                              UNITED STATES DISTRICT COURT
                              FOR THE DISTRICT OF COLUMBIA



 QUALITY AUTOMOTIVE
 SERVICES, LLC,

                          Plaintiff,

                v.                                     Civil Action No. 12-1503 (ESH)

 PENSION BENEFIT GUARANTY
 CORPORATION,

                          Defendant.



                                       MEMORANDUM OPINION

       Plaintiff Quality Automotive Services, LLC (“QAS”) has sued the Pension Benefit

Guaranty Corporation (“PBGC”), challenging its determination of “substantial damage” to the

Freight Drivers and Helpers Local No. 557 Pension Fund as arbitrary and capricious. Before the

Court are plaintiff’s Motion for Summary Judgment (Mar. 13, 2013 [ECF No. 15] (“Pl.’s Mot.”))

and defendant’s Cross-Motion for Summary Judgment (Apr. 12, 2013 [ECF No. 17] (“Def.’s

Mot.”)). For the reasons set forth below, plaintiff’s motion will be denied, and defendant’s

motion will be granted.

                                          BACKGROUND

I.     STATUTORY FRAMEWORK

       The Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq., as

amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C.

§§ 1381 et seq., seeks to protect the viability of multiemployer pension plans. It provides that

when a contributing employer withdraws from a multiemployer pension plan, that employer


                                                 1
owes withdrawal liability in the amount of its share of the plan’s unfunded vested benefits. See

29 U.S.C. § 1381. However, there are a number of exceptions to that rule, including one for

withdrawals from plans that receive contributions primarily from employers engaged in the

trucking industry. See id. § 1383(d). Under this “trucking industry exception,” a withdrawal

occurs—and withdrawal liability is incurred—only if:

       (A)     an employer permanently ceases to have an obligation to contribute under
               the plan or permanently ceases all covered operations under the plan, and
       (B)     either:
               (i)     [PBGC] determines that the plan has suffered substantial damage
                       to its contribution base as a result of such cessation, or
               (ii)    the employer fails to furnish a bond issued by a corporate surety
                       company that is an acceptable surety for purposes of section 1112
                       of this title, or an amount held in escrow by a bank or similar
                       financial institution satisfactory to the plan, in an amount equal to
                       50 percent of the withdrawal liability of the employer.

Id. § 1383(d)(3) (emphasis added). The statute goes on to state:

       If, after an employer furnishes a bond or escrow to a plan under paragraph
       (3)(B)(ii), [PBGC] determines that the cessation of the employer’s obligation to
       contribute under the plan (considered together with any cessations by other
       employers), or cessation of covered operations under the plan, has resulted in
       substantial damage to the contribution base of the plan, the employer shall be
       treated as having withdrawn from the plan on the date on which the obligation to
       contribute or covered operations ceased, and such bond or escrow shall be paid to
       the plan. [PBGC] shall not make a determination under this paragraph more than
       60 months after the date on which such obligation to contribute or covered
       operations ceased.

Id. § 1383(d)(4) (emphasis added).

II.    FACTUAL BACKGROUND

       CSX Corporation owns an intermodal railroad loading and unloading facility in Jessup,

Maryland, called the Annapolis Junction Facility. (Administrative Record [ECF Nos. 6-10, 13]

(“AR”) at 1, 1378.) Total Distribution Services, Inc. (“TDI”), a subsidiary of CSX Corporation,

hires subcontractors to operate the facility. (Id. at 1385.) Beginning in August 2005, QAS began



                                                2
operating the facility as a subcontractor for TDI. (Id. at 1378, 1385.) QAS signed a collective

bargaining agreement with Freight Drivers and Helpers Local Union No. 557 (“Local 557”) and

employed members of Local 557 at the facility. (Id. at 1, 1378, 1385.) Pursuant to the terms of

the collective bargaining agreement, QAS contributed to the Freight Drivers and Helpers Local

No. 557 Pension Fund (“the Fund”) based on the number of hours worked by its union

employees. (Id. at 1, 1378.)

