stated in FHA v. The Darlington, Inc., 358 U.S. at 92, 79 S. Ct. at 146, a party operating in a field already subject to regulation cannot claim surprise if Congress acts to buttress its established legislative scheme. The conditional nature of the asserted "right," as well as the inherent unreasonableness of any expectation that no liability would result either by act of Congress or by termination of the plan, compel this conclusion. To decide otherwise would turn speculation into substance, and risk into rights.
Even assuming arguendo that plaintiffs possess some property interest cognizable under the Takings clause, the character of the legislation as a "public program adjusting the benefits and burdens of economic life to promote the common good" would resolve the issue on the basis that no "taking" has occurred. Penn Central Transportation Co. v. New York City, 438 U.S. at 124-25, 98 S. Ct. at 2659; Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 426, 102 S. Ct. 3164, 3171, 73 L. Ed. 2d 868 (1982); Republic Industries, Inc. v. Teamsters Joint Council, supra, 718 F.2d at 642.
E. Right to Jury Trial
The Seventh Amendment guarantees the right to trial before a jury in suits at common law. An exception to the guaranty is recognized for suits alleging breach of statutorily-created public rights, i.e., "where the Government is involved in its sovereign capacity under an otherwise valid statute creating enforceable public rights." Atlas Roofing Co. v. Occupational Safety Health Review Comm'n, 430 U.S. 442, 458, 97 S. Ct. 1261, 1270, 51 L. Ed. 2d 464 (1977).
Plaintiffs in this case reiterate a distinction argued in Peick v. Pension Benefit Guaranty Corp., 539 F. Supp. at 1061, namely, that "public rights" exist only between the Government and individuals, and not between private parties. This theory has no merit. The right to jury trial has been held inapplicable "where jury trials would be incompatible with the whole concept of administrative adjudication and would substantially interfere with . . . the statutory scheme." Curtis v. Loether, 415 U.S. 189, 194, 94 S. Ct. 1005, 1008, 39 L. Ed. 2d 260 (1974). Where Congress has entrusted enforcement of statutory rights to an administrative process, as here, the concept of expertise essential to fair administration of the statutes is inconsistent with the use of a jury as fact finder. Id. at 194 n. 8, 94 S. Ct. at 1008 n. 8, citing L. Jaffe, Judicial Control of Administrative Action 90 (1965). Given the role of the arbitrator as provided under the MPPAA, the Seventh Amendment right to jury trial does not attach here. Accord, The Washington Star Co. v. International Typographical Union, supra, at 308-09.
F. Procedural Due Process Rights Under the Fifth Amendment
Plaintiffs dispute the constitutionality of the procedures embodied in Section 4221 of the Act, 29 U.S.C. § 1401, on grounds that the presumptions of correctness afforded to the findings of the Fund's trustees and of the arbitrator, deny plaintiffs the right to a full hearing on issues of fact and law, and particularly constitutional defenses. An individual deprived of property rights cognizable under the due process clause is entitled to "some kind of hearing . . . at some time" before being finally deprived of those property interests. Wolff v. McDonnell, 418 U.S. 539, 557-58, 94 S. Ct. 2963, 2975, 41 L. Ed. 2d 935 (1974). See also Ewing v. Mytinger & Casselberry, 339 U.S. 594, 599, 70 S. Ct. 870, 873, 94 L. Ed. 1088 (1950). The issue to be decided concerns the nature of the process that is due.
1. The Procedures at Issue
Under 29 U.S.C. § 1401(a)(1), disputes between a withdrawn contributor and a plan sponsor concerning the plan's determinations under 29 U.S.C. §§ 1381-1399 shall be resolved by arbitration. The arbitrator must presume a plan's determinations to be correct, except upon a showing by a preponderance of the evidence that the plan's findings were clearly erroneous or unreasonable. § 1401(a)(3)(A). The presumption is also afforded to the plan's determinations of unfunded vested benefits for each plan year unless a party shows by a preponderance of the evidence that (i) the actuarial assumptions or methods used were in the aggregate unreasonable, or (ii) the actuary erred significantly. § 1401(a)(3)(B). Upon review by a trial court,
the arbitrator's findings of fact are presumed to be correct, and are rebuttable only by a clear preponderance of the evidence. § 1401(c).
