as the order on damages that followed the order and summary judgment of the trustees request that this court overturned the district court because the district court did not examine the supremacy of the pension protection act of two thousand and six and instead applied the international respect for reciprocal or reciprocity agreement as it's been called in this litigation some of the words of the statute that you think provide you with this and support yes absolutely your hon rehabilitation plan and as part of that plan to include a default schedule and that default schedule requires that the trustees reduce all benefit acute accruals and future benefits to the lowest level permitted by statute which is statute compelled the result you were just it looks to me as though it says you may have to cut the pensions they receive but it i don't understand why it bears on whether under a deal that the unions have on have relating to the travelers and that it controls how much is remitted by the trust that is inadequate to the what specific provision required that to apply to these travelers so maybe you have to lower how many benefits accrue and maybe you have to add fees but is there anything that says you have to do that to essentially visitors from another planet there's nothing in the pension protection act that addresses reciprocal contributions at all and there's no then how can you say the statute requires it because congress created the pension protection act for the specific purpose of allowing these plans that are critical status or critically underfunded to recover from that critical underfunding and they create this new stream of contributions and that newsroom contributions is not part of the contributions that are required under the collective bargain agreements in effect at the time the critical status does nation is made for the plan will ok i don't think this is a really this this issue is really as difficult as it might appear on the surface  the act was was amended to provide that these funds your clients that were in difficulty financial difficulty they were required by the law to file this notice in then they are given some additional powers to amend the plan as you have indicated in your absolutely correct there in order to make gets of additional contributions in from the from the plan's members right the problem is these are planned members this money never belonged to your client in the st place it is entirely fortuitous on any one day how many travelers happened to be in your plans geographic area and that was the whole reason for setting up this agreement between the various plans across  the spectrum was because these people would find themselves they might be here one week or month and then there someplace else and they're not having any unified so they have to have a home plan your claim is basically just acting as  for the passed through and they have an obligation to pass this money through and back to the plan in which the traveler is a member now if that plan was in trouble they would have the obligation or right to make that individual or individuals cough up additional contributions but for our purposes that's not the issue about their plan it's your your client's plan so my my problem is that these were not really your clients funds the your client was is simply collecting these funds and behalf of someone else just like someone else is collecting funds on behalf of your client and when they come into your client your client can make those additional deductions in accordance with your plan so what you want to do almost let's assume that their plan is also in trouble you deduct from them the money then goes to their plan and they deduct from them so they get double deductions that doesn't seem fair nor does it seem like it's in accordance with the plan it would appear to me at and maybe i'm taking too simplistic view of this that it doesn't apply why because these aren't your clients money just as i would agree to a certain extent with your statement regarding the transfer of contributions and the money so the four hundred and sixty two dollars per hour and contributions that was set in the plan and by the c b s at the time the critical status designation was made that is contributions pursu are not monies that belong to the travelers because the purpose of the p p a is to protect this plan the pacific coast plan and to allow it to merge in critical status do you are in that those funds to the  about before you went into critical status did those funds get remitted to the whole plan so there was there was an issue prior to no no just the answer the id before critical status before anything else was going on those funds go back to the old way i think the answer is yes are we discussing the four hundred and sixty two in contribution we're talking about all the money that needed to be taken back pursuant to the agreement the answer is yes with one is the prior decision in this case when these trustees prior to a critical status designation took one dollar directly from the four hundred and sixty two in contributions and kept it and then we transferred three hundred and sixty two back to see the b s actually say for sixty two dollars the c b s at the time of the critical status and that nation were for sixty two dollars and contributions which pursuant to ten and then they list out that specific amount of dollars and cents rather than saying something like the amount contributed or that something like that so each of the c b s will have a schedule and that schedule have a schedule of different contributions and wages and typically the amount will be spelled out now there may be an m o you are in any way