       Effective July 31, 2007, TDI replaced QAS with another subcontractor, Annapolis

Junction Rail Solutions (“AJRS”). (Id. at 1378-79, 2084.) At that time, QAS ceased to have any

obligation to contribute to the Fund. (Id. at 6, 1411, 1379.) As QAS had done, AJRS signed the

Local 557 collective bargaining agreement, hired members of Local 557, and began contributing

to the Fund. (Id. at 1379, 2084.)

       On December 3, 2009, the Fund assessed withdrawal liability against QAS in the amount

of $2,045,014. (Id. at 6, 1438, 2081, 2083.) Thereafter, QAS’s parent company, MCS

Properties, LLC, deposited 50% of the assessed withdrawal liability in escrow. (Id. at 6-7 & n.6,

1379, 1758.)

       On September 30, 2011, QAS requested a determination from PBGC that its departure

from the Fund had not caused “substantial damage” to the Fund’s contribution base. (Id. at

1378-82.) QAS argued that “its substitution with AJRS did not result in substantial damage to

the Fund’s contribution base because, inter alia, AJRS continued to contribute to the Fund on

behalf of a similar number of employees as QAS did before it.” (Pl.’s Mot. at 9 (citing AR at

1378-82, 2085-143).)

       On January 27, 2012, the Fund urged PBGC to reject QAS’s position and to conclude

that QAS’s exit had caused the Fund’s contribution base to suffer substantial damage because



                                                3
AJRS’s replacement of QAS as a contributing employer was not the relevant inquiry, but rather,

PBGC should focus on the decline in the overall financial condition of the Fund since 2000. (AR

at 1-25.)

       On July 31, 2012, exactly 60 months after QAS ceased its obligation to contribute to the

plan, PBGC determined that “[QAS’s] cessation of covered operations on July 31, 2007,

substantially damaged the contribution base of the Fund.” (Id. at 2075.) The determination

stated that it was based on “the cessation of contributions by both the employer under

consideration and all other employers that have ceased contributing to the plan prior to the date

PBGC’s determination must be made.” (Id.) The determination also noted that in previous such

determinations, PBGC had also considered “the plan’s overall financial health and its benefit

cost structure.” (Id.) PBGC based its determination of substantial damage on numerous

financial metrics of the Fund’s overall health, including the recent decreases in contribution base

units, contributing employers, number of active participants, and ratio of inactive to active

participants, as well as the increase in employers’ annual cost of benefits. (Id. at 2076).

       As correctly recognized by plaintiff, there is only one issue presented by this case: did

PBGC correctly determine that QAS’s cessation of covered operations “resulted in substantial

damage” to the Fund’s contribution base? (Pl.’s Mot. at 6 (quoting 29 U.S.C. § 1383(d)(4)).) To

decide this issue of statutory interpretation, the Court must decide whether PBGC’s

determination was arbitrary and capricious and contrary to law under the Administrative

Procedure Act (“APA”), 5 U.S.C. § 706(2)(A), because it relied on the cumulative effect of the

cessations of all withdrawn employers, as opposed to the effect of the cessation of the exiting

employer—QAS. (Pl.’s Mot. at 12-13.)




                                                 4
                                    LEGAL FRAMEWORK

I.     MOTION FOR SUMMARY JUDGMENT

       Normally, a motion for summary judgment under Rule 56 shall be granted if the

pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no

genuine issue as to any material fact and that the moving party is entitled to judgment as a matter

of law. Fed. R. Civ. P. 56(a), (c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247

(1986). “In a case involving review of a final agency action under the [APA], however, the

standard set forth in Rule 56[] does not apply because of the limited role of a court in reviewing

the administrative record.” Sierra Club v. Mainella, 459 F. Supp. 2d 76, 89 (D.D.C. 2006)

(citation omitted). “Under the APA, it is the role of the agency to resolve factual issues to arrive

at a decision that is supported by the administrative record, whereas ‘the function of the district

court is to determine whether or not as a matter of law the evidence in the administrative record

permitted the agency to make the decision it did.’” Id. at 90 (quoting Occidental Eng’g Co. v.

