*4 Before ESCHBACH, CUDAHY and Cir- conditioned upon remaining in the service SWYGERT, Judges, cuit Senior Circuit of his employer. Employers were re- Judge. quired to amend the terms of their plans
to reflect these minimum standards effec- tive January CUDAHY, [29 Circuit Judge. U.S.C.] 1053(a) (1976) A second area of [ dif- ]. appeal, In this involving a suit seeking a ficulty was the inadequacy of the funding declaratory judgment, we are asked to con- cycle used many plans. To improve sider the constitutionality of the Multiem- the fiscal soundness of pension ployer Plan Pension Amendments Act of funds, Title II amends the Internal Reve- (the “MPPAA”). we Specifically, nue require Code to minimum funding. called upon to decide issues concerning the Title III imposes fiduciary responsibilities justiciability of this case and whether the on the pension trustees of the funds and district court erred upholding with- provides for greater information and dis- drawal liability provisions of the MPPAA closure to employee-participants. The fi- against challenges based on the due process nal area of concern addressed ERISA clause, clause, the takings and several other was the loss of employee benefits which constitutional provisions. The district court resulted from plan terminations. or- granted defendant Pension Benefit Guaran- der protect an employee’s interest ty Corporation’s (the “PBGC”) cross motion his accrued rights benefit when a plan for summary judgment and dismissed the failed or terminated with insufficient case, thereby sustaining the constitutionali- *5 funds, Title IV establishes system a of ty of the For MPPAA. the reasons detailed insurance, termination effective Septem- below, we affirm the district court in all ber 1974. respects. Nachman Corp. v. Pension Benefit Guaran ty Corp., 592 (7th F.2d 951 Cir.1979), I aff’d, 446 (1980). L.Ed.2d 354 The most pro relevant A. The Background of the MPPAA1 vision of ERISA for present purposes is the The 1974 enactment of Employee termination program insurance contained in Retirement Income Security (“ERISA”) Act Title IV. program This by run marks the PBGC, attempt initial a governmental the federal by entity which re government regulate pension ceives no plans in a direct federal appropriations. comprehensive manner.2 The PBGC statute relies instead primarily pre This con- tains numerous mium provisions: payments: Under pre-MPPAA ERI- SA, plans multiemployer paid per cov $.50 Title I attacks lack of adequate “vest- employer employee ered per year single while
ing” provisions in many plans. Before pla created, operated ERISA, for ns—t hose example, if a plan did not by maintained a single employer acting provide for vesting retirement, until an paid per covered employee per $1.00 alone — employee years with 30 of service could year to fund the PBGC. 29 U.S.C. § lose rights all in his pension benefits in the event that his employment was termi- nated prior to retirement. Title I estab- Upon enactment of ERISA in lishes minimum vesting standards to en- PBGC immediately insured receipt sure that a after certain of service length all benefits” “nonforfeitable that had been an employee’s benefit rights would not be earned employees single in employer 1. essentially This adopted section Judge say regulation not 2. This is that federal was Getzendanner’s thorough well-reasoned prior nonexistent pp. ERISA. See 1271- opinion Peick below. v. Pension Benefit Guar 1272 infra. anty Corp., F.Supp. (N.D.Ill. 1029-34 1982). not, employer general, obligate wished to fits. ERISA did
plans.3 single A required was thus first plan withdrawing terminate its employer provide the PBGC 1341(a). If notify the PBGC. U.S.C. § any security potential obliga- for this subsequently revealed that investigation exception tion. An was how- recognized, pay sufficient assets to its plan lacked ever, in the case of a employ- “substantial” benefits,” the “nonforfeitable PBGC itself er, per one that had contributed at least ten for the shortfall. at obligated became Id. cent of all contributions received 1341(b), (c). expended amounts so Any § specified Id. at plan period over time. the terminating could be recovered from 1301(a)(2). Withdrawing § id. at but the latter’s employer, § meeting description required were thirty could no event exceed place equaling in escrow an amount what percent net worth. Id. at their termination would have been 1362(b)(2).4 § plan had the terminated on the date of benefits were treated Multiemployer plan 1363(b). withdrawal. Id. at Alternative- § differently. They were not insured uncon- ly could furnish a bond. Id. enactment, ditionally upon rather were but 1363(c)(1). actually If no termination § guaranteed solely at the discretion of the occurred the next five during years, 1,1978. time, PBGC until At January escrow was or the cancelled. refunded bond guarantees were to mandatory. become 1363(c)(2). Id. at § interim, Id. 1381(c)(1). In the § Congress were several reasons why There PBGC was authorized to determine on a not to multiemployer plan chose insure all case-by-case pay basis whether it would immediately Congress benefits the differ- terminating plan’s beneficiaries multiemployer plans viewed as more stable ence guaranteed between the value of their single employer plans and secure than benefits and the value the plan’s assets thus saw less need to insure the former. on the date of termination. Id. at Connolly Guaranty v. Pension Benefit See 1381(c)(2). As in single employer (9th Cir.1978); 581 F.2d Corp., context, secondary employer liability Cong.Rec. 12,179 (1980) (remarks Rep. imposed all cases in which PBGC funds moreover, Biaggi). Congress, was con- actually expended. were all Specifically, *6 about the costs such a potential cerned employers that to a terminated contributed program. These worries became more multiemployer plan during years the five prevalent January approached. were immediately preceding termination Javits warned his in late colleagues Senator liable to the for collectively PBGC 1977 that he knew of several multiemployer disbursed, amount the latter had each em- planned which to terminate soon after plans for its ployer proportionate share of year. the first of the id. at See S10099 single employer total. As in the case of (daily July 29, 1980). Recognizing ed. plans, employer’s no individual termination study it needed more time to the entire liability thirty per could exceed cent of its problem, Congress delayed the effective Employers net worth. Id. at 1364. § mandatory guarantee program date of the (i.e., on-going withdrew from an non-termi- and extended the discretionary PBGC’s au- nating) multiemployer plan thus incurred a thority through June 1979. Pub.L. No. contingent liability. contingent It was first 95-214, 91 Stat. 1501 At the same upon terminating within the next plan’s second, Congress absence time ordered the years, prepare five in the PBGC to insurance, upon comprehensive report mandatory analyzing benefit mul- plan’s bene- situation. deciding tiemployer PBGC’s insure Employers Actually, guarantees 4. were in no event liable to the 3. were made effec- 30, 1974, prior occurring tive as of June a date to ERISA’s PBGC on account of terminations 1381(b) (1976). prior enactment. 29 U.S.C. § to the date of ERISA’s enactment. 1381(b) (1976). U.S.C. $1,000 benefit of report July per The PBGC submitted month at age 65 is major 1978. The factual findings of well average above the vested benefit were report that: level in multiemployer plans.... 1. There were about two thousand all, all, nearly Since of the vested multiemployer pension plans
