OCTOBER TERM, 1992
Syllabus
CONCRETE PIPE & PRODUCTS OF CALIFORNIA, INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CALIFORNIA
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH
CIRCUIT
No. 91-904. Argued December 1, 1992-Decided June 14, 1993
The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA)
amended the Employee Retirement Income Security Act of 1974 (ERISA)
to provide that in certain circumstances an employer withdrawing
from a multiemployer plan incurs as "withdrawal liability" a share
of the plan's unfunded vested benefits, 29 U. S. C. §§ 1381, 1391.
Withdrawal liability is assessed by means of a notification by the
"plan sponsor" and a demand for payment. § 1399(b). An unresolved
dispute is referred to arbitration, where (1) the sponsor's factual
determinations are "presumed correct" unless a contesting party
"shows by a preponderance of the evidence that the determination
was unreasonable or clearly erroneous," § 1401(a)(3)(A); and (2)
the sponsor's actuary's calculation of a plan's unfunded vested
benefits is presumed correct unless a contesting party "shows by a
preponderance of the evidence" that,
inter alia, "the
actuarial assumptions and methods" used in a calculation "were, in
the aggregate, unreasonable," § 1401(a)(3)(B). Petitioner Concrete
Pipe and Products of California, Inc., is an employer charged with
withdrawal liability by the trustees of respondent, a multiemployer
pension plan (Plan). After losing in arbitration, Concrete Pipe
filed an action to set aside or modify the arbitrator's decision
and raised a constitutional challenge to the MPPAA, but the
District Court granted the Plan's motion to confirm the award. The
Court of Appeals affirmed.
Held:
1. The MPPAA does not unconstitutionally deny Concrete Pipe an
impartial adjudicator by placing the determination of
withdrawalliability in the plan sponsor, here the trustees, subject
to § 1401's presumptions. Pp. 616-636.
(a) Even assuming that the possibility of trustee bias toward
imposing the greatest possible withdrawal liability would suffice
to bar the trustees from serving as adjudicators of Concrete Pipe's
withdrawal liability because of their fiduciary obligations to
beneficiaries of the Plan, the Due Process Clause is not violated
here because the first adjudication in this case was the
arbitration proceeding, not the trustees' initial liability
determination. The trustees' statutory notification
603
and demand obligations are undertaken in an enforcement
capacity. Pp. 616-620.
(b) Nor did the arbitrator's adjudication deny Concrete Pipe its
right to procedural due process. While the § 1401(a)(3)(A)
presumption shifts the burden of persuasion to the employer, the
statute is incoherent with respect to the degree of certainty
required to overturn a plan sponsor's factual determination. In
light of the assumed bias, deference to a plan sponsor's
determination would raise a substantial due process question. The
uncertainty raised by this incoherent statute is resolved by
applying the canon requiring that an ambiguous statute be construed
to avoid serious constitutional problems unless such construction
is plainly contrary to Congress's intent. Thus, the presumption is
construed to place the burden on the employer to disprove an
alleged fact by a preponderance permitting independent review by
the arbitrator of the trustees' factual determinations. The
approach taken by the arbitrator and courts below in this case is
not inconsistent with this Court's interpretation of the first
presumption. pp. 621-631.
(c) The § 1401(a)(3)(B) presumption also raises no procedural
due process issue. The assumptions and methods used in calculating
withdrawalliability are selected in the first instance not by the
trustees, but by the plan actuary, § 1393(c), who is a trained
professional subject to regulatory standards. The technical nature
of the assumptions and methods, and the necessity for applying the
same ones in several contexts, limit an actuary's opportunity to
act unfairly toward a withdrawing employer. Moreover, since §
1401(a)(3)(B) speaks not about the reasonableness of the trustees'
conclusions of historical fact, but about the aggregate
reasonableness of the actuary's assumptions and methods in
calculating the dollar liability figure, an employer's burden to
overcome the presumption is simply to show that an apparently
unbiased professional, whose obligations tend to moderate any
claimed inclination to come down hard on withdrawing employers, has
based a calculation on a combination of methods and assumptions
that falls outside the range of reasonable actuarial practice. Pp.
631-636.
2. The MPPAA, as applied, does not deny substantive due process
in violation of the Fifth Amendment. The imposition of
withdrawalliability is clearly rational here because Concrete
Pipe's liability is based on a proportion of its contributions
during its participation in the Plan. pp. 636-641.
3. The MPPAA, as applied, did not take Concrete Pipe's property
without just compensation. The application of a regulatory statute
that is otherwise within Congress's powers may not be defeated by
private contractual provisions, such as those protecting Concrete
Pipe from liability beyond what was specified in its
collective-bargaining and trust
604
604 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
Syllabus
agreements. See
Connolly v.
Pension Benefit Guaranty
Corporation, 475
U. S. 211, 223-224. Examining Concrete Pipe's relationship with
the Plan in light of the three factors the Court has said have
particular significance for takings claims confirms this. First,
the Government did not physically invade or permanently appropriate
Concrete Pipe's assets for its own use. Second, Concrete Pipe has
failed to show that having to pay out an estimated 46% of
shareholder equity is an economic impact out of proportion to its
experience with the Plan, since diminution in a property's value,
however serious, is insufficient to demonstrate a taking. See,
e. g., Village of Euclid v.
Ambler Realty Co.,
272 U. S. 365,
384. Third, the conditions on its contractual promises did not give
Concrete Pipe a reasonable expectation that it would not be faced
with liability for promised benefits. At the time it began making
payments to the Plan, pension plans had long been subject to
federal regulation. Indeed, withdrawing employers already faced
contingent liability under ERISA, and Concrete Pipe's reliance on
ERISA's original limitation of contingent withdrawal liability to
30% of net worth is misplaced, there being no reasonable basis to
expect that the legislative ceiling would never be lifted, see
Usery v.
Turner Elkhorn Mining Co., 428 U. S. 1, 16. Pp.
641-647.
936 F.2d
576, affirmed.
SOUTER, J., delivered the opinion of the Court, which was
unanimous except insofar as O'CONNOR, J., did not join the
statement to which n. 28 is attached, SCALIA, J., did not join Part
III -B-1-b, and THOMAS, J., did not join Part III-B-l. O'CONNOR,
J., filed a concurring opinion,
post, p. 647. THOMAS, J.,
filed an opinion concurring in part and concurring in the judgment,
post, p. 649.
Dennis R. Murphy argued the cause for petitioner. With
him on the briefs was
James M. Nelson.
John S.
Miller, Jr., argued the cause and filed a
brief for respondent.
Carol Connor Flowe argued the cause for the Pension
Benefit Guaranty Corporation as
amicus curiae urging
affirmance. With her on the brief were
Jeffrey B. Cohen and
Israel Goldowitz. *
*Briefs of
amici curiae urging reversal were filed for
the American Trucking Associations, Inc., by
Daniel R. Barney,
Laurie T. Baulig, and
William H. Ewing; and for Midwest
Motor Express, Inc., et al. by
Alan
Briefs of
amici curiae urging affirmance were filed for
the American Academy of Actuaries by
Lauren M. Bloom; for
the American Federation
605
JUSTICE SOUTER delivered the opinion of the Court.1 Respondent
Construction Laborers Pension Trust for Southern California (Plan)
is a multiemployer pension trust fund established under a Trust
Agreement executed in 1962. Petitioner Concrete Pipe and Products
of California, Inc. (Concrete Pipe), is an employer and former
contributor to the Plan that withdrew from it and was assessed
"withdrawal liability" under provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U. S. C. §§ 1301-1461 (1988
ed. and Supp. III), added by the Multiemployer Pension Plan
Amendments Act of 1980 (MPP AA), Pub. L. 96-364, 94 Stat. 1208.
Concrete Pipe contends that the MPP AA's assessment and arbitration
provisions worked to deny it procedural due process. And, although
we have upheld the MPP AA against constitutional challenge under
the substantive component of the Due Process Clause and the Takings
Clause,
Pension Benefit Guaranty Corporation v.
R. A.
Gray &
Co., 467 U. S. 717 (1984);
Connolly v.
Pension Benefit Guaranty Corporation,
475 U. S. 211
(1986), Concrete Pipe contends that, as applied to it, the MPP AA
violates these provisions as well. We see merit in none of Concrete
Pipe's contentions.
I
A pension plan like the one in issue, to which more than one
employer contributes, is characteristically maintained to fulfill
the terms of collective-bargaining agreements. The contributions
made by employers participating in such a multiemployer plan are
pooled in a general fund available to pay any benefit obligation of
the plan. To receive benefits, an
of Labor and Congress of Industrial Organizations by
Robert
M. Weinberg and
Laurence Gold; for the Central States,
Southeast and Southwest Areas Pension Fund by
Thomas C.
Nyhan and
Terence G.
Craig; for the National
Coordinating Committee for Multiemployer Plans by
Gerald M.
Feder and
David R. Levin; and for the Teamsters Pension
Trust Fund of Philadelphia & Vicinity et al. by
James D.
Crawford, James J.
Leyden, Thomas W Jennings, and
Kent Cprek.
IJU8TICE SCALIA does not join Part III-B-1-b of this
opinion.
606
606 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
employee participating in such a plan need not work for one
employer for any particular continuous period. Because service
credit is portable, employees of an employer participating in the
plan may receive such credit for any work done for any
participating employer. An employee obtains a vested right to
secure benefits upon retirement after accruing a certain length of
service for participating employers; benefits vest under the Plan
in this case when an employee accumulates 10 essentially continuous
years of credit. See Brief for Petitioner 28.
Multiemployer plans like the one before us have features
that are beneficial in industries where
"there [is] little if any likelihood that individual employers
would or could establish single-employer plans for their employees
... [,] where there are hundreds and perhaps thousands of small
employers, with countless numbers of employers going in and out of
business each year, [and where] the nexus of employment has focused
on the relationship of the workers to the union to which they
belong, and/or the industry in which they are employed, rather than
to any particular employer." Multiemployer Pension Plan Termination
Insurance Program:
Hearings before the Subcommittee on Oversight of the House
Committee on Ways and Means, 96th Cong., 1st Sess., 50 (1979)
(statement of Robert A. Georgine, Chairman, National Coordinating
Committee for Multiemployer Plans).
Multiemployer plans provide the participating employers with
such labor market benefits as the opportunity to offer a pension
program (a significant part of the covered employees' compensation
package) with cost and risk-sharing mechanisms advantageous to the
employer. The plans, in consequence, help ensure that each
participating employer will have access to a trained labor force
whose members are able to move from one employer and one job to
another without
607
losing service credit toward pension benefits. See 29 CFR §
2530.210(c)(1) (1991); accord,
Washington Star Co. v.
International Typographical Union Negotiated Pension Plan,
582 F. Supp. 301, 304 (DC 1983).
Since the enactment of ERISA in 1974, the Plan has been subject
to the provisions of the statute as a "defined benefit plan." Such
a plan is one that does not qualify as an "'individual account
plan' or 'defined contribution plan,'" which provide, among other
things, for an individual account for each covered employee and for
benefits based solely upon the amount contributed to the covered
employee's account. See 29 U. S. C. §§ 1002(35), 1002(34), 1002(7).
Concrete Pipe has not challenged the determination that the Plan
falls within the statutory definition of defined benefit plan, and
no issue as to that is before the Court.
A
We have canvassed the history of ERISA and the MPPAA before. See
Pension Benefit Guaranty Corporation v.
R. A. Gray
&
Co., supra; Connolly v.
Pension Benefit Guaranty
Corporation, supra. ERISA was designed "to ensure that
employees and their beneficiaries would not be deprived of
anticipated retirement benefits by the termination of pension plans
before sufficient funds have been accumulated in [them] ....
Congress wanted to guarantee that if a worker has been promised a
defined pension benefit upon retirement-and if he has fulfilled
whatever conditions are required to obtain a vested benefit-he will
actually receive it."
