The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_904/91_904.zc1

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SUPREME COURT OF THE UNITED STATES
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No. 91-904
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CONCRETE PIPE AND PRODUCTS OF CALIFORNIA,
INC., PETITIONER v. CONSTRUCTION LABORERS
PENSION TRUST FOR SOUTHERN CALIFORNIA
on writ of certiorari to the united states court
of appeals for the ninth circuit
[June 14, 1993]

  Justice Thomas, concurring in part and concurring in
the judgment.
  I join all of the Court's opinion except Part III-B-1-the
portion of the opinion in which the Court grapples with
the trustee presumption in 29 U. S. C. 1401(a)(3)(A).
The Court finds the presumption -incoherent with respect
to the degree of probability of error required of the
employer to overcome a factual conclusion made by the
plan sponsor.-  Ante, at 22.  And because, in the Court's
view, -there would be a substantial question of procedural
fairness under the Due Process Clause- if employers had
to show that sponsors' findings were unreasonable or
clearly erroneous, ante, at 23, the Court proceeds to
interpret the statute as if it required an unconstrained
evidentiary hearing into -any factual issue- concerning the
employer's withdrawal liability, ante, at 27.
  Until today, 1401(a)(3)(A) provided:
-For purposes of any [arbitration] proceeding under
this section, any determination made by a plan spon-
sor under sections 1381 through 1399 of this title and
section 1405 of this title is presumed correct unless
the party contesting the determination shows by a pre-
ponderance of the evidence that the determination was
unreasonable or clearly erroneous.-  (Emphasis added.)
Now the statute provides, in effect, that -any factual
determination made by a plan sponsor shall be rejected
by the arbitrator if the party contesting the determination
shows by a preponderance of the evidence that the deter-
mination was erroneous.-  There is no meaningful pre-
sumption of correctness and no examination for reason-
ableness or clear error.  I decline to participate in this
redrafting of a federal law.
  As I see it, there are three missteps in the analysis.
First, the Court believes the statutory text is -incompre-
hensib[le],- ante, at 22, because it refers to three different,
and mutually inconsistent, -degree[s] of certainty,- ante,
at 19, or of -probability,- ante, at 22.  This is incorrect-in
large part because the Court overlooks the grammatical
structure of the statute.  Section 1401(a)(3)(A) sets up no
parallelism between the phrase -by a preponderance of the
evidence,- which establishes the standard of proof for the
arbitration proceeding, and the critical terms -unreason-
able- and -clearly erroneous.-  -[B]y a preponderance of
the evidence- is an adverbial phrase that modifies the
-show[ing]- required of the employer.  -Unreasonable- and
-clearly erroneous,- on the other hand, are predicate
adjectives used to describe what it is the employer must
show.
  The incoherence identified by the Court follows from the
assumption that Congress has -confus[ed]- burdens of
proof with standards of review.  Ante, at 20.  The Court
believes that the terms -clearly erroneous- and -unreason-
able- must signify standards of review.  Ante, at 19-20.
Standards of proof and standards of review are entirely
unrelated concepts (as the Court intimates, see ante, at
19-22).  The Court's reading leads to the conclusion that
1401(a)(3)(A) is -meaningless,- ante, at 22, because the
statute (as so interpreted) -defines the nature of the con-
clusion the arbitrator must draw by using a combination
of terms that are categorically ill-matched,- ante, at 21.
  The Court's preoccupation with standards of review is
understandable, at least with respect to -clearly errone-
ous,- a term with an established legal usage.  See Ander-
son v. Bessemer City, 470 U. S. 564, 573-575 (1985); Fed.
Rule Civ. Proc. 52(a).  But such a reading is not com-
pelled.  As used in this statutory provision, -unreasonable-
and -clearly erroneous- cannot signify standards applicable
to the review of prior findings, since the arbitrator himself
is undeniably a factfinder, not an appellate tribunal.  See
1401(c) (establishing a presumption of correctness for
-the findings of fact made by the arbitrator-).  That the
arbitrator is to undertake his examination -by a prepon-
derance of the evidence- explicitly establishes his role as
factfinder; appellate review does not occur -by- a taking
of -evidence.-  The Court sees the arbitrator as a -hybrid,-
who acts as both a trier of fact and a reviewer of facts
found.  Ante, at 20-21.  But the presumption of correct-
ness that applies to the plan sponsor's determinations
does not make the arbitrator a -reviewing body,- ante, at
21, any more than the presumption of innocence in a
criminal trial renders the jury a reviewer, rather than a
trier, of fact.
  The way out of the conundrum is apparent.  The terms
-unreasonable- and -clearly erroneous- must refer to what
are, in effect, elements of the employer's claim in the arbi-
tration proceeding.  To prevail in its action before the
arbitrator, in other words, the employer must show by a
preponderance of the evidence, first, that the plan sponsor
has made a determination under one of the relevant pro-
visions and, second, that that determination was either
unreasonable or clearly erroneous.  This construction
requires us to put aside the technical definition of -clearly
erroneous- and focus on the literal meaning of the phrase.
-Clear- error can simply mean an obvious, plain, gross,
significant, or manifest error or miscalculation.  See
Black's Law Dictionary 250 (6th ed. 1990).  That may not
be the most natural reading (for a court, that is) of this
legal term of art, but if we do not drop the assumption
that -clearly erroneous- must be a reference to the Besse-
mer City standard of review, we cannot avoid the incoher-
ence that has trapped the majority.  The term -unreason-
able,- of course, is even more readily construed to refer
to something other than a standard of review, since it can
hardly be thought to have a sharply defined meaning that
is limited to the context of appellate review.  There is, for
example, nothing unusual about requiring a party to show
as an element of a substantive claim that something-an
interstate carrier's filed rate, for example, see Reiter v.
