Summary of DSRA’S Litigation Against the PBGC

      In September 2009, the DSRA sued the PBGC in federal court in Detroit to challenge the PBGC’s then-recent termination of the Delphi Salaried Pension Plan.  The PBGC terminated the plan by simple agreement with Delphi, rather than through a court adjudication as required by the Employee Retirement Income Security Act (ERISA).  In its lawsuit, the DSRA asserted that the termination:  (1) violated ERISA and constitutional due process because it was accomplished without a court adjudication; (2) is substantively insupportable because the PBGC had not satisfied the criteria for terminations that ERISA establishes and instead ordered the Plan terminated in compliance with the preference of the Auto Task Force.  For relief, the DSRA requested that the retirees be put in the position they would have been in had the termination not occurred, so that, at a minimum, the PBGC would now run the Plan and pay benefits as if the Plan had never been terminated.
      After nearly a decade of discovery (fraught with delays caused by the PBGC and U.S. Treasury that very nearly resulted in both being sanctioned), the federal court in Detroit granted summary judgment to the PBGC on the DSRA’s claims.  The DSRA appealed to the United States Court of Appeals for the Sixth Circuit, which heard oral argument on January 28, 2020.  We await a decision from the Court of Appeals.