afterwords that nates increases in contributions and wages but there will be dollar amounts in the c b s the will state what amounts are going to be contributed tell me tell me something about the statute when i look at one b one it refers to the bargaining parties the statute is long and complex and i have not looked up the definition of the bargaining parties what is the definition so for purposes of this plan the bargaining parties because of the modify employer plan are the lever union and employers that's what i suspected so that's the way it is and it looks as though the bargaining parties would not include then the trust that the traveller's contributions have to be sent to i'm sorry can you ask that question  again the trust that receives the contributions from the home trust where the travelers are doing their work people come to california for one or another disaster that california has and they come from pennsylvania or someplace let's hypothesi pennsylvania they want all their contributions to go to pennsylvania so that they'll get the biggest pension and when they retire california has the financial problem and wants to keep the money now if i'm understanding what the bargaining parties means in the one b one it means the california employer or employer consortium and the california union or union consortium in california not pennsylvania and not the party did him that created the reciprocal agreement so it looks as though pennsylvania and the reciprocal agreement would not be affected at all by the distress of the california union and would not be affected at all by the special provisions in one b one what am i missing here so those bargaining parties in pennsylvania would not be affected by the statute because they're not required to adopt a rehabilitation plan but it does right now under the reciprocal agreement every dollar that the california gets just  to be forwarded under the reciprocal agreement to pennsylvania in the reciprocal agreements states that call pennsylvania can't lose money on account of something that's not involved in the recipient agreement states that all contributions pursuant to a c b s must be transferred with the pension protection act contributions under the default schedule those are not required by the c p a those were required by the rehabilitation plan and it's default so what makes them play or pay them adopted that plan but had they not adopted it there are two enforcement mechanisms that are written in the p p a to ensure that these rehab plans going to effect st you have twenty nine u s c twenty five eat three c which states that if the parties do not adopt a new c v a with the rehabilitation plan terms the trustees will be required upon expiration just so ok so you're saying the california employers or wherever these people are working they have to they have to agree to the p p a fees but what what requires them to not call them contributions such as they would be triggered by the reciprocal agreement because they're required to adopt the default schedule and that default schedule requires them to reduce all future benefits and benefit of cools and then only add in the increase in contributions that's necessary to emerge from critical status it seems like if they're not going to send every dollar under the reciprocal agreement for whatever reason they have to withdraw from the reciprocal agreement which they can do but if they withdraw from the reciprocal agreement and all the withdrawal effects the money in both directions and these trustees did withdraw from the and sixteen but it's not the trustees argument and they don't believe that the law is that they needed to withdraw from that agreement they want to be able to keep the money instead of forwarding it is the reciprocal agreement provides with that withdrawing from the reciprocal agreement even though they could withdraw from the reciprocal agreement and then they could keep the money they would just have it real hard time attracting travellers because these trustees argue that these pension protection that contributions are created by federal law and this federal law which is later acted about twenty years after actually this planet doc did the sceptical agreement that this later federal law controls because it created a sea change in what multiemployer plans have to do to fund them so that if you're going to contract but you are you told us that the federal law doesn't speak to travelers it doesn't speak to travelers but it does speak to the increased contributions under the fall schedule and they can only be used for a single purpose which is increasing the funding of this plan use we're right back where we were before trying to define what the it whether it's benefit or not benefit monies and who who who owns the money and i would agree with you there was no reciprocal agreement but there was and so these monies to me it looks like we're contemplated under the reciprocal agreement to be just passed through monies and what you're saying is that somehow this is amendment to allow the us rehabilitation measures to be taken voided in one respect only and we're getting right back to what judge kleinfeld said one respect only voided the reciprocal agreement and then i'm still having a difficult time trying to figure out how and again as judge klein phillip and judge  also pointed out you could do both in other words have your cake and eat it to get the money from the reciprocal agreement from you're other travelers and yet not have to really you know give them back because you decided that's the way it is your trustees decided that's the way it certainly with these trustees they decided that they're going to keep the pension