Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-11-07151/USCOURTS-caDC-11-07151-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

---

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 21, 2012 Decided December 14, 2012 

No. 11-7113 

JAMAL J. KIFAFI, INDIVIDUALLY, AND ON BEHALF OF ALL 

OTHERS SIMILARLY SITUATED, 

APPELLEE

v. 

HILTON HOTELS RETIREMENT PLAN, ET AL., 

APPELLANTS

Consolidated with 11-7151 

Appeals from the United States District Court 

for the District of Columbia 

(No. 1:98-cv-01517) 

Thomas C. Rice argued the cause for appellants-cross 

appellees. With him on the briefs were Andrew M. Lacy and 

Jonathan K. Youngwood. 

Stephen R. Bruce argued the cause for appellee-cross 

appellant. With him on the briefs was Allison C. Pienta. 

Before: SENTELLE, Chief Judge, BROWN and 

KAVANAUGH, Circuit Judges. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 1 of 25
2 

 Opinion for the Court filed by Circuit Judge BROWN. 

 BROWN, Circuit Judge: In the late 1990s, Jamal Kifafi, an 

erstwhile Hilton employee and participant in Hilton’s 

retirement plan (“Plan”), noticed a problem with the benefits 

calculation on his statement of benefits. Concluding the Plan 

violated the Employee Retirement Income Security Act 

(“ERISA”) in a number of ways, he sued. Now, almost fifteen 

years and twelve district court opinions later, we join the fray 

and force the parties a little closer to final resolution of their 

dispute. The district court found that the Plan was 

impermissibly backloaded and that Hilton failed to calculate 

participants’ vesting credit properly, and it imposed relief 

accordingly. We affirm because the district court’s handling 

of the case was well within its discretion. 

I 

ERISA guarantees neither a particular benefit nor a 

particular method for calculating the benefit. Alessi v. 

Raybestos-Manhattan, Inc., 451 U.S. 504, 511–12 (1981). Yet 

employers do not have carte blanche. 

ERISA defines the universe of permissible benefitaccrual rates by requiring defined benefit plans to satisfy 

one—and only one—of three rules designed to prevent 

backloading, which occurs when a plan awards benefits to 

employees in later years of service at a rate disproportionately 

higher than the rate for employees in earlier years of service. 

See 29 U.S.C. § 1054; H.R. REP. NO. 93-807, at 21 (1974), 

reprinted in 1974 U.S.C.C.A.N. 4670, 4688 (defining 

“backloading”). The three rules contained in this antibackloading provision are known as the 3% rule, the 

fractional rule, and the 133 1/3% rule. The 3% rule 

“prescribes a minimum percentage of the total retirement 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 2 of 25
3 

benefit that must be accrued in any given year.” Alessi, 451 

U.S. at 512 n.9. The fractional rule is “essentially a pro rata 

rule under which in any given year, the employee’s accrued 

benefit is proportionate to the number of years of service as 

compared with the number of total years of service 

appropriate to the normal retirement age.” Id. The 133 1/3% 

rule, meanwhile, “permits the use of any accrual formula as 

long as the accrual rate for a given year of service does not 

vary beyond a specified percentage from the accrual rate of 

any other year under the plan.” Id. Specifically, the “rate of 

benefit accrual in any future year may not be more than onethird greater than the rate in the current year.” Lonecke v. 

Citigroup Pension Plan, 584 F.3d 457, 464 (2d Cir. 2009). 

ERISA circumscribes pension plans in other ways as 

well, such as by setting minimum vesting standards. Where 

accrual relates to “the amount of the benefit to which the 

employee is entitled,” vesting relates to when an employee 

has a right to the accrued benefit. Holt v. Winpisinger, 811 

F.2d 1532, 1536 (D.C. Cir. 1987) (quoting Stewart v. Nat’l 

Shopmen Pension Fund, 730 F.2d 1552, 1562 (D.C. Cir. 

1984)) (internal quotation marks omitted). Benefit accrual and 

vesting are not coextensive concepts, so an employee might 

“earn credit toward vesting without accumulating any pension 

benefits.” Id. at 1537. Because vesting is tied to length of 

employment, this would happen if an employee works 

without participating in the plan (“nonparticipating service”), 

although the benefits do not actually vest until the employee 

begins participating in the plan. ERISA generally requires 

employers to count all of an employee’s years of service when 

calculating vesting credit, including years completed before 

the employee began participating in the plan. See 29 U.S.C. 

§ 1053; Holt, 811 F.2d at 1536–37. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 3 of 25
4 

This appeal implicates both rules.1

 In his complaint, 

Kifafi alleged that the Plan’s benefit accrual formula was 

impermissibly backloaded and that Hilton, the Plan sponsor 

and administrator, violated both ERISA and the Plan by 

failing to credit certain years of service when calculating 

employees’ vesting credit. 

Unfortunately, the parties were not content to let the 

district court decide (relatively) straightforward issues of law. 

Instead, as the district court later put it, they “shifted their 

burden to the Court to determine which facts are in dispute 

between the parties” and they “repeatedly shifted their 

arguments such that the Court has consistently been presented 

with moving targets.” Kifafi v. Hilton Hotels Ret. Plan, 616 F. 

Supp. 2d 7, 22 (D.D.C. 2009) (“Kifafi I”). This included 

changing the facts of the case. 

