Court Opinion

ID: 2951014
Source: CourtListenerOpinion
Date Created: 2015-09-16 17:00:33.799005+00
Date Added: 2024-06-11T11:41:42.395447
License: Public Domain

PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT
                  _____________

                Nos. 14-1956 and 14-1957
                     _____________

          BOARD OF TRUSTEES OF THE IBT
            LOCAL 863 PENSION FUND,
                           Appellant/Cross-Appellee

                           v.

          C&S WHOLESALE GROCERS, INC.
           WOODBRIDGE LOGISTICS LLC,
                  Appellees/Cross-Appellants
                 _____________

       Appeal from the United States District Court
               For the District of New Jersey
  (D.C. Civil Action Nos. 2-12-cv-07823, 2-12-cv-07824)
         District Judge: Honorable Jose L. Linares
                       ____________

                Argued January 12, 2015

Before: MCKEE, Chief Judge, HARDIMAN and SCIRICA,
                   Circuit Judges

           (Opinion Filed: September 16, 2015)

Thomas J. Hart, Esq. (Argued)
Slevin & Hart
1625 Massachusetts Ave., N.W.
Suite 450
Washington, D.C. 20036

Kenneth I. Nowak, Esq.
Zazzali Fagella Nowak Kleinbaum & Friedman
One Riverfront Plaza
Suite 320
Newark, NJ 07102

       Counsel for Appellant/Cross-Appellee

Susan K. Hoffman, Esq. (Argued)
Matthew J. Hank, Esq.
Littler Mendelson
1601 Cherry Street
Suite 1400, Three Parkway
Philadelphia, PA 19102

       Counsel for Appellees/Cross-Appellants

                        ____________

                 OPINION OF THE COURT
                      ____________

McKEE, Chief Judge.

                   I.    INTRODUCTION

       This appeal arises from a disagreement between C&S
Wholesale Grocers, Inc./Woodbridge Logistics LLC
(“Woodbridge”) and the Board of Trustees of the IBT Local
863 Pension Fund (“the Board”) about the amount that
Woodbridge should pay annually after withdrawing from the
IBT Local 863 Pension Fund (“the Fund”) in 2011.1 At the
time of its withdrawal from the Fund, Woodbridge was the
largest wholesale grocery distributor by revenue in the United
States. The Board administers the Fund, which is a
multiemployer pension plan2 subject to the provisions of the

1
 As of September 1, 2011, the actuarial value of Fund assets
was $202,865,255, while the accrued benefit liabilities totaled
almost $400 million.
2
  As the name suggests, a multiemployer pension plan is one
to which multiple employers contribute, usually under
collective bargaining agreements. Concrete Pipe & Prods. of
Cal., Inc. v. Contr. Laborers Pension Tr. for S. Cal., 508 U.S.
605, 605-06 (1993). Under such a plan, employers’
                               2
Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq. Before withdrawing
from the Fund, Woodbridge had been contributing to it
pursuant to three collective bargaining agreements
(“CBAs”).3

        As a result of amendments to ERISA in the
Multiemployer Pension Plan Amendments Act of 1980
(“MPPAA”), 29 U.S.C. §§ 1381-1461, employers cannot
withdraw from multiemployer pension plans without
consequence. Instead, they still must pay the share of the
Fund’s total unfunded vested benefits allocable to them. The
parties here agree that the total amount that Woodbridge owes
is $189,606,875. Because Woodbridge has elected to satisfy
this “withdrawal liability” through annual payments instead
of a lump sum, the amount of those payments is at the heart
of this dispute.

         One of the provisions added to ERISA by the MPPAA,
29 U.S.C. § 1399(c)(1)(C)(i), provides that the annual
payments must be based on the “the highest contribution rate
at which the employer had an obligation to contribute under
the plan
. . . .” The first point of disagreement between the parties is
the meaning of “highest contribution rate.” The Board seeks
to select the single highest rate from the multiple contribution
rates established in the three CBAs under which Woodbridge
was contributing to the Fund. Woodbridge contends that it is

contributions are pooled in a general fund and can be used to
satisfy any of the plan’s obligations. Id. Multiemployer
plans are advantageous to employers because of their cost and
risk-sharing mechanisms. Simultaneously, these plans benefit
employees because, among other things, they are able to work
for any of the participating employers in any covered capacity
without losing service credit toward pension benefits. Id. at
606-07.
3
  The three CBAs are: (1) the Warehouse CBA, (2) the
Mechanics’ CBA, and (3) the Porters’ CBA. Participants in
the Fund are current and former employees in the trucking
and warehouse industry primarily located in New Jersey.

