Amicus Curiae Brief — Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal.

Supreme Court brief1993

Ask Donna

What actually matters in this document.

Text

No. 91-904 , SEE 2 t (982

— STs Tie CLERS

IN THE

Supreme Court of the Wuited States

OCTOBER TERM, 1992

- CONCRETE PIPE AND PRODUCTS OF CALIFORNIA, INC.,

. Petitioner,

CONSTRUCTION LABORERS PENSION TRUST

FOR SOUTHERN CALIFORNIA,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE

PENSION BENEFIT GUARANTY CORPORATION

AS AMICUS CURIAE IN SUPPORT OF RESPONDENT

CAROL CONNOR FLOWE *

Gencral Counsel

JEFFREY B. COHEN

Deputy Genera! Counsel

ISRAEL GOLDOWITZ

Assistant Genera! Counsel

RUSSELL G. GALER

NATHANIEL RAYLE

Attorneys

PENSION BENEFIT GUARANTY

CORPORATION

2020 K Street, N.W.

Washington, D.C. 20006

* Counsel of Record (202) 778-8820

WiLeon - Eres Printing Co., Inc. - 789-0096 - WasHINGTON, D.C. 20001

or -

TABLE OF CONTENTS

INTEREST OF THE AMICUS CURIAE

STATEMENT

A. Congress’s Response to a Faltering Multiem-

ployer Plan Program

B. The Special Nature of Multiemployer Pension

Plans

C. The Statutory Process For Calculating With-

drawal Liability

SUMMARY OF ARGUMENT

ARGUMENT

|. CONGRESS'S CHOSEN METHOD FOR RESO-

LUTION OF WITHDRAWAL LIABILITY DIS-

PUTES DID NOT DENY CONCRETE PRO-

CEDURAL DUE PROCESS

A. Enrolled Actuaries, Not Plan Trustees, Are

Responsible for Selecting Actuarial Assump-

tions

3. The Presumption Afforded the Factual De-

terminations of Plan Trustees Does Not Vio-

late Procedural Due Process

1. Plan Trustees Perform No Quasi-Judicial

Function and Have No Disabling Bias

A MPPAA Arprbitration Provides an Em-

ployer with a Full and Fair Opportunity

to Challenge a Withdrawal Liability

Assessment

CONCRETE’S SUBSTANTIVE DUE PROC-

ESS AND TAKINGS CHALLENGES ARE

CONTROLLED BY CONNOLLY AND GRAY

A. MPPAA Did Not Deny Concrete Substantive

Due Process

B. The Imposition of Withdrawal Liability Is

Not a Taking of Concrete’s Property Under

the Fifth Amendment

CONCLUSION ..

TABLE OF AUTHORITIES

CASES CITED Page

Anita Foundations, Inc. v. ILGWU Nat'l Retire-

ment Fund, 902 F.2d 185 (2d Cir. 1990) _. 18

Bituminous Coal Operators Ass'n v. Connors, 867

F.2d 625 (D.C. Cir. 1989) ......... 6

Board of Trustees v. Thompson Bldg. Materials,

749 F.2d 1396 (9th Cir. 1984), cert. denied, 471

U.S. 1054 (1985) . = 12

British Motor Distribs. v. ‘San Francisco “Automo-

tive Indus. Welfare Fund, 882 F.2d 371 (9th

Cir. 1989) _. wistendebalesmiaasstiagtnea an 5

Building Servs. Employees Pension Trust v. Ogden

Allied Servs. Corp., 10 Employee Benefit Cas.

(“E.B.C.”) 1401 (1988) (Brand, Arb.) 21

Carnation Co. v. Central States Pension Fund, 9

E.B.C. 1409 (1988) (Nagle, Arb.) . 14,16

Casablanca Indus. v. UFCW Local 23-Giant Eagle

Pension Fund, 7 E.B.C. 2705 (1986) (Jaffe,

Arb.), aff'd in part sub nom. Huber v. Casa-

blanca Indus., No. 87-0077 (W.D. Pa. Oct. 30,

1989), aff'd, 916 F.2d 85 (3d Cir. 1990), petition

for cert. filed, 59 U.S.L.W. 3503 (U.S. Jan. 9,

BIE D, ... ccccccaccocssediiibscsienstncsasienmannaeeeee .....14, 16, 18

a States, S.E. and S.W. Areas Pension Fund

*, Gerber Truck Serv., 870 F.2d 1148 (7th Cir.

1989) . eee ncet ii atta ae 4, 5, 26

Central States Pension Fund | v. _ Bellmont Trucking

Co., 610 F. Supp. 1505 (N.D. Ind. 1985), aff'd,

788 F.2d 428 (7th Cir. 1986) . 25

Chicago Truck Drivers Pension Fund 1 v. . Louis Zahn

Drug Co., 890 F.2d 1405 (7th Cir. 1989) . Ze 10

Connolly v. PBGC, 475 U.S. 211 (1986) —............ passim

_ Connolly v. PBGC, 581 F.2d 729 (9th Cir. 1978),

cert. denied, 440 U.S. 935 (1979) 4

Del Monte Corp. v. Bakery & Confectionery Union

& Indus. Pension Fund, 8 E.B.C. 1574 (1986)

Cian, BD cceccoccsnsninntisiisiliipmanaeatnantmcaiiiansiodn 21

Ferquson v. Skrupa, 372 US. 726 (1963) . ... 23,24

Grand Union Co. v. Food Employers Labor ‘Rela-

tions Ass'n, 808 F.2d 66 (D.C. Cir. 1987) ......... 9

TABLE OF AUTHORITIES—Continued

Page

H.C. Elliott, Ine. v. Carpenters Pension Trust

Fund, 13 E.B.C, 1962 (1991) (Kagel, Arb.) 20

Hurd v. Hutnik, 419 F. Supp. 630 (D.N.J. 1976) 6

Keith Fulton & Sons v. New England Teamsters &

Trucking Indus. Pension Fund, 762 F.2d 1137

(Ist Cir. 1985) (en banc) - 12, 14, 16

Keyes v. School Dist. No. 1, 413 U.S. 189 (1973) 20

Lavine v. Milne, 424 U.S. 577 (1976) 16, 20

Lewis v. Benedict Coal Corp., 361 U.S. 459 (1960) 5

Local Union 5, Sheet Metal Workers’ Int'l Ass'n

v. Mahoning & Trumbull County Bldg. Trades

Welfare Fund, 541 F.2d 636 (6th Cir. 1976) 5

Lucas v. South Carolina Coastal Council, 112 8. Ct.

2886 (1992) a 28

Marshall v. Jerrico, 446 U. S. 238 (1980) 17, 18

Mathews v. Lucas, 427 U.S. 495 (1976) 19

Michigan United Food and Commercial Workers

Pension Fund v. Eberhard Foods, Ine., 831 F.2d

1258 (6th Cir. 1987) 15

Mobile, J. & K.C. Ry. v. Turnipseed, 219 U.S. 35

(1910) ........... 20

Nachman Corp. v. PBGC, 446 US. 359 (1980) 1,2,4

Nachman Corp. v. PBGC, 592 F.2d 947 (7th Cir.

1979) ‘ 27

National R.R. Passenger Corp. v. Atchison, T. &

S.F. Ry., 470 U.S. 451 (1985) aaiek 23

NLRB wv. Amar Coal Co., 453 U.S. 322 (1981) 29

Noble State Bank v. Haskell, 219 U.S. 104 (1911) 29

Norman v. Baltimore & O. R.R., 294 U.S. 240

(1935)

O'Hare v. General Marine Transp. Corp., 740 F.2d

160 (2d Cir. 1984), cert. denied, 469 U.S. 1212

PBGC wv. R.A. Gray & Co. 467, U.S. 117 (1984) passim

Peick v. PBGC, 724 F.2d 1247 (7th Cir. 1983), cert.

denied, 467 U.S. 1259 (1984) . 23

Peick v. PBGC, 539 F. Supp. 1025 (N.D. Ill. 1982) 29

Philadelphia, B. & W. Ry. v. Schubert, 224 U.S. 603

ET RSD IRR a ees

TABLE OF AUTHORITIES—Continued

Page

PTMA-ILA Pension Fund v. E.W. Coslett & Sons,

Inc., 6 E.B.C. 2705 (1985) (Jaffe, Arb.) 21

Republic Indus. v. Teamster Joint Council No. 83,

718 F.2d 628 (4th Cir. 1983), cert. denied, 467

es oa 12

Roark v. Boyle, 439 F.2d 497 (D.C. Cir. 1970) 26

Stanley v. Illinois, 405 U.S. 645 (1972) 19

Stump v. Sparkman, 435 U.S. 349 (1978) 17, 18

Taylor v. Hayes, 418 U.S. 488 (1974) 18

Textile Workers Pension Fund v. Standard Dye &

Finishing Co., T25 F.2d 843 (2d Cir.), cert. de-

nied, 467 U.S. 1259 (1984) are oereeee 12

Tumey v. Ohio, 273 U.S. 510 (1927) 18

United Mine Workers of America Health and Re-

tirement Funds v. Robinson, 455 U.S. 562

(1982) 27

United Retail & Wholesale Employees Teamsters

Union Local No. 115 Pension Plan v. Yahn &

McDonnell, Inc., 787 F.2d 128 (3d Cir. 1986),

aff'd by equally divided vote sub nom. PBGC rv.

Yahn & McDonnell, Inc., 481 U.S. 735 (1987) 12

United States Dep't of Agric. v. Murry, 413 US.