Before Kifafi filed suit,2

 the Plan calculated normal 

retirement benefits as a function of participants’ 

compensation and years of service, less the participant’s 

“integrated benefits,” that is, benefits payable to that 

participant under another pension plan or governmentsponsored system to which Hilton contributed (including half 

of the participant’s social security benefits). This calculation 

guaranteed, at a minimum, 2% of the participant’s average 

monthly compensation multiplied by the participant’s years of 

service up to twenty-five years, plus 0.5% of the average 

 

1

 Facts are set out at greater length in the district court’s 

opinions. See, e.g., Kifafi v. Hilton Hotels Ret. Plan, 616 F. Supp. 

2d 7 (D.D.C. 2009). We recite only those facts relevant to this 

appeal.

2

 The Plan underwent a number of amendments before Kifafi 

filed suit, but we do not differentiate among them because the last 

amendment before Kifafi filed suit that is reflected in the record 

applied retroactively.

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 4 of 25
5 

monthly compensation for each year after twenty-five years, 

minus the integrated benefits offset. The Plan also included 

the following language in a separate article titled “Limitation 

on Benefits and Payments”: “The method of computing a 

Participant’s accrued benefit under the provisions of Article 

IV is intended to satisfy the requirements of the 133-1/3 rule 

provided in Section 411(b)(1)(B) of the [Internal Revenue] 

Code.” 

After Kifafi moved for class certification (but before the 

district court ruled on the motion), Hilton amended the Plan 

(“1999 Plan”) to eliminate “any controversy regarding the 

proriety [sic] of the rate of benefit accruals under the Plan.” 

The 1999 Plan modified the benefit accrual formula using a 

“greater of” approach: Plan participants would receive the 

greater of the benefit determined under the old Plan or the 

benefit determined under the 1999 Plan’s modified accrual 

formula, which, as the IRS subsequently determined, satisfied 

the fractional rule. The 1999 Plan also made two other 

retroactive changes: first, it decreased the relevant percentage 

of employees’ average monthly compensation during the first 

twenty-five years of service from 2% to 1.33%; and second, it 

increased the social security offset. 

 The district court ultimately certified Kifafi’s proposed 

“benefit-accrual class” for the backloading claim—all former 

and current Hilton employees whose pension benefits “have 

been, or will be, reduced” because of the backloading—but 

not Kifafi’s proposed class for the vesting claim. Four years 

later, after the parties completed discovery, Kifafi renewed his 

motion to certify the vesting claim and sought to include as 

class representatives three class members he hoped would 

cure any deficiencies in the original class certification motion. 

This time, the court granted the certification motion (though it 

denied the motion to intervene), certifying for class treatment 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 5 of 25
6 

Kifafi’s claim that Hilton “failed to credit employees with 

years of union service for vesting purposes.” The court 

ultimately granted summary judgment to Kifafi on both 

claims and, eventually, ordered Hilton (1) to amend the Plan’s 

benefit accrual formula by capping the social security offset, 

thereby bringing the Plan into retroactive compliance with the 

133 1/3% rule, and (2) to administer a claim procedure for 

crediting participants’ years of union service for vesting 

purposes. Both parties appealed. 

II 

 As an initial matter, Hilton claims the 1999 Plan mooted 

Kifafi’s backloading claim, an argument this Court assesses 

de novo. Del Monte Fresh Produce Co. v. United States, 570 

F.3d 316, 321 (D.C. Cir. 2009).3

 As most of the issues in this 

case presuppose a live controversy over the backloading 

claims, Hilton’s victory on this point would resolve those 

other issues quite tidily. Unfortunately for Hilton, its 

arguments do not persuade us. See Honeywell Int’l, Inc. v. 

NRC, 628 F.3d 568, 576 (D.C. Cir. 2010) (explaining that the 

party asserting mootness carries a “heavy burden”). 

 

3

 By pegging mootness determinations to an abuse of discretion 

standard, Kifafi oversimplifies the relationship between mootness 

and equitable relief. Mootness and its various exceptions implicate 

a court’s jurisdiction. Initiative & Referendum Inst. v. U.S. Postal 

Serv., 685 F.3d 1066, 1074 (D.C. Cir. 2012). There is, however, a 

doctrine of “prudential mootness” under which a court may dismiss 

a case in equity despite concluding the case is not in fact moot. See, 

e.g., Penthouse Int’l, Ltd. v. Meese, 939 F.2d 1011, 1019–20 (D.C. 

Cir. 1991) (explaining that prudential mootness doctrine allows 

courts to refrain from exercising equitable authority). Vesting the 

district court with discretion to dismiss a case on grounds of 

prudential mootness does not alter the standard of review for 

determinations of constitutional mootness. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 6 of 25
7 

Mootness doctrine “limits federal courts to deciding 

actual, ongoing controversies.” Am. Bar Ass’n v. FTC, 636 

F.3d 641, 645 (D.C. Cir. 2011) (internal quotation marks 

omitted). A case is moot when the court’s decision “will 

neither presently affect the parties’ rights nor have a morethan-speculative chance of affecting them in the future.” Id.

(internal quotation marks omitted). Accordingly, a court must 

dismiss a properly-brought case if it is subsequently rendered 

moot. Honeywell Int’l, 628 F.3d at 576. Hilton marshals three 

arguments to show that happened here: the district court relied 

on bad law, the 1999 Plan did not violate ERISA’s “anticutback” provision, and the backloading was eliminated and 

would not likely recur. 