Cooper, 507 U. S. ___ (1993)-is -unreasonable.-  Section
1401(a)(3)(A) is thus susceptible of a reading that gives
it a coherent meaning.
  This interpretation also conforms neatly with the very
similar language and structure of the actuarial presump-
tion in 1401(a)(3)(B), which the Court today finds un-
problematic.  See ante, at 29-33.  That presumption pro-
vides that the actuary's determination of unfunded vested
benefits will be presumed correct unless the employer
shows -by a preponderance of the evidence- that the actu-
arial assumptions and methods were -unreasonable- or
that the actuary made a -significant error.-  The Court
offers no persuasive explanation as to why this presump-
tion does not suffer from the same incoherence.  In addi-
tion, my reading of the term -clearly erroneous- in
1401(a)(3)(A) renders it virtually indistinguishable from
the term -significant error- in 1401(a)(3)(B).
  The second false step in the Court's analysis is the use
of the rule of construction applied in Edward J. DeBartolo
Corp. v. Florida Gulf Coast Building & Construction
Trades Council, 485 U. S. 568, 575 (1988).  Ante, at
26-27.  This rule, which requires a court to adopt a rea-
sonable alternative interpretation of a statute when
necessary to avoid serious constitutional problems, does
not provide authority to construe the statute in a way
that -is plainly contrary to the intent of Congress.-  De-
Bartolo, supra, at 575.  The rule -cannot be stretched
beyond the point at which [the alternative] construction
remains `fairly possible.'-  Public Citizen v. Department
of Justice, 491 U. S. 440, 481 (1989) (Kennedy, J., con-
curring in judgment) (emphasis in original) (quoting
Crowell v. Benson, 285 U. S. 22, 62 (1932)).  -And it
should not be given too broad a scope lest a whole new
range of Government action be proscribed by interpretive
shadows cast by constitutional provisions that might or
might not invalidate it.-  Public Citizen, supra, at 481.
Here it is plain, in my view, that Congress intended to
shield the plan sponsor's factual determinations behind a
presumption of correctness and intended that withdrawing
employers would have to show something more than sim-
ple error.  The Court's construction is plainly contrary to
this intent and is not -fairly possible- under the terms of
the statute.  Rather than a reasonable alternative reading,
therefore, the interpretation adopted by the Court today
is effectively a declaration that the statute as written is
unconstitutional.
  Which leads to my final, and perhaps most fundamental,
disagreement with the Court.  Before a court can appro-
priately invoke the Crowell/DeBartolo rule of construction,
it must have a significantly higher degree of confidence
that the statutory provision would be unconstitutional
should the problematic interpretation be adopted.  The
potential due process problem troubling the Court is the
supposed lack of a neutral or -impartial- arbitration hear-
ing.  Ante, at 23.  This potential is based on an -assump-
tion- about a -risk- or -possibility- of trustee bias, ante,
at 13, 15-bias that, if it existed, might be -preserve[d]-
during the arbitration proceeding by the presumption of
correctness.  Ante, at 17.  Petitioner has not established
that the trustees were biased in fact.  And whatever
structural bias may flow from the trustees' fiduciary obli-
gations or from the fact that the trustees are appointed
by interested parties, see ante, at 12-14, will likely be
nullified by the elaborately detailed criteria that channel
and cabin their exercise of discretion.  See 29 U. S. C.
1381-1399 (1988 ed. and Supp. III).  Such bias may be
checked, in particular, by the requirement of consistency
that governs the trustees' choice of a method for calculat-
ing liability.  See Keith Fulton & Sons, Inc. v. New Eng-
land Teamsters & Trucking Industry Pension Fund, Inc.,
762 F. 2d 1137, 1142 (CA1 1985) (en banc).  And the very
fiduciary duty the trustees owe to the fund should simul-
taneously prevent them from imposing excessive with-
drawal liability that will discourage other employers from
joining the fund in the future.  Id., at 1142-1143.  The
Court does not consider these countervailing forces.
  But even if there is a real risk that structural bias may
distort the trustees' factual determinations, I am inclined
to believe that the arbitration proceeding-presumption
and all-provides adequate process for the employer.  Cf.
Mathews v. Eldridge, 424 U. S. 319, 334-335 (1976) (ade-
quacy of specific procedures involves consideration of
private and public interests and risk of erroneous depriva-
tion).  This conclusion rests principally on the nature of
the particular statutory determinations to which the pre-
sumption applies (those described in 1381-1399 and
1405).  Many of these determinations, such as the mathe-
matical computations the trustees must perform under
1386, 1388, and 1391, involve little or no discretion.
As a result, the employer will have correspondingly little
difficulty proving the existence of any significant error
made by the trustees (either inadvertently or because of
bias).  The same can be said of withdrawal-date determi-
nations under 1381 and 1383, especially where all the
information relevant to the determination is better known
to the employer than to the trustees.
  To me, the public interest is plain on the face of the
statute: Congress did not want withdrawing employers to
avoid their obligations by engaging in a lengthy arbitra-
tion over relatively insignificant errors.  At the same time,
the employer's interest in correcting miscalculations that
are significant is adequately protected by the opportunity
for arbitration afforded by 1401.
  For these reasons, I concur only in the Court's judgment
that the application of 1401(a)(3)(A) -did not deprive
Concrete Pipe of its right to procedural due process.-
Ante, at 28-29.