508 (1973) 19

Usery v. Turner Elkhorn Mining Co., 428 US. 1

EERSTE | passim

Viandis v. Kline, 412 US. 441 (1973) 19

Wachtell, Lipton, Rosen & Katz v. Commissioner, .

No. 14574-90, slip op. (T.C. July 14, 1992) T-

Washington Star Co. v. International Typoyraphi-

cal Union Negotiated Pension Plan, 729 F.2d

1502 (D.C. Cir. 1984) 12, 20

Washington Star Co. v. International Typoqgraphi-

cal Union Negotiated Pension Plan, 5&2 F. Supp.

301 (D.D.C. 1983) Saale 5, 26

Williamson rv. Lee Optical Co., 348 US. 483

(1955) . 23. 24

Withrow v. Larkin, 421 U.S. 35 (1975) 22

Woodward Sand Co. v. Operating Eng'rs Pension

Trust, 3 E.B.C. 2351 (1982) (Kaufman, Arb.) - 17

TABLE OF AUTHORITIES—Continued

STATUTES AND REGULATIONS CITED

26 U.S.C. Section 401 (a)

29 U.S.C.

Section 411 (d) (6)

Section 412(c) (3) (A)

Section 413(b) (7)

Section 413(c) (2)

Section 7701 (a) (35)

Section 186(c) (5)

Section 100la(a) (4)

Section 1001la(c) (2)

Section 100la(c) (3)

Section 1002 (34)

Section 1002 (35)

Section 1002 (37)

Section 1053

Section 1053 (b) (1)

Section 1060(a)

Section 1081Ta) (8)

Section 1082(¢) (3) (A)

Section 1082(c) (9)

Section 1108(c) (2)

Section 1241

Section 1242

Section 1242 (b)

Section 1301 (a) (3)

Section 1302 (a)

Section 1302(a) (1)

Section 1302(b) (1)

Section 1306 (1976)

Section 1321 (b) (1)

Section 1323

Section 1361

Section 1361 (1976)

Section 1362(b) (1976)

Section 1364 (1976)

Section 1381 (1976)

Section 1281 (b) (1)

Section 1381 (¢) (2)-(4) (1976)

Section 1383

Section 1383 (a)

Page

—

oe ok

—

wn De nee Nee DADA see uve & & &

2, 6,2

— a

vi vii

TABLE OF AUTHORITIES—Continued TABLE OF AUTHORITIES—Continued

Page Page

Section 1383 (e) 21 § 2641.4 . 19

Section 1384 21 § 2641.4(a) (1) 10, 21

Section 1385 ~ § 2641.4(a) (2) 9

Section 1385 (b) (2) (A) (i) 21 § 2641.4(a) (4) 10

Section 1391 x | § 2641.5. ; 19

Section 1391 (b) x §$ 2641.5(c) 9

Section 1391 (b) (1) ~ ' § 2641.5(d) 9

Section 1391 (b) (2) (E) 8, 20 | § 2641.5(e) (3) 9

Section 1391 (b) (3) (B) 8 § 2641.5(g¢) 10

Section 1391 (b) (4) ~ ; § 2641.7(a) (1) . 10

Section 1391 (c) (1) 8 § 2642.2 x

Section 1391 (ce) (4) 23

Section 1393 (a) 7.15 | ACTS OF CONGRESS CITED

Section 1393(b) (1) 6 | Employee Retirement Income Security Act of 1974,

Section 1393 (c¢) 8 ) Title IV, 29 U.S.C. $$ 1301-1461 (1988) 1

Section 1394 (a) ~ . Multiemployer Pension Plan Amendments Act of

Section 1394 (b) 8 ) 1980, Pub. L. No. 96-364, 94 Stat. 1208 Be

Secti : |

te a = ene i. ) LEGISLATIVE MATERIALS CITED

Section 1399(b) (1) 9 ) 126 Cong. Rec. 810100 (daily ed. July 29, 1980) 3

Section 1399(b) (2) 9 126 Cang. Rec. 323288 (daily ed. Aug. 26, 1980) 18

Section 1399(¢) (1) 24, 28 126 Cong. Rec. H7899 (daily ed. Aug. 26, 1980) 1n

Section 1401 11 S. Rep. No. 383, 93d Cong., 2d Sess. (1974) 14

Section 1401 (a) 11,19 H.R. Rep. No. 807, 93d Cong., 2d Seas. (1974) 14

Section 1401 (a) (2) 9 H.R. Rep. No. 869, 96th Cong., 2d Sess. (1980) 3, 15,

Section 1401 (a) (3)¢6 12, 13, 22 16, 24

Section 1401 (a) (3) (A) 10, 12, 20 Multiomployer Pension Plan Termination Inaur-

Section 1401 (a) (3) (B) 10, 13, 15 ance Program: Hearings before the Subcomm.

= Section 1401 (a) (3) OB) Ci) 15 on Oversight « of | the House Comm. on Ways and

Section 1401 (a) (3) (B) (ii) 15 Means, 96th Cony., ist Sess. (1979) 5

Section 1401 (b) (2) 10 Sen. Gomm. on Labor and Human Resources, 96th

Section 1401 (¢) 10,13 Cong., 2d Sess., S. 1076: The Multiemployer

Section 1405 « Pension Plan Amendments Act of 1980: Sum-

Section 1431 1 mary and Analysis of Consideration (Comm.

20. F.R. § 901.1.-.71 6 Print 1980) » 15, 16

: ‘

wore. a (8) (0888) - OTHER AUTHORITIES CITED :

§ 2641.3(b) 19 D. McGill, Fundamentals of Private Pensions (5th

§ 2641.3(c) 19 ed. 1984) 7, 23, 25

viii

TABLE OF AUTHORITIES—Continued

Frank Cummings and Alicia Kershaw. Multiem-

ployer Plans—Special Rules, 359-24 Tax Mymt.

(BNA) (1990)

Gerald Cole and Ellen Hennessy, Miultiemployer

Withdrawal Liability, 1 Pens. and Profit Sharing

(P-H) (1984)

J. Stephen Caflisch, Employer Withdrawal Liahil-

ity Under the Multiomployer Pension Plan

Imendments Act of 1980, 9 Pens. Rep. (BNA)

(19R2)

PBGC Op. Lir. 91-7 (Oct. 1, 1991)

Pension Benefit Guaranty Corporsutiom, Woell

employer Study Required by FPA Mim! f i

(1978)

Prohibited Transaction Exemption W ») Fed

Reg. 12740 (1976)

0 Wigmore on Evidence & 2486 (Chatibourne rev.

ed. 1981)

Paye

23, 25

INTEREST OF THE AMICUS CURIAE

Amicus curiae the Pension Benefit Guaranty Corpora-

tion (“PBGC") is the federal ageney charged by Con-

gress with the responsibility for administering and en-

forcing Tithe IV of the Employee Retirement Income

Security Act of 1974, as amended (“ERISA”), 29 U.S.C.

$$ 1301-1461 (1988), incinding the provisions of the

Multiemployer Pension Plan Amendments Act of 1980

(“MPPAA”), Pub. L. No. 96-364, 94 Stat. 1208, at issue

here.’ PBGC insures the payment of certain pension bene-

fits to participants in, infer alia, insolvent multiemployer

pension plans. 29 U.S.C. ££ 1361, 1431. Among the

PBGC's purposes is “encourag!/ing| the continuation and

maintenance of voluntary private pension plans for the

benefit of their participants.” 29 U.S.C, £1302(a) 1).

This case involves constitutional challenges to provi-

sions in MPPAA that are intended both to protect PBGC’s

multiemployer pension plan insurance program and to bol-

ster the statutory objective of encouraging the continua-

tion and maintenance of multiemployer pension plans.

PBGC therefore has a vital interest in its outcome.

STATEMENT

A. Congress's Response to a Faltering Multiemployer Plan

Program.

The background and legislative history of both ERISA

and MPPAA are set forth in detail in Connolly v. PBGC,

175 U.S. 211 (1986), and PBGC +. R.A. Gray & Co., 467

U.S. 717 (1984). See also Nachman Corp. v. PBGC, 146

U.S. 359 (1980). We summarize here only those portions

of that description relevant to the issues before the Court.

Congress enacted ERISA in 1974 to “guarantee that ‘if

a worker has been promised a defined pension benefit upon

'The PBGC is a wholly-owned federal government corporation

whose Board of Directors is composed of the Secretaries of Labor.

Commerce, and Treasury. The ? BGC, which has independent liti

gating authority, 20 U.S.C, §1302(b) (1), appears in this Court

through its own counsel

wee

retirement—and if he has fulfilled whatever conditions

are required to obtain a vested benefit—he actually will

receive it.) Gray, 467 U.S. at 720 ‘quoting Nechman,

446 U.S. at 375). To that end, Congress established in

ERISA a comprehensive scheme for the regulation of

private pension plans, including a pension plan termina-

tion insurance program to be administered and enforced

iy PBGC. 29 U.S.C. § 1302 +a),

PBGC's insurance program, which covers both single-

employer and multiemployer. pension plans, was to be

financed with premiums collected from all covered plans.

29 U.S.C. £1306 (1976). When an insured single-

employer pian terminated with insufficient assets to pay

promised benefits, PBGC was obligated to pay partici-

pants certain basic benefits, 29 U.S.C. £§$ 1361, 1381

(19761, and to collect any shortfall in the plan’s assets

from the employer, up to 30 percent of the employer's net

worth. 29 U.S.C. § 1362(b) (1976). Congress delayed

the mandatory guarantee of benefits in terminating mul-

tiemployer plans until 1978, however, and instead gave

PBGC discretion whether to guarantee benefits upon plan

termination. 29 U.S.C. § 1381(¢1 (21-14) (1976). When

a multiemployer plan terminated, all employers that had

contributed to the plan during the five years before its

termination were liable to the PBGC for the shortfall in

amounts proportional to their share of the plan’s con-

tributions during that period, subject to the 30 percent of

net worth limitation. 29 U.S.C. £ 1364 (1976).