2. The Procedural Due Process Analysis
The fundamental requirement of due process is that a party shall be afforded the opportunity to be heard "at a meaningful time and in a meaningful manner." Mathews v. Eldridge, 424 U.S. 319, 333, 96 S. Ct. 893, 902, 47 L. Ed. 2d 18 (1976), quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S. Ct. 1187, 1191, 14 L. Ed. 2d 62 (1965). Three factors must be weighed: a) The private interests affected by the official action;
b) the risk of erroneous deprivation of property under the mandated procedures, and the value, if any, of additional or substitute procedural safeguards; and c) the public and Governmental interests involved, including the burdens that additional procedures might entail. Mathews v. Eldridge, 424 U.S. at 335, 96 S. Ct. at 903.
a) The Private Interests Involved
As noted, supra, § 1401 provides for two speedy avenues of review which may be implemented alternatively or subsequently before any liability is due under § 1399(c)(2). Of the two, arbitration encompasses the fuller spectrum of required procedural rights. While arbitration may be instituted by either party within sixty (60) days, the proceedings in many cases might not be complete prior to the due date of the initial payment. Some deprivation of property may thereby occur; but the length of any erroneous deprivation, where an employer seeks timely review, will not be exceedingly great. See Fusari v. Steinberg, 419 U.S. 379, 389, 95 S. Ct. 533, 540, 42 L. Ed. 2d 521 (1975) (length of deprivation a significant factor); Iuteri v. Nardoza, 560 F. Supp. 745, 751 (D.Conn.1983) (same).
Any pre-hearing deprivation which may occur is mitigated substantially by § 1399(c)(1)(C), which amortizes the withdrawn employer's liability into installment payments to be paid within a period calculable by the formula provided, but in all cases within twenty (20) years. Further, the nature of the property at issue -- payments under a statute imposing automatic in lieu of contingent ERISA liability -- weighs less on balance than if the liability were entirely new or unexpected. Moreover, liability under the MPPAA is triggered by the withdrawal of the plan contributor, and not by unilateral government action. Cf. Goldberg v. Kelly, 397 U.S. 254, 264, 90 S. Ct. 1011, 1018, 25 L. Ed. 2d 287 (1970).
b) The Risk of Erroneous Deprivation
The initial determinations of liability under the MPPAA are made by the trustees of the pension plans. Since due process demands impartiality from those in judicial or quasi-judicial capacities, Schweiker v. McClure, 456 U.S. 188, 195, 102 S. Ct. 1665, 1670, 72 L. Ed. 2d 1 (1982), citing Marshall v. Jerrico, Inc., 446 U.S. 238, 242-243 and n. 2, 100 S. Ct. 1610, 1613 n. 2, 64 L. Ed. 2d 182 (1980), plaintiffs contend that the MPPAA abrogates procedural due process rights by entrusting initial determinations of liability to self-interested parties.
Although a plan's trustees, as fiduciaries, act solely in the interests of the plan, NLRB v. Amax Coal Co., 453 U.S. 322, 329, 101 S. Ct. 2789, 2794, 69 L. Ed. 2d 672 (1981), Restatement (Second) of Trusts § 170(1) (1957), the role they perform in the statutory scheme is one of administration or enforcement rather than of adjudication. Both the fact and the degree of liability are determined by the trustees according to statutorily mandated standards and methods which otherwise satisfy the requirements of due process. Supra at C. In this respect, the precision of the Congressionally-prescribed standards cures the process of the innate taint of partiality. Schweiker v. McClure, 456 U.S. at 197, 102 S. Ct. at 1670-71. Cf. Ward v. Village of Monroeville, 409 U.S. 57, 93 S. Ct. 80, 34 L. Ed. 2d 267 (1972). See also The Washington Star Co. v. Int. Typographical Workers, supra, at 308.
However, insofar as the statute entrusts a plan with mixed questions of law and fact, supra at II, the plaintiffs suggest that due process requires de novo review of a plan's determinations by an arbitrator or a court. De novo review could be accomplished simply by eliminating the presumption accorded the findings of a plan under § 1401(a)(3). The result of this revision, however, would not differ substantially from the result of procedures presently provided by § 1401. Unlike the traditional arbitrator's role as mediator of disputes, arbitrators under the MPPAA are obliged to act as adjudicators. Remarks of Rep. Thompson, 126 Cong.Rec. H7899 (Daily ed., Aug. 26, 1980). Review in arbitration may thus curtail any partiality, unfairness or mistake by the plan's trustees under the "unreasonable or clearly erroneous" standard § 1401(a)(3)(A).