                               3
      responsible only for a weighted average of all of the
      contribution rates it is obligated to pay under the CBAs. The
      second point of disagreement is whether Woodbridge’s
      annual payment should include a 10 percent surcharge that
      Woodbridge had been paying pursuant to 29 U.S.C. §
      1085(e)(7)(A) before withdrawing from the Fund. This
      subsection is part of another amendment to ERISA, the
      Pension Protection Act of 2006 (“PPA”), 29 U.S.C. § 1085.
      The Board claims this surcharge should be included in the
      annual payment that Woodbridge owes.               Woodbridge
      disagrees.

             After an unsuccessful attempt at arbitration, both
      parties filed suit in the District Court. Thereafter, the District
      Court partially granted and partially denied the parties’ cross
      motions for summary judgment. The court ruled that the
      annual withdrawal liability payment should be based on the
      single highest contribution rate (rather than averaging the
      rates in Woodbridge’s CBAs), but should not include the
      surcharge. For the reasons that follow, we affirm the District
      Court’s order and hold that: (1) the “highest contribution”
      rate means the single highest contribution rate established
      under any of the three CBAs, and (2) the annual payment
      does not include the 10 percent surcharge.

II.          STATUTORY BACKGROUND

             Congress designed ERISA to regulate both single
      employer and multiemployer private pension plans. 29
      U.S.C. § 1001 et seq. In enacting ERISA, Congress sought to
      guarantee that “if a worker has been promised a defined
      pension benefit upon retirement -- and if he has fulfilled
      whatever conditions are required to obtain a vested benefit --
      he actually will receive it.” Nachman Corp. v. Pension
      Benefit Guar. Corp., 446 U.S. 359, 375 (1980). As
      mentioned above, this dispute focuses on multiemployer
      plans.

              A significant drawback of multiemployer pension
      plans is that “the possibility of liability upon termination of a
      plan create[s] an incentive for employers to withdraw from
      weak multiemployer plans.” Concrete Pipe & Prods. of Cal.,
      Inc. v. Contr. Laborers Pension Tr. for S. Cal., 508 U.S. 605,

                                      4
608 (1993). When an employer withdraws from a pension
plan before fully funding the amounts attributable to its
employees, the plan’s contribution base is reduced and the
remaining contributing employers have no choice but to
absorb the higher costs through increased contribution rates.
See Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211,
216 (1986). This may jeopardize the plan’s survival because
the remaining employers have an increased incentive to also
withdraw. Id. The MPPAA was enacted to mitigate the
incentives that employers would otherwise have to withdraw
from multiemployer pension plans mired in financial
difficulty. See Concrete Pipe, 508 U.S. at 608-09.

        Under the MPPAA, when an employer completely
withdraws from a multiemployer pension plan, it incurs
withdrawal liability that corresponds to the value of the
benefits in the plan that have vested and are attributable to its
employees.4 29 U.S.C. § 1391(c)(3), provides the formula
with which a plan’s actuaries are to calculate the amount of
this liability. 5 In short, this liability is “the employer’s

4
  A complete withdrawal is when an employer either
“permanently ceases to have an obligation to contribute under
the plan” or “permanently ceases all covered operations under
the plan.” 29 U.S.C. § 1383(a).
5
 Section 1391(c)(3)(B) directs that an employer’s allocable
amount of unfunded vested benefits be based on a fraction:

       (i) the numerator of which is the total amount
       required to be contributed by the employer
       under the plan for the last 5 plan years ending
       before the withdrawal, and

       (ii) the denominator of which is the total
       amount contributed under the plan by all
       employers for the last 5 plan years ending
       before the withdrawal, increased by any
       employer contributions owed with respect to
       earlier periods which were collected in those
       plan years, and decreased by any amount
       contributed to the plan during those plan years
                               5
proportionate share of the plan’s ‘unfunded vested benefits,’
calculated as the difference between the present value of
vested benefits and the current value of the plan’s assets.”
Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S.
717, 725 (1984) (citing 29 U.S.C. §§ 1381 and 1391 in
explaining that the withdrawal liability is “a fixed and certain
debt to the pension plan”). An employer may make a one-
time payment to satisfy its entire withdrawal liability or it
may amortize the debt in equal annual payments under
Section 1399(c)(1)(A).6 The formula for calculating the
amount of each of these annual payments is provided in 29
U.S.C. § 1399(c)(1)(C)(i):

