SARA LEE CORPORATION, P la in t if f,
v. AM ERIC AN BA KER S AS SOC IA TIO N RETIREMENT PLAN, e t al.,

De fend ant s. UNITED STAT ES DIS TRICT COURT F OR THE D ISTRIC T OF CO LU M BIA

Ci vi l A cti on 06 -00 81 9 (H HK)

M EM OR

AN DU M OP IN ION Sara L ee Corpor ation (“Sar a L ee” ) bring s this action under the Employ ee Re tirement Income Sec urity

Act (“ ERI SA”), 29 U.S.C. §§ 1001 et seq. , seekingreve rsal of a 2006 deter mination of the Pension Be nefit Gua ranty Corporation (“ PBGC”) that the Amer ican B aker s Association Retirement Plan (“ AB A Plan” or “ Plan”) is a multiple-employer pe nsion plan. Sara L ee is a participating e mploy er in the A BAPlan; the Plan, its Boa rd of Tr ustees, and othe r participating e mploy ers a re a lso parties to this suit . Be fore the Court is PBGC’s motion for summary judgme nt [ #46], which the Court held in abeyance pendingan asse ssment of the completene ss of the administrative re cord a nd which is now ripe f

or dec ision. Upon consideration of the motion, the oppositi on there to, and the re cord of this case, the Court conclude s that the motion shall be gr anted.2 I. BACKG ROUND A. Re gul at or y Ba c kgr ound PBGC is a fe dera l ag ency and wholly -owne d corpor ation of the U.S. Gove rnment that administers the pension plan insura nce pr og ram e stablished by Title I V of ERI SA. 29 U.S.C. §§ 13 01 -1 37 1. PB GC e xists to e ns ur e that r e tir e e s r e c e ive pe ns ion be ne fi ts the y

have e arn e d e ve n if their employ er ha s terminated its pension plan or is other wise unwilling or

unable to pay
. Mead Corp. v. Till ey , 4 9 0 U
. S
. 7 1 4 , 7 1 7
- 1 8 ( 1 9 8 9 )
. W h e na p e n s i o np l anc o v e r e d

b y T i t l e IV terminates without suffic ient assets to pay all of its promised benef

its, P BG C ty

pically become s trustee of the plan and pa

y s participants their be nefits, up to statutory limit s. See 29 U.S.C. §§ 1321-1322, 1361. Under ERI SA, gr oups of employ ers may form joint pension plans. There are two ty pes of joint plans for employ ees whose pensions ar e not maintained pur suant to collective ba rg aining ag ree ments. A “multiple[-] employ er pla n” is a plan “ maintained by two or more c ontributing [em plo y e rs ] . . . un de r whic h a ll p lan a sse ts a re ava ila ble to p ay be ne fi ts t o a ll p lan p art ic ipa nts and bene ficiar ies.” 29 C.F.R. § 4001.2. An “ ag g reg ate of single -employ er pla

ns” is an
a sso c iatio n o f s e pa

rate pla ns in whic h e a c h e mpl oy e r’ s c on tr ibutio ns are ma int a ine d in se pa rate
a c c ounts or

oth e rw ise e ff

e c tiv e ly re str ic te d s o th a t th e fu

nd s o f e a c h e mpl oy e r a

re us e d o nly

to pay the bene fits of that employ er’ s employ ees. See P ension Bene fit Guar. Cor

p. v. Artra Grp. , 972 F.2d 771, 773 ( 7th Cir. 1992) (adoptingPBGC’s def inition of an ag g reg ate of single

e mpl oy e r p lans ); Pe ns ion Be ne fit Gu ar . Co rp . v . P ota sh , 1986 WL3809, at *2-3 (W.D.N.Y. Mar. 26, 1986) (same)
.3

The distinction is relevant, inte r a lia , to de te rm ini ngan e mpl oy e r’ s li a bil ity wh e n it terminates a

plan with insufficient funds to pa y benef its due to retiree s. Artra Grp. , 972 F.2d at 77 2. In a mul tip le -e mpl oy e r p lan, an e mpl oy e r i s g e ne ra lly on ly lia ble fo r u nd e rf un din g if it i s a “substantial employ er” within the meaningof ERI SA, 29 U.S.C. § 1301(a)(2) , or has made contributions to the plan within the five y ear s prec edingthe termination of the pla n as a whole, id. §§ 1363, 1364. Otherw ise, the oblig ation for that liability falls to the other c ontributors to the fund. See id. § 1301(a) (2). In an ag g reg ate plan, how ever , the employ er must make up the mis sin g c on tr ibutio ns or

se e k to qu a lif

y fo r a “ dis tr e sse d” or

“ inv olu nta ry” te rm inatio n b y

PB GC , in which ca se PBGC be comes liable f or that plan’s oblig ations. See A rtra Grp. , 972 F.2d at 772- 73; 29 U.S.C. § 1322. B. F ac tu al B ac kgr ound The AB A Plan is a define d-bene fit pension plan to which seve n employ ers, including Sara L ee, c urre ntly

contribute on be half of the ir curr ent and f ormer e mploy ees. The Plan was founded in 1961 a

nd has bee n cover ed by

ERI SA since that statute’s e nactment in 1974. 1. 1979 Det erm ination On J une 21, 1979, PBG C sent a letter to the A merica n Ba kers Assoc iation (“1979 L e tte r” ) s tatin g that it

ha d “ c on c lud e d th a t th e [AB A Pl an] c on sti tut e s a n a g g re g a te of

se pa rate pension plans.” Administrative Rec ord (“ AR”) 212. PB GC descr ibed the standa rd for making such a de termination:

Our de termination as to the natur e of a n entity —whether

it is a single plan or an a g g re g a te of

sin g le pla

ns —is ba se d o n it s st

ru c tur e and

ho w i t a c tua lly operates on an ong oing ba sis. W e look to the documents g overningthe entity and to releva nt evidence of how it has oper ated a nd continues to operate. Such e vid e nc e may

inc lud e the re a so na

ble e xpe c tatio ns and

int e nt o f t

he pa rt ie s.4 The availability

of funds he ld by

an entity to provide bene fits is a centra l fa c tor in o ur ana ly sis . Re str ic tio ns on the us e of

su c h f un ds ind ic a te that th e e nti ty may be an a g g reg ate of

single plans. For

example, if separ ate a ccounts a re maintained for

eac h contributing employ er, it may be possible to restric t the use of assets fr om eac h separ ate a ccount to pay only the bene fits of the employ eeparticipa nts of the employ er ma intaining the a ccount. I f the e vidence shows that pay ments are eff

ectively restric ted, by

whateve r mea

ns, so that there is a minimal risk of funds attributable to the contributions of one e mploy er be ing use d to pay the bene fits of another

