source: Caselaw Access Project

author: Justice Breyer

license: Public Domain

text:
    MILWAUKEE BREWERY WORKERS’ PENSION PLAN v. JOS. SCHLITZ BREWING CO. et al.
    No. 93-768.
    Argued December 5, 1994
    Decided February 21, 1995

      Breyer, J., delivered the opinion for a unanimous Court.

      Michael G. Bruton argued the cause for petitioner. With him on the briefs were Neil K. Quinn, Robert Marc Chem-ers, and Mary Anne H. Capron.

      Richard K. Willard argued the cause for respondents. With him on the brief were Sara E. Hauptfuehrer, James W. Greer, and David C. Hertel.

       Briefs of amici curiae urging reversal were filed for the Central States Southeast and Southwest Areas Pension Fund by Thomas C. Nyhan and Terence G. Craig; and for the National Coordinating Committee for Multiemployer Plans by K. Peter Schmidt and Philip W. Horton.

   Justice Breyer

delivered the opinion of the Court.

The Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), 94 Stat. 1208, 29 U. S. C. §§1381-1461, provides that an employer who withdraws from an underfunded multi-employer pension plan must pay a charge sufficient to cover that employer’s fair share of the plan’s unfunded liabilities. The statute permits the employer to pay that charge in lump sum or to “amortize” it, making payments over time. This case focuses upon a withdrawing employer who amortizes the charge, and it asks when, for purposes of calculating the amortization schedule, interest begins to accrue on the amortized charge. The Court of Appeals for the Seventh Circuit held that, for purposes of computation, interest begins to accrue on the first day of the year after withdrawal. We agree and affirm its judgment.

I

We shall briefly describe the general purpose of MPPAA, the basic way MPPAA works, and the relevant interest-related facts of the case before us.

A

MPPAA’s General Purpose

MPPAA helps solve a problem that became apparent after Congress enacted the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, 29 U. S. C. § 1001 et seq. ERISA helped assure private-sector workers that they would receive the pensions that their employers had promised them. See, e. g., Concrete Pipe & Products of Cal., Inc. v. Construction Laborers Pension Trust for Southern Cal., 508 U. S. 602, 605-609 (1993). To do so, among other things, ERISA required employers to make contributions that would produce pension plan assets sufficient to meet future vested pension liabilities; it mandated termination insurance to protect workers against a plan’s bankruptcy; and, if a plan became insolvent, it held any employer who had withdrawn from the plan during the previous five years liable for a fair share of the plan’s underfunding. See 26 U. S. C. § 412 (minimum funding standards); 29 U. S. C. § 1082 (samé); 29 U. S. C. § 1301 et seq. (termination insurance); 29 Ü. S. C. § 1364 (withdrawal liability).

Unfortunately, this scheme encouraged an employer to withdraw from a financially shaky plan and risk paying its share if the plan later became insolvent, rather than to remain and (if others withdrew) risk having to bear alone the entire cost of keeping the shaky plan afloat. Consequently, a plan’s financial troubles could trigger a stampede for the exit doors, thereby ensuring the plan’s demise. See Connolly v. Pension Benefit Guaranty Corporation, 475 U. S. 211, 216 (1986); Pension Benefit Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717, 722-723, n. 2 (1984); see also 29 U.S.C. § 1001a(a)(4); H. R. Rep. No. 96-869, pt. 1, pp. 54-55 (1980); D. McGill & D. Grubbs, Fundamentals of Private Pensions 618-619 (6th ed. 1989). MPPAA helped eliminate this problem by changing the strategic considerations. It transformed what was only a risk (that a withdrawing employer would have to pay a fair share of underfunding) into a certainty. That is to say, it imposed a withdrawal charge on all employers withdrawing from an underfunded plan (whether or not the plan later became insolvent). And, it set forth a detailed set of rules for determining, and collecting, that charge.

B

MPPAA’s Basic Approach

The way in which MPPAA calculates interest is related to the way in which that statute answers three more general, and more important, questions: First, how much is the withdrawal charge? MPPAA’s lengthy charge-determination section, § 1391, sets forth rules for calculating a withdrawing employer’s fair share of a plan’s underfunding. See 29 U. S. C. § 1391. It explains (a) how to determine a plan’s total underfunding; and (b) how to determine an employer’s fair share (based primarily upon the comparative number of that employer’s covered workers in each earlier year and the related level of that employer’s contributions).

One might expect § 1391 to calculate a withdrawal charge that equals the withdrawing employer’s fair share of a plan’s underfunding as of the day the employer withdraws. But, instead, §1391 instructs a plan to make the withdrawal charge calculation, not as of the day of withdrawal, but as of the last day of the plan year preceding the year during which the employer withdrew — a day that could be up to a year earlier. See §§ 1391(b)(2)(A)(ii), (b)(2)(E)(i), (c)(2)(C)(i), (c)(3)(A), and (c)(4)(A). Thus (assuming for illustrative purposes that a plan’s bookkeeping year and the calendar year coincide), the withdrawal charge for an employer withdrawing from an underfunded plan in 1981 equals that employer’s fair share of the underfunding as calculated on December 31, 1980, whether the employer withdrew the next day (January 1,1981) or a year later (December 31,1981). The reason for this calculation date seems one of administrative convenience. Its use permits a plan to base the highly complex calculations upon figures that it must prepare in any event for a report required under ERISA, see 29 U. S. C. § 1082(c) (9), thereby avoiding the need to generate new figures tied to the date of actual withdrawal.

Second, how may the employer pay the withdrawal charge? The statute sets forth two methods: (a) payment in a lump sum; and (b) payment in installments. The statute’s lump-sum method is relatively simple. A withdrawing employer may pay the entire liability when the first payment falls due; pay installments for a while and then discharge its remaining liability; or make a partial balloon payment and afterwards pay installments. See 29 U. S. C. § 1399(c)(4). The statute’s installment method is more complex. The statutory method is unusual in that the statute does not ask the question that a mortgage borrower would normally ask, namely, what is the amount of each of my monthly payments? What size monthly payment will amortize, say, a 7% 30-year loan of $100,000? Rather, the statute fixes the amount of each payment and asks how many such payments there will have to be. To put the matter more precisely, (1) the statute fixes the amount of each annual payment at a level that (roughly speaking) equals the withdrawing employer’s typical contribution in earlier years; (2) it sets an interest rate, equal to the rate the plan normally uses for its calculations; and (3) it then asks how many such annual payments it will take to “amortize” the withdrawal charge at that interest rate. 29 U. S. C. §§ 1399(c)(l)(A)(i), (c)(l)(A)(ii), (c)(1)(C).

It is as if Brown, who owes Smith $1,000, were to ask, not, “How much must I pay each month to pay off the debt (with 7% interest) over two years?” — but, rather, “Assuming 7% interest, how many $100 monthly payments must I make to pay off that debt?” To bring the facts closer to those of this case, assume that an employer withdraws from an underfunded plan in mid-1981; that the withdrawal charge (calculated as of the end of 1980) is $23.3 million; that the employer normally contributes about $4 million per year to the plan; and that the plan uses a 7% interest rate. In that case, the statute asks: “How many annual payments of about $4 million does it take to pay off a debt of $23.3 million if the interest rate is 7%?” The fact that the statute poses the installment-plan question in this way, along with an additional feature of the statute, namely, that the statute forgives all debt outstanding after 20 years, 29 U. S. C. § 1399(c)(1)(B), suggests that maintaining level funding for the plan is an important goal of the statute. The practical effect of this concern with maintaining level payments is that any amortization interest § 1399(c)(l)(A)(i) may cause to accrue is added to the end of the payment schedule (unless forgiven by § 1399(c)(1)(B)).

