Local 144 Nursing Home Pension Fund v. Demisay Page 13

Local 144 Nursing Home Pension Fund v. Demisay general information

Media for Local 144 Nursing Home Pension Fund v. Demisay

Audio Transcription for Oral Argument - January 11, 1993 in Local 144 Nursing Home Pension Fund v. Demisay

Henry Rose:

--For... there are a number of provisions.

It's a prohibited transaction, to transfer assets to a party in interest.

The respondent employers are parties--

John Paul Stevens:

Well, we don't have to say it's a prohibited transaction.

You're just saying it's not a mandated transaction under ERISA.

Henry Rose:

--That is correct.

It certainly is not... there's absolutely clear that it's not a mandated transaction, but it... in fact, I am arguing that it is a prohibited transaction.

John Paul Stevens:

We surely don't have to decide that, because if we say 302(c)(5) doesn't justify it, and it's not prohibited by ERISA, why do we have to go on and say what might or might not be mandated?

Henry Rose:

You're quite right, you don't have to.

I would hope you would.

There was a suggestion by my friend that--

[Laughter]

That the--

Antonin Scalia:

Mr. Rose, excellent.

[Laughter]

Henry Rose:

--That the legislative history somehow did talk about the use of the money in the plan, and I would question that that is so.

I looked at it very carefully, and I recall none.

With regard to the prohibited transaction, though, I would add one point, and that is that this Court has stated in Central States v. Central Transport that the use of plan assets by employers, even temporarily, is a prohibited transaction, and that was in the context of the possibility of a plan not seeking collection of contributions with sufficient expedition, that letting it ride might in fact be a prohibited transaction simply because it is an extension of credit.

William H. Rehnquist:

Thank you, Mr. Rose.

The case is submitted.