       Except as provided in subparagraph (E), the
       amount of each annual payment shall be the
       product of—

       (I) the average annual number of contribution
       base units for the period of 3 consecutive plan
       years, during the period of 10 consecutive plan
       years ending before the plan year in which the
       withdrawal occurs, in which the number of
       contribution base units for which the employer
       had an obligation to contribute under the plan is
       the highest, and

       (II) the highest contribution rate at which the
       employer had an obligation to contribute under
       the plan during the 10 plan years ending with
       the plan year in which the withdrawal occurs.

      The contribution base units mentioned in Section
1399(c)(1)(C)(i)(I) are generally the compensable or paid

       by employers who withdrew from the plan
       under this section during those plan years.
6
 The MPPAA provides that the balance of the employer’s
withdrawal liability is forgiven after it has made payments
annually for 20 years. See 29 U.S.C. § 1399(c)(1)(B) (“In
any case in which the amortization period . . . exceeds 20
years, the employer’s liability shall be limited to the first 20
annual payments . . . .”).
                                6
hours for which an employer contributes to the plan on behalf
of its employees. See Huber v. Casablanca Indus., Inc., 916
F.2d 85, 95 n.21 (3d Cir. 1990) (describing contribution base
units as “e.g., hours worked, weeks worked, tons of coal”),
abrogated on other grounds by Milwaukee Brewery Workers’
Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414
(1995). The term “obligation to contribute,” in 29 U.S.C. §
1399(c)(1)(C)(i)(II), is defined in 29 U.S.C. § 1392(a) as an
obligation arising either “(1) under one or more collective
bargaining (or related) agreements, or (2) as a result of a duty
under applicable labor-management relations law.”

        In 2006, Congress amended ERISA again. It enacted
the PPA “to protect and restore multiemployer pension plans
in danger of being unable to meet their pension distribution
obligations in the near future.” Trs. of the Local 138 Pension
Tr. Fund v. F.W. Honerkamp Co. Inc., 692 F.3d 127, 130 (2d
Cir. 2012). Under Section 1085(b)(2)(A), which was added
by the PPA, a multiemployer pension plan that is less than 65
percent funded is in “critical status.” When a plan is in
critical status, Section 1085(a)(2) requires the plan sponsor to
adopt and implement a rehabilitation plan. This rehabilitation
plan “must set forth new schedules of reduced benefits and
increased contributions, from which participating employers
and unions may choose when it is time to negotiate successor
CBAs.” Honerkamp, 692 F.3d at 131.

       In addition to requiring a rehabilitation plan, the PPA
imposes an automatic surcharge from 30 days after the
employer has been notified that the plan is in critical status
until the adoption of a new CBA in accordance with the
rehabilitation plan. 29 U.S.C. § 1085(e)(7)(C)-(D). In the
first year, the surcharge is equal to five percent of the
contributions required under the CBA. Id. § 1085(e)(7)(A).
In subsequent years, the surcharge is fixed at 10 percent of
the contributions.      Id.    Under Section 1085(e)(7)(B),
surcharges are “due and payable on the same schedule as the
contributions on which the surcharges are based. Any failure
to make a surcharge payment shall be treated as a delinquent
contribution under [29 U.S.C. § 1145] . . ..”
Section 1085(e)(9)(B), in turn provides that “[a]ny surcharges
under paragraph (7) shall be disregarded in determining the
allocation of unfunded vested benefits to an employer under

                               7
       section 1391, except for purposes of determining the
       unfunded vested benefits attributable to an employer under
       section 1391(c)(4) or a comparable method approved under
       section 1391(c)(5).”

