IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

DENNIS BLACK, et al.,

Plaintiffs,

v.

PENSION BENEFIT GUARANTY CORP., et al.,

Defendants.

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)

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)

)

)

)

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Case No. 2:09-cv-13616

Hon. Arthur J. Tarnow

Magistrate Judge Donald A. Scheer

PLAINTIFFS’ MOTION FOR AN ORDER TO SHOW CAUSE AS TO WHY THE 

PENSION BENEFIT GUARANTY CORPORATION SHOULD NOT BE HELD IN 

VIOLATION OF THIS COURT’S ORDER ON PRELIMINARY INJUNCTION

Plaintiffs hereby move for an order to show cause as to why the Defendant Pension 

Benefit Guaranty Corporation (“PBGC”) is not in violation of the Court’s January 26, 2010 

Order on Plaintiffs’ Motion for Preliminary Injunction. A supporting brief accompanies this 

motion. Counsel for Plaintiffs has contacted counsel for the PBGC regarding this motion, and 

the PBGC does not consent to the motion. 

 Respectfully submitted, 

 /s/ Anthony F. Shelley________________

Alan J. Schwartz (P38144)

JACOB & WEINGARTEN, P.C.

777 Somerset Place

2301 Big Beaver Road

Troy, Michigan 48084

Telephone: 248-649-1900

Facsimile: 248-649-2920

E-mail: alan@jacobweingarten.com

Anthony F. Shelley 

Timothy P. O’Toole 

Michael N. Khalil

MILLER & CHEVALIER CHARTERED

655 15th St. NW, Suite 900

Washington, DC 20005

Telephone: 202-626-5800

Facsimile: 202-626-5801

E-mail: ashelley@milchev.com

 totoole@milchev.com

 mkhalil@milchev.com

 Attorneys for Plaintiffs

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7633 Filed 03/16/10 Page 1 of 7
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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

DENNIS BLACK, et al.,

Plaintiffs,

v.

PENSION BENEFIT GUARANTY CORP., et al.,

Defendants.

)

)

)

)

)

)

)

)

)

)

)

Case No. 2:09-cv-13616

Hon. Arthur J. Tarnow

Magistrate Judge Donald A. Scheer

PLAINTIFFS’ BRIEF IN SUPPORT OF THEIR MOTION FOR

AN ORDER TO SHOW CAUSE AS TO WHY THE PENSION BENEFIT

GUARANTY CORPORATION SHOULD NOT BE HELD IN VIOLATION

OF THIS COURT’S ORDER ON PRELIMINARY INJUNCTION

Plaintiffs are participants in the Delphi Retirement Program for Salaried Employees (“the 

Plan”). Plaintiffs’ lawsuit asserts in pertinent part that Defendant Pension Benefit Guaranty 

Corporation (“PBGC”) improperly terminated the Plan in violation of the Employee Retirement 

Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq., and in violation of the due 

process clause of the Fifth Amendment to the United States Constitution. In October of 2009, 

Plaintiffs filed a motion for a preliminary injunction seeking to maintain their pension benefits at 

pre-termination levels (which were then in effect but would be reduced by the PBGC starting on 

February 1, 2010) pending resolution of their claims against the PBGC. See Dkt. No. 7.

On January 26, 2010, this Court entered an order (the “January 26th Order”) on Plaintiffs’ 

preliminary injunction motion. In the January 26th Order, the Court ruled that benefit reductions 

could take place as scheduled on February 1, 2010, but only if the PBGC took one of two steps 

designed to ensure that irreparable harm would not occur to Plaintiffs should this Court 

ultimately determine that Plan termination was unlawful. See Dkt. No. 101. First, the PBGC 

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7634 Filed 03/16/10 Page 2 of 7
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could place sufficient funds in a segregated escrow account such that equitable relief could be 

granted if Plaintiffs were to prevail. Second, as an alternative, the PBGC could stipulate that 

Plaintiffs would be entitled to receive from the PBGC the difference between the reduced 

benefits the PBGC was going to begin paying and full benefits under the Plan, if the Court 

determined the Plan had been illegally terminated. The Court concluded in the January 26th

Order that, if the PBGC were to meet either condition, Plaintiffs would be assured that they

would be made whole if they prevailed in the lawsuit, and thus irreparable harm would not occur

pending judicial review of the Plan’s termination.