covered benefits of participants guaran- would be approximately eight participants. million teed upon termination under the current Guaranty Corporation, Pension Benefit law, the cost of plan termination to par- Multiemployer Study Required by P.L. ticipants would be greatly reduced. This 95-214, (1978) (hereafter at cited as does not mean necessarily partici- Report). PBGC pants will have an incentive to bargain 2. About ten cent of these per plans plan termination merely to take ad- were experiencing financial difficulties vantage of the insurance program. How- plan that could result in terminations be- ever, the removal of the threat of benefit fore 1988. plans These had about 1.3 losses does make termination a viable op- Id. at participants. million 138. tion to active employees in situations in 3. If all of these troubled were plans high proportion which a of pension contri- terminate, it could cost the insurance butions being used for the benefits of system about billion to plan fund all $4.8 retirees. benefits then covered by guar- Title IV’s The principal plan deterrent termi- premium antee. The annual needed to nation under the program current is em- fund unacceptably this would be ployer liability, imposes which a direct Id. 139. high. termination, cost upon employers for 4. Limiting only consideration cost on employees indirect active since those covered multiemployer pension money less will be available for other plans experiencing were sufficient- However, labor costs. to assure that ter- serious financial it ly difficulties that was mination liabilities do not cause undue likely they would become insolvent before hardship jobs, business and loss of em- 1988, the system cost to the insurance is limited to 30 ployer liability percent of guaranteed plan fund all benefits could net worth. Because of this net worth approximately be million. The an- $560 limitation, employer liability may very per capita premium nual needed to fund maintaining well be less than the cost of could fifty rise from cents to plan in some situations. Since the Id. 2,16, as much as nine dollars. most, program insurance would cover if all, benefits, not vested participants’ derived these figures by using PBGC advantage the mutual may be to a computer model that analyzed pre- union, and the active em- employers, dicted the financial projected health of a to terminate the ployees plan. sample selected plans. PBGC *7 stressed that it relied on economic solely may rules also weaken a Other ERISA analysis forecasting data and statistical and result in eventual termination. plan expected number of terminations. It may discourage The withdrawal rules did not to factor in as well attempt multiem- large employers entering favoring incentives termination which ERI- plans. The restrictions on benefit ployer Id. at 137, might provide. Appen- SA itself may cause reductions contained in ERISA argued dix XIV. Nevertheless the PBGC terminate, a troubled financially plan present that such incentives were both be though even the benefits that would troubling: terminated would be less paid plan if the limitations) statutory provisions, (because guarantee
Under the current of the if mandatory paid termination insurance than the benefits that would be to reduce its multiemployer plans protect plan permitted would virtu- were Id. ally multiemployer obligations all vested benefits in to avoid termination. plans, (footnote omitted). since the 23-24 guaranteeable maximum obligation addition a tion have no further to fund analyzed The PBGC number amended. It ex- ways plan, employers could be the liabilities of the while ERISA proposals amined that would: plan who remain with a until it termi- nates, years or withdraw within five pay guaranteed 1. the PBGC to Require termination are liable to PBGC for un- multiemployer when a only benefits insolvent, guaranteed up rather than funded benefits to 30 plan per- became 56, 57, 69, terminated. Id. at simply cent of net worth.
70. financially In the case of a troubled of benefits which 2. Reduce the level plan, termination creates an ad- Id. at 57. guaranteed. were ditional incentive for to with- In such early. plan, draw contribution finan- provide 3. Authorize the PBGC may escalating sharply increases be so multiemployer plans cial assistance to liability may prove termination financial experiencing temporary than cheaper continuing plan. problems. Id. at 56. remaining employers have an incentive to multiemployer plans experi- 4. Permit plan. terminate the Where active em- to reduce encing financial difficulties determine be ployees may that benefits payments. benefit Id. 40. provided considerably for them at less Require funding 5. faster of multiem- cost than current and are contributions ployer plan obligations. Id. at 56. that vested satisfied benefits for retirees premiums paid by 6. Increase the mul- virtually percent and others are cov- tiemployer plans. Id. at 137-63. guarantees, ered there is an incen- 7. Impose upon withdrawing employer agree tive for union to to terminate equal employ- a fixed to that plan. The result is to transfer er’s plan’s share of the unfunded providing cost of benefits to the insur- vested Id. at liability. ance system. current termination 27, 1979, On February PBGC sub- provisions insurance thus of ERISA mitted legislative proposal incorporating threaten the survival of multiemployer some of these ideas. This was followed plans by exacerbating problems May by the formal introduction in financially plans weak and encouraging both houses of Congress legislation employer withdrawals from and termina- which ultimately became MPPAA. Be- tion of plans financial distress. bill, cause of scope Congress once 96-869, I, H.R.Rep. Cong., No. Part 96th 2d again delayed the effective date of the 1974 54-55, reprinted Sess. in 1980 U.S. Code mandatory guarantee this time program, Cong. (hereinafter 2922-23 & Ad.News 1,May 96-24, until 1980. Pub.L. No. Report); cited as Education and Labor ac- Stat. cord, 60-61, reprinted id. at in id. at 2928- The House Education and Labor Commit- Ways 29. The House and Means Commit- tee favorably reported April MPPAA on expressed report tee similar views in its 1980. The Committee specifically agreed April H.R.Rep. released No. 1980. See with the PBGC’s assessment of the 1974 96-869, II, Cong., Part 96th 2d Sess. 15 Act: Cong. reprinted in 1980 Code & Ad. existing (hereinafter
Under the termination Ways insur- News cited as rules, ance guarantees provided Report). April Means On Con- the PBGC to in a participants gress delayed imple- terminated for a third time *8 plan. Guarantee high enough guaran- levels are mentation of the 1974 mandatory 1, to result in coverage virtually per- of 100 extension until July tees. This lasted 96-239, cent of the participants vested benefits of 1980. Pub.L. No. 94 341 Stat. 22,1980, certain multiemployer plans. Employ- (1980). Finally, May on the House ers multiemployer by who from a MPPAA a vote of 374-0. 126 approved withdraw Cong.Rec. plan 12,233-34 (1980). more years than five before termina-
1255 July followed on drawal from an approval on-going Senate multiemployer only yet pension plan changed. longer but after another extension— No did such rise, August give ERISA, to 1980— of the PBGC’s discre an event itas had under under the 1974 law. tionary authority contingent to a liability payable to the 96-293, (1980). MPPAA, Pub.L. No. 94 610 The Stat. PBGC. Under an who employer Senate vote in favor of MPPAA was 85-1. withdraws must immediately begin pay Cong.Rec. (daily July 126 ed. fixed S10169 and certain debt owed to the plan.7 1980). Differences the House between The details of this liability” “withdrawal eventually Senate versions were reconciled extremely complex. To obtain a basic September of 19805 and President Car grasp, important to realize that approval ter’s followed soon thereafter on regulates multiemployer plans MPPAA of the 26th of that month.6 “Taft-Hartley” variety. These plans major The MPPAA effected a of are in trusts variety reality created collective MPPAA, changes in bargaining ERISA. Under between union and several law, is required guarantee pen- employers. By appoints PBGC certain the union half trustees, sion multiemployer benefits of covered employers ap fund’s and the plans. The level guaranteed by point of benefits other half. 29 U.S.C. under the 186(c)(5)(B) 1981). PBGC MPPAA is lower than V (Supp. The trust guaranteed the level prior passage by employer funded contributions which are the MPPAA. The premiums employers made at a rate established terms of must for pay sig- bargaining PBGC insurance are the collective contract. Id. nificantly The higher usually expressed under MPPAA. This rate is as an amount provide PBGC is also authorized to financial time worked or per product produced, e.g., assistance to plans per per widget. which cannot meet their hour or $.75 $1.50 obligations. current financial permits This trustees collect contributions and then determine, a plan having considering which is financial difficulties after all the con continue, and allows employers imposed by to contin- straints the contract and all data, making ue contributions to an insolvent actuarial the level of bene applicable plan without under ERI- All incurring liability prudently fits which can be offered. SA. Under the insurable decisions as to benefits are within the sole rule, plan insolvency, general event for a is its rather of the trustees. As a province parts than its termination. The MPPAA further an with its contribu once tion, provides plan rights benefits are to it retains no thereafter to deter be period money applied. funded over a shorter of time than mine how that should be Borden, Work formerly required requires Dairy arbitration But cf. Inc. v. United (E.D. to resolve a wide variety disputes Program, F.Supp. be- ers Pen. tween employers. 1981). Mich. trustees
For
purposes
appeal
plan’s
what is most
A
vested
is the actuarial
26, 1980,
significant
is that on
September
present
obligations
value of
benefit
the rules
governing
employer’s with- which have vested.8 The difference be-
months,
repassed
August
5. The House
Au-
its version 363-0 on
fect for less than two
gust
(daily ed.).