employ er’ s employ ee- participa nts, then the entity

is an a g g re g a te of

sin g le pla

ns . AR 212-13. PBGC’s letter

then discussed c erta in aspec ts of the func tioning of the Plan. Any
em p l o y er en t er i n g th e P l an , o r a n y em p l o y er ch an gi n g i t s co n tri b u t i o nra t es , wa s re qu i re d t o s i gn a par ticipation ag ree ment that set rate s of cove rag e and “ state[d] that the employ er’ s participation in the Fund is only

with respec t to its own employ ees” ; to be the subject of a n actua rial
e va luatio n to de te rm ine wh e the r a surc ha rg e is n e c e ssa

ry to “ avo id a

ny a c tua ri a l de fi c ie nc y ” ; to
a pp ly to t he Inte rn a l Re ve nu e Se rv ic e fo r a de te rm inatio n th a t it s p lan me t c e rt a in r e qu ir e me nts ; and to be a

war e of the intent, expressed in a docume nt titl ed “Summary Plan Descr iption,” that
eac h employ er pr ovide the funds to pay its employ ees’ benef

its. AR 213-14. The 1979 L etter a cknowledg ed that “a ll contributions are pa id into and all distributi ons
are pa id f ro m th e c omm ing le d tr

us t” and “ on an o ng oin g ba sis the [Plan] on ly ma int a ins se pa

rate
acc ounting pe r employ er f or purpose s of cost allocation.” AR 214. But it also noted that upon te rm inatio n o f a

pa rt ic ipatin g e mpl oy e r’ s p lan, the Pla n h a d th e re qu isi te inf

or matio n to “historically

re- cre ate se parate ac counts” so that, pursua nt to a 1976 amendment to the Plan, “a ny amount attributable to [the employ er’ s] contributi ons that prove to be in e x cess of the ac crue d pensions of its employ ees” could re vert to that employ er. A R 214-15. PBGC thus conclude dAll citations herein to the c omplaint refe r to Sara L ee’ s Second Amende d 1 Com pla int
. Severa l documents and filing s ref er to this party

as Interstate B aker ies 2 Cor po ratio n. Th e pa

rt y re fe rs to i tse lf

, a nd is l ist e d o n th e do c ke t of thi s c a se , a s Inte rs tate Br ands Corporation. 5 that “[i] n this case the se parate ac tuarial va luations made with reg ard to e ach e mploy er a nd the sy stem of surcha

rg es . . . ef

fec tively minimi ze the risk that one employ er’ s contributions will be used to fund the be nefits of a nother e mploy er’ s employ ees.” AR 215. 2. 2006 deter m ination In 2005, an asse ssment of the Plan’s financ es re veale d that sever al par ticipating employ ers c arr ied neg ative bala nces in the Plan, mea

ning that the benef

its owed to the employ er’ s retire es, alongwith administrative expenses, wer e g reater than the contributions and investment income in the Plan’s ac count attributable to that e mploy er. Compl. ¶ 27. Sara L ee, 1 which had a

positive balance in the Plan’s acc ount, sought to withdraw its funds to establish an independe nt pension plan exclusively for Sar a L ee e mploy ees. SeeAR 287; Compl . ¶ 28. Meanwhile, Interstate B rands Corpor ation (“I BC”) , a par ticipating e mploy er in the A BAPlan 2 with a neg ative bala

nce, ha d filed for

bankruptc y . See AR 1572. In J une 2005, I BC aske d PBGC to rec onsider its 1979 determination that the AB A Plan
was a n ag g reg ate of

single -employ er pla

ns rather than a multiple-employ er pla n. AR 339. As noted, this disti nction controls which e ntity is liable for I BC’s ne g ative bala nce: if the Plan was pr op e rl y c a te g or ize d a s an a g g re g a te of sin g le -e mpl oy e r p lans , PB GC wo uld be larg e ly responsible for

the def icit; if instead the Plan is mult iple-employ er pla n, Sara L ee a

nd otherBe cause of the c onsequenc es of the de termination on Sara L ee’ s liabilit y for 3 I BC’s ne g ative bala

nce, when Sara

L ee sought to transfer

assets fr om the AB A Plan to its new pension plan, the Plan held $27 million of Sara L ee’ s funds pendingthe PBGC’s outcome . AR 356-60, 1565 n.2. I BC also ha s an intere st in the determination: appar ently its share of Plan lia bil iti e s w ou ld b e re du c e d f ro m $6 9 mi lli on

to $ 40 mil lio n if

the Pla n is re c la ssi fi e d a s a multipl e-e mploy er pla

n. AR 1564-65. The c ost to P BG C of assuming liability for the ne g ative balanc e is approximately

$60 milli on. See Pl. S ara L ee’ s Opp’n to Def

.’s Mot. for Summ. J . at 17. 6 participating e mploy ers would be obligated to cover the costs of pa

ying be nefits to I BC’s f

ormer
e mpl oy e e s. 3 In November

2005, PBGC notified the AB A Plan, as we ll as participatingemploy ers Sar a L e e , I B C, a

nd Ke tte ri ngB akin g Com

pa ny (“ Ke tte ri ngB akin g ” ), that it int e nd e d to re vis it i ts 1979 deter

mination. AR 427-28. PBGC reque sted that these “ interested pa rties” submit “any written statement or

documents that you would like PBGC to consider in its dec ision-making proce ss.” AR 427. PBGC re ceive d materia ls from the AB A Plan, Sara L ee, I BC, and K ettering Ba king. On August 8, 2006, PBGC issued a seve nteen- pag e dete rmination letter (“ 2006 L etter” ) in which it concluded that the ag ency ’s application of the rele vant leg al standar d in its 1979 L etter w as “simply

wrong ” and that the AB A Plan “is, and indee d alway s has bee n, a multipleemploy er pla

n.” AR 1563, 1570. The le tter beg an by explaining the fa ctual bac kg round re lated here as we ll as Sara L ee’ s and I BC’s f inancial inter ests in the outcomes they eac h supported. See AR 1564-66. PBGC next recited the standard “ consistently applied” f

or distinguishingbetwee n multipl e-e mploy er pla

ns and ag g reg ates of sing le-e mploy er pla ns: as stated in the 1979 L etter, the ana ly sis “ is b a se d o n [a pla n’ s] stru c tur e and

ho w i t a c tua lly

op e ra te s o n a n o ng oin g ba sis ”
and inc lud e s “ loo k[in g ] to the do c ume nts g ov e rn ingthe e nti ty and to r e le va nt e vid e nc e of

