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U.S. Supreme Court
508 U.S. 602
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 and Products of California, Inc., 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 District Court granted the Plan's motion to confirm the award. The Court of Appeals affirmed.


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's presumptions. Pp. 616-636.

(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 [508 U.S. 602, 603]   notification and demand obligations are undertaken in an enforcement capacity. Pp. 616-620.

(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. 621-631.

(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. 631-636.

2. The MPPAA, as applied, does not deny substantive due process in 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. 636-641.

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 [508 U.S. 602, 604]   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., Village of 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. 641-647.

936 F.2d 576 (CA9 1991), affirmed.

SOUTER, J., delivered the opinion of the Court, which was unanimous except insofar as O'CONNOR, J., did not join the statement to which n. 28 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, post, p. 647. THOMAS, J., filed an opinion concurring in part and concurring in the judgment, post p. 649.
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Union Agreement to Indemnify Employer for Withdrawal Liability Upheld in Issue of First Impression
Posted on March 26th, 2012
By Susan Katz Hoffman and Matthew J. Hank
In Shelter Distribution Inc. v. General Drivers, Warehousemen & Helpers Local Union No. 89, No. 11-5450 (6th Cir. Mar. 16, 2012), the Sixth Circuit Court of Appeals held that nothing in ERISA prohibits a union from contractually agreeing to be held liable for an employer’s withdrawal liability under the Multiemployer Pension Plan Amendments Act (“MPPAA”).  The Sixth Circuit thus joined the Third Circuit in enforcing such indemnity provisions.
The issue arose after the employer and union entered into a collective bargaining agreement (“CBA”) providing that the union would “indemnify the Company for any contingent liability which may be imposed under [MPPAA].”  The indemnification clause did not shift liability – the employer was still financially liable to the fund in the event of a withdrawal, but the employer simply could seek reimbursement for that liability from the union.  [WHICH IN THE END AMOUNTS TO THE FUNDS TAKING THE HIT, THUS - NO SIDE DEALS] Shortly before the CBA was scheduled to expire, the employer and union began negotiating a new agreement.  During negotiations, and before agreeing to a new contract, the union disclaimed its representation of the company’s employees and terminated the collective-bargaining process.  As a result, the employer withdrew from the multiemployer plan and was assessed withdrawal liability.  The employer paid that liability and, under the terms of the CBA, demanded indemnification from the union.  The union refused to honor the CBA’s indemnification clause, arguing in arbitration that the expiration of the CBA rendered the indemnification clause void, and that the arbitration provision was unenforceable because it violated public policy.  The arbitrator rejected both arguments and issued an award in the employer’s favor.  The district court upheld the award.
On March 16, 2012, the Sixth Circuit likewise upheld the award.  The Sixth Circuit’s analysis focused entirely on the public policy issue.  Although the court noted that the question was one of first impression in the Sixth Circuit, it readily concluded that the CBA’s indemnification clause did not violate public policy.  The court observed that the purpose of withdrawal liability under ERISA and MPPAA is to “provide even more security to employee retirement plans,” and reasoned that indemnification was not inconsistent with the statutory purpose, provided that (as was true in this case) the employer remained primarily liable for its own withdrawal liability.
Lessons Learned . . .

Employers may draw several practical lessons and caveats from Shelter Distribution:
 •It is now more likely that provisions in CBAs requiring the union to indemnify the employer for withdrawal liability will be enforced;
 •Indemnification provisions should include explicit language that the duty to indemnify survives the expiration of the CBA;
 •Indemnification provisions should make clear that the employer remains primarily liable for any withdrawal debt;
 •The employer should be prepared to pay its withdrawal debt before seeking indemnification from the union; and
 •Because the issue in Shelter Distribution has not been addressed in most circuits, it is possible that arbitrators or other courts could disagree and conclude that it does violate public policy for a third party to agree to be held liable for an employer’s withdrawal liability.
Contracts (CBA's) and Union By-Laws need to be changed so that Benefit Fund Attorneys, Union Organizers and Officers cannot make or enforce any such deals with any Employer they seek to bring in, or to those who seek to leave.