September
1980. 126
H7909
the date President
Cong.Rec.
approved slightly
approved
The Senate
different
bill
MPPAA.
Carter
day.
(daily ed.)
same
ence
Id. at SI 1676
A confer-
provides
MPPAA
in certain
7.
also
followed,
with the Senate and House
“partial
cases of
withdrawal.” See 29 U.S.C.
agreeing
report
September
to the conference
1981).
(Supp. V
§§
respectively.
September
18 and
Id. at
(daily ed.);
(daily ed.)
S12901
(vote
Id. at H9180
employee’s right
pension
An
to collect a
ben-
8.
324-1).
pre-retire-
when it survives a
efit is “vested”
employment.
proposal
Nachman
6. A
ment
termination
extend the PBGC’s discretion-
ary authority
Corp.
Guaranty Corp., 446
August
v. Pension Benefit
a fifth time failed on
1727-28,
359, 363-64,
(daily ed.).
H6984
Cong.Rec.
mandatory
program
ultimately
was thus
in ef-
L.Ed.2d 354
*9
Teamsters, Chauffeurs,
and
the
Warehousemen
the value of
and
this amount
tween
(“Local 705”); and four
Helpers of
vested
America
its
is called
unfunded
plan’s assets
organizations,
the Illinois Motor
employer
withdrawing
a
liability. Under
(the “IM-
Operators
Truck
Association
the date of
liable on
becomes
employer
Associations,
TOA”),
Trucking
the Illinois
the
share of
proportionate
for a
withdrawal
of
(the “ITA”),
Cartage Exchange
the
Inc.
trustees
Id.
at
1382. The
figure.
§
latter
(the “CEC”), and the
Chicago,
Motor
Inc.
deciding how
discretion in
have substantial
(the
Advisory Council
Carriers Labor
or em-
given employer
much to assess
“MCLAC”),
nonprofit corpora-
which are all
Thus,
statute lists several dif-
the
ployers.
in
engage
which
and
collec-
represent
tions
un-
allocating
plan’s
methods of
a
ferent
(col-
companies
member
bargaining
tive
and it
em-
liability,
vested
further
funded
or Or-
“Employer Associations
lectively, the
approval
the
to seek PBGC
powers
trustees
IMTOA,
The
ITA and CEC
ganizations”).
of their
completely
of a
different method
estab-
original agreement
the
negotiated
the
Id.
at
1391. Under
design.
§
own
Fund,
the
be-
the 705
and
MCLAC
lishing
1391(b),
of
method
section
“presumptive”
Agreement
Trust
in
party
a
to the
came
basically by multiply-
the
is derived
appoints
employee
the
1975. Local 705
vested
ing
plan’s aggregate
the
unfunded
Employer
the
of the 705 Fund and
trustees
the
of
a fraction
numerator
liability by
trus-
appoint
employer
the
Organizations
re-
is the sum of all contributions
which
defendant-appel-
tees of the
Fund.
by
made
withdraw-
quired to have been
the
charged
implementing
with
lee PBGC
previous
five
ing employer during
Title IY of
as amend-
enforcing
and
ERISA
of all
The denominator is
sum
years.
by
ed
MPPAA.
by
employers
made
all
contributions
through
created
The 705
was
collec-
Fund
disputes
If
be-
during
period.
this same
in 1954 and is now
bargaining
appar-
tive
arise
employer
an
and the trustees
tween
multiemployer
larger
plans
one
ently
assessment,
resolved,
be
they
over an
The 705 Fund is funded
country.
in the
Id.
at
initially,
least
arbitration.
col-
parties
who are
solely by employers
1401.
§
agreements.
appel-
lective bargaining
aspect
highly
final
of MPPAA is
One
in the
allege
provisions
that the
collec-
lants
Though
provisions
to this case.
relevant
agreements
trust
bargaining
tive
enactment,
general upon
effect in
take
employers’ obligations
limit
expressly
rules are
making
negotiated
a
contribution
Fund
1980. Id. April
retroactive to
made
en-
instrumental
have been
Fund
1461(e)(2)(A).
that with-
Any employer
their
to increase
couraging
employers
MPPAA’s
after this date and before
drew
contributions,
bringing
about
increase
same basis
is thus liable
enactment
encouraging
and in
plan
in the
benefits
September
who left after the
those
respect
of contracts
negotiation
enactment date.
employers.
newly organized
1980, 15,733
January of
workers
As of
B. The Parties
1,279
contribu-
employers
employed
were
here
a number of
brought
Suit
6,900 of those
the 705 Fund.
work-
ting to
Interna-
involved with the
parties
Local
right
pension
to a
had a
ers
nonforfeitable
Pension
Brotherhood of Teamsters
tional
4,300 additional
approximately
benefit and
(the
Fund”), multiemployer
a
“705
Fund
even
pension rights
had vested
participants
creat-
organized
trust
pension
Illinois
employed by
longer
were no
though they
bargaining agree-
pursuant
January
ed
to collective
On
employer.
contributing
variety
having
between a
assets
ments
Fund owned
Local
and had
associations and Teamsters
million
$174.7
market value
million,
leaving
the 705
include
Plaintiffs-appellants
vested liabilities
$357.9
Fund;
During
itself;
million.
funding
trustees of the
deficit of
eight
$183.2
Fund
1980, the
ending January
fiscal year
International
Local
Brotherhood
*10
plaintiffs
the
through
collected
million
contri-
in the
Fund
case did not have
$29.8
con-
butions, earned
million more on in-
$13.6
stitutional
standing to seek a declaratory
vestments and disbursed
million in
$17.2
judgment and that
the case was insuffi-
1981,
payments.
participat-
each
benefit
ciently
adjudication.
