# Amicus Curiae Brief — Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0221%3A13 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1993 - **Citation:** 508 U.S. 602 ## Text "apreme Court, | CONCRETE PIPE AND PRODUCTS OF CALIFORNIA, INC., Petitioner, Vv. 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 AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS AS AMICUS CURIAE IN SUPPORT OF RESPONDENT ROBERT M. WEINBERG VIRGINIA A. SEITZ 1000 Connecticut Avenue, N.W. Washington, D.C. 20086 LAURENCE GOLD (Counsel of Record) 815 16th Street, N.W. Washington, D.C. 20006 (202) 687-6890 Witeou - Eras Paerrine Co., Inc. - 769-0096 - WasHINGTON, D.C. 20001 o> ~ BEST AVAILABLE COPY! TABLE OF CONTENTS Page TABLE OF AUTHORITIES ...000000 ii SUMMARY OF ARGUMENT .....W00 en. 1 ARGUMENT ............................ shadushbteaiadtceebbediesiieaebeanuaitaaateedes I, PETITIONER’S TAKINGS CLAUSE CLAIM... 4 II. PETITIONER’S SUBSTANTIVE DUE PROC- ESS CLAIM............ siianlansasiciitntinabeiaidscaanadaeiaiiialieateie 11 III. PETITIONER’S PROCEDURAL DUE PROC- ITER wisiscovcucsirsinctnienenseicsenenssbinnine eensnaicabiaibanbetenia 11 CORI annccsneececessecnccccnvsseeess ‘sccheiiemenneenemnninennnne 20 ii TABLE OF AUTHORITIES CASES Page Air Line Pilots Ass'n v. O'Neill, 111 5. Ct. 1127 (1991) 13 Rd. of Trustees of Western ¢ ‘ont. of Teamsters Pension Fund v. Thompson Bldg, Materials, Ine., 749 F.2d 1396 (Oth Cir. 1984), cert. denied, AT U.S. 1054 (1985) . 13 Bruch v. Firestone Tire & Rubber Co., 489 US. LOL (1989) 13 Chicago Truck Drivers Pension Fund vo L. Zahn Drug, 890 F.2d 1405 (7th Cir, 1989) 13, 19 Connolly v. Pension Benefit Guaranty Corp. AT U.S. 211 (1986) 4,5, 10-11 FHA v. The Darlinaton, Ine., 358 U.S. 84 (1958) 6 International Ass'n of Machinists N ational Pen- sion Fund Benefit Plan C. v. Stoekton Tri Indus., 727 F.2d 1204 (D.C. Cir. 1984). 13, 19 Keith Fulton & Sons v. New England Teamsters, 762 F.2d 1187 (1st Cir. 1985) 16,17 Lavine v. Milne, 424 U.S. 577 (1976) —. 19 Nachman Corp. v. PBGC, 446 U.S. 359 (1980) 4 PBGC v. R.A. Gray, re TES CAGED ovcccccsmcone 6 Republie Indus., Ine. v. Teamsters Joint Council No. 82 of Va. Pension Fund, 718 F.2d 628 (4th Cir. 1983), cert. denied, 467 U.S, 1259 (1984). 13 Sinclair Oil Corp. v. Levien, 280 A.2d 717 (Del. 1971) eiouetall 13 Trustees of Amalgamated Ins. Fund vr. -Geltman Indus... Inc., 784 F.2d 926 (9th Cir.) cert. denied, Yr bee S 2. | ee prnenee: 13 Union Asphalts and Roadoils, Ine. v. MoKan Teamsters Pension Fund, 857 F.2d 1230 (8th Cir. 1988) . ...... 13 United Retail & Wholesale E mployees ¢ v. “Yahn «& McDonnell, 787 F.2d 128 (3d Cir. 1986) aff'd by an equally divided court, 481 U.S. 735 (1987)... 18 STATUTES 29 U.S.C. § 1002 (35) ......... a 4 TABLE OF AUTHORITIES—Continued Page 29 U.S.C. § 1053 0b) 01) a} 29 U.S.C. & 1060Ca) . ee 5 29 U.S.C, § 1082 (ce) (3) 18 29 U.S.C. § 1391 0b) - ae 6 29 U.S.C. § 1391 (Ce) (4) | Sh i) 29 U.S.C. § 1393 | YY 29 U.S.C, § 13940b) Peete OE nit ee 15 29 U.S.C. § 1401 (a) () —.. __...12, 13, 15, 16 29 U.S.C. § 1401 (ce) .. . > trustees’ factual determinations. It is also very much to the point that if deference were not fiven to such factual determinations, every decision com- mitted to the trustees’ diseretion would be subject to review of its factual premises on a de novo basis, and the practical effect of such review would be to impede the trustees’ ability to carry out their proper role. The limiting standards of “reasonableness” and “clearly erroneous” written into subsection (A) are, moveover, sufficient to prevent abuse by the trustees of their deci- sionmaking prerogatives. Other factors as well serve to prevent arbitrary or biased decisions by the trustees. MPPAA specifically requires that a plan’s rules for determining withdrawal liability “operate and be applied uniformly with respect to each employer.” 