focus on two of them this morning because they have the biggest impact on the scope of relief and i think they're also the ones that lend themselves to the most questions first the court extended relief to thousands of participants who left the company long before the suit was commenced and should have been removed from the class on statute of limitations grounds and second the relief that was awarded to the class was much greater than what was needed to remove the wear away that gave rise to the class misunderstanding as a result of these two iranians rulings alone footlocker stands to incur over one hundred million dollars in liability over and above the relief that would otherwise be appropriate here which we estimate i somewhere in the neighborhood of twenty five to fifty million dollars the statute of limitations issue boils down to whether participants should have on limited time to pursue a claim based on faulty communications about their benefits even after they subsequently received additional information that should have alerted them that something was amiss here the summary plan description and the related communications that gave rise to the finding of plaintive had been gone for footlocker for five years and boast of the employees whom he sought to represent had left much earlier in the interim yes you can you explain a little bit what you think is sufficient to put wouldn't be enough on the other hand if it maybe asking more to say there's an actual notice that here's how we violated your rights or something like that to put them on notice so something is heres what your benefit is under the old plan here's one of your current account balances and here's the number that's controlling and i would think that an ordinary relatively  educating person and maybe even someone educated my think oh this is nice they're giving us the higher of two things that must be a good thing and not particularly recognize that what that means is that their benefit has been frozen for two years until the second number gets up as high as the first number so allow me to give a couple of examples so for example in the appendix said thirty one eighty four to thirty one ninety there was an example of the many benefit estimates that were sent to plan participants before they terminated employment or in response to the request and the benefit of estimate takes the participant through the myth showing what the accrued benefit under the probably ok ash balance plan was then takes that accrued benefit and runs it through forward as a careful balance benefit and then significantly says point blank the monthly single annuity payable at retirement is the greater of the amount to term and under the care balance formula or the amount provided under the provisions of the plan in effect on december thirty hundred ninety five there were two arguments made by the other side as to why participants couldn't understand the first was by mr r s burke who said he did he knew he was getting a minimum lump sum and minimum benefit that was bigger than the one in the cash balance plan but he didn't know it came from the prior plan so again here it says point blank that that greater benefit is the one available under the provisions of the prior plan and similarly there are benefit estimates that in the calculation for alarm some one example is at thirty one thirty nine and what you can see there is when the participant is alerted to them up the lump sum calculation that calculation is performed by multiplying the accrued benefit by an actuarial factor and the accrued benefit ninety two thirteen point forty noyon is exactly the same as the accrued benefit as of twelve thirty one ninety five the first page of the estimate shows that accrued benefit is the annual accrued benefit to twelve thirty one ninety five and that seems number is used to calculate the minimum lump sum so it's just not correct to understand or that you were telling us which may be entirely accurate or you had mr michael c who's the former c f o on the stand right right and correct me if i'm wrong you did not succeed stand that if he got his minimum lump sum payment his pay and interest credits the benefits that recruit on to the new plan did not count i asked him that and he admitted that so did miss glick field by the way who is the one who did the calculations he did say or is counsel said that he still couldn't a figured out that his benefits were frozen because the amount of the minimum lump sum went up you see where the problem is immediately here in terms of trying to understand this case it seems to be difficult to argue that class members who receive these communications could have had constructive notice of the so called where way when the class have understood this i think first of all well there is that pittance that members of the class raised questions although it wasn't referred to in the opinion there's a set of internal e mail exchanges beginning at thirty two o three that specifically and just to keep in mind the difficulties of defending a case like this the testimony was that there were hundreds of phone calls a week to a call in center there were letters that were responses to letters their estimate of what those emails specifically said were getting numerous questions and the two most frequent questions were why is my accrued benefit the same as it was on my last estimates last statement why is the lump sum on a current estimate lower than the lump sum on an estimate i received last year and then the email refers to an irate participant who called up because she didn't understand why her lump sum had gone down was the answer it was provided a form letter was provided that was given to the situation one version appears on thirty one twenty six and it explains that the minimum lump sum is a function of interest rates and when the interest rates go up the minimum lump sum goes down and when the interest rate goes down the