In 1978, Congress further postponed a mandatory

guarantee because the threat of multiemployer plan ter-

minations posed an unacceptable risk to the insurance

system. Gray, 467 U.S. at 720-22.° Indeed, ERISA’s

*A 1978 PBGC report esiimated that about ten percent of all

multiemployer plans, covering 1.3 million participants, could ter-

minste before 1988, costing the insurance system about 4.8 billion

dollars, and requiring unacceptable premium increases. Pension

jenefit Guaranty Corporation, Multiemployer Study Required by

enactment may have exacerbated the problem by encour-

aging employers to withdraw from weak multiemployer

plans. Connolly, 475 U.S. at 215-16; Gray, 467 U.S. at

722-24. The absence of immediate liability upon with-

drawal permitted an employer to “withdraw from a plan

leaving unfunded benefit obligations for his employees

which must be paid by the remaining employers in the

plan,” and encouraged a “ ‘last man out’ mentality, with

employers withdrawing from plans to avoid possible plan

termination liability.” 126 Cong. Rec. 810,100 ‘daily ed.

July 29, 1980) (statement of Sen. Javits).

Accordingly, after several years of legislative and ex-

ecutive branch study, and after considering numerous al-

ternatives, Congress enacted MPPAA. Gray, 467 U.S.

at 723-25, 732. Under MPPAA, if an employer with-

draws from a multiemployer plan, it incurs “withdrawal

liability” to the plan. Withdrawal liability pr “ects the

financial stability of multiemployer plans and the retire-

ment income of millions of participants by requiring

withdrawing employers to continue funding their share

of the plans’ liabilities. Withdrawal liability, which is “a

prophylactic extension of the liability initially imposed by

ERISA,” Connolly, 475 U.S. at 231 (O’Connor, J., con-

curring), is a “fixed and certain debt to the pension plan”

that is*.“the employer’s proportionate share of the plan’s

‘unfunded vested benefits.’” Connolly, 475 U.S. at 217

(quoting Gray, 467 U.S. at 725!. By requiring a with-

drawing employer to pay its fair “share of the plan obli-

gations,” Connolly, 475 U.S. at 225, Congress ensured

that those obligations did not fall on the remaining em-

ployers and discourage new employers from joining the

plans. Gray, 467 U.S. at 721-23. Withdrawal liability

was thus the cornerstone of Congress’s efforts to protect

plan participants against benefit losses.

PLL. 95-214 138-39 (1978): see H.R. Rep. No. 869, 96th Cong., 2d

Sess., pt. 1, at 56-57 (1980), reprinted in 1980 U.S.C.C.A.N, 2918,

2924.

Bb. The Special Nature of Multiemployer Pension Plans.

Congress's solution to the problem of underfunded mul-

tiemployer pension plans reflected the special nature of

these plans. Multiemployer plans, by definition, are pen-

sion plans to which more than one employer is required

to contribute, and are maintained pursuant -to collective

bargaining agreements. 29 U.S.C. § 1301(a'13) (1988),

See also 29 U.S.C. $ 1002137). Where a union partici-

pates in plan management, the plan must be jointly ad-

ministered by representatives of labor and management

under section 302(¢) 15) of the Labor Management Rela-

tions Act of 1947 (“*LMRA"), 29 U.S.C. § 18616115),

Pension plans ar@ either “defined contribution plans”

or “defined benefit plans”; respondent is a defined bene-

fit pension plan.* Because participants in a defined bene-

fit plan receive a benefit only if they “vest,” some partici-

pants in defined benefit plans never receive benefits. Sec.

e.g., Central States, S.E. and S.W. Areas Pension Fund

v. Gerber Truck Serv., 870 F.2d 1148, 1154 (7th Cir.

1989) ‘en banc!.' The benefits payable from a defined

*A defined contribution plan provides for contributions to an

ndividual account for each participant and pays benefits based

solely upon the value of the participant's account. 29 U.S.C.

$ 1002134). The funding provisions of ERISA generally do not

apply te such plans, 20 U.S.C. § 1081(a) (8), and such plans sre

not insured, 29 U.S.C. §$ 1321(b)(1). See Connolly v. PBGC, 581

F.2d 729, 733 (9th Cir. 1978), cert. denied, 440 U.S. 985 (1979).

By contrast, 2 defined benefit plan, which is any plan that does

not provide benefits based atipen the value of the participant’s ac-

count, 29 U.S.C. § 100235), promises a participant a fixed and

definite benefit. See Nachmgn, 446 U.S. at 363 n.5. Most multi-

employer pension plans are dgfined benefit plans.

' Benefits in a plan vest after a participant completes a specified

period of service, 20 U.S.C. $1053: thus, « plan’s “vested benefits”

include amounts payable in the future to participants who have not

vet retired, as well as amounts currently being paid to retirees

or their beneficiaries.

{es

benefit plan depend on a formula that takes into account

factors such as age, years of service, and salary.

The contributions made by employers participating in

a multiemployer pension plan are pooled in a general fund

and are based upon actuarial assumptions designed to as-

sure that enough assets will be available to pay all bene-

fits when due.* The pooled contributions of all employers

are available to satisfy any benefit obligation under the

plan. See Lewis v. Benedict. Coal Corp., 361 U.S. 459,

469 (1960) (pre-ERISA law); British Motor Car Dis-

tribs. v. San Francisco Automotive Indus. Welfare Fund,

882 F.2d 371, 378 (9th Cir. 1989); Gerber Truck, 870

F.2d at 1154; O'Hare v. General Marine Transp. Corp.,

740 F.2d 160, 173 (2d Cir. 1984), cert. denied, 469 U.S.

1212 (1985); Local Union 5 Sheet Metal Workers’ Int’!

* The pooling of contributions enables employers to share the

cost of providing pensions to their employees, reduce administrative

costs, and increase investment options. Washington Star Co. v.

International Typographical Union Negotiated Pension Plan, 582

F. Supp. 301, 303-04 (D.D.C. 1983), aff'd, 729 F.2d 1502 (D.C.

Cir, 1921). These features are particularly beneficial in indus-

tries where

there was little if any likelihood that individual employers

would or could establish single-employer plans for their em-

ployees ..., where there are hundreds and perhaps thousands

of small employers, with countless numbers of employers going

in and out of business each year, [and where! the nexus of em-

ployment has focused on the relationship of the workers to the

union to which they belong, and/or the industry in which they

are employed, rather than to any particular employer.

Multiemployer Pension Plan Termination Insurance Program:

Hearings betore the Subcomn. on Oversight of the House Comm.

on Ways and Means, 96th Cong., Ist Sess. 50 (1979) (statement

of Robert A. Georgine, Chairman, National Coordinating Commit-

tee for Multiemployer Plans). Such plans provide access to a

trained labor supply that can move from employer to employer and

project to project without a loss of service credit. Washington Star,

582 F. Supp. at 304; see also 29 U.S.C. §$ 1053(b) (1), 1060(a) ;

29 C.F.R. § 2530.210(¢)(1) (1991) (portability of service credit

mandatory ).

Union ve. Mahoning and Trumbull County Bldq. Trades

Welfare Fund, 541 F.2d 636, 639 (6th Cir. 1976); Hurd

'. Hutnik, 419 F. Supp. 630, 644 (D.N.J. 1976) (pre-

ERISA law). Thus, for purposes of determining whether

a multiemployer plan is for the “exclusive benefit” of an

employer's employees and beneficiaries, see 26 U.S.C.

$401ia'; 29 U.S.C. § 18616115), all of the participants

in the plan are considered to be the employees of each

employer participating in the plan. 26 U.S.C. $413

ie) (2),

Under the Internal Revenue Code, moreover, the limits

on the amount of contributions deductible are determined

“as if all participants in the plan were employed by a

single employer.” 26 U.S.C. § 413(b)(7). See Bitumi-

nous Coal Operators Ass’ v. Connors, 867 F.2d 625, 628

(D.C. Cir, 1989). And consistent with the pooling of con-

tributions and benefit liabilities, ERISA as originally en-

acted imposed upon employers a contingent termination

liability based upon the aggregate unfunded liabilities of

a terminating multiemployer plan. 29 U.S.C. § 1364

(1976). The pooling concept applicable to multiemployer

pension plans has, accordingly, been deeply embedded in

federal law for decades.

C. The Statutory Process For Calculating Withdrawal Lia-

bility.

Withdrawal liability is an employer's statutory share

of the plan’s “unfunded vested benefits,” 29 U.S.C.

< 1381'bi(1); thus, the first step in calculating with-

drawal! liability is caleulating the plan’s unfunded vested

benefits. The plan’s actuary, who is subject to regulatory

and professional standards, 29 U.S.C. ss 1241, 1242; 26

U.S.C. § 7701(a) (35); see 20 C.F.R. $$ 901.1-.71. deter-

mines the present value of a plan’s liability for vested

benefits in an actuarial valuation performed at least. tri-

ennially, and in many plans, annually. See 29 U.S.C.