ho w i t has oper ated a

nd continues to operate.” AR 1566-67.7

The 2006 L etter w ent on to descr ibe the Plan’s historical f unctioning. PB GC noted that fr om t he Plan’ s in c e pti on , “ be ne fi t c os ts w e re no t se g re g a te d o n a n e mpl oy e r- by -e mpl oy e r b a sis , so cost shifting c ould occur .” AR 1568. Ac cordingto the 2006 L etter, when PBG C reviewe d the Plan’s pra ctices in 1979, it relied on the Trustee s’ re prese ntations of their intent to ensure that
eac h employ er f

ully funded the benef

its for its employ ees, but this relianc e wa s misplaced. AR 1569-70. In particula

r, PBGC re asoned that the Plan’s require ment that a ter minating e mploy er
cover its li abilities at the time it ex ited the Plan signifie d that an employ er c ould have a neg ative balanc e, and “ a neg ative bala nce w as proof

positive that cost shifting had oc curr ed bef ore the employ er ha d withdrawn f rom the Plan.” AR 1570. Turningto the operation of the Plan since 19 79 , PB GC wr ote that a lth ou g h th e Pla n it se lf state s th a t it

is a n a g g re g a te of

se pa rate pla ns , sever al fa ctors sug g est the opposite is true: the Plan is g overne d identically for a ll participating employ ers; its “asse ts are poole d in a sing le trust and one c ustodial acc ount”; “sepa rate actua rial valuations of the Plan asse ts and liabiliti es attributable to a particula r employ er w ere to be perf ormed only

when a n employ er te rminated pa rticipation in the Plan” or upon r equest; and a n
acc ounting in 2004 re veale d that sever al employ ers ha d neg ative bala nces. A R 1570-73. In the final sec tion of the 2006 L etter, la beled “ L eg al Analy sis,” PBGC desc ribed evidenc e submitted by

I BC on which it re lied to determine that the AB A Plan was a multipl eemploy er pla

n. AR 1573. PBGC discussed five cate g ories of e vidence
. First, it noted that a box indicating status as a multipl e-e mploy er pla

n was c hecke d on the Plan’s For

m 5500s, an ERI SA reportingform submitted to the I nterna l Revenue Ser vice a nd the Depa rtment of L abor e ach year . AR 1574. PBGC reje cted the T rustees’ explanation that the forms do not have an alter native box for an ag g reg ate of single -employ er pla

ns, rea soning that the I RS requires sepa

rate For m 5500s for ea ch sing le plan. Id.8

Second, PBG C ex plained that the Sche dule B attachme nts to the Form 5500s, sig ned by
an ac tuary , “stated that the Plan had one f unding sta

ndard a ccount a

nd one pool of a ssets and benef it liabili ties,” mea

ning that the participating e mploy ers’ funds wer e “c ommingled a nd identified as c ontributions to t he [ABA] Plan, not to any individual [ employ er’ s plan].” Id. The letter stated that PBGC “re g ard[s] t his unbroken cha in of repor ts as persua sive evidenc e that the Plan alway s operated [on an] ongoing basis as one, multiple-employ er pla n in which all plan assets have been a

vailable to pay

all plan bene fits.” AR 1575. Third, PBGC quoted two c ommunications, one from the Plan’s attorney to J ames Ke t t er i n g, th e p re s i d en to f K et t er i n g Ba k i n g, an d th e o th er fr o mth e P l an ’s ac tu ary

t o Ke t t er i n g, as examples of statements de scribingthe Plan’s oper ation in a manner consistent with the functioningof a multiple-employ er pla n. The attorney

reje cted Ke ttering ’s re quest to provide benef its to former Ke tteringBa king e mploy ees at a diffe rent rate than that used by other pa rt ic ipatin g e mpl oy e rs be c a us e “ [t]o th e e xtent th e e xpe ri e nc e of e a c h e mpl oy e r w e re se pa rate ly deter mined, the Plan would eff ectively be ‘de constituted’ into a g roup of sing le employ er pla ns.” Id. The a ctuar

y descr ibed the Plan’s sy stem of re quiring surcha rg es for cer tain new pa

rticipating employ ers, notingthat the sy stem “wa s never intended to come up w ith the same contribution rate s that would have r esulted fr om full actuar ial valuations for e ach e mploy er.” AR 1576. Four th, PBGC stated that the Plan’s re quired c ertified f inancial state ments for the year s
e nd ingSe pte mbe r 3 0, 20 03 and Se pte mbe r 3 0, 20 04 “ fa il[] to a c c ount f or any of the Pla n a sse ts and liabilities on an employ er- by -employ er ba sis” or to “e ven mention the segreg ation of employ er a ssets and liabilities required f or ag g reg ate of

single -employ er pla

n status.” AR 1577.Sara L ee ma kes these de mands for r elief in Count Iof its complaint. The Court 4 pr e vio us ly

dis mis se d Co un ts I Iand

I I Iof the c omp la int , w hic h a lle g e d th a t th e AB A Pl an a nd its Boa rd of Tr ustees violated its fiduciar y duties and the ter

ms of the Plan ag ree ment by permitting 9 Fifth, PBG C ex plained that the r epre sentations on which the 1979 L etter w as base d—that employ ers mig ht pay

surcha rg es upon ente ringthe Plan and would cor rec t for any

funding defic iency

or surplus upon exiti ng it—had in prac tice not bee n fully implemented, and “ the
measure s the Plan did take did not eff ectively preve nt cost shifting among pa rticipating employ ers on a

n ong oing ba sis.” AR 1577-78. The sy stem of surcha rg es wa s “a pe rfunc tory calc ulation” rather than a method of trac king “ employ er- by -employ er a ccount ba lance s on an ong oing ba sis.” AR 1578. Furthe rmore, “ the Plan has not consistently treated the withdra

wal of a par ticipating e mploy er a s a plan ter mination or retroa ctively

cre ated a separ ate a ccount f

or ea ch such employ er a

nd trued up a

ny fundingdefic iency

or surplus,” instea d allowing “inac tive” employ ers to “a

bandon[] their attributable a ssets and alloca ble liabilities to t he Plan.” Id. In l ight of t he “ex igenc ies ” of t he m att er, P BGC mad e it s d ete rm in ati on th at t he A BA Plan was a multiple-employ er pla n eff ective immediate ly

upon issuance, dispe nsing w ith the obligation to ex haust administrative re medies prior to initiating a suit in federa l court. AR 1579; see also 29 C.F.R. § 4003.22(b). C. P roce dural Hi story Sara L ee f

iled this action ag ainst the AB A Plan and its Boa rd of Tr ustees on May

3, 2006 and subseque ntly

added PB GC as a de fenda nt. Relevant to the motion before the Court are Sara L e e ’s re qu e sts fo r r e ve rs a l of PB GC ’s de te rm inatio n in the 20 06 L e tte r t

hat th e AB A Pl an is a multipl e-e mploy er pe nsion plan and to enjoin PBGC fr om enforc ing the 2006 L etter or
resc inding the 1979 L etter. In November 2006, the AB A Plan and its Trustees f iled a 4employ ers to have neg ative bala nces in the Plan a ccount. Se e Sa ra Le e Cor p. v . A m. Ba k

e rs Ass’n Retireme nt Plan , 512 F. Supp. 2d 39, 43 (D.D .C. 2007).

