NACHMAN CORPORATION, Plaintiff-Appellee, v. PENSION BENEFIT GUARANTY CORPORATION and International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, Defendants-Appellants.
Nos. 77-2146, 77-2147.
United States Court of Appeals, Seventh Circuit.
Argued Sept. 26, 1978. Decided Jan. 23, 1979.
592 F.2d 947 | 1 Employee Benefits Ca 1450
Before CUMMINGS, Circuit Judge, WISDOM, Senior Circuit Judge, and SPRECHER, Circuit Judge.
M. Jay Whitman, International Union, UAW, Detroit, Mich., Mitchell L. Strickler, Deputy Gen. Counsel, Pension Benefit Guaranty Corp., Washington, D. C., for defendants-appellants. Joel D. Rubin, Chicago, Ill., for plaintiff-appellee.
1 The Pension Benefit Guaranty Corporation and the United Auto Workers appeal from the district court order granting summary judgment in favor of the plaintiff, Nachman Corporation. The lower court granted declaratory relief, limiting Nachman‘s pension liability to the amounts accumulated in a pension plan trust fund.
2 The collectively bargained pension plan contains a clause excluding employer liability by limiting the employees’ recourse to the assets of the pension fund. The issue raised on appeal is whether the
3 Pursuant to collective bargaining with the UAW, in 1960 Nachman established a pension plan for certain employees at its Armitage Avenue facility in Chicago. The plan terms provided for vesting of benefits after employees fulfilled specified age and length-of-service requirements. This pension plan is characteristic of “defined-benefit” plans, promising a fixed monthly benefit level for each year of service. As is typical of a defined-benefit plan, Nachman was required to make annual contributions to a trust fund on an actuarial basis. Those contributions were calculated by reference to administrative costs of the fund, benefit liabilities accruing during the current plan year (“normal costs“), and the amounts necessary to amortize the past service liability over thirty years.1 The parties do not dispute that Nachman complied fully with the funding obligations imposed by the plan.
4 On October 1, 1975, Nachman gave timely notice to the UAW that it was terminating the pension plan effective December 31, 1975. The termination accompanied the closing of the Armitage Avenue facility, which had become unprofitable. The propriety of the termination is not challenged.
5 It is also undisputed that the assets in the trust fund are insufficient to pay all the vested benefits which accrued before December 31, 1975. Apparently the fund assets can provide only thirty-five percent of the accrued vested benefits. Under the terms of the plan, the employees’ benefits would be reduced ratably. Nachman would not be obligated to assume liability for the unfunded benefits. Article V, section 3 of the plan provides:
6 Benefits provided for herein shall be only such benefits as can be provided by the assets of the Fund. In the event of termination of th(e) Plan, there shall be no liability or obligation on the part of the company to make any further contribution to the Trustee except such contributions, if any, as on the effective date of such termination, may then be accrued but unpaid.
7 Nachman brought an action for declaratory relief to determine whether ERISA would impose any liability on it for the vested, but unfunded, benefits. The district court granted summary judgment in Nachman‘s favor, holding that Congress did not intend until January 1, 1976, to subject employers to liability for unfunded benefits which they had disclaimed. Since Nachman terminated the pension plan prior to that date it was not found subject to statutory liability.
II
8 In 1974 Congress passed the Employee Retirement Income Security Act (ERISA) in order to establish “minimum standards . . . assuring the equitable character of . . . (private pension) plans and their financial soundness.”
10 When the PBGC guarantees benefits in excess of the fund assets, the act provides for recovery from the employer-sponsor.
11 Nachman‘s potential liability to the PBGC depends upon whether the employees’ vested benefits, unfunded at the date of termination, are “guaranteed” under
12 It is conceded that the benefits in issue were vested under the terms of the plan. Thus, the precise question before us is only whether the plan term limiting benefit rights to the assets of the fund rendered the rights forfeitable and thus not guaranteed.
13 Title IV does not provide a definition of “nonforfeitable.” However, the word nonforfeitable is used in Title I, the “minimum vesting” sections, as well. Title I requires that after January 1, 1976, every plan must provide that benefits become “nonforfeitable” upon the satisfaction of the minimum eligibility requirements.