             On December 16, 2014, Congress passed the
       Multiemployer Pension Reform Act of 2014 (“MPRA”).
       Pub. L. No. 113-235, Div. O, 128 Stat. 2130, 2773-2822
       (amending the PPA, 29 U.S.C. §§ 1084–1085 and 26 U.S.C.
       §§ 431–432, among other things). As amended by the
       MPRA, 29 U.S.C. § 1085(e)(9)(B) now states:

             Any surcharges under subsection (e)(7) shall be
             disregarded in determining the allocation of
             unfunded vested benefits to an employer under
             section 4211 and in determining the highest
             contribution rate under section 4219(c), except
             for purposes of determining the unfunded
             vested benefits attributable to an employer
             under section 4211(c)(4) or a comparable
             method approved under section 4211(c)(5).

       This amendment does not affect the surcharges here as they
       accrued before December 31, 2014. Thus, unless specifically
       noted, the statutory references and language in this opinion
       refer to ERISA as it was before the MPRA.

III.         FACTUAL AND PROCEDURAL HISTORY

              In February 2011, Woodbridge completely withdrew
       from the Fund after closing its Northern New Jersey facilities
       for economic reasons. The three CBAs under which
       Woodbridge contributed to the Fund established multiple
       hourly contribution rates ranging from $1.50 to $3.69 per
       hour. Since the plan year beginning on September 1, 2008,
       the Fund had been in “critical status,” as defined by Section
       1085(b)(2)(A)(i) of the PPA. Accordingly, Woodbridge had
       been paying the Fund a surcharge for over two years before
       withdrawing. The surcharge was fixed at 10 percent of
       Woodbridge’s contributions by the time Woodbridge
       withdrew.

                                     8
        Once Woodbridge withdrew from the Fund, it fell to
the Board to determine the total amount of unfunded vested
benefits that Woodbridge owed pursuant to Section
1391(c)(3). The parties do not dispute that the correct amount
is $189,606,875. Because Woodbridge opted to make annual
payments, rather than extinguishing the debt with a single
payment, the Board also calculated the amount of these
annual payments using the formula in Section
1399(c)(1)(C)(i). In interpreting “the highest contribution
rate” mentioned in that subsection, the Board selected the
single highest contribution rate in the CBAs. That rate was
$3.69 per hour established in the Warehouse CBA. The
Board also interpreted the text of 29 U.S.C. § 1392(a) and its
definition of the “obligation to contribute” mentioned in
Section 1399(c)(1)(C)(i)(II) as including the surcharge that
Woodbridge had been paying. Thus, the Board added 10
percent to $3.69 per hour and arrived at a total contribution
rate of $4.06 per hour. The resulting calculation pursuant to
Section 1399(c)(1)(C)(i) resulted in an annual withdrawal
liability payment of $8,553,551. This amount far exceeded
the highest annual payment that Woodbridge had ever made
before withdrawing from the Fund, $5,777,708.

       Woodbridge disputed the Board’s methodology. It
argued that the Board should not have used the single highest
contribution rate in all of the CBAs or included the 10 percent
surcharge in calculating its withdrawal liability. Thus, the
parties submitted the following issues to an arbitrator:7

      (1) Did the Fund comply with ERISA Section
      4219(c)(1)(C) [29 U.S.C. § 1399(c)(1)(C)] and
      the regulations promulgated thereunder when it
      calculated Woodbridge’s withdrawal liability
      payment schedule by taking into account the
      highest contribution rate at which Woodbridge
      was obligated to contribute to the Fund,

7
  29 U.S.C. § 1401(a)(1) provides that “[a]ny dispute between
an employer and the plan sponsor of a multiemployer plan
concerning a determination made under sections 1381
through 1399 of this title shall be resolved through
arbitration.”

                               9
      notwithstanding the fact that the last bargaining
      agreements in effect allowed lower contribution
      rates for some employee classifications?

      (2) Is the Fund’s inclusion of Woodbridge’s
      [automatic] surcharges in the calculation of the
      contribution    rate   used     to    determine
      Woodbridge’s withdrawal liability payment
      schedule permissible under ERISA?

Bd. of Trs. of the IBT Local 863 Pension Fund v. C&S
Wholesale Grocers Inc. Woodbridge Logistics LLC, 5 F.
Supp. 3d 707, 713 (D.N.J. 2014) (second alteration in
original) (citation omitted).