Id., at 214 (citations and internal
quotation marks omitted). As enacted in 1974, ERISA created the
Pension Benefit Guarantee Corporation (PBGC) to administer and
enforce a pension plan termination insurance program, to which
contributors to both single-member and multiemployer plans were
required to pay insurance premiums. 29 U. S. C. §§ 1302(a), 1306
(1988 ed. and Supp. III). Under the terms of the statute as
originally enacted, the guarantee of basic
608
608 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
benefits by multiemployer plans that terminated was not to be
mandatory until 1978, and for terminations prior to that time, any
guarantee of benefits upon plan termination was discretionary with
PBGC. 29 U. S. C. §§ 1381(c)(2)-(4) (1976 ed.). If PBGC did choose
to extend a guarantee when a multiemployer plan terminated with
insufficient assets to pay promised benefits, an employer that had
contributed to the plan in the five preceding years was liable to
PBGC for the shortfall in proportion to its share of contributions
during that 5-year period, up to 30 percent of the employer's net
worth. 29 U. S. C. §§ 1362(b), 1364 (1976 ed.). "In other words,
any employer withdrawing from a multiemployer plan was subject to a
contingent liability that was dependent upon the plan's termination
in the next five years and the PBGC's decision to exercise its
discretion and pay guaranteed benefits."
Gray, 467 U. S., at
721.
"As the date for mandatory coverage of multiemployer plans
approached, Congress became concerned that a significant number of
plans were experiencing extreme financial hardship."
Ibid.
Indeed, the possibility of liability upon termination of a plan
created an incentive for employers to withdraw from weak
multiemployer plans.
Connolly, 475 U. S., at 215. The
consequent risk to the insurance system was unacceptable to
Congress, which in 1978 postponed the mandatory guarantee pending
preparation by the PBGC of a report "analyzing the problems of
multiemployer plans and recommending possible solutions."
Ibid. PBGC issued that report on July 1, 1978. Pension
Benefit Guaranty Corporation, Multiemployer Study Required by P. L.
95-214 (1978). "To alleviate the problem of employer withdrawals,
the PBGC suggested new rules under which a withdrawing employer
would be required to pay whatever share of the plan's unfunded
liabilities was attributable to that employer's participation."
Connolly, 475 U. S., at 216 (citation and internal quotation
marks omitted).
609
Congress ultimately agreed, see id., at 217, and passed the MPP
AA, which was signed into law by the President on September 26,
1980. Under certain provisions of the MPPAA (which when enacted had
an effective date of April 29, 1980, 29 U. S. C. § 1461(e)(2)(A)
(1976 ed., Supp. V)), if an employer withdraws from a multiemployer
plan, it incurs "withdrawal liability" in the form of "a fixed and
certain debt to the pension plan."
Gray, supra, at 725. An
employer's withdrawalliability is its "proportionate share of the
plan's 'unfunded vested benefits,'" that is, "the difference
between the present value of vested benefits" (benefits that are
currently being paid to retirees and that will be paid in the
future to covered employees who have already completed some
specified period of service, 29 U. S. C. § 1053) "and the current
value of the plan's assets. 29 U. S. C. §§ 1381, 1391."
Gray,
supra, at 725.2
B
The MPP AA provides the procedure for calculating and assessing
withdrawal liability. The plan's actuary, who is subject to
regulatory and professional standards, 29 U. S. C. §§ 1241, 1242;
26 U. S. C. § 7701(a)(35), must determine the present value of the
plan's liability for vested benefits.3 In the absence of
regulations promulgated by the PBGC, the actuary must employ
"actuarial assumptions and methods which, in the aggregate, are
reasonable (taking into account the experience of the plan and
reasonable expectations) and which, in combination, offer the
actuary's best estimate of anticipated experience under the plan."
29 U. S. C.
2 In various places the statute uses the terms "participant" and
"beneficiary," and these terms are defined at 29 U. S. C. §§
1002(7), 1002(8). For simplicity, we will use the term "covered
employee" to refer depending on context both to those earning
service credits and to those entitled to benefits.
3 Even if no employer withdraws, ERISA requires an assessment of
the plan's liability at least annually. See 29 U. S. C. §
1082(c)(9) (1988 ed., Supp. III).
610
610 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
§ 1393(a)(1).4 The assumptions must cover such matters as
mortality of covered employees, likelihood of benefits vesting,
and, importantly, future interest rates. After settling the present
value of vested benefits, the actuary calculates the unfunded
portion by deducting the value of the plan's assets. § 1393(c).
In order to determine a particular employer's withdrawal
liability, the unfunded vested liability is allocated under one of
several methods provided by law. § 1391. In this case, the Plan
used the presumptive method of § 1391(b), which bases withdrawal
liability on the proportion of total employer contributions to the
plan made by the withdrawing employer during certain 5-year
periods. See §§ 1391(b)(2) (E)(ii), (b)(3)(B), (b)(4)(D)(ii). In
essence, the withdrawal liability imposes on the withdrawing
employer a share of the unfunded vested liability proportional to
the employer's share of contributions to the plan during the years
of its participation.
Withdrawal liability is assessed in a notification by the "plan
sponsor" (here the trustees, see § 1301(a)(10)(A)) and a demand for
payment. § 1399(b). The statute requires notification and demand to
be made "[a]s soon as practicable after an employer's complete or
partial withdrawal." § 1399(b)(1). A "complete withdrawal"
"occurs when an employer-
"(1) Permanently ceases to have an obligation to contribute
under the plan, or
"(2) permanently ceases all covered operations under the plan."
§ 1383(a).5
4 While the PBGC is also authorized to promulgate regulations
governing such assumptions under 29 U. S. C. § 1393(a), it has not
done so. See Brief for Pension Benefit Guaranty Corp. as
Amicus
Curiae 7, n. 7.
5 There is an exception to this definition that applies to the
building and construction industry, see § 1383(b), but neither
party argues that it pertains in this case.
611
"[T]he date of a complete withdrawal is the date of the
cessation of the obligation to contribute or the cessation of
covered operations." § 1383(e).
The statute provides that if an employer objects after notice
and demand for withdrawal liability, and the parties cannot resolve
the dispute, § 1399(b)(2), it shall be referred to arbitration. See
§ 1401(a)(1). Two presumptions may attend the arbitration. First,
"any determination made by a plan sponsor under [29 U. S. C. §§
1381-1399 and 1405 (1988 ed. and Supp. II!)] is presumed correct
unless the party contesting the determination shows by a
preponderance of the evidence that the determination was
unreasonable or clearly erroneous." 29 U. S. C. § 1401(a)(3)(A).
Second, the sponsor's calculation of a plan's unfunded vested
benefits
"is presumed correct unless a party contesting the determination
shows by a preponderance of evidence that-
"(i) the actuarial assumptions and methods used in the
determination were, in the aggregate, unreasonable (taking into
account the experience of the plan and reasonable expectations),
or
"(ii) the plan's actuary made a significant error in applying
the actuarial assumptions or methods." § 1401(a) (3)(B).
The statute provides for judicial review of the arbitrator's
decision by an action in the district court to enforce, vacate, or
modify the award. See § 1401(b)(2). In any such action "there shall
be a presumption, rebuttable only by a clear preponderance of the
evidence, that the findings of fact made by the arbitrator were
correct." § 1401(c).
II
The parties to the Trust Agreement creating the Plan in 1962 are
the Southern California District Council of Laborers (Laborers) and
three associations of contractors, the
612
612 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
Building Industry of California, Inc., the Engineering
Contractors Association, and the Southern California Contractors
Association, Inc. App. 75, , 6 (stipulation of facts filed in the
District Court). Under § 302(c)(5)(B) of the Labor Management
Relations Act, 1947 (LMRA), 29 U. S. C. § 186(c)(5)(B), when a
union participates in management of a plan permitted by the LMRA,
the plan must be administered jointly by representatives oflabor
and management. Accordingly, half of the Plan's trustees are
selected by the Laborers, and half by these contractors'
associations. Concrete Pipe has never been a member of any of the
contractors' associations that are parties to the Trust
Agreement.
In 1976, Concrete Pipe, which is a wholly owned subsidiary of
Concrete Pipe and Products Co., Inc., purchased certain assets of
another company, Cen-Vi-Ro, including a concrete pipe manufacturing
plant near Shafter, California, which Concrete Pipe continued to
operate much as Cen-Vi-Ro had done. Cen-Vi-Ro had
collective-bargaining agreements with several unions including the
Laborers, and Concrete Pipe abided by the agreement with the latter
by contributing to the Plan at a specified rate for each hour
worked by a covered employee.6 In 1978, Concrete Pipe negotiated a
new 3-year contract with the Laborers that called for continuing
contributions to be made to the Plan based on hours worked by
covered employees in the collective-bargaining unit.7 The
collective-bargaining agreement specified that it would remain in
effect until June 30, 1981, and thereafter from year to year unless
either Concrete Pipe or the Laborers gave notice of a desire to
renegotiate or terminate it. "'Such written notice [was to] be
given at least sixty (60)
6 The average rate for covered employees at which Concrete Pipe
contributed to the Plan in 1977 was $1.14 per hour, and Concrete
Pipe's contributions for 1977 totaled $29,337.71.
7 The collective-bargaining agreement provided for contributions
for each laborer at a rate of $1.20 per hour. In 1978 Concrete
Pipe's total contribution to the Plan was $49,913.04, and in 1979
it was $20,826.60.
613
days prior to June 30 ... [and if] no agreement [was] reached by
June 30 ... the Employer or the [Laborers might] thereafter give
written notice to the other that on a specified date [at least]
fifteen (15) days [thereafter] the Agreement [should] be considered
terminated.'" App. 76.
In August 1979, Concrete Pipe stopped production at the Shafter
facility. Although the details do not matter here, by October 1979,
work by employees covered by the agreement with the Laborers had
virtually ceased, and Concrete Pipe eventually stopped making
contributions to the Plan. In the spring of 1981, Concrete Pipe and
the Laborers each sent the other a timely notice of a desire to
renegotiate the collective-bargaining agreement. Concrete Pipe
subsequently bargained to an impasse and, on November 30, 1981,
sent the Laborers a letter withdrawing recognition of that union as
an employee representative, and giving notice of intent to
terminate the 1978 collective-bargaining agreement. At about the
same time, however, in November 1981, Concrete Pipe reopened the
Shafter plant to produce 7,000 tons of concrete pipe needed to fill
two orders for which it had successfully bid. It hired employees in
classifications covered by its prior agreement with the Laborers,
but did not contribute to the Plan for their work.
In January 1982, the Plan notified Concrete Pipe of withdrawal
liability claimed to amount to $268,168.81. See id., at 89-94.
Although the demand letter did not specify the date on which the
Plan contended that "complete withdrawal" from it had taken place,
it referred to the failure of Concrete Pipe to make contributions
to the Plan since February 1981, and stated that "[w]e are further
advised that you have not signed a renewal of a collective
bargaining agreement obligating you to continue contributions to
the Plan on behalf of the Construction laborers currently in your
employ."
Id., at 90.
The Plan filed suit seeking the assessed withdrawalliability.
Concrete Pipe countersued to bar collection, contending
614
614 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
that "complete withdrawal" had occurred when operations at the
Shafter plant ceased in August 1979, a date prior to the effective
date of the MPPAA, and challenging the MPPAA on constitutional
grounds. These cases were consolidated in the United States
District Court for the Central District of California, which
sua
sponte ordered the parties to arbitrate the issue of whether
withdrawal occurred prior to the effective date of the MPPAA.8
The arbitration took place in two phases. In the first, the
arbitrator determined that Concrete Pipe had not withdrawn from the
Plan prior to the effective date of the MPP AA. App. 216. In the
second phase, explicitly applying the presumption of 29 U. S. C. §
1401(a)(3)(B), the arbitrator found that Concrete Pipe had failed
to meet its burden of showing the actuarial assumptions and methods
to be unreasonable in the aggregate. App. 400. For reasons not at
issue here, the arbitrator did rule partially in Concrete Pipe's
favor, and reduced the withdrawal liability from $268,168.81 to
$190,465.57.
Concrete Pipe then filed a third action in the District Court,
to set aside or modify the arbitrator's decision, and again raised
its constitutional challenge.
Id., at 406. The District
Court treated Concrete Pipe's subsequent motion for summary
judgment as a petition to vacate the arbitrator's award, which it
denied, and granted a motion by the Plan to confirm the award.
Construction Laborers Pension Trust for Southern California
v.
Cen- Vi-Ro Concrete Pipe
8 The District Court concluded that the effective date of the
withdrawal liability provisions of the MPPAA was September 26,
1980, in reliance on the Ninth Circuit's decision in
Shelter
Framing Corp. v.
Pension Benefit Guaranty Corporation,
705 F.2d
1502 (1983), which held the retroactivity provision of the
MPPAA unconstitutional. App. 198. The decision in
Shelter
Framing was reversed by this Court in
Pension Benefit
Guaranty Corporation v.