There are problems with each argument, but at bottom, 

the issue comes down to whether a party can deprive a court 

of jurisdiction with a wave of its hand.4

 It cannot, no matter 

how contritely it apologizes for the conduct giving rise to the 

litigation. “It is well settled that the voluntary cessation of 

allegedly unlawful conduct does not moot a case in which the 

legality of that conduct is challenged.” Christian Legal Soc’y 

Chapter of the Univ. of California, Hastings Coll. of the Law 

v. Martinez, 130 S. Ct. 2971, 3009 n.3 (2010) (Alito, J., 

dissenting). A defendant’s voluntary cessation of allegedly 

unlawful conduct moots a case only if (1) “there is no 

reasonable expectation . . . that the alleged violation will 

 

4

 Hilton’s attempt to undermine the legal support for the district 

court’s finding of non-mootness improperly shifts Hilton’s burden 

of showing mootness onto the district court: knocking down an 

argument disputing mootness does little to prove the case is moot. 

And the 1999 Plan’s compliance with the anti-cutback provision 

has only contingent relevance to the mootness analysis, a 

completely separate inquiry: compliance with the anti-cutback 

provision is not sufficient to moot a case. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 7 of 25
8 

recur,” and (2) “interim relief or events have completely and 

irrevocably eradicated the effects of the alleged violation.” 

Am. Bar Ass’n, 636 F.3d at 648 (quoting HARRY T. EDWARDS 

& LINDA A. ELLIOTT, FEDERAL STANDARDS OF REVIEW—

REVIEW OF DISTRICT COURT DECISIONS AND AGENCY 

ACTIONS 114–15 (2007)) (internal quotation marks omitted). 

Hilton’s argument that the backloading will not recur 

boils down to its promise not to violate the anti-backloading 

provision. See Hilton Br. at 50–51 (arguing it would be 

“illogical,” “irrational,” and “absurd” to further violate the 

anti-backloading provision because doing so would subject 

Hilton to further litigation and might entail adverse tax 

consequences). This is insufficient. See United States v. 

Concentrated Phosphate Export Ass’n, 393 U.S. 199, 203 

(1968) (finding insufficient “appellees’ own statement that it 

would be uneconomical for them to engage in [the challenged 

activity]”). And even were it sufficient, Hilton has given us 

little reason to think its intentions are a good predictor of 

reality. When amending the Plan in 1999, for instance, Hilton 

flatly asserted its belief “that the Plan satisfied ERISA’s 

benefit accrual requirements even without the amendment.” 

See also Kifafi I, 616 F. Supp. 2d at 28 (noting that Hilton 

“has insisted upon the legality of the challenged practices”).

As the district court concluded—and Hilton now concedes—

this assessment was wrong. Hilton may have made its 

erroneous statements in good faith, but that does little to 

reassure us that it is “absolutely clear” the backloading could 

not reasonably be expected to recur. Friends of the Earth, Inc. 

v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 

(2000). This is a complicated area of law in which even the 

best-intentioned actors may yet do wrong. 

Because Hilton cannot meet its burden of showing there 

is no reasonable likelihood of future backloading, we need not 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 8 of 25
9 

determine whether the 1999 Plan eradicated the effects of the 

backloading. Hilton’s inability to show the first scuttles all 

need for the second. See Cnty. of L.A. v. Davis, 440 U.S. 625, 

631 (1979). 

III 

 The parties challenge the district court’s remedy and 

class certification from a number of angles. We review the 

district court’s class certification decisions and its remedial 

decisions for abuse of discretion. See, e.g., Garcia v. Johanns, 

444 F.3d 625, 631 (D.C. Cir. 2006); SEC v. Banner Fund 

Int’l, 211 F.3d 602, 616 (D.C. Cir. 2000). To determine if the 

district court applied the wrong legal standard or otherwise 

“misapprehended the underlying substantive law,” Brayton v. 

Office of the U.S. Trade Representative, 641 F.3d 521, 524 

(D.C. Cir. 2011) (quoting Kickapoo Tribe of Indians of the 

Kickapoo Reservation in Kan. v. Babbitt, 43 F.3d 1491, 1497 

(D.C. Cir. 1995)) (internal quotation marks omitted), we 

consider whether the court “failed to consider a relevant 

factor” or “relied on an improper factor,” as well as whether 

“the reasons given reasonably support the conclusion.” Peyton 

v. DiMario, 287 F.3d 1121, 1126 (D.C. Cir. 2002). 

A 

 Hilton first challenges the district court’s general 

remedial approach to the backloading claim. In granting 

Kifafi summary judgment on the issue, the district court relied 

on the pre-1999 Plan’s statement of intent and Hilton’s 

representation of compliance with the 133 1/3% rule to the 

court and the IRS. Stating that Hilton was “required to 

comply with the accrual method it expressly selected,” the 

court concluded that “the Plan’s participants are entitled to 

receive the benefits they would have accrued had the Plan 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 9 of 25
10 

complied with the 133 1/3% rule.” Kifafi I, 616 F. Supp. 2d at 

24. It therefore directed the parties to discuss, “at a minimum, 

the methodolog[y] that should be used to . . . provide 

members of the ‘benefit-accrual class’ with the benefits they 

would have accrued under the Plan’s initial benefit accrual 

formula, amended only to bring it into compliance with the 

133 1/3% rule.” Hilton now argues that requiring the Plan to 

comply with the 133 1/3% rule in particular, rather than the 

anti-backloading provision generally, was an abuse of 

discretion. We disagree.