Third, when must the employer pay? The statute could not make the employer pay the calculated sum (or begin to pay that sum) on the date in reference to which one calculates the withdrawal charge, for that date occurs before the employer withdraws. (It is the last day of the preceding plan year, i. e., December 31,1980, for an employer who withdraws in 1981.) The statute, of course, might make the withdrawing employer pay (or begin payment) on the date the employer actually withdraws. But, it does not do so. Rather, the statute says that a plan must draw up a schedule for payment and “demand payment” as “soon as practicable” after withdrawal. 29 U. S. C. § 1399(b)(1). It adds that “[withdrawal liability shall be payable ... no more than 60 days after the date of the demand.” § 1399(c)(2).

Thus, a plan that calculates quickly might demand payment the day after withdrawal and make the charge “payable” within 60 days thereafter. A plan that calculates slowly might not be able to demand payment for many months after withdrawal. For example, in the case of the employer who withdraws on August 14, 1981, incurring a withdrawal charge of $23.3 million (calculated as of December 31, 1980), the lump sum of $23.3 million, or the first of the installment payments of roughly $4 million, will become “payable” to the plan “no later than 60 days” after the plan sent the withdrawing employer a demand letter. The day of the first payment may thus come as soon as within 60 days after August 15, 1981, or it may not come for many months thereafter, depending upon the plan’s calculating speed.

C

This Case

The facts of this case approximate those of our example. Three brewers, Schlitz, Pabst, and Miller, contributed for many years to a multiemployer pension plan (Plan). On August 14, 1981, Schlitz withdrew from the Plan. See App. 151-152. By the end of September 1981, the Plan completed its calculations, created a payment schedule, and sent out a demand for payment (thereby making the first installment payment “payable”) “on or before November 1, 1981.” Id., at 153, 154. From the outset, the parties agreed that the annual installment payment amounted to $3,945,481, and that the relevant interest rate was 7% per year. After various controversies led to arbitration and a court proceeding between Schlitz and the Plan, the courts and parties eventually determined that the withdrawal charge (calculated as of the last day of the previous plan-bookkeeping year, December 31, 1980) amounted to $23.3 million.

But the parties disagreed whether interest accrued during 1981, the year in which Schlitz withdrew. The Plan claimed that, for purposes of calculating the installment schedule, interest started accruing on the last day of the plan year preceding withdrawal (December 31, 1980). Schlitz, on the other hand, argued that accrual began on the first day of the plan year following withdrawal (January 1, 1982). Under either reading, the number of annual payments is eight. But, under the Plan’s reading, the final payment would amount to $3,499,361, whereas, in Schlitz’s reading, that payment would amount to $880,331.

The arbitrator in this case agreed with Schlitz’s reading. See 9 EBC 2385,2405 (1988). The District Court, reviewing the arbitration award, disagreed, No. 88-C-908 (ED Wis., June 6, 1991), reprinted in App. 25, 62-69, but the Court of Appeals for the Seventh Circuit reversed the District Court, 3 F. 3d 994 (1993). Because the Seventh Circuit’s decision conflicts with a holding of the Third Circuit, Huber v. Casablanca Industries, Inc., 916 F. 2d 85, 95-100 (1990), cert. dism’d, 506 U. S. 1088 (1993), this Court granted certiorari, 512 U. S. 1234 (1994). Our conclusion, like that of the Seventh Circuit, is that, for purposes of computation, interest does not start accruing until the beginning of the plan year after withdrawal.

II

At first glance, the statutory provision that (the parties agree) governs this case seems silent on the issue of withdrawal-year interest. Indeed, it does not mention interest directly at all. Rather, it says that a withdrawing employer

“shall pay the amount determined under section 1391... over the period of years necessary to amortize the amount in level annual payments determined under sub-paragraph (C), calculated as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs and as if each subsequent payment were made on the first day of each subsequent plan year.” 29 U. S. C. § 1399(c)(l)(A)(i) (emphasis added).

After considering the parties’ arguments, which focus upon the emphasized language, we have become convinced that, for purposes of computation, this provision, although causing interest to accrue over subsequent plan years, does not cause interest to accrue during the withdrawal year itself.

A

The Plan points out, and we agree, that' the word “amortize” normally assumes interest charges. After all, the very idea of amortizing, say, a mortgage loan, involves paying the principal of the debt over time along with interest. But the Plan (supported by the Government, which is taking a view of the matter contrary to the view the Pension Benefit Guaranty Corporation took in the Huber case, see 916 F. 2d, at 96) goes on to claim that the word “amortize” indicates that interest accrues during the withdrawal year as well as during subsequent years. We do not agree with that claim. In our view, one generally does not pay interest on a debt until that debt arises — that is to say, until the principal of the debt is outstanding. And the instruction to calculate payment as if the first payment were made at the beginning of the following year tells us to treat the debt as if it arose at that time (i. e., the first day of the year after withdrawal), not as if it arose one year earlier.

For one thing, unless a loan is involved, one normally expects a debtor to make a first payment at the time the debt arises, not one payment cycle later. Suppose, for example, that a taxpayer arranges to pay a large tax debt in four quarterly installments. Would one not expect the taxpayer to make the first payment on April 16, the day the tax debt becomes due? Similarly, would one not expect a buyer of, say, a business to make the first payment (a down payment) at the time of the closing? By way of contrast, when a loan is involved (say, when one borrows money on a home mortgage and repays it in installments), interest accrual normally does begin before the first payment. That is because the borrower has had the use of the money for one cycle before the first payment. In the case of a loan, it would seem pointless, and would simply generate an unnecessary back-and-forth transfer of money, for a first repayment to take place on the very day the lender disburses the loan proceeds.

The “first payment” at issue here, however, looks more like a tax or purchase-money installment than a loan installment. Under the statute, the withdrawing employer’s debt does not arise at the end of the year preceding the year of withdrawal. In fact, the employer may not have withdrawn from the plan at the beginning of the year, but instead may have continued to make its ordinary contribution until well into the year. In any event, the statute makes clear that the withdrawing employer owes nothing until its plan demands payment, which will inevitably happen some time after the beginning of the year. See 29 U. S. C. §§ 1399(b)(1), (c)(2). In fact, the withdrawing employer cannot determine, or pay, the amount of its debt until the plan has calculated that amount — which must take place some time after the beginning of the withdrawal year. All these features make it difficult to find any analogy in withdrawal liability to a loan.

For another thing, we cannot easily reconcile the Plan’s reading of the statute with the statutory provision that permits an employer to pay the amount owed in a lump sum. That provision says that a withdrawing employer We read this provision to permit an employer, by paying a lump sum, to avoid paying the amortization interest that § 1399(c)(l)(A)(i) would otherwise cause to accrue. (Under any other reading, the prepayment provision would not create much of an “entitle[ment].” Moreover, the prepayment provision refers to “payments determined under [§ 1399(c)(1) (C)]” — not § 1399(c)(1)(A), the provision that causes amortization interest to accrue.) It would seem odd if the prepayment provision enabled an employer to avoid all interest except the interest accruing during the year of withdrawal. And, if interest accrued from the last day of the year before withdrawal, there would hardly ever be a time that no interest was due. Such a reading would thus make it very difficult to give meaning to the words “if any” in the phrase “plus accrued interest, if any.” (The Third Circuit suggested that these words might refer to a lump-sum payment made immediately after a scheduled installment. See Huber, 916 F. 2d, at 99. We agree that they could, theoretically. But, realistically speaking, it seems unlikely that Congress inserted “if any” to deal with such an unusual event.)

“shall be entitled to prepay the outstanding amount of the unpaid annual withdrawal liability payments determined under [§ 1399(c)(1)(C)], plus accrued interest, if any, in whole or in part, without penalty.” § 1399(c)(4).