“ripe” for
The district
ing employer
per
per
contributed
week
$51
rejected
court
arguments,
amici’s
find-
employee.
that
ing
Employer Associations had
Historically, there has been some fluctua-
standing to contest the MPPAA on the ba-
membership
plan. During
tion in
in the
sis of the actual
which certain of
period
five year
preceding January
their members had incurred under the Act
left the
employers
over
705 Fund and
Fund,
due to their
the 705
companies joined.
more than
other
The
and on the basis of
injury
suffered by
employees participating
number of active
employer
all
members who were forced to
plan
precisely
remained almost
uniform
disclose their potential
liabilities under the
over this same period.
MPPAA in their public financial
state-
Appellants allege
April
that between
ments. The district court
rejected
also
cer-
(the
date when the withdrawal
liabili-
ripeness arguments,
tain
holding that be-
effect)
ty provisions of MPPAA first
took
cause the case before it was a “facial” chal-
September
(the
and
date the
lenge to the
validity
signed
law),
MPPAA was
into
thirteen em-
inadequacies of the factual
record before
contributing
ceased
to the 705
ployers
the court were irrelevant.
Fund. Nine additional
are al-
employers
leged
contributing
to have also ceased
be-
The district court then turned to the sub-
tween
September
and December
arguments
stantive
it. The
before
court
Employer Organizations
1980. The
fur-
question
first considered the
whether
allege
ther
that some of their members
imposition of withdrawal
liability upon an
have been
termi-
seriously contemplating
had,
enactment,
prior
which
nating their businesses. Because the con-
entered into an enforceable contract which
tingent
liability resulting from withdrawal
it from
apparently protected
type
that
must
probability
all
be disclosed in an
process.
violated due
The court
(thus
employer’s
pre-
financial statements
applied
analysis
the framework of
devel-
sumably affecting
standing),
its credit
Nachman,
oped by this court in
and found
organizations
allege
and their members
that
no due
violation had been
existence
operation
“rational”
shown and that
the Act was
MPPAA’s allegedly
provi-
unconstitutional
The dis-
meaning
within the
of Nachman.
injury
sions constitute
a substantial
the MPPAA with-
trict court found that
them.
and the
analysis
stood both a rational basis
The Trustees have not taken
anal-
of contract clause
heightened scrutiny
steps required under the MPPAA to assess
thus avoided a decision as to
ysis, and
a withdrawal liability against
case.
proper
this
analysis
mode
contributing
who have ceased
to the 705
extremely
“an
stating
While
it was
joined
Fund. The Trustees have instead
call,”
upheld the
the district court also
close
with the 705 Local
the Employer
Or-
em-
liability upon
imposition withdrawal
judg-
ganizations
seeking
declaratory
during the
which had withdrawn
ployers
liability provi-
ment
the withdrawal
29, 1980, the
day period
April
between
sions of the MPPAA are unconstitutional.
liability provisions
date the withdrawal
Litigation
C. This
effective,
September
made
were
signed the
the date President Carter
court
the con-
district
first addressed
law.9
tentions of various amici curiae both that MPPAA into
court,
Following
period.”
the lead of the district
we
period
“retrospective
refer to
shall
as
Supreme
Court has characterized
equal-protec-
rejected
also
The court
in an action under
question
justiciability
MPPAA irra-
that the
argument
tion-based
Act,
Judgment
28 U.S.C.
Declaratory
burdens on mul-
imposed greater
tionally
“whether the facts
being one of
on employ-
than
plan businesses
tiemployer
*11
circumstances, show
under all the
alleged,
finding that
having
plans,
ers
their own
controversy, be-
that there is a substantial
despite its differ-
Congress
rationally
acted
legal
adverse
inter-
parties having
tween
similarly situated entities.
ing treatment of
ests,
immediacy
reality
sufficient
and
of
the MPPAA
Plaintiffs’ contentions
declaratory judg-
of a
warrant the issuance
and that the
unconstitutionally vague
Casualty Co. v. Pacific
Maryland
ment.”
required
arbitration
under
mandatory
Co.,
270, 273,
312
61 S.Ct.
Coal & Oil
U.S.
plaintiffs’
seventh amend-
Act violated
(1941).
510, 512,
826
also
85 L.Ed.
See
jury
similarly
ment
to a
trial were
right
303,
J.N.S.,
Indiana, 712
305
Inc. v.
F.2d
court.
rejected by the district
Cir.1983).
essentially the same
(7th
This is
con-
provided by
the basic
standard as
II
which the
standing
minimum of
stitutional
articulated,
repeatedly
Court has
Supreme
JUSTICIABILITY
show a “distinct
namely,
party
that a
must
“fairly
which is
tracea-
palpable injury”
appellants’
Before we turn to the
being
the conduct or statute
chal-
ble” to
statute,
challenges to the
we
constitutional
Seldin,
490, 501,
v.
422
lenged. Warth
U.S.
whether this case both
must first address
2197, 2206,
(1975);
The Employer immedi organiza- Associations are ate or threatened injury tions whose of the sort membership includes that employers would make justiciable which out a have case had the actually withdrawn from the members Fund, 705 themselves brought Warth, both the suit.” during retrospective pe- 2211; riod at by created the U.S. at MPPAA and after the S.Ct. Rockford League MPPAA of Women was enacted on Voters v. September United States 1980, and are Nuclear Regulatory Commission, thus liable for withdrawal 679 F.2d (7th if the 705 1221-22 Cir.1982). Fund acts in accordance Associational with the standing mandate the is statutory particularly appropriate when MPPAA.12 Actual the injury also suffered association is seeking represent inter by employer members which were seriously ests which are central to the purpose of the contemplating withdrawal from the plan organization, see 13 C. A. Miller & Wright, and which would have to disclose their po- E. Cooper, Federal Practice And Proce tential liabilities on their financial state- (1975), at 214 and where the dure ments, thus their affecting ratings.13 credit sought relief is some form of prospective We find that the Employer Associations remedy, such as a declaratory judgment, have standing challenge the MPPAA as which will inure organ to the benefit of the representatives of the interests of their Warth, ization’s membership. at U.S. membership. 515, 95 at 2213. S.Ct.
12.
Thus,
The district
employers
court
that such
found
member-
MPPAA.
the
a declara-
seek
employers did,
fact,
effectively prevent
exist and were
tion
current
which would
the fund
Employer
assessing liability.
members of the
and the
Associations.
PBGC from
This
F.Supp.
appears
precisely
to be
at 1036 n.
We
the situation for which
19.
have no reason to
Declaratory Judgment
designed,
question
findings
they
the
Act was
factual
and,
contentions,
contrary
challenged
any
to the
parties
not been
dissent’s
this
or the
application of the
amici. This is not a
case,
therefore,
Act is constitutional.
where
statutory questio
determination of a
n —wheth
Nothing
persuades
in the
us that the
dissent
er a withdrawal has in fact occurred — could
by accepting
district court erred
the uncontro-
obviate decision on the constitutional
issues.
spell
verted affidavits
out the effect of
which
Transport
Express,
See
Motor
Inc. v. Central
contingent
this
financial
the
status
States, Southeast and Southwest Areas Pen
employers.