minimum lump sum goes up with no there's no calculation here that fact is in those pay in interest credits the essential claim here is i thought i was getting the benefit of my pay and interest credits and if you look at these calculations it's very clear that whether you understand some of it or all of it none of the pay in interest credits are going into this minimum lump sum calculation and many many of the benefit estimates specifically said that your minimum lump sum could go down that's what it sets out to the extent that mr stephen who by the way he if you look at the cover letter to his estimate it specifically tells him we're not going to tell you the estimate in two thousand nine hundred ninety seven because it's a function of the interest rate and we don't know of the interest rate and it turned out that at the end of one nine hundred ninety six the i r s rate went up and in fact mr stevens minimum on some must have gone down even though we didn't have a record of it and many many participants in one nine hundred ninety seven were asking for that reason why did my minimum some go down so i think what's going on here your honour's and then i would like to try and switch to there will be from little time that i have left is participants had the ingredients of the claim they understood that there was a benefit where they were told that there was a benefit that was based on the prior benefit that could be greater than the current one they simply didn't put two and two together and translate that into a benefit for release the way their counsel did when he brought this case and i think the question for you are is is there is supposed to be a distinction between constructive notice an actual notice and i think that those pieces of evidence constitute constructive notice they give the participants the information from which they including live three two and two together but doing some differential calculus well i don't think it's differential calculus to see that your benefit is based on the old benefit and the new one is in county as two of the witnesses admit it and with your honor's permission i'd like to go spend a couple of minutes on relief because i have very little time where it is true the food locker told their pension benefits were growing after ninety nine this week and we're not we're not contesting liability there's no doubt we're not contesting that the summary plan description of the other documents that was sent out in one nine hundred ninety five in one nine hundred ninety six made statements that were found to be misleading intentionally misleading fortunately with this meeting but they were all these individual eyes communications afterwards and i think the novella case says your honor that in a circumstance like this there can't be a class claim because you have a class posting statute of limitations issue now with respect to what not sure that this is that's an interesting point i'm not sure right now it makes a practical difference but are you asking that the class be decertified are you asking now that started should be excluded from the class because it's an individualized question of facts and circumstances question as to whether they were on duty and those of those people that the district court would do want and then  nothing because they would have to file new claims or conduct individual hearings for people what happens at that point he would not get class relief that's correct are you researching time with i'm hoping the court will let me at least the court julia any clerk on the edge of the class of plaintiffs mr remailed finally came to the admission that the district court found that these communications were intentionally misleading intentionally false she said it over and over again in her findings this is not a case of inadvertent miscommunication and the reason that's important is because when you have this kind of large multi billion dollar company that set out deliberately to conceal from its employees a fact that he had thought would cause it to lose employees when it needed to keep them during restructuring a fact that their vice president of human resources admitted would spread like wildfire if anybody found it out you know you shouldn't assume that something that is buried in these conflicts calculations was actually enough to put people on notice that there was a freak on their benefits here and the district court examined every single communication that footlocker could come up with and made a finding that no class member could reasonably have been aware that their benefits had been frozen during this period of time now that brings me to the i mean and let me add one more thing which is direct evidence on like the generalized circumstantial evidence which this court found was a not in a market to support such a class wide claim in this case we have the admission of footlockers pension manager a woman named carol can do it and this was in the district court's findings that footlocker made sure that no communication ever disclosed the benefit f footlockers claim here is that well you know yes we had this deliberate effort to conceal this from everybody for solid company reasons and yet somehow they should have been able to sort their way through these complex calculations and figure it out judge when she asked about would need to they would need to work through the calculations necessarily isn't all that necessary is in one year you get a statement that says here's your term benefit here's your current account balance your pension lump sum will be the old time one and then the next year you get one that says essentially the same thing that your account balance has grown a tiny bit but it's still not up to  the lump sum and you've got to get them some say look at those two communications and put them together and you know that you've been frozen nothing you can gain anything in that year but in fact the statements did not