29 U.S.C. * 1394(b). The trustees thus cannot adopt ad hoe stand- ards to meet a given case but must consider the long term impact of the rules adopted on the interests of the trust. In particular, the trustees of a multiemployer trust must consider the effect of rules respecting withdrawal liability on the willingness of employers to continue par- ticipating in the plan or of new employers to become party to the plan. Rules that may be advantageous in the short term but that would be seen as unduly onerous by such employers would not serve the long term interests in the plan. As the House Report on the bill which became MPPAA states: Plan fiduciaries are given a great deal of flexibility to strike a balance among the competing considera- 16 tions of encouraging new entrants, discouraging withdrawals, easing administrative burdens, and pro- tecting the financial soundness of a fund. The com- mittee wishes to make it clear that in choosing the rules that would eliminate or reduce liability, the choice of such a rule is not per se a violatiog of fi- duciary standards; the determination must be made as to whether the fiduciary has acted reasonably and in the interests of plan participants and beneficiaries and otherwise in accordance with the fiduciary stand- ards. |H.R. Rep. No, 869, 96th Cong., 2d Sess. 67. | And, as the Court of Appeals for the Virst Cireuit has added: . This commentary makes it clear that the trustees’ role is not simply to find the highest value for with- drawal liability; they would not meet their fiduciary duty to the fund, for example if they set excessively high withdrawal liabilities which would have the ef- fect of discouraging future participation. [Keith Fulton & Sons v. New England Teamsters, 762 F.2d 1137, 1142-43 (1st Cir. 1985). ] 4. Much of what we have said to this juncture applies as well to the presumptions adopted in 20 U.S.C, £1401 ‘a’ (3)«(B?) thereinafter “subsection (Bi). Subsection (B) requires deference to the trustees’ determination of the plan’s unfunded liabi’ities: the “actuarial assump- tions and methods used in the determination” are pre- sumed correct unless shown to be “unreasonable (taking into account the experience of the plan and reasonable expectations!”; the application of these assumptions and methods is presumed correct unless it is shown that “the Plan’s actuary made a significant error’ in that process, The congressional reports accompanying the bill that became MPPAA explain that the presumptions in sub- section (B) were created “to reduce the likelihood of dispute and delay over technical actuaria! matters with respect to which there are often several equally ‘correct 17 approaches.’” Sen, Comm. on Labor and Human Re- sources, Section 1076, The Multiemployer Pension Plan Amendments Act of 1980: Summary and Analysis of Consideration, 96th Cong., 2d Sess. 21 (1980) ( quoted in Keith Fulton & Sons v, New England Teamsters, 762 F.2d 1157, 1143 n.7 (ist Cir. 1985)). Without these presumptions, Congress feared that plans might be “help- less to resist dilatory tacties by a withdrawing employer— tactics that could, and could be intended to, result in prohibitive collection costs to the plan.” Jd. See also H.R. Rep. 869, 96th Cong., 2d Sess., pt. 1, at 86 (1980), (“These rules are necessary in order to ensure the en- forceability of employer liability. In the absence of these presumptions, employers could effectively nullify their obligation by refusing to pay and forcing the plan sponsor to prove every element involved in making an actuarial determination”). Here again, Congress chose not to dictate a “correct” choice of “assumptions and methods” but to permit trustees and their actuaries to choose from a range of reasonable alternatives, taking into account the particular experience of the plan. Implicit in this legislative choice is the recognition that, for example, actuaries who have knowledge of a plan’s investment experience and invest- ment options are better able to determine the investment return assumption than the drafters of federal legislation or reviewing courts or arbitrators. Without the pre- sumption, courts and arbitrators would be placed in the position of making a de novo detemination of what as- sumption is “best” as to future investment returns. The Constitution does not compel Congress to place the courts and arbitrators in that position. Moreover, here too, there are additional constraints on the determinations made by the plan and the plan actu- aries. MPPAA requires trustees to adopt actuarial as- sumptions “which, in the aggregate, are reasonable .. . and which, in combination, offer the actuary’s best esti- 18 mate of anticipated experience under the plan.” 29 U.S.C. $1393. Identical language appears in ERISA, 29 U.S.C. $ 1082(¢) (3), governing trustees’ adoption of actuarial assumptions to be used in determining whether a plan has satisfied ERISA’s minimum funding requirements. This scheme requires plan trustees to use a consistent set of actuarial assumptions for all purposes.’ By so doing, MPPAA and ERISA significantly cabin the trustees’ discretion: 'Tlhe use of assumptions overly favorable to the fund in one context will tend to have off-setting un- favorable consequences in other contexts. For ex- ample, the use of assumptions (such as low interest rates! that would tend to increase the fund’s un- funded vested liability for withdrawal liability pur- poses would also make it more difficult for the plan to meet the minimum funding requirements of [ERISA]. [United Retail & Wholesale Employees v. Yahn & McDonnell, 787 F.2d 128, 146-47 (3d Cir. 1986) (Seitz, J., dissenting in part) aff'd by an equally divided court, 481 U.S. 735 (1987).] B. The second subsection of MPPAA which petitioner chal- lenges, 29 U.S.C. § 1401\c}, provides: In any proceeding under subsection (b) of this sec- tion, there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the find- ings of fact made by the arbitrator were correct. Congress determined that, in this context, arbitration is the preferred forum for making findings as to facts in dispute. As the District of Columbia Circuit stated in ° H.R. Conf. Rep. No. 1280, 93d Cong., 2d Sess. 18 states: “The conferees intend that under this provision [section 1082(c)(3)} a single set of actuarial assumptions will be required for all purposes ‘eg., for the minimum funding standard, reporting to the Depart- ment of Labor and to participants and beneficiaries, financial re- porting to stockholders, ete.)”. 19 1AM. National Pension Fund Benefit Plan C v. Stockton Tri Indus.. supra, 727 F.2d at 1208 (footnote omitted) : [In| establishing the arbitrative scheme, as in estab- lishing an administrative agency, Congress has ex- pressed a preference for initial resolution of the dispute in a non-judieial forum.... [A]n arbitrator sleillod in pension and labor matters, like an agency ina given administrative area, is in theory likely to fashion superior resolutions of disputes within the arbitratoi’s area of expertise. [I]nitial resort to arbitration, like initial resort to an administrative tribunal, promotes judicial economy both because an arbitrator’s decision may dispose of the dispute, and because even if one party appeals the arbitral de- cision, courts will have the benefit of the arbitrator’s sifting of the facts. |See also Chicago Truck Drivers Pension Fund v. L. Zahn Drug, supra, 890 F.2d at 1410.] Having decided that the facts should be determined in the arbitral process, Congress in § 1401(c) did no more than adopt a rule that courts should defer to the arbitra- tor’s factual findings rather than engage in the fact- finding process on a de novo basis. In this context, that rule serves the legitimate objectives of the statute and in no way impinges on the right of a withdrawing employer to an impartial decisionmaker.” Petitioner may also intend to challenge the allocation of the burden of proof in the two subsections at issue. Suffice it to say here that the allocation of the burden of proof established in these provisions works with the presumptions discussed in text to fur- ther the interests already described that Congress sought to serve in creating the procedures governing withdrawal liability. And, as this Court has stated: Where the burden of proof lies on a given issue is, of course, rarely without consequence and frequently may be dispositive to the outcome of the litigation or application. ... . However that may be, it is not for us to resolve the question of where the burden ought to lie on this issue. 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 v. Milne, 424 U.S. 577, 585 (1976).] 20 CONCLUSION For the foregoing reasons, the judgment of the Ninth Circuit should be affirmed. Respectfully submitted, ROBERT M. WEINBERG VIRGINIA A, SEITZ 1000 Connecticut Avenue, N.W. Washington, D.C. 20036 LAURENCE GOLD (Counsel of Record) 815 16th Street, N.W. Washington, D.C. 20006 (202) 637-5390 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0221%3A13. Public record. Not legal advice.