999 F. Supp. 2d 88
D.D.C.2013Background
- ERISA class action concerning Hilton Hotels Retirement Plan backloading and vesting violations, with certified subclasses and previous court orders.
- Court previously held the pre-amendment plan violated ERISA’s minimum accrual rules and that the 1999-1 Amendment attempted to remedy backloading but did not moot all claims.
- Court ordered remedial measures in 2011 to cap Social Security offset and to administer vesting credit procedures; these were affirmed by the D.C. Circuit in 2012.
- Plaintiff seeks attorneys’ fees, expenses, and a $50,000 incentive award; Defendants do not oppose fees/expenses but dispute what constitutes the common fund and fee basis.
- Parties agree backloading remedy benefits are part of the common fund; dispute whether 1999-1 Amendment and 978 Plan “new” accrued benefits should be included.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 1999-1 Amendment benefits are part of the common fund | Include 1999-1 benefits as catalyst relief. | Treat 1999-1 as outside court’s jurisdiction and not in common fund. | Include 1999-1 Amendment benefits not yet in pay status; exclude those already paid. |
| Whether the 978 Plan 'new' accrued benefits should be included in the common fund | Include the 978 benefits as increased value from litigation. | Exclude; accrued under original plan, not a litigation catalyst. | Exclude; not a catalyst for creation of those benefits. |
| What is the appropriate value of the common fund and the fee percentage | 15% of the large common fund (potentially $230M) depending on scope. | Limit to backloading benefits; smaller fund; contest percentage. | Value about $140M for purposes of fee; 15% of the common fund deemed reasonable. |
| Whether expenses and an incentive award are payable from the common fund | Expenses ($603,000) and $50,000 incentive award are appropriate. | No opposition to expenses/incentive but disputes funding source. | Award $603,000 in expenses and $50,000 incentive from the common fund. |
Key Cases Cited
- Consolidated Edison Co. of New York, Inc. v. Bodman, 445 F.3d 438 (D.C. Cir. 2006) (catalyst theory supports fee recovery when relief is caused by litigation)
- American Lands Alliance v. Norton, 525 F. Supp. 2d 135 (D.D.C. 2007) (litigation can be catalyst for relief justifying fees)
- Stivers v. Pierce, 71 F.3d 732 (9th Cir. 1995) (voluntary changes may support fee awards if relief aligns with claim)
- Boeing Co. v. Van Gemert, 444 U.S. 472 (Supreme Court 1980) (common fund doctrine rationale and unjust enrichment policy)
- Williams v. Rohm and Haas Pension Plan, 658 F.3d 629 (7th Cir. 2011) (market rate for ERISA class actions often 25–33%)