Court Opinion

ID: 4273959
Source: CourtListenerOpinion
Date Created: 2018-05-10 15:00:19.220298+00
Date Added: 2024-06-11T07:49:17.520775
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                       File Name: 18a0090p.06

                    UNITED STATES COURT OF APPEALS
                                    FOR THE SIXTH CIRCUIT

 ELIZABETH A. CLEMONS, DAVID R. KHALIEL, and               ┐
 LARRY W. TAYLOR, on behalf of themselves and all          │
 other similarly situated individuals,                     │
                  Plaintiffs-Appellees/Cross-Appellants,   │
                                                           >      Nos. 16-5063/5124
                                                           │
        v.                                                 │
                                                           │
                                                           │
 NORTON HEALTHCARE INC. RETIREMENT PLAN,                   │
              Defendant-Appellant/Cross-Appellee.          │
                                                           ┘

                           Appeal from the United States District Court
                        for the Western District of Kentucky at Louisville.
                        3:08-cv-0069—Thomas B. Russell, District Judge.

                                      Argued: June 22, 2017

                                Decided and Filed: May 10, 2018

                   Before: SILER, McKEAGUE, and WHITE, Circuit Judges.
                                   _________________

                                            COUNSEL

ARGUED: Keith L. Pryatel, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio,
for Appellant/Cross-Appellee. Michael D. Grabhorn, GRABHORN LAW OFFICE, PLLC,
Louisville, Kentucky, for Appellees/Cross-Appellants. ON BRIEF: Keith L. Pryatel, Kenneth
M. Haneline, KASTNER WESTMAN & WILKINS, LLC, Akron, Ohio, Lira A. Johnson,
Michael P. Abate, DINSMORE & SHOHL LLP, Louisville, Kentucky, for Appellant/Cross-
Appellee. Michael D. Grabhorn, Andrew M. Grabhorn, GRABHORN LAW OFFICE,
PLLC, Louisville, Kentucky, William T. Payne, Joel R. Hurt, FEINSTEIN DOYLE PAYNE
& KRAVEC, Pittsburgh, Pennsylvania, for Appellees/Cross-Appellants.

       McKEAGUE, J., delivered the opinion of the court in which SILER, J., joined, and
WHITE, J., joined in part. WHITE, J. (pp. 37–40), delivered a separate opinion concurring in
part and dissenting from Part III and Part IV. C. 3.
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                                       _________________

                                            OPINION
                                       _________________

       McKEAGUE, Circuit Judge. This appeal is the latest installment in an ERISA litigation
saga that has spanned almost ten years. At the risk of oversimplifying their case, the Plaintiff–
Retirees claim that Defendant Norton Healthcare, Inc. Retirement Plan (“Norton”) underpaid
them under the terms of the plan. The district court found that the plan was unambiguous in the
Retirees’ favor. We agree with the district court on most issues. However, because the Plan is
ambiguous in one crucial respect and may not comply with ERISA in another, we VACATE the
district court’s summary judgment order and REMAND for further examination of those issues.
Consequently, we also VACATE the district court’s damages order, including its certification of
a class under Rule 23(b)(1)(A) and (b)(2) during the damages stage. In doing so, we mean no
slight to the district judges and their staff, who ought to be praised for their commitment to this
case and for their patience with the complex issues it presents.

                                                 I

       Plaintiffs Elizabeth A. Clemons, David R. Khaliel, and Larry W. Taylor (“the Retirees”)
were employed by Norton Healthcare. They are covered by a plan (“the Plan”) established to
benefit former Norton employees. In January 2008, the Retirees brought a putative class action
under ERISA, alleging Norton underpaid retirees who elected to take their pension as a lump-
sum payment. The district court certified a class in 2011 and eventually granted summary
judgment to the Retirees. Damages have not been reduced to a sum certain, but the district court
adopted the Retirees’ formula for calculating damages, awarded pre-judgment interest at a fixed
rate, and entered a final judgment for the Retirees. Collateral proceedings indicate that the total
amount at issue is between sixty and seventy million dollars.

       Both sides appealed the judgment.        Norton (technically, the appellant) disputes the
district court’s interpretation of the Plan, the standard of review employed by the district court,
class certification, and the district court’s adoption of the Retirees’ proffered damages formula.
The Retirees (technically, the cross-appellants), ask us to apply a longer statute of limitations and
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quibble with the appropriate rate of prejudgment interest, in addition to disagreeing with
Norton’s arguments on appeal.       After the Retirees filed their cross-appeal, Norton balked,
asserting that we lack jurisdiction over the entire case because the district court’s last order was
not final under 28 U.S.C. § 1291.

                                                  A

       The facts relevant to this appeal are straightforward and undisputed. In 1991, Norton
merged two predecessor plans (the “MEH Plan” and the “NKC Plan”) into one Plan, which is the
defendant here. The Plan is a single-employer plan governed by ERISA, funded by Norton, and
maintained under a written document (the “Plan Document”). Although the initial Plan was
established in 1991, the most recent, restated Plan Document became effective January 1, 1997.
Since then, it has been amended multiple times.

       As of January 1, 1997, the Plan used two basic formulas for pension benefits. First, it
included a traditional defined-benefit formula applicable only to members of the predecessor
plans from MEH and NKC. It also included a cash-balance formula applicable to all other plans.
See Norton Plan § 4.03. In 2004, the Plan was amended to tie off the predecessor plans; that is,
to end accruals under the defined-benefit formulas and allow further accruals only under the
cash-balance benefit formula established in the merged Plan.

       In all its iterations, the Plan provides for benefits for “normal” retirement at age 65, late
retirement, early retirement, and disability retirement.       §§ 4.03–4.07.     The Plan allows
participants who are at least 55 years old and have at least 10 years of service to retire early.
§§ 2.22, 4.05(a). The Plan allows retirees to take their benefit in the “Basic Form” or in one of
six alternative forms. § 4.02(a)–(b). One of those alternative forms is a lump-sum payment
received on the date of retirement. § 4.02(b)(6).