L ewis B rothers is the named par ty , althoug h Chicag o Ba

king Company

—a 5 wholly -owne d subsidiary of L ewis B rothers—is the pa rticipatingemploy er. The motion seeks summary judgme nt as to Counts I and I Iof Sara L ee’ s Second 6 Amended Complaint, of which only Count Inow re mains, and as both of the two counts of the AB A Pl an’ s T hir d- Part

y Com pla int
. 10 c ounte rc la im a g a ins t Sara L e e , a c ro ss- c la im a g a ins t PB GC , a nd a thi rd -p art

y c omp la int

a g a ins t the Am e ri c an B ake rs As so c iatio n a nd the oth e r p art ic ipa

nts in t he Pla n—Ke tte ri ngB akin g , I B C, L ewis B rothers B aker ies, Inc. (“ L ewis B rothers” ), Har ris Ba king Company , Inc., and Jenny L ee 5 Ba kery , Inc.—see king de clar atory relief resolvingthe contra diction betwee n the 1979 L etter a nd 2006 L etter. PBGC moved for

summary judgme nt in April 2007. The Court has a lrea dy issued an 6 opinion resolving some of the issues ra ised by PBGC’s motion. Sa ra Le e Cor p. v . A m. Ba k

e rs Ass’n Retireme nt Plan , 512 F. Supp. 2d 32 (D.D .C. 2007). The Court re jected a n argument by Sara L e e that th e a

pp ro pr iate sta

nd ard of re vie w o f P B GC ’s de te rm inatio n is de novo
. Id. at 37- 38. Instead, the Court de termined that a pplication of the de fer ential standar d of the A dm i n i s tr a t i v e P r o c e d

ur e A c t( “ A P A ” )

— c o n s i d e r i n g w h e th e r ana c t i o nw a s “ ar

b i tr ar y, capr icious, an abuse of discre tion, or otherwise not in ac corda nce w ith law,” 5 U.S.C. § 706(2)( a)—is appr opriate. Id. In response to Sara L ee’ s contention that discover y was ne cessa

ry to addre ss inadequac ies in PBGC’s re cord, the Court ruled that it could not determine whether the administrative re cord be fore it was complete a nd would hold the motion for summary judgme nt in abey ance pendingresolution of that issue. Id. at 38-39.11

In acc ordanc e with the Court’s opinion and orde r, the pa rties turned to a ddressingthe question of whethe r mater ials should be added to the a dminist rative r ecor d submitt ed to the Court by PBGC. Sara

L ee f iled a motion for leave to serve discovery and supplement the
a dmi nis tr a tiv e re c or d, wh ic h th e Court re fe rr e d to Un ite d St a te s Ma g istra te Judg e JohnM. Fa cciola. Judge Fa cciola de nied the motion but noted that there w ere three cate g ories of do c ume nts PB GC ha d a lr e a dy a g re e d to a dd

to t he re c or d. As de sc ri be d b y the pa rt ie s, tho se three cate g ories we re: (1) exhibi ts attache d to the oppositions t o PBGC’s motion for summary j u d gm en tfi l edb y

S ar a Lee, L ew i s Br o th er s , an d th e A BA P l an an d

i t s T ru s t ee s ; (2 ) f

i l i n gs PBGC submitted in the I BC bankr uptcy proce eding ; and (3) doc uments PBGC provided to Sara L ee in r esponse to a F OIA re quest. These materia ls are now befor e the Court as pa

rt of the administrative re cord. Wit h the issues of discove ry and complete ness of the r ecor d resolved, the Court can now
a sse ss whe the r t

he PB GC ’s 20 06 de te rm inatio n w a s a rb itr ary and c a pr ic iou s. II. LEGAL STANDARDS A. AP A Revie w As noted, the Court has c oncluded that it must review Sar a L ee’ s claim ac cordingto the APA’s def

ere ntial standard. In conductingits review, the Court must “hold unlawf ul and set aside a g ency

action, finding s, and conc lusions found to be . . . arbitra ry , capr icious, an abuse of discretion, or othe rwise not in ac corda nce w ith the law.” 5 U.S.C. § 706(2). The Supreme Court has written: [A] n ag ency

rule would be arbitra

ry and ca pricious if the a g ency

has re lied on fac tors which Cong ress ha s not intended it to consider, entire ly failed to c onsider an important aspe ct of the pr oblem, offe red a n explanation of its decision that12

ru ns c ounte r t o th e e vid e nc e be fo re the a g e nc y , o r i s so imp la us ibl e that it

c ou ld not be asc ribed to a diff

ere nce in view

or the produc t of ag ency

expertise. Motor VehicleMfrs. Ass’n v. State Farm M ut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983). In other words, as longas an a g ency considers r eleva

nt fac tors and ca

n articulate a “ rational c onnection betwee n the fa cts found and the choice made,” then its decision will be upheld. Se e Sta teFa rm , 4 6 3 U. S
. at4 2 -4 3 (q u o t i n g Burlington T ruck Lines v. U

nited States , 371 U.S. 156, 168 (1962)) (i nte rn a l qu otatio n ma

rk s o mitte d) ; Ma rsh v . O r. Natural R es. Cou nc il , 490 U.S. 360, 378 (1989) (holding that ag ency

action will not be re verse d under the “ar bitrary and ca pricious” standa

rd of revie w abse nt a clea

r er ror of judgme nt). An ag ency

may alter or reve rse its policies and positions as long as it supplies a “r easone d analy sis indicating that pr ior policies and standa rds
are beingdeliberately

chang ed.” Gr e ate r B os ton Te le v isi on Cor p. v . FCC , 444 F.2d 841, 852 (D.C. Cir. 1970). Despite this defe rential standa rd, a c ourt must conduct a “ sear chingand ca ref ul” re view of the re c or d to e sta

bli shthat th e a g e nc y ’s de c isi on is r a tio na l and

ba se d o n c on sid e ratio n o f a ll rele vant fa ctors. Citi

zens to Preserv e Ov erton Park v . Volpe , 401 U.S. 402, 416 (1971). A court’s r eview is limited to the administrative rec ord and the g rounds for de cision invoked by the ag ency . Se e Cam

p v . P itt s , 4 11 U. S. 1 38 , 1 42 (1 97 3) ; SEC v. Chenery Corp. , 332 U.S. 194, 196 (1947). B. Su m m ar y J udgm e nt Summary judgme nt is the proper me chanism for deciding , as a matter of law , whether an ag ency action is supported by

the administrative re cord a nd consistent with the APA standard of revie w. Stuttering Found. of Am. v. Springer , 498 F. Supp. 2d 203, 207 (D.D .C. 2007) (citing13