14 a claim obtained by a participant or his beneficiary to that part of an immediate or deferred benefit under a pension plan which arises from the participant‘s service, which is unconditional, and which is legally enforceable against the plan.
15 Another definition of nonforfeitable for the purposes of Title IV was promulgated by the PBGC as the administering agency. Benefits are nonforfeitable, and guaranteed, if
16 on the date of termination of the plan . . . (t)he participant has satisfied all of the conditions required of him under the provisions of the plan to establish entitlement to the benefit, except the submission of a formal application, retirement, or the completion of a required waiting period.
17
19 We conclude that ERISA was designed to insure benefits which were vested under the plan terms, without regard to liability exclusion clauses, effective September 2, 1974. Benefits which would only vest by mandate of Title I standards rather than prior plan terms would not be insured until 1976. Since the Nachman plan was terminated after 1974, and since the benefits had admittedly vested under the terms of the plan (without regard to Title I) we hold that Nachman is subject to liability under ERISA.
III
20 We agree with the district court that the definition of “nonforfeitable” provided in Title I should govern the construction of that term‘s use in Title IV.6 However unlike the district court, we conclude that the PBGC definition is consistent with the Title I definition. Although the district court‘s further construction is linguistically plausible, we conclude that the benefit rights of Nachman‘s employees fit within the Title I definition of “nonforfeitable.” Reference to the legislative history and the fundamentals of pension plans in effect before the passage of ERISA illustrates beyond any doubt that the PBGC definition also reflects the construction of the Title I definition intended by Congress.
21 Under ordinary usage, it may seem illogical to conclude that the Nachman plan provides employees with nonforfeitable benefits when a clause in the plan expressly precludes recovery from the employer in the event the plan terminated with insufficient assets. It certainly appears to be a forfeiture. This is undoubtedly the “illogic” which led the district court below, and the district court in A-T-O, Inc. v. Pension Benefit Guaranty Corp., 456 F.Supp. 545 (N.D.Ohio 1978), to conclude the benefits were forfeitable. But see In re Williamsport Milk Products Co., Inc., (M.D.Pa.1978). But as the Second Circuit recently stated in Riley v. MEBA Pension Trust, 570 F.2d 406, 408-09 (2d Cir. 1977), “the court fell victim to the not uncommon error of reading technical pension language as if it were ordinary English speech.”
22 Notwithstanding the plausibility of the lower courts’ construction of “nonforfeitable” another construction is also possible; and it is that construction which we believe to be the correct one. This construction, like the district court‘s also derives from the three elements required for nonforfeitability under the
23 In a basic contradiction to the pure legal concept of vesting, the Benefit under a pension plan that is described as vested, is, in the usual case . . . contingent . . . upon survival . . . (and) upon the availability of assets in the plan. In principle, however, this is no different from some other types of vested property rights such as those embodied in bonds and promissory notes that may not be honored at maturity because of the financial condition of the promisor. In essence, therefore, the vesting of a pension benefit simply means that the realization of the benefit is no longer contingent upon the individual‘s remaining in the service of the employer to normal retirement age.
24 D. McGill, Preservation of Pension Benefit Rights, 6 (1972). See also Departments of Treasury and Labor, Study of Pension Plan Terminations 1972, 19 (1973).8
Notes
legal claim obtained by a participant or his beneficiary to that part of an immediate or deferred pension benefit, which arises from the participant‘s service and is no longer contingent on continued service or any other obligation to the employer, sponsoring organization, or other party in interest.
H.R.2, 93rd Cong., 1st Sess., § 3(19) (1973), reprinted in II Legislative History of Employee Retirement Income Security Act of 1974, 2251-52 (herein Legislative History). See also S.1557, 93rd Cong., 1st Sess., § 3(t) (1973), I Legislative History at 285. Despite a wide variance in the definitions employed in various versions of the act, there is substantial evidence that the object of coverage in this regard never differed. Thus even though this language was replaced, the committee report accompanying H.R.12906, the bill incorporating definitional language very similar to that eventually passed, clarifies that both definitions were designed to “requir(e) plans to insure unfunded vested . . . (liabilities up to the amounts insured by the Act).” II Legislative History at 3346. See also note 10 Infra.
25 In sum, the definition instructs that nonforfeitability must be measured by the quantum of rights against the plan and without regard to rights against the employer. The liability exclusion clause is therefore irrelevant to a determination of nonforfeitability because it relates only to a claim the employee may have had against an entity other than the plan itself.