The affidavits of two finan-
Fund,
sion
(7th Cir.1983).
Associational
with
agree
ment have been wasted. We
Asso
Employer
in this case. The
propriate
to, or inter-
the district court that
harm
original agreement
negotiated
ciations
with,
agree-
bargaining
ference
the Local’s
Fund,
power
have the
establishing the 705
MPPAA is rather
ment attributable to the
of the 705
appoint
trustees
attenuated;
true
conjectural
while it is
respon
the entities
Fund and continue to be
liability provisions
the withdrawal
interests
overseeing
employers’
sible for
alter or harm the Union’s
might ultimately
involve
with
to the 705 Fund. This
respect
simply
position,
possibility
bargaining
major
facet of
ment with the 705 Fund is
upon at this
standing
too remote to base
activities.
Employer
Associations’
time.
Moreover,
Associa
Employer
the role of the
parallels
tions in this suit
the role
that the
amici also assert
PBGC
respect
with
played
those entities have
appropriate
defendant because
is not
employers’ relationship
the individual
injury
“cause” the
suffered
PBGC did not
responsible
As
entities
the 705 Fund.
entry
because the
plaintiffs
in
overseeing
employers’
ultimately
pre
the PBGC could not
judgment against
Fund, it is en
respect
injury
Entry
terests with
cure the
identified.
vent or
deprive
would
against
should re
the PBGC
tirely fitting
judgment
these entities
ability
require
of its
the trus
the PBGC
present
challenge
in this
assess,
*13
to
and the
tees
the 705 Fund
the
Fund.
legislation affecting
federal
Employer Organizations
to
members
that
the
also believe
district
We
is,
this suit
pay,
liability.
withdrawal
Since
eight
found that the
individ
correctly
court
core,
imposition
an effort
to avoid the
the 705 Fund and the 705
ual trustees of
liability,
of this
a decision for
payment
in this case. The
standing
Fund itself had
very
would eliminate the
real
appellants
the
statutorily
are
trustees and the 705 Fund
require
will seek to
threat
that
the PBGC
assess withdrawal
obligated to
satisfy
respective
to
their
appellants
the
the
from
who withdraw from
Thus, entry
under the MPPAA.
obligations
1382, 1399
V
(Supp.
Fund. 29 U.S.C. §§
cure
against the PBGC would
judgment
1981). These
have chosen not to
appellants
the
asserted: Because the
precisely
injury
obli
comply
apparent statutory
with their
to have chosen to disre
appellants appear
ef
gation. They therefore face remedial
the
statutory mandate of
gard
apparent
the
the
and are thus
by
forts instituted
PBGC
quo
to the status
only
the
threat
con
position
they
directly
in a
where
are
require
to
the
ability
the PBGC’s
lies in
with the issue of the MPPAA’s cons
cerned
If the
the MPPAA.
to follow
appellants
titutionality.14
doing
prevented
PBGC is
court,
appellants
the
are
of this
decision
district court’s
agree
We
with the
injury
all
threat of
possible
freed from
inju
conclusion that Local 705’s assertion of
Therefore,
by the MPPAA.
caused
justify standing
is too
for
ry
speculative
defendant
certainly
appropriate
is
PBGC
it has
argues
Local 705. Local 705
constitutionality of
to the
challenge
in this
injured
bargain
been
in that
its collective
the MPPAA.
altered
ing agreement
has been
liability provisions,
argument
withdrawal
is also no credible
MPPAA’s
There
in this
party
interested
is not an
spent
and thus the time and resources
PBGC
liability they
potential personal
act con-
appreciate
predica-
if
14. The dissent fails to
face
trary
29 U.S.C.
the interests of
fund.
trustees find themselves.
ment
which the
Declaratory Judgment Act was
requires
The
take action
The MPPAA
which
them to
litigants
be-
they
adopted
of the choice
to relieve
believe would harm the fund
causing
acting illegally
harm to
The
has
tween
would be unconstitutional.
PBGC
others,
brief,
elected,
according
at least where there is
to its
to await
themselves
injuries
instituting
suffered
claim for relief.
an ac-
colorable
by
outcome of this case before
ideally
re-
suited for
compel
are thus
to assess withdraw-
the trustees
tion to
the trustees
fiduciaries,
declaratory judgment
trustees,
action.
liability. Further,
dress in a
al
“
dispute. The PBGC is the government
‘One does not have to await the consum
agency which is ultimately responsible for mation of threatened injury to obtain pre
administering and enforcing the MPPAA.
ventive relief.
If the injury is certainly
”
The PBGC
all
promulgates
regulations
impending, that
enough.’
Gas,
Pacific
implement
and,
needed to
the statute
most
S.Ct.
quoting Regional Rail
importantly, has the power
bring
civil Reorganization
Cases,
Act
102, 143,
419 U.S.
actions to enforce
provisions
all
335, 358,
95 S.Ct.
42 L.Ed.2d
(1975).
PBGC,
MPPAA.
fact,
stated in the
We find this case ripe
adjudica
district court that it
“very likely”
tion. The issues presented by the case in its
it would take such action if needed.
present posture are fully “fit” for our deci
sion. There is no doubt that more issues
The related
ripeness
issue of
is also
involving the
operation
actual
argued by
appellants.
Ripeness is a
MPPAA would be
parties
before us if the
doctrine which
use
pru
courts
to enforce
had not initiated this suit until liability had
dential
upon
limitations
their jurisdiction.15
assessed,
been
arbitrated,
contested and
but
The doctrine has been stated as having two
the potential
of a
existence
different or
major aspects, requiring a court to “evalu
more multifaceted
case
the future cannot
ate” both the fitness of the
judi
issues for
relieve us of the obligation to decide the
cial decision and the hardship
parties
case before us now. The district court
of withholding court consideration. Pacific
characterized its
as one deciding
decision
Gas and Electric Co. v.