R. A. Gray &
Co.,
467 U. S. 717
(1984). Subsequent to this Court's decision in
Gray,
Congress amended the effective date of the MPPAA's withdrawal
liability provisions. See 29 U. S. C. § 1461(e)(2)(a).
615
and Products, CV-82-5184-HLH (CD Cal., July 5, 1989),
App. 416-425.9 On Concrete Pipe's appeal, the judgment of the
District Court was affirmed.
Board of Trustees of Construction
Laborers Pension Trust for Southern California v.
Concrete
Pipe and Products of California, Inc., No. 89-55854 (CA9, June
27, 1991), App. 431-432, judgt. order reported at
936 F.2d
576. We granted certiorari limited to two questions presented,
which are set out in the margin. 504 U. S. 940 (1992).10
III
Concrete Pipe challenges the assessment of withdrawalliability
on several grounds, the first being that by placing determination
of withdrawal liability in the trustees, subject to the
presumptions provided by § 1401, the MPPAA is unconstitutional
because it denies Concrete Pipe an impartial adjudicator. This is
not the first time this legal question has been before the Court.
See
Pension Benefit Guaranty Corporation v.
Yahn
&
McDonnell, Inc., 481 U. S. 735 (1987),
aff'g by an equally divided Court
United Retail &
Wholesale Employees Teamsters Union Local No. 115
Pension
Plan v.
Yahn &
McDonnell, Inc., 787 F.2d
128 (CA3 1986).
9 In its motion to confirm the award, the Plan also asked that
it be modified. The District Court treated this as a motion to
vacate the arbitration award and denied it as well. See App. 416.
The Plan did not appeal.
10 Our grant of certiorari was limited to the questions: "Do the
presumptions in 29 U. S. C. § 1401 favoring multiemployer plans
like Construction Laborers Pension Trust for Southern California
... violate the due process rights of Concrete Pipe and Products by
denying access to an impartial decisionmaker?" and "Do the
provisions of the Multi-Employer Pension Plan Amendments Act ...
violate the Fifth Amendment rights of Concrete Pipe and Products,
as applied, by retroactively imposing withdrawalliability on an
employer who never had employees vested in the pension plan and
whose collective bargaining agreements specifically limited
liability to contributions made?" Pet. for Cert. i.
616
616 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
A 1
Concrete Pipe and its amw~ point to several potential sources of
trustee bias toward imposing the greatest possible withdrawal
liability. The one they emphasize most strongly has roots in the
fact that "all of the trustees, including those selected by
employers, are fiduciaries of the fund, 29 U. S. C. §
1002(21)([A]), and thus owe an exclusive duty to the fund."
Id., at 139 (emphasis omitted). As we said in another case
discussing employee benefit pension plans permitted under LMRA:
"Under principles of equity, a trustee bears an unwavering duty
of complete loyalty to the beneficiary of the trust, to the
exclusion of the interests of all other parties. To deter the
trustee from all temptation and to prevent any possible injury to
the beneficiary, the rule against a trustee dividing his loyalties
must be enforced with 'uncompromising rigidity.'
"In sum, the duty of the management-appointed trustee of an
employee benefit fund under § 302(c)(5) is directly antithetical to
that of an agent of the appointing party .... ERISA essentially
codified the strict fiduciary standards that a § 302(c)(5) trustee
must meet. [Title 29 U. S. C. § 1104(a)(1)] requires a trustee to
'discharge his duties ... solely in the interest of the
participants [i. e., covered employees] and beneficiaries.'"
NLRB v. Amax Coal Co., 453 U. S. 322, 329-332
(1981) (citations and footnote omitted).
The resulting tug away from the interest of the employer is
fueled by the threat of personal liability for any breach of the
trustees' fiduciary responsibilities, obligations, or duties, 29 U.
S. C. § 1109, which may be enforced by civil actions brought by the
Secretary of Labor or any covered employee or beneficiary of the
plan, § 1132(a)(2).
617
The trustees could act in a biased fashion for several reasons.
The most obvious would be in attempting to maximize assets
available for the beneficiaries of the trust by making findings to
enhance withdrawal liability. The next would not be so selfless,
for if existing underfunding was the consequence of prior decisions
of the trustees, those decisions could, if not offset, leave the
trustees open to personalliability. See Brief for American Trucking
Associations, Inc., as
Amicus Curiae 9. A risk of bias may
also inhere in the mere fact that, fiduciary obligations aside, the
trustees are appointed by the unions and by employers. Union
trustees may be thought to have incentives, unrelated to the
question of withdrawal, to impose greater rather than lesser
withdrawal liability. Employer trustees may be responsive to
concerns of those employers who continue to contribute, whose
future burdens may be reduced by high withdrawal liability, and
whose competitive position may be enhanced to boot. See Brief for
Midwest Motor Express, Inc., et al. as
Amici Curiae 8,
citing Note, Trading Fairness for Efficiency:
Constitutionality of the Dispute Resolution Procedures of the
Multiemployer Pension Plan Amendments Act of 1980, 71 Geo. L. J.
161, 168 (1982).
As against these supposed threats to the trustees' neutrality,
due process requires a "neutral and detached judge in the first
instance,"
Ward v.
Village of Monroeville, 409 U. S. 57, 61-62
(1972), and the command is no different when a legislature
delegates adjudicative functions to a private party, see
Schweiker v.
McClure, 456 U. S. 188, 195
(1982). "That officers acting in a judicial or quasi-judicial
capacity are disqualified by their interest in the controversy to
be decided is, of course, the general rule."
Tumey v.
Ohio, 273 U. S. 510, 522 (1927). Before one may be deprived
of a protected interest, whether in a criminal or civil setting,
see
Marshall v.
Jerrico, Inc., 446 U. S. 238, 242, and
n. 2 (1980), one is entitled as a matter of due process of law to
an adjudicator who is not in a situation "'which would offer a
possible
618
618 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
temptation to the average man as a judge ... which might lead
him not to hold the balance nice, clear and true .... "
Ward,
supra, at 60 (quoting
Tumey, supra, at 532). Even appeal
and a trial
de novo will not cure a failure to provide a
neutral and detached adjudicator. 409 U. S., at 61.
"[J]ustice," indeed, "must satisfy the appearance of justice,
and this stringent rule may sometimes bar trial [even] by judges
who have no actual bias and who would do their very best to weigh
the scales of justice equally between contending parties."
Marshall v.
Jerrico, Inc., supra, at 243 (citations
and internal quotation marks omitted). This, too, is no less true
where a private party is given statutory authority to adjudicate a
dispute, and we will assume that the possibility of bias, if only
that stemming from the trustees' statutory role and fiduciary
obligation, would suffice to bar the trustees from serving as
adjudicators of Concrete Pipe's withdrawal liability.
2
The assumption does not win the case for Concrete Pipe, however,
for a further strand of governing law has to be applied. Not all
determinations affecting liability are adjudicative, and the"
'rigid requirements' ... designed for officials performing judicial
or quasi-judicial functions, are not applicable to those acting in
a prosecutorial or plaintiff-like capacity." 446 U. S., at 248.
Where an initial determination is made by a party acting in an
enforcement capacity, due process may be satisfied by providing for
a neutral adjudicator to "conduct a
de novo review of all
factual and legal issues." Cf.
id., at 245; see also
id., at 247-248, and n. 9; cf.
Withrow v.
Larkin, 421 U.
S. 35, 58 (1975) ("Clearly, if the initial view of the facts
based on the evidence derived from nonadversarial processes as a
practical or legal matter foreclosed fair and effective
consideration at a subsequent adversary hearing leading to ultimate
decision, a substantial due process question would be raised").
619
The distinction between adjudication and enforcement disposes of
the claim that the assumed bias or appearance of bias in the
trustees' initial determination of withdrawal liability alone
violates the Due Process Clause, much as it did the similar claim
in
Marshall v.
Jerrico. Although we were faced there
with a federal agency administrator who determined violations of a
child labor law and assessed penalties under the statute, we
concluded that the administrator could not be held to the high
standards required of those "whose duty it is to make the final
decision and whose impartiality serves as the ultimate guarantee of
a fair and meaningful proceeding in our constitutional regime." 446
U. S., at 250. Of the administrator there we said, "He is not a
judge. He performs no judicial or quasi-judicial functions. He
hears no witnesses and rules on no disputed factual or legal
questions. The function of assessing a violation is akin to that of
a prosecutor or civil plaintiff."
Id., at 247.
This analysis applies with equal force to the trustees, who, we
find, act only in an enforcement capacity. The statute requires the
plan sponsor, here the trustees, to notify the employer of the
amount of withdrawal liability and to demand payment, 29 U. S. C. §
1399(b)(1), actions that bear the hallmarks of an assessment, not
an adjudication. The trustees are not required to hold a hearing,
to examine witnesses, or to adjudicate the disputes of contending
parties on matters of fact or law.u In
Marshall, we observed
that an employer "except[ing] to a penalty ... is entitled to a
de novo hearing before an administrative law judge," 446 U.
S., at 247, and we concluded that this latter proceeding was
the
11 While the employer "may ask the plan sponsor to review any
specific matter relating to the determination of the employer's
liability and the schedule of payments," 29 U. S. C. § 1399(b)(2),
and while the plan sponsor must then respond, ibid., this hardly
amounts to "adjudication." The statute does not require the
employer to exhaust the avenue of making a request of the plan
sponsor prior to initiating arbitration proceedings. See §
1401(a)(1).
620
620 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
"initial adjudication," id., at 247, n. 9. Likewise here, we
conclude that the first adjudication is the proceeding that occurs
before the arbitrator, not the trustees' initial determination of
liability.12
B
This does not end our enquiry, however, for Concrete Pipe goes
on to argue that the statutory presumptions preserve the trustees'
bias by limiting the arbitrator's autonomy to determine withdrawal
liability, and thereby work to deny the employer a fair
adjudication.
1
Under the first provision at issue here, "any determination made
by the plan sponsor under [29 U. s. C. §§ 1381-1399 and 1405] is
presumed correct unless the party contesting the determination
shows by a preponderance of the evidence that the determination was
unreasonable or clearly erroneous." 29 U. s. C. § 1401(a)(3)(A).
Concrete Pipe argues that this presumption denied it an impartial
adjudicator on the issue of its withdrawal date, thus raising a
constitutional question on which the Courts of Appeals have
dividedP
12 "[W]e need not say with precision what limits there may be on
a financial or personal interest of one who performs a
prosecutorial function,"
Marshall, 446 U. S., at 250
(footnote omitted), as that issue is not within the scope of the
questions on which we granted certiorari in this case.
13 The Courts of Appeals for the First, Second, Fourth, Ninth,
and District of Columbia Circuits have found the provision at issue
constitutional, while the Court of Appeals for the Third Circuit
has struck it down. Compare Keith Fulton & Sons, Inc. v. New
England Teamsters and Trucking Indus. Pension Fund, Inc.,
762 F.2d
1137, 1140-1143 (CAl1985) (en bane); Board of Trustees of
Western Conference of Teamsters Pension Trust Fund v. Thompson
Bldg. Materials, Inc.,
749 F.2d
1396, 1403-1404 (CA9 1984), cert. denied, 471 U. S. 1054
(1985); Washington Star Co. v. International Typographical Union
Negotiated Pension Plan, 235 U. S. App. D. C. 1, 10,
729 F.2d
1502, 1511 (1984); Textile Workers Pension Fund v. Standard Dye
& Finishing Co.,
725 F.2d
843, 855 (CA2), cert. denied sub nom. Sibley, Lindsay &
Curr Co. v. Bakery, Confectionery & Tobacco Workers, 467 U. S.
1259 (1984); and Republic Indus., Inc. v. Teamsters
621
The parties apparently agree that this presumption applies only
to factual determinations, see Reply Brief for Petitioner 17; Brief
for Respondent 24 (deferring to brief for the PBGC as
amicus
curiae); Brief for Pension Benefit Guaranty Corporation as
Amicus Curiae 10, and n. 11, and this position is consistent
with a PBGC regulation requiring the arbitrator "[i]n reaching his
decision [to] follow applicable law, as embodied in statutes,
regulations, court decisions, interpretations of the agencies
charged with the enforcement of the Act, and other pertinent
authorities," 29 CFR § 2641.4(a)(1) (1992). We will assume for
purposes of this case that the regulation reflects a sound reading
of the statute.14
a
It is clear that the presumption favoring determinations of the
plan sponsor shifts a burden of proof or persuasion to the
employer. The hard question is what the employer must show under
the statute to rebut the plan sponsor's factual determinations,
that is, how and to what degree of probability the employer must
persuade the arbitrator that the sponsor was wrong. The question is
hard because the statutory text refers to three different concepts
in identifying this burden: "preponderance," "clearly erroneous,"
and "unreasonable."
