Opinion ID: 2951014
Heading Depth: 1
Heading Rank: 4

Heading: the highest contribution rate

Text: We begin our analysis by discussing the meaning of “the highest contribution rate at which the employer had an obligation to contribute” under Section 1399(c)(1)(C)(i)(II) where there are multiple CBAs and multiple contribution 10 The District Court had jurisdiction pursuant to 29 U.S.C. §§ 1401 and 1451. The parties claim that the District Court had jurisdiction under 29 U.S.C. § 1132. However, 29 U.S.C. § 1401(b)(2) states: “Upon completion of the arbitration proceedings in favor of one of the parties, any party thereto may bring an action, no later than 30 days after the issuance of an arbitrator’s award, in an appropriate United States district court in accordance with section 1451 of this title to enforce, vacate, or modify the arbitrator’s award.” Section 1451(c), in turn, states: “The district courts of the United States shall have exclusive jurisdiction of an action under this section without regard to the amount in controversy, except that State courts of competent jurisdiction shall have concurrent jurisdiction over an action brought by a plan fiduciary to collect withdrawal liability.” We have jurisdiction pursuant to 28 U.S.C. § 1291. Our review of a District Court’s grant of summary judgment is plenary. See, e.g., Watson v. Eastman Kodak Co., 235 F.3d 851, 854 (3d Cir. 2000). We “apply the same standard as that used by the District Court.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 580-81 (3d Cir. 2009). 12 rates for different classes of employees. As discussed above, the District Court selected the single rate of $3.69 per hour which was the highest contribution rate under any of the employer’s three CBAs. See IBT Local 863 Pension Fund, 5 F. Supp. 3d at 717-20. The court reasoned that Section 1392(a)(1)’s reference to “one or more collective bargaining (or related) agreements” shows that Congress contemplated the possibility of multiple CBAs in directing in Section 1399(c)(1)(C)(i)(II) that the single highest contribution rate be used. We agree. Accordingly, we hold that, even where there are multiple contribution rates under multiple CBAs, Section 1399(c)(1)(C)(i)(II) requires that the single highest rate determine the amount of an employer’s annual withdrawal liability payment. Woodbridge makes several unpersuasive arguments in support of its contrary position. First, Woodbridge contends that Section 1392 has no bearing on the meaning of “highest contribution rate” because it contains neither the term “highest contribution rate,” nor “contribution rate.” Woodbridge’s reading is far too restrictive. Section 1399(c)(1)(C)(i)(II), plainly refers to “the highest contribution rate at which the employer had an obligation to contribute under the plan.” Thus, the meaning of “obligation to contribute” is essential to understanding this subsection. Section 1392(a), defines “obligation to contribute” for purposes of Section 1399 and other provisions of ERISA relating to employer withdrawals. See 29 U.S.C. § 1392(a) (stating that it provides a definition“[f]or purposes of this part”). Second, Woodbridge argues that there is an ambiguity in the statute where multiple CBAs call for different contribution rates. In order to resolve this ambiguity, Woodbridge offers both the legislative history and the aforementioned PBGC Opinion Letter 90-2. It characterizes the PBGC letter as endorsing a “contract-by-contract” approach under which its annual withdrawal liability would be “the sum of the products described in Section 4219(c)(1)(C)(i) computed separately for each of the employer’s contracts.” (1990 WL 260108, at .) Woodbridge argues that when both the legislative history and the PBGC letter are read together, they establish that the 13 Board must consider the highest contribution rate for each class of employees, rather than the single highest contribution rate overall. Because we disagree that the statute is ambiguous, we are not at liberty to examine the legislative history and the PBGC letter.11 See S.H. ex rel. Durrell v. Lower Merion Sch. Dist., 729 F.3d 248, 259 (3d Cir. 2013) (“Legislative history has never been permitted to override the plain meaning of a statute.”). Statutory interpretation begins with the plain language of the statute and when the language is clear, the court “must enforce it according to its terms.” Jimenez v. Quarterman, 555 U.S. 113, 118 (2009). A