receives from the statute and the specific procedures employed by the arbitrator are not so vague as to render MPPAA constitutionally infirm.
For example, PBGC has adopted, as an interim measure, rules of the American Arbitration Association and has stated that they will control arbitration procedures.
Those rules provide for the selection of an impartial, qualified arbitrator to preside over the stenographically recorded hearing. Parties who so desire are represented by counsel; witnesses testify under oath and are subject to the rigors of cross-examination. Although the Federal Rules of Evidence do not strictly govern the introduction of evidence, the arbitrator is, nevertheless, required to initially judge the materiality and relevancy of the evidence. At the conclusion of the hearing, counsel are invited to submit briefs in order to aid the arbitrator in making his decision within the mandatory thirty-day period. Finally, the arbitrator's award must be written and supported by findings of fact.
Plaintiff contends, however, that the Act's allocation of proof requires, in reality, that the arbitrator rubber-stamp the Fund's demand. The burden of proof which rests upon plaintiff at the arbitration proceeding is to prove by a preponderance of the evidence that the demand was unreasonable or clearly erroneous. See 29 U.S.C. § 1401(a)(3)(A). Moreover, in proving that the Fund's demand and the actuarial assumptions upon which it is predicated are erroneous, an employer bears the burden of showing their unreasonableness in the "aggregate" or by proving a significant error. See 29 U.S.C. § 1401(a) (3)(B)(i) and (ii). The presumption of correctness which attaches to the Fund's demand is particularly offensive, plaintiff reasons, because it is prepared under the direction of the Fund's trustees, two of whom represent employers and have an interest in maintaining the integrity of the Fund while keeping their own contributions thereto as small as possible. But see N.L.R.B. v. Amax Coal Co., 453 U.S. 322, 101 S. Ct. 2789, 69 L. Ed. 2d 672 (1981) (employer trustees owe a fiduciary duty to the trust fund).
These mere allegations of structural bias: private, interested parties proceeding against plaintiff in a constitutionally offensive forum which "stacks the deck", do not rise to the level of a clear and unambiguous constitutional violation justifying circumvention of the statutorily mandated remedies. In sustaining a statutory scheme similar to the one at bar, the Third Circuit noted that upholding plaintiff's contentions would "destroy the valuable congressional schemes for self-regulation". First Jersey Securities, Inc. v. Bergen, 605 F.2d at 698. Plaintiff attempts to distinguish First Jersey Securities by arguing that there the Securities and Exchange Commission (SEC) had the authority to make a de novo review of the private agency's action while here, no official agency has such power. Plaintiff urges that since the inter-agency layers of protective review which insured against private abuses in First Jersey Securities are not present here, the statute is unconstitutional.
We are not persuaded by this distinction. First, as the First Jersey Securities court noted, the principles of exhaustion are "particularly apt" when applied to a claim of bias since such an allegation is "usually controverted". 605 F.2d at 699.
Moreover, and importantly, far from "stacking the deck" against plaintiff, the statute provides a real and effective means for challenging the arbitrator's award. Courts traditionally review agency proceedings with an eye toward determining whether the findings are supported by substantial evidence on the record as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 487-91, 71 S. Ct. 456, 464-466, 95 L. Ed. 456 (1951); National Labor Relations Board v. National Car Rental System, Inc., 672 F.2d 1182, 1186 (3d Cir. 1982). In sharp contrast to this standard, an arbitrator's award under MPPAA is accorded substantially less deference. The award creates only a rebuttable presumption which may be upset by a "clear preponderance of the evidence". See 29 U.S.C. § 1401(c). True, First Jersey Securities turned aside a constitutional attack and articulated as a reason for doing so, the fact that the SEC had de novo review powers of the private decision-maker's conclusion prior to a court challenge. Once that review was made, however, the court could upset the decision only in rare circumstances. In the instant situation, there is no de novo review undertaken by an agency. Here, the Court's review of the arbitrator's decision is, therefore, relatively non-deferential. This is because the non-judicial procedures are not statutorily as complete as exist in more "traditional" "agency" proceedings. However, the non-judicial remedies appear to provide for a fair and reasonable accommodation of the parties' competing rights in an unbiased forum. See, Chung v. Park, 514 F.2d 382, 386 (3d Cir. 1975) (Due process is "protean in nature" and "depends upon appropriate accommodation of the competing interests involved".) The Court's review of that accommodation, once made, permits reversal upon a showing that the arbitrator's award is not supported by a "clear preponderance" of the evidence and that it is erroneous. Should plaintiff believe, after proceeding to arbitration, that it has suffered a constitutional deprivation, it may thereafter raise constitutional issues in the district court. For present purposes, since the Act is not patently at variance with the constitution, we will require plaintiff to follow its mandate.
Plaintiff also challenges the retroactive application of the Act. At the very threshold it must be observed that legislation which adjusts the burdens and benefits of economic life comes to the Court with a presumption of constitutionality and that the burden is on the party complaining of a due process violation to establish irrational and arbitrary legislative conduct. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15, 96 S. Ct. 2882, 2892, 49 L. Ed. 2d 752 (1976). Moreover, legislation readjusting rights and burdens is not unlawful solely because it "upsets otherwise settled expectations". Id. at 16, 96 S. Ct. at 2893.
