agrees with

the Debtors that the 20-Year Cap must be applied and that such

withdrawal liability claims should be discounted to net present

value. Because the appropriate discount rate appears to be a

factual dispute not suitable for summary judgment, the

Committee takes no position on the appropriate discount rate at

this time.”).

D.I. 4015; D.I. 4028.

D.I. 3803 (Central States’ motion for summary judgment),

D.I. 3805 (other pension funds’ motion for summary judgment),

D.I. 3917 (debtors’ opposition brief), D.I. 3918 (MFN’s opposition

brief), D.I. 4009 (other pension funds’ reply), D.I. 4010 (Central

States’ reply), D.I. 4009 (other pension funds’ reply); D.I. 3825

(debtors’ motion for summary judgment), D.I. 3950 (Central

States’ opposition brief), D.I. 3975 (other pension funds’

opposition brief), D.I. 4011 (debtors’ reply brief), D.I. 4012

(MFN’s reply); D.I. 3882 (PBGC’s motion for summary judgment), D.I. 3992 (debtors’ opposition brief), D.I. 3993 (MFN’s

opposition brief), D.I. 4034 (PBGC’s reply).

43a

reconsideration, the Court issues this Amended

Memorandum Opinion.

Jurisdiction

The district court has subject-matter jurisdiction

over this contested matter under 28 U.S.C. § 1334(b).

This case has been referred to this Court under 28

U.S.C. § 157(a) and the district court’s standing order

of February 29, 2012. The motions for partial summary judgment arise in connection with a claims

allowance dispute, which is a core bankruptcy

matter. 50

Analysis

This claims allowance dispute is a contested matter

whose procedures are governed by Bankruptcy Rule

9014, which incorporates Civil Rule 56. 51 Under Rule

56, summary judgment (in whole or in part) may be

entered if “the movant shows that there is no genuine

dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” 52 In opposing a motion for summary judgment, a party must

“set forth specific facts showing that there is a

genuine issue for trial.” 53

The parties agree that with respect to the matters

on which summary judgment is sought, there is no

genuine dispute of material fact. Rather, the differences between the parties are over questions of

law. The parties therefore sensibly agreed to present

these issues to the Court for resolution on cross28 U.S.C. § 157(b)(2)(B) (“Core proceedings include . . .

allowance or disallowance of claims against the estate”).

See Fed. R. Bankr. P. 9014(c).

Fed. R. Civ. P. 56(a).

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

44a

motions for partial summary judgment, in the hope

that, following the Court’s resolution of the disputed

legal questions, it may be relatively easy to resolve

the remaining questions with respect to claims

allowance (preserving, of course, all parties’ rights to

seek review of this Court’s resolution of the legal

issues presented).

I. The Phase-In and No-Receivables Regulations are valid.

The framework for considering Yellow’s challenge

to the PBGC regulations is set forth in the Supreme

Court’s recent decision in Loper Bright. 54 Overruling

Chevron, the Supreme Court in Loper Bright rejected

the “fiction” that every ambiguity in a statute is an

implicit delegation of authority to an agency charged

with administering the program. 55 The Supreme

Court instructed judges to resolve questions of

statutory interpretation independently. 56

At the same time, Loper Bright recognized that the

correct reading of a statute may well be that it

authorizes an agency to exercise discretion. 57 “For

example, some statutes expressly delegate to an

agency the authority to give meaning to a particular

statutory term. Others empower an agency to

prescribe rules to fill up the details of a statutory

scheme, or to regulate subject to the limits imposed

by a term or phrase that leaves agencies with

Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244

(2024).

Id. at 2268.

Id.

Id. at 2263.