 Whether a plan satisfies the anti-backloading provision—

and which anti-backloading rule it satisfies—turns on the 

nature of the plan. In other words, the terms of the plan will or 

will not be amenable to analysis under any given rule as a 

matter of fact. See, e.g., Tomlinson v. El Paso Corp., 653 F.3d 

1281, 1290 (10th Cir. 2011) (noting party concession the plan 

“must qualify under the ‘133 1/3 percent’ test if it qualifies at 

all”); Hurlic v. S. Cal. Gas Co., 539 F.3d 1024, 1033 n.4 (9th 

Cir. 2008) (disclaiming need to consider plan’s ability to 

satisfy fractional or 3% rules because plan satisfies the 

133 1/3% rule); Carollo v. Cement & Concrete Workers Dist. 

Council Pension Plan, 964 F. Supp. 677, 681 (E.D.N.Y. 

1997) (noting party agreement that “the 133 1/3% Rule is the 

only standard the Plan is capable of satisfying”). A plan must 

be measured not against the anti-backloading rule it says it is 

following, but against ERISA’s general provision for plans to 

satisfy any one of the three anti-backloading rules. As Hilton 

points out, it would be absurd to find a plan that in fact 

satisfies one of the anti-backloading rules to be backloaded 

because it “intends” to comply with a different rule. 

Such is not the case here because the Plan did not satisfy 

any of the anti-backloading rules, but that does not change the 

fact that the Plan’s statement of intent is irrelevant to the 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 10 of 25
11 

backloading analysis. The 133 1/3% rule delimits only a 

range of possibility; to comply, plans must still set out the 

benefit accrual rate. See 29 U.S.C. § 1102(b)(4); Kennedy v. 

Plan Adm’r for DuPont Sav. & Inv. Plan, 555 U.S. 285, 300 

(2009); Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 

83 (1995). And once a plan sets out an accrual rate, the rate is 

directly testable against the various anti-backloading rules. 

Kifafi’s claim that statements of intent are “clearly” 

enforceable terms therefore overstates the analogy between 

ERISA plans and contracts where intent is relevant either 

under the substantive law or to clarify ambiguity. See, e.g., In 

re Palmdale Hills Prop., LLC, 457 B.R. 29, 44–45 (B.A.P. 

9th Cir. 2011) (invoking language of intent in order to 

determine parties’ intent). Certainly, no one has claimed the 

accrual formula is ambiguous. 

 But this does not mean the district court abused its 

discretion. Once the court determined the Plan violated 

ERISA, it entered the world of equity. See 29 U.S.C. 

§ 1132(a)(3); CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1875, 

1879–80 (2011) (concluding that 29 U.S.C. § 1132(a)(3) 

authorized district court’s reformation of plan and injunction 

requiring the plan to pay corresponding benefits). And 

Hilton’s premise that a plan’s prospective compliance with 

ERISA’s anti-backloading mandate circumscribes a court’s 

remedial options in the face of past violations cannot be 

sustained. We see no reason why the court’s remedy need be a 

perfect reflection of the legal violations supporting the 

remedy; the district court exercised a discretion informed by 

much more than just the ERISA violation. See Cobell v. 

Salazar, 573 F.3d 808, 813 (D.C. Cir. 2009); Sheaffer v. 

Warehouse Emps. Union, Local No. 730, 408 F.2d 204, 206–

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 11 of 25
12 

07 (D.C. Cir. 1969). Hilton misses this distinction.5

 No doubt 

a plan may alter its accrual formula to comply with a different 

anti-backloading rule than the one it had hitherto complied 

with (assuming it does not violate ERISA in other ways); the 

IRS accordingly concluded the 1999 Plan satisfied the 

fractional rule, even though the pre-1999 Plan had failed to 

satisfy any of the anti-backloading rules. But the standard for 

prospective compliance does not ipso facto establish the 

adequacy of a retroactive amendment or court-imposed relief. 

To reduce the district court’s remedy to nothing more than a 

demand that Hilton comply with any of the anti-backloading 

rules would—like evaluating a movie by analyzing a single 

frame—ignore too much. 

 First, the parties did not make things easy for the district 

court. After Kifafi filed suit, for example, Hilton amended the 

Plan into compliance with the anti-backloading provision, 

simultaneously making two changes to the benefit accrual 

formula unfavorable to Plan participants, and over the next 

few years, Hilton amended the Plan additional times in 

response to Kifafi’s various legal claims. This, in addition to 

freezing the Plan’s benefit accruals in 1996, which Kifafi’s 

actuarial expert explained had a material impact on the Plan’s 

ability to comply with the various anti-backloading rules. The 

court expressed its frustration when, in its summary judgment 

opinion, it referred to the parties’ arguments as “moving 

 

5

 For this reason, Hilton’s reliance on Lonecke and Revenue 

Ruling 2008-7 is misplaced. Neither says anything about retroactive 

amendments; they purport to deal only with prospective 

compliance. See, e.g., Lonecke, 584 F.3d at 465, 469 (upholding 

plan granting participants sufficient additional benefits to comply 

with the fractional rule “upon the termination of the period of 

employment” if the rate of benefits accrual failed the 133 1/3% 

rule, and explaining that the fractional rule explicitly ties the 

accrued benefit to the employee’s separation from employment). 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 12 of 25
13 

targets.” Kifafi I, 616 F. Supp. 2d at 22. In short, more than a 

decade passed after Kifafi filed suit before the district court 

granted summary judgment, what the court referred to as “an 

extraordinary amount of judicial time.” 

