Document ID: EPA-HQ-OAR-2004-0022-0189
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2004-04-07T04:00Z

CONCRETE
PIPE
&
PRODUCTS
OF
CALIFORNIA,
INC.
v.
CONSTRUCTION
LABORERS
PENSION
TRUST
FOR
SOUTHERN
CALIFORNIA
certiorari
to
the
united
states
court
of
appeals
for
the
ninth
circuit
No.
91­
904.
Argued
December
1,
1992
­­
Decided
June
14,
1993
The
Multiemployer
Pension
Plan
Amendments
Act
of
1980
(
MPPAA)
amended
the
Employee
Retirement
Income
Security
Act
of
1974
(
ERISA)
to
provide
that
in
certain
circumstances
an
employer
withdrawing
from
a
multiemployer
plan
incurs
as
"
withdrawal
liability"
a
share
of
the
plan's
unfunded
vested
benefits,
29
U.
S.
C.
""
1381
1391.
Withdrawal
liability
is
assessed
by
means
of
a
notification
by
the
"
plan
sponsor"
and
a
demand
for
payment.
"
1399(
b).
An
unresolved
dispute
is
referred
to
arbitration,
where
(
1)
the
sponsor's
factual
determinations
are
"
presumed
correct"
unless
a
contesting
party
"
shows
by
a
preponderance
of
the
evidence
that
the
determination
was
unreasonable
or
clearly
erroneous,"
"
1401(
a)(
3)(
A);
and
(
2)
the
sponsor's
actuary's
calculation
of
a
plan's
unfunded
vested
benefits
is
presumed
correct
unless
a
contesting
party
"
shows
by
a
preponderance
of
the
evidence"
that,
inter
alia,
"
the
actuarial
assumptions
and
methods"
used
in
a
calculation
"
were,
in
the
aggregate,
unreasonable,"
"
1401(
a)(
3)(
B).
Petitioner
Concrete
Pipe
is
an
employer
charged
with
withdrawal
liability
by
the
trustees
of
respondent,
a
multiemployer
pension
plan
(
Plan).
After
losing
in
arbitration,
Concrete
Pipe
filed
an
action
to
set
aside
or
modify
the
arbitrator's
decision
and
raised
a
constitutional
challenge
to
the
MPPAA,
but
the
court
granted
the
Plan's
motion
to
confirm
the
award.
The
Court
of
Appeals
affirmed.
Held:
1.
The
MPPAA
does
not
unconstitutionally
deny
Concrete
Pipe
an
impartial
adjudicator
by
placing
the
determination
of
withdrawal
liability
in
the
plan
sponsor,
here
the
trustees,
subject
to
"
1401'
spresumptions.
Pp.
12­
33.
(
a)
Even
assuming
that
the
possibility
of
trustee
bias
toward
imposing
the
greatest
possible
withdrawal
liability
would
suffice
to
bar
the
trustees
from
serving
as
adjudicators
of
Concrete
Pipe's
withdrawal
liability
because
of
their
fiduciary
obligations
to
beneficiaries
of
the
Plan,
the
Due
Process
Clause
is
not
violated
here
because
the
first
adjudication
in
this
case
was
the
arbitration
proceeding,
not
the
trustees'
initial
liability
determination.
The
trustees'
statutory
notification
and
demand
obligations
are
taken
in
an
enforcement
capacity.
Pp.
12­
16.
(
b)
Nor
did
the
arbitrator's
adjudication
deny
Concrete
Pipe
its
right
to
procedural
due
process.
While
the
"
1401(
a)(
3)(
A)
presumption
shifts
the
burden
of
persuasion
to
the
employer,
the
statute
is
incoherent
with
respect
to
the
degree
of
certainty
required
to
overturn
a
plan
sponsor's
factual
determination.

In
light
of
the
assumed
bias,
deference
to
a
plan
sponsor's
determination
would
raise
a
substantial
due
process
question.
The
uncertainty
raised
by
this
incoherent
statute
is
resolved
by
applying
the
canon
requiring
that
an
ambiguous
statute
be
construed
to
avoid
serious
constitutional
problems
unless
such
construction
is
plainly
contrary
to
Congress's
intent.
Thus,
the
presumption
is
construed
to
place
the
burden
on
the
employer
to
disprove
an
alleged
fact
by
a
preponderance
permitting
independent
review
by
the
arbitrator
of
the
trustees'
factual
determinations.