45a

flexibility, such as ‘appropriate’ or ‘reasonable.’” 58 As

examples, the Supreme Court pointed to the language of the Fair Labor Standards Act and the Atomic

Energy Act that authorized administrative agencies

to issue regulations that define statutory terms, as

well as environmental statutes that authorized the

Environmental Protection Agency to regulate power

plants if “such regulation is appropriate and necessary.” 59 When “the best reading of a statute is that

it delegates discretionary authority to an agency, the

role of the reviewing court under the” Administrative

Procedure Act “is, as always, to independently

interpret the statute and effectuate the will of

Congress subject to constitutional limits.” 60 To “stay

out of discretionary policymaking left to the political

branches,” judges should “independently identify and

respect such delegations of authority, police the outer

statutory boundaries of those delegations, and ensure

that agencies exercise their discretion consistent with

the APA.” 61

Furthermore, Loper Bright reaffirmed that in

resolving statutory ambiguities, courts should give

“due respect” to the Executive Branch. 62 The Supreme Court explained that the “interpretations and

Id. at 2263 (citations, brackets, and internal quotations

omitted).

Id. n. 5 & 6.

Id. The Administrative Procedure Act is referred to as the

“APA.”

Id. at 2263. See also Mayfield v. Department of Labor, No.

23-50724, 2024 WL 4142760, at *4 (5th Cir. Sept. 11, 2024)

(“[h]ere, because there is an uncontroverted, explicit delegation

of authority, the question is whether the Rule is within the

outer boundaries of that delegation”).

Id. at 2257.

46a

opinions” of a government agency with “specialized

experience” could be a source “to which courts and

litigants [could] properly resort for guidance,” particularly when the agency’s view was well reasoned,

longstanding, and consistently held. 63

Congress has expressly granted the PBGC the type

of gap-filling authority that Loper Bright described,

both in ERISA as originally enacted in 1974 and

again in the provisions of the American Rescue Plan

Act that are directly at issue here. As originally

enacted, ERISA authorized the PBGC to adopt

“regulations as may be necessary to carry out the

purposes” of Title IV of ERISA, which is the chapter

of the statute addressed to the insurance of defined

benefit pension plans. 64 And in the provisions of the

American Rescue Plan Act that provided special

financial assistance for troubled multiemployer

pension plans, Congress authorized the PBGC to

“impose, by regulation or other guidance, reasonable

conditions on an eligible multiemployer plan that

receives special financial assistance relating to . . .

withdrawal liability.” 65

Accordingly, the questions for this Court are

whether the No-Receivables Regulation and the

Phase-In Regulation exceed the boundaries of these

express delegations of authority and, alternatively,

whether the regulations are arbitrary and capricious.

Id. at 2259 (citing Skidmore v. Swift & Co., 323 U.S. 134,

139-140 (1944) (brackets in original)).

29 U.S.C. § 1302(b)(3); see also, e.g., Doe v. United States,

372 F.3d 1347, 1357 (Fed. Cir. 2004) (explaining that a similar

grant of rulemaking authority – the authority to issue “regulations . . . necessary for the administration of this subchapter” –

allows an agency to issue substantive regulations).

29 U.S.C. 1432(m).

47a

For the reasons described below, the answer to each

of these questions is no.

A. The regulations are authorized by 29

U.S.C. §§ 1302(b)(3) and 1432(m).

As explained above, in both §§ 1302(b) and 1432(m)

of Title 29, Congress expressly granted the PBGC the

authority to fill statutory gaps through regulation.

The Phase-In and No-Receivables Regulations fall

within the boundaries of those delegations because

they implement the American Rescue Plan Act’s

directive that special financial assistance funds may

be used only to “make benefit payments and pay plan

expenses.” 66 If such funds instead were to eliminate

or reduce the payments a withdrawing employer

would have otherwise have been required to make,

those federal funds would, in effect, be used to

subsidize the withdrawing employer, even if indirectly. These regulations are therefore precisely the

kind of “gap-filling” regulation that Loper Bright

contemplated. Moreover, for the reasons set forth

below, the Phase-In and No-Receivables Regulations

are not contrary to other relevant statutory provisions.

1. The No-Receivables Regulation and

the

Phase-In

Regulation

are

properly regarded as conditions on

the plans’ receipt of the special

financial assistance.

The American Rescue Plan Act authorized the

PBGC to “impose, by regulation or other guidance,

reasonable conditions on an eligible multiemployer

plan that receives special financial assistance

29 U.S.C. § 1432(l).

48a

relating to . . . withdrawal liability.” 67 The debtors

contend that the Phase-In and No-Receivables

Regulations impermissibly impose conditions on

employers – who do not receive special assistance

funds and thus do not agree to the terms of such

grants – rather than conditions on the plans.