        The arbitrator found that the term “the highest
contribution rate” as used in Section 1399(c)(1)(C)(i)(II) was
ambiguous. He resolved this ambiguity by consulting
legislative history and the Pension Benefit Guaranty
Corporation’s (“PBGC”) Opinion Letter 90-2.8 Based on
those two sources, he ruled that the Board should have
adopted a weighted average of the different contribution rates
established in each of the three CBAs, instead of selecting the
single highest contribution rate of $3.69.9 The arbitrator

8
  In that letter dated April 20, 1990, the PBGC addressed a
situation similar to this one in which the employer was
contributing to the multiemployer plan pursant to multiple
CBAs containing multiple contribution rates. (1990 WL
260108, at *3.) The question posed to the PBGC was
whether, under ERISA Section 4219(c)(1)(C)(i), the Board of
Trustees of the plan in question could use a “contract-by-
contract” approach to compute the employer’s annual
withdrawal liability payment as “the sum of the products
described in Section 4219(c)(1)(C)(i) computed separately for
each of the employer’s contracts.” Id. The PBGC opined that
this approach was “reasonable and consistent with the intent
of the statute.” Id.
9
 The arbitrator was also concerned that, as noted above, the
$8,553,551 annual payment that the Board calculated was
much greater than the highest annual payment of $5,777,708
                              10
rejected Woodbridge’s challenge to inclusion of the 10
percent surcharge, reasoning that 29 U.S.C. § 1085(e)(7)(B)
indicates that surcharges are contributions because they are
treated as delinquent contributions.    He believed Section
1085(e)(9)(B) “reinforced the conclusion that surcharges paid
by Woodbridge should be included in the highest contribution
rate by negative implication.” IBT Local 863 Pension Fund,
5 F. Supp. 3d at 715-16.

       Both parties filed complaints in the District Court.
The District Court reversed both of the arbitrator’s rulings in
an order resolving the parties’ cross motions for summary
judgment. The court held that the single highest contribution
rate in the three CBAs (the $3.69 per hour rate in the
Warehouse CBA) applied. The court concluded that Section
1399(c)(1)(C)(i)(II) is plain and unambiguous in referring to a
single contribution rate: “the highest contribution rate at
which the employer had an obligation to contribute under the
plan.” See IBT Local 863 Pension Fund, 5 F. Supp. 3d at 719
(citing Section 1399(c)(1)(C)(i)(II)). Accordingly, the court
declined to rely on sources beyond the statutory text. The
court interpreted the statute as contemplating multiple CBAs
in directing that the highest contribution rate be used because
the definition of “obligation to contribute” in 29 U.S.C. §
1392(a)(1) refers to “one or more” CBAs. Id. at 717.

       The court also held that the arbitrator should not have
included the surcharge in calculating Woodbridge’s annual
withdrawal liability payment. The court reasoned that the
“obligation to contribute” under Section 1392(a)(1) included
only amounts arising under the CBAs and the CBAs in
question did not include the surcharge. The court recognized
that, under Section 1392(a)(2), the “highest contribution rate”
is also that at which the employer had an obligation to
contribute “as a result of a duty under applicable labor-
management relations law[.]” It explained, however, that it
was not aware of any such law and the Board had not argued
that the surcharge arose under such a law. The court also
pointed out that, while contribution rates inform the value of
contributions, contributions are separate from and do not

that Woodbridge had ever made before withdrawing from the
Fund.
                              11
determine contribution rates. Thus, even if contributions and
surcharges are one and the same, the court reasoned, the
surcharge would not change the CBAs’ underlying
contribution rates.

       This appeal and cross appeal followed. Woodbridge
appeals the court’s decision to apply the single highest
contribution rate provided in the CBAs, and the Board
appeals the court’s decision to disallow the surcharge in
calculating Woodbridge’s annual withdrawal liability
payment.10

III. THE HIGHEST CONTRIBUTION RATE

       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 *3.)
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 *3.) The PBGC did not suggest that
plan administrators are required to employ a contract-by-
contract approach in lieu of a literal application of Section
1399(c)(1)(C)(i)(II). (1990 WL 260108, at *3.)

                              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).

IV. THE SURCHARGE

        The remaining issue which we must resolve is whether
“the highest contribution rate at which the employer had an
obligation to contribute” includes the 10 percent surcharge
imposed by Section 1085(e)(7)(A).12 As discussed above, the
District Court concluded that the surcharge should not be
included in the annual withdrawal liability payment. Section
1392(a) expands on the sources of the “obligation to
contribute,” stating: “the term ‘obligation to contribute’
means an obligation to contribute arising-- (1) under one or
more collective bargaining (or related) agreements, or (2) as a
result of a duty under applicable labor-management relations
law . . . .” Thus, we must decide if the surcharge arises under
either the CBAs or an “applicable labor-management
relations law.” We conclude that the surcharge does not arise
under either.

