Jeffrey H. Beck, Liquidating Trustee of the Estates of Crown Vantage, Inc. and Crown Paper Company v. Pace International Union et al. (551 U.S. 96)
U.S. Supreme Court · decided June 11, 2007 · Supreme Court Database (Spaeth)
- Citation
- 551 U.S. 96 · 127 S. Ct. 2310
- Decided
- June 11, 2007
- Term
- October Term 2006
- Vote
- 9–0
- Majority author
- Justice Scalia
- Issue area
- Economic Activity
- Disposition
- Reversed and remanded
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice Scalia delivered the opinion of the Court. We decide in this case whether an employer that sponsors and administers a single-employer defined-benefit pension plan has a fiduciary obligation under the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq., to consider a merger with a multiemployer plan as a method of terminating the plan. I Crown Paper and its parent entity, Crown Vantage (the two hereinafter referred to in the singular as Crown), employed 2,600 persons in seven paper mills. PACE International Union, a respondent here, represented employees covered by 17 of Crown’s defined-benefit pension plans. A defined-benefit plan, “as its name implies, is one where the employee, upon retirement, is entitled to a fixed periodic payment.” Commissioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 154 (1993). In such a plan, the employer generally shoulders the investment risk. It is the employer who must make up for any deficits, but also the employer who enjoys the fruits (whether in the form of lower plan contributions or sometimes a reversion of assets) if plan investments perform beyond expectations. See Hughes Aircraft Co. v. Jacobson, 525 U. S. 432, 439-440 (1999). In this case, Crown served as both plan sponsor and plan administrator. In March 2000, Crown filed for bankruptcy and proceeded to…
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