Further, the interpretation under which interest would accrue from the last day of the year before withdrawal is difficult to reconcile with the statutory language that defines a withdrawing employer’s basic liability. Section 1381(a) says that the withdrawing employer becomes “liable to the plan in the amount determined under this part to be the withdrawal liability.” Section 1381(b)(1) defines “withdrawal liability” as “the amount determined under section 1391.” Yet, § 1391 says nothing about a year’s worth of interest. Why then read the provision here at issue so that it inevitably and always creates liability in the amount of the withdrawal charge plus one year's interest, irrespective of when the employer, in fact, withdraws and how or when the employee begins to pay?

Finally, the provision here at issue asks one to calculate the installment payments as if the “first payment” was made, not on the last day of the withdrawal year, but on the “first day” of the next year, i. e., one year plus one day after the withdrawal charge calculation date. This choice of time (a year and a day) would be an odd way to signal that one is to treat the first payment as if it occurred at the end of a cycle.

B

The Plan (and supporting amici) make several arguments in support of a reading in which, for purposes of calculation, interest starts accruing on the last day of the year before withdrawal. But we are not persuaded.

First, the Plan argues that our interpretation works against the basic objective of the statute, requiring a withdrawing employer to pay a fair share of the underfunding. Under our interpretation, says the Plan, the withdrawing employer will fail to pay a year’s worth of interest on the withdrawal charge, thereby requiring the remaining employers to make up what, in fact, was part of the withdrawing employer’s fair share. Suppose, for example, that an underfunded plan needed exactly $20 million as of the end of 1980 to create a sum that would grow to just the amount needed to pay then-vested benefits falling due, say, in 1999. By the end of 1981 that same plan would need more money; indeed, if we assume the $20 million would have grown 7% each year, it would need 7% more to pay those same vested 1999 benefits. Thus, if the withdrawing employer’s fair share of the $20 million is $3 million as of the end of 1980, its fair share must have grown to $3,210,000 by the end of 1981. Why, asks the Plan, should the remaining employers have to make up for this missing $210,000?

One answer to the Plan’s question is that the $210,000 will not necessarily be missing. For one thing, until the employer withdraws, it will be required to make contributions that should contain a component designed to reduce underfunding. See 26 U. S. C. § 412(b)(2); 29 U. S. C. § 1082. For another thing, if a plan moves quickly, it may be able to force a withdrawing employer to begin making installment payments even before the end of the withdrawal year. Either way, to charge such an employer a full year’s worth of interest would overcharge that employer and thereby provide the remaining employers with a kind of underfunding-reduction windfall.

Another answer is that we are not convinced that MPPAA aims to make withdrawing employers pay an actuarially perfect fair share, namely, a set of payments in amounts that, when invested, would theoretically produce (on the plan’s actuarial assumptions) a sum precisely sufficient to pay (the employer’s proportional share of) a plan’s estimated vested future benefits. For one thing, the statute forgives de mini-mis amounts. See 29 U. S. C. § 1389. For another thing, it forgives all annual installment payments after 20 years, see § 1399(c)(1)(B) — and that means that, if an employer’s normal annual contribution was low compared to the withdrawal charge, the presence or absence of withdrawal-year interest (which shows up at the end of the payment schedule, see supra, at 419) will make no difference (for the last payments will never be made). Finally, in making the first installment “payable” only after a plan demands it, MPPAA contemplates that an employer sometimes may pay its actual first installment long after the withdrawal year — as was the case in Huber, supra, at 88 (2V2-year delay) — in which case no interpretation of the statute can avoid an employer’s actually paying something less than its fair share of interest.

Second, the Plan argues that the statute’s language favors its interpretation. It refers to a dictionary that defines an amortization plan as “ ‘one where there are partial payments of the principal, and accrued interest, at stated periods for a definite time, at the expiration of which the entire indebtedness will be extinguished,’ ” Brief for Petitioner 27 (quoting Black’s Law Dictionary 76 (5th ed. 1979)) (emphasis added), and to another definition that says that, “ ‘[i]f a loan is being repaid by the amortization method, each payment is partially repayment of principal and partially payment of interest/ ” Brief for Petitioner 27 (quoting S. Kellison, The Theory of Interest 169 (2d ed. 1991)) (emphasis added). These definitions accurately describe the repayment of loans. But, they do not seem to focus upon whether or not one would normally include interest in the first installment of an amortized payment of a debt that is not a loan. We have no reason to believe they intend to define away the issue before us here.

The Plan adds that our reading of the statute makes the first “as if” clause in § 1399(c)(l)(A)(i) superfluous because, “if Congress had not intended to include interest in the first payment, it could have simply provided that the presumed payment schedule should be calculated as if payments were made annually.” Brief for Petitioner 38. It seems to us that the premise of this argument is that, without contrary indication, one would expect that, in the case of an indebtedness of the kind here at issue, interest would not start accruing before the first payment is due — a premise with which we agree, see supra, at 422-423. More importantly, had Congress not used the words “as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs,” the reader might have thought that interest would begin to accrue immediately upon withdrawal, a reading that has some intuitive appeal, see 3 F. 3d, at 1004 (“An assessment of interest between the date of withdrawal and the date on which payments begin . . . would not be troubling”). But, the first “as if” clause makes clear that interest does not begin accruing on that date. (The same concern may explain the second “as if” clause in §.1399(c)(l)(A)(i), concerning subsequent payments. Without that clause, one might think that one should calculate the amortization schedule as if the first payment is made out of order, and as if each successive payment is made on the anniversary of the date of withdrawal.)

We recognize that Congress might have been more specific. For example, it could have said: “Calculate amortization as if the first payment is made on the date the employer’s withdrawal liability is due” (had it intended interest to start accruing on that date); or: “Calculate amortization as if each payment is made on the last day of the year at the beginning of which it is due” (had it intended interest to start accruing one cycle before the first payment is due). Instead, Congress said that one should calculate amortization “as if the first payment were made on the first day of the plan year following the plan year in which the withdrawal occurs.” And, that actual language, as we have said, offers more support for our interpretation than for the alternative. Were we to read the actual language as does the Plan, we would have to analogize the valuation date (the last day of the year preceding withdrawal) to the date on which liability arises; to the date on which the debt becomes “payable”; or to the date on which the employer withdraws. But, in fact, the calculation date is none of those things; it is a date chosen simply for ease of administration; and ease of administration does not require choosing the same date for interest-accrual purposes. See 3 F. 3d, at 1004 (“Establishing a simple rule for calculating funding shortfalls has nothing to do with interest”).

Third, the Plan points to legislative history. The Plan says that the original bill provided that interest would not begin accruing until the date of withdrawal. And, the Plan points out, just like the version that ultimately became law, the bill located the valuation date (the date as of which the withdrawing employer’s share in the plan’s underfunding is determined) at the end of the plan year before withdrawal. Thus, the Plan says, the original bill contemplated a “funding gap” — from the valuation date to the withdrawal date. Because the section providing that interest started accruing on the withdrawal date did not make it into the statute as enacted, the Plan argues, Congress expressly rejected the idea of a “gap.” Brief for Petitioner 41.

