Document: 467 U.S. 717 104 S.Ct. 2709 81 L.Ed.2d 601 PENSION BENEFIT GUARANTY CORPORATIONv.R.A. GRAY & COMPANY. OREGON-WASHINGTON CARPENTERS-EMPLOYERS TRUST FUND v. R.A. Nos. 83-245, 83-296. Supreme Court of the United States Argued April 16, 1984. Decided June 18, Syllabus The Employee Retirement Income Security Act (ERISA), enacted in 1974, created a pension plan termination insurance program whereby Pension Benefit Guaranty Corporation (PBGC), wholly owned Government corporation, collects premiums from covered private retirement plans and provides benefits to participants if their terminates with insufficient assets support its guaranteed benefits. For multiemployer plans, PBGC's payment was not become mandatory until January 1, 1978. During intervening period, PBGC had discretionary authority pay upon such plans. If exercised discretion benefits, employers who contributed during five years preceding were liable amounts proportional share plan's contributions that period. As coverage date approached, Congress became concerned significant number experiencing extreme financial hardship would result numerous forcing assume obligations excess capacity. Ultimately, after deferring August 1980, extensively debating issue withdrawal liability 1979 Multiemployer Plan Amendments 1980 (MPPAA), requiring an employer withdrawing fixed certain debt amounting employer's proportionate "unfunded vested benefits." These provisions made take effect approximately months before statute into law. When appellee building construction firm, within this 5-month withdrew it been contributing under collective-bargaining agreements labor union, notified incurred demanded payment. Appellee then filed suit Federal District Court, seeking declaratory injunctive relief against claiming, inter alia, retroactive application MPPAA violated Due Process Clause Fifth Amendment. rejected claim granted summary judgment favor PBGC. Appeals reversed, holding because reasonably relied on contingent included ERISA prior passage equities generally favored over plan. Held: Application period statute's enactment does violate Pp. 728-734. (a) burden showing legislation complies due process is met by justified rational legislative purpose. Here, for conclude MPPAA's purposes could be more fully effectuated applied retroactively. One primary problems identified encouraged withdrawals properly have even greater incentive withdraw they knew impose burdensome being considered. therefore utilized prevent taking advantage lengthy while debated necessary revisions statute. 728-371. (b) It doubtful invalid suddenly without any deliberate consideration. But assuming advance notice constitutionally compelled, ample imposed MPPAA. Not only did liability, but various proposals uniformly effective dates. 731-732. (c) principles embodied Amendment's never held coextensive prohibitions existing state impairments pre-existing contracts. Rather, limitations Contract contrasted less searching standards economic Clauses. 732-733. (d) Unlike invalidated Railroad Board Alton R. Co., 295 330, 55 758, 79 L.Ed. 1468, which required finance pensions former employees already compensated employed, merely requires compensate at time withdrawal. 733-734. 705 F.2d 1502, reversed remanded. Baruch Fellner, Washington, D.C., appellants. Thomas M. Triplett, Portland, Or., appellee. Justice BRENNAN delivered opinion Court. 1 question presented these cases whether violates We hold not. 2 * A. 3 In careful study 88 Stat. 829, 29 U.S.C. § 1001 et seq. Among principal "comprehensive reticulated statute" ensure beneficiaries deprived anticipated sufficient funds accumulated Nachman Corp. Corp., 446 359, 361-362, 374-375, 100 1723, 1726, 1732-1733, 64 354 (1980). See Alessi Raybestos-Manhattan, Inc., 451 504, 510-511, 101 1895, 1899-1900, 68 402 (1981). wanted guarantee "if worker has promised defined benefit retirement—and he fulfilled whatever conditions are obtain benefit—he actually will receive it." Nachman, supra, U.S., 375, S.Ct., 1733; Alessi, 510, 1899. 4 Toward end, Title IV ERISA, 1301 seq., program, administered corporation Department Labor, 1302. those §§ 1322, 1361. maintained single employers, obligation took immediately 1974. 1381(a)-(b). however, 1381(c)(1). 5 1381(c)(2)-(4). 1364. other words, subject dependent next decision exercise addition, individual exceed 30% net worth. 1362(b)(2). 6 hardship. This, turn, resulted To avoid potential collapse deferred 18 months—until July 1979—extending PGBC's insure terminating interim. Pub.L. 95-214, 91 1501.1 also directed prepare comprehensive report analyzing faced recommending appropriate action. S.Rep. No. 95-570, pp. 1-4 (1977), U.S.Code Cong. Admin.News 1977, p. 4128; H.R.Rep. 95-706, (1977). way, "time legislate, necessary, comes effect." 