# Petition — Nachman Corp. v. Pension Benefit Guaranty Corporation > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0108%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1980 - **Citation:** 446 U.S. 359 ## Text In the MICHABL RODAK, JR., CLERK Supreme Court of the Gnited States OCTOBER TERM, 1978 No. 28-1557 | NACHMAN CORPORATION, Petitioner, Vv. PENSION BENEFIT GUARANTY CORPORATION and INTERNATIONAL UNION, UNITED AUTOMOBILE AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA. Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIROUIT LAWRENCE R. LEVIN ROBERT W. GETTLEMAN JOEL D. RUBIN H. DEBRA LEVIN 30 North LaSalle Street Chicago, Illinois 60602 (312) 236-9200 Attorneys for Petitioner e Of Counsel D’ANCONA, PFLAUM, WYATT & RISKIND 30 North LaSalle Street Chicago, Illinois 60602 a INDEX PAGE EIEIO WT choc rruhinasdeoacinecasecDeccsdninagus.seekacecshenndevcithenaanaie 1 "SEE era SNORE aU sO 2 EET ORE Oe 2 Statutory Provisions Involved .............ccsccssessesseceseseeseees 3 UN SE UNI INI So lincen cede coerccs sas ccsccececoceveicnzesvensvene 5 Reasons for Granting the Wit ..............ccccssssseeeees sae NINE shia tls sock ccutvclninncctneccnssoecnensepsseocsessnsee 10 I. The Ruling Below Conflicts With Applicable De- cisions of This Court Holding That Retroactive Imposition of Liability is Unconstitutional ........ 11 If. The Ruling Below is Erroneous and Creates a Conflict of Rationale Among the Circuits ............ 16 Ill. This Case Presents a Critical Issue of Federal Law Which Should Be Settled By This Court .... 19 COMCIOSION .......ccssssvssssesssssernesersessnscessssessecsnessnnsgneestacsnnesesnensnes 20 Appendix (Opinion and Judgment of Court of B. Gae a CORRS Fn trinclstlne App. 1 AUTHORITIES CITED Cases: Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 RU AIL E. als hate na Detter pas dccenceanchtaasansbenicoseeeeaqeetytesocsens 7, 11-16 A-T-O v. PBGC, 456 F.Supp. 545 (N.D. Ohio, 1978) .... 18-19 Fisher & Porter de P.R., Inc. v. ITT Hammell-Dahl/- Conoflow, 369 F.Supp. 638 (D.P.R. 1974) .........sssesee 13 Fornaris v. Ridge Tool Co., 423 F. 2d 563 (1st Cir. 1970), Rev’d. on other grounds, 400 U.S. 41 (1970) ........0000 13 Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219 (1948) .......cccesseseeesees oS Rea ‘11 ii PAGE Martin v. Hunter’s Lessee, One Wheat (14 U.S.) 304 GUE siasssecteepichiithscdeninsctddscevenielil eatrasisitils Sislinapisaidins vcdeapabebeodnnestis 19 Nachman Corp. v. PBGC, 436 —— 1334 _ Tl. MER widadseeipenusbinitngeessitictirenttlashaiitensitiabinlassiaatioscbeanapenianicdbates 1, 16 Railroad Retirement Board v. Alton Railroad Co., 295 U.S. 330 (19385) ......... shadnoals Brie Beet Riley v. MEBA Pension — 570 F.2d 406 (2nd Cir. pg ee ihe sebittltinsnléiiiaidiomeniteiatenctntl tan 17, 19 Standard Oil Co. of Louisiana v. Poterie, 12 F.Supp. 100 (E.D. La. 1935) siidahalidedsiteddonedbeniipniecabiiccaibecateais 13 US. v. Public Utilities Commission of Cal., 345 U.S. 295 (1953) sialadebeislsiadisioucriacbaigdlivhasiadyieaensinieiileietahanilasanpildeceshes 19 Usery v. Turner Elkhorn Mining Oo., 428 U.S. 1 (1976) 11, 13-14 Other Authorities: U.S. Constitution, Amendment V_ ..............:sssscsseresssssesoeseees 3 AO TEs ECR D ShehcnicssoctnsvckonsinatasacansicGjenotehdoneibcoscncaacvns 8,17 ' SRS As APE TED selacscitinssosiincescsttecsonntediccerussdiitisonmaciesiioon 3, 8, 10, 17-19 29 U.S.C. $1053 (a) ...cccccccoccccsccsesssseseseses idilibemadisdasaash onset 3,7 29 U.S.C. §1061(b) (2) ............. siahijtncenaareiiaactsoasintvinsusihioks 4, 7, 14 29 U.S.C. §1082(b) (3) ..........0.. laphaniinalibiclatacaldoc tacos sic 4,7 Be Py ONIN ac issinitoctiaceorsscknn risdbthavsctlatbibébdabniencusesisses 5, 7, 14 MP NP: QUID Soka. ccs Salis mpnshiscsnschinsssononsecbasibonsi 5, 10, 18 Se AM is IID soo idses sn sceeicebiaicks wcabedSsits acai Sua 18 Oxford English Dictionary ............c.cccssssssssssecsscssssesscsseesessees 19 Webster’s New Collegiate PIMOS casciisinssicesidabivsrincesesie ‘19 Funk & Wagnall Standard Desk Dictionary ............... aw 0 In the Supreme Court of the Anited States OcTOBER TERM, 1978 No. NACHMAN CORPORATION, Petitioner, v. PENSION BENEFIT GUARANTY CORPORATION and INTERNATIONAL UNION, UNITED AUTOMOBILE AEROSPACE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH OIROUIT Petitioner, Nachman Corporation, respectfully prays that a writ of certiorari issue to review the judgment and opinion of the United States Court of Appeals for the Seventh Circuit entered in this proceeding on January 23, 1979. OPINION BELOW The opinion of the Court of Appeals, not yet reported, appears in the appendix hereto. The opinion of the United States District Court for the Northern District of Illinois, which was reversed by the Court of Appeals, appears at 436 F.Supp 1334. JURISDICTION The judgment of the United States Court of Appeals for the Seventh Circuit was entered on January 23, 1979. Jurisdiction of the courts below was based upon 28 U.S.C. §§1331 and 1339, and 29 U.S.C. §1302(b). This Court’s jurisdiction is invoked under 28 U.S.C. §1254(1). QUESTIONS PRESENTED 1. Whether the retroactive application of ERISA (as hereinafter defined) to compel employer liability under a lawfully terminated pension plan which did not provide for continued funding in excess of the plan’s assets on termination violates the due process clause of the fifth amendment to the United States Constitution. 2. Whether an employer, which lawfully terminated a pension plan prior to the effective date of the minimum vesting and fanding standards imposed by ERISA, is compelled to continue to fund the pension plan to provide payments to participants for which the employer was not contractually liable. 3 STATUTORY PROVISIONS INVOLVED United States Constitution, Amendment V: ‘*No person shall . . . be deprived of life, liberty, or prop- erty, without due process of law....” United States Code, Title 26 §401(a)(7) [prior to amendment by ERISA] ‘¢(7) A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that, upon its termination or upon complete dis- continuance of contributions under the plan, the rights of all employees to benefits accrued to the date of such termi- nation or discontinuance, to the extent then funded, or the amounts credited to the employees’ accounts are nonforfeit- able.’’ United States Code, Title 29 §1002(19) ‘*For purposes of this subchapter : (19) The term ‘‘nonforfeitable’’ when used with re- spect to a pension benefit or right means a claim obtained by a participant or his beneficiary to that part of an im- mediate or deferred benefit under a pension plan which arises from the participant’s service, which is uncondi- tional, and which is legally enforceable against the plan. For purposes of this paragraph, a right to an accrued benefit derived from employer contributions shall not be treated as forfeitable merely because the plan contains a provision described in section 1053(a) (3) of this title.’’ §1053 (a) ‘*(a) Each pension plan shall provide that an employee’s right to his normal retirement benefit is nonforfeitable upon the attainment of normal retirement age and in addition shall satisfy the requirements of paragraphs (1) and (2) of this subsection. 4 (1) A plan satisfies the requirements of this para- graph if an employee’s rights in his accrued benefit de- rived from his own contributions are nonforfeitable. (2) A plan satisfies the requirements of this para- graph if it satisfies the requirements of subparagraph (A), (B), or (C). (A) A plan satisfies the requirements of this sub- paragraph if an employee who has at least 10 years of service has a nonforfeitable right to 100 percent of his accrued benefit derived from employer contribu- tions... .’’ §1061 (b) (2) ‘*(2) Except as otherwise provided in subsections (c) and (d) of this section in the case of a plan in existence on January 1, 1974, this part shall apply in the case of plan years beginning after December 31, 1975.’’ §1082(b) (3) ‘*(3) For a plan year, the funding standard account shall be credited with the sum of— (A) the amount considered contributed by the em- ployer to or under the plan for the plan year, (B) the amount necessary to amortize in equal an- nual installments (until fully amortized)— (i) separately, with respect to each plan year, the net decrease (if any) in unfunded past service lia- bility under the plan arising from plan amendments adopted in such year, over a period of 30 plan years (40 plan years in the case of a multiemployer plan), (ii) separately, with respect to each plan year, the net experience gain (if any) under the plan, over a period of 15 plan years (20 plan years in the case of a multiemployer plan), and (iii) separately, with respect to each plan year, the net gain (if any) resulting from changes in 5 actuarial assumptions used under the plan, over a period of 30 plan years.’’ §1086(b) ‘*(b) Except as otherwise provided in subsections (c) and (d) of this section, in the case of a plan i in existence on January 1, 1974, this part shall apply in the case of plan years beginning after December 31, 1975.’’ §1322(a) ‘*(a) Subject to the limitations contained in subsection (b) of this section, the corporation shall guarantee the payment of all nonforfeitable benefits (other than bene- fits becoming nonforfeitable solely on account of the termination of a plan) under the terms of a plan which terminates at a time when section 1321 of this title ap- plies to it.’’ STATEMENT OF THE CASE This declaratory judgment action’ arises from the deter- mination by respondent Pension Benefit Guaranty Corpo- ration (‘‘PBGC’’) that the Employee Retirement Income Security Act of 1974, 29 U.S.C. $1001, et seq. (‘‘ERISA’’) compels petitioner Nachman Corporation (‘‘Nachman’’) to continue to fund a lawfully terminated collectively bargained pension plan despite an express limitation of vequaga ~ liability to the Plan. The Plan at issue (the ‘‘ Nachman Plan’’) was established in 1960 pursuant to a collective bargaining agreement be- tween Nachman and the International Union, United Auto- mobile Aerospace & Agricultural Implement Workers of America (the ‘‘UAW’’), which provided that Nachman 1 Nachman filed a declaratory judgment action against the PBGC alone. The UAW subsequently intervened as a defendant. The case was decided on cross motions for summary judgment. 6 would contribute to a pension plan a certain number of cents per hour worked for each employee. Under the Plan, Nachman’s obligation to make annual contributions to a trust fund was translated into an actuarial formula calcu- lated so that the benefits under the Plan would be fully funded after 30 years if the Plan had not terminated.’ As acknowledged by the Seventh Circuit, ‘‘The parties do not dispute that Nachman complied fully with the funding obligations imposed by the Plan.’” The Nachman Plan expressly provided that benefits were payable to participants only if the funds contributed by Nachman and the accumulated earnings thereon were ade- quate to pay all such benefits: ‘*Benefits provided for herein shall be only such benefits as can be provided by the assets of the Fund. In the event of termination of th[e] Plan, there shall be no liability or obligation on the part of the Company to make any further contribution to the Trustee except such contributions, if any, as on the effective date of such termination, may then be ac- crued but unpaid.’” Under its terms, the Plan could be terminated at any time after the collective bargaining agreement expired. The Plan also provided that upon termination, the contributions previously made by Nachman constituted a ‘‘complete dis- charge of the Company’s financial obligation.’” Prior to ERISA, the applicable provisions of the Internal Revenue Code and Illinois law permitted an employer such as Nachman to terminate a plan and cease contributing. Benefits would then be paid to participants from the funds 2Joint Appendix, pp. 15-21. 5Slip Opinion, Appendix p. 2. *Article V, §3 of the Plan, Joint Appendix, p. 39. 5Article V, §5 of the Plan, Joint Appendix, p. 37. 7 | already contributed and for which the employer received a deduction on its income tax return. ERISA established a number of requirements for plans to provide truly ‘‘non- forfeitable’’ benefits, i.e., certain benefits could not be for- feited due to early termination of employment, or plan termination, and minimum funding obligations must be undertaken by the employer. ERISA did not, however, require a plan to provide these nonforfeitable benefits upon its enactmert in 1974. Instead, the requirement to provide nonforfeitable benefits was phased in to allow employers time to plan appropriate courses of action to deal with the requirements of the new Act. See Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 249 (1978) discussed at pp. 11-16, mfra). Thus, under Title I of ERISA, every plan such as the Nachman Plan was required to be amended by January 1, 1976 to provide that a participant’s benefits become non- forfeitable after he completes a certain length of employment. 29 U.S.C. §§1053(a), 1061(b)(2). The first contribution to meet the new minimum funding requirements imposed by ERISA would have been for the year beginning January 1, 1976. 29 U.S.C. $41082(b) (3), 1086(b). Relying on this timetable, on October 1, 1975 Nachman, which was closing its plant, gave timely notice to the VAW that it was terminating the Plan effective December 31, 1975. Nachman could not have given such notice sooner because, under the provisions of the Nachman Plan, termination was not permitted during the term of the collective bargaining agreement which expired on October 31, 1975. As the court below acknowledged, ‘‘The propriety of the termination is: not challenged.’ ®Article IX, §2 of the Plan, as amended by Amendment No. 3 to the Plan, Joint Appendix pp. 50, 76. TSlip Opinion, Appendix p. 3. _ The effect of such termination on Nachman, however, is in- deed challenged. Although the parties and the court below conceded that Nachman could not have terminated the plan prior to October 31, 1975, and although Congress allowed a grace period to January 1, 1976 to amend such plans to pro- vide that benefits become ‘‘nonforfeitable,’’ the Seventh Cir- cuit (reversing the District Court) found (1) that the benefits provided under the Plan, which were expressly conditioned upon sufficiency of Plan assets, were nonforfeitable under ERISA prior to 1976, and (2) that the express terms of the plan had been retroactively amended by ERISA to impose liability for continued funding where no such liability had . previously existed, even though the Plan was properly termi- nated before 1976. The court further held that such an inter- pretation did not violate the due process clause of the fifth amendment. The court held, first, that the definition of ‘‘nonforfeitable’’ contained in section 1002(19) of Title I of ERISA applies to the use of that term in Title IV, which governs the PBGC. This is important since Nachman’s liability to the PBGC is limited only to the extent the Plan provides nonforfeitable benefits. A claim to benefits is ‘‘nonforfeitable’’ under sec- tion 1002(19) only if it ‘‘is unconditional, and. . . is legally enforceable against the plan.’’ Although the finding that the section 1002(19) definition applies to Title TV was in accord with the position taken by the District: Court and Nachman, the Court of Appeals held that the benefits at issue were ‘*‘nonforfeitable’’ under that definition, despite the fact that those benefits were limited by express contract to the assets of the Nachman Plan at termination. Moreover, the Court of Appeals held that such an inter- pretation did not offend due process despite the fact that it, (a) created new and expensive obligations on the employer (which admittedly had complied with all its obligations), (b) ignored the express contractual limitation of liability which was the product of collective bargaining, and (c) imposed this new liability without any chance for the employer to have avoided it under the grace period provisions of ERISA. 10 ’ REASONS FOR GRANTING THE WRIT Introduction The instant case meets three of the five requirements for review by this Court set forth in Supreme Court Rule 19(b). First, the ruling below squarely conflicts with applicable decisions of this Court which hold unconstitutional the retro- active imposition of liability to pay additional compensation for services already rendered and fully compensated. Fur- ther, the Seventh Circuit’s rationale conflicts with that of the Second Circuit in interpreting the definitional section of ERISA at issue (section 1002(19)). Finally, the statutory issue presented—the definition of ‘‘nonforfeitable benefit’’— constitutes a critical issue of federal law which should be . settled by this Court since, (a) the PBGC insures, and employers are obligated to fund, only such ‘‘nonforfeitable benefits,’ (b) the issue directly affects at least 12,000 em- ployees and their employers throughout the United States (including the 135 former employees of the plant closed by Nachman),*® and (c) a uniform approach to this legislation generally is required to guide both the public and private sectors in administering retirement benefit funds which af- fect practically every working person in this country. Petitioner contends that the Seventh Circuit’s interpreta- tion of ERISA was erroneous and constitutes a violation of the due process right of Nachman and other employers who lawfully terminated pension plans prior to the effective date of the minimum vesting and funding requirements. § 29 U.S.C. §1322 (a). *Joint Appendix at 138. 11 I. THE RULING BELOW CONFLICTS WITH APPLI- CABLE DECISIONS OF THIS COURT HOLDING THAT RETROACTIVE IMPOSITION OF LIABILITY IS UN- CONSTITUTIONAL. The Seventh Circuit, in holding that the benefits at issue were ‘‘nonforfeitable,’’ concluded that the statute as so inter- preted, although admittedly retroactive, did not violate due process. Thus, the court found that Nachman could constitu- tionally be held liable for continued funding although (a) Nachman had complied with all its obligations under the Plan, (b) Nachman could not have terminated the Plan be- fore it did so, and take advantage of certain grace periods set forth in ERISA, (c) the Plan expressly limited benefits to its assets and limited Nachman’s liability to accrued contributions at termination, and (d) the Plan was lawfully terminated prior to the date on which such plans had to be amended to provide for truly nonforfeitable benefits. This holding directly conflicts with the decisions of this Court in Railroad Retirement Board v. Alton Railroad Co., 295 U.S. 330 (1935), and Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978)." In Alton, this Court held 10 Although the portion of the Alton opinion dealing with the com- merce clause was overruled in Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 230 n.9 (1948), the coordinate holding of Alton on the due process limitations imposed on Congress by the Constitution remains in effect and unaltered, as recognized by this Court in Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 19, n.18 (1976). 11 Although the latter case was decided under the Contract Clause, the court below properly noted that “the analysis employed in Contract Clause cases is also relevant to judicial scrutiny of Congressional enactments under the Due Process Clause.” Slip opinion, Appendix p. 21. 12 that Congressionally imposed liability (under the Railroad Retirement Act) requiring the payment of pension benefits based in part on employment prior to enactment of that Act violated due process. The Court rejected the govern- ment’s argument that Congress, by imposing liability to fund pension benefits based in part on past services, was acting in the best interests of the nation and the railroad industry. The Alton Court, in language directly applicable to Nachman’s situation, held that by requiring payment ‘‘for services long since rendered and fully compensated,’’ Con- gress had deprived the employers—who had no opportunity to terminate their obligations or increase retroactively their charges to their customers—of property without due process. 295 U.S. at 354. Similarly, in Allied Structural Steel, this Court struck down a Minnesota statute which imposed liability on em- ployers who terminated pension plans for the payment of unfunded benefits to all employees who had worked at least ten years. That statute, the Court ruled, unconstitutionally created a “severe disruption of contractual expectations... .” 438 U.S. at 247. Liability for benefits based on services already rendered was imposed on employers who terminated plans immediately after enactment of the Minnesota statute. This Court compared such an impermissible retroactive im- position of liability without an opportunity to avoid such liability to the ‘‘gradual applicability of grace periods’’ which it found were provided by ERISA. 