Further, the reasonableness of a plan's legal determinations may be weighed by the arbitrator in light of the plan's interests and expertise. Some evidence of this legislative intent may be gathered from the language of § 1401(a)(3), which grants generally a presumption of correctness to all of the plan's findings, but specifically reinforces the presumption only with respect to the computations and actuarial assumptions employed. Compare § 1401(a)(3)(A) with § 1401(a)(3)(B).
The nature of the proceeding also diminishes the need for a prompt pre-deprivation hearing under the Act. Unlike those cases concerning eligibility for government benefits or entitlements, issues under the MPPAA center upon the correctness of methods and conclusions of the plan rather than upon the credibility of witnesses, or of the factfinders themselves. Cf. Mathews v. Eldridge, 424 U.S. at 343-344, 96 S. Ct. at 907; Goldberg v. Kelly, 397 U.S. at 269, 90 S. Ct. at 102 (full pre-deprivation hearing is appropriate where credibility of the witnesses is at issue). Although in specific cases the credibility of the trustees may be placed at issue, procedural due process rules are shaped by the risk of error in the generality of cases and not the exceptions. Mathews v. Eldridge, 424 U.S. at 344, 96 S. Ct. at 907.
With respect to the inherent procedural adequacy of arbitration, "it is too late in the day to argue that compulsory arbitration, per se, denies due process of law." Republic Industries, Inc. v. Teamsters Joint Council, supra, 718 F.2d at 640, and cases cited therein.
All the aforementioned arguments apply with equal measure to the value and utility of de novo review by a court of law of determinations by a plan or an arbitrator. The judiciary lends its legal expertise to review of the findings below, while only factual determinations are granted the presumption under § 1401(c). Thus, a withdrawn contributor bearing a legitimate challenge to the constitutionality of the Act preserves fully the right to mount an "as applied" legal attack while developing the necessary factual record in arbitration below.
Considering the available safeguards under the Act, and the nature of the determinations reviewed, the additional procedures requested by plaintiffs would not alter significantly the results of the present process of review. In such cases, "where the potential length or severity of the deprivation does not indicate a serious loss and where the procedures underlying the decision to act are sufficiently reliable to minimize the risk of erroneous determination, government may act without providing additional 'advance procedural safeguards,'" Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 19, 98 S. Ct. 1554, 1565, 56 L. Ed. 2d 30 (1978) (citations omitted).
c) The Public and Governmental Interests
Finally, the interests of the Government and the pensioners reinforce the effectiveness of and the purpose behind the chosen procedures. Complex technical determinations of the amount of liability are allocated to those with the greatest expertise. Plans are protected under the Act from inconsistent judicial or arbitrator holdings by a range of acceptable actuarial methods, and a concrete formula by which liability may be calculated. Lengthy, futile and costly bickering over the adequacy of the methods chosen is precluded by the statutory provisions of §§ 1002(31), 1391 and the presumptions of § 1401. The Act thus rejects compromise as antithetical to the paramount interests of the pensioners and the PBGC. While additional procedural safeguards might contribute to the perception of the withdrawn contributors that justice had been equitably served, the extensive cost to the taxpayer and to the funds far outweighs the benefit to be gained. See Parham v. J.R., 442 U.S. 584, 605 and n. 14, 99 S. Ct. 2493, 2506 n. 14, 61 L. Ed. 2d 101 (1979). In recognition of the strong presumption favoring the validity of congressional actions and of "congressional solicitude for fair procedure . . .," Califano v. Yamasaki, 442 U.S. 682, 693, 99 S. Ct. 2545, 2553, 61 L. Ed. 2d 176 (1973), the Court concludes that section 4221 of the Act, 29 U.S.C. § 1401, is a just and rational construct that satisfies the procedural requirements of the due process clause.
The legislative power, most aptly employed, must be capable of remedying infirmities in prior legislation as may be warranted in light of experience and changing economic conditions. To accept the contentions of plaintiff would require the exercise of judicial power in defiance of those economic and social policies clearly within the province and discernment of Congress. This Court cannot stretch the language of the Constitution to such extremes. The climate and the assumptions which produced such decisions as Railroad Retirement Bd. v. Alton R.R. Co., 295 U.S. 330, 55 S. Ct. 758, 79 L. Ed. 1468 (1935), will no longer invalidate urgent and necessary ameliorative pension reforms. The Court thus concurs with the majority of the circuits in affirming the constitutionality of the MPPAA.
Wherefore, it is hereby ORDERED that Defendant's Motion for Summary Judgment shall be and is hereby GRANTED; and it is
FURTHER ORDERED that the complaint be and hereby is dismissed with prejudice and judgment entered for the defendant.