                                                  B

       The Retirees here are all former Norton employees who (a) retired after the 2004
amendments became effective and (b) elected the lump-sum benefit. On January 30, 2008, they
filed their first Class Action Complaint. The case was assigned to Judge Jennifer B. Coffman.
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          After two years of motion practice and class-certification discovery, the Retirees filed the
operative complaint on May 10, 2010. Explaining the core of their allegations, the Retirees
stated:

          On behalf of themselves and others similarly situated, Plaintiffs challenge the
          calculation of their pension benefits as follows:
                 a. the Defendant Plan’s failure to include the value of the
                 “increasing monthly income” (“cost-of-living”) in the calculation
                 of participant lump sum benefits and in the calculation of
                 participant “cash balance” starting balances;
                 b. the Defendant Plan’s failure to include the value of early
                 retirement subsidies in the calculation of participant lump sum
                 benefits and in the calculation of participant “cash balance”
                 starting balances; and/or
                 c. the Defendant Plan’s failure to calculate participant lump sum
                 benefits according to the contra[c]tual formula.

                                                   1

          On May 17, 2010, the Retirees filed a motion for class certification. They sought
certification under Rule 23(b)(1)(A), (b)(2), and (b)(3), defining their proposed class as:

          All participants in the Norton Healthcare, Inc. Retirement Plan, its predecessors
          and successors, whose contractual lump sum pension benefits:

          (1)    did not include the value of the basic form of benefit – an “increasing
                 monthly retirement income” (annual cost-of-living adjustment) – when
                 election of such basic form would have yielded the highest value for the
                 participant; and/or
          (2)    did not include the value of the “alternative” lump sum benefit where the
                 basic form of benefit is multiplied by 212, when election of such
                 alternative form would have yielded the highest value for the participant;
                 and/or
          (3)    did not include the value of the early retirement subsidy.

The district court granted the motion and certified the class under Rule 23(b)(1)(A) and (b)(2),
finding Norton’s counterarguments to be improperly merits-based. It also appointed Khaliel and
Taylor as class representatives, but rejected Clemons, reasoning that the Retirees had not
satisfied the typicality requirement as to her. The district court defined the class as requested by
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the Retirees. In April 2011, the parties began merits discovery. Meanwhile, Norton petitioned
for interlocutory review of the certification order. We denied the petition.

       Back in the district court, Norton moved for partial summary judgment. The basis for the
motion was that Kentucky’s five-year statute of limitations for statutory claims applied, and that
all claims related to benefits paid before January 30, 2003 should be dismissed. See Ky. Rev.
Stat. Ann. § 413.120(2).      The Retirees countered that their claims were timely because
Kentucky’s fifteen-year statute of limitations for claims based on a written contract should apply.
See Ky. Rev. Stat. Ann. § 413.090(2). The district court denied the motion. The court reasoned
that the dispute “centers around the plaintiffs’ rights under their contract with [Norton],” and that
the Retirees were not seeking to enforce any statutory rights created by ERISA.

                                                 2

       After we denied interlocutory appeal of the class certification decision, the Supreme
Court decided Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). On July 24, 2012, Norton
attacked the existing class certification, citing Dukes and West v. AK Steel Corp., 484 F.3d 395
(6th Cir. 2007). Norton asked the district court to decertify the class entirely because the highly
individualized nature of pension calculations forestalled a finding of commonality. Norton also
attacked the merits of Khaliel’s and Taylor’s individual claims and argued that certification
under Rule 23(b)(2) was improper in light of Dukes and West.

       The district court denied the motion. The court found Dukes inapplicable, reasoning that
the commonality requirement was satisfied because Norton “stipulated that its actuaries used a
consistent methodology when they calculated benefits,” and “the crux of the Plaintiffs’ claims”
was whether that methodology was correct. The district court also concluded that even if
certification under Rule 23(b)(2) was improper, the class “would remain properly certified under
Rule 23(b)(1)(A).”

       While Norton’s motion to decertify was pending, the parties completed merits discovery
and filed cross-motions for summary judgment. Shortly after briefing on these motions was
completed, Judge Coffman retired, and the case was reassigned to Judge Thomas B. Russell.
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       On August 23, 2013, Norton filed a motion asking Judge Russell to reconsider Judge
Coffman’s ruling on the statute-of-limitations issue. The district court granted the motion,
concluding that Fallin v. Commonwealth Indus., Inc., 695 F.3d 512 (6th Cir. 2012), and Redmon
v. Sud–Chemie Inc. Ret. Plan for Union Emps., 547 F.3d 531 (6th Cir. 2008), compelled the
conclusion that Kentucky’s five-year limitations period for statutory claims applied.

                                                C

       On October 31, 2013, the district court granted summary judgment to the Retirees.
Only the issues germane to this appeal are discussed below.

       First, the district court held that, because the Plan gives its administrator discretion to
construe the terms of the plan, arbitrary-and-capricious review applies. Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 115 (1989). After announcing that conclusion, however, the court
engaged in a lengthy discussion of whether the doctrine of contra proferentum should also apply.
Relying primarily on dicta in University Hospitals of Cleveland v. Emerson Electric Co.,
202 F.3d 839 (6th Cir. 2000), the court concluded that there is “no significant reason why this
basic and equitable contract principle should not apply in the context of ERISA contracts.”

       Second, the district court concluded that the Plan documents unambiguously favored the
Retirees’ position on most issues. This included a finding that the 2004 amendments created an
“early retirement subsidy” and that the Plan called for any lump sum to account for an increasing
monthly income for sixty months certain. The court supplemented its discussion by stating,
“However . . . to the extent that any of the relevant provisions are ambiguous, they would be
construed against the drafter and in favor of plaintiffs.” However, the district court did agree
with Norton on a structural issue, applying the last paragraph of a disputed section globally,
rather than only to the subparagraph immediately preceding it.