disclose that the one nine hundred ninety six statement and there's a good example for class member companies and of the justified it a twenty seven eighty five say as here's your starting account the islands and here's your all annual accrued benefits from the total thirty one ninety five plane it was a twenty seven eighty five so that's that's at the beginning january one ninety six now his ninety seven statement which you'll find it a twenty five sixty and i polygons that those aren't adjacent his nine hundred ninety i and i feel sorry about that through your honor i had these take it back to a twenty seventy five yes your honor the statement is the company statement tell us what on that page is something that we should focus on ok so on the left side it says your account balance as of january one thousand nine hundred ninety six so that's the conversion balance and then of course there's they told participants over and over and over again was of equal value to your benefits accrued under the old plan which the footlocker witnesses admitted was a lot because of the nine percent discount rate but here it just gives you your opening account balance  initial account balance that supposed to be equal in fact at the end of that very next paragraph it says your account balance represents the actuarial present value of your crew benefit as of twelve thirty one ninety five and then it gives you your annual accrued benefits under the old plan so that was if you had retired at normal retirement age under the old playin you would have received nine thousand six hundred thirty eight dollars and thirty three cents a year in benefits now you know as you understand most people can't readily calculate the conversion from an annual benefit it age sixty five to a lump sum present value as of now so then you go to twenty five sixty and this is the same participant twenty five sixty ok this shows your account balance as of january one ninety six and then in in furtherance of the the second law i that footlocker told everybody which is your balance your account is growing every year with compensation credits and interest credits they show the addition of a year of interest credit the addition of a year of compensation credit and your account balance at the end of that year no where on this statement does it show for comparison what you had earned under the old plan nor does it show anything about a comparison so that you can even see that there's a horse race going on between the value of your old benefit and the value of what you've now got under this new plan and in dealing with the the so called questions that came in from participants mystery males argument was that that the most frequent questions were why does my minimum lump sum change from year to year that apparently wasn't asked and why isn't my balance growing well dare i use the term alternative facts here i mean the e mail that was the only evidence that they presented in support of that argument is it a thirty two o five it does not say anything about frequent questions more frequent questions all it says is and i'm can i can't find my copy of it right now headed out mark they've got to get you into these cases earlier thank you here and i appreciate the thought of thirty two zero zero five which is rather difficult to read because it's just a poor copy of an old e mail and now i found  all that it says is if i remember correctly don mentioned two specific types of questions and one of them is written as why has my accrued benefit the same as it was on my last estimate or statement now if you track through the joint appendix though it's clear that footlocker despite multiple opportunities to come up with any other examples of this came up with one and the date on that one match this email precisely one question and that question which is it a thirty one no sorry thirty two seventy two is one of many questions that this participant ask which is why is the number shown is the annual accrued benefit the same figure that shown on my retirement plan statement for twelve thirty one ninety five that's all the answer which they sent him is it a thirty one fifty nine to thirty one sixty  all it did was repeat the false statements that were in the summary plan description you started with an initial account balance of equal value we added your company sation and interest credits and you  you'll end up with the greater of this or that had to all that it's that you take one minute briefly to address the seniority adjustment and specifically could you address the argument that the seniority adjustment was intended from the beginning as depending on how charitably you view it and either an effort to compensate for wear away in the case of people who are senior to disguise the wear away issue for those people who would encounter it most dramatically would be most likely to be paying attention to what's going on but however it's characterized in and i think the argument is that that was something that was specifically timed to compensating for the effects of wear away and then what the district court is doing in terms of relief is fixing the wear away problem and i think the defendant's argument is therefore this becomes a kind of double counting it gives some people a rather large benefit i was rather impressed with the chart that they provide trial judge followed a mother of five which said that the appropriate remedy in refer mation is to give the participants what they were promised she found that what they had been promised was starting account balance of equal actuarial value to their old benefit plus in the case of these senior participants who would have gotten an early retirement subsidy under the old plan but weren't going to get it under the new plan to make up for the loss of that subsidy this inhance meant and then like the younger people going on from there they get the compensation credits and the interest credit footlockers witness