Second, Hilton represented its compliance with the 

133 1/3% rule to Kifafi, the IRS, and the district court. We do 

not, as Hilton charges, think this constitutes the predicate for 

estoppel. Rather, this suggests the Plan was more amenable to 

analysis under the 133 1/3% rule than under the fractional or 

3% rules. See, e.g., Carrabba v. Randalls Food Mkts., Inc., 

145 F. Supp. 2d 763, 773 (N.D. Tex. 2000) (requiring plan 

without accrual rate to satisfy 133 1/3% rule, which, the court 

concluded, “most appropriately recognizes the objectives of 

the [plan] in an ERISA context,” based on the actual 

progression of benefits), aff’d, 252 F.3d 721 (5th Cir. 2001) 

(per curiam) (calling the district court opinion “conscientious” 

and “well-reasoned”). Indeed, as Kifafi’s actuarial expert 

attested in an affidavit, “The progression of the Plan’s 

existing accrual rates lends itself to compliance with [the 

133 1/3%] rule.” 

Read in this context, we understand the district court’s 

remedial order to be an attempt to pin Hilton down, denying it 

the opportunity to avoid the consequences of its ERISA 

violations. The district court certainly used language 

suggesting it thought that as a matter of law Hilton could not 

comply with any anti-backloading rule other than the 

133 1/3% rule. But like the court’s reliance on the statement 

of intent, most such statements occurred in the context of the 

court’s conclusion that the original Plan was backloaded 

under any of the anti-backloading rules. The court also stated, 

in the context of rejecting Hilton’s mootness argument, that 

Plan participants are entitled to what they would have 

received had the Plan complied with the 133 1/3% rule. But it 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 13 of 25
14 

continued: “If this were not so, Hilton and all other employers 

that have unlawfully backloaded benefit accruals could 

simply ‘amend away’ their ERISA violations.” Kifafi I, 616 F. 

Supp. 2d at 25. And as it emphasized in a later proceeding, 

the 1999 Plan’s compliance with the fractional rule came at 

the expense of “substantial modifications to the benefits that 

would be paid to participants.” Kifafi v. Hilton Hotels Ret. 

Plan, 736 F. Supp. 2d 64, 73 (D.D.C. 2010) (“Kifafi II”). This 

was enough to support its remedy. See, e.g., Shahriar v. Smith 

& Wollensky Rest. Grp., Inc., 659 F.3d 234, 251–52 (2d Cir. 

2011); In re Grand Jury Investigation, 545 F.3d 21, 26 (1st 

Cir. 2008). Just as an employer would not remedy its failure 

to pay overtime by “retroactively revising the base rate of pay 

down from $10 per hour to $6.50 per hour and offering to 

multiply the reduced rate by the required ‘time and one-half,’” 

Kifafi Br. at 36, the district court did not abuse its discretion 

by requiring Hilton to provide a remedy it considered 

meaningful. See, e.g., Hecht Co. v. Bowles, 321 U.S. 321, 329 

(1944) (tying the injunctive process to deterrence); H.R. REP. 

101-386, at 433 (1989) (Conf. Rep.), reprinted in 1989 

U.S.C.C.A.N. 3018, 3036 (stating congressional intent that 

courts fashion remedies for ERISA violations “that not only 

protect participants and beneficiaries but deter violations of 

the law as well”). 

B 

Hilton next invokes the statute of limitations to argue the 

district court should have dismissed the claims of Plan 

participants who received benefits more than three years 

before Kifafi filed this suit. Although ERISA is not entirely 

silent with respect to statutes of limitations, see, e.g., 29 

U.S.C. § 1113, there is no applicable limitations period for the 

type of claims Kifafi brought. See Kifafi I, 616 F. Supp. 2d at 

35 (noting Kifafi brought his class claims under 29 U.S.C. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 14 of 25
15 

§ 1132). We accordingly apply “the most closely analogous 

statute of limitations from the state in which the court sits.” 

Connors v. Hallmark & Son Coal Co., 935 F.2d 336, 341 

(D.C. Cir. 1991). Fortunately, the parties agree on the 

appropriate limitations period (three years), as well as the 

appropriate standard for determining when the limitations 

period begins (the discovery rule). They disagree, however, 

about whether the district court properly applied these 

principles. We think it did.6

 

Statutes of limitations ordinarily begin running when “the 

factual and legal prerequisites for filing suit are in place.” 

Norwest Bank Minn. Nat’l Ass’n v. FDIC, 312 F.3d 447, 451 

(D.C. Cir. 2002). It will not always be obvious when this 

happens. In such cases, and absent a contrary congressional 

directive, this Court applies the discovery rule, which 

provides that the statute of limitations begins when the 

plaintiff “discovers, or with due diligence should have 

discovered,” the injury supporting the legal claim. Connors, 

935 F.2d at 341, 343. 

Hilton’s sole argument is that its payment of backloaded 

benefits to Plan participants amounted to a repudiation of the 

participants’ right to additional benefits, the implication being 

 

6

 It is irrelevant whether we review Hilton’s statute of 

limitations argument de novo or for abuse of discretion: Hilton 

loses either way. Ordinarily, a district court’s application of a 

statute of limitations demands de novo review. See Jung v. Mundy, 

Holt & Mance, P.C., 372 F.3d 429, 432 (D.C. Cir. 2004). Here, 

though, the statute of limitations issue might be conceived as a 

piece of the district court’s class certification decision, see Kifafi I, 

616 F. Supp. 2d at 37 (“[T]he Court finds that modification of the 

class definitions to exclude claims based on the statute of 

limitations is unnecessary and inappropriate.”), a decision entrusted 

to its discretion. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 15 of 25
16 

that the participants should have discovered from these 

payments that their benefits were backloaded. Courts have 

indeed held that repudiation can trigger ERISA’s statute of 

limitations if it is clear and made known to the plan 

beneficiary. See, e.g., Thompson v. Ret. Plan for Emps. of S.C. 