       Third, the district court agreed with the Retirees that, regardless of the various formulas
set out in the Plan, “ERISA require[s] that a participant’s lump sum benefit be the ‘actuarial
equivalent’ of the [Monthly Retirement Income].” 29 U.S.C. § 1054(c)(3).
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        Fourth, the district court declined to attempt any actual damages calculations, instead
leaving them “for the parties to perform, consistent with the Court’s instructions.” To that end,
the court ordered Norton to recalculate the class members’ pensions within 45 days, and the
Retirees to raise any objections within 14 days thereafter.

                                                 D

        Translating the district court’s rulings into a pension formula proved more difficult and
contentious than expected. With the Retirees’ agreement, the deadline was extended by 45 days.
However, Norton continued to struggle to assemble the necessary records and cull the requisite
data.   The parties therefore jointly requested an open-ended extension, based on Norton’s
promise that once its spreadsheet detailing all the data and calculations was completed, Norton
would share the spreadsheet with the Retirees and make the underlying hard-copy documents
available to the Retirees. The parties also promised to discuss Norton’s new formula and attempt
to resolve any disagreements. The district court granted the open-ended extension request on
January 24, 2014.

        This cooperation broke down about a year later.        Subsequently, the parties offered
competing damages formulas, both supported by expert affidavits. The Retirees also requested
pre-judgment interest at a rate of eight percent. Norton argued that the Retirees were not entitled
to any pre-judgment interest. Norton also used its damages brief to reargue the certification
question.

        The district court issued its damages opinion on January 6, 2016 (more than two years
after its liability ruling). The court’s order addresses a variety of issues, however, and was not
limited to damages.

        First, the district court ordered that the Retirees’ formula be used to recalculate class
members’ pensions, explaining:

        After extensively reviewing the parties’ formulas and their arguments, this Court
        finds that Norton did not provide a formula that will ensure that the recalculated
        lump sums are at least actuarially equivalent to the Monthly Retirement Income.
        Norton goes to great lengths to critique the Class’s proposed formula, but it does
        not adequately explain to this Court how its own formula results in an actuarially
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       equivalent lump sum. Norton makes several conclusory statements that its
       formula results in an actuarial equivalent lump sum, but it does little to explain to
       the Court how this is so. Alternatively, the Class has gone to great lengths to not
       only create a formula and demonstrate how it is actuarially equivalent but also to
       respond to any of Norton’s criticisms concerning its formula.

       Second, the district court rejected Norton’s request to decertify the class entirely. The
district court also rejected Norton’s request to interpret its liability holding in a way that would
narrow the scope of the class.

       Third, the district court concluded that the Retirees are entitled to pre-judgment interest.
However, the court found that eight percent “would be excessive.”            Employing the post-
judgment interest statute and seeking to avoid “the complexities of compounding interest,” the
district court instead awarded pre-judgment interest at a flat two percent rate. 28 U.S.C. § 1961.

       Finally, the district court concluded its damages opinion with the following:

       To conclude that this matter is complex is probably an understatement. . . . The
       complexity of comprehending and analyzing lengthy interrelated documents and
       deciphering the nuisances therein has been time consuming on the part of counsel
       and the Court. The Court is not inclined to entertain any motion for
       reconsideration. Frankly, the Court has given this matter its best shot. Too much
       time has elapsed between the earlier ruling and the current posture of this case.
       The Court originally thought agreeing on a formula would not be a time
       consuming process. Obviously, it was time consuming. It is time for another
       court, if the parties are so inclined, to look at this matter with new eyes.

The district court then entered judgment for the Retirees “in an amount consistent with” its
opinion, and stated that its judgment was “final and appealable.”

                                                 E

       Norton filed a notice of appeal on January 20, 2016. The Retirees filed a notice of cross-
appeal on February 2, 2016. On May 27, 2016, Norton filed a motion to dismiss the cross-appeal
for lack of jurisdiction, arguing the district court has not entered a final order for purposes of
28 U.S.C. § 1291.
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                                                          II

         We have jurisdiction over this appeal. Norton’s motion to dismiss is DENIED.1

         The court of appeals has jurisdiction over all “final decisions of the district courts.”
28 U.S.C. § 1291. A district court’s statement that its judgment is final and appealable does not
make it so. Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 742 (1976); Day v. NLO, Inc., 3 F.3d
153, 155 (6th Cir. 1993). Rather, a “final decision is ‘one which ends the litigation on the merits
and leaves nothing for the [district] court to do but execute the judgment.’” Gelboim v. Bank of
Am. Corp., 135 S. Ct. 897, 902 (2015) (quoting Catlin v. United States, 324 U.S. 229, 233
(1945)). Generally, “[a] judgment is not final for purposes of appeal when the assessment of
damages remains,” unless the calculation is purely ministerial. Woosley v. Avco Corp., 944 F.2d
313, 316–17 (6th Cir. 1991). Norton contends that the district court’s order was not final
because it has not reduced damages to a sum certain and because “the complex actuarial
calculations required to compute the Plaintiffs’ damages” under the formula adopted by the
district court “are far more than ‘ministerial.’”

