Jamal Kifafi v. Hilton Hotel Retirement Plan
403 U.S. App. D.C. 156
| D.C. Cir. | 2012Background
- Kifafi sued Hilton’s Retirement Plan alleging ERISA backloading and improper vesting credit for years of service.
- The district court found the plan impermissibly backloaded and improper vesting credits, and ordered remedies.
- Hilton amended the plan multiple times, including a 1999 plan that used a greater-of accrual method and reduced early-year accruals while increasing the Social Security offset.
- The district court certified a backloading class, but not a vesting class, and later entered summary judgment against Hilton with remedial orders.
- Hilton challenged mootness, the remedy, class certification, limitations, and the vesting remedy; the court reviewed for abuse of discretion.
- The court affirmed, holding ERISA allows equitable remedies beyond mere compliance with the anti-backloading rule and that the remedial fashion chosen was reasonable
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case is mootable after 1999 plan changes | Kifafi argues backloading remains live; mootness not satisfied | Hilton claims 1999 plan eliminates backloading and ongoing risk | No; live controversy remains; mootness not established |
| Proper remedy for backloading under ERISA | Remedy should reflect pre-1999 accruals governed by backloaded formula | Remedy must avoid unwarranted enrichment and reflect anti-backloading standards | District court's remedy upheld; equitable relief appropriate and tailored |
| District court's class certification for vesting claim | Potential broader nonparticipating service class; union service focus | Vesting class should be limited to union service allegations as pleaded | Class certification for vesting affirmed; court reasonably limited scope and maintained integrity of proceedings |
| Limitations period and discovery rule for ERISA §1132 claims | Three-year discovery rule applies; some claims timely | Payments and timing do not trigger discovery; several bets older than three years barred | Three-year discovery rule applied; limitations properly assessed under district court’s discretion |
| Union service v. nonunion nonparticipating service in vesting credit | Failing to credit nonunion nonparticipating service also violates vesting | Record limitations and scope constrained class and remedy to union service | District court did not abuse discretion; remedy tailored to union-service focus within broader vesting issues |
Key Cases Cited
- Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504 (U.S. 1981) (ERISA does not guarantee a benefit or calculation method, but plans must avoid backloading)
- Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 555 U.S. 285 (U.S. 2009) (Accrual rate must be testable against anti-backloading rules; 133 1/3% rule guidance)
- Lonecke v. Citigroup Pension Plan, 584 F.3d 457 (2d Cir. 2009) (133 1/3% rule limits on accrual rates for backloading)
- Amara v. CIGNA Corp., 131 S. Ct. 1866 (S. Ct. 2011) (Remedies may reform plans and order equitable relief under ERISA)
- H.R. Rep. No. 93-807, (1974) ( - ) (Legislative context describing anti-backloading rules)