+8 1082(¢1 (9), 13931b) (1). The actuarial valuation is a

snapshot, as of a given date, of the present value of the

plan’s liability for those benefits,

To arrive at the present value of a plan’s liability for

vested benefits, the actuary must employ certain assump-

tions and methods. 29 U.S.C. § 1898(a). In general,

after arriving at a total value of all vested benefits then

earned by all participants, the actuary must discount that

value by using certain actuarial assumptions. The actuary

knows, for example, that some participants will die before

receiving all or a portion of their benefits. Accordingly,

the actuary uses a mortality assumption to discount the

‘otal value to reflect this contingency. Similarly, the ac-

tuary knows that some vested benefits will be satisfied by

earnings on assets the plan is expected to accumulate for

decades into the future. Consequently, the actuary uses

actuarial interest rate assumptions to discount the liabil-

ity for estimated future investment earnings over the

period—often 40 years or longer—during which the vested

benefits will be paid.* By law, the actuary’s assumptions

and methods must be “in the aggregate, . . . reasonable”

and “offer the actuary’s best estimate of anticipated ex-

perience under the plan.” 29 U.S.C. § 1393(a).7

“As noted in the concurring opinion in Connolly, if the actuary’s

assumptions prove too conservative, the plan might have excess as %

sets with which to increase benefits. 475 U.S. at 233. In the event

the assumptions prove overly optimistic and the assets do not grow

as projected, the plan may later have to increase the amount of

required contributions; however, the law generally does not permit

accrued benefits to be reduced. See 26 U.S.C. $411(d) 16).

7 PBGC is authorized to issue regulations governing such as-

sumptions, 29 U.S.C. §$1393(a), but, due to the varying demo-

graphics and investments among multiemployer plans, has not de-

termined it necessary to do so. MPPAA’s “reasonable in the ag-

gregate” standard, however, has a well-settled meaning in both the

actuarial profession and the law. The standard is Virtually iden-

tical to that contained in 29 U.S.C. § 1082(¢) (3) (A) (ii) and 26

U.S.C. §412(¢) (3) (A) (ii), which govern actuarial assumptions

used for determining the contributions required to be made to

multiemplover pension plans. See generally D. MeGill. Funda-

mentals of Private Pensions 242 (5th ed. 1984) {hereinafter “Me-

Gill”; Wachtell, Lipton, Rosen & Katz v. Commissioner, No.

14574-90, slip op. at 9-18 (T.C. July 14, 1992),

After calculating the present value of the plan’s vested

benetits, the actuary deducts the value of the plan’s as-

sets to determine the amount of the plan’s unfunded

vested benefits, 29 U.S.C. § 13931¢e). The actuary’s valu-

ation is then presented to the trustees of the plan.

In the second step in the process, the trustees must al-

locate the unfunded vested benefits pursuant to one of

four statutory allocation methods, or a method approved

by PBGC, 29 U.S.C, £1391." Respondent used the “pre-

sumptive” method set forth in 29 U.S.C. § 1391(b), which,

as a “construction industry” plan, it is required to use for

the plan’s construction employers. See 29 U.S.C. § 1391

fehi dl); 29 CLPLR, S$ 2642.2. Under that method, the plan

determines a withdrawing employer's proportional share

of each of three different categories of unfunded vested

benetits.’ Generally, the employer's share is derived from

fractions comparing the employer's required contributions

during a 5-year period to the contributions made by all

employers during the same period. 29 U.S.C. § 1391 (b)

(2.08) Cibb, (he +3) ¢ Bi. (bi +4) OD) iis.

In the third step, the trustees determine whether and

when an employer has withdrawn. See 29 U.S.C. $$ 1383,

1385. Then, after considering on the basis of available

facts Whether any of MPPAA’s “forgiveness provisions”

apply, sec, ey., 29 U.S.C. § 1405, the trustees issue a no-

* By law, the trustees must select an allocation method before the

witndrawal of any employer to which the method is applied. 29

U.S.C. £ 139412). Likewise, all allocation methods are based on

actuarial valuations performed for plan years preceding the em-

ployer’s withdrawal, 20 U.S.C. $1391, and the allocation method

must “operate and be applied uniformly with respect to each em-

ployer.” 29 U.S.C. $1394(b).

* Those categories are (1) the employer's proportional share of

post-1980 changes in the unfunded vested benefits; (2) its share,

if any, of pre-1980 unfunded vested benefits: and (3) its share

of reallocated unfunded vested benefits, if any (i.e... amounts un-

collectible or unassessable for reasons described in 29 U.S.C.

$1391(b)(4)). 29 U.S.C. § 1391(b)(1)(A), (B), (C).

tice and demand for withdrawal! liability. 29 U.S.C.

£1399 (bit),

The fourth step is mandatory conciliation. See 29

U.S.C. § 1399(b) (2). The employer is entitled to ask the

trustees to review any specific matter relating to the de-

termination of liability, identify any inacctyracies in the

determination, or furnish any additional relevant infor-

mation, 29 U.S.C. § 1399(b)(2)(A). The trustees then

review the issues raised by the employer and notify the

employer of their determination. 29 U.S.C. § 1399(b)

(2); Br.

The fifth step in the process, if a disagreement persists,

is arbitration. The arbitration is to be conducted “in ac-

cordance with fair and equitable procedures,” 29 U.S.C.

+ 1401/a'(2), that have been promulgated by the PBGC.

See 29 C.F.R. pt. 2641. Unlike the caleulation and issu-

ance of the demand, 29 U.S.C. § 1399(b) (1), or the in-

formal dispute resolution process of section 1399(b) (2),

the arbitration is a trial-type adjudication. See PBGC

Op. Ltr, 91-7 (Oct. 1, 1991) (MPPAA arbitration is a

“hearing” that “afford|s| each side a full and equal op-

portunity to be heard’).

In a MPPAA arbitration, both parties are typically

represented by counsel. 29 C.F.R. § 2641.5(e). There is

discovery similar to that under the Federal Rules of

Civil Procedure. See 29 C.F.R. § 2641.4(a) (2). The par-

ties file pre-hearing statements and exchange witness lists.

29 C.FLR. § 2641.4(a)(2); there is a hearing on the rec-

ord, 29 C.F.R. § 2641.5'1d); and each party may present

Witnesses and documentary evidence, and cross-examine

the other party’s witnesses. 29 C.F.R. § 2641.5/e) (3).

The arbitrator is empowered to issue subpoenae for the

This “informal review” is a “private ordering” that serves

to “clarify and perhaps pare down the issues,” Grand Union Co. v.

Food Employers Labor Relations Ass'n, 808 F.2d 66. 78 (D.C. Cir.

1987), and may eliminate the need for litigation.

attendance of witnesses and the production of documents.

2 CFR. § 2641.41a114), The parties are entitled to file

post-hearing briefs. 29 C.F.R. § 2641.5(g). The arbi-

trator files a written opinion, giving the reasons for his

award, including findings of fact and conclusions of law.

29 CPLR. § 2641.7/a' (1). And this opinion may be re-

viewed in federal district court, 29 U.S.C. § 1401(b) 12).

Where the arbitvator’s findings of fact may be reversed

only if contrary to “a clear preponderance of the evi-

dence.” 29 U.S.C. $1401/c). Questions of law are re-

viewed de novo. See Chicago Truck Drivers Pension Fund

\. Lows Zahn Drag Co., 890 F.2d 1405, 1411 (7th Cir.

1989).

Depending on the issues raised in the arbitration, two

“presumptions” may be applicable. First, any factual

determination made by the plan trustees under sections

1581 through 1399 and section 1405 “is presumed correct

unless the employer! shows by a preponderance of the

evidence that the determination was unreasonable or

clearly erroneous.” 29 U.S.C. § 1401(a'(3)(A)."" See-

ond, the actuary’s determination of a plan’s unfunded

vested benefits “is presumed correct unless | the employer |

shows by a preponderance of evidence that—(i) the actu-

arial assumptions and methods used in the determination

were, in the aggregate, unreasonable (taking into account

the experience of the plan and reasonable expectations }

or (ii) the plan’s actuary made a significant error in

applying the actuarial assumptions or methods.” 29

U.S.C. § 14011a) (3) 1B).

" This provision is limited to factual determinations; by con-

trast, on questions of law, the arbitrator is directed to “follow ap-

plicable law,” 20 C.F.R. § 2641.4(a) (1), and decide the case in the

manner of a trial judge, as opposed to a commercial or labor arbi-

trator who tries to reach a compromise. See 126 Cong. Rec. H7899

(daily ed. Aug. 26, 1980) (statement of Rep. Thompson).

SUMMARY OF THE ARGUMENT

Petiiioner Conerete Pipe and Products of California,

Inc. ‘“Conerete”) challenges a withdrawal liability as-

sessment by the Construction Laborers Pension Trust of

southern California (the “Plan”) that has been upheld

by an independent arbitrator and two federal courts."

Concrete challenges the presumptions in 29 U.S.C. § 1401,

but only the presumption in favor of actuarial assump-

tions Is properly before the Court, and that presumption

in no way implicates the “biased decisionmaker” case law

on which Conerete relies. Moreover, even if the presump-

tion afforded the factual determinations of plan trustees—

which does nothing more than shift the burden of persua-

sion to the employer—were before the Court, Concrete’s

arguments rest on a mischaracterization of the non-adju-

dieatory functions that plan trustees perform in assessing

liability. The trustees’ role does not implicate due process

concerns because it is ministerial and quasi-prosecutorial

rather than adjudicative, and their institutional bias,

if any, is remote and insubstantial. And, in any event,

24 U.S.C. §1401/a) and regulations promulgated there-

under provided Concrete a plenary trial-type hear-

ing before an independent adjudicator; consequently, the

burden of proof did not deprive Concrete of a full and

fair opportunity to present its case.