On January 28, 2010, the PBGC filed a motion informing the Court it would not meet 

either of the conditions and sought the alteration or amendment of the January 26

th Order. See 

PBGC’s Motion to Alter or Amend the Court’s January 26, 2010 Order on Plaintiffs’ Motion for 

Preliminary Injunction, Dkt. No. 107 (hereafter, the “PBGC Motion to Alter or Amend”). The 

PBGC claimed that, consistent with its powers under ERISA, it “could not” satisfy either 

condition set forth in the January 26th Order. Id. at 2. The PBGC also argued that, even if the 

Court were to find that the PBGC acted improperly in terminating the Plan, this Court’s remedial 

powers are limited to “reversing PBGC’s termination of the Plan.” Id. at 3. The Court 

supposedly could do nothing more than require the “PBGC to return the Plan to DPH Holdings, 

Inc. (‘Old Delphi’), the liquidating debtor.” Id.

In opposition, Plaintiffs asserted that federal law, namely ERISA and the Constitution, 

authorizes this Court to award equitable relief to redress injury. See 29 U.S.C. § 1303(f)(1) (any

participant who is “adversely affected by any action of the [PBGC] with respect to a plan . . . 

may bring an action against the [PBGC] for appropriate equitable relief in the appropriate 

court”); 5 U.S.C. § 705 (“On such conditions as may be required and to the extent necessary to 

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7635 Filed 03/16/10 Page 3 of 7
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prevent irreparable injury, the reviewing court . . . may issue all necessary and appropriate

process to postpone the effective date of an agency action or to preserve status or rights pending 

conclusion of the review proceedings.”). Plaintiffs further underscored that equitable relief can 

be sufficiently flexible so as to ensure that the PBGC makes Plaintiffs whole. See, e.g., CarterJones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 846 (6th Cir. 1999). 

On February 1, 2010, without satisfying either of the conditions imposed by the Court, 

and without any other authorization for doing so, the PBGC began reducing Plaintiffs’ benefits.

On February 17, 2010, this Court denied the PBGC Motion to Alter or Amend. As the 

Court explained, there was substantial legal support for each alternative the Court had provided 

in the January 26th Order. See Order Granting Plaintiffs’ Motion for Leave to File a Response to 

Defendant’s Motion and Denying Defendant PBGC’s Motion to Alter or Amend the Court’s 

January 26, 2010 Order on Plaintiffs’ Motion for Preliminary Injunction, Dkt. No. 122 (hereafter, 

“February 17

th Order”). In the February 17th Order, the Court specifically “decline[d] to accept 

Defendant’s position that Plaintiffs cannot obtain any relief in this lawsuit if the Court concludes 

that the PBGC acted improperly.” Id. at 3. 

As a result of this Court’s denial of the PBGC Motion to Alter or Amend, the PBGC had 

two lawful options available to it: (1) it could appeal the January 26th Order and seek a stay of

its terms pending appeal; or (2) it could comply with the January 26th Order, either by:

(a) “setting aside an escrow account containing funds made up of the 

difference between Plaintiffs’ current benefit levels paid under the Plan 

and the reduced level of benefits Plaintiffs are set to begin receiving 

effective February 1, 2010;” or

(b) “fil[ing] a stipulation with this Court specifying that if this Court found, 

after a consideration of the merits of Plaintiffs’ complaint, that PBGC 

improperly terminated the Plan and wrongfully reduced benefits, then 

Plaintiffs would be entitled in this action to (and would be compensated by 

PBGC with) the difference between their current benefit levels paid under 

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7636 Filed 03/16/10 Page 4 of 7
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the Plan and the reduced level of benefits Plaintiffs were set to begin 

receiving effective February 1, 2010.”

February 17

th Order at 1-2. Without satisfying one of these two options, the PBGC could not 

lawfully continue its benefit reductions.

On March 4, 2010, the PBGC filed a “Statement Regarding the Court’s January 26, 2010 

Order On Plaintiffs’ Motion For Preliminary Injunction.” Dkt. No. 126 (hereafter, “PBGC 

Statement”). In the PBGC Statement, the PBGC announced that it would not presently appeal 

the January 26th Order, but also did not agree to follow either of the possible courses of action set 

forth by the Court in the January 26th Order. Instead, the PBGC asserted in pertinent part:

While PBGC must comply with the limitations of ERISA, see 29 U.S.C. § 1361, 

PBGC can, within the parameters of its statutory obligations, stipulate that if 

termination of the Plan is overturned by a final and non-appealable court order, 

PBGC will relinquish the Plan and its more than $2 billion in assets, along with

payment and participant records that will allow the administrator to determine and 

pay the amount of Plan benefits owed to each participant to date.

