Perfection Bakeries, Inc. v. Retail Wholesale and Department Store International Union and Industry Pension Fund

The first question presented is whether 29 U.S.C. §1386(b)(1)’s instruction to “reduce[]” any “withdrawal liability” of an employer in a subsequent plan year “by the amount of any partial withdrawal liability … for a previous plan year,” requires a multiemployer plan to calculate the employer’s “withdrawal liability” for the subsequent plan year and reduce that amount, or to apply the earlier withdrawal liability as one of four potential adjustments to the “allocable amount of unfunded vested benefits” used to reach the amount of “withdrawal liability” for a subsequent year. Despite the statute’s instruction that any partial withdrawal liability in a previous year “shall” “reduce[]” any “withdrawal liability” in a subsequent plan year, the majority below applied this credit as an adjustment to the “allocable amount of unfunded vested benefits” used to determine the subsequent “withdrawal liability” in the first instance. This result conflicts with the long-standing opinion of the Pension Benefit Guaranty Corporation, which in 1985 declared such a method “clearly erroneous.” PBGC Op. Ltr. 85-4, p. 1 (January 30, 1985). Moreover, the circuit judge supplying the second vote joined the majority opinion only “[a]fter much back and forth,” and despite “residual doubts about the correct answer,” explaining that his doubts were “not sufficient to create a circuit split.” App., infra, 16a. This raises a second question: whether in construing a statute a circuit judge may treat an out of circuit opinion as a statutory tiebreaker, in effect giving that opinion decisive weight against creating a “circuit split,” and to that degree shield the majority’s reasoning from this Court’s legitimate scrutiny.