statute is “ambiguous only where the disputed language is ‘reasonably susceptible of different interpretations.’” In re Phila. Newspapers, LLC, 599 F.3d 298, 304 (3d Cir. 2010). The mention of “one or more collective bargaining (or related) agreements” in Section 1392(a) makes clear that Congress contemplated a situation, such as the one before us, in which there would be multiple CBAs. In such a situation, Section 1399(c)(1)(C)(i)(II) expressly directs that “the highest contribution rate” be used. There is no ambiguity in the definite article “the.” In short, when Sections 1392 and 1399 are read together, it is clear that Congress appreciated that an employer might contribute at different rates under multiple plans and designated “the highest” rate as the appropriate rate to apply in calculating annual payments of the withdrawal liability. Woodbridge’s last argument is that applying only the single highest contribution rate will lead to an unduly harsh 11 It is noteworthy, however, that as the District Court pointed out, “the PBGC did not opine that an alternative approach could be forced on a board against its will.” IBT Local 863 Pension Fund, 5 F. Supp. 3d at 718 n.5. Indeed, the PBGC opined merely that a contract-by-contract approach was “reasonable and consistent with the intent of the statute.” (1990 WL 260108, at .) The PBGC did not suggest that plan administrators are required to employ a contract-bycontract approach in lieu of a literal application of Section 1399(c)(1)(C)(i)(II). (1990 WL 260108, at .) 14 result in which its annual withdrawal liability payment will be greater than the annual payments it was making when it was participating in the plan. We agree that that is the result but we do not agree that it is unduly harsh. Moreover, we must enforce a statute according to its terms. We are not at liberty to rewrite it to address Woodbridge’s perceived inequity. See Lamie v. U.S. Tr., 540 U.S. 526, 534, 538 (2004) (“[W]hen the statute’s language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms. . . . Our unwillingness to soften the import of Congress’s chosen words even if we believe the words lead to a harsh outcome is longstanding.”). In addition, as we have just noted, we do not agree that the higher annual contributions following withdrawal are necessarily inequitable or that Congress was unaware that this could be the result of selecting the highest contribution rate of multiple CBAs. Woodbridge’s equitable argument ignores the fact that under Section 1399(c)(1)(C)(i), its annual payments are capped at 20 years even if more than 20 annual payments would be required to completely satisfy Woodbridge’s withdrawal liability. Thus, Woodbridge will not necessarily pay more following withdrawal than it would have had it remained in the fund. Yet the higher annual payment for 20 years clearly deters employers from withdrawing from multiemployer funds without fully funding their share of the liability. We do not believe that Congress intended that a withdrawing employer pay only the amounts that would ordinarily be due under the pension plan. Indeed, the Supreme Court has noted that it is “not convinced that MPPAA aims to make withdrawing employers pay an actuarially perfect fair share, namely, a set of payments in amounts that, when invested, would theoretically produce (on the plan’s actuarial assumptions) a sum precisely sufficient to pay (the employer’s proportional share of) a plan’s estimated vested future benefits.” Milwaukee Brewery, 513 U.S. at 426. Features of the MPPAA, such as the statute’s forgiveness of de minimis amounts under Section 1389 and the waiving of the balance after 20 years of annual payments under Section 1399(c)(1)(B), all indicate that Congress contemplated a scheme under which withdrawal payments would not correspond exactly to the employer’s allocable unfunded 15 amounts under the plan. See id. (Also noting that these features mean that “if an employer’s normal annual contribution was low compared to the withdrawal charge, the presence or absence of withdrawal-year interest (which shows up at the end of the payment schedule) will make no difference (for the last payments will never be made).”); see also Bay Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192, 196-97 (1997) (“Payments are set at a level that approximates the periodic contributions the employer had made before withdrawing from the plan. . . .”) (emphasis added).