Concrete’s contention that MPPAA violates substantive

due process and the “takings” clause of the Fifth Amend-

ment is controlled by this Court’s unanimous decisions in

Connolly and Gray. Conerete’s arguments, moreover, rely

on a misunderstanding of the nature of multiemployer

' The Ninth Circuit agreed with the arbitrator that Concrete’s

withdrawal occurred in 1981, after the effective date of MPPAA,

J.A. at 216, 379, 431-32, and this Court declined to review the

question. The Ninth Cireuit also agreed with the arbitrator’s re-

duction of the amount assessed, J.A. at 402, 432, a ruling neither

party now contests. Accordingly, neither of these issues is before

the Court.

“se 12

pension plans, and ignore the fact that Concrete was on

notice when it joined the Plan that th« Plan was under-

funded, that it could be responsible for a share of that

underfunding on the basis of its contributions to the

Plan, and that ERISA had invalidated liability disclaimer

clauses like the one on which Concrete now relies.

All of Conerete’s challenges are, consequently, without

merit, and the decision of the court below should. there-

fore, be affirmed.

ARGUMENT

I. CONGRESS’S CHOSEN METHOD FOR RESOLU-

TION OF WITHDRAWAL LIABILITY DISPUTES

DID NOT DENY CONCRETE PROCEDURAL DUE

PROCESS.

Five of the six Courts of Appeals that have considered

the issue have upheld both of the presumptions in 29

U.S.C. § 1401/a)(3) against procedural due process at-

tack.'* Only the Court of Appeals for the Third Circuit

held otherwise. and that court addressed only the vre-

sumption in section 1401/ai(3)(A) applicable to factual

determinations by plan trustees."

Here, without distinguishing between the two presump-

tions, Concrete obtained a writ of certiorari with respect

to a question regarding “the presumptions in 29 U.S.C.

'S Keith Fulton & Sons v. New England Teamsters & Trucking

Indus. Pension Fund, 762 F.2d 1137. 1140-48 (1st Cir. 1985) (en

banc); Board of Trustees v-. Thompson Bldg. Materials, 749 F.2d

1396, 1403-04 (9th Cir. 1984), cert. denied, 471 U.S. 1054 (1985) ;

Washington Stor, 729 F.2d at 1511; Textile Workers Pension Fund

v. Standard Dye & Finishing Co., 725 F.2d 843, 855 (2d Cir.), cert.

denied, 467 U.S. 1259 (1984) - Republic Indus. v. Teamsters Joint

Council No. 82, 718 F.2d 628, 639-41 (4th Cir. 1983), cert. denied,

467 U.S. 1259 (1984).

"United Retail & Witelesale E mployees Teamsters Union Local

No. 115 Pension Plan v- Yohn & McDonnell, Inc., 787 F.2d 128 (3d

Cir. 1986), aff'd by equally divided vote sub nom. PBGC v. Yahn &

McDonnell, Inc., 481 U.S. 735 (1987).

* 1401.” In fact, however, only the presumption in section

1401/4) (3)(B)—the presumption afforded actuarial as-

sumptions and methods—is properly before the Court.”

That presumption does not even arguably implicate the

“biased decisionmaker” line of cases on which Concrete

relies, and the decision of the court below should, there-

fore, be affirmed.

A. Enrolled Actuaries, Not Plan Trustees, Are Re-

sponsible for Selecting Actuarial Assumptions.

Conerete argues that plan trustees perform an adjudi-

caiive function when they choose the actuarial] assump-

tions used to calculate withdrawal liability, and that they

are institutionally incapable of impartiality in perform-

ing this function. However, the selection of actuarial as-

sumptions with which to calculate a plan’s unfunded

vested benefits is the responsibility of the plan’s enrolled

actuary, not the trustees.

Congress made it clear that actuarial assumptions must

be “independently determined by the actuary,” and that

'’ Of the three issues raised by Concrete in contesting the Plan’s

withdrawal liability assessment, only resolution of the actuarial

assumption issue was potentially affected by use of a presumption.

Both the arbitrator and the district court decided the date of with-

drawal issue without regard to the presumptions in section 1401

(a) (3), see J.A, at 205-16, 419-22, and Concrete prevailed as to the

appropriate contribution history to be used in calculating its li-

ability. And while the arbitrator referred to the statutory presump-

tions in his decision regarding Concrete’s challenge to the Plan's

actuarial assumptions, even there, he recited the presumptions only

after having already reached his conclusion. See J.A. at 378-402.

Section 1401(¢) also provides that, upon review of an arbitrator’s

decision, the district court is to presume, unless rebutted by a

“clear preponderance of the evidence,” that the findings of fact

made by the arbitrator were correct. Here, however, the district

court expressly found that the arbitrator's factual conclusions and

inferences were reasonable, and not even “contrary to a mere pre-

ponderance.” J.A. at 421 (emphasis added). Concrete was, there-

fore, also unaffected by this statutory presumption.

plan trustees may not “substitute [their] judgment in

these matters for that of a qualified actuary.” S. Rep. No.

383, 93d Cong., 2d Sess. (19741, reprinted in 1974

ULS.C.C.LALN. 4890, 4954. See Keith Fulton, 762 F.2d at

1141 n.3. Indeed, where it has been found that a plan’s

actuarial assumptions were wot the actuary’s “best esti-

mate,” but were instead dictated or influenced by the

trustees, they have been struck down. See, e.g., Casa-

blanca Indus. v. UFCW Local 23—Giant Eagle Pension

Fund, 7 Employee Benefit Cas. (BNA) (“E.B.C.") 2705

(1986) (Jaffe, Arb.,), affd in relevant part sub nom.

Huber v. Casablanca Indus., No, 87-0077, slip op. (W.D.

Pa. Oct. 30, 1989), aff'd, 916 F.2d 85 (3d Cir. 1990), pe-

tition for cert. filed, 59 U.S.L.W. 3503 (U.S. Jan. 9,

1991); ef. Carnation Co. v. Central States Pension Fund,

9 E.B.C. 1409, 1428-29 (1988) (Nagle, Arb.). Moreover,

if the actuary allows himself to be subjected to improper

influence, his enroliment can be suspended or terminated.

29 U.S.C. § 1242 1b).

Actuaries are, of course, in no sense “biased decision-

makers.”” Rather, they are trained and licensed experts

charged by Congress with establishing the assumptions

necessary for calculating a plan’s unfunded vested bene-

fits.

Congress’s decision to assign this task to actuaries was

eminently reasonable. In 1974, Congress had entrusted

the determination of actuarial assumptions and methods

for funding purposes to the professional judgment of the

plan’s enrolled actuary, 26 U.S.C. § 412(¢)(3) (A), 29

U.S.C, § 10821¢)13)(A), because “proper actuarial as-

sumptions may differ substantially between industries,

among firms, geographically, and over time. ... |Thus,]

any attempt to specify actuarial assumptions . . . would

in effect place... plans in a straitjacket so far as estimat-

ing costs is concerned, and would be likely to result in

cost estimates that are not reasonable.” H.R. Rep. No.

807, 93d Cong., 2d Sess. 27 (1974), reprinted in 1974

U.S.C.CLA.N 4670, 4694. Six years later, when enacting

MPPAA, Congress again turned to the actuarial profes-

sion to establish actuarial assumptions for withdrawal

liability purposes, and adopted the same “reasonable” and

“best estimate” standards for that purpose that had been

in use for funding purposes, 29 U.S.C. § 1893 (a). At the

same time, Congress limited challenges to a showing that

the actuary failed to conform to these standards, 29

U.S.C. § 1401/a) (3) 1B). This limitation Was necessary

io reduce the likelihood of dispute and delay over

technical actuarial matters with respect to which

there are often several equally “correct” approaches,

Without such a presumption, a plan would be helpless

to resist dilatory tactics by a withdrawing employer- -

tactics that could, and could be intended to, result in

prohibitive collection costs to the plan. The presump-

tion can be rebutted in those cases where injustice

would otherwise result to the withdrawing employer.

Sen. Comm. on Labor and Human Resources, 96th Cong..

2d Sess. S. 1076: The Multiemployer Pension Plan

Amendments Act of 1980: Sum mary and Analysis of Con-

sideration 20-21 (Comm. Print 1980) [hereinafter “Sen-

ee Summary”|. Accord H.R. Rep. No. 869, pt. 1,

at d6.

When challenging the actuary’s unfunded vested bene-

fit determination, however, the employer need only show

“by a preponderance of the evidence” that “the actuarial

assumptions and methods used... were, in the aggregate,

unreasonable (taking into account the experience of the

plan and reasonable expectations) ,” 29 U.S.C. § 1401 (a)

(3)(B) (i), or that the actuary made a “significant er-

ror” in applying them. 29 U.S.C. § 1401(a) (8) (B) (ii).

Congress’s decision to place the burden on employers to

show that the actuarial assumptions are “unreasonable”

makes sense, because actuarial assumptions are predie-

tions about events that will occur over decades, See Michi-

yan United Food and Commercial Workers Pension Fund

». Eberhard Foods, Ine., 831 F.2d 1258, 1261 (6th Cir.

1987): Keith Fulton, 762 F.2d at 1143-44. Such as-

sumptions cannot be said to be “correct” or “incorrect”

unless one is willing to wait until the final participant

dies and his annuity ceases, often 40 years or longer.

Thus, imposing the burden on employers was in no way

arbitrary. It simply reflected Congress’s desire to avoid

“lengthy, futile and costly bickering” over “matters with

respect to Which there are often several equally ‘correct

approaches," Keith Fulton, 762 F.2d at 1143 & n.7

‘citations omitted), by which employers could “effectively

nullify their obligation” by forcing the plan “to prove

every element involved in making an actuarial determina-

tion.” H.R. Rep. No. 869. pt. 1, at 86. See also Senate

Labor Summary, supra, at 20-21, Such rational choices

pass constitutional muster. See Usery v. Turner Elkhorn

Mining Co., 428 U.S. 1, 28 (1976); Lavine v. Milne, 424

U.S. 577, 585 (1976).

