Brief Fact Summary. Pension Benefit Guarantee Corporation (PBGC) is a wholly owned United States Government Corporation, modeled after the Federal Deposit Insurance Corporation. PBGC administers and enforces Title IV of the Employee Retirement Income Security Act (ERISA), including a mandatory Government insurance program that protects the pension benefits of American workers. PBGC issued a Notice of Restoration to LTV Corporation’s plan, and LTV refused to comply.
Synopsis of Rule of Law. The APA Section:706 prohibition against arbitrary and capricious decision-making by agencies should not be applied too broadly.
Issue. Was the decision of the PBGC to restore certain pension plans under Section:4047 of ERISA arbitrary and capricious, or contrary to law, within the meaning of APA Section:706?
Held. No. The determination was lawfully made by informal adjudication, the minimal requirements for which are set forth under APA Section:555. The lower courts misconstrued the meaning of APA Section:706. At most, Overton Park suggested that the requirement that agency action not be “arbitrary and capricious” imposes a general “procedural” requirement by mandating that an agency take whatever steps it needs to provide an explanation that will enable courts to evaluate the agency’s rationale at the time of the decision. In this case, unlike in Overton Park, the court did not suggest that the administrative record was inadequate to enable the court to fulfill its duties under Section:706. Dissent. None. Concurrence. None.
Subsequent legislative history is a hazardous basis for inferring the intent of an earlier Congress.View Full Point of Law