         We think Woosley controls the outcome here. In Woosley, we held that a judgment
ordering the employer to calculate backpay was final, even though the court had yet to calculate
the exact amount owed. 944 F.2d at 317. As the variables necessary to calculate backpay were
not known to the court, the judgment ordered the parties to supply stipulations about those
variables, which would automatically be incorporated into the judgment. Id. at 316. The
employer appealed before the stipulations were filed, and the employees subsequently challenged
the jurisdiction of this Court on finality grounds, arguing that there were still complex
calculations left to be done about which the parties were arguing. Id. at 316–17. We denied the
motion to dismiss, reasoning that although the calculations required more than simple addition,

         1
           The analysis below is included to satisfy our own, independent obligation to ensure that we have
jurisdiction. Norton’s decision to file a jurisdictional motion to dismiss its own appeal only after its opponents filed
a cross-appeal smacks of gamesmanship, sloppiness, or both, and is not well-taken. If Norton thought we lacked
jurisdiction over an appeal, it should have considered that issue thoroughly before appealing, not as a tactical
afterthought. See Fed. R. Civ. P. 11(b)(1)–(2). Nevertheless, mindful that we must “police jurisdiction for
ourselves, whether [a party] deserves the inquiry or not,” we engage in the analysis anyway. Exact Software N. Am.,
Inc. v. DeMoisey, 718 F.3d 535, 539 (6th Cir. 2013).
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they did not affect the finality of the judgment. See id. In doing so, we pointed out that “the
equities between the parties were resolved,” even though someone still had to find a more
advanced calculator before writing the check. Id. at 317.

          The same is true here. The district court answered all the parties’ merits questions, and
found that Norton had misapplied the terms of the Plan. The district court then told the parties
exactly how to recalculate those Retirees’ benefits—by using the Retirees’ proposed formula.
Thus, there are no unanswered legal or equitable questions in this case. Norton also does not
contend it lacks the data necessary to perform the calculations, or that the parties dispute the
accuracy or authenticity of the relevant records, so there are no unanswered factual questions
either.    It is undoubtedly true that the calculations required here are complex and time-
consuming. But the point made by the Woosley panel was that complexity is not a vice in this
context. See id. The need for an advanced understanding of applied mathematics to obey an
order of the court does not make that judgment any less final for our purposes. The motion to
dismiss is DENIED.

                                                 III

          The first thing the parties dispute is the standard of review applicable to Norton’s
interpretation of the plan documents.       Ordinarily, a plan administrator’s denial-of-benefits
decision is reviewed de novo. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
But if the plan “gives the administrator or fiduciary discretionary authority to determine
eligibility for benefits or to construe the terms of the plan,” we review such decisions under the
arbitrary-and-capricious standard. Id. at 111, 115. Further, if the plan gives the administrator
discretion to make factual determinations, arbitrary-and-capricious review extends to those
issues as well. Shaw v. AT&T Umbrella Benefit Plan No. 1, 795 F.3d 538, 547 (6th Cir. 2015).
However, “if a benefit plan gives discretion to an administrator or fiduciary who is operating
under a conflict of interest, that conflict must be weighed as a factor in determining whether
there is an abuse of discretion.” Firestone, 489 U.S. at 115 (citation, quotation marks, and
brackets omitted).
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       Under the Plan, the Retirement Committee serves as the Plan administrator, and is
granted “the power and discretion . . . to construe all terms, provisions, conditions and limitations
of the Plan,” and “to determine all questions arising out of or in connection with the provisions
of the Plan or its administration in any and all cases . . . .” Norton Plan § 6.06(b)(2)–(3). This
language clearly invokes Firestone deference.

       However, we have also suggested in dicta that the common-law doctrine of contra
proferentum might apply to ERISA cases.           The doctrine is traditionally used to construe
ambiguous terms against the drafter of a contract. Our precedent has not been a model of clarity
on the issue—in some cases, we have implied that it sweeps broadly; in others, we have
expressed confusion about how contra proferentum and Firestone deference can apply at the
same time. Compare Univ. Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839 (6th Cir.
2000), with Smiljanich v. Gen. Motors Corp., 182 F. App’x 480, 486 n.2 (6th Cir. 2006).

       The district court recognized this confusion and did its best to obey these cases insofar as
it understood them. Although the court ultimately disclaimed any reliance on the rule to decide
the case, the doctrine reappears at least five times throughout the court’s substantive analysis.
Our review of the plan documents and the parties’ disputes leads us to conclude that the Plan is
ambiguous on an issue of significant importance to the parties—whether the early retirement
reducers apply to the Retirees bringing this lawsuit. We think, therefore, that the law’s treatment
of this ambiguity is necessary to the outcome here, and compels us to examine whether contra
proferentum can be used in conjunction with Firestone deference. We conclude that it cannot.

                                                 A

       It appears that dicta on this issue first appeared in our cases in 1993. See Tolley v.
Commercial Life Ins. Co., 14 F.3d 602 (table) (6th Cir. 1993) (per curiam). That panel declined
to reach the question because the insurance policy in dispute was not ambiguous. Id.; see also
Schachner v. Blue Cross & Blue Shield of Ohio, 77 F.3d 889, 895 n.6 (6th Cir. 1996) (same);
Swisher-Sherman v. Provident Life & Accident Ins. Co., 37 F.3d 1500 (table) (6th Cir. 1994) (per
curiam) (same).
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      16-5124

       In Perez v. Aetna Life Insurance Co., however, the en banc court issued stronger dicta on
the subject. In that case, we stated, without qualification: “The rule of contra proferentum
provides that ambiguous contract provisions in ERISA-governed insurance contracts should be
construed against the drafting party.” 150 F.3d 550, 557 n.7 (6th Cir. 1998) (en banc). The
dispute in Perez was whether a particular plan provision gave the administrator discretion to
decide sufficiency-of-the-evidence questions. Id. at 556–57. However, the court found that the
plan unambiguously did provide for such discretion, and thus did not need to apply contra
proferentum. See id. at 557 n.7.

       In University Hospitals, a panel went further, but still did not move from dicta to a
holding. University Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839 (6th Cir. 2000). In
that case, we stated that “to the extent that the [p]lan’s language is susceptible of more than one
interpretation, we will apply the ‘rule of contra proferentum’ and construe any ambiguities
against Defendants/Appellees as the drafting parties.” Id. at 846–47. However, we ultimately
concluded that the defendant’s interpretation of the plan was implausible. Id. at 850. Since the
panel concluded that the plan was unambiguous in the plaintiff’s favor, its statements on contra
proferentum were dicta.