PBGC Statement at 2. 

Plaintiffs submit that the PBGC’s proposed course of action is not permitted by the 

January 26th Order. The PBGC has not agreed to avail itself of either of the two options 

permitted by this Court in the January 26th Order, namely: (1) placing the disputed funds in 

escrow; or (2) stipulating that if Plaintiffs prevail they will be “entitled in this action to (and 

would be compensated by PBGC with) the difference between their current benefit levels paid 

under the Plan and the reduced level of benefits Plaintiffs were set to begin receiving effective 

February 1, 2010.” Instead, the PBGC’s suggestion that, if the Plan’s termination were 

overturned “by a final and non-appealable court order” it would simply “relinquish the Plan,” 

PBGC Statement at 2, is just a re-articulation of “Defendant’s position[s] that Plaintiffs cannot 

obtain any relief in this lawsuit if the Court concludes that the PBGC acted improperly” and that 

the PBGC supposedly lacks “authority” to pay Plaintiffs anything -- positions that the Court 

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7637 Filed 03/16/10 Page 5 of 7
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(recognizing that it has the power to order equitable relief) has already declined to accept. 

February 17

th Order at 3; compare with PBGC Motion to Alter or Amend at 3 (PBGC asserting 

that Court is limited to requiring the “PBGC to return the Plan to DPH Holdings, Inc. (‘Old 

Delphi’), the liquidating debtor”).

Plaintiffs have contacted Counsel for the PBGC, who stated that the PBGC opposes the 

relief here requested. Counsel for the PBGC indicated that the PBGC believes the two 

conditions set forth in the Court’s January 26th Order were only contingencies and that the PBGC 

was not directed to implement either of them. To the contrary, Plaintiffs believe that the January

26th Order made clear that the PBGC could not begin reducing pension benefits under the Plan 

without complying with one of those two stated conditions. Nevertheless, the PBGC began 

reducing pension payments to Plan participants on February 1, 2010, and now has emphasized in 

the recent PBGC Statement that the PBGC is not complying with, and currently does not intend 

to comply with, either condition of the January 26th Order. 

For these reasons, Plaintiffs respectfully ask this Court to enter an order to show cause as 

to why the PBGC should not be found to be in violation of the January 26th Order. Plaintiffs also

request that the Court take all necessary and appropriate action to enforce its January 26th Order.

 Respectfully submitted,

 /s/ Anthony F. Shelley____________

Alan J. Schwartz (P38144)

JACOB & WEINGARTEN, P.C.

777 Somerset Place

2301 Big Beaver Road

Troy, Michigan 48084

Telephone: 248-649-1900

Facsimile: 248-649-2920

E-mail: alan@jacobweingarten.com

Anthony F. Shelley 

Timothy P. O’Toole 

Michael N. Khalil

MILLER & CHEVALIER CHARTERED

655 15th St. NW, Suite 900

Washington, DC 20005

Telephone: 202-626-5800

Facsimile: 202-626-5801

E-mail: ashelley@milchev.com

 totoole@milchev.com

 mkhalil@milchev.com

 Attorneys for Plaintiffs

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7638 Filed 03/16/10 Page 6 of 7
CERTIFICATE OF SERVICE

I hereby certify that on March 16, 2010, I electronically filed the foregoing with the Clerk 

of the Court using the CM/ECF system which will send notification of such filing to the 

following e-mail addresses:

landy.ralph@pbgc.gov (Ralph Landy)

david.glass@usdoj.gov (David M. Glass)

edward.w.risko@gm.com (Edward W. Risko)

rswalker@jonesday.com (Robert S. Walker)

susan.ashbrook@ohioattorneygeneral.gov (Susan E. Ashbrook)

/s/ Anthony F. Shelley____________________

Case 2:09-cv-13616-AJT-MKM ECF No. 130, PageID.7639 Filed 03/16/10 Page 7 of 7