Joint Council No. 83 of Virginia Pension Fund,
718 F.2d
628, 639-641 (CA4 1983), cert. denied, 467 U. S. 1259 (1984),
with United Retail & Wholesale Employees Teamsters Union Local
No. 115 Pension Plan v. Yahn & McDonnell, Inc.,
787 F.2d
128, 138-142 (CA3 1986), aff'd by an equally divided Court sub
nom. Pension Benefit Guaranty Corporation
14 There is no utility in attempting to construe § 1401(a)(3)(A)
finely to apply the "unreasonable" standard to certain
determinations possible under §§ 1381-1399 and 1405, and the
"clearly erroneous" formulation to others. These distinctions are
not relevant in light of the relationship in this context of both
of these terms to the statutory phrase requiring a showing "by a
preponderance," which we explain below.
622
622 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
The burden of showing something by a "preponderance of the
evidence," the most common standard in the civil law, "simply
requires the trier of fact 'to believe that the existence of a fact
is more probable than its nonexistence before [he] may find in
favor of the party who has the burden to persuade the [judge] of
the fact's existence.'"
In re Winship,
397 U. S. 358, 371-372
(1970) (Harlan, J., concurring) (brackets in original) (citation
omitted). "A finding is 'clearly erroneous' when although there is
evidence to support it, the reviewing [body] on the entire evidence
is left with the definite and firm conviction that a mistake has
been committed."
United States v.
United States Gypsum
Co., 333 U. S.
364, 395 (1948). A showing of "unreasonableness" would require
even greater certainty of error on the part of a reviewing body.
See,
e. g., Anderson v.
Liberty Lobby, Inc., 477 U. S. 242, 252
(1986).
In creating the presumption at issue, these terms are combined
in a very strange way. As our descriptions indicate, the first,
"preponderance," is customarily used to prescribe one possible
burden or standard of proof before a trier of fact in the first
instance, as when the proponent of a proposition loses unless he
proves a contested proposition by a preponderance of the evidence.
The term thus belongs in the same category with "clear and
convincing" and "beyond a reasonable doubt," which are also used to
prescribe standards of proof (but when greater degrees of certainty
are thought necessary). Before any such burden can be satisfied in
the first instance, the factfinder must evaluate the raw evidence,
finding it to be sufficiently reliable and sufficiently probative
to demonstrate the truth of the asserted proposition with the
requisite degree of certainty.
The second and third terms differ from the first in an important
way. They are customarily used to describe, not a degree of
certainty that some fact has been proven in the first instance, but
a degree of certainty that a factfinder in the first instance made
a mistake in concluding that a fact
623
had been proven under the applicable standard of proof. They
are, in other words, standards of review, and they are normally
applied by reviewing courts to determinations of fact made at trial
by courts that have made those determinations in an adjudicatory
capacity (unlike the trustees here). See,
e. g., Fed. Rule
Civ. Proc. 52(a). As the terms readily indicate, a reviewing body
characteristically examines prior findings in such a way as to give
the original factfinder's conclusions of fact some degree of
deference. This makes sense because in many circumstances the costs
of providing for duplicative proceedings are thought to outweigh
the benefits (the second would render the first ultimately
useless), and because, in the usual case, the factfinder is in a
better position to make judgments about the reliability of some
forms of evidence than a reviewing body acting solely on the basis
of a written record of that evidence. Evaluation of the credibility
of a live witness is the most obvious example.
Thus, review under the "clearly erroneous" standard is
significantly deferential, requiring a "definite and firm
conviction that a mistake has been committed." And application of a
reasonableness standard is even more deferential than that,
requiring the reviewer to sustain a finding of fact unless it is so
unlikely that no reasonable person would find it to be true, to
whatever the required degree of proof.
The strangeness in the statutory language creating the first
presumption arises from the combination of terms from the first
category (burdens of proof) with those from the second (standards
of review). It is true, of course, that this apparent confusion of
categories may have resulted from the hybrid nature of the
arbitrator's proceeding in which it is supposed to be applied. The
arbitrator here does not function simply as a reviewing body in the
classic sense, for he is not only obliged to enquire into the
soundness of the sponsor's determinations when they are challenged,
but may receive new evidence in the course of his review and adopt
his own conclusions of fact. He may conduct proceedings in the
624
624 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
same manner and with the same powers as an arbitrator may do
under Title 9 of the United State Code, see 29 U. S. C. §
1401(b)(3), being authorized, for example, to hear (indeed to
subpoena) witnesses and to take evidence. See 9 U. S. C. § 7; 29 U.
S. C. § 1401(b)(3) (making specific reference to subpoena power).
He is, then, a reviewing body (as is clear from his obligation,
absent a contrary showing, to deem certain determinations by the
plan sponsor correct), but a reviewing body invested with the
further powers of a finder of fact (as is clear from his power to
take evidence in the course of his review and from the presumption
of correctness that a district court is bound to give his "findings
of fact," § 1401(c)). The arbitrator may thus provide a dual sort
of trial and review, ultimately empowered to draw his own
conclusions, and it would make sense to describe his different
functions respectively by the language of trial and the language of
review.
It does not, however, make sense to use the language of trial
and the language of review as the statute does, for the statute
does not refer to different arbitrator's functions in language
appropriate to each; it refers, rather, to one single conclusion
that must be drawn about a determination previously made by a plan
sponsor. By its terms the statute purports to provide a standard
for reviewing the sponsor's findings, and it defines the nature of
the conclusion the arbitrator must draw by using a combination of
terms that are categorically ill-matched. They are also
inconsistent with each other on any reading. As used here, as
distinct from its more usual context, the statutory phrase
authorizing the arbitrator to reject a factual conclusion upon
proof by a "preponderance" implies review of the sponsor's
determination on the basis of the record, supplemented by any new
evidence, for simple error. If this statutory phrase were given
effect, and the arbitrator concluded from a review of the record
and of new evidence that a finding of fact was more probably wrong
than not, it would be rejected, and a different
625
finding might be substituted. On the other hand, requiring a
showing that the sponsor's determination was "clearly erroneous" or
"unreasonable" would grant the plan sponsor's factual findings a
great deal of deference. But to say in this context that one must
demonstrate that something is more probably clearly erroneous than
not or more probably than not unreasonable is meaningless. One
might as intelligibly say, in a trial court, that a criminal
prosecutor is bound to prove each element probably true beyond a
reasonable doubt. The statute is thus incoherent with respect to
the degree of probability of error required of the employer to
overcome a factual conclusion made by the plan sponsor.15
The proper response to this incomprehensibility is obviously
important in deciding this case. If it permitted an employer to
rebut the plan sponsor's factual conclusions by a
15JUSTICE THOMAS reads the statute not to be about the standard
of review of the plan sponsor's findings of fact at all. On his
reading, "clearly erroneous" is not a term of art, but an attempt
at independent literal description. Under his reading, if the
arbitrator concludes a factual determination of a plan sponsor is
probably wrong, it will nonetheless be permitted to stand, unless
the error is "obvious, plain, gross, significant, or manifest." See
post, at 652 (citation omitted). JUSTICE THOMAS does not
adequately explain what purpose would be served by a statute that
let some erroneous (and presumably material) factual determinations
stand even when they were "clearly erroneous" in the legal sense or
"unreasonable," merely because of the degree to which they happened
to deviate from the true facts, even when the latter are supported
by overwhelming evidence. He does refer to a possible congressional
desire to avoid disputes over "insignificant errors,"
post,
at 655, but under his reading a factual error could be significant,
in the sense that it was both material and undeniably incorrect,
and yet still stand because it was not that far different from the
truth.
JUSTICE THOMAS cites the presumption of innocence for the
proposition that the presumption at issue here does not imply a
standard of review. See
post, at 652. But just because some
presumptions do not imply standards of review does not mean that
this one does not. Here, by its terms, the statutory presumption
says that factual findings of the plan sponsor will stand unless
some showing is made, necessarily implying a standard of review of
those findings.
626
626 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
preponderance, merely placing a burden of persuasion on the
employer, and permitting adjudication of the facts by the
arbitrator without affording deference to the plan sponsor's
determinations, the provision would be constitutionally
unremarkable. For although we have observed that "[w]here the
burden of proof lies on a given issue is, of course, rarely without
consequence and frequently may be dispositive to the outcome of the
litigation or application, ... [o]utside the criminal law area,
where special concerns attend, the locus of the burden of
persuasion is normally not an issue of federal constitutional
moment."
Lavine v.
Milne, 424 U. S. 577, 585 (1976)
(footnote omitted). Concrete Pipe points to no special interest
that would distinguish this from the normal case. It is indeed
entirely sensible to burden the party more likely to have
information relevant to the facts about its withdrawal from the
Plan with the obligation to demonstrate that facts treated by the
Plan as amounting to a withdrawal did not occur as alleged. Such
was the rule at common law. W. Bailey, Onus Probandi 1 (1886)
(citing Powell on Evidence 167-171) ("In every case the
onus
probandi lies on the party who wishes to support his case by a
particular fact which lies more peculiarly within his knowledge, or
of which he is supposed to be cognizant").
On the other hand, if the employer were required to show the
trustees' findings to be either "unreasonable or clearly
erroneous," there would be a substantial question of procedural
fairness under the Due Process Clause. In essence, the arbitrator
provided for by the statute would be required to accept the plan
sponsor's findings, even if they were probably incorrect, absent a
showing at least sufficient to instill a definite or firm
conviction that a mistake had been made. Cf.
Withrow v.
Larkin, 421 U. S., at 58. In light of our assumption of
possible bias, the employer would seem to be deprived thereby of
the impartial adjudication in the first instance to which it is
entitled under the Due Process Clause. See
supra, at
617-618.
627
b
Having found the statutory language itself incoherent, we turn,
as we would in the usual case of textual ambiguity, to the
legislative purpose as revealed by the history of the statute, for
such light as it may shed.16 Unsurprisingly, we have found no
direct discussion in the legislative history of the degree of
certainty on the part of the arbitrator required for the employer
to overcome the sponsor's factual conclusions. The Report of the
House Committee on Education and Labor on the bill that became the
MPP AA describes the presumption as applying to "a determination of
withdrawal liability by a plan," and lumps it together with the
statutory presumption, discussed below, that applies to the choice
of actuarial assumptions and methods. See H. R. Rep. No. 96-869,
pt. 1, p. 86 (1980); 29 u. S. C. § 1401(a)(3)(B).17 The Report
states that
16 The textual incomprehensibility concerns a very narrow
matter, and we find nothing in the structure of the statutory
scheme that provides elucidation.
17The presumption at issue here was included in a new §4221
added by the MPPAA to ERISA. In the text of the version of the bill
to which the House Report refers the presumption was contained in §
4203, and the provision began: "For purposes of this part, a
determination made with respect to a plan under section 4201
[relating to employer withdrawals] is presumed correct unless the
party contesting the determination shows .... " See H. R. Rep. No.
96-869, pt. 1, p. 17 (1980). As enacted, this text was replaced
with "For purposes of any proceeding under this section, any
determination made by a plan sponsor under sections 4201 through
4219 and section 4225 is presumed correct unless the party
contesting the determination shows .... " Pub. L. 93-406, title IV,
§ 4221, as added, Pub. L. 96-364, title I, § 104(2), Sept. 26,
1980, 94 Stat. 1239, 29 U. S. C. § 1401(a)(3)(A). The text of what
was called § 4201 differs somewhat from the text of the sections to
which the enacted bill refers, which are now codified at 29 U. S.
C. §§ 1381-1399 and 1405. Our concern with legislative history here
goes only to the question of what degree of certainty of error
Congress intended to require in this situation. While the change in
referent that took place might have some implications for this
question, we do not think anything relevant in the legislative
history turns on the different scope of the earlier version of the
bill.
628
628 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
"[t]hese rules are necessary in order to ensure the
enforceability of employer liability. In the absence of these
presumptions, employers could effectively nullify their obligation
by refusing to pay and forcing the plan sponsor to prove every
element involved in making an actuarial determination. The
committee believes it is extremely important that a withdrawn
employer begin making the annual payments even though the period of
years for which payments must continue will be based on the actual
liability allocated to the employer." H. R. Rep. 96-869, pt. 1,
supra, at 86.