protection act amounts there's no information in the record concerning what these other funds have as far as default schedules if they're even critical status what money is being sent back between the plans under the p p a i don't know that's critical i think what's critical is what's happening with your client clients and and one other one other concern with the pennsylvania example and going back on the reciprocity agreement and the transfer is those funds and pennsylvania and those travelers will be receiving a bit of a windfall because they're going to be working in a plan that is a critical status which required you could have written them out of it you could have written it to say we're going to increase the fees on everyone but travelers that's your father about how you wrote the plan how you wrote the amendment well the increase in contributions is required for all hours of work in the jurisdiction so the trustees are in charge of the hour's work and the jurisdiction right they have this jurisdictional area and they are increasing contributions under twenty five so you're saying the statute would not have permitted them to  carve out people who are really contributing to a different plan yes absolutely provision in the law though you said it doesn't speak to travelers so it doesn't speak directly to travelers but what it does do is it specifically states that the trustees can only use these increase contributions which are permitted pursuant to the statute for the specific purpose feinberg who says you have to increase the contributions on travelers so it's that's not written into a plan but for the c p a purposes the parties adopted that  schedule and that default schedule would make bidding when it comes to these plans they have to bid that's really interesting i can see i can see where they might because the california employers would want all travellers because it'll be cheaper they won't have to contribute as much to pension funds but that doesn't really bear on who gets to keep the money and it sounds from your answer to judge  if it weren't for the business interest in avoiding and that consequence that the california plan could write out the travelers and say you get your travelers cheaper that could certainly be a reverse consequence  if you're going to try to attract travelers that way the problem is your plan that you are already a trustee of that you have a fiduciary duty to those participants if you're not increasing contributions like you're required to do  them on your own plan members you just can't increase them on other people yes but you're also the other issue of treating all the members the same people in the same classification at that same amount of contributions so that's another issue where if you're saying this person is going to be a four dollars contribution rate this person is going to be a thirteen contribution rate that employers are going to want to bring in workers from other areas they bring in the workers from the other areas that means the people here and in this planet tacoma this tacoma plan are going to lose membership and the previous appeal of this case there was already evidence that what was happening was you were having people from the tacoma local change their card which means their membership from tacoma or kent up to seattle for the purpose of getting increased contributions because of the pension protection act amounts that are here and that issue also goes against a further provision in the p p a that states that these p p a amounts can't be for increased contributions but isn't that a matter for congress to to address in terms of legislation if that if that situation is occurring or as you have pointed out if your client feels that this is creating a an dissident puts him in some disadvantage then they simply withdraw which they did later which they did but now the issue also comes in that the members in their plan are not having their amount reciprocated in the entire purpose of the receptacle agreement was to ensure that people are earning their pensions you're not getting a minor pension and tacoma and your major pension in seattle in a couple hours in portland what happens is they have the contributions transferred those contributions are transferred into the plan and credit is given for those amounts so the pension amount which is the same pension amount that would be contributed on behalf of members in this plan which is for sixty two dollars per hour which they are getting their accruals on that same amount is being sent back to the home plans those even now without the recent bill agreement correct they're getting the same well even now it depends because what would happen is there are these other private reciprocal agreements that happen between plans and i can't speak to all of those but what was happening under this amendment is the four hundred and sixty one contributions that is being granted a cruel for the people in this plan is also being sent back to people's home plans that way they can accrue their pensions so the overriding purpose of the reserve government is also being done because they're getting their amounts transferred that would be subject in this plan to benefits and benefit of kools so the entire purpose of the reserve agreement is upheld while at the same time if you keep the pension protection act amounts here the overriding purpose of congress and ensuring that this plan emerges from critical status is also done service to get we've taken you over your time kind of do well on that for a minute because as your honor pointed out you know this involves pensions that seem complex but really it's it's kind of simple it's a matter of contract law