The UBCJA has organized far too many firms who come in undercapitalized, who have poor management and accounting practices and who fail to make timely payments for member benefits and who never should have been signed in the first instance.

The mindset of signing a firm at any cost has to change as it leads directly to submission of articially low bids, poor quality work which impacts our branding and the contractor looking for a way to make it up somewhere else. That leads directly to fraud, racketeering, cash workers and employment of illegal aliens. In the end, they come running back to the benefit funds looking for a way out and in NYCDCC that has resulted in a past policy of accepting 10 or 20 cents on the dollar for member benefits which result in under-funded pension & welfare funds.

The entire model for Organizing and signing firms in the UBCJA has to change.
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Perfect model for Organizing : Snail Zombies aka NYCDCC

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In reply to this post by Ted
excerpt March 3, 2011 post by Richard Dorrough:

Millions of working Americans are depending at least in part on pension funds provided by their trade unions. But at least 108 of those funds are in danger due to being inadequately funded by the union officials responsible for insuring their financial integrity, according to the federal government.

If you are depending on one of the following at-risk union pension funds, here are two questions you should ask your union's leaders:


Of the 108 Funds 14 are Carpenters Pension Funds including NYC:

Carpenters Retirement Plan of Western Washington 73.10%.
Chicago District Council of Carpenters Pension Fund 70.10%.
Carpenters Pension Trust Fund of St Louis 68.60%
MA State Carpenters Pension Fund 68.60%.
Carpenters Pension Fund of Philadelphia and Vicinity 66.40%.
Carpenters Pension Fund of Illinois 64.20%.
NJ Carpenters Pension Fund 63.60%.
Carpenters Pension fund of Western Pennsylvania 60.80%
Carpenter Pension Trust for Southern California 60.40%
NY District Council of Carpenters Pension Plan 59.30%.
Wisconsin Carpenters Pension Fund 56.50%
Carpenters Pension Trust Fund for Northern California 53.70%.
Michigan Carpenters Pension Fund 50.20%.
Twin City Carpenters Pension Fund 50.20%.

The article says to ask two very important questions:

If you are depending on one of the following at-risk union pension funds, here are two questions you should ask your union's leaders:

* Why aren't you funding our pension properly?

* What have you funded with our money instead of our pension fund?

Look at the California funds run directly by McCarron and His Brother.60% for the Northern and 53% for the Southern.

A good majority of the Pension Funds are in dire financial conditions due to this one simple phrase, which UBC District Councils nationwide all use in some form or another within the Benefit Trust Fund language, or directly within the Contract (CBA), NOTED AS FOLLOWS:

pg. 34 Wall & Ceiling contract:

Wage, wage rates and fringe benefit contributions within the bargaining unit shall be determined and/or reallocated by [the] sic Union at its sole discretion]

This language is inserted into every Contract.

It destroys the promissory value of the Contract, negates The NLRA, LMRA, LMRDA in one fell swoop, negates decades of precedent Supreme Court cases and it provides the Benefit Fund Trustees, Fiduciaries and certain of their "at will, Non-Union Employees" Unilateral Control of you, your Union and your family's rights to the contracted for Pay Raises which belong in each man or woman's paycheck and no where else!

"wage rates and fringe benefit contributions within the bargaining unit"......


be what?

"determined and/or reallocated by [the] sic Union at its sole discretion".

Your newly Elected DC Officers & Executive Committee members and Council Delegates must strike this language from each and every Contract (CBA), and from each and every Benefit Trust Fund contract and from the Benefit Fund By-Laws, which to date the Council and their attorneys refuse to publish and make available for review to the rank & file member on direct violation of Board precedent of the NLRB.

Two Motions need to be made and filed, along with a written Information Request to the Bargaining Committee:

1)   Motion to strike Section 8 language on its entirety from all Contracts

2)   Motion to publish all Benefit Trust Fund By-Laws and make same available to all members by direct mailing (for those not online) and via e-mail / internet to those who have confirmed their electronic information to the Council.
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In reply to this post by Ted
See the MPRA (2015); wherein the Corporate whore-mongoring International Trade Union General Presidents & the Congress & liberal sacks of shit like Obama are continually selling you out when it comes to your retirement.