The only other comment that we have found in the legislative
history occurs in a Report prepared by the Senate Committee on
Labor and Human Resources, which first purports to speak about both
statutory presumptions, but directs its brief discussion to
problems unique to "technical actuarial matters." See S.
1076: The Multiemployer Pension Plan Amendments Act of 1980:
Summary and Analysis of Consideration, 96th Cong., 2d Sess., 20-21
(Comm. Print 1980) (hereinafter Committee Print); see also
infra, at 635, and n.20.
The legislative history thus sheds little light on the odd
language chosen to describe the employer's burden. All it tells us
is that the provision's purpose is to prevent the employer from
"forcing the plan sponsor to prove every element involved in making
an actuarial determination." Since this purpose would be served
simply by placing the burden of proof as to historical fact on the
employer, however light or heavy that burden may be, the
legislative history does nothing to make sense of the drafter's
failure to choose among the standards included in the text.
c
The only way out of the muddle is by a different rule of
construction. It is a hoary one that, in a case of statutory
ambiguity, "where an otherwise acceptable construction of
629
a statute would raise serious constitutional problems, the Court
will construe the statute to avoid such problems unless such
construction is plainly contrary to the intent of Congress."
Edward J.
DeBartolo Corp. v.
Florida Gulf Coast
Building &
Construction Trades Council, 485 U. S. 568, 575
(1988). "Federal statutes are to be so construed as to avoid
serious doubt of their constitutionality. 'When the validity of an
act of Congress is drawn in question, and even if a serious doubt
of constitutionality is raised, it is a cardinal principle that
this Court will first ascertain whether a construction of the
statute is fairly possible by which the question may be avoided.'
Crowell v.
Benson, 285 U. S. 22, 62
[(1932)]." Machinists v.
Street, 367 U. S. 740, 749-750
(1961). Cf.
Parsons v.
Bedford, 3 Pet. 433, 448-449
(1830) (Story, J.) (a construction that would render a statute
unconstitutional should be avoided);
Murray v.
Schooner
Charming Betsy, 2 Cranch 64, 118 (1804) (Marshall, C. J.).
Although we are faced here not with ambiguity within the usual
degree, but with incoherence, we have a common obligation in each
situation to resolve the uncertainty in favor of definite meaning,
and the canon for resolving ambiguity applies with equal force when
terminology renders a statute incoherent. In applying that canon
here, we must give effect to the one conclusion clearly supported
by the statutory language, that Congress intended to shift the
burden of persuasion to the employer in a dispute over a sponsor's
factual determination. This objective can be realized without
raising serious constitutional concerns simply by construing the
presumption to place the burden on the employer to disprove a
challenged factual determination by a preponderance. In so
construing the statute we make no pretense to have read the
congressional mind to perfection. We would not, indeed, even have
this problem if an argument could not obviously be made that
Congress intended greater deference than the preponderance standard
extends. But one could hardly call the intent clear after wondering
why the preponderance
630
630 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
standard was also included. In these circumstances it is enough
that the choice to attain coherence by obviating constitutional
problems is not "plainly contrary to the intent of Congress."
DeBartolo, supra, at 575.
Because the statute as we construe it does not foreclose any
factual issue from independent consideration by the arbitrator (the
presumption is, again, assumed by all to be inapplicable to issues
of law), there is no constitutional infirmity in it. For the same
reason, that an employer may avail itself of independent review by
the concededly neutral arbitrator, we find no derivative
constitutional defect infecting the further presumption that a
district court must afford to an arbitrator's findings of fact. See
29 U. S. C. § 1401(c).
d
Before applying the presumption to this case, one must recognize
that in spite of Concrete Pipe's contention to the contrary,
determining the date of "complete withdrawal" presents not a mere
question of fact on which the arbitrator was required in the first
instance to apply the § 1401(a)(3)(A) presumption, but a mixed
question of fact and law. The relevant facts are about the closure
of the Shafter plant (such as the intent of Concrete Pipe with
respect to the plant, its expression of that intent, its activities
while the plant was not operating, and the circumstances of the
plant's reopening), while the question whether these facts amount
to a "complete withdrawal" is one of law.
As to the truly factual issues, the arbitrator's decision fails
to reveal the force with which factual conclusions by the trustees
here were presumed correct, and in such a case we would ordinarily
reverse the judgment below for consideration of the extent to which
the arbitrator's application of the presumption was contrary to the
construction we adopt today. But two reasons (urged upon us by
neither party) persuade us not to take this course: the Plan's
letter to Concrete Pipe contains no statement of facts justifying
the trust-
631
ees' demand, and the parties entered into a factual stipulation
in the District Court prior to commencing the arbitration. Because
of these two circumstances, there were virtually no contested
factual determinations to which the arbitrator might have deferred.
And, on the one question of fact that may have been disputed, the
arbitrator found, apparently in the first instance, that Concrete
Pipe's intent in closing the Shafter plant had been to cease
operations permanently. App.213-214.18
While we express no opinion on whether the facts in this case
constitute a "complete withdrawal" within the meaning of the
statute, a question not before us today, the approach taken by the
arbitrator and the courts below is not inconsistent with our
interpretation of the first presumption. The determination of the
date of withdrawal by the arbitrator did not involve a
misapplication of the statutory presumption, and it did not deprive
Concrete Pipe of its right to procedural due process.
2
The second presumption at issue attends the calculation of the
amount of withdrawal liability. The statute provides that in the
absence of more particular PBGC regulations, the plan is required
to use "actuarial assumptions and methods which, in the aggregate,
are reasonable (taking into account the experience of the plan and
reasonable expectations) and which, in combination, offer the
actuary's best estimate of anticipated experience under the plan."
29 U. S. C. § 1393(a)(1). The presumption in question arises under
§ 1401(a)(3)(B), which provides that
18 Despite this favorable finding, Concrete Pipe still lost, of
course. The arbitrator treated subjective intent as irrelevant. See
App. 213-215. While the District Court and the Court of Appeals,
which relied on the District Court's reasoning, did not go so far,
see id., at 419-420, any factual deference in their decisions would
be to the arbitrator's finding, itself untainted by the force of
any presumption. See 29 U. S. C. § 1401(c); Fed. Rule Civ. Proc.
52(a).
632
632 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
"the determination of a plan's unfunded vested benefits for a
plan year, [is] presumed correct unless a party contesting the
determination shows by a preponderance of evidence that-
"(i) the actuarial assumptions and methods used in the
determination were, in the aggregate, unreasonable (taking into
account the experience of the plan and reasonable expectations),
or
"(ii) the plan's actuary made a significant error in applying
the actuarial assumptions or methods."
Concrete Pipe's concern is with the presumptive force of the
actuarial assumptions and methods covered by subsection (i).
While this provision is like its counterpart creating the
presumption as to factual determinations in placing the burden of
proof on the employer, the issues implicated in applying it to the
actuary's work are not the same. As the text plainly indicates, the
assumptions and methods used in calculating withdrawal liability
are selected in the first instance not by the trustees, but by the
plan actuary. For a variety of reasons, this actuary is not, like
the trustees, vulnerable to suggestions of bias or its appearance.
Although plan sponsors employ them, actuaries are trained
professionals subject to regulatory standards. See 29 U. S. C. §§
1241, 1242; 26 U. S. C. § 7701(a)(35). The technical nature of an
actuary's assumptions and methods, and the necessity for applying
the same assumptions and methods in more than one context, as a
practical matter limit the opportunity an actuary might otherwise
have to act unfairly toward the withdrawing employer. The statutory
requirement (of "actuarial assumptions and methods-which, in the
aggregate, are reasonable ... ") is not unique to the withdrawal
liability context, for the statute employs identical language in 29
U. S. C. § 1082(c)(3) to describe the actuarial assumptions and
methods to be used in determining whether a plan has satisfied the
minimum funding requirements contained in the statute. The use of
the same language to describe the actu-
633
arial assumptions and methods to be used in these different
contexts tends to check the actuary's discretion in each of
them.
"U sing different assumptions [for different purposes] could
very well be attacked as presumptively unreasonable both in
arbitration and on judicial review.
"[This] view that the trustees are required to act in a
reasonably consistent manner greatly limits their discretion,
because the use of assumptions overly favorable to the fund in one
context will tend to have offsetting unfavorable consequences in
other contexts. For example, the use of assumptions (such as low
interest rates) that would tend to increase the fund's unfunded
vested liability for withdrawal liability purposes would also make
it more difficult for the plan to meet the minimum funding
requirements of § 1082." United Retail & Wholesale
Employees Teamsters Union Local No. 115 Pension Plan v.
Yahn & McDonnell, Inc., 787 F. 2d, at 146-147
(Seitz, J., dissenting in part).
This point is not significantly blunted by the fact that the
assumptions used by the Plan in its other calculations may be
"supplemented by several actuarial assumptions unique to withdrawal
liability." Brief for Respondent 26. Concrete Pipe has not shown
that any method or assumption unique to the calculation of
withdrawal liability is so manipulable as to create a significant
opportunity for bias to operate, and arguably the most important
assumption (in fact, the only actuarial assumption or method that
Concrete Pipe attacks in terms, see Reply Brief for Petitioner
18-20) is the critical interest rate assumption that must be used
for other purposes as well.19
19 It may be that the trustees could, in theory, replace the
actuary's assumptions with their own, but that would involve a
different case from this, and while we are aware of at least one
case in which a plan sponsor exercised decisive influence over an
actuary whose initial assumptions it
634
634 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
The second major difference attending the two presumptions lies
in the sense of reasonableness that must be disproven by an
employer attacking the actuary's methods and assumptions, as
against the reasonableness of the trustees' determinations of
historical fact. Following the usual presumption of statutory
interpretation, that the same term carries the same meaning
whenever it appears in the same Act, see
Atlantic Cleaners
&
Dyers, Inc. v.
United States, 286 U. S. 427, 433
(1932), we might expect "reasonable" in § 1401(a)(3)(B) to function
here just as it did in § 1401(a) (3)(A), to denote a certain range
of probability that a factual determination is correct. For several
reasons, however, we think it clear that this second presumption of
reasonableness functions quite differently.
First, of course, the statute does not speak in terms of
disproving the reasonableness of the calculation of the employer's
share of the unfunded liability, which would be the finding of
future fact most obviously analogous to the findings of historical
fact to which the § 1401(a)(3)(A) presumption applies. Section
1401(a)(3)(B) speaks instead of the aggregate reasonableness of the
assumptions and methods employed by the actuary in calculating the
dollar liability figure. Because a "method" is not "accurate" or
probably "true" within some range, "reasonable" must be understood
here to refer to some different kind of judgment, one that it would
make sense to apply to a review of methodology as
disliked, see
Huber v.
Casablanca Industries,
Inc., 916 F.2d
85, 93
(CA3 1990), we know of none in which a plan
sponsor was found to have replaced an actuary's actuarial methods
or assumptions with different ones of its own. Although we express
no view on the question whether a plan sponsor must adopt the
assumptions used by the actuary, we note that the legislative
history of § 1082, which was enacted as part of ERISA in 1974,
suggests that the actuarial assumptions must be "independently
determined by an actuary," and that it is "inappropriate for an
employer to substitute his judgment ... for that of a qualified
actuary" with respect to these assumptions. S. Rep. No. 93-383, p.
70 (1973); see also H. R. Rep. No. 93-807, p. 95 (1974).
635
well as of assumptions. Since the methodology is a subject of
technical judgment within a recognized professional discipline, it
would make sense to judge the reasonableness of a method by
reference to what the actuarial profession considers to be within
the scope of professional acceptability in making an unfunded
liability calculation. Accordingly, an employer's burden to
overcome the presumption in question (by proof by a preponderance
that the actuarial assumptions and methods were in the aggregate
unreasonable) is simply a burden to show that the combination of
methods and assumptions employed in the calculation would not have
been acceptable to a reasonable actuary. In practical terms it is a
burden to show something about standard actuarial practice, not
about the accuracy of a predictive calculation, even though
consonance with professional standards in making the calculation
might justify confidence that its results are sound.
As thus understood, the presumption in question supports no due
process objection. The employer merely has a burden to show that an
apparently unbiased professional, whose obligations tend to
moderate any claimed inclination to come down hard on withdrawing
employers, has based a calculation on a combination of methods and
assumptions that falls outside the range of reasonable actuarial
practice. To be sure, the burden may not be so "mere" when one
considers that actuarial practice has been described as more in the
nature of an "actuarial art" than a science,
Keith Fulton
&
Sons v.