Nothing in the record here, moreover, indicates that

Concrete was denied a fair hearing on the actuarial as-

sumptions issue. The arbitrator, as the trier of fact,

made a credibility determination that the Plan’s enrolled

actuary, a principal in a major firm that serves many

multiemployer plans, was more persuasive than the em-

ployer’s actuary, who had no multiemployer plan eX-

perience and who insisted that on/y the rates his firm

used for its single-employer plan clients were reasonable.

J.A. at 397-98. The district court agreed with the arbi-

trator, J.A. at 423. Notably, the statutory burden of

proof has not prevented other employers from success-

fully challenging actuarial assumptions, including the in-

terest rate assumptions that are the object, of Concrete’s

attack.” That Conerete was unable to meet its burden in

18 See, e.g.. Carnation, 9 E.B.C. 1409 (actuarial assumptions and

methods for imputing age and service data unreasonable and not

actuarv’s “best estimate”): Casablanca, 7 E.B.C. 2705 ‘actuarial

asset valuation not “best estimate’ where dictated to actuary by

this case is not a basis for finding that burden constitu-

tionally defective.

B. The Presumption Afforded the Factual Determina-

tions of Plan Trustees Does Not Violate Procedural

Due Process.

1. Plan Trustees Perform No Quasi-Judicial Func-

tion and Have No Disabling Bias.

Even if the presumption afforded the trustees’ factual

determinations were properly before the Court, it in no

way implicates procedural due process concerns because

plan trustees are neither “decisionmakers” nor “biased”

in a constitutional sense.

The trustees’ determination and demand for with-

drawal liability is more the functional equivalent of the

issuance of a civil complaint or administrative charge

than an adjudication, as in Marshall v. Jerrico, 446 U.S.

238 (1980). In Jerrico, a federal agency administrator

determined violations of a child labor law and assessed

penalties under the statute, but the validity of the as-

sessment was decided de novo by an administrative law

judge. Like the administrator in Jerrico, the plan trust-

ees under MPPAA “perform{] no judicial or quasi-

judicial functions. [They] hear|] no witnesses and

rule{] on no disputed factual or legal questions.” Jer-

rico, 446 U.S. at 247. Accord Stump v. Sparkman, 435

U.S. 349, 360 (1978).

Rather, their functions of identifying employer with-

drawals and applicable exemptions, calculating liability

based on the actuary’s valuation of unfunded vested bene-

fits, demanding payment, and participating in informal

review as a prelude to arbitration, all pursuant to explicit

statutory directives, are “akin to that of a prosecutor or

trustees); Woodward Sand Co. v. Operating Eng’rs Pension Trust,

3 E.B.C. 2351 (1982) (Kaufman, Arb.) (actuarial assumption of

rate of return on investment unreasonable),

civil plaintiff.” Jerrico, 446 U.S. at 247. “!T)he strict

requirements of neutrality cannot be the same . ++ as for

judges, whose uty it is to make the final decision and

whose impartiality serves as the ultimate guarantee of

a fair and meaningful proceeding in our constitutional

regime.” /d. at 250.

Even if plan trustees could be considered “adjudica-

tors” in making their demand, they have no disqualifying

bias. Trustees, who either receive a fixed salary or serve

without pay if they are union or employer officials, 29

U.S.C. £11081¢) (2), have no obvious, direct, or personal

pecuniary interest in the outcome of withdrawal liability

disputes, Compare Jervico, 446 U.S. at 247, with Tumey

» Ohio, 273 U.S. 510 (1927). Nor, on this record, 1s

there any evidence of actual bias against Concrete. See,

e.g., Taylor v. Hayes, 418 U.S, 488 | 1974).

Concrete points to trustees’ fiduciary obligations as a

putative source of bias. But fiduciary obligations do not

permit or require a fiduciary to seek more from employ-

ers than the statute permits, nor to work at the outer

limits of the permitted range of reasonableness." To the

contrary, in proper cases trustees May prudently compro-

mise withdrawal liability claims. See 126 Cong. Ree.

S23.288 (daily ed. Aug. 26, 1980) (statement of Sena-

tors Williams and Javits). See also Prohibited Trans-

action Exemption 76-1, 41 Fed. Reg. 12,740 (1976). By

acting lawfully and reasonably, plan trustees are “with-

out [the] apprehension of personal consequences and

“without [the] fear of suit” that would disqualify them

from what Concrete erroneously suggests is a quasi-

judicial function. Stump, 435 U.S. at 363, 364. See 29

* a See. eg. Cascblanca, 7 E.B.C, 2705 ‘trustees impermissibly

directed actuary to develop conservative assumptions benefiting

fund at the expense of withdrawing employer, and thus assump-

tions did not represent actuary’s “best estimate’). See also Anita

Foundations, Inc. v. ILGWU Nat'l Retirement Fund, 902 F.2d 185,

190 (2d Cir. 1990) (“{t}he Fund cannot shield itself from liability

by hiding behind its fiduciary status”).

U.S.C. §$ 1323 ‘action or withholding of action required

under Title IV of ERISA not a breach of fiduciary duty).

2. A MPPAA Arbitration Provides an Employer

with a Full and Fair Opportunity to Challenge

a Withdrawal Liability Assessment.

After the trustees have assessed liability and informal

review has narrowed the issues to the extent possible, an

independent arbitrator hears evidence in a plenary pro-

ceeding that approximates a trial. 29 C.F.R. $$ 2641.3(b)

& (c), 2641.4, 2641.5. In this trial-type proceeding, the

employer and the plan trustees are litigants, and the ar-

bitrator takes evidence, makes credibility determinations

and findings of fact, and issues a decision. 29 C.F.R. pt.

2641. He does not merely review a prior determination

or record in the manner of an appellate tribunal. Indeed,

there is no pre-existing record. Rather, the arbitration

proceeding is in effect a trial de novo at which the em-

ployer may present any cognizable issue to the arbitra-

tor, regardless of whether the issue was raised at the in-

formal review stage. See PBGC Op. Ltr. 91-7 (Oct. 1,

1991).

In the arbitration proceeding, no issue is irrebuttably

presumed in the plan’s favor, and thus no “determinative

issue” is foreclosed from independent arbitral considera-

tion. Stanley v. Illinois, 405 U.S. 645, 656-57 (1972).'*

Indeed, the “presumptions” here do not operate like tradi-

tional presumptions at all. With a true “presumption,”

once a party proves fact A, fact B is deemed to be true.

See, e.g., Mathews v. Lucas, 427 U.S. 495 (1976) (upon

proof of specified facts, child is presumed to have been

a dependent of deceased parent). But the “presumptions”

in section 1401(a) merely shift the burden of proof to

'' Cases rejecting “irrebuttable presumptions” under the Due

Process Clause, see, e.g., United States Dep't of Agric. v. Murry,

413 U.S. 508 (1973); Vilandis v. Kline, 412 U.S. 441, 453 (1973),

are accordingly distinguishable.

the employer to show that the plan was wrong.'’ Thus,

the plan need not prove affirmatively every element under-

lying its claim; the employer must first come forward

with its case, and the plan need only rebut the evidence

the employer adduces. See Washington Star, 729 F.2d at

1511.

“Outside the criminal law area, where special concerns

attend. the locus of the burden of persuasion is normally

not an issue of federal constitutional moment.” Lavine,

424 U.S. at 585. A legitimate allocation of the burden of

proof need only have a rational basis, and assure that, in

practical effect, a party is not precluded from presenting

its case. See, e.g., Turner Elkhorn, 428 U.S. at 27-30;

Mobile, J. & K.C. Ry. v. Turnipseed, 219 U.S. 35, 43

(1910). “There are no hard-and-fast standards govern-

ing the allocation of the burden of proof. ... [It] ‘is

merely a question of policy and fairness based on experi-

ence in the different situations.” Keyes v. School Dist.

No. 1. 413 U.S. 189, 209 (1973) ‘quoting Wigmore on

Evidence § 2486 (3d ed. 19401). To prevail ina MPPAA

arbitration, an employer need only prove “by a prepon-

derance of the evidence,” the traditional civil standard,

that the plan trustees’ initial determination of factual

matters under MPPAA are “unreasonable” or “clearly

erroneous,” 29 U.S.C. § 1401 ar i3i tA).

Numerous aspects of a withdrawal liability assess-

ment can be and are challenged under this standard. On

such issues as the amount of the employer's required con-

tributions. see 29 U.S.C. § 1391'b) 12) ¢E), the employer

can overcome the “presumption of correctness” if it sim-

ply shows by a preponderance of the evidence that the

plan made a mathematical mistake.*’” An employer may

# «@

'’ This Court has recognized that a statutory pfgvision may be

stated as a rebuttable presumption, but in fact do nothing more

than allocate the burden of persuasion to a particular party. See

Lavine, 424 U.S. at 584.