      A. The Surcharge Does Not Arise Under the CBAs

       The Board argues that, because Section 1085(e)(7)(B)
makes surcharges “due and payable on the same schedule as
the contributions” and provides that “failure to pay a
surcharge shall be treated as a delinquent contribution” under
Section 1145, the “statute regards both CBA and PPA-

12
  The parties do not dispute that the pension plan was in
critical status and the surcharge is 10 percent of the
contributions otherwise required under the applicable
collective bargaining agreement.

                              16
mandated employer contributions, and their respective rates,
in an identical manner.” Appellant Br. 26. Section 1145
governs delinquent contributions and states that “[e]very
employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan or under the
terms of a collectively bargained agreement shall . . . make
such contributions in accordance with the terms and
conditions of such plan or such agreement.” As the Supreme
Court has observed, “[t]he text of [29 U.S.C. § 1145] plainly
describes the employer’s contractual obligation to make
contributions but omits any reference to a noncontractual
obligation.” Laborers Health & Welfare Tr. Fund for N. Cal.
v. Advanced Lightweight Concrete Co., Inc., 484 U.S. 539,
546 (1988).        Because surcharges are noncontractual
obligations created by Section 1085(e)(7), they are not within
the scope of Section 1145. Indeed, this is precisely why
Section 1085(e)(7)(B) is necessary to ensure that surcharges
are treated similarly to contributions when delinquent.

       In addition, the phrase “treated as” in Section
1085(e)(7)(B) is telling. Congress would hardly need to
inform a plan’s actuaries that surcharges are to be “treated as”
contributions when delinquent if surcharges and contributions
were already identical for all purposes, including calculating
annual withdrawal payments. In other words, if surcharges
were contributions already, then Section 1085(e)(7)(B) would
be rendered redundant and meaningless.              It is well
established, however, that “legislative enactments should not
be construed to render their provisions mere surplusage.”
Dunn v. Commodity Futures Trading Comm’n, 519 U.S. 465,
472 (1997). In order to give effect to Section 1085(e)(7)(B),
surcharges cannot be treated as contributions except when
delinquent. Thus, the surcharge established in Section 1085
does not arise under the CBAs.

       B. The Surcharge Is Not Part of the “Highest
          Contribution Rate”

       Under Section 1392(a)(2), an “obligation to
contribute” may also arise “as a result of a duty under
applicable labor-management relations law.” Woodbridge
argues that the only “applicable labor-management relations
law” is the National Labor Relations Act (“NLRA”). The

                               17
Board contends that Section 1085 is also such a law.13
Woodbridge also argues that the Board waived this argument.
Assuming arguendo that the issue is not waived, the Board’s
position is not persuasive because it fails to distinguish
between contributions and contribution rates. Even if, as the
Board argues, the surcharge arises under the PPA and
assuming that the PPA is an “applicable labor-management
relations law,” the surcharge cannot be added to
Woodbridge’s annual payments unless it is part of the highest
contribution rate.

13
   Woodbridge is correct that the Supreme Court has
concluded that the NLRA is an “applicable labor-
management relations law.” See Advanced Lightweight
Concrete Co., 484 U.S. at 545-46 (“[Obligation to contribute]
is defined for the purposes of the withdrawal liability portion
of the statute in language that unambiguously includes both
the employer’s contractual obligations and any obligation
imposed by the NLRA.”) (emphasis added). The Court has
not concluded, however, that the NLRA is the only such law
and indeed, has suggested that the phrase “applicable labor-
management relations law” is meant generally. Cf. Bay Area
Laundry, 522 U.S. at 196 n.1 (“An ‘obligation to contribute’
arises from either a collective-bargaining agreement or more
general labor-law prescriptions. See 29 U.S.C. § 1392(a).”
(emphasis added)). Furthermore, nothing in ERISA suggests
that this Court should restrict the phrase “applicable labor-
management relations law” to the NLRA. Indeed, had
Congress meant only the NLRA, we presume it would have
specified that Act. As the statutory background above makes
clear, the PPA does address labor-management relations by
specifying what employers must do—e.g., comply with
rehabilitation plans, or have the default schedules imposed
upon them—when they underfund pension plans. Cf. also 29
U.S.C. § 1001a(a)(4)(A) (discussing congressional finding
that “withdrawals of contributing employers from a
multiemployer pension plan frequently result in substantially
increased funding obligations for employers who continue to
contribute to the plan, adversely affecting the plan, its
participants and beneficiaries, and labor-management
relations[.]”) (emphasis added).