438 U.S. at 247. The ruling of the court below in the instant case, however, ef- fectively rejects the existence of such grace periods and denies Nachman the opportunity to take advantage of them. 13 The Alton and Allied cases, along with the numerous lower court decisions following them,’* stand for the proposition that the Constitution forbids legislation which imposes a new liability on employers to pay additional compensation to its employees for work which has been fully performed and compensated. Further, the cases emphasize the suspect nature of retroactively applied obligations, and reject arguments seeking to justify such legislation on the ground that the legislatures were acting in the public interest. In rejecting the applicability of the precedent established by this Court in the above cited cases, the Seventh Circuit, although acknowledging the retroactive effect of its inter- pretation, relied entirely on Usery v. Turner Elkhorn Mining Co., 428 U. 8. 1, (1976), where this Court upheld Congressional imposition of liability on coal industry em- ployers to compensate employees suffering from black lung disease. That reliance is misplaced. The opinion in Turner Elkhorn carefully distinguished Alton, and held that retro- active benefits for black lung victims constituted compen- sation for essentially tortious injury, ‘‘to satisfy a specific need created by the dangerous conditions under which the former employee labored.’’ Alton, on the other hand, in- volved an unconstitutional attempt to require increased pension compensation in the nature of additional salary. 428 U.S. at 19. In the instant case, the pension payments imposed 12Fornaris v. Ridge Tool Co., 423 F.2d 563 (1st Cir. 1970), Rev'd. on other grounds, 400 U.S. 41 (1970) ; Fisher & Porter de P.R., Inc. v. ITT Hammell-Dahl/Conoflow, 369 F.Supp. 638 (D.P.R. 1974) ; Standard Oil Co. of Louisiana v. Poterie, 12 F.Supp. 100 ‘ (E.D. La. 1935). ; 14 | by the Seventh Circuit are, without question, in the nature of additional salary, and bear no relation to compensation for tortious injury or similar conduct. Clearly, this case should be governed by the principles of Alton, and not by those of Turner Elkhorn. Even if this Court were to conclude that the imposition of new liability for past service were permissible, due process requires that Nachman be given the opportunity to avoid that liability. The Court in Allied, in striking down the Minnesota statute, criticized its ‘‘sudden, totally unanticipated, and substantial retroactive obligation’’ im- posed by the Minnesota statute, and compared it with the gradual applicability of the ‘‘[fJunding and vesting re- quirements [of ERISA which] were delayed for an addi- tional year [to January 1, 1976]. 29 U.S.C. §§1086(b), 1016(b)(2).” 438 U.S. at 249, n.23. The statutory interpretation of the Seventh Circuit un- necessarily nullifies the grace period emphasized by this Court in Allied, by imposing liability for benefits prior to the effective date of the mandatory vesting and funding pro- visions—a result which, like Alton and Allied, established a constitutionally impermissible retroactive alteration of employer obligations for additional pension benefits. In reaching its conclusion, the Seventh Circuit mentioned several tests which it believed might apply to the judicial - scrutiny of ERISA, as interpreted by that court.” The court below concluded that the retroactive imposition of liability on Nachman did not violate due process, mainly 18 Thus, the court helow mentioned a “means-end rationality test” (at p. 21), as well as a comparative test requiring an examination of both the problem to be remedied and the “nature and scope of the burden imposed to remedy that problem.” (Slip opinion at p. 23.) 15 because it found ‘‘ample evidence that Congress perceived a widespread problem of national importance.’’ (Slip opin- ion p. 24.) That conclusion is fallacious, because the Sev- enth Circuit’s analysis erroneously presumed that the entire effect of ERISA was being subjected to constitu- tional scrutiny. In fact, this litigation involves only those plans which terminated prior to the end of the grace period —the first date on which Congress mandated plan amend- ments to provide for truly nonforfeitable benefits. Although Congress undoubtedly perceived a ‘‘ widespread problem of national importance,’’ Congress also, as noted by this Court in Allied, allowed phase-in grace periods during which employers could terminate plans without further liability. To hold, as did the court below, that ERISA allowed Nachman no opportunity to terminate its obligations during this grace period, squarely contradicts this Court’s holding in Allied. Since Nachman terminated its Plan at the first op- portunity, and admittedly complied with all of its obligations under the Plan, the entire constitutional rationale of the Seventh Circuit is invalid. One further important point should be mentioned with respect to the holding of the court below on the constitu- tional question. The opinion dealt at some length with the issue of respective reliance by Nachman and its employees, concluding that the ‘‘employees’ reliance interests in vested benefits outweigh the employer’s reliance on prior fund- ing.’’ (Slip Opinion at 25.) That startling finding is con- trary to the record that the benefits at issue were not promised under the terms of the Plan, but only as the Plan was later affected by ERISA. Moreover, this finding totally ignores the fact that the Nachman Plan was the product of collective bargaining by the employer and the employees, the latter acting through the UAW. Nachman agreed to 16 contribute a certain sum to the Plan each year during which the collective bargaining agreement was in effect and the UAW agreed that benefits would be limited to the amount of those contributions. Thus, as this Court recognized in Allied (438 U.S. at 246, n.18), the employees clearly had no expectation of benefits which were not provided in the agreement, and thus no ‘‘reliance’’ on the receipt of such benefits. As the District Court held in this case, based on the record, ‘‘the advent of ERISA does nothing to disturb the contractual expectations of Nachman or its employees.’’ 436 F.Supp. at 1339. Indeed, any discussion of reliance must be settled in favor of Nachman in light of its lack of any liability to continue funding under pre-ERISA law. Further, to hold that reliance by the employer on the provisions of a duly executed collective bargaining agreement are any less than those of the employees who entered into that agree- ment violates constitutional doctrine, the National Labor Relations Act, and common sense. The decision below is constitutionally offensive, contra- dicts established precedent, and should be reviewed and reversed by this Court. II... THE RULING BELOW IS ERRONEOUS AND CREATES A CONFLICT OF RATIONALE AMONG THE OIR- CUITS. In the instant case, although the benefits at issue were expressly conditioned upon sufficiency of assets, the Seventh Circuit held that the benefits were ‘‘nonforfeitable”’’ since the benefits were ‘‘vested,’’ i.e., the participants had met the re- quired length of service requirements. The Seventh Circuit concluded that since the terms ‘‘nonforfeitable’’ and 17 ‘*vested’’ are used interchangeably in much of the legislative history regarding ERISA, the vested benefits under the Plan are nonforfeitable."