Johnson & Son, Inc., 651 F.3d 600, 604 (7th Cir. 2011);

Miller v. Fortis Benefits Ins. Co., 475 F.3d 516, 520–21 (3d 

Cir. 2007); Davenport v. Harry N. Abrams, Inc., 249 F.3d 

130, 134–35 (2d Cir. 2001); Union Pac. R. Co. v. Beckham, 

138 F.3d 325, 330 (8th Cir. 1998); see also Connors, 935 

F.2d at 342 (noting consistency of discovery rule and “time of 

injury” rule). But the requirement that the repudiation be clear 

and made known to the plan beneficiaries is not an idle one. 

Whether repudiation may trigger the limitations period 

depends on what the prospective plaintiff should have 

understood from the miscalculated benefit payments. Where 

the miscalculated benefits comprise a single lump-sum 

payment, it might make sense to hold plan participants 

responsible for their failure to notice the miscalculation, 

although we do not decide the issue. See Thompson, 651 F.3d 

at 606 (holding that receipt of lump-sum distribution served 

as an “unequivocal repudiation of any entitlement to benefits 

beyond the account balance” because it was clear that “no 

additional benefits would be forthcoming”). The same might 

be true for miscalculated periodic payments. See Miller, 475 

F.3d at 521–22 (explaining that beneficiaries ordinarily 

should know if a benefit award is improperly low). But if so, 

the miscalculation must still be such that the beneficiary 

should recognize it. See id. at 523 (“[T]he need for Miller to 

be vigilant was triggered only when his receipt of benefits 

alerted him that his award had been miscalculated.”). Miller

involved “a simple calculation of sixty percent of [the 

beneficiary’s] salary,” id. at 522, and if one thing in this case 

is clear, it is that Hilton’s miscalculation was anything but 

simple. To catch the backloading, Plan participants would 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 16 of 25
17 

have needed to apply complex law to complex facts. If Hilton 

itself admits the Plan “did not appear to be backloaded,” it 

makes no sense to ask the participants to navigate the 

complexity of ERISA’s anti-backloading provision 

immediately upon receipt of their first benefits payment. They 

are the parties least likely “to have a clear understanding of 

the terms of the pension plan and their application to [the] 

case.” Novella v. Westchester Cnty., 661 F.3d 128, 146 (2d 

Cir. 2011). 

C 

 Having failed to circumscribe the scope of the district 

court’s remedy by excluding participants who received 

benefits more than three years before Kifafi filed suit, Hilton 

tries to contain the remedial fallout by challenging the district 

court’s determination that the Plan’s retroactive compliance 

with the 133 1/3% rule should apply to participants who 

separated from service before the controversial statement of 

intent was added to the Plan in 1994 (with retroactive effect). 

This argument also fails. The district court determined that the 

Plan had never complied with the anti-backloading provision 

and that the benefits accrual formula did not substantially 

change in 1994, findings Hilton does not challenge. If the 

Plan violated the anti-backloading provision after 1994, and it 

violated the anti-backloading provision essentially the same 

way before 1994, then we see no reason to distinguish 

between pre- and post-1994 separation dates, particularly 

given our conclusion that the statement of intent is irrelevant 

to the backloading violation. 

D 

 Kifafi, in turn, argues the district court improperly 

accepted Hilton’s theory that participants can “outgrow” the 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 17 of 25
18 

backloading merely by participating in the Plan for a 

sufficiently long period of time. As Kifafi puts it, 

if a plan offers a $5 per month per year of 

participation rate of accrual for years 1-7, and a $10 

per month rate of accrual in years 8-25, the 133% 

rule is violated in years 1-7, no matter how much 

longer the participant works, e.g., whether the 

participant works one more year or 18 more years. A 

participant who works for 25 years, and has 18 years 

at the $10 rate, does not ‘grow out’ of the 

backloading violation because his or her accruals for 

years 1-7 continue to be only $5 per month per year 

of participation. 

Kifafi Br. at 56–57. According to Kifafi, the district court 

should have increased the early-year accrual rates without 

touching the later-year accrual rates. Translated into his 

hypothetical plan, this would mean offering a $7.50 rate of 

accrual for the first seven years while leaving everything else 

about the plan unchanged. We disagree. 