For the reasons stated above, see supra, at 426-427, we doubt that our reading, as a practical matter, will cause a significant gap to occur. But, regardless, if we were to consider legislative history in this case, we would find that it undermines, rather than supports, the Plan’s reading. The Plan’s rendering is incomplete, for the relevant statutory provisions went through not two but four versions:

(1) the original bill, calling for a valuation on the last day of the year before withdrawal and for interest accrual beginning on the date of withdrawal,
see S. 1076, 96th Cong., 1st Sess., § 104 (1979) (adding ERISA §§ 4201(d)(1)(A), (e)(5)), reprinted in 125 Cong. Rec. 9800, 9803 (1979); H. R. 3904, 96th Cong., 1st Sess., §104 (1979) (adding ERISA §§ 4201(d) (1)(A), (e)(5)), reprinted in Hearings on the Multiem-ployer Pension Plan Amendments Act of 1979 before the Task Force on Welfare and Pension Plans of the Subcommittee on Labor-Management Relations of the House Committee on Education and Labor, 96th Cong., 1st Sess., pp. 3,21,25 (1979) (hereinafter Task Force Hearings);
(2) a second version, which moved the valuation date to the end of the withdrawal year and also said that interest shall be determined “as if each payment were made at the end of the year in which it is due” (thus apparently indicating that interest would start accruing one year before the first payment fell due),
see H. R. 3904, supra, § 104 (adding ERISA §§ 4201(e) (2)(E), (f)(2)(C), (f)(3)(A), (f)(4)(A), (i)(2)(A) (ii)), reprinted in Task Force Hearings 246-247, 249, 251, 252,256;
(3) a third version, which kept the valuation date at the end of the withdrawal year but changed the interest-accrual language to the “as if” clauses found in the statute as we now know it,
see H. R. 3904, 96th Cong., 1st Sess., §104 (1980) (adding ERISA §§ 4201(e)(2)(E)(i), (f)(2)(C)(i), (f) (3)(A), (f)(4)(A), (i)(2)(A)(i)), reprinted in H. R. Rep. No. 96-869, pt. 1, pp. 12-15 (1980); H. R. 3904, 96th Cong., 1st Sess., §104 (1980) (adding ERISA §§4201(e)(2)(E)(i), (f)(2)(C)(i), (f)(3)(A), (f)(4)(A), 4202(c)(l)(A)(i)), reprinted in H. R. Rep. No. 96-869, pt. 2, pp. 129-131, 135-136 (1980); and
(4) a final version, which moved the valuation date back to the end of the year preceding withdrawal but retained the third version’s interest-accrual language,
see H. R. 3904, 96th Cong., 1st Sess., § 104 (1980) (adding ERISA §§4211(b)(2)(E)(i), (c)(2)(C)(i)(I), (c)(3)(A), (c)(4)(A)(i), 4219(c)(l)(A)(i)), reprinted in 126 Cong. Rec. 23003, 23014, 23016 (1980).

This history suggests two things, neither of which helps the Plan. First, throughout the bill’s history, the valuation date and interest-accrual date moved about in an apparently uncoordinated way. This somewhat undermines the Plan’s suggestion that Congress was very concerned about the interplay between the two. It certainly dispels the notion that the final version should primarily be viewed as a rejection of the “funding gap” found in the original bill. Second, the evolution of the “as if” clause from “as if each payment were made at the end of the year in which it is due” to “as if the payment were made on the first day of the plan year [following withdrawal]” suggests that Congress replaced a scheme in which interest starts accruing a full payment cycle before the first payment with a scheme in which interest starts accruing on the first day of the year following withdrawal.

III

We consequently hold that MPPAA calculates its installment schedule on the assumption that interest begins accruing on the first day of the year following withdrawal. The judgment of the Court of Appeals is therefore

Affirmed.


author: Justice Breyer Justice Thomas,

text:
    O’NEAL v. McANINCH, WARDEN
    No. 93-7407.
    Argued October 31, 1994
    Decided February 21, 1995

      Breyer, J., delivered the opinion of the Court, in which Stevens, O’Connor, Kennedy, Souter, and Ginsburg, JJ., joined. Thomas, J., filed a dissenting opinion, in which Rehnquist, C. J., and Scalia, J., joined, post, p. 445.

      Thomas R. Wetterer, Jr., by appointment of the Court, 511 U. S. 1067, argued the cause for petitioner. With him on the briefs were Gloria Eyerly, Gregory L. Ayers, and John A. Bay.

      Richard A. Cordray, State Solicitor of Ohio, argued the cause for respondent. With him on the briefs were Lee Fisher, Attorney General, Simon B. Karas, and Stuart A. Cole and Timothy J. Mangan, Assistant Attorneys General.

      James A. Feldman argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Days, Assistant Attorney General Harris, and Deputy Solicitor General Wallace.

       Briefs of amici curiae urging reversal were filed for the American Civil Liberties Union et al. by Larry W. Yackle, Steven R. Shapiro, and James S. Liebman; and for Timothy Scott Sherman by Andrew L. Frey, Roy T. Englert, Jr., James G. Duncan, and Stuart J. Robinson.

      A brief of amici curiae urging affirmance was filed for the State of Maryland et al. by J Joseph Curran, Jr., Attorney General of Maryland, Tarra DeShields-Minnis, Assistant Attorney General, and Eleni M. Constantine, and by the Attorneys General for their respective jurisdictions as follows: James H. Evans of Alabama, Bruce M. Botelho of Alaska, Grant Woods of Arizona, Winston Bryant of Arkansas, Daniel E. Lungren of California, Gale H. Norton of Colorado, John M. Bailey of Connecticut, Charles Oberly of Delaware, Robert A. Butterworth of Florida, Michael J. Bowers of Georgia, Robert A. Marks of Hawaii, Larry EchoHawk of Idaho, Roland W. Burris of Illinois, Pamela Carter of Indiana, Bonnie J. Campbell of Iowa, Robert T. Stephan of Kansas, Chris Gorman of Kentucky, Richard P. Ieyoub of Louisiana, Michael E. Carpenter of Maine, Scott Harshbarger of Massachusetts, Frank J. Kelley of Michigan, Hubert H. Humphrey III of Minnesota, Mike Moore of Mississippi, Jeremiah (Jay) Nixon of Missouri, Joseph P. Mazurek of Montana, Don Stenberg of Nebraska, Frankie Sue Del Papa of Nevada, Jeffrey R. Howard of New Hampshire, Deborah T. Poritz of New Jersey, Tom Udall of New Mexico, G. Oliver Koppel of New York, Michael F. Easley of North Carolina, Susan B. Loving of Oklahoma, Theodore R. Kulongoski of Oregon, Ernest D. Preate, Jr., of Pennsylvania, Pedro R. Pierluisi of Puerto Rico, Jeffrey B. Pine of Rhode Island, T. Travis Medlock of South Carolina, Mark Barnett of South Dakota, Charles Burson of Tennessee, Dan Morales of Texas, Jan Graham of Utah, Jeffrey L. Amestoy of Vermont, Rosalie Sim-mo-nds Ballentine of the Virgin Islands, James S. Gilmore III of Virginia, Christine O. Gregoire of Washington, Darrell V. McGraw, Jr., of West Virginia, James E. Doyle of Wisconsin, and Joseph B. Meyer of Wyoming.

        Lawrence J. Fleming and Harry R. Reinhart filed a brief for the National Association of Criminal Defense Lawyers et al. as amici curiae.

   Justice Breyer

delivered the opinion of the Court.

Reviewing courts normally disregard trial errors that are harmless. This case asks us to decide whether a federal ha-beas court should consider a trial error harmless when the court (1) reviews a state-court judgment from a criminal trial, (2) finds a constitutional error, and (3) is in grave doubt about whether or not that error is harmless. We recognize that this last mentioned circumstance, “grave doubt,” is unusual. Normally a record review will permit a judge to make up his or her mind about the matter. And indeed a judge has an obligation to do so. But we consider here the legal rule that governs the special circumstance in which record review leaves the conscientious judge in grave doubt about the likely effect of an error on the jury’s verdict. (By “grave doubt” we mean that, in the judge’s mind, the matter is so evenly balanced that he feels himself in virtual equipoise as to the harmlessness of the error.) We conclude that the uncertain judge should treat the error, not as if it were harmless, but as if it affected the verdict (i. e., as if it had a “substantial and injurious effect or influence in determining the jury’s verdict”).

