Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 81 C 4535 -- Joel M. Flaum, Judge.
Cudahy and Eschbach, Circuit Judges, and Swygert, Senior Circuit Judge.
In this expedited appeal,*fn1 we are asked to consider the constitutionality of various provisions of the Multiemployer Pension Plan Amendment Act of 1980 (the "MPPAA"). Appellants contend that the withdrawal liability provisions of the MPPAA, allegedly as applied in a retroactive manner to them, violate the due process and takings clauses of the fifth amendment and that the procedures established by the MPPAA for contesting and paying this liability violate various other constitutional provisions. Because the district court reached the constitutional issues without ruling on appellants' potentially dispositive statutory contentions, we remand the case to the district court to determine whether the constitutional issues need to be reached at all.
This action was initiated by two interstate motor common carriers of freight, Transport Motor Express, Inc. ("Transport") and E.W. Bohren Transport, Inc. ("Bohren") and their parent company, the Essex Group, Inc. ("Essex" or the "Essex Group"). Bohren was wholly owned by the Essex Group, which, in turn, is a wholly-owned subsidiary of the United Technologies Corporation. In 1979, Transport employed approximately 1,100 people, about 900 of whom were represented by the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the "Teamsters"). In 1979, Bohren employed approximately 90 people, all of whom were represented by the Teamsters. The defendant-appellee, Central States, Southeast and Southwest Areas Pension Fund (the "Central States Fund") is a multiemployer pension plan with approximately 425,000 participants, assets in 1979 of more than $2.4 billion, and income in 1979 of more than $780 million. Pursuant to their labor agreements with the Teamsters, Transport and Bohren were required to contribute a fixed amount per week per covered employee to the Central States Fund so long as these companies employed permanent employees represented by the Teamsters.
A decision was made by the management of Transport and Bohren to terminate business operations and liquidate both companies on April 24, 1980. On April 25 and 26, 1980, substantially all employees of Transport and Bohren were dismissed. A small number of employees, including some represented by the Teamsters, remained on a temporary basis to assist in the closing of the business. By the end of May 1980, all remaining employees represented by the teamsters were dismissed.*fn2
The assets of the business were sold in a series of transactions starting on April 27, 1980. The total proceeds of liquidation as of June 25, 1981, were approximately $11.8 million. Approximately $3.2 million remained after payment of liabilities through that date, although additional liabilities remained to be paid.
The MPPAA, which was signed into law by the President on September 26, 1980, was, by its own terms, made retroactive with respect to the imposition of withdrawal liability to April 29, 1980. This created a "retrospective period" of 150 days. Relying on the MPPAA, the Central States Fund assessed a withdrawal liability against Transport (and Essex) for $8,071,885.29 and against Bohren for $563,007.14. These sums represented allocated shares of the Central States Fund's unfunded vested benefits ("UVB") as of December 31, 1979. The computation of the Central States Fund's UVB was the subject of some contention in the district court. Apparently the trustees of the Central States Fund considered three different actuarial estimates of UVB ranging from $2.047 billion to $4.108 billion before settling on the figure of $3.576 billion that provided the basis for the claims assessed against the withdrawing companies.
The district court initially addressed the contention of the PBGC that the court should not reach the constitutional issues which the case raised because the MPPAA required the plaintiffs to arbitrate any dispute they had with the Central States Fund before seeking any relief in court. The court rejected this contention, noting that it considered the case to be a "facial challenge" to the MPPAA and that compelling arbitration "would not promote deference to either Congress or the autonomy of the arbitration process." Transport Motor Express, Inc. v. Central States, Southeast and Southwest Areas Pension Fund, No. 81 C 4535, slip op. at 10 (N.D. Ill. May 18, 1983).
Turning to the substantive issues in the case, the district court addressed the plaintiffs' allegations that a withdrawal claim based upon an employer's withdrawal from the Central States Fund during the retrospective period violated the due process clause of the fifth amendment. The plaintiffs also alleged a variety of other constitutional deficiencies in the MPPAA and argued that the case presented an "as-applied" constitutional challenge to the MPPAA on a complete factual record. The district court was not persuaded by any of the plaintiffs' contentions. The court followed the analysis developed by this court in Nachman Corp. v. Pension Benefit Guaranty Corp., 592 F.2d 947 (7th Cir. 1979), aff'd, 446 U.S. 359, 64 L. Ed. 2d 354, 100 S. Ct. 1723 (1980), and concluded that the MPPAA did not unconstitutionally apply retroactive liability. The court did not agree that the case was entirely an as-applied challenge, finding that the plaintiffs' procedural arguments were essentially facial challenges because the plaintiffs had not pursued the arbitration process. Noting that the procedural arguments had been considered and rejected in other cases, the court found that the Act survived constitutional challenge.
"The great gravity and delicacy of constitutional decision-making counsels that federal courts abjure constitutional rulings where a 'dispositive nonconstitutional ground is available.'" Ruslan Shipping Corp. v. Coscol Petroleum Corp., 635 F.2d 648, 650 (7th Cir. 1980) quoting Hagans v. Lavine, 415 U.S. 528, 547, 39 L. Ed. 2d 577, 94 S. Ct. 1372 (1974). See also United States v. Security Industrial Bank, 459 U.S. 70, 103 S. Ct. 407, 412, 74 L. Ed. 2d 235 (1982); Ashwander v. TVA, 297 U.S. 288, 341, 80 L. Ed. 688, 56 S. Ct. 466 (1936) (Brandeis, J., concurring). In recognition of this principle, we must consider, as a preliminary matter, whether it was proper for the district court to reach the complex constitutional issues raised in this litigation, without determining if a "withdrawal" on the part of appellants indeed occurred. This issue is raised in the case before us because, if no withdrawal under the terms of the MPPAA has occurred, the appellees have no basis for assessing withdrawal liability and appellants' contentions concerning the constitutionality of the MPPAA become moot.
The district court, unfortunately, made no explicit finding with respect to the issue of withdrawal. While that court arguably determined or implicitly assumed that a withdrawal had occurred (since such a determination is a necessary prerequisite to the resolution of the constitutional questions), it is improper to proceed to the important constitutional questions in this case without an explicit determination of this potentially dispositive non-constitutional issue. The appellants themselves stated in their amended complaint that "No withdrawal from the Central States Fund by any of the plaintiffs has occurred and no withdrawal liability is owed to the Central States Fund by any of the plaintiffs." Amended Complaint para. 55. Unlike the situation presented in Peick v. Pension Benefit Guaranty Corp., 724 F.2d 1247 (7th Cir. 1983), where employers have actually withdrawn and no statutory defenses have been raised, there is a substantial question in this case concerning the applicability of the MPPAA's withdrawal liability provisions to these appellants. Because, unlike the employers in Peick, appellants ...