 Backloading is nothing more than the improper allocation 

of benefit accrual rates; the concept does not necessarily say 

anything about the amount of benefits participants ultimately 

accrue. Fixing a backloaded plan might entail increased 

benefits, but it need not. A participant in Kifafi’s hypothetical 

plan, for instance, accrues $2,580 after twenty-five years of 

service. Amending the plan to comply with the 133 1/3% rule 

by offering $7.50 each month for the first seven years, as 

Kifafi suggests, would yield participants an additional $210 

after twenty-five years of service. But the plan could satisfy 

the 133 1/3% rule while still yielding only $2,580; this would 

happen if, say, the plan offered $8 per month rate of accrual in 

the first seven years and (approximately) $8.83 in the next 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 18 of 25
19 

eighteen, or if it offered $8.60 every month for all twenty-five 

years. The district court did not abuse its discretion when it 

chose which of these counterfactual accrual formulas the 

backloading remedy should track.7 As Revenue Ruling 2008-

7, 2008-7 I.R.B. 419, explains, if a plan becomes backloaded 

because of a decreased interest crediting rate, the plan could 

be amended into compliance with ERISA by increasing “the 

hypothetical pay credits at the earlier ages,” reducing the 

credits at the higher ages, or a combination of both.

According to Kifafi, IRS regulations prohibit the district 

court’s “average rate of accrual” methodology. See Treas. 

Reg. § 1.411(b)-1(b)(2)(iii) (Example 3) (explaining that a 

plan under which a participant accrues benefits at the rate of 

2% for each of the first five years, 1% for each of the next 

five years, and 1.5% for every year thereafter violates the 

133 1/3% rule because 1.5% is more than 133 1/3% of 1%). 

This is beside the point. The regulations purport to address 

base compliance with the anti-backloading provision; we now 

deal only with the remedy for an undisputedly backloaded 

formula. Though there may be situations where the proper 

remedy for backloading involves additional benefits, this is 

not one of them. See Kifafi II, 736 F. Supp. 2d at 72 (finding 

that over time, some participants in fact recovered from any 

benefits deficiency they may have initially suffered). Given 

that the benefit-accrual class is limited to “employees whose 

benefits ‘have been, or will be, reduced’” because of the 

backloading, id., and that the Plan could have yielded the 

 

7

 Kifafi implicitly concedes this when, in his reply brief, he 

notes—in contrast to his initial claim that a participant in the 

hypothetical plan does not outgrow the backloading violation by 

working for the full twenty-five years—that the effects of 

backloading are eliminated “if a participant has worked long 

enough . . . to earn the Plan’s full ‘normal retirement benefit’ as 

described in ERISA § 204(b)(1)(B).” 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 19 of 25
20 

same amount of total benefits to participants while complying 

with the anti-backloading provision, the district court’s refusal 

to apply its remedy to employees whose benefits were not

reduced by the backloading—to penalize Hilton for the fact of 

the backloading—is far from an abuse of discretion. See 

Mertens v. Hewitt Assocs., 508 U.S. 248, 257 n.7 (1993) 

(noting that punitive damages were not a “major issue” when 

ERISA was enacted). Equitable relief—the only kind of relief 

at issue here—may very well mean “something less than all

relief.” Id. at 258 n.8. 

E 

Finally, Kifafi challenges the district court’s approach to 

his union service vesting claim. The court found that Hilton 

violated the Plan’s vesting provisions by failing to credit 

employees’ years of union service, and it molded its remedial 

relief around the contours of that finding. Kifafi complains 

this contravenes both ERISA and the Plan itself. His argument 

goes like this: because both ERISA and the Plan require 

crediting all nonparticipating service and, under the Plan, 

union membership is not the only type of nonparticipating 

service,8

 the district court erred by addressing Hilton’s failure 

to count years of union service but not its failure to count 

years of nonunion nonparticipating service, either in its class 

certification decision or its remedial order. This is an 

impractical approach, he continues, because Hilton failed to 

 

8

 We again ignore the chronology of the various Plan 

amendments. Kifafi’s complaint alleged failure to count his 1985 

union service, and the district court responded by broadly finding 

that “Hilton failed to properly credit union service for vesting 

purposes.” Hilton likewise discusses the Plan’s vesting provisions 

in present tense. Since no one has differentiated among the different 

Plan amendments’ treatment of the issue in a meaningful way, we 

will not be the first to do so. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 20 of 25
21 

maintain any records about employees’ union service, so 

participants end up bearing the burden of proving uncredited 

union service years after the fact when the district court could 

have avoided this by broadening its perspective to encompass 

Hilton’s general failure to count nonparticipating service. 

We reject Kifafi’s arguments. The district court’s 

approach to Kifafi’s vesting claim is not just a matter of law; 

it reflects the parties’ respective actions throughout the 

litigation and effected the court’s determination about how 

best to manage the shape-shifter shackled to the parties’ 

dispute. In this light, we see no abuse of discretion. 

To start, the court could reasonably have concluded that 

Kifafi was best able to represent a class limited to union 

participation. As Kifafi’s original complaint made evident, his 

claim to representative status on the nonparticipating service 

issue derived from his “service as a union employee prior to 

1985.” The complaint thus listed as one of the two legal 

questions “common to the members of the class and subclass” 

whether Hilton may “fail to credit years in unionized 

employment with Hilton,” and it mentioned only union 

service in the relevant complaint count. Kifafi subsequently 

amended the complaint, expanding the scope of the proposed 

class to include Hilton employees who “have not been 

credited with all years of service with Hilton, including years 

in unionized employment,” but he continued to suggest that 

his claim remained tied to union service. For example, when 

describing the nature of the case at the beginning of the 

complaint, he alleged that Hilton “violated ERISA by not 

crediting his years of union service,” and in his claim for 

relief, he alleged only that Hilton “violated the Retirement 

Plan by not counting years of service in union employment.” 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 21 of 25
22 