New England Teamsters, 762 F.2d
1137, 1143 (CA1 1985) (en banc) (internal quotation marks
omitted), and that the employer's burden covers "technical
actuarial matters with respect to which there are often several
equally 'correct' approaches," Committee Print 20-2po But since
im-
20 Indeed, our view of the problem of imprecision in reviewing
actuarial methods and assumptions seems to have been the very
reason for including the presumption in the statute. The Senate
Committee Report states that "[t]he [Senate] Committee [on Labor
and Human Resources] includes
636
636 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
precision inheres in the choice of actuarial methods and
assumptions, the resulting difficulty is simply in the nature of
the beast. Because it must fall on whichever party bears the burden
of persuasion on such an issue, at least where the interests at
stake are no more substantial than Concrete Pipe's are here, its
allocation to one party or another does not raise an issue of due
process. See
supra, at 625-626.
IV
Concrete Pipe argues next that, as applied, the MPP AA violates
substantive due process and takes Concrete Pipe's property without
just compensation, both in violation of the Fifth Amendment. As to
these issues, our decisions in
Gray and
Connolly
provide the principal guidance.
A
In
Gray we upheld the MPP AA against substantive due
process challenge. Unlike the employer in
Gray, Concrete
Pipe here has no complaint that the MPP AA has been retroactively
applied by predicating liability on a withdrawal decision made
before passage of the statute. To be sure, since there would be no
withdrawal liability without prewithdrawal contributions to the
Plan, some of which were made before the statutory enactment, some
of the conduct upon which Concrete Pipe's liability rests antedates
the statute. But this fact presents a far weaker premise for
claiming a substantive due process violation even than the
Gray employer raised, and rejection of Concrete Pipe's
contention is compelled by our decisions not only in
Gray,
but in
Usery v.
Turner Elkhorn Mining Co., 428 U. S. 1 (1976), upon
which the
Gray Court relied.
the presumption to reduce the likelihood of dispute and delay
over technical actuarial matters with respect to which there are
often several equally 'correct' approaches. Without such a
presumption, a plan would be helpless to resist dilatory tactics by
a withdrawing employer-tactics that could, and could be intended
to, result in prohibitive collection costs to the plan." Committee
Print 20-21.
637
"'It is by now well established that legislative Acts adjusting
the burdens and benefits of economic life come to the Court with a
presumption of constitutionality, and that the burden is on one
complaining of a due process violation to establish that the
legislature has acted in an arbitrary and irrational way. See,
e. g., Ferguson v. Skrupa, 372 U. S. 726 (1963);
Williamson v. Lee Optical Co., 348 U. S. 483, 487-488
(1955).
"'[I]t may be that the liability imposed by the Act ... was not
anticipated at the time of actual employment. But our cases are
clear that legislation readjusting rights and burdens is not
unlawful solely because it upsets otherwise settled expectations.
See Fleming v. Rhodes, 331 U. S. 100 (1947);
Carpenter v. Wabash R. Co., 309 U. S. 23 (1940);
Norman v. Baltimore & Ohio R. Co.,
294 U. S. 240
(1935); Home Bldg. & Loan Assn. v.
Blaisdell, 290
U. S. 398 (1934); Louisville & Nashville R.
Co. v. Mottley, 219 U. S. 467 (1911).
This is true even though the effect of the legislation is to impose
a new duty or liability based on past acts. See Lichter v.
United States, 334 U. S. 742 (1948);
Welch v. Henry, 305 U. S. 134 (1938);
Funkhouser v. Preston Co., 290 U. S. 163 (1933).'"
Gray, 467 U. S., at 729-730, quoting Turner Elkhorn,
supra, at 15-16 (footnotes omitted).
To avoid this reasoning, Concrete Pipe relies not merely on a
claim of retroactivity, but on one of irrationality. Since the
company contributed to the plan for only 31/2 years, it argues,
none of its employees had earned vested benefits through employment
by Concrete Pipe at the time of its withdrawal. See Brief for
Petitioner 28. Concrete Pipe argues that, consequently, no rational
relationship exists between its payment of past contributions and
the imposition of liability for a share of the unfunded vested
benefits.
But this argument simply ignores the nature of multiemployer
plans, which, as we have said above, operate by
638
638 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
pooling contributions and liabilities. An employer's
contributions are not solely for the benefit of its employees or
employees who have worked for it alone. Thus, Concrete Pipe's
presupposition that none of its employees had vested benefits at
the time of its withdrawal may be wrong. An employee whose benefits
had vested before coming to work for Concrete Pipe may have earned
additional vested benefits by the subsequent covered service.
Another may have had sufficient prior service credit to obtain
vesting of benefits during employment at Concrete Pipe. A third may
have attained vesting while working for other employers but based
in part on service credits earned at Concrete Pipe.
But even if Concrete Pipe is correct and none of its employees
had earned enough service credits for entitlement to vested
benefits by the time of Concrete Pipe's withdrawal, as a Concrete
Pipe employee each had earned service credits that could be built
upon in future employment with any other participating employer. In
determining whether the imposition of withdrawal liability is
rational, then, the relevant question is not whether a withdrawing
employer's employees have vested benefits, but whether an employer
has contributed to the plan's probable liability by providing
employees with service credits. When the withdrawing employer's
liability to the plan is based on the proportion of the plan's
contributions (and coincident service credits) provided by the
employer during the employer's participation in the plan, the
imposition of withdrawal liability is clearly rational.
It is true that, depending on the future employment of Concrete
Pipe's former employees, the withdrawal liability assessed against
Concrete Pipe may amount to more (or less) than the share of the
Plan's liability strictly attributable to employment of covered
workers at Concrete Pipe. But this possibility was exactly what
Concrete Pipe accepted when it joined the Plan. A multiemployer
plan has features of an insurance scheme in which employers spread
the risk that their employees will meet the plan's vesting
requirements
639
and obtain an entitlement to benefits. A rational employer hopes
that its employees will vest at a rate above the average for all
employees of contributing employers, and that, in this way, it will
pay less than it would have by creating a single-employer plan. But
the rational employer also appreciates the foreseeable risk that
circumstances may produce the opposite result.21 Since the MPPAA
spreads the unfunded vested liability among employers in
approximately the same manner that the cost would have been spread
if all of the employers participating at the time of withdrawal had
seen the venture through, the withdrawal liability is consistent
with the risks assumed on joining a plan (however inconsistent that
liability may be with the employer's hopes). In any event, under
the deferential standard of review applied in substantive due
process challenges to economic legislation there is no need for
mathematical precision in the fit between justification and means.
See
Turner Elkhorn, 428 U. S., at 19.
Concrete Pipe's substantive due process claim is not enhanced by
its argument that the MPP AA imposes obligations upon it contrary
to limitations on liability variously contained in the 1962 Trust
Agreement,22 in a collective-
21 An employer's calculation whether to join a plan will include
these factors as well as a determination of the other benefits it
can hope to receive from its participation in the plan. See supra,
at 606-607.
22 The 1962 Trust Agreement states:
'''Section 4.07. Neither the Association or (sic) any officer,
agent, employee or (sic) committee member of the Associations shall
be liable to make Contributions to the Fund or with respect to the
Pension Plan, except to the extent that he or it may be an
Individual Employer required to make Contributions to the Fund with
respect to his or its own individual or joint venture operations,
or to the extent he may incur liability as a Trustee as hereinafter
provided. The liability of any Individual Employer to the Fund, or
with respect to the Pension Plan, shall be limited to the payments
required by the Collective Bargaining Agreements with respect to
his or its individual or joint venture operations, and in no event
shall he or it be liable or responsible for any portion of the
Contributions due from other Individual Employers with respect to
the operations of
640
640 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
bargaining agreement between the Laborers and multiemployer
associations (the "1977-1980 Laborer's Craft Master Labor
Agreement") 23 and in an appendix to the "Southern California
Master Labor Agreements in 1977-1980."24 Even assuming that all
these provisions apply to Concrete Pipe,25 its argument runs
against the holding in
Gray that federal economic
legislation, which is not subject to con-
such Individual Employers. The Individual Employers shall not be
required to make any further payments or Contributions to the cost
of operation of the Fund or of the Pension Plan, except as may be
hereafter provided in the Collective Bargaining Agreements.
"'Section 4.08. Neither the Associations, any Individual
Employer, the Union, any Local Union, nor any Employee shall be
liable or responsible for any debts, liabilities or obligations of
the Fund or the Trustees.''' App. 80-81, , 32.
23 Article X, § E(4) of the 1977-1980 Laborers' Craft Master
Labor Agreement provides:
"'The parties recognize and agree that the Pension Trust and
Plan was created, negotiated, and is intended to continue to be if
permitted by law under ERISA, a defined contribution plan and trust
and that the individual Contractors' liability with regard to the
pension has been and remains limited exclusively to payment of the
contributions specified from time to time in collective bargaining
agreements.'''
Id., at 82, , 34.
24 Appendix K to the Southern California Master Labor Agreements
in 1977-1980 states:
" 'IMPORTANT.
PENSION BENEFITS ARE NOT AND HAVE NEVER BEEN GUARANTEED. THEY
ARE PAYABLE ONLY TO THE EXTENT THAT THE FUND HAS ASSETS TO PAY
BENEFITS. NEITHER YOUR EMPLOYER NOR YOUR UNION HAS ASSUMED ANY
LIABILITY, DIRECTLY OR INDIRECTLY, TO PROVIDE MONTHLY PENSION
BENEFITS. YOUR EMPLOYER'S SOLE OBLIGATION IS TO MAKE THE
CONTRIBUTIONS CALLED FOR IN ITS COLLECTIVE BARGAINING AGREEMENT.
THE PENSION PLAN HAS ALSO BEEN CONSIDERED BY THE EMPLOYERS, THE
UNION AND THE TRUSTEES TO BE A DEFINED CONTRIBUTION PLAN.'''
Id., at 81-82, , 33.
25 The Plan contends that the record does not reflect that the
appendix mentioned in the text was incorporated by reference into
Concrete Pipe's own collective-bargaining agreement. See Brief for
Respondent 10, n. 7.
641
straints coextensive with those imposed upon the States by the
Contract Clause of Art. I, § 10, of the Federal Constitution,
Gray, 467 U. S., at 733;
United States Trust Co. of
N.
Y. v.
New Jersey, 431 U. S. 1, 17, n. 13
(1977), is subject to due process review only for rationality,
which, as we have said, is satisfied in the application of the MPP
AA to Concrete Pipe.
Nor does the possibility that trustee decisions made "before
[Concrete Pipe] entered [the Plan]" may have led to the unfunded
liability alter the constitutional calculus. See Brief for
Petitioner 31. Concrete Pipe's decision to enter the Plan after any
such decisions were made was voluntary, and Concrete Pipe could at
that time have assessed any implications for the Plan's future
liability. Similarly, Concrete Pipe cannot rely on any argument
based on the fact that, because it was not a member of any of the
contractors' associations represented among the Plan's trustees, it
had no control over decisions of the trustees after it entered the
Plan that may have increased the unfunded liability. Again,
Concrete Pipe could have assessed the implications for future
liability of the identity of the trustees of the Plan before it
decided to enter.26 The imposition of withdrawal liability here is
rationally related to the terms of Concrete Pipe's participation in
the Plan it joined and that suffices for substantive due process
scrutiny of this economic legislation.
B
Given that Concrete Pipe's due process arguments are unavailing,
"it would be surprising indeed to discover" the challenged statute
nonetheless violating the Takings Clause.
Connolly, 475 U.
S., at 223. Nor is there any violation. Following the analysis in
Connolly, we begin with the contractual provisions relied
upon from the Trust Agreement and
26 Even if Concrete Pipe were represented, its representative,
like all the trustees, would be bound to act consistently with the
fiduciary duty owed by trustees to covered employees and
beneficiaries of the plan. See 29 U. S. C. § 1l04(a)(1).
642
642 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
the collective-bargaining agreements, which we find no more
helpful to Concrete Pipe than those adduced in the facial challenge
brought in
Connolly, as described in that opinion:
"By the express terms of the Trust Agreement and the Plan, the
employer's sole obligation to the Pension Trust is to pay the
contributions required by the collectivebargaining agreement. The
Trust Agreement clearly states that the employer's obligation for
pension benefits to the employee is ended when the employer pays
the appropriate contribution to the Pension Trust. This is true
even though the contributions agreed upon are insufficient to pay
the benefits under the Plan." Id., at 218 (citations and
footnotes omitted).