Too many of you ass-clowns in the UBC did the rah, rah for Obama's elections; not once mind ya, but twice because the Local told you to & because you are mindless drones spending far too much time screwing around playing with your drone phones to see the latest idiot you tube video or you are so very improtant that you must know what's up on you social media page or troll in on some idiotic twiddle dee (twitter) blathering by another moron - rather than paying attention to the bouncing ball of your Union & its political nominees/candidates leading you astray.

The Multi-Employer Pension Reform Act of 2015 MPRA (2015) was by design set up to weaken the MPPAA (1980), the Pension Protection Act (2006) or PPA (2006) {hardship withdrawals on your Annuity Funds, Funding Improvement Plans for Pensions (FIP)} as well as the base 1974 ERISA laws and all of the case law through state district & superior and Supreme Courts, Appellate Courts and the U.S. Supreme Court so the corporate whores & sell outs like McCarron can raid your Retirement Funds via illegally declared Trusteeships/Receiverships placed upon District Councils and/or Locals so he & his corporate scheister pals, & political buddies (congress etc.) can fire the lot, pro-tem yes men & raid the Funds therein redistributing said assets of the Council and/or Local to International coffers; washing the money through cheap accounting tricks, offshoring it & then bringing it back in to the good ole U.S.A. and handing out loans, otherwise illegal under too many laws to list here to his favorite CEO's or Politicians while you & yours face dramatic cuts to your monthly retirement check under the MPRA (2015).

If you are too dumb to pay attention. next election at your local or district council or for council delegates - don't elect another dummy like yourself; rather, elect someone with a brain who can read, write & spell and who will pay attention and work to protect your rights. 
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In reply to this post by Ted
Cousin Melissa scores a nice win on her first trip to the First Circuit Court of Appeals on behalf of the Teamsters Pension Fund for New England.

re: MPPAA, Double Breasted/Alter Ego Corporations, Fraudulent Transfer of Assets earmarked for Pensioners retirement accounts, Federal subject matter jurisdiction & Piercing the Corporate Veil etc. Note: see: Massachusetts Carpenters Cent. Collection Agency v. Belmont Concrete Corp. ("Belmont"), 139 F.3d 304, 308 (1st Cir. 1998); and  Chicago Dist. Council of Carpenters Pension Fund v. P.M.Q.T., Inc., 169 F.R.D. 336, 342 (N.D. Ill. 1996))

United States Court of Appeals
For the First Circuit

No. 15-2553
Plaintiff, Appellant,



Defendants, Appellees.


[Hon. Rya W. Zobel, U.S. District Judge]

Before Torruella, Lipez, and Barron,
Circuit Judges.

Melissa A. Brennan, with whom Catherine M. Campbell and Feinberg, Campbell & Zack, PC were on brief, for appellant. Oleg Nikolyszyn for appellees Laurent J. Duhamel and Elizabeth A. Duhamel. Robert A. Mitson, with whom Mitson Law Associates was on brief, for all appellees.

August 2, 2017

- 2 -

LIPEZ, Circuit Judge. In this appeal, we consider whether the Supreme Court's decision in Peacock v. Thomas, 516 U.S. 349 (1996), requires dismissal of a pension fund's lawsuit against an employer's alleged alter egos. Specifically, we must decide whether there is federal subject matter jurisdiction for the fund's suit seeking $1.2 million in unpaid withdrawal liability that previously was assessed against the employer in a default judgment. The pension fund's manager, appellant Edward F. Groden, maintains that subject matter jurisdiction exists under the Employee Retirement Income Security Act of 1974 ("ERISA"). Concluding otherwise, the district court dismissed the case and subsequently denied appellant's motion for post-judgment relief. Having carefully reviewed the law and the fund's allegations, we vacate the court's post-judgment ruling and remand the case for further proceedings.