tom kiley tried to persuade her in his testimony that if they where a way if they hadn't done a nine percent discount rate on that initial account balance then they would not have given the senior people the unhandsome and on top of the initial account balance she rejected his testimony on credibility grounds and she found that these were independent that footlocker intended to give the enhanced mut as an independent form of benefit to the senior people whom it needed to retain during this period of restructuring that it was going through and that was the factual basis for her conclusion that the enhanced munt should be part of the relief in addition to fixing the nine percent discount rate i think that and i understand your answer the question you know you argue that case didn't you are no actually i didn't you're thinking of lorentz the pricewaterhouse and i knew you for one of those cases if i could your honor it with the court's indulgence i really think it's important for the court to understand that what footlocker is arguing for here in taking people out of the class and in removing the enhancement relief is not just a small largest rightsizing of an award here i they're fraud they're admitting they lie to these participants and then what they're trying to do with these reductions is effectively to take away a very very large majority of the relief that the district court found was appropriate to remedy that fraud for this class of participant if you could just address this question which i'm sure this through i'm old will be with you which is this whole issue of the u deserved windfall that your honor does center on this enhanced month that i was discussing with judge lynch which is and the reason why the remedy here is not an abus discretion is that finding which she made which was that the enhanced mut was promised independently of the equal value initial account balance that these are two promises footlocker promised an equal actuarial value initial account balance we're going to fix that footlocker also promised the senior employees who meet needed to keep that they would have this enhanced mut to compensate them for losing the early retirement subsidies in the plan conversion and that those that both of those pieces of the remedy are important in order to fully compensate the purchase of it that's just not an abuse of discretion she had two experts she had factual support for her conclusion and for her to reach that conclusion applying the omara five standard on the record on the expert testimony is not an abuse of discretion here effectively what footlocker is asking for would be a windfall to footlocker if they got the reduction in the in the judgment request thank you very much a court my name is eric trevor it and i am representing the u s secretary of labor thank you for having us today i would like to briefly discuss three issues implicated by this case the first involves application of a section four one three statute of limitations and in particular section four one three six year from discovery limitations period for fraud or concealment the second involves whether a plaintiff must show detrimental reliance in order to establish a violation and or is a section four for a and that because plaintiffs did not show an intent to defraud or detrimental reliance in this case the fraud or consumer provision does not apply this argument is foreclosed by this court's precedent in two thousand and one this court examine the fraud or concealment provision in however that concealment portion of the provision refers not to fraud but to a separate legal concept regarding concealment to come under the concealment portion of section four one three a party or a plaintiff need only show that if you do sherry engaged in  footlocker repeatedly lied to its plan participants it told them their initial account balance in the new cash balance plan was the actuarily equivalent lump sum of the benefit they had accrued under the prior pension plan this was patently false footlocker also told plant participants that they would continue to earn benefits as they continue their employment with footlocker but because of the way the initial account balance was calculated this too was a lie plan participants instead suffered a benefits freeze footlocker knew it statements to plan participants were false they wanted to cut costs through making retirement changes and they didn't want participants to know about the benefits freeze for fear of a predictable backlash from employees no one is happy when their employer tells them they will be paid less for the same work these lawyers constituted self concealing acts sufficient to come under the concealment prong of section four one three with these was told before the cash balance conversion repeated many times afterwards footlocker acted to cover up its produce yairi breaches and its actions were for a bit of discussion there pages twenty seven to twenty nine about the about the information the participants were given second opponents argue that a plaintiff must show detrimental reliance to establish a section for all for a violation of this argument for close perhaps first by appellants discussion earlier that they are not challenging liability in this case but also by the supreme court's decision cigna court in a market the court explained that when the substantive provision of a residence not set forth any particular standard for determining harm any requirement of harm like a required showing of detrimental reliance must arise from the law of equity the supreme court explained that an acquittal remedy like a stop will does require a detrimental reliance showing but importantly the actual remedies of reformation and surcharge do not no more deal with violations of the receptions one zero two and two zero four h not with section four for a but i would note that playing us have also made out a section one of two a violation here section