Ri c ha rd s v . I NS , 554 F.2d 1173, 1177 & n.28 (D.C. Cir.1977)). Courts ar e not to apply ty pical summary judgme nt standards, howe ver, when re viewinga fina l action of a n administrative ag ency under the APA: Un de r R ule 56 (c ) o f t

he F e de ra l Ru le s o f C ivi l Pr oc e dure , s umm ary jud g me nt i s appropr iate whe n the pleading s and the e vidence demonstrate that “there is no g e nu ine iss ue a s to any

mate ri a l f

a c t and that th e mov ingpa

rt y is e nti tle d to judgme nt as a matter

of law.” Fe d. R. Civ. P . 56(c) . In a ca se involving r eview of a fi na l a g e nc y

a c tio n und e r t

he [APA ], ho we ve r, the sta nd ard se t f or th i n Ru le 56(c) does not apply

beca use of the limited role of

a cour t in reviewingthe administrative re cord. Se e Sie rra Clu b v . M ain e lla , 459 F.Supp.2d 76, 89-90 (D.D.C. 2006). Under the APA, it is t he role of the a g ency to resolve f

actua l issues to arrive at a de cision that is supported by the administrative re cord, wh e re a s “ the fu

nc tio n o f t

he dis tr ic t c ourt

is t o d e te rm ine wh e the r o r n ot a s a matte r o f l aw the e vid e nc e in t he a dmi nis tr a tiv e re c or d p e rm itt e d th e a g e nc y to make the de cision it did.” Se e Oc c ide nta l E ng ’g Co. v . I NS , 753 F.2d 766, 769- 70 (9 th C ir .1 98 5) ; see also Nw. Motorcyc le Ass’n v. U .S. Dep’ t of Agric. , 18 F.3d 1468, 1472 (9th Cir.1994) ( “ [T] his case involves r eview of a fina l ag ency deter mination under the [APA] ; theref ore, r esolution of th[ e] matter does not re qu ir e fa c t f

ind ingon be ha lf of thi s c ourt . Rathe r, the c ourt ’s re vie w i s li mit e d to the administrative re cord.” ). Stuttering Foundation , 498 F. Supp. 2d at 207. Ac cording ly , in review ing PB GC’s motion, the Court evaluate s whether

the evidenc e in the administrative r ecor d permitted PBGC to dete rmine that th e AB A Pl an is a

mul tip le -e mpl oy e r p lan r a the r t ha n a n a g g re g a te of

sin g le -e mpl oy e r p lans . III . A NA LY SIS PB GC argue s th a t it

is e nti tle d to summa

ry jud g me nt b e c a

us e its 20 06 L e tte r c on sti tut e s a detailed, thoroughly

rea soned ana ly sis of the appropr iate cla ssification of the AB A Plan. The ag ency asser ts that it correc tly

stated the re levant leg al issue and its outcome is supported by evidenc e in the administrative r ecor d. PBGC re iterate s that the “c entra l fac tor” in dete rminating whether a plan is a multiple-employ er pla n or an a g g reg ate of

single -employ er pla

ns “is the availability

of all plan a ssets to pay

benef its to any participa nt or bene ficiar

y ,” and that “the wa

yEac h also argues that PBGC’s pr ocedur es in makingthe 2006 deter mination 7 violated due pr ocess a

nd other proc edura l rig hts. Bec ause the se ar g uments larg ely rely on the need f or, and se ek as r edre ss, discovery and supplementation of the rec ord, they have be en re so lve d b y

Judg e F a c c iol a ’s or de r d e nyingdis c ov e ry and the pa rt ie s’ a g re e me nt t o a dd

c e rt a in documents to the re cord. Insofar as the a rguments focus on PBG C’s method of re questing input befor e issuing the 2006 L etter, the y also fail. No pa

rty has explained what proc edure was nece ssary , but not provided, to comply with constituti onal due pr ocess r equire ments. Nor has any party disputed PBGC’s conte ntion that the letter wa s an informa l adjudication subject to the minimal procedura l require ments of 5 U.S.C. § 555 or argued that PBG C’s proce ss failed to mee t those requir ements. Ther efor e ther e is no basis for the Court to conclude that a ny proce dural violations occurr ed. See P ension Bene fit Guar. Cor

p. v. LTV Corp. , 496 U.S. 633, 655-56 (1990) ( noting that infor

mal adjudication does not c all for the pr ocedur es, such a s notice and the opportunity

to submit fac ts, arguments, and propose d finding s, nece ssary for f ormal a dju dic a tio ns and

ho ldi ngthat “ fa ilure to p ro vid e [suc h p ro c e dure s] w he re the Du e Pr oc e ss Clause itself does not re quire them (which has not bee n asser ted her e) is ther efor e not un lawf ul” ); se e als o 5 U.S.C. § 555 (requiringonly that “[p] rompt notice shall be g iven of the denial in whole or

in part of a

written application, petition, or other reque st of an intere sted person made in connec tion with any ag ency proce eding ” and “ the notice sha ll be acc ompanied by a br ie f s tate me nt o f t

he g ro un ds fo r d e nia l” ); Zotos Int’l, Inc. v. Young , 8 30 F .2 d 3 50 , 3 53 (D .C. Cir. 1987) (noting that informal adjudica tion is “a categ ory

for whic h no proce dures a re sp e c if ie d” ). Con se qu e ntl y , th e Court a g re e s w ithPB GC ’s a sse rt ion that PB GC is e nti tle d to summary judgme nt as to Count I Iof the Plan’s Third- Party Complaint, which alleg es a due proce ss violation. 14 that th e pla

n is str uc tur e d a nd a c tua lly op e rate s o n a

n o ng oin g ba sis is d isp os iti ve .” De f. ’s Mo t. fo r S umm . J. at 13 -1 4. PB GC the re fo re argue s th a t it wa s a pp ro pr iate to c on c lud e that be c a us e the Plan has not preve nted cost-shiftingbetwee n employ ers—in other words, bec ause the Plan holds all employ ers’ assets in one a ccount a nd has no mec hanism for e nsuring that eac h employ er fu nd s o nly the be ne fi ts o f i ts o wn

e mpl oy e e s— it “ cannot be an ag g reg ate of single -employ er plans, reg ardle ss of what the pa rties intended, what the plan documents state, or how the plan ha s been tr eate d in the past.” De f.’s Reply at 19. Sara L ee, the AB A Plan, and L ewis B rothers ha ve all filed oppositions to PBGC’s motion. Each ar g ues that PBGC’s 2006 de termination was a rbitrar y and ca pricious. None of