I

Robert O’Neal filed a federal habeas corpus petition challenging his state-court convictions for murder and other crimes. The Federal District Court agreed with several of his claims of constitutional trial error. On appeal the Sixth Circuit disagreed with the District Court, with one important exception. That exception focused on possible jury “confusion” arising out of a trial court instruction about the state of mind necessary for conviction combined with a related statement by a prosecutor. The Sixth Circuit assumed, for argument’s sake, that the instruction (taken together with the prosecutor’s statement) had indeed violated the Federal Constitution by misleading the jury. Nonetheless, the court disregarded the error on the ground that it was “harmless.” O'Neal v. Morris, 3 F. 3d 143, 147 (1993).

The court’s opinion sets forth the standard normally applied by a federal habeas court in deciding whether or not this kind of constitutional “trial” error is harmless, namely, whether the error “ ‘ “had substantial and injurious effect or influence in determining the jury’s verdict.’”” Id., at 145 (quoting Brecht v. Abrahamson, 507 U. S. 619, 627 (1993) (quoting, and adopting, standard set forth in Kotteakos v. United States, 328 U. S. 750, 776 (1946))). But, rather than ask directly whether the record’s facts satisfied this standard, the court seemed to refer to a burden of proof. Its opinion says that the habeas petitioner must bear the “burden of establishing” whether the error was prejudicial. 3 F. 3d, at 145. As a practical matter, this statement apparently means that, if a judge is in grave doubt about the effect on the jury of this kind of error, the petitioner must lose. Thus, O’Neal might have lost in the Court of Appeals, not because the judges concluded that the error was harmless, but because the record of the trial left them in grave doubt about the effect of the error.

This Court granted certiorari to decide what the law requires in such circumstances. We repeat our conclusion: When a federal judge in a habeas proceeding is in grave doubt about whether a trial error of federal law had “substantial and injurious effect or influence in determining the jury’s verdict,” that error is not harmless. And, the petitioner must win.

II

As an initial matter, we note that we deliberately phrase the issue in this case in terms of a judge’s grave doubt, instead of in terms of “burden of proof.” The case before us does not involve a judge who shifts a “burden” to help control the presentation of evidence at a trial, but rather involves a judge who applies a legal standard (harmlessness) to a record that the presentation of evidence is no longer likely to affect. In such a case, we think it conceptually clearer for the judge to ask directly, “Do I, the judge, think that the error substantially influenced the jury’s decision?” than for the judge to try to put the same question in terms of proof burdens (e. g., “Do I believe the party has borne its burden of showing . . . ?”). As Chief Justice Traynor said:

“Whether or not counsel are helpful, it is still the responsibility of the . . . court, once it concludes there was error, to determine whether the error affected the judgment. It must do so without benefit of such aids as presumptions or allocated burdens of proof that expedite fact-finding at the trial.” R. Traynor, The Riddle of Harmless Error 26 (1970) (hereinafter Traynor).

The case may sometimes arise, however, where the record is so evenly balanced that a conscientious judge is in grave doubt as to the harmlessness of an error. See id., at 22-23. This is the narrow circumstance we address here.

Ill

Our legal conclusion — that in cases of grave doubt as to harmlessness the petitioner must win — rests upon three considerations. First, precedent supports our conclusion. As this Court has stated, “the original common-law harmless-error rule put the burden on the beneficiary of the error [here, the State]... to prove that there was no injury ....” Chapman v. California, 386 U. S. 18, 24 (1967) (citing 1 J. Wigmore, Evidence §21 (3d ed. 1940)). When this Court considered the doubt-as-to-harmlessness question in the context of direct review of a ramconstitutional trial error, it applied the same rule. In Kotteakos v. United States, the Court wrote:

“If, when all is said and done, the [court’s] conviction is sure that the error did not influence the jury, or had but very slight effect, the verdict and the judgment should stand .... But if one cannot say, with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error, it is impossible to conclude that substantial rights were not affected. The inquiry cannot be merely whether there was enough to support the result, apart from the phase affected by the error. It is rather, even so, whether the error itself had substantial influence. If so, or if one is left in grave doubt, the conviction cannot stand.” 328 U. S., at 764-765 (emphasis added).

Id., at 776 (holding that error is not harmless if it had “substantial and injurious effect or influence” upon the jury). That is to say, if a judge has “grave doubt” about whether an error affected a jury in this way, the judge must treat the error as if it did so. See also United States v. Olano, 507 U. S. 725, 741 (1993) (stating that under Federal Rule of Criminal Procedure 52(a) the Government bears the “burden of showing the absence of prejudice”); United States v. Lane, 474 U. S. 438, 449 (1986) (quoting Kotteakos as providing the proper harmless-error standard in cases of misjoinder and quoting “ ‘grave doubt’ ” language).

When this Court considered the same question in the context of direct review of a constitutional trial error, it applied the same rule. See Chapman, 386 U. S., at 24 (holding that error is harmless only if “harmless beyond a reasonable doubt”). Indeed, the Chapman Court wrote that “constitutional error... casts on someone other than the person prejudiced by it a burden to show that it was harmless.” Ibid.

We must concede that in Brecht v. Abrahamson this Court, in the course of holding that the more lenient Kot-teakos harmless-error standard, rather than the stricter Chapman standard, normally governs cases of habeas review of constitutional trial errors, stated that habeas petitioners “are not entitled to habeas relief based on trial error unless they can establish that it resulted in ‘actual prejudice.’” Brecht, 507 U. S., at 637 (emphasis added). This language, however, is not determinative. The issue in Brecht involved a choice of substantive harmless-error standards: the stricter Chapman, or the less strict Kotteakos, measure of harmlessness. Both of those cases had resolved the issue now before us the same way, placing the risk of doubt on the State. Moreover, the sentence from Brecht quoted above appears in a paragraph that adopts the very Kotteakos standard that we now apply. That paragraph does not explain why the Court would make an exception to the “grave doubt” portion of the Kotteakos standard. Furthermore, the Brecht opinion, in this respect, did not speak for a Court majority. Four Members of the Court, supporting application of Chapman’s standard, dissented. And Justice Stevens, while a Member of the majority, stated explicitly that the Kotteakos standard applied in its entirety. 507 U. S., at 640 (concurring opinion) (agreeing, in part, because that standard “places the burden on prosecutors to explain why those errors were harmless”).

We further acknowledge that this Court, in Palmer v. Hoffman, 318 U. S. 109 (1943), said:

“He who seeks to have a judgment set aside because of an erroneous ruling carries the burden of showing that prejudice resulted.” Id., at 116.

But this pre-Kotteakos language, in context, referred to what the preceding sentence in Palmer described as “[m]ere ‘technical errors.’” 318 U. S., at 116. Kotteakos itself makes clear that “technical errors” may be different. It quotes an excerpt from the House Report accompanying the harmless-error statute (then 28 U. S. C. § 391) that says the statute casts

“ ‘upon the party seeking a new trial the burden of showing that any technical errors that he may complain of have affected his substantial rights.’” Kotteakos, 328 U. S., at 760 (quoting H. R. Rep. No. 913, 65th Cong., 3d Sess., 1 (1919)).

The Report, however, (as Kotteakos immediately points out) goes on to say that if the error is not “technical,” if, instead,

“ ‘the error is of such a character that its natural effect is to prejudice a litigant’s substantial rights, [then] the burden of sustaining a verdict will, notwithstanding this legislation rest upon the one who claims under it.’” H. R. Rep. No. 913, swpra, at 1.