       We have since addressed University Hospitals and the doctrine of contra proferentum at
least seven times. Three times, we found no ambiguity and thus did not address any potential
conflict between contra proferentum and Firestone. See Osborne v. Hartford Life & Accident
Ins. Co., 465 F.3d 296, 300 (6th Cir. 2006); Marquette Gen. Hosp. v. Goodman Forest Indus.,
315 F.3d 629, 632 (6th Cir. 2003); Ziegler v. HRB Mgmt., Inc., 182 F. App’x 405, 408 (6th Cir.
2006). Three other times, we have criticized the doctrine on various grounds. Mitzel v. Anthem
Life Ins. Co., 351 F. App’x 74, 82 (6th Cir. 2009) (“Limiting the application of the contra
proferentem rule to cases in which an administrator’s decision is reviewed de novo strikes us as
the only sensible approach . . . .”); Smiljanich v. Gen. Motors Corp., 182 F. App’x 480, 486 n.2
(6th Cir. 2006) (concluding that applying contra proferentum would be improper where
Firestone deference applies); Mitchell v. Dialysis Clinic, Inc., 18 F. App’x 349, 353–54 (6th Cir.
2001) (characterizing the statements in University Hospitals, Perez, and Schachner as non-
binding dicta).
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       The only contrary case appears to be Copeland Oaks v. Haupt, 209 F.3d 811 (6th Cir.
2000). The Copeland Oaks court never used the term contra proferentum. But in holding the
plan administrator had abused her discretion, the court stated that Firestone deference should not
be understood to allow a plan to “avoid a default rule of insurance law applicable in the ERISA
context merely by giving itself discretion to interpret the plan.” Id. at 813. The court went on to
state that “even an arbitrary and capricious standard of review can be tempered by considering
conflicts of interest such as those implicit in any self-funded plan, and by construing ambiguities
against a plan drafter.” Id.

       This last statement went beyond the holding in Copeland Oaks. That case dealt solely
with the issue of whether Firestone discretion allowed the plan to avoid a default rule of federal
insurance law (the “make-whole” rule). Id. We concluded that the plan could not avoid default
obligations that we have imposed on all ERISA plans simply by interpreting the plan to its
advantage. Id. Instead, we required a clear statement before we would conclude that the parties
had chosen to abandon the make-whole rule. Id. at 813–14. This result is not obtained by
“tempering” arbitrary and capricious review, but instead is mandated by a cardinal principle of
administrative law: that ambiguity does not give administrators license to ignore fundamental
policy judgments made by the governments that supervise them. Cf. Util. Air Regulatory Grp. v.
Envt’l Protection Agency, 134 S. Ct. 2427, 2444 (2014); Food & Drug Admin. v. Brown
& Williamson Tobacco Corp., 529 U.S. 120, 125–26, 132–33 (2000).

       Contra proferentum has nothing to do with this logic. It applies as a sort of equitable
estoppel between parties to a contract, not as a way for parties to escape the strictures of public
policy. See, e.g., Merrimack Valley Nat’l Bank v. Baird, 363 N.E.2d 688, 690–91 (Mass. 1977)
(“The author of the ambiguous term is held to any reasonable interpretation attributed to that
term which is relied on by the other party.”). Thus, suggestions in a case dealing with the latter
issue are not necessarily helpful in the former cases.

                                                 B

       Faced solely with a mountain of dicta, we move from law to reason. And we think that
contra proferentum is inherently incompatible with Firestone deference. Thus, we hold that
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when Firestone applies, a court may not invoke contra proferentum to “temper” arbitrary-and-
capricious review. However, when it is not clear whether the administrator has, in fact, been
given Firestone deference on a particular issue, we think the doctrine still has legitimate force.

                                                         1

        In Firestone, the Court rejected the Plan’s position that arbitrary-and-capricious review
should be the norm in denial-of-benefits cases. Before ERISA, a denial-of-benefits lawsuit was
governed by ordinary contract law, unless the plan itself “g[a]ve the employer or administrator
discretionary or final authority to construe uncertain terms.” Firestone, 489 U.S. at 112–13.
When it enacted ERISA, Congress relied heavily on concepts of trust law, including the
fundamental rule that the courts would construe trust terms “without deferring to either party’s
interpretation.” Id. at 112. The Court was therefore skeptical that Congress meant to give
employees less protection under ERISA than they possessed under pre-ERISA contract law.

        But even though de novo review was the default rule, the Court recognized a significant
exception. It observed that “when trustees are in existence, and capable of acting, a court of
equity will not interfere to control them in the exercise of a discretion vested in them by the
instrument under which they act.” Id. at 111 (quoting Nichols v. Eaton, 91 U.S. 716, 724–25
(1875)) (emphasis supplied by the Firestone Court). In other words, parties to a trust may, by
contract, remove certain decisions from the de novo supervision of an equity court. Id. A trustee
therefore cannot violate the terms of the trust he or she was vested with authority over, but could
violate the vesting clause itself through an abuse of discretion. Id. at 114–15.

        The contra proferentum doctrine is, at its core, a rule of equity. See RESTATEMENT
(SECOND)    OF   CONTRACTS § 206 cmt. a (noting that the principle’s “operation depends on the
positions of the parties as they appear in litigation, and sometimes the result is hard to distinguish
from a denial of effect to an unconscionable clause”).2 It compels a drafting party to be honest

        2
           See also Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62–63 (1995) (“The reason for this
rule is to protect the party who did not choose the language from an unintended or unfair result.”); Merrimack Nat’l
Bank, 363 N.E.2d at 690–91 (“The author of the ambiguous term is held to any reasonable interpretation attributed
to that term which is relied on by the other party.”); Westfield Ins. Co. v. Galatis, 797 N.E.2d 1256, 1262 (Ohio
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      16-5124

about its offer up front, by threatening to construe terms “against the offeror” if he attempts to
hoodwink the other party. Id.; Contra Proferentem, BLACK’S LAW DICTIONARY (10th ed. 2014).
The rule’s equitable nature and its stated goals suggest that it does not make a good roommate
for Firestone, but that it might make a good neighbor.