7Specifica lly , Article X I I Iof the Plan states that “ [t ]hi s Plan constitutes an 8 a sso c iatio n o f s ing le e mpl oy e r p lans ” and that “ it i s th e fu

nd ame nta l c on c e pt a

nd int e nt o f t

his Plan that the contributions of ea ch sepa rate employ er w ill be used only to provide bene fits for Participants (a

nd Be nefic iaries ther eof) by rea son of such Participa

nts’ employ

ment by such employ ers; and only

contributions by

such employ er w ill be used to provide bene fits for such Participants (a

nd Be nefic iaries) .” AR 1378. 15 the se pa rt ie s r e fute s PB GC ’s state me nt o f t he a pp lic a ble sta nd ard ; in ste a d, the y

take iss ue wi th PBGC’s interpr etation of the f acts be fore it. The Court conc ludes, upon consider ation of the 2006 L etter a s a whole, that PBGC’s decision wa s “base d on a conside ration of the r eleva nt fac tors,” does not re flec t “a c lear err or of judgme nt,” and is there fore not arbitrar y or ca pricious. Ma rsh , 490 U.S. at 378. The letter ref lects consider ation of the history of the Plan and the 1979 deter mination as well as evide nce of the Plan’s oper ation over time. PBG C places most emphasis on the a bsence of re strictions on the use of e mploy ers’ funds, and the Court be lieves the log ic of that foc us stands up to the defe rential standa

rd of r eview it is bound to apply . For the re asons explained below, the opposing pa

rties’ a rguments fail to persua de the Court other wise. A. P BGC’ s Consid erat ion of Evid ence Be yond th e P lan Docum ents Does N ot Re nder th e 20 06 De te r m ina ti on A r bit r ar y a nd C apr ic iou s Sara L e e argue s th a t PB GC sh ou ld h ave loo ke d to the Pla n’ s g ov e rn ingdo c ume nts , whi ch ex pres s t he i nt entto be an agg regate o f si ngle- emp lo y er pl ans , andno fur th er. T he A BA 8 Plan and its Trustees a lso argue that PBG C should not have considere d evidenc e beyond the Plan’ s g ov e rn ingdo c ume nts “ wh e re a s h e re the pla n o n it s f a c e is a n ‘ a g g re g a te .’ ” Cr os sClaimant ABA Plan’ s Opp’n to Def .’s Mot. for Summ. J . at 26 (“ Plan Opp’n”)
. PBGC ac knowledg es that the Plan docume nts are e vidence of intent to cre ate a n
a g g re g a te of

sin g le -e mpl oy e r p lans . B ut i t c on te nd s th a t th e re le va nt p ro vis ion s o f t

ho se16

do c ume nts me re ly

state tha t in te nt r a the r t

ha n im ple me nti ngit; the langua g e its e lf “ do [es ] nothing to minimiz e the r isk of cost shifting a mong c ontributing e mploy ers.” Def .’s Reply at 23. Fur thermore , PBGC ar g ues, plan doc uments are not controlling when ther e is contra dictory evidenc e of a

plan’s ac tual operation. PBGC has the be tter ar g ument. Although its 2006 L etter c lear ly conce des that the Plan’s foundational doc uments prese nt the Plan as an a g g reg ate of separ ate plans, A R 1570, it was
a pp ro pr iate —p ro ba

bly e ve n n e c e ssa

ry —f or PB GC to l oo k b e y on d th a t la ngua g e to a sse ss whether the ac tual operation of the Plan confor med to it. The standar d articulated in the 1979 and 2006 L etters c alls for lookingto the operation of a plan, a nd there is no reason why PBGC sh ou ld n ot d o s o. Th e fe w c a se s w hic h s he d li g ht o n th is i ssu e , in c lud ingc a se s Sa ra L e e c ite s to support its argument, do not provide support for the proposition that looking at e vidence beyond plan documents is improper. See P ension Bene fit Guar. Cor

p. v. Artra Group, Inc

. , 1 9 9 3 WL 22 53 70 , at *2 (N .D . I ll. June 23 , 1 99 3) (a ff ir min g the c on c lus ion

of the PB GC B oa

rd of Ap pe a ls that a plan wa s an ag g reg ate of single -employ er pla

ns and conduc ting the r eview by asking , afte r
acc epting the B oard’ s conclusion that the plan doc uments “ensur e that the c ontributions of eac h employ er w ill go to its employ ees a nd to no one else,” “whe ther the [plan] was actua lly operated in s uc h a mann e r a s to ind ic a te a

dif fe re nt r e su lt” ); Nowell v. Cent. Serv. Assoc. , 106 F. Supp. 2d 888, 894-95 (S.D. Miss. 2000) (c oncluding that a plan wa s a multiple-employ er pla n wher e the plan documents de scribed it as suc h and “[t]here is nothing in the r ecor d to indicate that the Plan [was] administered other

than as re cited ther ein”) . There fore , the Court will not reverse the 2006 de te rm inatio n o n th is b a sis
.In particula r, the Court re fer s to arguments reg ardingrepr esentations on Form 9 5 5 0 0 s s u b m i t t e d t o th e IR S an d

i nth e tw o l e t t e r s , w r i t t e nb y a P l ana t t o r

n e y an d a c tu ar y, respe ctively , ref

ere nced in the 2006 L etter. The same re asoningapplies to Sara L ee’ s argument that la ngua g e in e mpl oy e rs ’ P art ic ipatio n A g re e me nts is s ig nif ic ant. Although the Court acknowle dg es that PBGC discussed the se fa ctors in the 2006 10 L etter, it does not appe ar that the PBGC re sted its conclusion on them. Courts do not require perf ection in ag ency

decisionmaking
. See M

otor Vehicle M

frs. Ass’n , 463 U.S. at 43 (“‘ We may no t su pp ly a re a so ne d b a sis fo r t

he a g e nc y ’s a c tio n th a t th e a g e nc y its e lf ha s n ot g ive n. ’ We wi ll, howeve r, ‘uphold a de cision of less than idea l clarity if the ag ency ’s path may

rea sonably

be d i s ce rn ed
. ’” (q u o t i n g Chenery Corp. , 3 32 U. S. at 19 6; Bo wm an Tra ns p. In c . v . A rk