* The Seventh Circuit failed to realize, however, that the terms ‘‘nonforfeitable’’ and ‘‘vested’’ be- came interchangeable only after all the provisions of ERISA —including the minimum funding and vesting requirements —became effective. Prior to such time, and under pre-ERISA law, vested benefits were nonforfeitable only to the extent funded. 26 U.S.C. §401(a)(7) [prior to amendment by ERISA]. Moreover, the Seventh Circuit decision directly conflicts with the rationale of the Second Circuit in Riley v. MEBA Pension Trust, 570 F.2d 406 (2nd Cir. 1977). In Riley, the Second Circuit found that a benefit that had vested by the time the employee terminated his employment was in fact forfeitable because it was subject to a condition subsequent— the benefit would be forfeited if the employee competed with his former employer. Thus, in Riley, a ‘‘vested’’ benefit was ‘‘forfeitable.’’ Al- though these two cases arise under different factual settings, the application of the Seventh Circuit’s holding in the instant case to the facts of Riley would have, without question, re- sulted in a contrary ruling to that of the Second Circuit on the issue of interpretation of the same statutory provision, section 1002(19)."* If the Riley plan had terminated before January 1, 1976, the Second Circuit would have held that the employee’s vested benefit was not insured because it was for- feitable. The vesting of benefits in the Plan merely established that a participant who terminated his employment before 14 Slip Opinion, p. 9, quoting D. McGill, Preservation of Pension Benefit Rights, 6 (1972). 18 The court in Riley went on to hold that although the benefit was forfeitable, the employee had not in fact breached the condition subsequent. 18 retirement age, but after his benefit vested, would still be entitled to receive benefits upon reaching retirement age, provided that assets in the fund were sufficient. The Seventh Circuit’s ruling also conflicts directly with the decision in A-7-O v. PBGC, 456 F.Supp. 545 (N.D. Ohio, 1978). In that case, as in the instant case, the employer had terminated a plan, which limited liability to the assets of the fund, prior to the January 1, 1976 effective date of the minimum vesting and funding requirements. The court held that, as it interpreted section 1002(19), the benefits so limited were not nonforfeitable until after that date and, after an extensive review of the legislative history, found that Con- gress specifically intended to impose the new vesting require- ments prospectively, not retrospectively. 456 F.Supp. at 522. Counsel is informed that the A-7-O case has been appealed to the Fourth Circuit, but as of this date no opinion has been issued by the reviewing court. The interpretive issue addressed by the various district courts and courts of appeals is critical to the administration of ERISA since the PBGC insures only nonforfeitable ben- efits. 29 U.S.C. §1322. Although the PBGC has contended that its own definition of nonforfeitable (29 CFR §2605.6(a)) should take precedence over section 1002(19) for purposes of Title IV, every reported decision dealing with the issue has rejected that position. Only the Seventh Circuit, however, has held that a benefit is nonforfeitable under section 1002 (19) prior to 1976, where liability to pay the benefit was expressly and lawfully limited to the assets of the fund at termination. In A-T-O and the instant case, the lower courts drew extensively on legislative history to bolster their conclusions. Significantly, the Seventh Circuit reached a result diametri- cally opposite to that reached by the A-7-O court, relying on the same legislative history. (See Slip Opinion, pp. 11-13.) These published opinions not only cause confusion in the 19 manner of approaching the interpretation of ERISA, but cloud the ordinary meaning of the central term ‘‘nonforfeit- able’’ which, of course, should govern absent a finding of am- biguity.!* The dictionary definition of nonforfeitable is clear: ‘‘not subject to forfeiture; cannot lose right to.’’'’ Since the benefits at issue are strictly limited to the Plan’s assets at termination, those benefits clearly were—at least prior to 1976—not nonforfeitable under the common meaning of the term as used in section 1002(19). In short, the benefits were not ‘‘unconditional’’ or ‘‘legally enforceable against the Plan’’ prior to January 1, 1976, on which date plans then in existence were required to be amended to provide non- forfeitable benefits. The different approaches and conclusions drawn with respect to the definition of nonforfeitable under ERISA re- quire review by this Court. Il. THIS CASE PRESENTS A CRITICAL ISSUE OF FED- ERAL LAW WHIOH SHOULD BE SETTLED BY THIS COURT. Based upon the foregoing, the need for a uniform approach to the concept of nonforfeitability under ERISA becomes clear. The issue has been sharpened and reduced by the opinions of the lower courts in the instant case, by the Second Circuit in Riley and by the District Court (and soon by the Fourth Circuit) in A-T-O. ' 16 U.S. y. Public Utilities Commission of Cal., 345 U.S. 295 (1953), Martin v. Hunter's Lessee, One Wheat (14 U.S.) 304 (1816). 17Oxford English Distionary; See also, Webster’s New Collegiate Dictionary, Funk & Wagnall Standard Desk Dictionary. 20 To hold, as did the Seventh Circuit, that Congress allowed no grace period in retroactively imposing the new vesting and funding requirements of ERISA constitutes a violation of due process and a disregard for the legislation’s phase-in provisions. Too many employees and employers are affected by the sweeping changes mandated by ERISA to allow such a decision to stand. CONCLUSION For the foregoing reasons, petitioner Nachman Corpora- tion prays that this court issue a writ of certiorari to the United States Court of Appeals for the Seventh Circuit for purposes of reviewing and reversing the decision of that court. Respectfully submitted, LAWRENCE R. Levin Rosert W. GetrLEMAN JozL D. Rusm H. Desra Levin 30 North LaSalle Street Chicago, Illinois 60602 (312) 236-9200 Attorneys for Petitioner Of Counsel D’Anoona, Priraum, Wratt & Riskinp 30 North LaSalle Street Chicago, Illinois 60602 3n the Gnited States Court of Appeals For the Seventh Circuit Nos. 77-2146 and 77-2147 NACHMAN CORPORATION, \ Plaintiff-A ppellee, Vv. PENSION BENEFIT GUARANTY CORPORATION and INTER- NATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, Defendants-A ppellants. Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 76-C-2963—Abraham bk. Marovitz, Judge. ARGUED SEPTEMBER 26, 1978—DECIDED JANUARY 23, 1979 Before CUMMINGS, Circuit Judge, WisDOM, Senior Circuit Judge,* and SPRECHER, Circuit Judge. SPRECHER, Circuit Judge. The Pension Benefit Guar- anty Corporation and the United Auto Workers appeal from the district court order granting summary judg- ment in favor of the plaintiff, Nachman Corporation. The lower court granted declaratory relief, limitin Nachman’s pension liability to the amounts accumula in a pension plan trust fund. * Senior Circuit Judge John Minor Wisdom, of the United States Court of Appeals for the Fifth Circuit, -is sitting by designation. APPENDIX 2 Nos. 77-2146 and 77-2147 The collectively ined pension plan contains a clause excluding employer liability by limiting the employees’ recourse to the assets of the pension fund. The issue raised on appeal is whether Employee Retirement Security Income Act of 1974 (ERISA), 29 U.S.C. § 1001-1381 (1975), supersedes the employer liability disclaimer and thereby imposes liability for the ——_ of vested benefits on an employer who, after ptember 2, 1974, terminates a cove pension plan with insufficient assets. Additionally, Nachman chal- lenges the ign sg | of ERISA if construed to impose liability on employers for vested unfunded benefits. We hold that ERISA does subject the plaintiff to liability for the payment of unconditionally vested benefits effective September 2, 1974 and that this construction does not contravene the Due Process Clause of the Constitution. Accordingly, we reverse the judg- ment of the district court. I. Pursuant to collective bargaining with the UAW, in 1960 Nachman established a pension plan for certain employees at its Armi Avenue facility in Chicago. The plan terms provided for vesting of benefits after employees fulfilled specified age and length-of-service requirements. This pension plan is characteristic of “defined-benefit” plans, promising a fixed monthly benefit level for each yeas of service. As is typical of a defined-benefit plan, Nachman was required to make annual contributions to a trust fund on an actuarial basis. Those contributions were calculated by reference to administrative costs of the fund, benefit liabilities accruing during the current plan year (“normal costs”), and the amounts necessary to amortize the past service liability over thirty years.! The parties do not dispute chat Nachman complied fully with the funding obli- gations imposed by the plan. ' The plan credits an employee for years served prior to the establishment of the plan. “Past service liability” refers to the cost of paying monthly benefits for those years. Nos. 77-2146 and 77-2147 3 On October 1, 1975, Nachman gave timely notice to the UAW that it was terminating the pension plan effective December 31, 1975. The termination accom- panied the closing of the mg Avenue facility, which had become unprofitable. The propriety of the termination is not challenged. It is also undisputed that the assets in the trust fund are insufficient to pay all the vested benefits which accrued before December 31, 1975. Apparently the fund assets can provide only thirty-five percent of the accrued vested benefits. Under the. terms of the plan, the employees’ benefits would be reduced ratably. Nachman would not be obligated to assume liability for the unfunded benefits. Article V, section 3 of the plan provides: Benefits provided for herein shall be only such benefits as can be provided by the assets of the Fund. In the event of termination of th[{e] Plan, there shall be no liability or obligation on the part of the company to make any further contribution to the Trustee except such contributions, if any, as on the effective date of such termination, may then be accrued but unpaid. Nachman brought an action for declaratory relief to determine whether ERISA would impose any liability on it for the vested, but unfunded, benefits. The district court granted summary judgment in Nachman’s favor, holding that Congress did not intend until January 1, 1976, to subject employers to Pe He for unfunded benefits which they had disclaimed. Since Nachman terminated the pension plan prior to that date it was not found subject to statutory liability. II. In 1974 Congress passed the Employee Retirement Income Security Act (ERISA) in order to establish “minimum standards ... assuring the equitable char- acter of . . . [private pension] plans and their financial soundness.” 29 U.S.C. § 1001(a). ERISA consists of four titles, each designed to correct different abuses perceived in the private pension system. Title I attacks the lack of 4 Nos. 77-2146 and 77-2147 Tre “vesting” previsions in many plans. Before ERISA, for example, if a plan did — for vesting until tong prt Bog employee with 30 years of service could lose all rights in his pension benefits in the event that his employment was terminated prior to retirement. Title I establishes minimum vesting stand- ards to ensure that after a certain length of service an employee's benefit rights would not be conditioned upon remaining in the service of his employer. Employers were required to amend the terms of their plans to reflect these minimum standards effective January 1, 1976. Id. at § 1053(a). A second area of difficulty was the aos ag 4 of the funding cycle used by many plans. To improve the fiscal soundness of these pension funds, Title II amends the Internal Revenue e to require minimum funding. Title III imposes fiduciary responsi- bilities on the trustees of the rome funds and provides for ter information and disclosure to employee- Pot cipants. The final area of concern add by RISA was the loss of employee benefits which resulted from plan terminations. In order to protect an employ- ee’s interest in his accrued benefit mens when a plan failed or terminated with insufficient funds, Title IV establishes a system of termination insurance, effective September 2, 1974. The mechanics of the insurance system established in Title IV control the resolution of this case. Congress created the Pension Benefit Guaranty Corporation (PBGC) within the Department of Labor to administer the termination insurance program. The PBGC guaran- tees the ment of “nonforfeitable benefits (other than benefits ming nonforfeitable solely on account of the termination of a plan) under the terms of a plan which terminates at a time when... . this title applies to it.” Id. at §1322(a). Prior to the termination by an cmployer-sponsor of a covered pension plan, a notice of intent to terminate must be filed with the PBGC. Jd. at Ho The PBGC then examines the plan and etermines whether the assets of the fund are sufficient to pay all benefits guaranteed by the Act. If the assets are sufficient, termination proceeds. If, on the other hand, the PBGC is unable to determine that the assets are sufficient, a trustee is appointed and the guaranteed — Nos. 77-2146 and 77-2147 5 benefits are then paid out from the trust assets and, if those are insufficient, from PBGC funds.? Jd. at §§ 1341(c) & 1342(b). When the PBGC guarantees benefits in excess of the fund assets, the act provides for recovery from the employer-sponsor. /d. at § 1362. The amount of the employer's liability is determined by the value of the “plan’s benefits guaranteed under this subchapter on the date of termination” offset by the allocable assets of the trust fund. Jd. at § 1862(bX1). Liability, however, is limited to a maximum of thirty percent of the net worth of the employer. /d. Nachman’s potential liability to the PBGC depends upon whether the employees’ vested benefits, unfunded at the date of termination, are “guaranteed” under Section 1322, that is, whether these benefits are “nonforfeitable . . . under the terms of a plan” and the lan termination occurred after the effective date of Mritle IV, September 2, 1974. If they are so guaranteed, the PBGC must provide them and assess liability against the employer.’ It is conceded that the benefits in issue were vested under the terms of the plan. Thus, the — question before us is only whether the plan term limiting benefit 2 The PBGC funds are collected through premiums assessed against employer-sponsors and _ inves in var- ious accounts. 29 U.S.C. §§ 1305-07. 3 The district court suggested that although Nachman could not be liable to the PBGC for the payment of the benefits, the PBGC might nonetheless be required to provide those lost benefits to the employees. 436 F. Supp. at 1334. Nothing in the statutory language or history of the Act suppo this conclusion. The measure of the PBGC’s obligation to provide benefits and the measure of employer liability are identical under the Act; that measure is the amount of benefits “guaranteed.” 29 U.S.C. 1361-62. The effective date of both sections was Septem- r 2, 1974. Id. at § sssie). Furthermore, the act provides expressly for PBGC assumption of liability without recourse to the employer only for those ter- minations occurring between June 30, 1974 and Septem- ber 2, 1974. Id. at § 1381(b). 6 Nos, 77-2146 and 77-2147 rights to the assets of the fund rendered the rights forfeitable and thus not guaranteed. Title ITV does not provide a definition of “nonfor- feitable.” However, the word nonforfeitable is used in Title I, the “minimum vesting” sections, as well. Title I requires that after January 1, 1976, ery plan must provide that benefits become “nonforfeitable” upon the satisfaction of the minimum eligibility requirements. /d. at § 1053(a). The term “nonforfeitable right” is defined for purposes of Title I in Section 1002(19) as a claim obtained by a participant or his beneficiary to that part of an immediate or deferred benefit under a pension plan. which arises from the participant's service, which is unconditional, and which is legally enforceable against the plan. Another definition of nonforfeitable for the purposes of Title IV was promul by the PBGC as the admini- —s agency. Benefits are nonforfeitable, and guaran- . on the date of termination of the plan the partici- ant has satisfied all of the conditions required of tm under the provisions of the plan to establish entitlement to the benefit, except the submission of a formal application, retirement, or the completion of a required waiting period. 29 C.F.R. § 2605.6(a) (1977) (emphasis added). Nach- man’s employees have satisfied all conditions required of them. The benefits in issue are therefore clearly “nonforfeitable” if the PBGC definition is employed.‘ ‘The district court concluded that Nachman employees did not have nonforfeitable rights under the plan. Relying on the definition provided in Title I, the judge concluded that the employer liability exclusion clause in the plan rendered the employee rights both “conditional” and not “legally enforceable” and therefore forfeitable. . termination of the plan, the company | either would not have established the plan or perhaps would have utilized a more accelerated funding 28 In Allied Structural Steel Co. the Court objected to the “extremely narrow focus” of the Minnesota statute. 46 U.S.L.W. at 4891. Moreover, the Court found the “onl indication of legislative intent in the record” was represented by the Minne legislature’s concern with one plan termin- ation a White Motor Corp. Jd. Finally the Court also notes that the Minnesota legislation had an extremely short effective life, since it was to become void on the effective dates of ERISA. /d. at 4891 n.21. This time limitation further belies the narrowness of the legislative purpose. None of these defects in the Minnesota scheme are applicable to ERISA. Although the loss of pension benefits was not considered a national emergency by Congress, Allied Structural Steel Co., confirms the prior precedents holding that re ive liabil- ity can properly be imposed to re problems which fall short of an emergency. /d. at 4891 n.24. 22 The Supreme Court in Allied Structural Steel Co., stated that “[mJinimal alteration of contractual ae may end the inquiry at its first stage” under a traet Clause analysis. 46 U.S.L.W. at 4890. The record evidence i that the average benefit subject to guarantee for Nachman’s employees is $77 per month. The assets of the fund are only sufficient to provide an ave monthly benefit of $27, thus subjecting Nachman to potential gg Oe amortizing the average benefit of $50 per month for 135 employees. Nos. 77-2146 and 77-2147 25 schedule.” In Allied Structural Steel Co., the Supreme Court emphasized the gravity of altering an employer's obligation “in an area where the element of reliance was vital—the funding of a pension plan.” 46 U.S.L.W. at 4891. However, the nature of the reliance interests in this case can be distinguished in several respects. First, the Minnesota statute imposed liability for payment of benefits to employees who, since they had not fulfilled service requirements, had no vested rights under the plan. Thus the Minnesota employer had a far greater reliance interest displaced than the only reliance dis- placed by Title IV—the belief that the company would not be liable for funding deficiencies in the event of a plan termination. The Minnesota employer had not funded the plan to ever accommodate payment of benefits upon completion of only ten years service, as the Act now required. This is the only reliance element emphasized by the Supreme Court in Allied Structural Steel Co.—an element not present in this case.*! The second and more important distinction in the nature of the reliance interests is that in this case Con- gress found that the employees’ reliance interests in vested benefits outweighed the wa. a ae reliance on Had funding. In Allied Structural Steel Co., the upreme Court specifically stated that, “{iJn some situations the element of reliance may cut both ways,” but that “Minnesota did not act to protect any cite yes reliance interest demonstrated on the record.” 46 30 See D. MCGILL, FULFILLING PENSION EXPECTATIONS 276 ada! concluding that if an engraver were subject to liabilit or the payment of unfund nefits, “sound financia management and realistic accounting practice would call for the funding on a current and actuarially determined basis of benefit credits not yet vested”—a practice apparently not typical of plans excluding employer liability upon termination. 