The “grave doubt” language of Kotteakos itself makes clear that important trial errors, including any “constitutional violation, . . . fall in” this last mentioned category, and not “in the ‘technical’ category” that the House Report described. Brecht, supra, at 641 (Stevens, J., concurring); see Bruno v. United States, 308 U. S. 287, 294 (1939) (Frankfurter, J.) (describing technical errors as those concerned with the “mere etiquette of trials and with the formalities and minutiae of procedure”).

We also have examined the precedent upon which the State relies to support its view that appellants bear a “burden” of showing “prejudice” in civil cases. See, e. g., Erskine v. Consolidated Rail Corp., 814 F. 2d 266 (CA6 1987); Flanigan v. Burlington Northern Inc., 632 F. 2d 880 (CA8 1980); Creekmore v. Crossno, 259 F. 2d 697 (CA10 1958). The State contends that, because a habeas proceeding, technically speaking, is a civil proceeding, see, e. g., Browder v. Director, Dept. of Corrections of Ill., 434 U. S. 257, 269 (1978), this standard applies here. See Fed. Rule Civ. Proc. 61.

One problem with this argument lies in its failure to take into account the stakes involved in a habeas proceeding. Unlike the civil cases cited by the State, the errors being considered by a habeas court occurred in a criminal proceeding, and therefore, although habeas is a civil proceeding, someone’s custody, rather than mere civil liability, is at stake. And, as we have explained, when reviewing errors from a criminal proceeding, this Court has consistently held that, if the harmlessness of the error is in grave doubt, relief must be granted. We hold the same here.

Moreover, precedent suggests that civil and criminal harmless-error standards do not differ in their treatment of grave doubt as to the harmlessness of errors affecting substantial rights. In Kotteakos, the Court interpreted the then-existing harmless-error statute, 28 U. S. C. §391, now codified with minor change at 28 U. S. C. § 2111. See Kotteakos, 328 U. S., at 759 (explaining that the statute “grew out of widespread and deep conviction” that appellate courts had become “ ‘impregnable citadels of technicality’ ”) (citation omitted). That statute, by its terms, applied to both civil and criminal cases, and Kotteakos made no distinction, at least with respect to the question at issue here, between the two types of cases. See id., at 757, n. 9; 11 C. Wright & A. Miller, Federal Practice and Procedure § 2883, p. 276 (1973) (hereinafter Wright & Miller). Similarly, the current harmless-error statute “traces its lineage” to §391, and applies in both civil and criminal proceedings. See McDonough Power Equipment, Inc. v. Greenwood, 464 U. S. 548, 554, n. 4 (1984). And, more important for present purposes, the current harmless-error sections of the Federal Rules of Civil Procedure and the Federal Rules of Criminal Procedure (which use nearly identical language) both refer to § 391 as their statutory source. Compare Fed. Rule Crim. Proc. 52(a) (providing that “[a]ny error . . . which does not affect substantial rights shall be disregarded”) with Fed. Rule Civ. Proc. 61 (providing that the court “must disregard any error . . . which does not affect the substantial rights of the parties”); see Advisory Committee’s Notes on Fed. Rule Crim. Proc. 52(a), 18 U. S. C. App., p. 833 (referring to former §391 as a source); Advisory Committee’s Notes on Fed. Rule Civ. Proc. 61, 28 U. S. C. App., p. 676 (same). In fact, in recent cases, we have interpreted the nearly identical language of Rule 52(a) as treating instances of grave doubt just as we treat them here. See Olano, 507 U. S., at 740-741, 743; Lane, 474 U. S., at 449 (quoting Kotteakos, supra, at 765). For these reasons, even if, for argument’s sake, we were to assume that the civil standard for judging harmlessness applies to habeas proceedings (despite the fact that they review errors in state criminal trials), it would make no difference with respect to the matter before us. For relevant authority rather clearly indicates that, either way, the courts should treat similarly the matter of “grave doubt” regarding the harmlessness of errors affecting substantial rights, and as Kotteakos provides.

Second, our conclusion is consistent with the basic purposes underlying the writ of habeas corpus. As we have said, we are dealing here with an error of constitutional dimension — the sort that risks an unreliable trial outcome and the consequent conviction of an innocent person. See Brecht, 507 U. S., at 654 (O’Connor, J., dissenting). We also are assuming that the judge's conscientious answer to the question, “But, did that error have a ‘substantial and injurious effect or influence’ on the jury’s decision?” is, “It is extremely difficult to say.” In such circumstances, a legal rule requiring issuance of the writ will, at least often, avoid a grievous wrong — holding a person “in custody in violation of the Constitution ... of the United States.” 28 U. S. C. §§ 2241(c)(8), 2254(a). Such a rule thereby both protects individuals from unconstitutional convictions and helps to guarantee the integrity of the criminal process by assuring that trials are fundamentally fair. See Traynor 23 (“In the long run there would be a closer guard against error at the trial, if... courts were alert to reverse, in case of doubt, for error that could have contaminated the judgment”). By way of contrast, the opposite rule, denying the writ in cases of grave uncertainty, would virtually guarantee that many, in fact, will be held in unlawful custody — contrary to the writ’s most basic traditions and purposes. And, it would tell judges who believe individuals are quite possibly being held “in custody in violation of the' Constitution” that they cannot grant relief.

We concede that this opposite rule (denying the writ) would help protect the State’s interest in the finality of its judgments and would promote federal-state comity. It would avoid retrials, some of which, held so late in the day, may lead to freedom for some petitioners whose initial convictions were in fact unaffected by the errors that took place at their initial trials. The State’s interest in avoiding retrial of this latter category of individuals is legitimate and important. But this interest is somewhat diminished by the legal circumstance that the State normally bears responsibility for the error that infected the initial trial. And, if one assumes (1) that in cases of grave doubt, the error is at least as likely to have been harmful in fact as not, and (2) that retrial will often (or even sometimes) lead to reconviction, then that state interest is further diminished by a factual circumstance: the number of acquittals wrongly caused by grant of the writ and delayed retrial (the most serious harm affecting the State’s legitimate interests) will be small when compared with the number of persons whom this opposite rule (denying the writ) would wrongly imprison or execute. On balance, we must doubt that the law of habeas corpus would hold many people in prison “in violation of the Constitution,” for fear that otherwise a smaller number, not so held, may eventually go free.

Third, our rule has certain administrative virtues. It is consistent with the way that courts have long treated important trial errors. See, e. g., Olano, supra; Lane, supra; Chapman, 386 U. S., at 24; Kotteakos, supra; see also 11 Wright & Miller §2883. In a highly technical area such as this one, consistency brings with it simplicity, a body of existing case law available for consultation, see Brecht, supra, at 638, and a consequently diminished risk of further, error-produced, proceedings. Moreover, our rule avoids the need for judges to read lengthy records to determine prejudice in every habeas case. These factors are not determinative, but offer a practical caution against a legal rule that, in respect to precedent and purpose, would run against the judicial grain.

IV

The State makes one additional argument. It points to language in the habeas corpus statute that says the federal courts

“shall entertain an application for a writ of habeas corpus . . . only on the ground that [a petitioner] is in custody in violation of the Constitution or laws or treaties of the United States.” 28 U. S. C. § 2254(a).