Plaintiff primarily relies upon Railroad Retirement Board v. Alton, 295 U.S. 330, 55 S. Ct. 758, 79 L. Ed. 1468 (1935) where the Supreme Court invalidated, on constitutional grounds, a federally imposed compulsory retirement and pension system for all carriers subject to the Interstate Commerce Act. In striking down the Act, the court found that it imposed liability to pay again for services long since rendered and fully compensated. Id. at 354, 55 S. Ct. at 764.
The question for decision here is whether MPPAA allocates the burden of insuring the fiscal integrity of multiemployer funds in a rational, non-arbitrary manner. The House Labor and Education Committee, in considering MPPAA, noted "defects in existing law" with regard to withdrawals by employers from multiemployer funds. In order to remedy this problem, the Act's "primary purpose" seeks to "protect retirees and workers who are participants in such plans against the loss of their pensions." To do so, the Act fosters plan "continuation and growth" by providing participants and beneficiaries with the "greatest security against benefit loss". U.S.Code Cong. & Ad.News (1980) 2918, 2919. The legislation also seeks to remedy some of the "inequitable and disfunctional" aspects of prior law which existed by virtue of the fact that employers who withdrew from a plan early were rewarded, while employers who remained were penalized. Additionally, there was no provision for compensation to a plan upon employer withdrawal. U.S.Code Cong. & Ad.News at 2928.
MPPAA's "broad outline" promotes "benefit security through melioration of the financial condition of the multiemployer plans (and) the elimination of incentives for plan termination". An element of this comprehensive statutory scheme is to require employers who withdraw from a multiemployer fund to continue to fund their "fair share of the plan's unfunded pension benefits". U.S.Code Cong. & Ad.News at 2921-22 (emphasis added).
Contrary to plaintiff's argument that MPPAA requires employers to shoulder the entire statutory burden which benefits solely the plan and its employees, the Act permits multiemployer plans in "financial distress" to reduce benefit levels to retirees in order to prevent insolvency.
Hence, we conclude that the Act strikes a reasonable, rational, non-arbitrary and constitutional balance in the allocation of its benefits and burdens.
Moreover, a number of courts have considered and approved the retroactive application of ERISA's imposition of withdrawal liability on employers. See e.g., A-T-O, Inc. v. Pension Benefit Guaranty Corp., 634 F.2d 1013, 1024-26 (6th Cir. 1980); Pension Benefit Guaranty Corp. v. Ouimet Corp., 630 F.2d 4, 12 (1st Cir. 1980); Nachman Corp. v. Pension Benefit Guaranty Corp., 592 F.2d 947, 959 (7th Cir. 1979), aff'd on other grounds, 446 U.S. 359, 100 S. Ct. 1723, 64 L. Ed. 2d 354. Plaintiff's reliance on Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 98 S. Ct. 2716, 57 L. Ed. 2d 727 (1978) is misplaced since the court's holding there is grounded in Constitutional Contract Clause considerations, which have not been raised in the case at bar. Where retrospective application of Congressional action does not amount to a clear and unambiguous violation of constitutional standards, exhaustion is required.
Plaintiff's argument that there is a "taking" in violation of the Fifth Amendment's guarantee is grounded upon its assertion that it is required to insure the pension benefits to Johnson's former employees, members of the public which it, plaintiff, never employed. Plaintiff suggests a "uniform tax, binding on all" as an appropriate means to reach the desired goal of fiscal integrity for multiemployer funds. However, we think that the holdings of A-T-O, Inc. v. Pension Benefit Guaranty Corp.; Pension Benefit Guaranty Corp. v. Ouimet Corp., and Nachman Corp. v. Pension Benefit Guaranty Corp., supra, all implicitly considered and rejected this issue.
Finally, plaintiff's argument that the Act unconstitutionally deprives it of a jury trial need not detain us long; the Seventh Amendment's guarantee extends only to suits for claims which existed at common law. Moreover, initial resort to mandated, non-judicial remedies does not offend the aegis of the Seventh Amendment. Atlas Roofing Co. v. Occupational Safety and Health Review Comm., 430 U.S. 442, 97 S. Ct. 1261, 51 L. Ed. 2d 464 (1977). This is true because the Seventh Amendment is generally not implicated in administrative proceedings as a jury trial is inconsistent with the concept of administrative adjudications. Curtis v. Loether, 415 U.S. 189, 194, 94 S. Ct. 1005, 1008, 39 L. Ed. 2d 260 (1974). The Curtis court observed that
when Congress provides for enforcement of statutory rights in an ordinary civil action in the district courts ... there is obviously no functional justification for denying (a) jury trial ...
Id. at 195, 94 S. Ct. at 1009 (emphasis added). Here, of course, Congress has provided for just the opposite. Rather than permit enforcement of statutory rights in the district courts, Congress has required initial resort to non-judicial remedies. Since that direction does not patently offend the Seventh Amendment, we must honor it.
Upon careful consideration of the matters at bar, we conclude only that the challenged provisions of the Act are neither patently at variance with, nor clearly and unambiguously in violation of, constitutional requirements. Hence, plaintiff's failure to exhaust statutory remedies cannot be excused. Accordingly, we will enter an order denying plaintiff's motion for preliminary relief and granting defendant's motion to dismiss the plaintiff's complaint. This conclusion also renders moot plaintiff's alternative motion to strike.