I.N.S., 753 F.2d 766, 769-70 (9th Cir. 1985)).

II.    ARBITRARY AND CAPRICIOUS STANDARD

       The APA provides that the reviewing court shall set aside an agency action that is found

to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or

“in excess of statutory jurisdiction, authority, or limitations.” 5 U.S.C. § 706. An agency action

is “arbitrary and capricious” if “the agency has relied on factors which Congress has not intended

it to consider, entirely failed to consider an important aspect of the problem, offered an

explanation for its decision that runs counter to the evidence before the agency, or is so

implausible that it could not be ascribed to a difference in view or the product of agency

expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).



                                                  5
At its core, “to survive arbitrary and capricious review, an agency action must be the product of

reasoned decisionmaking.” Fox v. Clinton, 684 F.3d 67, 74-75 (D.C. Cir. 2012). The arbitrary

and capricious standard of review is highly deferential; the reviewing court will “defer to the

wisdom of the agency, provided its decision is reasoned and rational.” Dillmon v. Nat’l Transp.

Safety Bd., 588 F.3d 1085, 1089 (D.C. Cir. 2009) (citations and quotation marks omitted); see

also Fox, 684 F.3d at 74-75 (review is “fundamentally deferential,” determining only whether

process was “logical and rational” (citing Tripoli Rocketry Ass’n, Inc. v. Bureau of Alcohol,

Tobacco, Firearms, and Explosives, 437 F.3d 75, 77 (D.C. Cir. 2006))).

III.    CHEVRON DEFERENCE

        As a general rule, when reviewing an agency’s interpretation of the statute which that

agency administers, courts apply the familiar two-part framework announced in Chevron, U.S.A.,

Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842-43 (1984). See Fox, 684 F.3d at 75. In the

first step, the Court asks “whether Congress has directly spoken to the precise question at issue.”

Chevron, 467 U.S. at 842. If the statutory language is unambiguous and “the intent of Congress

is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the

unambiguously expressed intent of Congress.” Id. at 842–43. However, “if the statute is silent

or ambiguous with respect to the specific issue,” the Court will proceed to step two of the

Chevron analysis and ask whether the agency’s interpretation is “permissible.” Id. at 843. At

this step, the interpretation is “given controlling weight unless” it is “manifestly contrary to the

statute.” Id. at 844. The question at this step “is not whether the [plaintiff's] proposed

alternative is an acceptable policy option but whether the [agency action] reflects a reasonable

interpretation of [the statute].” Coal. for Common Sense in Gov't Procurement v. United States,

707 F.3d 311, 317 (D.C. Cir. 2013). As the Supreme Court recently explained, “Chevron thus



                                                   6
provides a stable background rule against which Congress can legislate: Statutory ambiguities

will be resolved, within the bounds of reasonable interpretation, not by the courts but by the

administering agency.” City of Arlington, Tex. v. F.C.C., 133 S. Ct. 1863, 1868 (2013).

                                            ANALYSIS

I.     PBGC’S CONSIDERATION OF THE CUMULATIVE IMPACT OF ALL
       EMPLOYER CESSATIONS

       Plaintiff’s first argument is that PBGC’s determination was arbitrary and capricious

because it was contrary to the plain language of the statute. (See Pl.’s Mot. at 13-16.)

Specifically, plaintiff claims that the statute requires PBGC to consider “the effect of the

cessation of the exiting employer, not the cumulative effect of the cessations of other employers

to the exclusion of the exiting employer.” (Id. at 14.) Thus, because PBGC acknowledged that it

based its determination on the “cumulative effect of all withdrawn employers rather than the

withdrawal of [QAS specifically]” (AR at 1411), plaintiff asserts that PBGC violated “both the

plain language and intent of the statute.” (Pl.’s Mot. at 15.)

