# Amicus Curiae Brief — Beck v. Pace Intern. Union

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0255%3A05

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007
- **Citation:** 551 U.S. 96

## Text

No. 05-1448

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JEFICE OF THE GLici in
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JEFFREY H. BECK, LIQUIDATING TRUSTEE OF THE
ESTATES OF CROWN VANTAGE, INC., AND
CROWN PAPER COMPANY, PETITIONER

PACE INTERNATIONAL UNION, ETAL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

HOWARD M. RADZELY
Solicitor of Labor
Department of Labor
Washington, D.C. 20210

JEFFREY B. COHEN
Chief Counsel
Pension Benefit Guaranty

Corporation
Washington, D.C. 20005

PAUL D. CLEMENT
Solicitor General
Counsel of Record
EDWIN S. KNEEDLER
Deputy Solicitor General
MATTHEW D. ROBERTS
Assistant to the Solicitor
General
Department of Justice
Washington, D.C. 20580-0001

(202) 514-2216

QUESTION PRESENTED

Whether an employer that sponsors and administers a
single-employer defined benefit plan has a fiduciary obliga-
tion under the Employee Retirement Income Security Act of
1974, 29 U.S.C. 1001 et seg., to consider merger as a way to
implement the employer’s decision to terminate the plan.

(1)

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TABLE OF CONTENTS

Page
SD bcp dks cneedesavdeduandieseedeabensandensaesat 1
Pe cc cdeciscdnantkessebeekedunssscsbedkee evans 6
A. The decision of the court of appeals is incorrect ...... 7
B. This Court’s review is warranted ................. 16
ED Sadddbancedsdaeevasathanascssuceusduensvet 20
TABLE OF AUTHORITIES
Cases:
Auer v. Robbins, 519 U.S. 452 (1997) ................. 13
Boivin v. U.S. Airways, Inc., 446 F.3d 148 (D.C. Cir.

DD diautthdneksneeeeenees hana enwabanenats 13
Brillinger v. General Elec. Co., 130 F.3d 61 (2d Cir.

1997), cert. denied, 525 U.S. 1138 (1999) ......... 16,17
Chait v. Bernstein, 835 F.2d 1017 (3d Cir. 1988) ....... 18
Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73

DE kd¢vcctescuidebimeaddeedeesGeanekis 7, 8, 9, 16
Flanagan v. General Elec. Co., 242 F.3d 81 (2d Cir.),

cert. denied, 534 U.S. 1065 (2001) ................. 17
Hawkeye Nat’! Life Ins. Co. v. Avis Indus. Corp.,

122 F.3d 490 (Sth Cir. 1908) 2... cece ccc cccccees 18
Hughes Aircraft Co. v. Jacobson, 525 U.S. 432

PPPrer eer Peer eee 2,8, 9, 11, 12, 16
King v. National Human Res. Comm., Inc.,

Se Fe UMP COU EMEC ENED cccccccccesccccesesecs 17

Lockheed Corp. v. Spink, 517 U.S. 882 (1996) ... 8, 9, 10, 16
Malia v. General Elec. Co., 23 F.3d 828 (3d Cir.),

cert. denied, 513 U.S. 956 (1994) ............ 10, 16, 17
Mead Corp. v. Tilley, 490 U.S. 714 (1989) ....-...... 3, 12

(III)

IV
Cases—Continued: Page
Nachman Corp. v. PBGC, 446 U.S. 359 (1980) ........ 2,9
Schaffer ex rel. Schaffer v. Weast, 1268. Ct. 528
BEE S46 sndknveadhs icddveddénandsdddssonencass 14
Shaw v. Delta Airlines, Inc., 463 U.S. 85 (1983) ......... )

Sutter v. BASF Corp., 964 F.2d 556 (6th Cir. 1992) .. 10,17

Systems Council EM-3 v. AT&T Corp., 159 F.3d 1376
Se ED cncdkeneddatesecuddtstdiesesecons 17

Statutes and regulations:

Employee Retirement Income Security Act of 1974,

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REE icc udinndidupeenbouenaen 15, 16
CEE dccuccwetkukiedudvadésedsasies 2
DUE ccicceateusdenssaben nes eennnsens 2