Indeed, one provision of the Trust Agreement on which Concrete
Pipe primarily relies is substantially identical to the one at
issue in
Connolly. Compare n. 22,
supra, with
Connolly, supra, at 218, n. 2.
We said in
Connolly that
"[a]ppellants' claim of an illegal taking gains nothing from the
fact that the employer in the present litigation was protected by
the terms of its contract from any liability beyond the specified
contributions to which it had agreed. 'Contracts, however express,
cannot fetter the constitutional authority of Congress. Contracts
may create rights of property, but when contracts deal with a
subject matter which lies within the control of Congress, they have
a congenital infirmity. Parties cannot remove their transactions
from the reach of dominant constitutional power by making contracts
about them.'
"If the regulatory statute is otherwise within the powers of
Congress, therefore, its application may not be defeated by private
contractual provisions." 475 U. S., at 223-224 (citations
omitted).
643
Nothing has changed since these words were first written.27
Following
Connolly, the next step in our analysis is to
subject the operative facts, including the facts of the contractual
relationship, to the standards derived from our prior Takings
Clause cases. See id., at 224-225. They have identified three
factors with particular significance for assessing the results of
the required "ad hoc, factual inquir[y] into the circumstances of
each particular case."
Id., at 224. The first is the nature
of the governmental action. Again, our analysis in
Connolly
applies with equal force to the facts before us today.
"[T]he Government does not physically invade or permanently
appropriate any of the employer's assets for its own use. Instead,
the Act safeguards the participants in multiemployer pension plans
by requiring a withdrawing employer to fund its share of the plan
obligations incurred during its association with the plan. This
interference with the property rights of an employer arises from a
public program that adjusts the benefits and burdens of economic
life to promote the common good and, under our cases, does not
constitute a taking requiring Government compensation." Id.,
at 225.
We reject Concrete Pipe's contention that the appropriate
analytical framework is the one employed in our cases dealing with
permanent physical occupation or destruction of economically
beneficial use of real property. See
Lucas v.
South
Carolina Coastal Council, 505 U. S. 1003, 1015
(1992). While Concrete Pipe tries to shoehorn its claim into this
analysis by asserting that "[t]he property of [Concrete Pipe] which
is taken, is taken in its entirety," Brief for Petitioner
27 To the extent that Concrete Pipe's argument could be
characterized as a challenge to the determination that,
notwithstanding the contractual language, it is a "defined benefits
plan" under the statute, this is a question on which Concrete Pipe
did not seek review. See supra, at 607.
644
644 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
37, we rejected this analysis years ago in
Penn Central
Transp. Co. v.
New York City, 438 U. S. 104, 130-131
(1978), where we held that a claimant's parcel of property could
not first be divided into what was taken and what was left for the
purpose of demonstrating the taking of the former to be complete
and hence compensable. To the extent that any portion of property
is taken, that portion is always taken in its entirety; the
relevant question, however, is whether the property taken is all,
or only a portion of, the parcel in question. Accord,
Keystone
Bituminous Coal Assn. v.
DeBenedictis, 480 U. S. 470, 497 (1987)
("[O]ur test for regulatory taking requires us to compare the value
that has been taken from the property with the value that remains
in the property, [and] one of the critical questions is determining
how to define the unit of property 'whose value is to furnish the
denominator of the fraction''') (citation omitted).
There is no more merit in Concrete Pipe's contention that its
property is impermissibly taken "for the sole purpose of protecting
the PBGC [a government body] from being forced to honor its pension
insurance." Brief for Petitioner 38; see also Brief for Midwest
Motor Express, Inc., et al. as
Amici Curiae 12. That the
solvency of a pension trust fund may ultimately redound to the
benefit of the PBGC, which was set up in part to guarantee benefits
in the event of plan failure, is merely incidental to the primary
congressional objective of protecting covered employees and
beneficiaries of pension trusts like the Plan. "[H]ere, the United
States has taken nothing for its own use, and only has nullified a
contractual provision limiting liability by imposing an additional
obligation that is otherwise within the power of Congress to
impose."
Connolly, supra, at 224.
Nor is Concrete Pipe's argument about the character of the
governmental action strengthened by the fact that Concrete Pipe
lacked control over investment and benefit decisions that may have
increased the size of the unfunded vested liability. The response
to the same argument raised
645
under the substantive Due Process Clause is appropriate here:
although Concrete Pipe is not itself a member of any of the
management associations that are represented among the trustees of
the fund, Concrete Pipe voluntarily chose to participate in the
Plan, notwithstanding this fact. See
supra, at 641, and n.
26.
As to the second factor bearing on the taking determination, the
severity of the economic impact of the Plan, Concrete Pipe has not
shown its withdrawal liability here to be "out of proportion to its
experience with the plan," 475 U. S., at 226, notwithstanding the
claim that it will be required to payout 46% of shareholder equity.
As a threshold matter, the Plan contests this figure, arguing that
Concrete Pipe, a wholly owned subsidiary of Concrete Pipe &
Products Co., Inc., was simply "formed to facilitate the purchase
... of certain assets of Cen-Vi-Ro," Brief for Respondent 2, and
that the relevant issue turns on the diminution of net worth of the
parent company, not Concrete Pipe. See Tr. of Oral Arg. 29. But
this dispute need not be resolved, for even assuming that Concrete
Pipe has used the appropriate measure in determining the portion of
net worth required to be paid out, our cases have long established
that mere diminution in the value of property, however serious, is
insufficient to demonstrate a taking. See,
e. g., Village of
Euclid v.
Ambler Realty Co., 272 U. S. 365, 384 (1926)
(approximately 75% diminution in value);
Hadacheck v.
Sebastian, 239
U. S. 394, 405 (1915) (92.5% diminution).
The final factor is the degree of interference with Concrete
Pipe's "reasonable investment-backed expectations." 475 U. S., at
226. Again,
Connolly controls. At the time Concrete Pipe
purchased Cen-Vi-Ro and began its contributions to the Plan,
pension plans had long been subject to federal regulation, and
"'[t]hose who do business in the regulated field cannot object if
the legislative scheme is buttressed by subsequent amendments to
achieve the legislative end.'
FHA v.
The Darlington,
Inc., 358 U. S.
84, 91 (1958). See
646
646 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
also
Usery v.
Turner Elkhorn Mining Co., 428 U.
S., at 15-16 and cases cited therein."
Id., at 227. Indeed,
at that time the Plan was already subject to ERISA, and a
withdrawing employer faced contingent liability up to 30% of its
net worth. See 29 U. S. C. § 1364 (1976 ed.); see also 29 U. S. C.
§ 1362(b) (1976 ed.);
Connolly, supra, at 226-227;
Gray,
467 U. S., at 721. Thus while Concrete Pipe argues that
requiring it to pay a share of promised benefits "ignores express
and bargained-for conditions on [its contractual] promises,"
Connolly, 475 U. S., at 235 (O'CONNOR, J., concurring), it
could have had no reasonable expectation that it would not be faced
with liability for promised benefits.
Id., at 227 (opinion
of the Court). Because "legislation readjusting rights and burdens
is not unlawful solely because it upsets otherwise settled
expectations ... even though the effect of the legislation is to
impose a new duty or liability based on past acts,"
Turner
Elkhorn, 428 U. S., at 16, Concrete Pipe's reliance on ERISA's
original limitation of contingent liability to 30% of net worth is
misplaced,28 there being no reasonable basis to expect that the
legislative ceiling would never be lifted.29
"The employe[r] in the present litigation voluntarily negotiated
and maintained a pension plan which was determined to be within the
strictures of ERISA."
Connolly, supra, at 227. In light of
the relationship between Concrete Pipe and the Plan, we find no
basis to conclude that Concrete Pipe is
28 See Brief for Petitioner 36-37 ("The ERISA contingent
liabilities were substantially different in scope from the
liabilities of MPPAA so that [Concrete Pipe] had no reasonable
notice that 46% of its net worth would be seized").
JUSTICE O'CONNOR does not join the statement to which this
footnote is attached.
29 Nor do the contractual provisions on which Concrete Pipe
would rely provide the support it seeks. Indeed, one such
provision, Article X, § E(4) of the 1977-1980 Laborers' Craft
Master Labor Agreement, provides that liability will be limited to
contributions specified in collective-bargaining agreements "if
permitted by law under ERISA." App. 82, , 34.
647
being forced to bear a burden "which, in all fairness and
justice, should be borne by the public as a whole."
Armstrong v.
United States, 364 U. S. 40, 49
(1960).
v
Having concluded that the statutory presumptions work no
deprivation of procedural due process, and that the statute, as
applied to Concrete Pipe, violates no substantive constraint of the
Fifth Amendment, we affirm the judgment of the Court of
Appeals.
It is so ordered.
JUSTICE O'CONNOR, concurring.
I join all of the Court's opinion, except for the statement that
petitioner cannot "rel[y] on ERISA's original limitation of
contingent liability to 30% of net worth."
Ante, at 646. The
Court's reasoning is generally consistent with my own views about
retroactive withdrawal liability, which I explained in
Connolly v.
Pension Benefit Guaranty Corporation,
475 U. S. 211,
228-236 (1986) (concurring opinion), and which I need not restate
at length here. In essence, my position is that the "imposition of
this type of retroactive liability on employers, to be
constitutional, must rest on some basis in the employer's conduct
that would make it rational to treat the employees' expectations of
benefits under the plan as the employer's responsibility."
Id., at 229.
The Court does not hold otherwise. Rather, it reasons that,
although "the withdrawal liability assessed against Concrete Pipe
may amount to more ... than the share of the Plan's liability
strictly attributable to employment of covered workers at Concrete
Pipe," this possibility "was exactly what Concrete Pipe accepted
when it joined the Plan."
Ante, at 638. I agree that a
withdrawing employer can be held responsible for its statutory
"share" of unfunded vested benefits if the employer should have
anticipated the prospect of withdrawal liability when it joined the
plan. In such a
648
648 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
case, the "basis in the employer's conduct that would make it
rational to treat the employees' expectations of benefits under the
plan as the employer's responsibility" would be the very act of
joining the plan.
I am not sure that petitioner did in fact "accept" the prospect
of withdrawal liability when it joined the Construction Laborers
Pension Trust (Plan) in 1976. As of that date, Congress had not yet
promulgated the Multiemployer Pension Plan Amendments Act of 1980
(MPP AA); the kind of "withdrawal liability" imposed on petitioner
did not yet exist. Although the Employee Retirement Income Security
Act of 1974 (ERISA) was in effect, and did create a contingent
liability for the employer that withdrew from a multiemployer
defined benefit plan, such liability was limited to 30% of the
employer's net worth. See 29 U. S. C. §§ 1364, 1362(b)(2) (1976
ed.). Petitioner's withdrawal liability under the MPP AA amounts to
46% of its net worth. See
ante, at 646, n. 28. In addition,
the Plan apparently is a hybrid "Taft- Hartley" plan, which
provides for fixed employee benefits and fixed employer
contributions. It remains an open question whether hybrid
Taft-Hartley plans are indeed "defined benefit" rather than
"defined contribution" plans, and therefore subject to withdrawal
liability. See
Connolly, supra, at 230, 232-235 (O'CONNOR,
J., concurring). We do not decide that question today. See
ante, at 607, 643, n. 27.
But petitioner has not argued that its withdrawal liability,
even if otherwise permissible, cannot exceed the 30% cap that was
in effect in 1976. Nor has petitioner claimed that the Plan is a
defined contribution plan. In short, petitioner has failed to
adduce the two features of this case that might have demonstrated
why it did not "accept" the prospect of full withdrawal liability
when it joined the Plan. I therefore agree with the Court's result
as well as most of its reasoning.
I cannot, however, agree that petitioner is precluded from
"rely[ing] on ERISA's original limitation of contingent liability
to 30% of net worth."
Ante, at 646. The Court seizes
649
upon a passing reference in petitioner's brief, see
ante,
at 646, n. 28, to justify issuing this unnecessary statement about
a difficult issue that the parties essentially have ignored. I
would not decide without adversary briefing and argument whether
ERISA's 30% cap might prevent retroactive withdrawal liability
above 30% of the employer's net worth for an employer that joined a
multiemployer plan after the passage of ERISA but before the
passage of the MPPAA. I also note that the Court's opinion should
not be read to imply that employers may be subjected to retroactive
withdrawal liability simply because "pension plans [have] long been
subject to federal regulation."