26 Not only does this construction more closely conform to the statute itself, but it is also the only construction substantially supported by the legislative history. Two facts from the legislative history are significant in this regard. First, there is ample evidence that Congress used “vested” and “nonforfeitable” interchangeably and understood the definition of “vest” to mean that benefits would “vest” upon the participant‘s fulfillment of plan requirements regardless of employer liability exclusion clauses.9 Second, the legislative history also shows that Congress enacted Title IV for the specific purpose of guaranteeing benefits that were lost because of employer liability exclusion clauses.
We find only one statement in the legislative history potentially supportive of this construction of the statute. The district court relied on the following passage in the conference report to conclude that Congress intended to insure only those unfunded, vested benefits for which the employer had assumed liability: “Under the conference substitute, vested retirement benefits guaranteed by the plan . . . are to be covered. . . .” III Legislative History at 4635. The court concluded that if the plan did not guarantee the vested benefits Congress did not intend to guarantee those benefits (until Title I became effective).
Although the sheer weight of the contrary history probably precludes the district court‘s conclusion, a closer reading of the paragraph cited reveals the propriety of a different inference than that drawn by the A-T-O court. The sentence reports the conference bill resolution of an issue of what variety of vested benefits should be insured. The report explains that the House version of the bill insured only those benefits “required to be vested under the bills minimum vesting standards” while the Senate version insured all benefits which vested by reason of plan terms. We read the quoted sentence as merely explaining that the Senate version was adopted and that vested benefits “guaranteed” by the plan, rather than Title I, would be insured. Thus it is inappropriate to read the word “guarantee” so strictly in a context where limitation-of-liability issues were not under discussion.
There in fact never was a dispute between the bills on the desirability of protecting vested benefits without regard to employer liability exclusion clauses. Senator Williams explained that “the conference substitute, as did the House and Senate bills, establishes an insurance program to protect employees against the loss of vested benefits . . .” without any qualification that those vested benefits be recoverable from the employer under the plan.
The district court in Nachman, on the other hand, apparently recognized that the words were used interchangeably throughout the Act, but nonetheless concluded that Congress used the word “vested” to describe unfunded benefit rights enforceable against the employer. We refuse to presume, without supporting legislative history, that Congress used this standard pension term to mean something other than its accepted definition. The legislative history, as discussed, indicates traditional usage of the term “vested.”
28 The definitional substitution is entirely appropriate. There is overwhelming evidence that the words vested and nonforfeitable were in fact used synonymously in this regard by Congress.10 Even though the Act uses the word “nonforfeitable,” various committee reports as well as remarks of members invariably state that Title IV insures “vested” benefits.11 During the hearings Senator Bentsen specifically stated that “(t)he risk we are talking about insuring is the vested interest of the participants.” Hearings before the Subcommittee on Private Pension Plans of the Senate Committee on Finance, 93d Cong., 1st Sess., Part I at 443 (1973). The words “nonforfeitable” and “vested” appear interchangeably in the dialogue of the history throughout all stages of the legislation.12 For example, in discussing the minimum funding standards the Senate Committee noted that the “presently vested (benefits) . . . represent the nonforfeitable rights of the employees.” S.Rep.No.93-383, I Legislative History of the Employee Retirement Security Income Act of 1974 (hereinafter Legislative History), at 1090. In another Senate Report it was explained that “(o)ne of the major private pension plan considerations centers around the concept of vesting. Vesting refers to the nonforfeitable right or interest which an employee acquires in the pension fund.” S.Rep.No.93-127, I Legislative History at 594.
Alternatively it is conceivable that “nonforfeitable” was preferred to “vested” to clarify that benefits guaranteed by Title IV must have vested unconditionally during the period before Title I‘s restrictions on vesting conditions went into effect. See note 7 Supra.
Moreover, the committee reports reveal clearly that although the statutory language was altered, the intent remained constant. In S.1179, the first Senate bill to use the term “nonforfeitable,” the accompanying committee report explained that insured benefits were those “vested . . . under the plan.” S.Rep.No.93-383, I Legislative History at 1094.