31 This aspect of differentiation with Allied Structural Steel Co., will be eliminated for terminations which occur after December 31, 1975, since the minimum vesting requirements of Title I will then be in effect. We need not consider the 2 ie ata of Title I in this case since it is inapplicable ere. 26 Nos. 77-2146 and 77-2147 U.S.L.W. at 4891 n.18. The Supreme Court was unwill- ing to speculate that employees without any vested rights under the plan had any substantial reliance in- terests. Title IV, however, protects the reliance interests of employees in benefit rights which had vested under the pension plan, an interest which, prima facie, is stronger than interests in unvested rights. Moreover, Lo: aes meen is - vee gemeneretee on the egislative record. Congress found that employees’ expec- tations for retirement security were being defeated by lant closings and other causes beyond their control.” he third and final distinction in the reliance interesis is that the expectation of the employer may also rationally be given less weight by ey 0 since pen- sion plan terminations had previously n subject to federal regulation,” another element notably missing in Allied Structural Steel Co. 46 U.S.L.W. at 4891. The basic equities of imposing the liability has also been relevant to the determination of whether the burden is irrational. In Allied Structural Steel Co., and Alton Railroad the Court emphasized that the employer was being forced to pay added compensation for fully % The following paragraph represents perhaps the most succinct explanation contained in the Congressional record: Concern for loss of benefits by workers after long years of labor through circumstances beyond their control was similarly expressed by President Richard M. Nixon on December 8, 1971, when, in a message to the Congress he said, “When a pension plan is terminated, an nmmeree participating in it can lose all or part of the benefits which he has long been relying on, even if his plan is fully vested. . . . Even one worker whose retirement security is destroyed by the termination of a plan is one too many. II LEGISLATIVE HISTORY at 3296.. 3% The Internal Revenue regulations imposed numerous requirements on the format of private pension plans necessary to obtain favorable tax treatment. Included in those regula- tions was the mandate that all funded benefits be made nonforfeitable simultaneous with plan termination. Treas. Reg. § 1.401-6 (1963). Nos. 77-2146 and 77-2147 27 compensated services. The employers received no benefit in the bargain. In Alton Railroad the employer had never agreed to pay any retirement benefits. In Allied Structural Steel Co. the employer had agreed«to pay retirement only if the employee served him for the req- uisite period of time—a time period not satisfied by nine of the eleven employees terminated. As the Supreme Court has noted, “the ‘true nature’ of the pension ayment is a reward for length of service.” Alabama ‘ower Co. v. Davis, 431 U.S. 581, 593 (1977): Here, however, Nachman received the benefit he bargained for. The Nachman employees entitled to ERISA benefits in this case served Nachman for the requisite number of years required by the tay orf under the terms of the lan and thus conferred the full benefit on the employer. n this case, then, the question Congress answered was not merely who should provide workers with retirement income, but who should bear the costs of a plan termina- tion: a solvent employer who has received the full benefit he bargained for or the employee with vested benefit rights. As in Turner Elkhorn Mining, it was reasonable for Congress to conclude that this liability represented “an actual, measurable cost of ... [the employer’s}] business.” 428 U.S. at 19. nrg x the most important facts distinguishin ERISA from the Minnesota statute in Allied Structura Steel are those revealing the Congressional attempt to moderate the impact of the liability imposed. Title IV provisions represent a rational attempt to impose liabili- ty only to the extent necessary to achieve the legislative purpose. Congress concluded that it was necessary to in- sure unfunded vested benefits and established a federal corporation for that purpose. However, it was also deter- mined that it would not be possible to maintain an effec- tive insurance Paw without imposing some liability on employers. The abuses employer liability was design- ed to cure included terminations motivated by a desire to avoid the continued burden of funding.™ III LEGISLATIVE HISTORY at 4741 (remarks of Sen. Wil- liams); II LEGISLATIVE HISTORY at 3382 (remarks of Rep. Gaydos). Congress was also concerned that without % ©6See text and notes supra at 14-16. 28 Nos. 77-2146 and 77-2147 the risk of liability, employers might use promises of higher retirement benefits for bargaining leve . knowing that the PBGC would be required to fulfill the promise. S. REP. No. 93-383, I LEGISLATIVE HISTORY at 1155. It was also believed that to impose liability would cause employers to assume a more responsible fundin schedule. II LEGISLATIVE HisTorY at 1873 (remarks o Sen. Griffin). These first two considerations would not have been relevant in the Minnesota scheme because no agency was established to assume primary responsi- bility for the payment of benefits. Acknowledging that vy, ot age on the verge of bankruptcy would be unlikely to terminate pension pene solely to take advan of termination insurance, ngress provided net worth limitations on the amount of potential liability. 29 U.S.C. § 1362. Congress also devised other provisions to temper the burdens imposed. Employers will not necessarily be liable for the full amount of benefits promised in the plan, since Congress set a level on the amount of benefits guaran . 29 U.S.C. 8 1322(bX3). In Section 1323 Congress required the PBGC to provide optional insurance to an employer who desires to poe against this contingent liability.* Finally, Title IV grants the PBGC discretion to arran reasonable terms for the — of liability. 29 U.S.C. § 1367. Thus Title IV of ERIS validated under Due Process or the Contract Clause does have “limitations as to time, amount, circumstances, [and] need.” W.B. Worthen, 292 U.S. at 434. The record supporting the enactment of ERISA, whol- Vy unlike that present in Allied Structural Steel, emonstrates that “the presumption favoring ‘legislative judgment as to the necessity and reasonableness of a TR measure’ ” must be allowed to govern here. 46 S.L.W. at 4891. Turner Elkhorn Mining, 428 U.S. at %* This protection would not have been available to Nachman since such insurance would have had to be in effect for 60 months. 29 U.S.C. § 1323(d). A, unlike the statutes in- Nos. 77-2146 and 77-2147 29 18, 19; Williamson v. Lee Optical Co., 348 U.S. 483, 488 (1955). Title IV of ERISA satisfies Nachman’s rights to Due Process. The order of the district court is reversed. REVERSED. A true Copy: Teste: Clerk of the United States Court of Appeals for the Seventh Circuit --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0108%3A01. Public record. Not legal advice.