2 See, e.g., H.C. Elliott, Inc. v. Carpenters Pension Trust Fund,

13 E.B.C. 1962, 1966 (1991) (Kagel, Arb.).

also challenge such determinations as the fact and date of

a withdrawal as well as the availability of statutory ex-

emptions and moderating provisions,“' and to the extent

that these determinations involve factual disputes, the

employer can overcome the “presumption of correctness”

by coming forward with a preponderance of evidence to

the contrary. To the extent that such disputes entail

statutory interpretation, the arbitrator makes an _ inde-

pendent judgment, based on “applicable law, as embodied

In statutes, regulations, court decisions, interpretations of

the agencies charged with the enforcement of the Act

and other pertinent authorities.” 29 C.F.R. § 2641.4

fart 1).~’ Indeed, as Concrete concedes, the arbitrator in

this case, interpreting 29 U.S.C. § 1384, reduced Con-

crete’s liability by over 25 percent because the Plan had

erroneously included a predecessor employer's contribu-

tion history in its calculation. J.A. at 392-93: Pet. Br at

18 n.9. 2

*' It is perfectly reasonable to require the employer to bear the

burden of proof on such issues, since it will usually have superior

access to the facts concerning such issues as the date it ceased

operations, 29 U.S.C. § 1383 (a), the existence of a labor dispute, 29

U.S.C. § 1398(2), or the existence of a qualifying sale of assets, 29

U.S.C. § 1384. See generally 9 Wi

C. § 1384. § y 9 Wigmore on Evidence & ;

bourn rev. ed. 1981), —

See, O4., Building Servs. Employees Pensign Trust v. Ogden

Allied Servs. Corp., 10 F.B.C. 1401, 1410° (1988) (Brand Arb.)

(factual determination regarding timeliness of withdrawal liabilit

demand); PMTA-ILA Pension Fund v. EW. Coslett & an

6 E.B.C, 2705, 2714-15 (1985) (Jaffe, Arb.) (factual dotermina-

tion rewarding “closed facility” reduction under 29 U.S.C. § 1397)

2 See, e.f., Ogden, 10 E.B.C. at 1410-14 (plan's interpretation

of section 1385(b)(2)(A)(i) and determination of partial with-

drawal overturned, applying traditional tools of statutory>comstruc -

tion i; Del Monte Corp. v, Bakery & Confectionery Union & Indus

attribution of contribution history to purchaser contrary to peor

language of 29 U.S.C. § 1384): Coslett, 6 E.B.C. at 2716 taleats

determination of date of withdrawal incorrect under 29 US.C

§ ISR38(e)). ‘ais

The standards of 29 U.S.C. §$ 1401(a)(3) are accord-

ingly rational and do not “foreclose|| fair and effective

consideration at a subsequent adversary hearing leading

to ultimate decision.” Withrow v. Larkin, 421 U.S. 35,

58 (1975). Indeed, as the arbitration decisions cited

above clearly indicate, arbitrators have had no difficulty

applying independent judgment to questions of credibility,

fact, and law, notwithstanding the statutory “presump-

tions.” And this is precisely what was done by the arbi-

trator in this case. J.A. at 205-16, 378-402.

Il. CONCRETE’S SUBSTANTIVE DUE PROCESS AND

TAKINGS CHALLENGES ARE CONTROLLED BY

CONNOLLY AND GRAY.

Concrete’s substantive due process and takings argu-

ments are controlled by the Court’s unanimous decisions

in Gray and Connolly, upholding MPPAA against “facial”

attacks on these grounds. Concrete attempts to show that

MPPAA is unconstitutional as applied in this case: how-

ever, virtually all of its arguments were fully addressed

by the Court’s prior decisions. To the extent they were

not, they reflect a fundamentally flawed understanding

of multiemployer plans.

A. MPPAA Did Not Deny Concrete Substantive Due

Process.

Concrete argues that it was irrational for Congress to

link the amount of its withdrawal! liability to its contri-

butions to the Plan. As this Court held in Gray, however,

Congress plainly had a rational and sound purpose for

enacting MPPAA—to discourage employer withdrawals

from multiemployer plans. 467 U.S. at 730. Congress

was concerned, after the passage of ERISA, that multi-

-employer plans would experience an increase in employer

®ithdrawals and a diminishing contribution base, caus-

ing failing plans to overwhelm PBGC’s insurance pro-

gram. See pp. —*—--3—, supra. Withdrawal liability,

which represents the withdrawn employer’s proportionate

share of the plan’s underfunding, restores the loss to the

plan's contribution base caused by the employer’s with-

drawal, See generally Gray, 467 US. at 721-25; Peick

'. PBGC, 724 F.2d 1247, 1267 (7th Cir. 1983). cert. de.

nied, 167 U.S. 1259 (1984). It Was, therefore pers

feetly logical for Congress to base an employer's liability

on its prior contributions to the plan.

In Connolly, this Court observed that Congress's allo-

cation of liability to employers who participated in a

plan was a reasonable legislative choice:

We are far from persuaded that fairness and justice

require the public, rather than the withdrawing em-

ployers and other parties to pension plan agreements

to shoulder the responsibility for rescuing plans that

are in financial trouble,

475 U.S. at 227. Whether Congress should have chosen

one particular cost-spreading formula over another to

achieve its purpose is “not a question of constitutional di-

mension.” Turner Elkhorn, 428 U.S. at 19 ‘citations

omitted’. Indeed, numerous decisions of the Court teach

that federal courts do not sit as a super-legislature to re-

assess the wisdom of a given legislative formula. FE q

National R.R. Passenger Corp. v. Atchison, T. & S.F Ry.

470 U.S. 451 (1985); Ferquson v. Skrupa, 372 U S 7243

(1963); Williamson v. Lee Optical Co., 348 US. 4183

(19551 .*"

** Congress did, in fact, legislate an alternative method for al-

locating « plan's unfunded liabilities that directly links an em-

ployer's withdrawal liability to the benefits earned by its employees

See 29 U.S.C, $ 189116) (4). However, “| flor most multiemployer

plans, the method would be completely impracticable more ax-

pensive and more cumbersome.” McGill, supra, at 574: see also

J. Stephen Caflisch, Employer Withdrawal Liability Vader the

Mulemploger Pension Plan Amendments Act of 1980 9 Pens

Rep. (BNA) 182, 190 (1982) (direct attribution method “would

require extensive data that most plans do not have . . land! is

fundamentally inconsistent with the basic nature of multiemployer

plans”): Frank Cummings and Alicia Kershow, Multiom lover

Plains—-Special Rules, 359-2d Tax Mgmt. (BNA) A-15 (1908

| hereinafter “Cummings” }. , |

Here, because Congress was concerned about’ with-

drawals resulting in a diminishing contribution base for

multiemployer plans, it linked an employer's withdrawal

liability to its contributions, and then also designed an

installment payment schedule for the liability that allows

an employer to pay on roughly the same basis as it had

been contributing. Sce 29 U.S.C. §$13991e1(1); H.R.

Rep. No. S69, pt. 1, at S2-83.° Congress thus “ap-

proach{ed| the problem of cost spreading rationally.”

Turner Bikhorn, 428 U.S. at 19. Due process requires no

more. ld. Accord berguson, 372 U.S. 726; Lee Optical,

348 U.S. 483.°°

Concrete next argues that MPPAA violates due process

by imposing liability when “none of its employees par-

ticipated long enough to have any ‘vested service’ attribut-

able to employment | with Concrete|.” Pet. Br. at 28. Re-

ferring to the concurring opinion of Justices O’Connor

and Powell in Connol/y, which suggests that the imposition

of withdrawal liability might, under certain circum-

stances, raise due process concerns, Concrete contends the

statute is constitutionally infirm because “there is no re-

lationship” between Concrete’s conduct and any detriment

to its employees. Pet. Br. at 27. However, Concrete’s

* See also Gerald Cole and Ellen Hennessy, Multiemployer With-

drawal Liability, 1 Pens. and Profit Sharing (P-H) * 1010, at 1016

(1984) ‘installment payment schedule “maintain|s| roughly the

same level of payments as the employer's required contributions

before withdrawal”).

Contvibutions, moreover, reflect the size of a withdrawing em-

ployer’s workforce, and a larger workforce equates with more em-

ployee service, which gives rise to additional benefits under the

plan. Consequently, a contribution-based fraction reflects both the

employer's workforce and the liabilities it has imposed upon the

plan.

*" Significantly, the contingent termination Jdiaility established

by ERISA wes also based on the amount of an empfoyer’s contribu-

tions to a multiemployer plan. See 29 U.S.C. § 13564 (1978). Be-

cause Concrete joined the Plan after the enactment of ERISA, it

was on notice that it was undertaking a potential liability for the

Plan's underfunding based on its share of the contributions to

the Plan. Connolly, 475 U.S. at 226-27.

argument simply ignores the design and function of multi-

employer pension plans.

As discussed above, the essence of a multiemployer pen-

sion plan is the pooling of assets and liabilities by a group

of employers. See McGill, supra, at 78-79. Typically,

employers agree to contribute a certain amount for each

hour an employee works—a collectively bargained formula

that reflects numerous actuarial assumptions about the

demographics of the entire pool of participants, rather

than these of any particular employer's workforce. See

generally Cummings, supra, at A-2; McGill, supra, at

237-38, 376. The plan then combines the contributions of

all of the employers and pays benefits out of the pool of

funds to the broader universe of plan beneficiaries. Thus,

‘tlhe whole purpose behind multiemployer pension

plans is to pool resources to pay all participants their

accrued benefits; withdrawal liability serves the pur-

pose of protecting the pool and thus the “benefit se-

curity” of participants in the plan. Withdrawal lia-

bility is therefore more than an obligation to one’s

employees; it is an obligation to the Fund. the par-

ticipants in it, and the other contributing employers.

Central States Pension Fund v. Bellmont Trucking Co.,

610 F. Supp. 1505, 1513 (N.D. Ind. 1985), aff'd, 788 F.2d

428 (7th Cir. 1986) (citations and footnote omitted). Ac-

cordingly, because employers participating in a multi-

employer plan have, by definition, elected to pool contri-

butions and share the costs of providing benefits to their

employees, it was in no way unreasonable for Congress to

require that those employers pay their share of that un-

funded liability upon leaving. It was instead rationally

related to MPPAA’s purposes of “discourag{ing| volun-

tary withdrawals” and “cushion|ing] the financial impact

lof withdrawals] on the plan.” Connolly, 475 U.S *at.217.