Ante, at 645. Surely the
employer that joined a multiemployer plan before
ERISA had
been promulgated-before Congress had made employers liable for
unfunded benefits-might have a strong constitutional challenge to
retroactive withdrawal liability. The issue is not presented
here-again, petitioner joined the Plan
after the passage of
ERISA-and the Court does not address it. It remains to be resolved
in a future case.
JUSTICE THOMAS, concurring in part and concurring in the
judgment.
I join all of the Court's opinion except Part III-B-l-the
portion of the opinion in which the Court grapples with the trustee
presumption in 29 U. S. C. § 1401(a)(3)(A). The Court finds the
presumption "incoherent with respect to the degree of probability
of error required of the employer to overcome a factual conclusion
made by the plan sponsor."
Ante, at 625. And because, in the
Court's view, "there would be a substantial question of procedural
fairness under the Due Process Clause" if employers had to show
that sponsors' findings were unreasonable or clearly erroneous,
ante, at 626, the Court proceeds to interpret the statute as
if it required an unconstrained evidentiary hearing into "any
factual issue" concerning the employer's withdrawal liability,
ante, at 630.
650
650 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
Opinion of THOMAS, J.
Until today, § 1401(a)(3)(A) provided:
"For purposes of any [arbitration] proceeding under this
section, any determination made by a plan sponsor under sections
1381 through 1399 of this title and section 1405 of this title
is presumed correct unless the party contesting the
determination shows by a preponderance of the evidence that the
determination was unreasonable or clearly erroneous." (Emphasis
added.)
Now the statute provides, in effect, that "any factual
determination made by a plan sponsor shall be rejected by the
arbitrator if the party contesting the determination shows by a
preponderance of the evidence that the determination was
erroneous." There is no meaningful presumption of correctness and
no examination for reasonableness or clear error. I decline to
participate in this redrafting of a federallaw.
As I see it, there are three missteps in the analysis.
First, the Court believes the statutory text is
"incomprehensib[le],"
ante, at 625, because it refers to
three different, and mutually inconsistent, "degree[s] of
certainty,"
ante, at 622, or of "probability,"
ante,
at 625. This is incorrect-in large part because the Court overlooks
the grammatical structure of the statute. Section 1401(a)(3)(A)
sets up no parallelism between the phrase "by a preponderance of
the evidence," which establishes the standard of proof for the
arbitration proceeding, and the critical terms "unreasonable" and
"clearly erroneous."
"[Bly a preponderance of the evidence"
(emphasis added) is an adverbial phrase that modifies the
"show[ing]" required of the employer. "Unreasonable" and "clearly
erroneous," on the other hand, are predicate adjectives used to
describe what it is the employer must show.
The incoherence identified by the Court follows from the
assumption that Congress has "confus[ed]" burdens of proof with
standards of review.
Ante, at 623. The Court believes that
the terms "clearly erroneous" and "unreasonable" must signify
standards of review.
Ante, at 622-623. Standards of proof
and standards of review are entirely unrelated
651
concepts (as the Court intimates, see
ante, at 622-625).
The Court's reading leads to the conclusion that § 1401(a)(3)(A) is
"meaningless,"
ante, at 625, because the statute (as so
interpreted) "defines the nature of the conclusion the arbitrator
must draw by using a combination of terms that are categorically
ill-matched,"
ante, at 624. *
The Court's preoccupation with standards of review is
understandable, at least with respect to "clearly erroneous," a
term with an established legal usage. See
Anderson v.
Bessemer City, 470 U. S. 564, 573-575
(1985); Fed. Rule Civ. Proc. 52(a). But such a reading is not
compelled. As used in this statutory provision, "unreasonable" and
"clearly erroneous" cannot signify standards applicable to the
review of prior findings, since the arbitrator himself is
undeniably a factfinder, not an appellate tribunal. See § 1401(c)
(establishing a presumption of correctness for "the findings of
fact made by the arbitrator"). That the arbitrator is to undertake
his examination "by a preponderance of the evidence" explicitly
establishes his role as factfinder; appellate review
*Regrettably, the Court compounds and further muddles the
textual difficulty by suggesting that in some sense, "preponderance
of the evidence," "unreasonable," and "clearly erroneous" are
comparable-that they all refer to relative "degree[s] of
certainty."
Ante, at 622. There is, in fact, no basis for
comparing any particular standard of proof with any particular
standard of review. An appellate tribunal could be required to
determine whether it was "clearly erroneous" to find a disputed
fact "by a preponderance of the evidence," or it could ask whether
any "reasonable" factfinder could have found "probable cause" to
believe, or "clear and convincing evidence" supporting, the fact in
question. See,
e. g., Anderson v.
Liberty Lobby,
Inc., 477 U. S.
242, 252 (1986) ("If the defendant in a ... civil case moves
for summary judgment or for a directed verdict ... , [the inquiry
is] whether
reasonable jurors could find
by a
preponderance of the evidence that the plaintiff is entitled to
a verdict") (emphasis added);
Jackson v.
Virginia,
443 U. S. 307,
318-319 (1979) ("[T]he critical inquiry on review of the
sufficiency of the evidence to support a criminal conviction ... is
whether [a]
rational trier of fact could have found the
essential elements of the crime
beyond a reasonable doubt")
(emphasis added). Any combination of evidentiary and review
standards is possible.
652
652 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
Opinion of THOMAS, J.
does not occur "by" a taking of "evidence." The Court sees the
arbitrator as a "hybrid," who acts as both a trier of fact and a
reviewer of facts found.
Ante, at 623-624. But the
presumption of correctness that applies to the plan sponsor's
determinations does not make the arbitrator a "reviewing body,"
ante, at 624, any more than the presumption of innocence in
a criminal trial renders the jury a reviewer, rather than a trier,
of fact.
The way out of the conundrum is apparent. The terms
"unreasonable" and "clearly erroneous" must refer to what are, in
effect,
elements of the employer's claim in the arbitration
proceeding. To prevail in its action before the arbitrator, in
other words, the employer must show by a preponderance of the
evidence, first, that the plan sponsor has made a determination
under one of the relevant provisions and, second, that that
determination was either unreasonable or clearly erroneous. This
construction requires us to put aside the technical definition of
"clearly erroneous" and focus on the literal meaning of the phrase.
"Clear" error can simply mean an obvious, plain, gross,
significant, or manifest error or miscalculation. See Black's Law
Dictionary 250 (6th ed. 1990). That may not be the most natural
reading (for a court, that is) of this legal term of art, but if we
do not drop the assumption that "clearly erroneous" must be a
reference to the
Bessemer City standard of review, we cannot
avoid the incoherence that has trapped the majority. The term
"unreasonable," of course, is even more readily construed to refer
to something other than a standard of review, since it can hardly
be thought to have a sharply defined meaning that is limited to the
context of appellate review. There is, for example, nothing unusual
about requiring a party to show as an element of a substantive
claim that something-an interstate carrier's filed rate, for
example, see
Reiter v.
Cooper, 507 U. S. 258 (1993)-is
"unreasonable." Section 1401(a)(3)(A) is thus susceptible of a
reading that gives it a coherent meaning.
653
This interpretation also conforms neatly with the very similar
language and structure of the actuarial presumption in §
1401(a)(3)(B), which the Court today finds unproblematic. See
ante, at 631-636. That presumption provides that the
actuary's determination of unfunded vested benefits will be
presumed correct unless the employer shows "by a preponderance of
the evidence" that the actuarial assumptions and methods were
"unreasonable" or that the actuary made a "significant error." The
Court offers no persuasive explanation as to why this presumption
does not suffer from the same incoherence. In addition, my reading
of the term "clearly erroneous" in § 1401(a)(3)(A) renders it
virtually indistinguishable from the term "significant error" in §
1401(a)(3)(B).
The second false step in the Court's analysis is the use of the
rule of construction applied in
Edward J.
DeBartolo
Corp. v.
Florida Gulf Coast Building &
Constr.
Trades Council, 485 U. S. 568, 575
(1988).
Ante, at 628-630. This rule, which requires a court
to adopt a reasonable alternative interpretation of a statute when
necessary to avoid serious constitutional problems, does not
provide authority to construe the statute in a way that "is plainly
contrary to the intent of Congress."
DeBartolo, supra, at
575. The rule "cannot be stretched beyond the point at which [the
alternative] construction remains
'fairly possible.'"
Public Citizen v.
Department of Justice, 491 U. S. 440, 481 (1989)
(KENNEDY, J., concurring in judgment) (emphasis in original)
(quoting
Crowell v.
Benson, 285 U. S. 22, 62 (1932)).
"And it should not be given too broad a scope lest a whole new
range of Government action be proscribed by interpretive shadows
cast by constitutional provisions that might or might not
invalidate it."
Public Citizen, supra, at 481. Here it is
plain, in my view, that Congress intended to shield the plan
sponsor's factual determinations behind a presumption of
correctness and intended that withdrawing employers would have to
show something more than simple error. The
654
654 CONCRETE PIPE & PRODUCTS OF CAL., INC.
v.
CONSTRUCTION LABORERS PENSION TRUST FOR SOUTHERN CAL.
Opinion of THOMAS, J.
Court's construction is plainly contrary to this intent and is
not "fairly possible" under the terms of the statute. Rather than a
reasonable alternative reading, therefore, the interpretation
adopted by the Court today is effectively a declaration that the
statute as written is unconstitutional.
Which leads to my final, and perhaps most fundamental,
disagreement with the Court. Before a court can appropriately
invoke the
Crowell/DeBartolo rule of construction, it must
have a significantly higher degree of confidence that the statutory
provision would be unconstitutional should the problematic
interpretation be adopted. The potential due process problem
troubling the Court is the supposed lack of a neutral or
"impartial" arbitration hearing.
Ante, at 626. This
potential is based on an "assumption" about a "risk" or
"possibility" of trustee bias,
ante, at 617, 618-bias that,
if it existed, might be "preserve[d]" during the arbitration
proceeding by the presumption of correctness.
Ante, at 620.
Petitioner has not established that the trustees were biased in
fact. And whatever structural bias may flow from the trustees'
fiduciary obligations or from the fact that the trustees are
appointed by interested parties, see
ante, at 616-617, will
likely be nullified by the elaborately detailed criteria that
channel and cabin their exercise of discretion. See 29 U. S. C. §§
1381-1399 (1988 ed. and Supp. III). Such bias may be checked, in
particular, by the requirement of consistency that governs the
trustees' choice of a method for calculating liability. See
Keith Fulton &
Sons, Inc. v.
New England
Teamsters &
Trucking Industry Pension Fund, Inc.,
762 F.2d
1137, 1142 (CA1 1985) (en bane). And the very fiduciary duty
the trustees owe to the fund should simultaneously prevent them
from imposing excessive withdrawal liability that will discourage
other employers from joining the fund in the future.
Id., at
1142-1143. The Court does not consider these countervailing
forces.
But even if there is a real risk that structural bias may
distort the trustees' factual determinations, I am inclined
655
to believe that the arbitration proceeding-presumption and
all-provides adequate process for the employer. Cf.
Mathews
v.
Eldridge, 424 U. S. 319, 334-335
(1976) (adequacy of specific procedures involves consideration of
private and public interests and risk of erroneous deprivation).
This conclusion rests principally on the nature of the particular
statutory determinations to which the presumption applies (those
described in §§ 1381-1399 and 1405). Many of these determinations,
such as the mathematical computations the trustees must perform
under §§ 1386, 1388, and 1391, involve little or no discretion. As
a result, the employer will have correspondingly little difficulty
proving the existence of any significant error made by the trustees
(either inadvertently or because of bias). The same can be said of
withdrawaldate determinations under §§ 1381 and 1383, especially
where all the information relevant to the determination is better
known to the employer than to the trustees.
To me, the public interest is plain on the face of the statute:
Congress did not want withdrawing employers to avoid their
obligations by engaging in a lengthy arbitration over relatively
insignificant errors. At the same time, the employer's interest in
correcting miscalculations that are significant is adequately
protected by the opportunity for arbitration afforded by §
1401.
For these reasons, I concur only in the Court's judgment that
the application of § 1401(a)(3)(A) "did not deprive Concrete Pipe
of its right to procedural due process."
Ante, at 631.
Comments
Be the first to comment
Leave a Comment