                                                       2

           As a practical matter, we do not think a court can apply Firestone deference and contra
proferentum to the same case without contradiction.

           First, the Firestone Court labeled the discretion-vesting clauses as a turning point in the
character of an ERISA plan. By conferring discretion on the administrator of a plan, ordinary
rules of equity no longer operate to control the administrator–trustee absent an abuse of
discretion that violates the vesting clause itself. See Firestone, 489 U.S. at 111. It follows that
contra proferentum, as an equitable rule, should not be injected to micromanage this discretion
or tip the scales in close cases. Whatever the precise contours of Firestone deference, it must
include the ability to choose between two reasonable interpretations of the Plan, and that is
precisely the situation in which the traditional contra proferentum rule operates against the
drafter.

           Indeed, the very point of vesting discretion in someone is to trust his or her judgment
when you are lost at sea or when you need to solve a Gordian knot. It makes little sense to
revoke that discretion when it is needed most—in difficult cases where there is no clear answer.
In effect, applying contra proferentum when language is ambiguous generates a paradox where
the administrator can only exercise his discretion when it is not needed, i.e., when the plan
language is clear. We are certain that this is not what the Supreme Court had in mind when it
decided Firestone.

           Second, we doubt that plan-construction and denial-of-benefits decisions will be
influenced by a contra proferentum rule. Courts construe ambiguities against a drafter to remind

2003) (applying the rule only when the parties have unequal bargaining power); In re Riconda, 688 N.E.2d 248, 253
(N.Y. 1997) (invoking the rule when the drafting party had a lawyer and the other party did not).
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      16-5124

the next drafter to state his terms clearly when he comes to the negotiating table. It is a
prophylactic rule, not a remedial device. See RESTATEMENT (SECOND)            OF   CONTRACTS § 206
(noting that the primary aim of the rule is to discourage drafters from being “deliberately
obscure”). But the kind of benefits and plan-construction decisions contemplated by ERISA are
far removed from contract negotiations, where parties cannot reasonably be expected to foresee
every possible negative consequence of the language they use. Indeed, it is this very uncertainty
that often compels parties to vest discretion in the administrator, rather than risk de novo review
under Firestone. The presence of an obvious vesting clause makes it hard to believe that
beneficiaries will be duped by a “deliberately obscure” clause in the plan, since they have
already agreed to trust the administrator’s judgment in those obscure cases. And it is equally
hard to believe that the administrator would deliberately write obscure benefits provisions, since
that can easily develop into a headache later on (or perhaps a ten-year-long, class-action lawsuit).
Thus, we do not see how contra proferentum has any worth as a prophylactic in these cases.

                                                  3

       Neither do we think that contra proferentum can be “weighed” in the final analysis “in
determining whether there is an abuse of discretion.” Firestone, 489 U.S. at 115 (citation
omitted) (quotation marks and brackets removed); Copeland Oaks, 209 F.3d at 813 (suggesting
this approach). An administrator’s conflict of interest is properly considered in this analysis,
because fiduciaries are absolutely forbidden from acting with ulterior motives.            Firestone,
489 U.S. at 115–16; RESTATEMENT (THIRD) OF TRUSTS § 78, cmt. b. Depending on the severity
of the conflict, discretion exercised under these circumstances can easily be capricious, in the
sense that the action is done without regard for the best interests of the beneficiary. See id.

       Plan ambiguities do not work this way. If the administrator deliberately makes the Plan
ambiguous so that it can invoke deference to serve its own interests, we might consider that fact
under Firestone. But we would do so under the conflicts-of-interest rubric and the breach-of-
trust doctrine, not because the plan was ambiguous. In other words, the equitable impulse to
construe the Plan against the drafter comes from the administrator’s malfeasance, not from the
Plan’s language. To the extent that we would “temper” arbitrary-and-capricious review by
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      16-5124

construing language against the administrator, we would do so only to take account for this kind
of misbehavior.

                                                       4

        This does not mean that we abandon contra proferentum entirely. The Firestone Court
made it clear that modifying the presumption of de novo review is a contractual decision.
489 U.S. at 115. And unlike denial-of-benefits and plan-construction decisions, defer-or-not
decisions are at the forefront of ERISA plan negotiations, because that is where Firestone puts
them. Indeed, the parties’ agreement on the Firestone procedural rules may often be more
important than the substance of the plan itself. In the immortal words of Rep. John Dingell:
“I’ll let you write the substance . . . you let me write the procedure. I’ll screw you every time.”
Hearing on H.R. 2327, 98 Cong. 312 (1983).

        Thus, we see the wisdom of applying contra proferentum to the threshold question of
whether Firestone deference exists. The administrator has an obvious desire to operate under
Firestone and an equally obvious motivation to obtain that result in a deliberately obscure
manner. We do not think it was an accident that our first unequivocal statement on this subject
occurred in an en banc case where the defer-or-not question was at issue. Perez v. Aetna Life
Ins. Co., 150 F.3d 550, 557 n.7 (6th Cir. 1998) (en banc). And if beneficiaries are to give the
administrator the kind of trust inherent in Firestone deference, they ought to do so on purpose,
not as the result of ambiguity.3 But since no one disputes that the Norton plan gives the
administrator Firestone deference here, this issue can be resolved at a later time.

        In sum, we hold that if the Plan clearly gives the administrator Firestone deference, then
contra proferentum has no place in reviewing the administrator’s decisions. The arbitrary-and-
capricious standard stays intact.