an sa s-Be st Freight System , 419 U.S. 281, 286 (1974))) . Acc ording ly , the Court does not believe that mention of fac tors other than those most sig nificant to an a g ency deter mination requires reve rsing an other

wise re asonable decision. 17 B. The Re as oni ng i n t he 20 06 Le tt e r Do e s N otLe ad t o t he Co nc lusi on t hatth e De te r m ina ti on W as Ar bit r ar y a nd C apr ic iou s Th e pa rt ie s o pp os ingPB GC ’s mot ion fo r s umm ary

jud g me nt m ake a

va ri e ty of argume nts dis putin g PB GC ’s ana ly sis of e vid e nc e be y on d th e Pla

n d oc ume nts . Se ve ra l of

the se argume nts
are beside the point; disag ree ments betwee n PBGC and the othe r par ties reg ardinghow the Plan has pre sented itself to g overnme ntal ag encie s are not releva nt to a deter

mination of how the Plan 9 h as o p er at ed
. L i k e t h e P l an d o cu m en t s , ev i d en ce o f h o w t h e P l an p re s en t edi t s el f i nt ax fi l i n gs

10 and the like is not as mea ningf ul as evidenc e of ma

nag ement of the Plan’s acc ount where the “ce ntral fa ctor” in disti ng uishing be tween ty pes of plans is “the availability of funds he ld by

an entity to provide bene fits.” Two a rguments relate d to the Plan’s operation merit more discussion. 1. The AB A P lan ’s sing le ac c ount F ir st, Sara

L e e take s is su e wi th P B GC ’s fo c us on the AB A Pl an’ s p ra c tic e of ke e pin g a ll
e mpl oy e rs ’ f

un ds in a sin g le a c c ount. Sara

L e e argue s th a t th e Pla

n ma de c le ar t o PB GC pr ior to its 1979 determination that it did not have separ ate a ccounts “ and the PB GC determined that the AB A Plan qualified a s an ag g reg ate of single -employ er pe nsion plans any way .” Sara

L ee O pp’nSara L ee a sserts in this section of its filing, as e lsewher e, that PBG C’s conce rn 11 about its own liabilit y

motivated PBGC’s dete rmination and constitutes a c onflict of intere st. Other tha n reque sting discove ry

—which, as e x plained above , is no longe r a pe nding issue be fore the Court—Sara L ee r equests no par ticular re lief to reme dy

its concer

n. The Court see s no rea son, or appr opriate ma nner, to a ct upon Sara

L ee’ s contention. Cf. Doolin Sec. Sav. Bank , F.S.B. v. Fe d. Deposit Ins. Corp. , 53 F.3d 1395, 1407 ( 4th Cir. 1995) (holding, in r esponse to an argument the Fe dera l Deposit I nsuranc e Corporation was biased in makinga par ticular a sse ssm e nt b e c a

us e of its pe c un iary

int e re st i n th e outc ome , th a t “ fi nd ing[the a g e nc y ] bia se d in this case would se riously

undermine the ability

of ag encie s in ge nera l to adjudicate disputes that aff ect their officia l policies”). L e wi s B ro the rs c on te nd s th a t “ annua l a c tua ri a l a dju stm e nts [] ef

fe c tiv e ly 12 minimi zed or eliminated the risk of f unds attributable to the contr ibutions of one employ er be ing us e d to pa

y the be ne fi ts o f a

no the r e mpl oy e r’ s e mpl oy e e -p art ic ipa nts .” Th ir d- Part

y De f. L e wi s Br os.’ Opp’n to De f.’s Mot. for Summ. J . at 12. B ut L ewis B rothers points to no evidenc e that 18 at 39. The AB A Plan and its Trustees make a similar a rgument, rea soning that it is arbitra ry 11
and c a pr ic iou s f or PB GC to r e a c h a

dif fe re nt c on c lus ion

in 2 00 6 th an in

19 79 ba se d o n th e same information re g ardingthe Plan’s comming led ac count. PBGC re plies that it has “neve r said” that “a plan’ s lack of se parate ac counts is . . . alone dispositi ve” of

the prope r categ orization of a plan. De f.’s Reply at 19. Instead it contends that the 2006 L etter r elies not on the same inf ormation ava ilable in 1979 but on new evide nce of

“ on g oin g pla

n o pe ratio n, ” re ve a lin g that e mpl oy e rs ’ f un ds have be e n u se d to pa y be ne fi ts t o other e mploy ers’ employ ees, that informed its decision. Id. at 20-22. PBGC’s position is not unreasonable a nd the Court will therefor e def er to it. Acc ording to PBGC’s standar d for disting uishing be tween multiple-e mploy er pla ns and ag g reg ates of single -employ er pla

ns, beca use the Plan’s funds w ere held in a sing le ac count, “[r]estrictions on the use of suc h funds indicate that the entity may be an a g g reg ate of

single plans.” AR 1567. Sara L ee a

nd the AB A Plan have not pointed to any evidenc e demonstrating that suc h restric tions exis t. On the other

hand, PBG C has pointed to evidence of a la ck of r estrictions. This evidenc e 12annua l a dju stm e nts oc c ur re d, no r d oe s it

dis pute the va lid ity

of PB GC ’s e vid e nc e that th e y did no t. AR

48 7 is a pa g e fr om a

do c ume nt t itl e d Summa

ry Pla n D e sc ri pti on , a

pp are ntl y 13 distributed by

the Plan to employ ees who will rece ive bene fits from the Plan, see AR 468, which contains the stateme nt that “there is . . . no separate annua l valuation for e ach E mploy er’ s contributions.” Fur

thermore , insofar a s this new information is consistent with the Plan’s 14 repr esentations of how it would operate g oing f orwa rd fr om 1979, PBGC is permitted to corre ct a prior, e rrone ous conclusion. Se e Go od Sa ma rit an Ho sp . v . S

ha lal a , 508 U.S. 402, 417 (1993) (“ [ A] nad m i n i s tra t i v e a gen cy i s n o td i s qu al i fi edfr o mch an gi n g i t s m i n d
. ” ( qu o t i n g NLRB v. Iron W or k e rs , 434 U.S. 335, 351 (1978)))
. Sara L ee sought to supplement the administrative rec ord with documents re lating 15 to severa l of these ter

minations. The rec ord now include s these additional mater ials. 19 inc lud e s a state me nt b y

the Plan’ s a c tua

ry that th e Pla

n d oe s n ot c a lc ulate ind ivi du a l e mpl oy e rs ’
a sse ts a nd lia bil iti e s o n a

n o ng oin g ba sis , A R 77 3; se e als o AR 487, and a c alculation that 13
se ve ra l e mpl oy e rs ha d n e g a tiv e ba lanc e s in the Pla n a c c ount i n 2 00 4, AR