123 Cong.Rec. 36800 (1977) (statement Sen. Williams); id., 36800-36802. 7 issued Corporation, Study Required P.L. 95-214 (1978). findings adequately protect adverse consequences when terminate participation in, or from, summarized: 8 "The basic problem rules designed primarily They do provide efficient mechanism reducing remaining employers. may encourage some instances (e.g., where imminent). Changes should considered: 9 "(1) increasing system, 10 "(2) disincentive voluntary withdrawals, 11 "(3) reduce remove disincentives entry, 12 "(4) work with, instead against, provisions." Id., 96-97.2 alleviate suggested new unfunded liabilities attributable participation. 97-114.3 tentative policy recommendations submitted February 27, 1979, incorporated proposed Executive Branch formally sent three later, S.1076, 96th Cong., 1st Sess. (1979). Most significantly present purposes, bill 1979—the initially Congress. 108. This chosen avoiding considered one Senator noted, "to . opportunistic imposition liability" serve "as deterrent hasty withdrawal." 126 20234 (1980) (remarks Matsunaga). 13 remainder much 1980. By two Committees House Senate approved substantially similar versions bill, each containing liability. Finance Committee yet completed sought consideration legislation. 3, n. 1. At same time, advanced imposing 29, Javits later explained: 14 committees decided part move up contained earlier original purpose date—namely, encouragement considered—has achieved. noted product strong political pressures caught date. I realize permitting increases burdens question, appears accept order enact deadline action." 20179 Javits). 15 9236-9237 Bentsen). 16 unanimously passed version including date, May 12233. version, adopting endorsed vote 85-1. 20247. Conference accepted Senate's signed law President September 26, (MPPAA Act), 96-364, 94 1208. enacted, benefits," calculated as difference between value current assets. 1381, 1391. Pursuant 1461(e), B 17 Gray Co. (Gray) firm doing business Oregon. Under series Oregon State Council Carpenters (Council), Oregon-Washington Carpenters-Employers Trust Fund (Pension Plan), 1301(a)(3). advised agreement expired continued engage industry, deemed completely withdrawn pursuant 1383(b). subsequently that, $201,359. set forth schedule quarterly payments accordance schedule. After preliminary correspondence trustees, informed delinquent payments. thereafter Oregon, PBGC.4 19 Gray's complaint raised several constitutional claims, challenge Amendment.5 particular, occurred MPPAA, directly affected retroactivity provision Act. Moreover, contended, sustained arbitrary irrational, impaired Council. 20 claim, 549 F.Supp. 531 (1982). Specifically, court analyzed constitutionality retroactively applying four-part test established Seventh Circuit 592 947 (1979), aff'd statutory grounds, requires, examined (1) reliance interest parties, (2) area previously subjected regulatory control, (3) burdens, (4) limit moderate impact imposed.6 criteria, concluded satisfied heavy parties attempting demonstrate acted arbitrarily irrationally enacting socioeconomic 21 Ninth although too believed four-factor standard use Shelter Framing 1502 (1983). 1511-1512, action Plan, 1512-1514. 22 Both invoked appellate jurisdiction 28 1252. probable jurisdiction, 464 912, 271, 78 253 (1983),7 now reverse. II 23 starting point analysis our Usery Turner Elkhorn Mining 428 96 2882, 49 752 (1976). Elkhorn, we effects Coal Mine Health Safety 1969 amended Black Lung Benefits 1972. Act, coal mine operators disabled pneumoconiosis though terminated industry enacted. nonetheless little difficulty upholding attack Clause. noted: 24 "It well Acts adjusting life come presumption constitutionality, complaining violation establish legislature irrational way. See, e.g., Ferguson Skrupa, 372 726, 83 1028, 93 (1963); Williamson Lee Optical 348 483, 487-488, 75 461, 464, 99 563 (1955)." 15, 2892. 25 further explained deference accorded field national no applicable Provided supported legitimate furthered means, judgments about wisdom remain exclusive province executive branches: 26 "[I]nsofar compensation disabilities bred employment enactment, retrospective effect—although, [after enactment]. And suffered actual employment. clear readjusting rights unlawful solely upsets otherwise settled expectations. Fleming Rhodes, 331 100, 67 1140, 1368 (1947); Carpenter Wabash 309 23, 60 416, 84 558 (1940); Norman Baltimore Ohio 294 240, 407, 885 (1935); Home Bldg. Loan Assn. Blaisdell, 290 398, 54 231, 413 (1934); Louisville Nashville Mottley, 219 467, 31 265, 297 (1911). true duty based past acts. Lichter States, 334 742, 1294, 92 1694 (1948); Welch Henry, 305 134, 59 121, 87 (1938); Funkhouser Preston 163, 243 (1933)." 15-16, 2892-2893 (footnotes omitted). 