Energy
State
Re
“facial challenge” to the statute. Whatever
sources Conservation Development
&
Com
-
characterization
given
type
of case
mission,
-,
us,16
before
we think that sufficient facts
1720,
lenge by against suit bounds of was Congress within whether in the by employer an challenge to await enacted the power when it its constitutional we While liability proceeding. context of a are at which liability provisions disapprove or way in no approve arises The issue heart of the MPPAA. action, it course of of this strategic merits upon pri- impact of the MPPAA’s because particular for this way is no clear that there which were arrangements vate contractual stage. “fitter” reach a case to the time in existence already ar- appellants enacted. The MPPAA was hard- substantial a case where This is also bar- the collective impairs that the Act gue to defer if the court were ship would result into entered agreements, and trust gaining constitu- key an opinion addressed 28,1980, impose do not prior April come another case should tional issues until liability going employer pension upon an vitally affect- will all be along. parties The to the 705 negotiated contribution beyond another, decision. ed, our way in one raised precise question Fund.17 in this injury party’s The nature of each withdraw from who whether is such that case, supra, pp. see 1259-1260 Septem- after multiemployer pension plans clarifying only is the means our decision be sub- constitutionally may ber There uncertainties. significant financial liability imposed to the withdrawal jected cases are, moreover, literally hundreds of party MPPAA if the by the country courts around pending now ostensibly contract which to an enforceable those in the similar to which raise issues liability.18 type include this did not cases, progress of those case before us. may be general, judicial economy from this ruling Analysis materially enhanced A. Process Due court. question initially We must decide feder- prop- governs this case is find that what standard
We therefore constitutional impact (after enact- having ex- appellants, legislation court. The al erly before the arrange- ment) existing contractual standing contest cept for local analysis for this starting point and the ments. The constitutionality of the MPPAA the fifth amend- clause of is the due adjudication. case is ripe *15 cease, the shall allege for each contribution appellants 705 that the 17. The under responsibilities for “only Employers have employers’ shall no agreement, the Fund’s trust employee shall No the Trustees. the acts of obligations time- the 705 are make Fund] [to title, any right, or interest individual ly plan in the amounts contributions Employer, Employer’s against contri- claim bution, collective set out in under the conditions Fund, may except be or the Trust appellants rely bargaining agreement.” The Agreement provided or expressly this for in agreement upon for this. of the trust Article 14 law. federal under agreement provision reads: of the trust This us, both it involves ARTICLE 14 before because case The Fund employers the 705 withdrew from Miscellaneous who employers Employer, retrospective period during In no event shall an Section 1. 26, 1980, September indirectly, any actu- directly refunds of after or receive who withdrew distinct, Trust, two, except ally levels in somewhat made to the contributions involves constitutionality mistake, analysis. first address We fide and as to case of bona respect who year MPPAA with one contributions are returned within 1980, because, 26, in September contributions, after payment nor di- withdrew of the after view, with were disposi- if the Act unconstitutional indirectly participate our rectly in the necessarily be group, respect it would benefits Fund or receive tion of the Trust respect employers who Upon unconstitutional Fund. transfer from the Trust period. retrospective Employers Trustees, in the responsibilities withdrew all
1263
Any
process analysis
ment.19
“due
properly
contract clause
only
indirectly
begins with a
appropriate
discussion of the
to the present case. The
.relevant
contract
clause,
face,
standard of review.” Duke
on its
applies
Power Co. v.
only to laws
passed by
Group,
Historically,
Carolina Environmental
States.
Study
appears
438
that the
59,
clause was
82,
prevent
intended to
U.S.
98
57
S.Ct.
L.Ed.2d
various
from enacting
States
(1978).
595
debtor relief
Appellants, and several of the
measures which unfairly
curiae,
amici
interfered with
argue that
process
due
ability
of creditors to collect debts dur-
clause is essentially coextensive with the
ing the economic depression which followed
contract clause20 and thus that we should
War.
Revolutionary
Spannaus,
See
438
analyze this case in terms of the contract
256-57,
U.S. at
98
(Bren-
S.Ct. at 2728-29
clause principles
enunciated
such recent
nan, J., dissenting); B.
Wright,
The Con-
Supreme Court cases as Energy Reserves
Of
4-8
tract
Clause
Constitution
Group
Co., -
v. Kansas Power and Light
(1938). While it is clear that
the contract
-,
697,
103
U.S.
S.Ct.
considering fifth
Cir.1983).
Fund,
(4th
628
Pension
718 F.2d
or so
economic
challenges to federal
based
See, e.g., In re
legislation.
cial welfare
process
due
clause
review of
Our
447,
(7th Cir.1982) (en
Gifford,
457
688 F.2d
con
jurisprudence
clause
and the contract
Co., 677 F.2d
Amoco Oil
banc); Brach v.
pro
that these two constitutional
vinces us
Circuit, in
(7th Cir.1982). The Sixth
1213
and
no means coextensive
by
visions are
O,
Guaranty
Benefit
Inc. v. Pension
A-T —
While
considered distinct.
rightly must be
Cir.1980),
(6th
has indi
1265
seeking
to impair
States
a contract
death or disability of miners due to pneu-
which it is a party,
the mode of analysis moconiosis. The coal mine operators con-
under
the due process clause apparently
tended that the legislation violated the due
closely parallels contract clause principles.
process clause of the fifth amendment be-
See, e.g.,
States,
Lynch v. United
292 U.S.
cause it required them to compensate for-
840,
54
843,
S.Ct.
Brach,
quoting
F.2d at
in Alton Railroad.
Inc.,
employed
79 shift from that
Darlington,
explicitly question
the Court
only
Not
did
3 L.Ed.2d
S.Ct.
Alton Railroad’s
vitality of
the continued
Turner Elkhorn
the
in
But
Court
19, 96
at
S.Ct.
process analysis,
due
U.S.
follow,
not
noted that
does
Mining also
“[i]t
employed mode of
but
it also
however,
legislate
can
Congress
that what
substantially more deferential
to
analysis
retrospective
legislate
it can
prospectively
in
employed
that
Al
legislative action than
at 2892.
In
S.Ct.
ly.”
U.S.
before us is
The case
also
ton Railroad.
has
question
the
legislation
where
cases
from Alton Rail
distinguishable
factually
effect,
care must be tak
special
retroactive
Nachman,
noted in
Alton
road. As we
“arbitrary
the
and irration
applying
inen
agreed
never
the
had
Railroad
determine if there was indeed
test to
al”
at all. Nach
any retirement benefits
pay
burden which
justification for the added
In the case
man, 592 F.2d at
before
those it
imposes on
legislation
retroactive
hand,
us,
other
had
on the
the
Mining,
In Turner Elkhorn
the
regulates.
benefits,
pension
fund
agreed to
previously
special
some
dis
way
in no
indicated
Court
require
than the
in a lesser
albeit
amount
legislation,
merely
but
for retroactive
taste
MPPAA.
by
imposed
ments
the
legislation as a
only
that not
must
stated
developed
principles
non-arbitrary
Applying
but
the
be rational and
whole
Mining to the
leg
in Turner Elkhorn
any
aspects
that
also
retroactive
liability pro
must,
rationally
be
it is clear that
particular,
islation
process
Act
due
scru
legislative
visions of the
survive
non-arbitrarily related
ERISA in
tiny. Since
enactment
goals.
recognized
special
Congress has
that Rail
argues
amicus curiae
here
One
multiemployer pension
posed by
problems
v. Alton Railroad
Retirement Board
road
the administrative
Congress, and
plans.