four and for a similar similarly does not set a standard subject to such other equitable or remedial remedial relief as the court may deem appropriate let me just ask you since your time is both true and what rate are we to give to the views of the the belief that if i continue working i'm going to get more benefits specifically the pay and interest credits in a mara the court gave a precise remedy for exactly the same problem you get the value of the benefit you earned before and you add to it the pay in interest credits and by doing it that way to what you were promised and there are some particular issues that may or may not have been random are with respect to what exactly was promised in the case of the seniority adjustments well in a morrow they were also starting balance enhanced minutes and they did not factor into the relief because the court's guiding principle was i'm going to give you the value of what you got before so as to facilitate that you continue working for more money and i'm going to offset whatever you received in the interim the benefit you got we're not taking away those so called seniority enhanced means if you got it you're keeping it what's really happening here is it's simply reducing the size of the relief because a person who got those enhanced minutes suffered less or maybe no way away at all as a result of those and he wants myths one of my colleagues suggested it's like looking at two people in a fair labor standards act case one of who made seven dollars an hour and one of whom made six dollars an hour if you bring them both up to the working for those pay in interest right now the problem with what the court did what the district court did here is judge forrest trying to fix the problem by adjusting the starting balance and then really there's three problems with that first of time the participant leaves because the applicable interest rate moves up and down in the interim and that's what happened here that's what created that problem that's a minimum of sums going down in one thousand nine hundred seventy so the legally proper way to do it if you want to capture what the person earned before is to do it at the time the person leaves which is the a benefit that was awarded in m r and is the a benefit that we were told that we were advocating here they wanted to do in the form of we would do it in the form of a lump sum since participants asked for lump sums but it's the equivalent value of the point being you do it when the participants terminates the other problem is that the judge resets the starting balance and removes the mortal assumption and again the legally correct way to recapture an annuity benefit to convert it into a lump sum is to factor in one tell it for the simple reason that if i give a participant at age fifty a benefit that he would otherwise have to to that there was a complaint that the judge identified in her opinion that by setting the mortality assumption at the time of conversion in a sense over did it because every year that a participant survives that should become smaller but if you do the a plus b belief that's in m r you take care of that because you fix the mortality assumption as of the time the participant leaves so he gets the benefit of those so called survivorship credits magic to what you are calling the relief awarded him on what what happened there and in any case is that the district court made certain calculations made some discretionary decisions came out with an answer we then approved that relief as being within the district court's discretion now it may be that there's some problem with the relief that's given here but doesn't seem to me that that problem can be that it's not exactly the same as what was done in the mark oh it was there could be a range of different benefits i think that's fair your honor i do think that everything that was identified as being an explanation of why the relief was different here was something that what i take it though what you're really saying is that conceptually it is just wrong to do what judge faras did but i don't think you can say because it isn't done in the same format as was done tomorrow therefore it can't be right no i think that's fair your honor and i think that where you are on a phrase that is correct because if in fact the wrong that identified is well you know way and if we're talking about equitable relief the relief is supposed to be catered to the misunderstanding that's supposed to be fixed and you know your honor mention the win for before so a participant who works one day into the new cast ballots benefit plan ok that's a participant who is of if i was trying to give him his lump sum value based on what he had earned before we would do it the way the i r s says we would take the four seventeen irrate that six percent and then we would reduce it by mortality but because this participant works one day under judge far as relief he gets the six percent reduction without any reduction for mortality and if he's fifty years old he gets a two thirds increase in that benefit while for working one day i do not believe your honor that there was a class understanding that people could get a two thirds increase in their benefit from working one day particularly with  company that was making changes because it was in financial distress so there is something inherently inequitable about their belief that the court ordered here so no it doesn't have to be what was done in amaro but what ammara did is the the more precise and maybe the most precise way to fix the problem that the court identified and that's really what our what up point is here so we would areas that the case be remanded with a direction to follow the principles of them are there maybe you know xor compliance is here that warrants some distinctions but to follow the principle of give the participant the value of what he had before and add to it the pay and interest credits because that