29 U.S.C. 1102(b)(3) (§ 402(b)(3), 88 Stat.
DUE bbe cccnscccdscdancvacccscccvasecesceens 7

V

Statutes and regulations—Continued: Page
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PTA EEE occ uddeencaccucusdnvenenensonens 19
SPT SHEE ccc cdcceecusenscsssessuuneee 19
SP PEE. ecccasccccsessseesmsoeees 11,15
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SOULE. TRE ss ccntcacesccssistineeee 6
29 U.S.C. 1341(b)3)(A) ......... eee eee 3, 6, 11, 18
RR Pee 5, 13
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SOTA. TERR kccvcscndccccstadcssuaes 3, 12

VI

Statutes and regulations—Continued: Page
Ee soc ccckatsuetaseeunse 3, 12,17
iid ine a anid ieeneael 15
i ods 16
I, | oe i ce eete ced ck nuenkads 15
EE ES eS 15, 16
ES a academe 15

Pension Protection Act of 2006, Pub. L. No. 109-280,

120 Stat. 780:

ie a ieee cn ivecesseooens 20
is ne cer nannnactannnsew 20

26 U.S.C. 402(c) (2000 & Supp. IT] 2008) .............. 14
he ccc eeonns aaaneenet 15
EE RE en ee 4
26 C.F.R.:

6 ee ee cinendeneseeueud 12

ED 6c cc ocucnaseenseeceseee 12,17

kde tee eaGeeenneneceeses 17

EE te keccakenseushenehest 17

EE 17
29 C.F.R.:

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ed ean ae eacnceeesese 3,15

ie og ad eee ccepeneeeeenese 3

i i. ccceeasetecsennesse 3, 6, 14,15

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Regulations—Continued: Page
ID, 60s nain de peau suads ceainiin a eel 2
a a an ee ee ee ae 3, 14

Miscellaneous:

PBGC, Annual Mangement Report, Fiscal Year 2006
(Nov. 15, 2006) (PBGC Report). -

ce. Finally, if certiorari is not granted, the PBGC will be
harmed by the court of appeals’ decision because it will have
to administer different termination regimes in different parts
of the country. In the Ninth Circuit, the PBGC will have to
accept merger as a method of distributing assets in a termina-
tion. In the remainder of the country, however, iuwerger will
remain an impermissible method of effectuating a termina-
tion, in accordance with the PBGC’s regulations, correctly
interpreted.

The PBGC will also be harmed because it will have to con-
tinue to insure some plans that would have terminated and
satisfied their full benefit liabilities but are instead required
under the Ninth’s Circuit’s rule to merge with other plans.

20

Despite some improvement in the PBGC’s financial condition
in the past two years, existing plans are massively under-
funded, and the PBGC’s future exposure to losses from finan-
cially troubled sponsors remains high. See PBGC Report 3-5,
15-16. The single-employer insurance program has an $18.1
billion deficit, and the PBGC estimates a reasonably possible
exposure to $73 billion in underfunding. /d. at 4-5, 14-15. The
total underfunding in all single-employer plans is estimated
at $350 billion. /d. at 15. The PBGC’s separate multiemploy-
er plan insurance program has a deficit of $739 million, and
$83 million in reasonably possible liability. Jd. at 5, 14, 16.
The total underfunding in multiemployer plans is estimated
at more than $150 billion. /d. at 15. Although the Pension
Protection Act of 2006, Pub. L. No. 109-280, Titles I, II, 120
Stat. 784, 858, attempts to address underfunding problems
with new funding rules, PBGC Report 8, the PBGC is not in
a position unnecessarily to assume responsibility for more
underfunded plans.
CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.
PAUL D. CLEMENT

Howarb M. RADZELY Solicitor General
Solicitor of Labor EDWIN S. KNEEDLER
Department of Labor Deputy Solicitor General

JEFFREY B, COHEN MATTHEW D. ROBERTS
Chief Counsel Assistant to the Solicitor
Pension Benefit Guaranty General

Corporation

DECEMBER 2006

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0255%3A05. Public record. Not legal advice.