Beck v. PACE International Union, et al.

Case Details

Status: Victory
Docket No: 05-1448
U.S. Chamber Litigation Center Involvement: Petitioner
Solicitor General Involvement: Petitioner
Industry: Consumer Goods
Sub-Industry: Paper Manufacturing
Term: 2006 Term
Oral Argument Date: April 24, 2007
Vote: 9-0
Opinion: Scalia
Lower Court: U.S. Court of Appeals for the Ninth Circuit

Question(s) Presented

Whether a pension plan sponsor’s decision to terminate a plan by purchasing an annuity, rather than to merge the pension plan with another, is a plan sponsor decision not subject to ERISA’s fiduciary obligations.

U.S. Chamber's Position

NCLC urged the Supreme Court to overturn a Ninth Circuit decision holding that a pension plan sponsor breached its fiduciary obligations under ERISA in determining to terminate a plan by purchasing an annuity rather than merging the pension plan with a multiemployer pension plan, as urged by the union. NCLC argued that if the Ninth Circuit’s decision were allowed to stand it would expose employers, whether in or out of bankruptcy, to fiduciary liability for business decisions regarding the creation, modification or termination of an employee benefit plan and would undermine and weaken the protections that the Pension Benefit Guaranty Corporation provides to employers.

Case Outcome

The Supreme Court agreed with NCLC and reversed the Ninth Circuit decision. The high court held that merger is not a permissible method of terminating a single-employer defined-benefit pension plan.

Justices in Majority
Procedural History

Amicus brief filed 3/5/07. Moot court held 4/20/07. Oral argument held 4/24/07. Decided 6/11/07.

Case Documents