and the basic law in the trust analysis that your honor pointed out is that when they sign up arrest of prosody agreement they've relinquished all power and control over those assets and essence they basically signed an agreement that said you know we'll pay traveler's prevailing wages in california and whatever amount of that is supposed to be contributed to the pacific coast plan it will be transferred to the home funds without deductions of any kind whatsoever and the reason why this case is up here is that they didn't  definitions as you know we will transfer x amount that will keep y amount for ourselves they could do that the problem is that the reciprocity agreement says you can't change that provision well out of majority that the nd thing is that if they want these contributions to be their contributions would be subject to the reciprocal plan and it's not like they can't do so it's not like all they have to do is agreement at that time the contributions instead of going to the home funds are made directly to their plans it's pursuant to their schedules and can be used for p they don't treat the travellers as participants in any manner in their plan they don't pay p v g c premiums they don't get many benefits they're not in their plan at all they're in you know the home funds and to me you're arguing council is so they're taking this money out of there but there but then these travelers who whose money is being deducted from are not getting any benefit whatsoever from this plan at any point but they are contributing somehow to the health of the plan for which they are not a participant is that right  considered an asset of the pacific coast point on any point in time because as you know pension laws complex and basically what pension laws says it once it becomes an asset of the pacific coast plan even for a nanosecond then and that money is transferred someplace else then all the benefit of rights and features of the pacific coast plan have to attach to that contribution so basically these things  you know from the home fund and using it to fund their own planners nothing in the pension protection act that says healthy plans have to donate money to reciprocal plans or simply not not which troubles me is you could have a major construction project i mean we're talking about a multi year construction project we're in individual steps out of their own planned territory and into another plan that's covered by this reciprocal agreement and they're building a dam or something it is taking four or five years they could have these contributions which are you know they escalate every year take it out the their their reduced amount is then going to their home play and which then reduces their benefit because they're not contributing as much right to their homeland wrecked right ok but they're not getting any benefit even though they might have worked here for five years they're not getting any benefits from the traveler plan right correct that is correct could congress really intended that i don't think it could not i employers who are employing these travelers are signatories to the c b s for the workers in tacoma who are members mostly are members of the pacific plan and that  b s were updated to do this relabeling so that their contributions and then there are these non contributions and that under the new c b a's they don't owe the non contributions to  home plans so how do we deal with that argument so we do well then in the sense that you know these these are contributions under the terms of both plan document so the plan documents say that any payment made pursuant to a collective bargaining agreement is a contribution the reciprocal document says that any payment made pursuant to a collective bargaining agreement but if the collective bargaining schedules that have contributions and non contributions while the c v s what the c p a does is it has incorporate a schedule under the rehabilitation plan so you know the parties will so when they started their rates were four dollars sixty two cents an hour and then they went up now there are nine dollars and there's different schedules and one schedules say it's eight dollars and one dollar schedule say it's nine dollars so in in the c p a bed opt maybe to make a contribution and the rehabilitation plan when you look at the schedules and there it says employer contributions and that's a percentage of the rate on you know two thousand and nine dollars so it says one hundred and twenty percent in two thousand and ten and so they're all employer contributions the tr itself then distinguishes how they're going to use those contributions but but so you're saying that because i don't think we have any of the c d s in our record at my right you're right so we have to kind of take both sides word for it it seems like maybe you have a different description of what the c b s have said i understand your opposing counsel to be saying the c v a itself now has a schedule in it that has not been contribution amounts under the p p s maybe that's not i don't know whether you well it's not true but but it doesn't really matter i mean what what the what the for st of all for for our clear up my misunderstanding if it is a misunderstanding if i if i'm understanding your discussion correctly with judges rule in judge friedman if the pacific plan were to prevail then the sick play in the pacific play and would get additional money from the labor of the travelers but the travelers would not get any additional would not get any pension money that the additional contributions from the employers are creating that's correct i mean when the people he came back you know would get to get the good part but not