       The Court disagrees. As an initial matter, the plain language of the statute is ambiguous

as to what the agency is to consider. First, in section (d)(3), the statute appears to endorse

plaintiff’s view of the issue; that section provides that a withdrawal “only occurs” if the agency

finds that “the plan has suffered substantial damage to its contribution base as a result of such

cessation.” 29 U.S.C. § 1383(d)(3) (emphasis added). That language suggests that the agency

must determine the impact on the plan’s contribution base that is attributable only to the

departure of the exiting employer. However, in the very next section, the statute suggests the

opposite and instructs the agency to treat an employer as having withdrawn from the plan if that

employer’s cessation, “considered together with any cessations by other employers,” has

substantially damaged the plan’s contribution base. Id. § 1383(d)(4). Nowhere does the statute

                                                  7
explain how these seemingly inconsistent sections are to be reconciled. But at a minimum, the

Court cannot conclude that Congress’ intent is “unambiguously expressed,” Chevron, 467 U.S. at

843, so it must proceed to Chevron’s step two to determine whether the agency’s interpretation is

permissible as a “reasonable interpretation” of the statute. Coal. for Common Sense in Gov't

Procurement, 707 F.3d at 317.

       In order to answer this question, the Court must first decide what the agency’s

interpretation of the statute was in this case. Plaintiff contends that PBGC considered the

cumulative effect of all prior employer cessations to the exclusion of the exiting employer. (Pl.’s

Mot. at 14.) However, an examination of the Administrative Record reveals that that is not an

accurate portrayal of what happened. In its determination, PBGC clearly stated that it had

considered “the impact of the cessation of contributions by both the employer under

consideration and all other employers that have ceased contributing to the plan prior to the date

PBGC’s determination must be made.” (AR at 2075 (emphasis added).) PBGC then concluded

that “Quality’s cessation, along with the cessation of all other employers through this date,

substantially damaged the Fund’s contribution base.” (Id. at 2076 (emphasis added).) And

indeed, one of the reasons given for that conclusion was that “Quality was a 3.9% contributor at

the time of its withdrawal in 2007.” (Id.) Thus, while its reasoning could have been more

clearly stated, the determination does reflect consideration of the effect of QAS’s departure on

the contribution base. That conclusion is bolstered by PBGC’s Executive Summary

Memorandum, prepared by the Assistant Chief Counsel and an attorney in the Office of the

Chief Counsel, which sets forth in detail the agency’s rationale for its determination and its

understanding of § 4203(d) of ERISA. (AR at 1437-42.) In that memorandum, a section of the

analysis is entitled “Quality’s Withdrawal,” in which the agency again noted the percentage of



                                                 8
the contribution base that QAS accounted for and stated that “the relevant analysis in this case is

whether Quality’s cessation in conjunction with other cessations substantially damaged the

Fund.” (Id. at 1441-42.) In their internal memorandum, the PBGC lawyers also recognized that

       [T]he relevant analysis in this case is whether Quality’s cessation in conjunction
       with other cessations substantially damaged the Fund. And here, the combined
       cessations caused such damage, regardless of the addition of an employer
       “replacing” Quality.

       The Fund’s declining contribution base and general financial distress demonstrate
       the substantial damage imposed by the cessation of Quality and other employers
       and direct against applying the trucking exception to the normal imposition of
       withdrawal liability.

(AR at 1442.) Moreover, in both that internal memorandum and in the final determination, the

agency considered the financial condition of the Fund from roughly 1999 to 2011, which extends

both prior to and after QAS’s cessation. (See id. at 1439-41, 2075.) Changes to the Fund’s

contribution base occurring after QAS’s cessation in July 2007 could be attributed, at least in

part, to QAS’s departure. In short, PBGC interpreted the statute as requiring it to consider the

cumulative effect of all employer cessations, including QAS.

