Connolly v. Pension Benefit Guaranty Corp.

PETITIONER: Connolly
RESPONDENT: Pension Benefit Guaranty Corp.
LOCATION: Hardwick's Apartment

DOCKET NO.: 84-1555
DECIDED BY: Burger Court (1981-1986)
LOWER COURT:

CITATION: 475 US 211 (1986)
ARGUED: Dec 02, 1985
DECIDED: Feb 26, 1986

ADVOCATES:
Baruch A. Fellner - on behalf of Appellees
Richard M. Freemann - for appellant in No. 84-1567
Richard M. Freeman - on behalf of Appellants in No. 84-1567
Wayne Jett - on behalf of Appellants in No. 84-1555

Facts of the case

Question

Media for Connolly v. Pension Benefit Guaranty Corp.

Audio Transcription for Oral Argument - December 02, 1985 in Connolly v. Pension Benefit Guaranty Corp.

Warren E. Burger:

Mr. Jett, I think you may proceed whenever you're ready.

Wayne Jett:

Mr. Chief Justice, and may it please the Court:

This case presents the question whether a federal statute which creates a new legal obligation requiring one private party to pay money to another private party takes property in violation of the taking clause of the Fifth Amendment.

This statute, known as ERISA, enacted in 1974, as amended in 1980, requires an employer who ceases participation in a multiemployer pension trust to pay money to the pension trust in amounts computed according to the statute as withdrawal liability.

The essential undisputed fact in this case is that absent the statute imposing the obligation, the employer otherwise would have no obligation to pay money to the pension trust.

Under the statute, the obligation to pay the money as withdrawal liability is triggered when the employer withdraws or ceases to have an obligation to contribute to the pension trust.

Now, in practice and in the case before this Court, this means that the employer has failed to enter into a new collective bargaining agreement requiring a continued contribution into the pension trust.

Therefore, in effect, if there is no ability to arrive at a consensual agreement between the union and the employer which includes continued contributions into the pension trust, the withdrawal liability taking of property is triggered.

Sandra Day O'Connor:

Mr. Jett, may I inquire just a moment.

Now, you're trustees of the operating engineers pension trust, is that right?

Wayne Jett:

That is correct.

Sandra Day O'Connor:

And not the employers?

Wayne Jett:

That is correct, Your Honor.

Sandra Day O'Connor:

And you challenged below the determination that the plan was a defined benefit plan?

Wayne Jett:

That is correct, Your Honor.

Sandra Day O'Connor:

And lost.

Wayne Jett:

That was under the 1974 statute, that is correct.

Sandra Day O'Connor:

Okay, and that issue has been resolved against you and it's not part of this case?

Wayne Jett:

That is correct, Your Honor.

It was resolved--

Sandra Day O'Connor:

So what's your interest as trustee in arguing the imposition of the withdrawal liability on the employers?

Wayne Jett:

--Your Honor, it is this interest.

To get back to your original point, the statutory interpretation in effect was resolved against us before the 1980 amendment.

When the 1980 amendment was passed, it made clear that Congress did intend to include this type of plan under its statute.

So therefore we did not contest the interpretation of the '74 statute any longer.

As far as the interest that the trustees have in the plan, under the statute as amended the statute uses the board of trustees as its instrumentality, the instrumentality of government to take the property.

It is true that the property is taken and given to the pension trust.

Nevertheless, the pension trust, when it is being used by this statute and required affirmatively to expend its own funds and to take affirmative action to collect this money, we believe that we have the standing to say that when this property is coming to us in violation of constitutional rights we have the standing and the right to--

Sandra Day O'Connor:

Well, whose rights?

The employers?