Co.,
758,
withdrawals of entire calculus is contributing employers significantly affected from a life multiemployer expectancy pension assumptions plan fre- and by present- quently result value calculations involving increased substantially interest rate as- funding obligations sumptions. for employers who continue to contribute to the plan, ad- All this helps to explain why the concept versely affecting the plan, participants of unfunded vested liability involves dy- and beneficiaries, and labor management process. namic When we attach a number relations.... to this concept at a particular point time
29 U.S.C. 1001a(a)(4)(A) V we are (Supp. 1981). taking a still picture of a moving target. But Congress was certainly not After extensive hearings and considera- acting irrationally in requiring that such a tion of the problem, Congress chose a solu- picture still be taken. Given the dynamic tion which placed the initial of sus- burden nature of the process coupled with the need taining plan stability withdrawing em- to appraise it particular at a moment ployers. The imposition of withdrawal lia- time, the method chosen to measure the bility upon employers who are leaving plans is, liability if not the available, best certain- was chosen as the most effective measure ly not without a sturdy basis in logic. both to reduce an employer’s incentives to withdraw from a multiemployer and plan And the choice of the time withdrawal offset the burden otherwise shifted to the assessing is far irra- remaining employers when a withdrawal tional. It is at this time that Congress nevertheless occurs. The basic question is apparently believed the proposed withdraw- whether this response to the present or er should be confronted with the immediate potential financial problems of multiem- prospect of assuming the economic burden ployer plans If, is irrational. at the time of providing actuarially sound backing withdrawal of a participating employer, the for the promised pensions. Only when that current value of fund assets falls short of burden part becomes of the choice the vested benefit liability, is it fair proposed withdrawer, can choice be assess the withdrawing employer with its made with appropriate concern for the eco- aliquot share of the deficiency? nomic expectations of the beneficiaries of the plan. If the is contingent burden First, one may ask whether this calcula- long-deferred, choice may not tion of the deficiency value of the assets take it adequately into may account. This is a meaningful basis for requiring from lead to withdrawals, unwarranted resulting any source a contribution to the fund. One economic decline of the and a plan domino may argue that this deficiency may in due effect of further ever more disruptive course disappear through appreciation in employer withdrawals. value of the fund assets. Or may be reduced in time a flood of employee new Appellants also argue that there was no participants as to whom employer contribu- “hard” evidence to Congress available con- tions be required will without a contempo- cerning the “true” risks which withdrawals Elk Turner significance. of constitutional financial note Appellants
posed.
Mining,
were
utilized
Congress
horn
projections
models”
projected
Rather,
have determined
“computer
we
upon
based
should
Congress
argue that
Con
legitimate
appear
rationally
furthers
MPPAA
evi-
empirical
more
until
have acted
find that
not
we
thus
concerns
gressional
available.
dence was
provisions
the due
not contravene
do
MPPAA
argument.
in this
no merit
perceive
We
until a
the Constitution.
obligation wait
clause
has no
Congress
*20
an actual
into
matures
problem
potential
separately
do not
the
Although
appellants
legislation
enacting corrective
crisis before
issue,
opera-
the
think that
we
address the
acted ra-
Congress
addressing
problem.
the
employ-
to
respect
MPPAA with
of the
tion
fu-
to
choosing
try
to
forestall
tionally
retrospective
during the
withdrew
ers who
of
millions
involving
crises
pension
ture
Sep-
and
April
or between
period,
withdrawing
forcing
essentially
by
workers
attention.
26, 1980,
special
merits
tember
lia-
pension
future
fund
fully
to
employers
who
noted, employers
court
As the district
not act arbitrari-
also did
Congress
bilities.
150-day
during this
plans
withdrew
to
apply
MPPAA to
fashioning the
ly in
their
governing
law
that the
found
period
stable
financially
currently
plans which
the fact.
after
liability changed
withdrawal
precarious
in a more
plans
well as to
particular
from a
withdrew
they
When
moderating
various
state. The
financial
the
contingent upon
liability was
their
plan,
as exclusions
such
features
under
five
terminating within
years
plan’s
withdrawal,
par-
the
definition
from the
of
September
On
of ERISA.
provisions
the
the
and
industries
exemption of certain
tial
however,
was
the MPPAA
when
that Con-
indicate
exemptions,
de minimis
law,
liabilities
withdrawal
their
signed into
the burdens
impose
to
attempted
gress
the con-
Given
payable.
and
fixed
necessary became
the extent
only to
legislation
the
for em-
liability
withdrawal
stitutionality of
objective.
legislative
its
to achieve
MPPAA’s
after the
withdraw
who
ployers
the
sum,
is no
there
indication
In
date,
question presented
the
enactment
problem
response
congressional
and
constitutionally irrational
it is
whether
multiemployer pension
stability
financial
em-
upon
liability
impose
also to
arbitrary
arbitrary. We
irrational
plans is either
retrospec-
during the
withdraw
who
ployers
whether
to determine
sought
have not
before the enactment
period
tive
more
be
scheme would
legislative
different
not one MPPAA.24
question
effective or wiser—that
of those
analysis,
discussion
defer our
we
appeals
con
have
The two courts of
24.
pp.
infra.
1271-1274
cases. See
disagreed
whether
over
issue
sidered this
repre
split
by
in the circuits
application of the
the
process
to
addition
due
is violated
disa
liability
and Ninth
provisions to
the Fourth
Circuits’
an
sented
MPPAA’s
Republic
Framing
In
retrospec
during
greement in Shelter
employer
the
withdrew
who
dustries,
Northern
courts of
the
the
Framing Corp.
district
v. Pen
period.
Shelter
tive
See
agree on
(9th
been unable
of Illinois have
Corp.,
District
Guaranty
705 F.2d
sion Benefit
example,
constitutionality MPPAA. For
unconstitutional)
Cir.1983) (holding MPPAA
District
Judge
of the Northern
McGarr
Industries,
Chief
Teamsters Joint
Republic
Inc. v.
held,
Judge
contrary
recently
Getzendan
Fund,
Virginia
83 of
Pension
No.
Council
Judge
in this case and
Cir.1983) (holding
ner’s conclusion
consti
(4th
MPPAA
F.2d 628
Express
Transport Motor
Flaum’s conclusion
explicitly
tutional).
confined
The Ninth Circuit
Fund,
81 C
No.
States Pension
during
v.
Central
holding
for withdrawals
grounds,
18, 1983),
May
on other
1502-03,
(N.D.Ill.
rev’d
period.
at
retrospective
705 F.2d
Cir.1983),
“retroac
(7th
that the
uphold
appeared
F.2d
Fourth
1515. The
Circuit
liability under
imposition of withdrawal
tive
constitutionality
assessing withdrawal
process clause of
due
violates the
during
the MPPAA
and after
both
for withdrawals
Steel Service
National
only
amendment.”
fifth
although
period
had
retrospective
States,
Center,
Southeast
Inc. v. Central
employer
withdrawn
had
before it
Fund,
82 C
No.
Area Pension
Republic,
Southwest
period.
during
retrospective
at
course,
23, 1983).
(N.D.Ill.
Of
slip op.
Nov.
at 9
courts
Because
examined
both
among
is in the
circuits
the conflict
clause
contract
under the Nachman
statute
unquestionable
"retrospec- MPPAA. The district court found that
It is
that this
Congress
liability" imposes
was concerned that one of the
tive
upon
some added burdens
employers
many
Congress
it affects. To
flaws in ERISA which
was
seeking
correct-possible encouragement
extent,
changes
legal
some
effects of a "closed transaction"-the
the statute
early withdrawal-might
em- of
have been ex-
acerbated if the MPPAA had not included a
ployer's
employer's
withdrawal. An
deci-
retrospective
Peick,
during
retrospective
date of effectiveness.
sion to withdraw
period
F.Supp.