The Supreme Court, however, has rejected a

similar argument when addressing the scope of

Congress’s authority to attach conditions on federal

grants pursuant to the Constitution’s Spending

Clause. The Supreme Court has explained that

“Congress may attach conditions on the receipt of

federal funds.” 68 And, as particularly relevant here,

the Supreme Court has not limited such “conditions”

to those matters that can be accomplished by the

recipient’s agreement to comply. In Philpott v. Essex

County Welfare Board, for example, the Supreme

Court addressed a provision of the Social Security Act

that provided that “none of the moneys paid or

payable . . . under this subchapter shall be subject to

execution, levy, attachment, garnishment, or other

legal process.” 69 Although the social security benefits

were paid to an individual, the Supreme Court held

that the quoted condition prevented a state agency

(the Essex County Welfare Board) from garnishing

the payments to offset the individual’s debts to the

state agency. The Supreme Court so held even

though the Social Security Act was an exercise of

Congress’s Spending Power 70 and the Essex County

29 U.S.C. § 1432(m).

South Dakota v. Dole, 483 U.S. 203, 206 (1987).

42 U.S.C. § 407.

See Charles C. Steward Mach. Co. v. Davis, 301 U.S. 548,

588-589 (1937).

49a

Welfare Board was not the recipient of the Social

Security Act funds and therefore did not agree to be

bound to its conditions.

The same reasoning applies here. Despite the

superficial appeal of the debtors’ argument that the

No-Receivables Regulation and the Phase-In Regulation essentially impose additional obligations on

withdrawing employers and operate only to the

benefit of the plans, under the precedent described

above (which dealt with an analogous situation), the

regulations may fairly be described as conditions on

the plans, and thus comport with § 1432(m). 71

In post-hearing submissions, the plans point to the decision

in Zinman v. FDIC, 567 F. Supp. 243 (E.D. Pa. 1983), as support

for the proposition that a condition imposed on one party can

affect others who did not agree to the condition. In Zinman, a

bank received financial assistance from the FDIC on the

condition that it issue warrants in favor of the FDIC. A

preexisting shareholder of the bank’s objected to the issuance of

the warrants on the ground they would dilute the shareholder’s

ownership interest. The court rejected that contention. Reliance

on Zinman misses the heart of the debtors’ argument. The

argument is not that a condition imposed on one party cannot

have incidental effects on other parties. It is instead that one

cannot achieve, through the imposition of a condition on a party,

anything that cannot be accomplished on account of that party’s

agreement to the condition. In Zinman, there was no suggestion

that the bank lacked the authority to issue warrants in favor of

the FDIC. The dilutive effect on its prior shareholders was

simply incidental to the bank’s decision to agree to the FDIC’s

condition. Philpott, however, is different (and more like the

PBGC regulations at issue here) in that the individual’s receipt

of social security funds operated to bar the exercise of the

collection remedies of Essex County Welfare Board, which (like

the debtors here) never agreed to the conditions at issue.

50a

2. In light of the specific statutory

directive that special financial

assistance be used only to pay

benefits and plan administrative

costs, the regulations do not run

afoul of any other applicable statutory command.

Section 1432(m) expressly limits the PBGC’s

authority to the adoption of “reasonable” conditions.

The debtors contend that even if the Phase-In and

No-Receivables Regulations are properly described as

conditions on the plans, they are contrary to another

statutory requirement and are therefore not “reasonable.” Specifically, the debtors argue that a general

ERISA provision that predates the American Rescue

Plan Act, 29 U.S.C. § 1393(c), defines the term

“unfunded vested benefits” to mean the value of the

“nonforfeitable benefits” minus “the value of the

assets of the plan.” The debtors argue that the term

“asset” has an ordinary meaning that includes

anything of value. Because the plan’s right to receive

special financial assistance once it is awarded by the

PBGC is something of value, the debtors argue that

the No-Receivables Regulation and the Phase-In

Regulation are not “reasonable” within the meaning

of Section 1432(m), which is the later-enacted provision of the American Rescue Plan Act. The Court

addresses each regulation separately and rejects the

debtors’ argument with respect to both regulations.

