Pension Benefit Guaranty Corporation v. LTV Corporation
By: LN on May 02, 2012 09:41:36 AM

Citation:  496 U.S. 633 (1990)

Summary:  Petitioner tried to restore the insurance plans which was previously followed by respondent but respondent refused. Petitioner claimed to enforce the decision on Respondent under (§ 706 (2) (A), Administrative Procedure Code).  .

Facts:  Pension Benefit Guaranty Corporation (PGBC) was a wholly owned United States Government Corporation for protecting private worker's pension benefits. The acts of the commission were pursuant to the Employee Retirement Income Security Act of 1974 (ELISA). It is treated as an agency for Administrative Procedure Act (APA). Petitioner was assigned the obligations of the respondent's plans. In the reorganization respondent proposed a new plan with its unions. Petitioner believed that the new plans had the same effect as though the old plans had never been terminated. The funds were to be paid through public sources rather through respondent. Petitioner's insurance plan was to wrap around the insurance benefits which were provided in this way. When Petitioner tried restoring the old plans, respondent objected hence petitioner filed suit. The district court ruled in favor of the Petitioner. Respondent appealed to the second circuit court which reversed the decision of the district court. Petitioner sought review of the decision passed by the second circuit court.

Issue:  (1) Whether the district court was correct in enforcing the decision of the petitioner? (2) Whether the second circuit court was correct in holding that the restoration decision was arbitrary and capricious?

Holding:  (1) Yes, the district court was correct in enforcing the decision of the petitioner. (2) No, the Second Circuit was not correct in holding that the restoration decision was arbitrary and capricious.

Procedure:  Judgment of the district court was reversed by the second circuit court. Judgment of the second circuit court was reversed by the United States Supreme Court.

Rule:  The section directs a court to ensure that an agency whose action is not contrary or capricious or otherwise contrary to law. It imposes a procedural requirement by mandating the agency to take whatever steps that enables the court to evaluate the rationale of the agency at the time of talking the decision. (§ 706 (2) (A), Administrative Procedure Code)

Rationale:  The court noted that the adjudication had met the minimum requirements of Due Process of Law and hence the adjudication is lawful and need not satisfy all the requirements of the law.

 

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Michael Mordechai YadegariReviewsout of 83 reviews