See § 2241(c)(3). If a “violation of the Constitution” is harmless, the State adds, then there is no causal connection between “violation” and “custody,” and the prisoner is not “in custody in violation of the Constitution.” And, by analogy to tort law, the State contends that, because the habeas petitioner is in the position of plaintiff, he must prove this causal connection. Whatever force there may be to this argument is countered by the equally persuasive analogy to affirmative defenses, on which the party in the position of defendant (here the State) bears the risk of equipoise. And, to read the statute as the State suggests would run counter to the principle of Kotteakos that when an error’s natural effect is to prejudice substantial rights and the court is in grave doubt about the harmlessness of that error, the error must be treated as if it had a “substantial and injurious effect” on the verdict. See Kotteakos, 328 U. S., at 764-765, 776.

We do not see what in the language of the statute tells a court that it should treat a violation as harmless when it is in grave doubt about its harmlessness. One might as easily infer the opposite — that the statute leaves the matter of harmlessness as a kind of affirmative defense — from the absence, in the Habeas Corpus Rules’ form petition, of any space for a “lack of harmlessness” allegation. See 28 U. S. C. § 2254 Rule 2(c) (providing in part that a habeas petition “shall be in substantially the form annexed to these rules”). Or, one might as easily infer neutrality on the point from the statute’s command that the court dispose of the petition “as law and justice require.” 28 U. S. C. §2243. Ultimately, we find no significant support for either side in any of this language. When faced with such gaps in the ha-beas statute, we have “look[ed] first to the considerations underlying our habeas jurisprudence, and then determined] whether the proposed rule would advance or inhibit these considerations by weighing the marginal costs and benefits of its application on collateral review.” Brecht, 507 U. S., at 633. We have done that in this case, and for the reasons set forth above, see supra, at 442-443, we conclude that, when a habeas court is in grave doubt as to the harmlessness of an error that affects substantial rights, it should grant relief.

V

For these reasons, the judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

It is so. ordered.

Justice Thomas,

with whom The Chief Justice and Justice Scalia join,

dissenting.

In my view, a federal habeas court may not upset the results of a criminal trial unless it concludes both that the trial was marred by a violation of the Constitution or a federal statute and that this error was harmful. Because the Court concludes otherwise, I respectfully dissent.

I

Though the majority begins with an examination of precedent construing the federal harmless-error statute, 28 U. S. C. §2111, the proper place to begin is with the statute governing habeas relief for prisoners in state custody. After all, the petitioner does not seek relief under the harmless-error statute.

Where a state prisoner is concerned, a writ of habeas corpus may issue only when that prisoner is “in custody in violation of the Constitution or laws or treaties of the United States.” 28 U. S. C. §§ 2241(c)(3), 2254(a). It is not enough that the habeas petitioner is in custody and that some violation of the Constitution or a federal statute occurred at trial; as amicus curiae the Solicitor General correctly argues, the statute requires a causal link between the violation and the custody. Quite obviously, a habeas petitioner who proves that a trivial (“harmless”) error occurred at trial will not secure habeas relief because such an error could not be said to have been a cause of the custody. Notwithstanding the error, the petitioner would have been in custody lawfully and thus relief is unwarranted. Even the majority implicitly agrees that causation is necessary, for otherwise it would have no need to discuss harmful errors as opposed to mere errors.

The habeas petitioner comes to federal court as a plaintiff. Because the plaintiff “seeks to change the present state of affairs,” he “naturally should be expected to bear the risk of failure of proof or persuasion.” 2 J. Strong, McCormick on Evidence § 337, p. 428 (4th ed. 1992). Part of that burden is the requirement that the plaintiff show that the defendant’s actions caused harm. In other areas of the law, the plaintiff almost invariably bears the burden of persuasion with respect to whether the defendant’s actions caused harm. See, e. g., Wards Cove Packing Co. v. Atonio, 490 U. S. 642, 669 (1989) (Stevens, J., dissenting) (“In the ordinary civil trial, the plaintiff bears the burden of persuading the trier of fact that the defendant has harmed her”); 2 Restatement (Second) of Torts §433B(1), p. 441 (1965) (“[T]he burden of proof that the tortious conduct of the defendant has caused the harm to the plaintiff is upon the plaintiff”). Establishing causation is thus an essential element of the plaintiff’s case in chief. Under the majority’s rationale, however, the habeas petitioner need not prove causation at all; once a prisoner establishes error, the government must affirmatively persuade the court of the harmlessness of that error. Ante, at 444. Without explaining why it favors habeas plaintiffs over other plaintiffs, the Court thus treats the question of causation as an affirmative defense.

Requiring the habeas petitioner to bear the risk of non-persuasion not only accords with the usual rules of litigation, but also is compelled by what we have said about the nature of habeas relief. “When the process of direct review . . . comes to an end, a presumption of finality and legality attaches to the conviction and sentence.” Barefoot v. Estelle, 463 U. S. 880, 887 (1983). We have acknowledged that the “writ strikes at finality,” one of the “law’s very objects,” McCleskey v. Zant, 499 U. S. 467, 491 (1991), and that when a habeas petitioner obtains a new trial, the government is put at a disadvantage “through the ‘erosion of memory’ and ‘dispersion of witnesses’ that occur with the passage of time,” Kuhlmann v. Wilson, 477 U. S. 436, 453 (1986) (plurality opinion) (quoting Engle v. Isaac, 456 U. S. 107, 127-128 (1982)). Our habeas cases indicate that upsetting the finality of judgments should be countenanced only in rare instances. See, e. g., Brecht v. Abrahamson, 507 U. S. 619, 633 (1993) (noting that “the writ of habeas corpus has historically been regarded as an extraordinary remedy”).

We have ample cause to be wary of the writ. Our criminal law does not routinely punish the innocent. Instead, our Constitution requires proof of guilt beyond a reasonable doubt. See In re Winship, 397 U. S. 358 (1970). As a result, the overwhelming majority of the innocent will never reach the habeas stage, since they will not have been found guilty at trial. Appeals and possible state postconviction relief further reduce the possibility that an innocent is in custody. The presumption of finality that we apply in ha-beas proceedings is therefore well founded.

Our habeas jurisprudence has also been informed by a proper recognition of the affront to a State when federal courts conduct habeas review. Habeas review “‘disturbs the State’s significant interest, in repose for concluded litigation, denies society the right to punish some admitted offenders, and intrudes on state sovereignty to a degree matched by few exercises of federal judicial authority.’ ” Duckworth v. Eagan, 492 U. S. 195, 210 (1989) (O’Connor, J., concurring) (quoting Harris v. Reed, 489 U. S. 255, 282 (1989) (Kennedy, J., dissenting)). See also McCleskey, supra, at 491; Engle, supra, at 128. Where the habeas court cannot say that an error resulted in harm, it seems particularly disrespectful to resolve doubts against the propriety of state-court judgments.

Our “harmless-error” inquiry in the habeas context concerns whether an error “ ‘had substantial and injurious effect or influence in determining the jury’s verdict.’” Brecht, supra, at 627 (quoting Kotteakos v. United States, 328 U. S. 750, 776 (1946)). As alluded to earlier, supra, at 446, this test consists of a causation inquiry — was the error a cause of the conviction. Thus, like all plaintiffs, the habeas plaintiff must show causation if he is to succeed.

II

The Court derives its contrary rule from cases construing the harmless-error statute, the purposes underlying the writ of habeas corpus, and the virtue of administrative consistency that stems from following established precedent. The Court’s analysis is unpersuasive.

A

The Court begins by examining harmless-error practice in the context of direct criminal appeals. I do not quarrel with the majority’s conclusion that once an error has been shown on direct appeal, the government must demonstrate that it was harmless if the conviction is to stand. See ante, at 437-438 (citing Kotteakos, supra, at 764-765, 776; Chapman v. California, 386 U. S. 18, 24 (1967); and United States v. Olano, 507 U. S. 725, 741 (1993)). Still, neither the harmless-error statute (which was the subject of Kotteakos) nor the rules governing harmless errors in district courts (discussed in Olano) apply to habeas review of errors that occurred in a prior ease. See 28 U. S. C. §2111; Fed. Rule Crim. Proc. 52(a); see also Fed. Rule Civ. Proc. 61.