29 The second significant aspect of the legislative history supporting our construction of “nonforfeitable” is even more direct: the purpose of Title IV was to guarantee benefits that might be lost because of employer liability disclaimers. We must note initially that construing ERISA, as did the court below, to cover only instances in which the employer assumed liability for incompletely funded plans would import so narrow a purpose to Congress as to make the enactment of Title IV almost meaningless.13 Congress was certainly aware of the fact that the standard private pension plan prior to ERISA disclaimed employer liability.14 Additionally, under this construction the congressional urgency behind Title IV would reasonably have to be further narrowed to reach only the instances where the employer was Both liable for plan deficiencies And insolvent. (Otherwise insurance would be generally unnecessary). There is no question that terminations often result because of some financial difficulty. However, the Treasury-Labor Study of pension plan terminations, on which Congress relied heavily, revealed that only three percent of employees who suffered benefit losses in 1972 worked for employers with a net worth less than the employee benefit losses. Departments of the Treasury and Labor, Study of Pension Plan Terminations 1972, 61 (1973). Further, seventy-one percent of the employees who suffered losses were employed by a firm with a net worth of at least 1,000 times greater than the benefits lost. Id. Therefore Congress clearly perceived the employer liability exclusions as the source of the losses and the problem to be remedied.15 As early as 1971, the Senate Subcommittee on Labor had concluded:
30 The need for or desirability of insurance arises because of the numerous contingencies which can result in . . . termination. . . . Employers ordinarily have no financial responsibility for pension payments beyond the contributions they are committed to make.
31 Interim Report of Activities of the Private Welfare and Pension Plan Study, Senate Committee on Labor and Public Welfare, Subcommittee on Labor, 92nd Cong., 2nd Sess., 74 (1971).
32 There is, however, no need to infer such a narrow purpose to Congress since in fact Congressional representatives definitely believed that Title IV of ERISA had been written to insure the benefits which employers had declined to guarantee. It was definitively stated during the floor debates in both the House and Senate, that the termination insurance, had it been in force in 1960, would have insured the vested benefit losses of the employees of the South Bend Studebaker plant. II Legislative History at 1639 (Remarks of Senators Bentsen and Javits); III Legislative History at 4694 (remarks of Rep. Brademas).16 Those losses resulted because the plan disallowed recourse to the employer‘s assets.17
33 Therefore, it is beyond doubt that the vested benefits of Nachman‘s employees are guaranteed by Title IV. The lower court suggested that even if the benefits were guaranteed Nachman would not be liable. As discussed supra,
34 Probably one of the most difficult problems confronted by the Congress was the selection of effective dates for the insurance program, and here both Senate and House conferees worked diligently to arrange a structure of effective dates that would bring the insurance protection generally into effect as quickly as possible. This was done in recognition of the fact that depressed economic conditions in certain regions created the possibility that a number of plans were in critical straits and were terminating or were likely to do so imminently. Lack of immediate protection for beneficiaries in these cases involved workers who had earned . . . pensions notwithstanding the new provisions of the bill which have a delayed effective date.
Until the 1974 act . . . the financial obligation of a pension trust was limited to the actual assets of the plan; there was no recourse beyond the limit for those to whom benefits had been promised but for whom the liability had been insufficiently funded. Under the new pension law, the gap between the employer and the pension plan has been bridged. If the PBGC has had to pay benefits to vested participants upon plan termination, employers are liable for reimbursing the insurance corporation for insurance benefits paid. . . .
The new termination insurance provisions constitute a recognition in public policy that an employer who establishes a pension plan cannot thereafter isolate himself from the financial consequences of the promises made. The reform was long overdue.
35 Id. at 4766. To hold that the unconditionally vested benefit rights of Nachman‘s employees are not insured under the Act would totally subvert the Congressional intent. Since the benefits are guaranteed under the Act, Nachman is subject to liability under
IV
36 Nachman argues that Congress cannot constitutionally impose retroactive liability for the payment of unfunded, vested benefits under the Due Process Clause.
37 The Supreme Court has confirmed that Congress has broad latitude to readjust the economic burdens of the private sector in furtherance of a public purpose. Only if Congress legislates to achieve its purpose in an “arbitrary and irrational way” is due process violated. Usery v. Turner Elkhorn Mining Co., supra, at 15; Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978). Turner Elkhorn Mining also instructs however that it is not necessarily true that “what Congress can legislate prospectively it can legislate retrospectively,” 428 U.S. at 16. Judicial scrutiny of a statute must therefore include an assessment of the rationality of the retroactive effects as a means to achieving the Congressional purpose.