In his renewed motion to certify the class,9

 Kifafi asserted that 

“the common legal thread that binds the class is Hilton’s 

failure to count all years of service,” but he did little else to 

advance that broader argument. Though referring generally to 

nonparticipating service and citing Hilton’s admission that it 

failed also to credit certain nonparticipating service other than 

union service, the motion otherwise focused on union service, 

tying general nonparticipating-service references to union 

service. Indeed, the motion’s list of “individuals whose union 

or other non-participating service was not counted for 

vesting” included only three individuals, each listed for his or 

her uncredited years of union service; and the three class 

members Kifafi sought to include as class representatives 

likewise asserted that their uncredited years consisted of 

union service. Even if it would have been reasonable to 

certify a broader nonparticipating service class, the district 

court’s actual certification decision was no less reasonable. 

The same is true of its later refusals to expand the certified 

subclass. See, e.g., Kifafi I, 616 F. Supp. 2d at 30 n.18; Kifafi 

II, 736 F. Supp. 2d at 74. 

Kifafi cites two cases where a court of appeals found an 

abuse of discretion in the district court’s class certification. 

Abrams v. Communications Workers of America, 59 F.3d 

1373 (D.C. Cir. 1995), involved a challenge to the adequacy 

of a union’s notice of the non-union members’ right to object 

to paying dues. We reversed the district court’s refusal to 

certify a class of all nonmember employees—including both 

employees who had objected and employees who merely 

might object—explaining that every employee had an interest 

 

9

 We conflate two versions of Kifafi’s renewed motion because 

our discussion, like its object, traverses a period of time. In 

actuality, the district court denied Kifafi’s first renewed motion 

without prejudice, asking Kifafi to rebrief the issue. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 22 of 25
23 

in adequate notice because “the union must provide notice in 

advance of an employee’s decision to object.” Id. at 1378. 

And in Green v. Ferrell, 664 F.2d 1292 (5th Cir. 1982), the 

Fifth Circuit required the district court to broaden the class of 

convicted prisoners to include pretrial detainees because 

“those rights and the conditions of confinement that impact 

upon those two groups at the same county jail facility are 

sufficiently common to warrant contemporaneous 

consideration in a single judicial proceeding under the 

circumstances present here.” Id. at 1295. Yet in both cases, 

the excluded group of proposed class members necessarily 

belonged to the included group: a challenge to notice 

procedures affects anyone who ought to receive that notice; a 

challenge to jail conditions affects anyone who is or will be 

held in that jail. Here, by contrast, Hilton’s alleged failure to 

count nonunion nonparticipating service potentially affects 

individuals other than those affected by its failure to count 

union service. That Hilton apparently treated union service as 

a mere subset of nonparticipating service, ignoring both 

entirely, does not mean it could not have counted one but not 

the other. The extent to which Hilton treated the two groups 

of employees the same is a question of fact, as is whether 

Hilton’s alleged blanket policy affected any employees for 

reasons unrelated to union service. And where changed jail 

conditions or notice procedures necessarily provide relief for 

all potential class members regardless of their identities, this 

case involves detailed actuarial determinations and 

individualized remedies. 

Rather than agreeing with Kifafi’s argument, then, we 

commend the district court for its exemplary work on this 

case. The court managed and reasonably disposed of this 

litigation—juggling a voluminous record and ably balancing 

competing considerations—despite shouldering much of the 

burden that should have been carried by counsel, and despite 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 23 of 25
24 

facing arguments it characterized as “moving targets.” Along 

the way, the district court fashioned a remedy that hewed 

closely to its class certification decision—and that makes 

sense. Indeed, the court had promised as much when it stated 

at the summary judgment phase that “[i]n resolving the 

parties’ claims, the Court shall not allow Kifafi to expand his 

Amended Complaint.” Kifafi I, 616 F. Supp. 2d at 23. Once it 

limited the scope of the dispute, the district court could quite 

reasonably restrict relief to those parameters. See Aviation 

Consumer Action Project v. Washburn, 535 F.2d 101, 108 

(D.C. Cir. 1976). 

For similar reasons, we reject Kifafi’s assertion that the 

claim procedure ordered by the district court was “completely 

unnecessary” and improperly shifts the burden onto the 

plaintiff class. The district court considered using 

nonparticipating service as a proxy for union service because 

Hilton’s records were incomplete, but it rejected the idea in 

order to prevent Kifafi from using the procedure to evade the 

court’s class certification decision. The court instead required 

Hilton to fund and administer a claim procedure open to all 

participants whose vesting status turns on nonparticipating 

service. As part of this, the district court not only required 

Hilton to provide Kifafi information submitted by claimants 

so Kifafi can challenge Hilton’s claim-process decisions, but 

it expressly permitted Hilton to credit all nonparticipating 

service if it wants to avoid the administrative costs incident to 

its mandated record searches and the claim procedure. This 

seems both fair and reasonable. While it is unfortunate for the 

burden to fall on innocent parties rather than the employer 

who failed to perform its statutory duties, that is not enough to 

turn the district court’s otherwise-competent performance into 

an abuse of discretion. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 24 of 25
25 

IV 

 For the reasons stated, the district court’s orders are 

Affirmed. 

USCA Case #11-7151 Document #1410119 Filed: 12/14/2012 Page 25 of 25