27 sure, went recognize meet future effects. follow what can legislate prospectively retrospectively. aspects legislation, prospective aspects, must process, justifications latter suffice former." 16-17, 2892-2893. simply itself example, found "the measure spread costs employees' profited fruits labor—the consumers." 2893. Similarly, cases, supporting easily identified. Indeed, quite explicit explaining reason retroactivity. believe eminently Javits); 20244 723-724. Withdrawals occurring increase ultimately stability themselves. amendments progressed through so encompass accomplish purposes. recently income tax Darusmont, 449 292, 296-297, 549, 551-552, 66 513 (1981) (per curiam), statutes "confined short limited periods practicalities producing customary congressional practice." loathe reject common practice conducting judicial review III 30 amici offer reasons subjecting form heightened scrutiny. persuaded, arguments. First, contends satisfy requirements unless persons "notice" changing legal circumstances "an opportunity conform conduct [the] legislation." Brief 20. doubts, lack consideration, often occurs floor "riders" added last minute pending cf. 299, 553 (similarly relevant consideration), dates among provisions. 723-725.8 32 Second, apply developed Clause, Art. I, 10, cl. ("No shall pass Law impairing Obligation Contracts ."), reviewing federal legislation.9 Energy Resources Group, Inc. Kansas Power Light 459 400, 103 697, 74 569 (1983); Allied Structural Steel Spannaus, 438 234, 98 2716, 57 727 held, Philadelphia, B. W.R. Schubert, 224 603, 589, 56 911 (1912). extent recent decisions addressed issue, New Jersey, 431 17, 13, 97 1505, 1515, 52 And, civil offend "particularly 'harsh oppressive,' " ibid. (quoting 147, 125, (1938), citing 14-20, 2891-2894), differ prohibition clearly enunciated Elkhorn. 33 Finally, urges resuscitate Court's 1935 1934 railroad employees. Assuming, 19, 2894, aspect "retains vitality" despite changes ensuing years, again find distinguishable litigation. Alton, working railroads, 34 Congress' purpose, withstands Accordingly, remanded proceedings consistent opinion. 35 ordered. 96-24, 70, 96-239, 341, finally 96-293, 610. On occasion, providing thorough complex issues posed superseded Congressional testimony Director caused plans: "A key ongoing especially declining industries, Employer contribution base. pushes rate higher levels fund service liabilities, generated longer participating plan, so-called inherited liabilities. rising encourage—or force—further thereby funded ever-decreasing vicious downward spiral continue reasonable possible continue." Termination Insurance Issues: Hearings Subcommittee Oversight Ways Means, 95th 2nd Sess., (1978) Matthew Lind). Again, provided elaborate explanation: "To deal problem, considers approach complete funding fair fall "We think would, first all, discourage curtail incentives flee Where occur, cushion plan." moved injunction restrain steps collect assessed. denied motion. App. 50-57. requested determination 1399(b)(2). response, "Decision Review," concluding "accurately determined: method allocating Gray, amount Plan's offered 531, 534 (Ore.1982). Although initiated arbitration issues, 1401(a), waived right arbitration, F.Supp., 534. different treatment afforded opposed single-employer equal protection component Amendment, Ex Post Facto 9, Constitution, Act's procedural trial jury. see 538-539, refused reach 539; 4, supra. reached Appeals, 1515 (CA9 1983), pressed relying (1978), 1468 (1935). below, control affecting burdens. infra, 732-734. underpinnings employed occasion consider factors mentioned might determining rational. Cf. 367-368, 12, 1729-1730, (explicitly limiting presented). least Courts Courts, satisfies standards. Textile Workers Standard Dye Finishing 725 843 (CA2 1984); Peick 724 1247 (CA7 cert. pending, 465 1098, 1588, 80 121; Republic Industries, Teamsters Joint Council, 718 628 (CA4 83-541. extensive nationwide All addressing challenges upheld Washington Star International Typographical Union Negotiated 235 U.S.App.D.C. 729 (1984); supra; Because 5, actively pursued F.2d, 852 ("Notice everywhere. [Employers] pervasive regulation, existed field, advent imminent"); 1269 ("[T]he intent very beginning process. [E]mployers [the retrospective] cannot argue unanticipated liabilities" (footnote justifiably claimed applies, either own terms convincing historical evidence, actions National Government. records debates Constitutional Convention leave doubt Framers explicitly contracts literal Clause: "MR. GERRY entered observations inculcating importance public faith, propriety restraint put states contracts; alleging ought laid like prohibitions. He motion effect. seconded." J. Elliott, Debates Constitution 546 (2 ed. 1876). Ferrand, Records 1787, 619

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