       With that understanding in mind, the Court can comfortably conclude that the agency’s

interpretation of the statute is reasonable. As explained above, section (d)(4) of the statute

clearly instructs the agency to consider the impact of the cessation of the employer in question

“together with any cessations by other employers.” 29 U.S.C. § 1383(d)(4). Thus, far from

being “manifestly contrary to the statute,” Chevron, 467 U.S. at 844, PBGC’s interpretation

represents a reasonable reading of the statute. 1



1
 In reaching this conclusion, the Court does not adopt PBGC’s argument that once it has
determined that a fund has been substantially damaged by the withdrawal of one contributing
employer, as PBGC did when U.S.F. Red Star, Inc. (“Red Star”) withdrew in 2009 (see Def.’s
Mot. at 14 (citing AR at 1443-49)), the trucking plan exception no longer applies to future
cessations by other employers. (See Def.’s Mot. at 5; PBGC’s Response to Plaintiff’s Motion for
                                                    9
II.    CONSISTENCY WITH PRIOR AGENCY PRECEDENT

       QAS next argues that PBGC’s determination was arbitrary and capricious because it

improperly departed, without explanation, from prior agency precedent. (Pl.’s Mot. at 16-17.)

Specifically, QAS claims that PBGC deviated from its prior opinions relating to the trucking

industry exception in two ways: (1) by pursuing a “cumulative only” approach rather than

directly analyzing the impact of QAS’s cessation; and (2) by expanding the time period during

which other employers’ cessations were considered. (See id. at 18.) The Court disagrees that

either of these approaches represents a departure from the agency’s prior precedents.

       With respect to the “cumulative only” approach, the Court concludes that PBGC has been

consistent in its consideration of other employers’ cessations. Prior to this determination, PBGC

has issued four other determinations regarding “substantial damage” to a plan under the trucking

industry exception. See Determination of Substantial Damage with Respect to Cessation of

Contributions by DeHart Motor Lines, Inc., and United News Transp. Co. to Trucking


Summary Judgment, Apr. 12, 2013 [ECF No. 16] (“Def.’s Opp’n”) at 4.) This interpretation
does not appear to have any support in the statute, but more importantly, this rationale was not
relied on by the agency at the time it issued its determination. A reviewing court “may not
accept appellate counsel’s post hoc rationalizations for agency action.” State Farm, 463 U.S. at
50. Instead, “an agency’s action must be upheld, if at all, on the basis articulated by the agency
itself.” Id.

Nonetheless, as a practical matter, PBGC’s argument regarding the inapplicability of the trucking
plan exception once there is a prior finding of substantial damage by the withdrawal of one
contributing employer would produce the same outcome as the one reached here. In 2009,
PBGC determined that Red Star’s departure, together with other previous cessations, had
substantially damaged the Fund. (AR at 1443-49.) Then, a mere three years later, PBGC
undertook to determine whether QAS’s cessation, together with those same previous
cessations—including Red Star’s—had left the Fund substantially damaged. Barring some
dramatic turnaround in those intervening three years, the addition of yet another employer’s
cessation to a plan that was already substantially damaged will almost always lead to the
conclusion that the plan remains substantially damaged. However, the mere likelihood that the
exception would be found not to apply in a particular case does not justify eliminating the
application of the exception altogether. Rather, it is only by conducting the requisite analysis
that the agency can determine whether a plan has indeed recovered.
                                                10
Employees of North Jersey Welfare Fund, Local 641 (“DeHart”), 50 Fed. Reg. 36,171 (Sept. 5,

1985); Request for Determination of Substantial Damage with Respect to Cessation of

Contributions by Pioneer Paper Stock to Freight Drivers and Helpers Local 557 Pension Fund

(“Pioneer Paper Stock”), 52 Fed. Reg. 28,881 (Aug. 4, 1987); Request for Determination of

Substantial Damage with Respect to the Cessation of the Obligation to Contribute by Kane

Transfer Co. to the Freight Drivers and Helpers Local Union No. 557 Pension Fund (“Kane”),

63 Fed. Reg. 1,511 (Jan. 9, 1998); Freight Drivers and Helpers Local Union No. 557 Pension

Plan Request for Substantial Damage Determination Relating to USF Red Star, Inc. (“Red Star”)

(May 22, 2009) (AR at 1443-49) (unpublished). In those determinations, PBGC has consistently

stated that it considers each cessation “within the context of other cessations under the same

plan.” See Pioneer Paper Stock, 52 Fed. Reg. at 28,882; DeHart, 50 Fed. Reg. at 36,171; Red

Star, AR at 1445. The difference between considering an employer’s withdrawal “within the

context of” other cessations—as was done in previous cases—and considering “the impact of

contributions by both the exiting employer and all other employers that have ceased contributing

to the plan”—as was done here (see AR at 2075)—is one of semantics, not substance.