38 Title IV of ERISA does affect Nachman retroactively. The defendants argue that since ERISA only requires employers to assume liability for pension benefits which become due upon terminations after the effective date of the Act, it assesses liability prospectively. This argument, however, relates only to the degree of retroactive impact. Although it is true that the statute applies only to prospective terminations, it also applies retrospectively to invalidate exclusion of liability clauses in pension plans agreed upon prior to ERISA. Thus to the extent that ERISA invalidates Nachman‘s otherwise valid acts which occurred prior to enactment, it is retroactive. See generally Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978).21
39 The Congressional purpose in enacting Title IV of ERISA was to protect employees from the loss of vested benefits when a pension plan terminates with insufficient funds.22 Nachman does not argue that this end itself exceeds Congressional regulatory power. Instead, the specific question presented for review is whether the imposition of retroactive liability on employers is an arbitrary and irrational means of achieving this end.
41 The Supreme Court found the employer could not be held to the liability imposed by the statute. The Court reviewed the statutory scheme and found it constitutionally insufficient, concluding that the legislature had made “no showing . . . that this severe disruption of contractual expectations was necessary to meet an important general social problem.” 438 U.S. 247. Although decided under the Contract Clause, which is applicable only to state legislation, several authorities have suggested that the analysis employed in Contract Clause cases is also relevant to judicial scrutiny of Congressional enactments under the Due Process Clause. Allied Structural Steel Co. v. Spannaus, 438 U.S. at 262, note 9 (dissenting opinion); Veix v. Sixth Ward Building & Loan Association, 310 U.S. 32, 41 (1940); Home Building & Loan Association v. Blaisdell, 290 U.S. 398, 448 (1934). See also Hochman, supra note 19, at 695; Hale, The Supreme Court and the Contract Clause, 57 Harv.L.Rev. 852, 890-91 (1944). Both employ a means-end rationality test. However, since we are convinced that ERISA withstands the scrutiny employed under the Contract Clause cases, we need not decide whether the two clauses in fact impose identical restraints on legislative impairment of contracts.
42 A second Contract Clause case,23 W. B. Worthen Co. v. Thomas, 292 U.S. 426 (1934), relied upon in Allied Structural Steel Co., may also be cited as support for Nachman‘s position. In Worthen, the Court invalidated Arkansas legislation exempting all life insurance from creditor attachment. The debt was incurred, judgment was obtained, and the writ of garnishment was issued, prior to the enactment of the legislation. The Court held that this limitation upon the means of enforcing a contract impaired the obligation of contracts and therefore could be justified only if it was enacted “in order to meet public need because of a pressing public disaster” and was “limited by reasonable conditions appropriate to the emergency.” Id. at 433. Applying these standards, the Court was unable to ascertain a public need sufficiently broad to justify an act containing “no limitations as to time, amount, circumstances, or need.” 292 U.S. at 434.24
43 In Railroad Retirement Board v. Alton Railroad, 295 U.S. 330 (1935), the Supreme Court invalidated under the Due Process Clause a federally imposed compulsory retirement and pension system for all carriers subject to the Interstate Commerce Act. The Act required employers to pay the cost of retirement pensions for all workers presently in their employ as well as for those workers who had terminated employment in the year prior to enactment. Whether the purpose of the legislation was viewed as a legislative effort to improve efficiency, safety or the retirement security of workers,25 the Court found it was arbitrary to achieve these ends through the “imposition of liability to pay again for services long since rendered and fully compensated,” 295 U.S. at 354, and violated Due Process.