                              18
       Section 1399(c)(1)(C)(i)(II), specifies that the annual
payments be based on the highest contribution rate at which
an employer has an obligation to contribute under the CBAs.
“Contribution rate” is widely used throughout the statute, but
never explicitly defined. See, e.g., 29 U.S.C. §§ 1396(a)(1),
1425(f), & 1426(c)(2). It is clear, however, as a matter of
common sense that contributions are distinct from
contribution rates. As the District Court aptly explained:

      [T]he “contribution rates” set forth in an
      employer’s CBAs with a multiemployer
      pension plan are distinct from the
      “contributions” that the employer generally
      pays to the plan. Although the contribution rates
      help determine the total value of the
      contributions, the contributions do not
      determine the contribution rates.

IBT Local 863 Pension Fund, 5 F. Supp. 3d at 722. A close
reading of ERISA further reinforces our conclusion that
contributions are not to be conflated with contribution rates.
For example, Section 1085(e)(3)(C)(iii) states that “[a]ny
failure to make a contribution under a schedule of
contribution rates provided under this subsection shall be
treated as a delinquent contribution under section 1145 of this
title and shall be enforceable as such.” (emphasis added).
Were contributions the same as contribution rates, that
provision would be redundant. Thus, the correct question is
whether surcharges are part of contribution rates (not whether
they constitute contributions) and we conclude that they are
not.

        This distinction is also evident from the fact that
contribution rates are set by CBAs while surcharges are set by
statute. Nothing in the statutory scheme suggests that
surcharges, when applicable, amend the underlying terms of
employers’ CBAs. Yet, that is the result of considering
surcharges as contribution rates set in the CBAs. In fact, the
statute distinguishes between surcharges and contribution
rates.    See, e.g., 29 U.S.C. § 1085(e)(7)(B) (making
surcharges “due and payable on the same schedule as the
contributions on which the surcharges are based”) (emphasis

                              19
added); Id. § 1085(e)(7)(A) (obligating employers to pay a
surcharge based on “10 percent of the contributions otherwise
so required”) (emphasis added). Furthermore, ERISA is a
“comprehensive and reticulated” statute. Nachman, 446 U.S.
at 361-62 (explaining at length that Congress passed ERISA
“following almost a decade of studying the Nation’s private
pension plans” and making “detailed findings”).             We
appreciate that ERISA is not a model of clarity. It is, in fact,
a bewilderingly complex statute. However, despite its many
obfuscations, it is clear that Congress intended to distinguish
between contribution rates and contributions, and we are not
convinced by the Board’s arguments to the contrary.

       The Board notes that Section 1085(e)(9)(B) provides
that “[a]ny surcharges under paragraph (7) shall be
disregarded in determining the allocation of unfunded vested
benefits to an employer” under Section 1391. Citing Russello
v. United States, 464 U.S. 16, 23 (1983), the Board contends
that the negative implication of this provision is that
surcharges should not be disregarded for any other purpose
and, consequently, they should be factored into annual
withdrawal liability payments. In Russello, the Supreme
Court explained that when Congress includes language in one
section of a statute, but omits it in another, Congress is
presumed to have acted intentionally. Id. at 23. The Board’s
reliance on this case is misplaced, however. As discussed
above, surcharges are not part of the highest contribution rate
on which the annual withdrawal liability payment is based
under Section 1399(c)(1)(C)(i)(II).       Accordingly, when
Congress added Section 1085(e)(9)(B), there was no need for
it to specify that surcharges are to be excluded from
determining the annual withdrawal liability payment. The
only issue before the Court was whether the calculation of
unfunded vested benefits allocated to the employer contained
in Section 1391 includes surcharges. Congress needed to
clarify that surcharges are not included in that calculation
because some of that section’s provisions refer to “the total
amount contributed under the plan” and “any amount
contributed by an employer.” In contrast, Sections 1392 and
1399 contain the phrase “obligation to contribute.” Thus,
Congress provided clarification in Section 1085(e)(9)(B).
Therefore the discussion in Russello does not advance our
inquiry here.