       And indeed, PBGC’s prior determinations have consistently focused on the overall

financial health of the plan in question, as affected not only by the departure of the exiting

employer, but also by other employer cessations and other market factors. In fact, with respect

to three of the four previous determinations, PBGC made no finding whatsoever as to the

departing employer’s direct impact on the plan’s contribution base, but instead, it focused only

on the plan’s overall financial health. See DeHart, 50 Fed. Reg. at 36,171; Pioneer Paper Stock,

52 Fed. Reg. at 28, 881; Kane, 63 Fed. Reg. at 1,512. That is exactly what PBGC did in this




                                                 11
case. Therefore, there is no support for the claim that PBGC “disregarded its prior precedents.”

(Pl.’s Mot. at 17.) 2

        The same conclusion applies to the time period PBGC considered in analyzing other

employer cessations. QAS claims that all of PBGC’s prior determinations evaluated employer

cessations over a time period that “correlated meaningfully with the date of the cessation in

question,” while in this case the agency considered data “spanning a full decade.” (Id. at 19.) A

review of the relevant precedents, however, reveals that PBGC has been consistent in its

approach to substantial damage determinations. First, PBGC has often acknowledged that the

60-month limitation on “substantial damage” determinations found in 29 U.S.C. § 1983(d)(4)

effectively sets the end date of its determination at five years post-departure. See DeHart, 50

Fed. Reg. at 36,171; Pioneer Paper Stock, 52 Fed. Reg. at 28,882. With respect to the start date,

PBGC has correctly observed that “[t]he statute does not limit [the context of other cessations] to

any specific time period.” See DeHart, 50 Fed. Reg. at 36,171; Pioneer Paper Stock, 52 Fed.

Reg. at 28,882; Red Star, AR at 1446. In DeHart and Pioneer Paper Stock, PBGC reviewed data

beginning five years prior to the departing employer’s cessation. See DeHart, 50 Fed. Reg. at

36,171; Pioneer Paper Stock, 52 Fed. Reg. at 28,882. However, in Pioneer Paper Stock the

agency acknowledged that “[i]n other cases, the PBGC may find that other time periods are

appropriate.” Pioneer Paper Stock, 52 Fed Reg. at 28,882. And indeed, it did. In Red Star, the

agency took a narrower approach, looking back only to the year prior to Red Star’s cessation.



2
 QAS makes much of PBGC statement in its Red Star determination that the “cessation of
contributions accounted for a decrease in [contribution base units] of approximately 16%.” (Pl.’s
Mot. at 18.) However, that 16% figure represented the decrease in contribution base units
resulting from “the cessation of contributions to the Fund by Red Star, considered together with
cessation by other employers.” (AR at 1448 (emphasis added).) Thus, it supports this Court’s
conclusion that PBGC has not departed from its prior precedent by considering the cumulative
impact of employer cessations in this case.
                                                12
(AR at 1446.) In Kane, the agency took a broader approach, looking as far back as thirteen years

prior to Kane’s 1993 cessation with respect to certain considerations. See 63 Fed. Reg. at 1,512

(considering change in contribution base of the Fund and number of active employers from

1980-1995; considering number of employer cessations from 1986-1994; considering

contribution rates from 1986-1995; considering unfunded vested benefits from 1992-1996). In

light of those decisions, PBGC’s consideration of data ranging from 2000 (seven years prior to

QAS’s cessation) to 2010 (three years after it) is consistent with its previous decisions.