See also 29 U.S.C. § 1001(a) (4), (61 (2), (e) (8).

Moreover, even though none of Concrete’s employees

may have vested solely as a result of their service with

Concrete, it is possible—indeed, probable—that some of

those employees will vest in their benefits under the Plan

when their service with Concrete is added to service with

previous and future employers. Under Concrete’s reason-

ing, the employer who fortuitously employed an employee

in the vear he vested would pay the entire bill. But that

is not the way multiemployer plans work. See Gerber

Trock, 870 F.2d at 1154, 1155; O'Hare, 740 F.2d at 173-

74.

In the long run, a particular employer's contributions

will approach the value of the liabilities associated with

its employees. While this proposition may he more un-

certain over the short term, that is a risk that a business

takes when it joins a multiemployer pool.** Moreover, by

sharing the costs of providing pensions, employers con-

tributing to multiemployer plans are able to provide a

benefit package that is less costly to the employer and

more valuable to its employees, see Washington Star, 582

F. Supp. at 304, one that “the employer might himself

have established in his own economic interest.” Roark +.

Boyle. 439 F.2d 497, 505 (D.C. Cir. 1970). Accordingly,

it is not remarkable, and certainly not irrational, that

Congress chose to base an employer's withdrawal liability

on that employer’s contributions to the plan rather than

on the benefits paid by the plan to any one set of workers.

Conerete further argues that MPPAA violates substan-

tive due process because it abrogated purported limita-

tions on its liability set forth in its collective bargaining

agreement and in the Plan documents. This argument was

fully and dispositively addressed in Connolly. As the

Court there said:

“Contracts, however express, cannot fetter the consti-

tutional authority of Congress. Contracts may create

rights of property, but when contracts deal with a

oi By joining a multiemployer plan, an employer gambles that

its employees, as a whole, will vest more regularly and earn bene-

fits higher than the pool median. If that happens, the employer

is paying less than if it had contributed to a plan established solely

for its own employees.

subject matter which lies within the control of Con-

gress, they have a congenital infirmity. Parties can-

not remove their transactions from the reach of dom-

inant constitutional power by making contracts about

them.”

If the regulatory statute is otherwise within the

powers of Congress, therefore, its application may not

he defeated by private contractual provisions.

475 U.S. at 223-24 (quoting Norman v. Baltimore & O.

RR. 294 U.S. 240 (19351). See also Turner Elkhorn,

428 U.S. at 15; Philadelphia, B. & W. Ry. v. Schubert,

224 U.S. 608, 614-15 (1912).

Significantly, Concrete joined the Plan post-ERISA.

With the enactment of ERISA in 1974, employers were

on notice that if they withdrew from an underfunded

multiemployer plan, they had a contingent liability for a

share of the plan’s underfunding. Connolly, 475 U.S. at

226-27; Gray, 467 U.S. at 721. And Concrete’s collective

bargaining agreement explicitly recognized that the Plan

language purporting to limit liability was valid only “if

permitted by law under ERISA,” J.A. at 82, which it was

not. See United Mine Workers of America Health and

Retirement Funds v. Robinson, 455 U.S. 562, 575 (1982);

Nachman Corp. v. PBGC, 592 F.2d 947, 957-58 (7th Cir.

1979), aff'd, 446 U.S. 359 (1980).

Finally, Conerete contends that MPPAA is unfairly

retroactive as applied to it because a portion of its with-

drawal liability stems from unfunded liabilities that

existed before it joined the Plan. Concrete was, however,

on notice when it voluntarily joined the Plan that it was

subject to potential liability under ERISA for its share

of the Plan’s underfunding. Cf. Connolly, 475 U.S. at

226-27. And in any event, the benefit increases about

which Concrete complains were required either by court

order or by ERISA itself. Pet. Br. at 8-9."

** Concrete also insists that it is being held liable for benefit in-

creases that occurred after it temporarily ceased operations in

1979; however, the lower courts ruled that Concrete did not incur

B. The Imposition of Withdrawal Liability Is Not a

Taking of Concrete’s Property Under the Fifth

Amendment.

Because the imposition of withdrawal liability does not

violate Conerete’s due process rights, “it would be sur-

prising indeed to discover” that “Congress unconstitu-

tionally had taken the assets of (Conerete].” Connolly,

175 U.S. at 223. And indeed the Court unanimously held

in Connolly that MPPAA’s withdrawal liability provisions

do not, on their face, constitute an unlawful taking of

property. 475 U.S. at 224. Concrete nevertheless claims

that the same provisions are unconstitutional “as applied

here but makes not a single argument in support of that

claim that was not addressed dispositively in Connolly.”

Thus, as in Connolly, Conerete contends that the eco-

nomic impact of MPPAA is severe because the amount of

withdrawal liability imposed on it allegedly comprises a

significant portion of its net worth. Connolly, 475 U.S.

293. But, as the Court observed, “| ijn the course of regu-

lating commercial and other human affairs, Congress

routinely creates burdens for some that directly benefit

others.” Id. The Court further noted that the assessment

“ig not made in a vacuum” but “directly depends on the

relationship between the employer and the plan to which

it had made contributions.” /d, at 225. Here, moreover,

the assessment was significantly moderated by an install-

ment payment schedule, in this case eleven years long.

See 29 U.S.C. § 13991c) (1); J.A. at 91. Thus, “the mere

fact that the employer must pay money to comply with

. withdrawal until it permanently ceased operations in 1981, and

ihat ruling is not before the Court.

2” Contrary to Concrete’s suggestion, this Court's cafegorica! tak-

ings analysis has no applicability to this case. Sees Lucas v. South

Carolina Coastal Council, 112 8, Ct. 2886, 2293 (1992). In Lucas,

the Court noted that such analysis has been confined to regulations

that “compel the property owner to suffer a physical ‘invasion’ of

his property,” and reyulations that “den|y) all economically bene-

ficial or productive use of land.” /d.

the Act is but a necessary consequence of the MPPAA’s

regulatory scheme.” Connolly, 475 U.S. at 226.

Pointing to the concurring opinion of Justices O’Connor

and Powell in Connolly, Concrete makes much of its lack

of control over investment, benefit, and other decisions

that may have increased the unfunded benefit obligations

of the Plan, and argues that there was therefore no rela-

tionship between its conduct and the withdrawal liability

assessment. But “|a|ctual consideration of |employer|

interests is... likely, given management’s statutory right

to select half of the trustees.” Peick v. PBGC, 539 F.

Supp. 1025, 1048 «N.D. Ill. 1982), aff'd, 724 F.2d 1247

(7th Cir. 1983), cert. denied, 467 U.S. 1259 (1984). And

even if Concrete was in fact disempowered, it voluntarily

elected to enter into this relationship. Cf. NLRB v. Amar

Coal Co., 453 U.S. 322 (1981) ‘rejecting identical argu-

ment under the National Labor Relations Act). Concrete

did, moreover, avail itself of the benefits of a multiem-

ployer plan, including the pooling of assets, liabilities, and

administrative costs, and access to a skilled workforce,

which are “sufficient compensation” for the “correlative

burden” MPPAA placed on it. See Noble State Bank v.

Haskell, 219 U.S. 104, 111 (1911).

Certainly, the Court’s decision in Connolly fully dis-

poses of Concrete’s contention that it had a “reasonable

investment-backed expectation” that the collective bar-

gaining agreement and Plan documents would limit its

liability. As the Court held, the government has taken

nothing for its own use, but “only has nullified a con-

tractual provision limiting liability by imposing an addi-

tional obligation that is otherwise within the power of

Congress to impose.” Connolly, 475 U.S. at 224. Here,

moreover, the “contractual provision” itself madé clear

that it was valid only if “permitted by law under

ERISA.” J.A. at 82; Pet. Br. at 6.”

” Significantly, there was no testimony in this “as applied” chal-

lenge that Concrete’s employees believed or understood that the

Plan’s promise of benefits was conditional. Cf. Connolly, 475 U.S.

at 230-31 (O’Connor, J., concurring).

Finally, as for the nature of the governmental action,

as the Court said in Connolly, “under the Act, the Gov-

ernment does not physically invade or permanently ap-

propriate any of the employer’s assets for its own use”

but rather “safeguards the participants in multiemployer

pension plans by requiring a withdrawing employer to

fund its share of the plan obligations incurred during its

association with the plan.” 475 U.S. at 225. Thus, Con-

gress simply adjusted the benefits and burdens of eco-

nomic life in an area that it initially regulated in the

LMRA in 1947, and has regulated in comprehensive and

reticulated detail in ERISA since 1974. Such economic

regulation has long been the province of Congress and

does not constitute a taking. Connolly, 475 U.S. at 225;

Turner Elichorn, 428 U.S. at 15-16.

CONCLUSION

The decision of the Ninth Circuit affirming Concrete’s

withdrawal liability should be affirmed.

Respectfully submitted,

CAROL CONNOR FLOWE *

Genera! Counsel

JEFFREY B. COHEN

Deputy General Counsel

ISRAEL GOLDOWITZ

Assistant General Counsel

RUSSELL G. GALER

NATHANIEL RAYLE

Attorneys

PENSION BENEFIT GUARANTY

CORPORATION

2020 K Street, N.W.

Washington, D.C. 20006

* Counsel of Record (202) 778-8820

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.