To be sure, we have borrowed the applicable standard for judging harmlessness in habeas from cases interpreting the federal harmless-error statute. See, e. g., Brecht, supra, at 631. Applying harmless-error analysis makes sense, because a trivial error could not be said to cause custody and thus warrant habeas relief. But the harmless-error statute and rules do not apply of their own force in the habeas cases, and so the harmless-error precedents relied upon by the majority are certainly not dispositive. Indeed, Brecht itself— despite adopting the standard for harmlessness set out in Kotteakos — departed from Kotteakos by placing the burden upon the habeas petitioner to “establish” that this standard has been met. See 507 U. S., at 637.

If we are to look at cases examining the harmless-error statute, I would think that civil cases would be of greater relevance. As the Court admits, habeas is a civil proceeding. See ante, at 440 (citing Browder v. Director, Dept. of Corrections of Ill., 434 U. S. 257, 269 (1978)). Although the Court acknowledges that Palmer v. Hoffman, 318 U. S. 109 (1943), put the burden on the party claiming prejudice to demonstrate it, the Court dismisses Palmer as a preKotteakos case about technical errors. See ante, at 439. But Kotteakos did not purport to overrule Palmer. Nor is it true that the rule in Palmer is limited to cases involving technical errors. Palmer merely quoted former 28 U. S. C. §391 (the predecessor to the modern §2111, and the statute at issue in Kotteakos as well), which itself referred to “technical errors.” Palmer held that the party seeking relief from a judgment because of an erroneous ruling “carries the burden of showing that prejudice resulted”; it did not say that only those challenging “technically” erroneous rulings were so encumbered. See 318 U. S., at 116. Accordingly, most of the Courts of Appeals that have considered the issue place the burden of showing prejudice on the civil appellant, just as Palmer did. See, e. g., Smith v. Wal-Mart Stores (No. 471), 891 F. 2d 1177, 1180 (CA5 1990) (per curiam); United States v. Killough, 848 F. 2d 1523, 1527 (CA11 1988); United States v. Seaboard Surety Co., 817 F. 2d 956, 964 (CA2), cert. denied, 484 U. S. 855 (1987); see also ante, at 440 (citing cases from the Sixth, Eighth, and Tenth Circuits). But see Barth v. Gelb, 2 F. 3d 1180, 1188 (CADC 1993) (quoting the “grave doubt” language of Kotteakos, supra, at 765).

The Court concludes that Palmer and these cases may be disregarded because the federal harmless-error statute, 28 U. S. C. §2111, makes no distinction between civil and criminal cases; since the rule in the criminal context places the burden of persuasion on the government, the Court decides that the same should be true in the civil context. Ante, at 441-442. But the majority’s syllogism could just as easily be turned against the result it reaches. Authority in the civil context assigns the risk of nonpersuasion to the party alleging error, and since the statute draws no distinction between civil and criminal cases, we might just as easily conclude that the civil rule should be followed in the criminal context. The Court’s reasoning yields no determinate answer.

As indicated above, however, the harmless-error provisions do not actually apply in habeas cases anyway. We have no occasion to harmonize the harmless-error cases by overruling Palmer and by rejecting the practice that prevails in the majority of the Courts of Appeals that have considered the issue, as the Court does today.

B

The Court’s second claim is that its “conclusion is consistent with the basic purposes underlying the writ of habeas corpus.” Ante, at 442. As part of its argument, the Court lays claim to the moral high ground: “[W]e are dealing here with an error of constitutional dimension — the sort that risks an unreliable trial outcome and the consequent conviction of an innocent person.” Ibid. The Court suggests that when there is a grave doubt about the harmfulness of an error, “a legal rule requiring issuance of the writ will, at least often, avoid a grievous wrong — holding a person ‘in custody in violation of the Constitution ... of the United States.’” Ibid. (quoting 28 U. S. C. §§ 2241(c)(3), 2254(a)).

The Court concedes that there are other interests at stake — a State’s interest in the finality of its judgments and the promotion of federal-state comity, see ante, at 443 — but goes on to set these principles aside. The Court concludes that the State’s interest in finality, while “legitimate and important,” ibid., is diminished by the fact that “the number of acquittals wrongly caused by grant of the writ and delayed retrial.. . will be small when compared with the number of persons whom [the] opposite rule . . . would wrongly imprison or execute,” ibid.

Despite its rhetoric, the Court itself is merely balancing the costs and benefits associated with disturbing judgments when a court is in grave doubt about harm. The Court decides that the possibility of unlawful custody should lead to the adoption of its grave doubt rule. But because the Court draws the line at “grave doubt” rather than “significant doubt” or “any doubt,” it is not willing to go as far as it must in order to ensure that no one is unlawfully imprisoned. Thus, under the majority’s assumptions, even its own rule will guarantee that “many, in fact, will be held in unlawful custody.” Ante, at 442.

It is important to recognize, moreover, that when the Court discusses erroneous imprisonments and executions, it is not addressing questions of innocence or guilt. The standard for judging harmlessness in habeas cases certainly does not turn on the innocence of the habeas petitioner. In fact, the Court’s rule applies only when the habeas court cannot make up its mind about whether a jury would have entertained any reasonable doubt about the defendant’s guilt. Though the majority seems to suggest otherwise, it certainly will not be true that in half of such cases, the State will have unjustly imprisoned an innocent person.

C

Citing Kotteakos, Chapman, and other cases, the Court concludes that its rule will be easier to administer because it is consistent with the way courts have treated grave doubts about harm. Ante, at 443. As indicated above, Palmer and the majority view in the Courts of Appeals provide an equally attractive rule that is consistent with longstanding practice. As for the Court’s assertion that its rule eliminates “the need for judges to read lengthy records to determine prejudice in every habeas case,” ante, at 443, I thought it settled that “it is the duty of a reviewing court to consider the trial record as a whole” when conducting a harmless-error analysis, United States v. Hasting, 461 U. S. 499, 509 (1983). Surely a judge cannot, in the midst of reading a record, declare himself to be in grave doubt, stop reviewing, and issue the writ. Because further review may always disturb the judge’s current view of the error, the judge cannot stop until he finishes reviewing the relevant portions of the record. Indeed, given that further review always has the potential to resolve any grave doubt, one is tempted to require a judge to continue to read and reread the relevant portions of the record until his grave doubts dissipate.

Ill

Fortunately, the rule announced today will affect only a minuscule fraction of cases. Even when there is a close question about whether an error was harmful, the conscientious judge ordinarily should make a ruling as to harm. The Court’s rule is not a means for judges to escape difficult decisions; it applies only in that “special circumstance” in which a judge, after a thorough review of the record, remains in equipoise. See ante, at 435.

The rule has such limited application that it most likely will have no effect on this case. The majority suggests that O’Neal “might have lost in the Court of Appeals, not because the judges concluded that [any supposed] error was harmless, but because the record of the trial left them in grave doubt about the effect of the error.” Ante, at 436. The Sixth Circuit did observe that “[t]he habeas petitioner bears the burden of establishing... prejudice.” O’Neal v. Morris, 3 F. 3d 143, 145 (1993). But the Court of Appeals did not refer again to this burden and did not appear to rely on it in reaching a decision. See id., at 147. That we chose this case to establish a “grave doubt” rule is telling: Cases in which habeas courts are in equipoise on the issue of harmlessness are astonishingly rare.

Though the question that the Court decides today will have very limited application, I believe that the Court gives the wrong answer to that question.

Accordingly, I respectfully dissent.