45 Application of the factors relevant to judicial assessment of rationality, as distilled from these and other precedents, indicates that Title IV of ERISA satisfies Due Process. Rationality must be determined by a comparison of the problem to be remedied with the nature and scope of the burden imposed to remedy that problem. In evaluating the nature and scope of the burden, it is appropriate to consider the reliance interests of the parties affected, Allied Structural Steel Co., 438 U.S. 234; Adams Nursing Home of Williamstown, Inc. v. Mathews, 548 F.2d 1077, 1080-81 (1st Cir. 1977); whether the impairment of the private interest is effected in an area previously subjected to regulatory control, Allied Structural Steel Co., 438 U.S. 234; Federal Housing Administration v. The Darlington, Inc., 358 U.S. 84, 91 (1958); the equities of imposing the legislative burdens, Alton Railroad, 295 U.S. at 354; Turner Elkhorn Mining, 428 U.S. at 19, and the inclusion of statutory provisions designed to limit and moderate the impact of the burdens. W. B. Worthen Co., 292 U.S. at 434; Allied Structural Steel Co., 438 U.S. 234. It must be emphasized that although these factors might improperly be used to express merely judicial approval or disapproval of the balance struck by Congress, they must only be used to determine whether the legislation represents a rational means to a legitimate end.26 See Turner Elkhorn Mining, 428 U.S. at 18-19.
46 Congress determined that each year somewhere in the vicinity of 20,000 workers lost vested pension benefits due to causes beyond their control when a pension plan terminated.27 Given that workers had “anticipated” that these vested benefits would provide retirement security, Congress viewed the termination losses as an abuse of the private pension system in need of correction.
Although the loss of pension benefits was not considered a national emergency by Congress, Allied Structural Steel Co., confirms the prior precedents holding that retroactive liability can properly be imposed to remedy problems which fall short of an emergency. Id. at 248 n. 24.
48 The second and more important distinction in the nature of the reliance interests is that in this case Congress found that the employees’ reliance interests in vested benefits outweighed the employer‘s reliance on prior funding. In Allied Structural Steel Co., the Supreme Court specifically stated that, “(i)n some situations the element of reliance may cut both ways,” but that “Minnesota did not act to protect any employee reliance interest demonstrated on the record.” 438 U.S. at 246 n. 18. The Supreme Court was unwilling to speculate that employees without any vested rights under the plan had any substantial reliance interests. Title IV, however, protects the reliance interests of employees in benefit rights which had vested under the pension plan, an interest which, prima facie, is stronger than interests in unvested rights. Moreover, this reliance interest is in fact demonstrated on the legislative record. Congress found that employees’ expectations for retirement security were being defeated by plant closings and other causes beyond their control.32 The third and final distinction in the reliance interests is that the expectation of the employer may also rationally be given less weight by Congress since pension plan terminations had previously been subject to federal regulation,33 another element notably missing in Allied Structural Steel Co., 438 U.S. at 234.
Concern for loss of benefits by workers after long years of labor through circumstances beyond their control was similarly expressed by President Richard M. Nixon on December 8, 1971, when, in a message to the Congress he said, “When a pension plan is terminated, an employee participating in it can lose all or part of the benefits which he has long been relying on, even if his plan is fully vested. . . . Even one worker whose retirement security is destroyed by the termination of a plan is one too many.”
II Legislative History at 3296.
50 Perhaps the most important facts distinguishing ERISA from the Minnesota statute in Allied Structural Steel are those revealing the Congressional attempt to moderate the impact of the liability imposed. Title IV provisions represent a rational attempt to impose liability only to the extent necessary to achieve the legislative purpose. Congress concluded that it was necessary to insure unfunded vested benefits and established a federal corporation for that purpose. However, it was also determined that it would not be possible to maintain an effective insurance program without imposing some liability on employers. The abuses employer liability was designed to cure included terminations motivated by a desire to avoid the continued burden of funding.34 III Legislative History at 4741 (remarks of Sen. Williams); II Legislative History at 3382 (remarks of Rep. Gaydos). Congress was also concerned that without the risk of liability, employers might use promises of higher retirement benefits for bargaining leverage, knowing that the PBGC would be required to fulfill the promise. S.Rep.No.93-383, I Legislative History at 1155. It was also believed that to impose liability would cause employers to assume a more responsible funding schedule. II Legislative History at 1873 (remarks of Sen. Griffin). These first two considerations would not have been relevant in the Minnesota scheme because no agency was established to assume primary responsibility for the payment of benefits.
51 Acknowledging that employers on the verge of bankruptcy would be unlikely to terminate pension plans solely to take advantage of termination insurance, Congress provided net worth limitations on the amount of potential liability.
53 The order of the district court is reversed.
54 Reversed.