        3
          We leave for another day whether contra proferentum applies to construe a plan where Firestone does not
apply, as we suggested in Mitzel v. Anthem Life Ins. Co., 351 F. App’x 74, 82 (6th Cir. 2009).
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      16-5124

                                                IV

         We now move to the core of our task: construing the Plan. Mindful that we are judges—
not actuaries or the “fairness police”—we ask one question, and one question only: Is the Plan
language clear? If it is, we must enforce it, no matter how unfair or bizarre it might seem to
Norton or to the Retirees. Perez, 150 F.3d at 556–57. It is simply not our job to rescue parties
from the unintended consequences of complexity, sloppy drafting, or bad negotiating. Id. at 557.
The time to close loopholes is in the offices of transactional lawyers, not in the courts fourteen
years later.

         To the extent that the Plan is truly ambiguous, Firestone requires the district court to
defer to Norton’s reasonable interpretation. The Plan is ambiguous if it is susceptible to multiple
reasonable interpretations, not just because clever lawyers can disagree over the meaning of
terms. Id. at 557 n.7. The district court held that the Plan was unambiguous on all fronts, and
for the most part, we agree. However, we think that the Plan gives ambiguous instructions on
one of the core disputes between the parties—whether or not the early retirement reducers apply
to these plaintiffs. We therefore must vacate the district court’s holding on that issue and remand
for a Firestone analysis of Norton’s proposed interpretation.

         Although many different variables and formulas are involved, calculating an individual’s
retirement benefit under the Plan involves three steps. First, identify the applicable rules.
Second, use those rules to determine the individual’s Monthly Retirement Income (MRI), which
is, essentially, the individual’s accumulated pension entitlement expressed as an amount per
month. Third, convert the MRI to the form of benefit selected by the individual, one of several
different annuities or a lump sum. Both parties raise a host of arguments about interpreting
discrete sections of the Plan. However, no one in this litigation has ever explained how the
whole plan works, i.e., how to calculate benefits from start to finish. This omission makes their
more nuanced arguments almost impossible to follow. We think such a roadmap is the only
logical starting point, and so we draw one for ourselves, addressing the parties’ disputes as they
arise.
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      16-5124

                A. Step 1: Identify the Appropriate MRI Rules

         The Plan divides Retirees into four categories: Normal, Early, Late, and Disability.
Norton Plan § 4.03–4.06. Each category has its own rules and restrictions for calculating MRI.
Thus, before we can start analyzing the benefits question, we must first identify the governing
rules.

         The class members in this case all retired early, and are therefore governed by § 4.05.
That section gives us two tracks from which we can choose: subsection (b), which applies
“[e]ffective prior to January 1, 2004,” and subsection (d), which is “[e]ffective only for a
Member who terminates employment on or after January 1, 2004.” § 405(b), (d) (as amended).
The choice is obvious. Subsection (d) governs the class. That subsection states:

         Effective only for a member who terminates employment on or after January 1,
         2004, upon such Member’s retirement on the Member’s Early Retirement Date,
         the Member shall be entitled to a Monthly Retirement Income equal to the benefit
         described under Subsection 4.03(b), determined as of the Member’s Early
         Retirement Date . . . provided, in no case shall such Monthly Retirement Income
         be less than the Member’s Accrued Benefit as of December 31, 2003.

§ 405(d). It is here that we find the first piece of tension dividing the parties. Generally, a
person who retires early receives less money than someone who retires on time. See § 4.05(a),
(b). However, the Retirees point out, correctly, that the cross-reference to “Subsection 4.03(b)”
refers to the rules for a person retiring on their Normal Retirement Date. See § 4.03(b).

         We see tension here, but no ambiguity. Subsection 4.05(d) uses terms of equivalence, not
incorporation. In other words, § 4.05(d) does not import § 4.03(b) wholesale—it simply tethers
one value to another. Thus, the reader is instructed to follow the rules in § 4.03(b), except that
we are to use the person’s early retirement date as if it was a normal retirement date. Tempering
the rules in § 4.03(b) with early retirement calculations at the MRI stage, as Norton suggests,
would violate the mandate that the early Retirees’ payment be “equal to the benefit described
under Subsection 4.03(b).” § 4.05(d) (as amended). Although this distinction seems trivial, it
becomes important later on in the analysis. Committed to our step-by-step process, we table its
implications until that time.
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      16-5124

                 B. Step 2: Calculate MRI

        Section 4.03(b) contains instructions for calculating MRI. The original plan did not
contain a § 4.03(b); instead, it was added by the same amendments that created § 4.05(d). These
amendments split “Normal” MRI calculations into two subsections: 4.03(a), which outlines the
defined-benefit scheme applicable before 2004, and 4.03(b), the new cash-balance scheme
created in 2004. Section 4.03(b) instructs the reader that this benefit “shall be determined” by a
two-step process. The two-step process is as follows:

        (1)      First, the Member’s Monthly Retirement Income determined under
                 Paragraphs 4.03(a)(1), (2), and (3) as of December 31, 2003 . . .
        (2)      Second, the Member’s Monthly Retirement Income as determined under
                 Paragraph 4.03(b)(1), increased monthly as follows:
                 (A)      beginning January 1, 2004 and each January 1 thereafter with
                          respect to the Monthly Retirement Income accrued for the prior
                          Plan Year, by a factor which, when compounded on a simple basis
                          for twelve (12) months, would produce the Index for the applicable
                          Plan Year, and
                 (B)      commencing January 1, 2004, by an increasing monthly income
                          accrued at the rate of one two hundred twelfth of a percentage of
                          the Member’s Compensation for any Plan Year in which the
                          Member completes one thousand (1000) Hours of Service based on
                          the following schedule [omitted].

§ 4.03(b)(1)–(2).4

        Thus, § 4.03(b) tells us to add two numbers together to find the MRI. The base number is
the amount accrued under the old defined-benefit system. § 4.03(b)(1). That number is then
“increased” by the benefit accrued under the cash-balance system established in 2004.
§ 4.03(b)(2).     There does not appear to be much dispute over how the (b)(2) number is
calculated. Thus, we stick to resolving the dispute under (b)(1).

