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Delphi retirees take last shot in high court

Behind door A: The U.S. Supreme Court agrees to hear legal challenges raised by Delphi salaried retirees in their more than 11-year battle to restore pensions lost when the auto parts maker went bankrupt.

Behind door B: The U.S. Supreme Court rejects the group’s request.

“There is no door C,” said Chuck Cunningham, legal liaison for the Delphi Salaried Retirees Association. “It’s our last chance as far as the legal system to get this remedied.”

The association has asked the high court to consider its case against the Pension Benefit Guaranty Corporation, which slashed the pensions of retirees — some by as much as 70 percent — when it took over the plan while Delphi was trying to emerge from bankruptcy.

The soonest a decision might come is Oct. 27, when the court opens its 2021-22 session, said Cunningham. The association filed its petition under seal, meaning it’s unavailable to the public now. A redacted petition will be made public later, which starts a 30-day clock ticking for when the PBGC has to respond.

Cunningham said he could not discuss particulars of the request, but he believes it merits the court’s review because, in part, of the due process claim the association is making.

“I can tell you we believe we have a case that should be of interest to the Supreme Court because it is relative to a lot of U.S. citizens,” Cunningham said. “There is a lot of people still in defined pension plans that sit out there that could be terminated by the PBGC if their plan gets in trouble or actually even if it doesn’t, if it’s just abandoned.”

“You have to catch their eye, it has to be something that is important,” Cunningham said. “The other thing is ours deals with certain points of constitutional law such as due process, and we think hopefully this court will be interested in that, and it involves a government agency, which generally means the Supreme Court gets into ruling on things that involve federal government agencies more than they would the local or state level.”

But the odds are long for that happening given, according to a U.S. judicial website, just 100 to 150 of the more than 7,000 cases the court is asked to review each year are accepted. Four of the nine judges must vote to accept the case.

The association is appealing a lower U.S. 6th Circuit Court of Appeals decision from September that sided with a March 2019 Michigan federal court judge’s ruling that dismissed the lawsuit against the PBGC.

The appeals court then rejected a request to review its decision, leaving the Supreme Court as the group’s last legal option.

The association sued the PBGC in 2009 after the agency took over the employee pensions when Delphi declared bankruptcy.

Delphi, formerly Packard Electric that at one time was part of General Motors’ parts division, filed for bankruptcy in October 2005 and emerged four years later. General Motors continued contributing to union-represented retirees, but salaried retirees, including about 1,500 local pensioners, were left with substantially reduced pensions when they were shifted to the PBGC.

The Supreme Court may be the association’s last legal attempt at victory, but there still would remain a chance to get something done from a political standpoint.

Recently, bipartisan groups of federal lawmakers from Ohio, including U.S. Rep. Tim Ryan, and senators, including U.S. Sens. Sherrod Brown and Rob Portman, have urged the Biden administration for a status update on former President Donald Trump’s memo to review the terminated pension plans.

Trump’s memo directed those same members of his Cabinet to report within 90 days recommendations to remedy the reduced retirement benefits that happened when the Pension Benefit Guaranty Corporation took responsibility for the pensions in 2009.

It was to include whether the pension plan can be restored to pretermination status and bring additional transparency to the decision to terminate the plan. The directive also contained a 180-day implementation period.

The reporting deadline long has passed.

The lawmakers have sent separate letters to the secretaries of the Treasury, Commerce and Labor asking them to report back when work on the report began, when it’s expected to be completed and when Congress can expect to receive a copy for review.

“The Delphi Salaried Pension Plan was unfairly terminated. This unfair action devastated the long-term financial security of the almost 22,000 salaried employees at Delphi whose benefits were significantly reduced. These employees deserve the benefits they have earned,” states a letter from Ryan, D-Howland, and others in July.

“Please know that we stand ready to work with you to ensure the Delphi retirees, and all American workers, can be secure in the benefits they have earned.”

The group of senators sent its letter in June.

rselak@tribtoday.com

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