        Because the Court concludes that PBGC’s determination in this case did not represent a

departure from the approach used in its prior determinations, the Court will not set aside the

determination as arbitrary and capricious on that basis.

III.    PBGC’S CONSIDERATION OF ALL NECESSARY FACTORS

        QAS next argues that PBGC improperly failed to consider its argument that “no

substantial damage to the Fund occurred because AJRS replaced QAS and filled the void left by

its cessation.” (Pl.’s Mot. at 21.) Plaintiff suggests that this was improper for two reasons. First,

plaintiff argues that an agency’s action is arbitrary and capricious if it “entirely fail[s] to consider

an important aspect of the problem,” and “[w]hether another employer filled the void left by

QAS is plainly an important aspect of the problem here.” (Id. at 20.) Second, plaintiff claims

that the statute clearly requires the agency to consider “whether other employers filled the void

by rehiring the exiting employer’s former employees and continuing to make contributions on

their behalf.” (Plaintiff’s Opposition to Defendant’s Motion for Summary Judgment, May 13,

2013 [ECF No. 19] (“Pl.’s Opp’n”) at 7.) In this instance, these two arguments essentially

coalesce, since PBGC’s explanation for not considering whether AJRS filled the void left by

QAS’s departure was that it was not required to consider that factor under the statute. (See AR at



                                                  13
1442 (“[T]he fact that a new employer may have performed similar covered work as Quality is

not relevant to an analysis under ERISA § 4203(d).”).)

       The Court again concludes that it cannot resolve this question based on the statute under

step one of Chevron. As an initial matter, the statute itself is silent as to how PBGC is to

determine “substantial damage” and whether the entry of a new contributing employer should be

factored into that determination. Moreover, reference to the legislative history and statutory

context does not solve the query. As plaintiff correctly points out, there is language in the

legislative history to suggest that Congress intended PBGC to consider whether the void left by

one contributing employer was filled by another. (See Pl.’s Opp’n at 10.) In particular, in

explaining the trucking industry exception, Senator Durenberger stated that “the contribution

base of a plan in the trucking industry almost always will be protected because motor freight

volume is relatively constant. When one employer leaves a plan, affected employees will almost

always be reemployed by another employer who takes his place.” 126 Cong. Rec. 23286 (Aug.

26, 1980). However, if Congress had intended the agency to rely on a departing employer’s

replacement by another contributing employer, it could have included language to that effect.

Indeed, it did exactly that in the very next section of the statute. There, the statute describes

when the sale of an employer’s assets will constitute a withdrawal for purposes of imposing

withdrawal liability. See 29 U.S.C. § 1384. The statute provides that a withdrawal will not be

deemed to have occurred in such circumstances if, among other things, “the purchaser has an

obligation to contribute to the plan with respect to the operations for substantially the same

number of contribution base units for which the seller had an obligation to contribute to the plan”

and in fact does “provide[] to the plan for a period of 5 plan years.” Id. § 1384(a)(1)(A), (B). In

other words, Congress instructed the agency to consider this very factor in determining



                                                  14
withdrawal based on sale of assets under § 1384, but not based on cessation of operations under

§ 1383.

       Given this ambiguity, the Court must move on to Chevron’s step two and determine

whether the agency’s interpretation of how it should determine “substantial damage” is

reasonable. As noted, the legislative history and the statutory structure point in opposite

directions. PBGC has chosen to follow one of those two directions. There can therefore be little

dispute that the agency action in this case “reflects a reasonable interpretation of [the statute].”

Coal. For Common Sense in Gov’t Procurement, 707 F.3d at 317. As a result, the Court will not

set aside PBGC’s determination based on its failure to consider the fact that AJRS had replaced

QAS as a contributing employer to the Fund.