66 2. In li g ht o f t

his evidenc e, the Court ca

nnot conclude that there is no “r ational conne ction betwee n the fa cts found and the c hoice made .” Sta teFa rm , 4 6 3 U. S
. at4 3 (q u o t i n g Burlington T ruck Lines , 371 U.S. at 168) (inter

nal quotation marks omitted). 14 2. Em plo ye r te r m ina ti ons Sara L ee a lso asserts that the manne r in which ter minations of participatingemploy ers h av e o c c ur

r e d d e m o n s tr a t e s th e P l an ’ s s t a tu s a s ana g g r e g a t e o f s i n g l e - e mp l o y e r

p l an s . In pa rt ic ula r, Sara L e e no te s th a t te rm inatin g e mpl oy e rs su bmi tte d te rm inatio n d oc ume nts to P B GC , th e P l ani n t e n d e d

t o h av e n o l i a

b i l i ty f o r th e e mp l o ye e s o f

th a te mp l o ye r , an d , m o s ts i g n i f i c an t l y, PBGC treated the ter

minations as single- employ er te rminations. The Plan and its Trustee s 15 make a related ar g ument focuse d on the re quirement that a terminatingemploy er c orre ct anyThe 2006 L etter doe s not cite to the evidenc e in the re cord de monstrating that 16 terminatingemploy ers ha d neg ative bala nces, but the A BAPlan itself has stated that “in se vera l c a se s te rm inatin g e mpl oy e rs have be e n c a lle d u po n to c on tr ibute a dd iti on a l a sse ts i n o rd e r t o make the Plan suff

icient for te rmination purposes.” A R 880. 20 sh or tf a ll c a us e d b y a ne g a tiv e ba lanc e a t th e tim e of te rm inatio n, arguin g that th is r ule “ a ssu re [s] that only assets attributable to e ach te rminating employ er ma y be used to pa

y benef its for that employ er’ s employ ees.” Plan Opp’n at 31. PBGC re sponds, reg ardingSara L ee’ s argument, that its “routine proc essing [of employ er terminations] i n acc ordanc e with the now- revoke d 1979 L etter . . . is not evidenc e of the Plan’s status.” Def

.’s Reply at 24-25. As to the AB A Plan’s asser tion, PBGC argues that the signific ance of ca lculations of terminatingemploy ers’ assets and liabilities lies in the resulting demonstrations that various pa rticipatingemploy ers ha d neg ative bala nces in the Plan a ccount at the tim e of

the ir te rm inatio ns . 16 Ag ain, PBGC’s r easoningpasses muster unde r the de fer ential standar d of re view the Court must apply . First, it is consistent with P BG C’s 1979 determination that the Plan, participating e mploy ers, a nd PBGC treated terminations as sing le-e mploy er te rminations. The 1979 L etter itself indicates that as a r esult of the conc lusion it announce s, “an e mploy er’ s
c e ssatio n o f p art ic ipatio n c on sti tut e s a pla n te rm inatio n. ” AR

21 2. I t is no t e rr or

fo r P B GC to
re a so n th a t a dh e re nc e to i ts o ri g ina l de te rm inatio n is no t de te rm inativ e of the a pp ro pr iate cate g orization of the Plan. Second, the Court finds re asonable PBGC’s view that calculations
reve aling some employ ers’ neg ative bala nces a re r eleva nt to a deter

mination of whether employ er f

unds were available to pay benef its to ot her e mploy ers’ employ ees. B eca use the Plan does not regularly

calc ulate the ba lance s of individual employ ers, it is far from cle ar e rror

to treatSara L e e and the AB A Pl an a lso make argume nts re g ard ingha rm that w ill ari se 17 from the r etroa ctive natur e of the 2006 L etter. PB GC responds that the 2006 L etter doe s not a dd re ss t he re tr oa c tiv e a

pp lic a tio n o f i ts c on c lus ion , ma kin g the op po sin g pa

rt ie s’ argume nts “complete ly

speculative.” De f.’s Reply at 25. B eca

use the 2006 L etter state s that it is “effe ctive imm e diate ly ,” no t th a t it

is r e tr oa c tiv e , th e Court

ne e d n ot a dd

re ss t he se argume nts . 21 information g ather ed whe n terminations occur red a s evidenc e of the Plan’s operation. F urth e r m o r e , a tl e a s to n e o th e r

c o urth a s h e l d

th a tth e o p p o s i t e c o n c l u s i o nw a s e r r o n e o u s . In Pe ns ion Be ne

fit Gu aran ty

Cor p. v . P ota sh , 1986 WL3809 (W.D.N.Y. Mar . 26, 1986), the c ourt reje cted PB GC’s relianc e on a pla n’s “r econstruc tion of . . . financia l statements . . . to include allocation of a ssets by

employ er” to support a conc lusion that a plan was a n ag g reg ation of sin g le -e mpl oy e r p lans : [T] he re construction of se parate asset a ccounts . . . c annot demonstrate a r e s tr ic ti o nu

p o nth e av a il a

b il it y o f a s s e ts o nano n g o in g b a s is a t t h e ti me o f

[a pa rt ic ipatin g e mpl oy e r’ s] w ith dr awa l. T he ne e d f or su c h r e tr oa c tiv e me a sure s is in fac t an admission that assets had not bee n seg reg ated, a llocated or restric ted per employ er dur ing the rele vant per iod. I ndeed the rec ord conta ins evidence that actua l asset allocations had been pe rfor med prior to [the date of the re c on str uc tio n] on ly

up on the wi thd

ra wa l of an e mpl oy e r, fu

rt he r i nd ic a tin g that, on an ong oing ba sis, assets had bee n g ener ally available
. Id. at *6. The 2006 de termination is consistent with this logic . The Court does not believe that PBGC’s re asoningin the 2006 L etter r eg ardingterminations ref lects a r ever sible “cle ar e rror of judgme nt.” Ma rsh , 490 U.S. at 378. B e c a us e the Court

c on c lud e s th a t th e 20 06 de te rm inatio n is no t arb itr ary and c a pr ic iou s, PBGC is entitled to summary judgme nt as to claims that the deter mination should be rever sed. 1722 IV . C ON CL USI ON For the fore g oing r easons, the Court c oncludes that PBG C’s motion for summary judgme nt [ #46] shall be gr anted a s to all remainingcounts of Sara L ee’ s Second Amende d Com pla int and the AB A Pl an’ s T hir d- Part y Com pla int . A n a

pp ro pr iate or de r a c c omp anie s th is memorandum opinion. Henr y H. Kenne dy , J r. Un i t edS t at es Di s tri ctJ u d ge