who would join subsequent to the Act.
4. Moderating Provisions
Several provisions of the Act moderate the impact of liability on some withdrawing employers. Under the de minimus section, withdrawal liability is eliminated if it is the lesser of $50,000 or .75% of a plan's unfunded vested liability. Liabilities between $50,000 and $150,000 are also reduced somewhat. 29 U.S.C. § 1389 (Supp.1982). Withdrawing employers in liquidation or dissolution are entitled to a reduction of 50% of their liability. Id., § 1405(b). Liability is abated if the employer later rejoins the plan. Id., §§ 1387, 1388.
The Star points out that the provisions moderating the impact of post-Act withdrawal for employers with lesser liability (small contributors) and for employers in bankruptcy actually increase the remaining pool of unfunded vested benefits from which its proportional liability is assessed. See 29 U.S.C. § 1391(b)(1)(C) (Supp.1982). Congress, however, made a rational determination that small or bankrupt contributors were entitled to greater consideration than other employers who were better off.
The Act also imposed contingent burdens on employees. The Act subjects vested benefits and guaranteed benefits to reductions in the event of termination or insolvency of the plan. Id., §§ 1426, 1441. The burdens imposed on employees are contingent on the plan's failure or near failure. Here, the plan is solvent and plan participants have not made any sacrifices comparable to the burden on the Star of approximately half a million dollars. However, Congress' concern was to maintain the financial integrity of multiemployer pension plans at the expense of solvent employers prior to demanding sacrifices from employees.
The Court concludes that the statutory presumptive method of calculating withdrawal liability in the Act, 29 U.S.C. § 1391(b) (Supp.1982), is rational and, therefore, constitutional.
B. Procedural Due Process and the Right to Jury Trial
The Plan contends that by failing to contest its liability through arbitration, the Star lacks standing to test the statutory procedures in court, citing Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 485, 102 S. Ct. 752, 765, 70 L. Ed. 2d 700 (1982). The Court disagrees. In contrast to the lack of personal injury in Valley Forge, the Star has clearly suffered economic injury by being assessed nearly half a million dollars in withdrawal liability. Where, as here, a party challenges a statute's constitutionality, it need not pursue the administrative scheme established by that statute. See Republic Industries, Inc. v. Central Pennsylvania Teamsters Pension Fund, 693 F.2d 290 (3d Cir.1982) (district court must rule on constitutionality of procedural provisions of MPPAA even though employer did not pursue arbitration). The Court rejects the Plan's standing argument and considers plaintiff's objections on their merits.
The statutory scheme assigning initial determination of liability to plan trustees is a rational approach to setting withdrawal liability. The trustees choose among statutory calculation methods, and their accountants determine liability using the selected method. There are no issues of disputed fact as in Gibson v. Berryhill, 411 U.S. 564, 93 S. Ct. 1689, 36 L. Ed. 2d 488 (1973) (board of optometrists determined fitness to practice optometry); Ward v. Village of Monroeville, 409 U.S. 57, 93 S. Ct. 80, 34 L. Ed. 2d 267 (1972) (mayor determined guilt or innocence of defendant); Tumey v. Ohio, 273 U.S. 510, 47 S. Ct. 437, 71 L. Ed. 749 (1927) (same). The trustees are obligated by statute to act in a fair manner and impartially; their duty to the plan to maintain plan assets does not permit them to cheat employees or employers, and the Court cannot assume that such a rare occurrence goes uncorrected or renders the statutory scheme unconstitutional as a violation of due process.
The Seventh Amendment provides that "In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." The Seventh Amendment does not apply where the proceeding is not in the nature of a suit at common law. N.L.R.B. v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 48, 57 S. Ct. 615, 629, 81 L. Ed. 893 (1937), citing Guthrie National Bank v. Guthrie, 173 U.S. 528, 537, 19 S. Ct. 513, 516, 43 L. Ed. 796 (1899). Here, Congress established a constitutionally valid procedure for the trustees of a pension fund to fix, demand, defend in arbitration, and enforce in court, if necessary, a withdrawing employer's liability imposed by statute. The Seventh Amendment is therefore inapplicable. See N.L.R.B. v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 57 S. Ct. 615, 81 L. Ed. 893 (1937) (Seventh Amendment inapplicable in resolving unfair labor practice complaints, where jury trial would substantially interfere with agency's role in statutory scheme); Katchen v. Landy, 382 U.S. 323, 339, 86 S. Ct. 467, 478, 15 L. Ed. 2d 391 (1966) (allowing jury trial of legal claim in bankruptcy proceeding would dismember statutory scheme).
The Court's analysis conforms with the decisions reached by every other court which has thus far considered the constitutionality of the withdrawal liability provisions of the Act. See, e.g., Peick v. Pension Benefit Guaranty Corporation, 539 F. Supp. 1025 (N.D.Ill.1982); S & M Paving, Inc. v. Construction Laborers Pension Trust, 539 F. Supp. 867 (C.D.Cal.1982); Trustees of the Retirement Fund of the Fur Manufacturing Industry v. Lazar-Wisotzky, 550 F. Supp. 35, 36 (S.D.N.Y.1982); R.A. Gray & Co. v. Oregon-Washington Carpenters-Employers Pension Trust Fund, 549 F. Supp. 531 (D.Ore.1982); International Multifoods Corporation v. Central States, Southeast and Southwest Areas Pension Fund, No. 81-C-6927 (N.D.Ill. April 22, 1982) (memorandum opinion and order); The Terson Company v. Pension Benefit Guaranty Corporation, 565 F. Supp. 203 (N.D.Ill.1982) (memorandum opinion); Eberhard Foods, Inc. v. Retail Store Employees Unions AFL-CIO, No. G82-23 CA1 (W.D.Mich. March 8, 1982) (memorandum opinion); Victor Construction Company v. Construction Laborers Pension Trust, 3 Employee Benefit Cases (E.B.C.) 1763 (C.D.Cal.1982); Ells v. Construction Laborers Pension Trust of Southern California, 539 F. Supp. 867, 3 E.B.C. 1449 (C.D.Cal.1982); Coronet Dodge, Inc. v. Speckmann, 553 F. Supp. 518 (E.D.Mo.1982) (memorandum and order); Pacific Iron & Metal Co. v. Western Conference of Teamsters Pension Trust Fund, 553 F. Supp. 523 (W.D.Wash.1982) (order and judgment).
In Shelter Framing Corporation v. Carpenters Pension Trust, 543 F. Supp. 1234 (C.D.Cal.1982), the Court held that the Act violated substantive due process as applied to employers withdrawing between passage of the Act on April 29, 1980 and enactment on September 26, 1980. The Shelter Framing court, however, left open the constitutionality of the Act as applied to employers, such as the Star, who remained in pension plans after the Act's enactment date. Id., at 1255.
Even assuming that the plaintiff had to pay more than the underfunding attributable to its own employees, as the Star seeks to show through discovery, the Act violates neither the Star's rights to due process under the Fifth Amendment nor its Seventh Amendment right to a trial by jury for suits at common law.