The Phase-In Regulation. The Phase-In Regulation

provides that the special financial assistance funds

that the plans received should not be treated as plan

assets immediately after they are paid to the plans.

Rather, those funds should be “phased in” over a 15year period.

51a

In challenging this regulation, the debtors point to

§ 1432(l), which provides that the special financial

assistance funding must be segregated from “other

plan assets.” They argue that this provision implies

that the special financial assistance funding is a plan

asset and must be included in the calculation of

withdrawal liability. In response, the PBGC does not

dispute that special financial assistance, once it has

been paid to a plan (as opposed to when it is just a

receivable), is an asset. The question is whether the

manner in which the Phase-In Regulation treats that

asset, for the purpose of calculating withdrawal

liability, is consistent with the text of ERISA.

To that end, it must be borne in mind that

statutory construction is a holistic exercise that

cannot begin and end with a single snippet of

statutory text. 72 In measuring the Phase-In Regulation against ERISA as a whole, the Court must

take account of the statutory requirement that

special financial assistance be used only “to make

benefit payments and pay plan expenses.” 73 In light

of the magnitude of the special financial assistance

provided and the statutory formula for how withdrawal liability is determined, it would necessarily be

the case that the mechanical application of ERISA’s

§ 1393(c) formula would mean that the special financial assistance funding would go toward reducing

the withdrawal liability employers would be required

to pay to plans in the absence of the cash infusion.

That result, however, could not be squared with the

specific restriction on the use of the funds imposed by

§ 1432(l).

See, e.g., In re Hertz Corp., No. 23-1169, 2024 WL 4132132,

at *14 (3d Cir. Sept. 10, 2024).

29 U.S.C. § 1432(l).

52a

The Supreme Court observed in Brown & Williamson that the “classic judicial task of reconciling many

laws enacted over time, and getting them to make

sense in combination, necessarily assumes that the

implications of a statute may be altered by the

implications of a later statute.” 74 The Supreme Court

noted that this “is particularly so where the scope

of the earlier statute is broad but the subsequent

statutes more specifically address the topic at

hand.” 75 In such a case, “a specific policy embodied in

a later federal statute should control our construction

of the earlier statute, even though it has not been

expressly amended.” 76

That account describes this case. The statutory

language regarding the computation of withdrawal

liability in § 1393(c) dates to the original adoption of

the MPPAA in 1980 and governs the calculation of

withdrawal liability in general. The PBGC was then

presented with a more specific question in 2021 when

Congress enacted the American Rescue Plan Act and

added the restriction set forth in § 1432(l). As in

Brown & Williamson, the specific policy embodied in

the subsequent legislation – here, to ensure that the

special financial assistance be used only to pay

benefits and plan expenses, not to reduce an employer’s withdrawal liability – conflicted with the

literal application of § 1393(c). Under these circumstances, the later and more specific enactment controls. When read in light of that established principle

Food and Drug Admin. v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 143 (2000) (internal quotation and citation

omitted).

Id.

Id. (internal quotation, citation, and brackets omitted).

53a

of statutory construction, the Phase-In Regulation

poses no conflict with ERISA as a whole.

The Court does not rely on an alternative rationale

the PBGC and the plans have offered for upholding

the Phase-In Regulation. They suggest that the

Phase-In Regulation is analogous to a Department of

Treasury Regulation that relates to minimum funding standards. Section 431(c)(2)(A) of Title 26 requires a plan to value its assets, for the purpose of

determining the minimum funding required, using

“any reasonable actuarial method of valuation that

takes into account fair market value and which is

permitted under regulations prescribed by the Secretary [of Treasury].” 77 And the Treasury regulations

permit some “smoothing” of the value of assets, such

that the minimum funding obligations would not

vary sharply based on short-term swings in the

present value of perhaps volatile assets.

The Treasury’s “smoothing” regulation, however,

can fairly be described as an effort to capture the

“true” value of a plan’s assets. The point of the

smoothing regulation is to minimize the impact of

short-term volatility in an asset’s price, and thus

avoid “spiking” that may turn out to be more

artifactual than representative of the asset’s true

value. The same is not true of the Phase-In

Regulation, as no one conte

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