IV.    PBGC’S CONSIDERATION OF IMPROPER FACTORS

       QAS’s next argument is that PBGC improperly relied on factors that Congress did not

intend it to consider. (Pl.’s Mot. at 23.) Plaintiff insists that in determining whether a plan has

suffered “substantial damage to its contribution base,” 29 U.S.C. § 1383(d)(3)(B)(i), the agency

is only permitted to consider the employer’s cessation and any cessations by other employers,

but nothing else. (Pl.’s Mot. at 23.) Thus, PBGC’s consideration of other factors—most notably

the plan’s overall financial condition—rendered the agency’s determination arbitrary and

capricious. (Id. at 23-24.) PBGC responds that “it is only when a reduction in [contribution base

units] is considered in the context of a plan’s financial condition that it can be determined

whether substantial damage has occurred.” (Def.’s Mot. at 15.)

       The Court agrees with PBGC. As already discussed, the statute itself is silent with

respect to how the agency should determine whether “substantial damage to its contribution

base” has occurred. And indeed, if Congress had intended PBGC to focus solely on the number



                                                  15
of contribution base units—perhaps the only economic metric directly attributable to an

employer’s cessation—it could have done so; instead, it mandated a broader consideration of

whether the plan’s contribution base was “substantially damaged.” Thus, it simply cannot be

said that considering the plan’s overall financial condition at the time of an employer’s cessation

is a factor “which Congress has not intended [the agency] to consider.” State Farm, 463 U.S. at

43.

       Nor is the overall financial health of a plan “a matter irrelevant” to the question of

whether the plan has been substantially damaged. Judulang v. Holder, 132 S. Ct. 476, 484

(2011). On the contrary, it is highly relevant to that question. As PBGC points out, a mere

reduction in contribution base units “is not always detrimental to a plan’s contribution base . . . if

the current contribution base supports future benefits.” (Def.’s Mot. at 15.) So again, the Court

concludes that PBGC’s determination cannot be faulted because the agency considered the plan’s

overall financial condition and the various other metrics that affect its financial well-being.

V.     PBGC’S ARTICULATION OF A SATISFACTORY EXPLANATION

       Finally, QAS argues that PBGC failed to articulate a satisfactory explanation for its

action. (Pl.’s Mot. at 24.) It is true that “[a] ‘fundamental’ requirement of administrative law is

that an agency ‘set forth its reasons’ for decision; an agency’s failure to do so constitutes

arbitrary and capricious agency action.” Tourus Records, Inc. v. Drug Enforcement Admin., 259

F.3d 731, 737 (D.C. Cir. 2001) (quoting Roelofs v. Sec’y of the Air Force, 628 F.2d 594, 599

(D.C. Cir. 1980)). This requirement is codified at 5 U.S.C. § 555(e), which requires an agency to

provide “a brief statement of the grounds for denial.” The purpose of the rule is two-fold: it “not

only ensures the agency’s careful consideration of such requests, but also gives parties the




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opportunity to apprise the agency of any errors it may have made and, if the agency persists in its

decision, facilitates judicial review.” Tourus Records, 259 F.3d at 737.

       The D.C. Circuit has described the “brief statement” requirement as “minimal,” Butte

Cnty. v. Hogen, 613 F.3d 190, 194 (D.C. Cir. 2010), requiring only that the agency explain “why

it chose to do what it did.” Tourus Records, 259 F.3d at 737 (internal quotation marks and

citation omitted). As this Court has recently noted, “[t]he agency explanations that the D.C.

Circuit has branded too brief seem to be limited to single, conclusory sentences.” Remmie v.

Mabus, 898 F. Supp. 2d 108, 119-20 (D.D.C. 2012) (collecting cases).

       Here, though far from a model of detail and clarity, PBGC’s determination complied with

the basic requirement that it provide a brief statement setting forth the reasons for its decision.

The two-page determination clearly identified the materials it had reviewed, the factors it had

considered, and six specific reasons in support of its conclusion that the Fund’s contribution base

had been substantially damaged. (AR at 2075-76.)

                                          CONCLUSION

       For the foregoing reasons, plaintiff’s motion for summary judgment is denied, and

defendant’s motion for summary judgment is granted. A separate Order accompanies this

Memorandum Opinion.


                                                                           /s/
                                                               ELLEN SEGAL HUVELLE
                                                               United States District Judge

Date: August 15, 2013




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