1055, Congress
presumably
upon 589
was con-
made based
encouraged
employer's understanding
cerned that
would be
of the current
legislation
governing
to withdraw while the
consideration if the statute became effec-
was under
law
MPPAA, by
such a transaction. The
retrospective
virtue of its
ef-
only upon
Congress
fect,
changing
tive
carefully
enactment.
Id.
could be viewed as
that situ-
retrospectivity provi-
ation, leaving
tailored the
with a final
sions of the act so as to minimize the con-
possibly quite
decision whose effects are
provisions.
cerns caused
originally
The bill
contemplated
different from what was
May
introduced in
of 1979had an
initially
the time the decision was
made.
February 27, 1979,
*21
effective date of
which
aspect
We must examine this
of the was the date of the PBGC's recommenda-
MPPAA under the same criteria we utilized
Congress.
legislation pro-
tions to
As the
respect
post-enactment opera
with
to the
gressed through
legislative process
this
recognize
tion of the statute. While we
the date was moved forward so that the final
general disfavor in which our law holds
encompass
date chosen would
the minimum
legislation
retrospective effect,
with
it is
period
Congress thought
time
sary
neces-
prohib
clear that the constitution "does not
prevent
April 29, 1980,
to
abuse.
retrospective
legislation,
civil
un'ess the
finally
by Congress
date
chosen
as the ini-
consequences
particularly
op
`harsh and
MPPAA,
tial effective date for the
was the
pressive.'" United States Trust Co. v. New
by
date
which the bill had evolved into
Jersey,
431 U.S.
17 n.
97 S.Ct.
essentially
what was
its final form.
(1977), quoting
1515 n.
either resumes V a case (Supp. Although withdrawal, provisions. retrospective 29 U.S.C. § base moderating inadequacy its contribution of 1981), increases made for may or be Id. withdrawal. ex- complete a the only be made at may units after provisions, however, does not or the The continuing 1388. of the pense § con- limitation of net worth 30% And have the pensions. of the security employees' ERISA, surely is moderat- which tained in balance equitable the agree not that we do the ceiling of has this sort But ing constitutionality. feature. weighs against case in the to unrelated being disadvantage of obvious effective that the Circuit found The Ninth the by as measured plan the the of needs selected, arbitrarily April of date And moderation liability. vested unfunded justi- showing of need was no that there may result ceiling through liability of this threat- liability which imposition of fy the burden continu- potential the shifting and that employers, solvency of ens the way by employees toor the ing employers could programs legislative other pensions. of their security of the diminished ensuring the of purpose the same served however, multiemployer plans. that addition, recognize we health of financial As to contain 1512-15. appear F.2d at Framing, does not the MPPAA Shelter moderate withdraw- selection above, would that the which we think provisions discussed the financial circumstanc- reason- unless liability al effective date was April 1980 of the particularly were question plan es of evidence the there was abundant that able and for such modera- argument The parlous. of imposition Congress’ justify of need the onerous Why impose to us: tion is made so- of alternative availability liability. clearly plan is liability unless that the extent only is relevant lutions or disaster? termination headed for the might indicate solution an alternative or that termination seems to be answer chosen de- Congress’ unconstitutionality of dis- or disaster, termination escape or that not think Because we do cision. certainty. with aster, rarely predictable bears proposed has been alternative merely is in fact And it not irrational —it with the disagree constitutionality, we on finan- measure financially conservative—to retro- conclusion Circuit’s Ninth liability, vested the unfunded cial health is un- the MPPAA application spective life-span though the ultimate even constitutional. Further, unpredictable. plan may be balance, that, summarize, we find on To funding inadequate seemingly burden of the liability provisions the withdrawal withdraw- must be borne someone—the analysis under the scrutiny survive MPPAA or, continuing employer ing employer, in Nach- decision court’s described With event, employee. in the ultimate respect conclusion We reach this man. observations, we note cautionary aspects retrospective clearly to both ab- court of the district comment impact after-the-fact the statute providing substan- some means of sence of existing contracts. with- in the case of from liability tial relief raise fund tends to a “healthy” drawal from Takings Clause C. statute whether some concern claim appellants’ now to turnWe the extent “liability to imposes only indeed liability provisions 1051. withdrawal Peick, F.Supp. necessary.” reducing liability if a with- provisions constitutionality ployers; infra, weighed in favor liquidation dissolu- Industries, results from Republic 639- drawal MPPAA. 1405; business, § id. at employer’s of an tion employer’s if limiting provisions exemp- minimis” “de 31. The statute contains beyond 20 annual payments stretch installment 1981), 1389(a) (Supp. tions, V re- § 29 U.S.C. 1399(c)(1)(B). payments, id. at em- ducing on smaller burden of
1275
MPPAA also violate the fifth amendment
lated from further
liability to the pension
proscription against
taking
of private
plans in
they
which
participate is “proper-
property for
use
public
just
without
com-
ty” protected under the takings clause.
pensation.32 The district court dispensed
appellants
argue that “contractual
with this claim rather cursorily,
finding
provisions creating investment backed ex
the “MPPAA does not
...
deprive
pectations constitute compensable property
employees of any rights in specific tangible
rights just as much as actual ownership of
property” and hence that the takings clause
property.” They cite such cases as Louis
was inapplicable. Peick, 539 F.Supp. at
ville Joint Stock
Radford,
Land Bank v.
295
1040 n. 30
(emphasis
original). While we
555,
854,
U.S.
55 S.Ct.
79
(1935),
L.Ed. 1593
reach a conclusion similar
that of
and Pennsylvania Coal
Mahon,
Co. v.
260
district
(and
court
also the Fourth Circuit in
393,
U.S.
43
158,
S.Ct.
The 705 (and Fund Trustees) similarly
failed to establish that the fund is suffering
an immediate, concrete injury.1 Affidavits America, UNITED submitted STATES of by a trustee and the fund’s actu- ary that, Plaintiff-Appellee, state opinions, their MPPAA will discourage newly organized v. employers from commencing contributions LAUCHLI, Richard A. to the 705 Fund and will encourage estab- Defendant-Appellant. lished employers reduce the number of workers No. 82-2868. for which they make contributions. The affiants opine that, at some future United States Court of Appeals, time, the 705 Fund’s viability might be Seventh Circuit.
jeopardized. Argued Dec. 1983.
I do not view these affidavits as a suffi- cient showing immediate, of an nonspecula- Jan. Decided 1984. tive injury. The affidavits do not assert Denied Rehearing Feb. the 705 Fund’s financial status has injured been to date. On the contrary, the
actuary’s own affidavit reveals that because
of the MPPAA the 705 Fund may collect
millions of dollars from withdrawing em-
1. There day-to-day is no indication that adversely fund are affected the existence of managerial operations investment and the MPPAA.