The
approach
taken
by
the
arbitrator
and
courts
below
in
this
case
is
not
inconsistent
with
this
Court's
interpretation
of
the
first
presumption.
Pp.
17­
29.
(
c)
The
"
1401(
a)(
3)(
B)
presumption
also
raises
no
procedural
due
process
issue.
The
assumptions
and
methods
used
in
calculating
withdrawal
liability
are
selected
in
the
first
instance
not
by
the
trustees,
but
by
the
plan
actuary,
"
1393(
c),
who
is
a
trained
professional
subject
to
regulatory
standards.
The
technical
nature
of
the
assumptions
and
methods,
and
the
necessity
for
applying
the
same
ones
in
several
contexts,
limit
an
actuary's
opportunity
to
act
unfairly
toward
a
withdrawing
employer.
Moreover,
since
"
1401(
a)(
3)(
B)
speaks
not
about
the
reasonableness
of
the
trustees'
conclusions
of
historical
fact,
but
about
the
aggregate
reasonableness
of
the
actuary's
assumptions
and
methods
in
calculating
the
dollar
liability
figure,
an
employer's
burden
to
overcome
the
presumption
is
simply
to
show
that
an
apparently
unbiased
professional,
whose
obligations
tend
to
moderate
any
claimed
inclination
to
come
down
hard
on
withdrawing
employers,
has
based
a
calculation
on
a
combination
of
methods
and
assumptions
that
falls
outside
the
range
of
reasonable
actuarial
practice.
Pp.
29­
33.
2.
The
MPPAA,
as
applied,
does
not
deny
substantive
due
processin
violation
of
the
Fifth
Amendment.
The
imposition
of
withdrawal
liability
is
clearly
rational
here
because
Concrete
Pipe's
liability
is
based
on
a
proportion
of
its
contributions
during
its
participation
in
the
Plan.
Pp.
33­
39.
3.
The
MPPAA,
as
applied,
did
not
take
Concrete
Pipe's
property
without
just
compensation.
The
application
of
a
regulatory
statute
that
is
otherwise
within
Congress's
powers
may
not
be
defeated
by
private
contractual
provisions,
such
as
those
protecting
Concrete
Pipe
from
liability
beyond
what
was
specified
in
its
collective
bargaining
and
trust
agreements.
See
Connolly
v.
Pension
Benefit
Guaranty
Corporation,
475
U.
S.
211,
223­
224.
Examining
Concrete
Pipe's
relationship
with
the
Plan
in
light
of
the
three
factors
the
Court
has
said
have
particular
significance
for
takings
claims
confirms
this.
First,
the
Government
did
not
physically
invade
or
permanently
appropriate
Concrete
Pipe's
assets
for
its
own
use.
Second,
Concrete
Pipe
has
failed
to
show
that
having
to
pay
out
an
estimated
46%
of
shareholder
equity
is
an
economic
impact
out
of
proportion
to
its
experience
with
the
Plan,
since
diminution
in
a
property's
value,
however
serious,
is
insufficient
to
demonstrate
a
taking.
See,
e.
g.,
Euclid
v.
Ambler
Realty
Co.,
272
U.
S.
365,
384.
Third,
the
conditions
on
its
contractual
promises
did
not
give
Concrete
Pipe
a
reasonable
expectation
that
it
would
not
be
faced
with
liability
for
promised
benefits.
At
the
time
it
began
making
payments
to
the
Plan,
pension
plans
had
long
been
subject
to
federal
regulation.
Indeed,
withdrawing
employers
already
faced
contingent
liability
under
ERISA,
and
Concrete
Pipe's
reliance
on
ERISA's
original
limitation
of
contingent
withdrawal
liability
to
30%
of
net
worth
is
misplaced,
there
being
no
reasonable
basis
to
expect
that
the
legislative
ceiling
would
never
be
lifted,
see
Usery
v.
Turner
Elkhorn
Mining
Co.,
428
U.
S.
1,
16.
Pp.
39­
45.
936
F.
2d
576,
affirmed.
Souter,
J.,
delivered
the
opinion
of
the
Court,
which
was
unanimous
except
insofar
as
O'Connor,
J.,
did
not
join
the
sentence
to
which
n.
29
is
attached,
Scalia,
J.,
did
not
join
Part
III­
B%
1­
b,
and
Thomas,
J.,
did
not
join
Part
III­
B%
1.
O'Connor,
J.,
filed
a
concurring
opinion.
Thomas,
J.,
filed
an
opinion
concurring
in
part
and
concurring
in
the
judgment.
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