the bad part they get to keep getting keep the money but not pay it and pensions right instead the traveller's work generates increased pensions for the pacific employees but not for the travelers who did the work like they at least would technically why because they stipulated that all the contributions were made pursuant to the c b a's and those were the damages so we never introduced and because it was never an issue and it's your position that it's their burden because they're making an argument this incorporation and and this argument was really just the same issue was was decided to in lehman won and that was what is an employer contribution and the court the court there said what the plan document says it's any payment the reciprocity agreement says it's any payment it doesn't differentiate between you know benefit and on benefit you know they argue they say well if we didn't use the that the difference is if they want to make that distinction if they want to a man their agreement to differentiate between contributions they can do it they just have to amend the definition of plan but that takes that takes a majority vote of all the signatories so in order to call it something else they can say it takes an amendment or they can you know they can keep all the money they just have to terminate the reciprocity agreement which they finally did and now there's no question it's their assets congress says you know you know it's to be used for the benefit of those individuals it's fine really do they have to create let me ask you this to the end to create if they keep the funds they don't pass the back right to the pension plan for which they won't so they will have  individual account there later standing from opposing counsel if they don't well what do they have an individual account so that they can draw up engine lets say they had a long term deal and the crew a lot of contributions you know the as much as from their home plan but do they get to then draw he reduced pension from the place where they were travelling and the answer is yes well they it depends on the you know definition and employees and so if they are covered by collective bargaining green you know that typical definition is if you're covered under a collective bargaining agreement to which contributions a know everyone had their investment schedule and every and you know the sum of the parts is never equal to the whole you know so the idea is to get them all into a reciprocal play on let them go elsewhere and whatever the going rate in those plans are going to be transferred whether it's higher or lower or whatever or whatever whatever reason i was thank you we're taking over your time well give you a minute for about all anderson three quick points in rebuttal st i want to clear up one thing from my argument was brought out with opposing counsel the collective bargaining agreements adopted the default schedule i do not know standing here today whether or not that the fall schedule just cut and pasted into the agreement but the c v a the bargaining parties were required to adopt the to the default schedule or one of the alternative schedules or the p p a and force that on them it would have automatically said if you don't adopt one of these schedules you're forced to adopt the default schedule and that's what the plan sponsors the trustees with adopted so i don't know if it's specifically in the c v a that cut and paste the table getting to two actual points here one at the very least we're looking at an issue of are the contributions the non benefit contributions as we call them that were created by the pension protection act are they contributions under the reciprocal agreement that's the major issue here that's kind of the rub between your argument  problems with the word any well any payment made pursuant to elective bargaining agreement correct in argument on that point is that these aren't made because of the collective bargaining agreement the collective bargaining agreement adopted them because the default schedule had them and they were required to do so or haven't enforced on them well i think the issue is also these funds belong in any way shape or form when you have any authority in any way shape or form under the combination of the reciprocal agreement which was then in effect and the revised law the amended law to keep the funds unilaterally i will say that  agreement states that amounts forwarded to the home plan are treated as being given directly to the home plan these amounts pursuant to the p p a are not forwarded to the home plan they're kept there for chicken or the egg going st because that's you're saying that that's the case because your claims made it the case well one thing i think maybe might help dispel that is there was some briefing on the cns wholesale grocers case from the rd circuit we cited as well as the other side and in that case the rd circuit was asked whether surcharges under the pension protection act are amounts that are to be used in determining a contribution rate highest contribution rate for withdraw liability now that court said that these surcharge amounts under the p p i which is five percent in the st year ten percent in any succeeding year forty three dollars forty four cents of that decision where they pointed to section twenty five dollars east seven which stated that the surcharge amounts are to be collected on the same schedule as contributions and treated as the link with contributions for that purpose nothing in this time so i think i need to cut you off thank you council thank you both sides for the helpful arguments cases submitted i think we should take a five minute break before next two cases so we'll