                               20
        The Board also points to a 2008 amendment that
changed the language of Section 1085(e)(9)(B) from “[a]ny
surcharges . . . shall be disregarded in determining an
employer’s withdrawal liability under section 1391 of this
title,” 29 U.S.C. § 1085(e)(9)(B) (2006) (emphasis added), to
“[a]ny surcharges . . . shall be disregarded in determining the
allocation of unfunded vested benefits to an employer under
section 1391 of this title,” 29 U.S.C. § 1085(e)(9)(B) (2008)
(emphasis added). The Board again relies on negative
implication in arguing that this change reveals that surcharges
should be included in the annual withdrawal liability
payment. However, the District Court’s explanation is far
more plausible. The court reasoned that since Section 1391
repeatedly speaks in terms of determining the employer’s
allocable “amount of unfunded vested benefits,” Congress
amended Section 1085(e)(9)(B) to match this language and
eliminate any confusion. IBT Local 863 Pension Fund, 5 F.
Supp. 3d at 724. This reasoning is reinforced by the text of
Section 1381. That provision states: “[t]he withdrawal
liability of an employer to a plan is the amount determined
under [29 U.S.C. § 1391] to be the allocable amount of
unfunded vested benefits, adjusted [in accordance with other
provisions of ERISA.]” In other words, an employer’s
withdrawal liability and allocable amount of unfunded vested
benefits are not synonymous. It is likely that Congress
enacted the amendment in an effort to clarify this very
difficult statute.

        The Board also points to the MPRA which, as noted
earlier, became effective as of December 16, 2014. It amends
Section 1085 to require that automatic surcharges “be
disregarded in determining the allocation of unfunded vested
benefits to an employer under [29 U.S.C. § 1391] and in
determining the highest contribution rate under [29 U.S.C.
§ 1399(c)].”    29 U.S.C. § 1085(g)(2) (2014) (emphasis
added). The Board argues that the prospective, rather than
retroactive, nature of the MPRA amounts to a repeal of
existing law. Thus, it contends that the amendment would not
have been necessary if Congress believed that the pre-MPRA
provisions excluded surcharges in calculating annual
withdrawal liability payments.

                              21
              However, as the Supreme Court has cautioned: “we
      [must] begin with the oft-repeated warning that the views of a
      subsequent Congress form a hazardous basis for inferring the
      intent of an earlier one.” Consumer Prod. Safety Comm’n v.
      GTE Sylvania, Inc., 447 U.S. 102, 117 (1980) (internal
      quotation marks omitted).         Indeed, the weight given
      subsequent legislation and whether it constitutes a
      clarification or a repeal is a context- and fact-dependent
      inquiry. See Miss. Poultry Ass’n, Inc. v. Madigan, 31 F.3d
      293, 302-03 (5th Cir. 1994) (“Although subsequent
      legislation has been characterized as being anything from of
      ‘great weight’ or having ‘persuasive value,’ to being of ‘little
      assistance’ to the interpretative process, resolution of the
      proper weight to be accorded such legislation depends on the
      facts of each case.”) (footnotes omitted).

             Here, because of the dearth of legislative history for
      the MPRA and lack of clear statutory language, it would be a
      hazardous venture for us to draw any conclusions from the
      enactment of the MPRA. The Board argues that the Congress
      that enacted the MPRA included an effective date provision
      because it interpreted Section 1085(e)(9)(B) as not excluding
      surcharges from Section 1399(c)(1)(C)(i)(II)’s “highest
      contribution rate.” Despite the Board’s arguments, “it
      [remains] the function of the courts and not the
      Legislature . . . to say what an enacted statute means.” Pierce
      v. Underwood, 487 U.S. 552, 566 (1988). We therefore
      conclude that the District Court correctly held that the 10
      percent surcharge should not be included in Woodbridge’s
      annual payment of its withdrawal liability.

IV.          CONCLUSION

             For the foregoing reasons, we will affirm the order of
      the District Court.

                                     22