        Subsection (b)(1) concerns the MRI accumulated under the defined-benefit scheme “as of
December 31, 2003.” § 4.03(b)(1). This number is static—it is determined at the close of 2003,

        4
          Section 4.03(b) also includes a third step based on ‘“set aside’ hours as of December 31, 1991,” which is
inapplicable here.
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      16-5124

and remains unchanged whether the employee retired on January 1, 2004, or January 1, 2014.
Id. In other words, everyone covered by the defined-benefit plan “retired” en masse from that
plan on December 31, 2003. Any post-2003 benefits are accounted for in the cash-balance
calculation created by § 4.03(b)(2). This is important because the 2004 amendments are not
retroactive beyond January 1, 2004. Therefore, other than the instruction that we are to use
December 31, 2003 as the cutoff or “retirement” date for benefits, we must ignore the 2004
amendments until we resurface from the defined-benefit calculation.

        Jump in the time machine. The old plan only had a defined-benefit system, governed by
§ 4.03(a). That section states:

        When a Member lives to his Normal Retirement Date, he shall be entitled to retire
        and to receive a Monthly Retirement Income in an amount certified to the Trustee
        by the Retirement Committee. The amount of the Member’s Monthly Retirement
        Income under the basic form described in Section 4.02(a) and payable at his
        Normal Retirement Date shall be equal to the largest of the amounts provided
        under the applicable provisions of paragraphs (1), (2) or (3) hereof . . . .

Id. § 4.03(a). The parties agree that paragraph (3) is the winner, at least for Khaliel, who is the
class representative. The relevant language states:

        (3)     For a Member with an NKC Accrued Benefit, the greater of (A) or (B):
                (A)    one and two-thirds percent (1-2/3%) of the Member’s Average
                       Monthly Earnings, such amount multiplied by the Member’s years
                       of Credited Service, minus the lesser of [two actuarial
                       calculations].
                (B)    The NKC accrued benefit.
                Such monthly amount shall be converted to a single sum on the basis of
                the interest rate or rates . . . for 30-year Treasury securities for the second
                month prior to the beginning of the applicable Plan Year and the mortality
                table prescribed by the Secretary of the Treasury and the resulting amount
                divided by 212.

§ 4.03(a)(3).    Subparagraph (A) refers to a Traditionally Accrued (or “TRAC”) benefit.
Subparagraph (B) refers to the Accrued Benefit under the pre-merger plan. The parties seem to
agree that Subparagraph (A) is the winner, again, for Khalil. But that is where the agreement
ends.
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      16-5124

         The final paragraph quoted above is at the center of the parties’ dispute. Under the
calculations prescribed in that paragraph, a nonincreasing monthly benefit is converted into an
increasing benefit—one that begins smaller, but increases over time to account for inflation. The
Retirees, apparently, believe that the subparagraph (A) benefit is already an increasing benefit,
while the subparagraph (B) benefit is not. Thus, they argue, it makes no sense to apply the
translation formula to subparagraph (A) again. Norton takes the opposite position, arguing that
both benefits are nonincreasing, and therefore that the translation is necessary for both.

         We need not get tied up in deciding who has the better argument on how the
subparagraphs operate in isolation. That is a question to be answered by the district court in the
first instance after hearing expert testimony from the parties.5 More importantly, however, the
minutiae of benefits calculations cannot control the answer given by the structure of § 4.03(a)(3).
Such analysis puts the cart before the horse: our first question is not what makes sense in the
context of the plan calculations; we ask, instead, what the plan says. Here, the final paragraph
lacks an introductory number or letter. However, it is aligned at the left margin with the
introductory language of § 4.03(a)(3) and with the subsection designations (A) and (B). We can
think of no reason that a drafter would do this other than to make the final paragraph applicable
to all of subsection 4.03(a)(3). Indeed, if the final paragraph was only supposed to apply to
subparagraph (B), then we would expect it to either be appended to (B) without separation or be
indented to the same extent that sub-subparagraphs (A)(i) and (ii), applicable only to (A), are
indented. It’s not. The inferences drawn by the Retirees—from § 4.03 or elsewhere—do not

         5
           The district court refused to consider expert testimony at all during the liability stage. We think this was
error. As the district court recognized, expert testimony is admissible to clarify or define trade usage and terms of
art. The district court’s October 30, 2013 order striking Parks’s testimony states that “[t]here is no indication that
any of the terms” of the Plan “are of special/technical usage or trade usage.” However, the district court’s summary
judgment order, issued the very next day, stated that (1) interpreting the Plan had been “challenging,” and “easier
said than done,” and (2) the court had struggled to understand the effect of the Plan’s various amendments, and that
trying to do so was “like traversing a matrix,” because “the complexity of documents” and their “piecemeal nature”
made the task “daunting for all concerned.” The district court also acknowledged that its opinion represented “an
attempt to interpret the plain meaning of the text where available.” In light of this admirable honesty and our own
review of the Plan, it is clear that expert testimony would be exceedingly helpful. See Fed. R. Evid. 702. To the
extent that further interpretation is required on remand, we think the district court would be well-advised to accept
reasonable proffers of expert testimony from the parties.
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      16-5124

overcome the unambiguous structure of the section.6 The extent to which our holding here
influences the district court’s resolution of the increasing-or-nonincreasing debate is up to the
district court’s sound evaluation of the expert testimony.

        In sum, we hold that the such-monthly-amount paragraph applies to all of § 4.03(a)(3),
not just to subparagraph (B). We therefore affirm the district court’s judgment on this issue.

                 C. Step 3: Convert MRI into the appropriate lump-sum benefit

        To reiterate: a person’s MRI under the Plan is the appropriate amount from § 4.03(a) plus
the amount accrued under § 4.03(b)(2). Once we go back up through the decision tree to
§ 4.05(d), we are ready to convert the MRI into the form elected by the Plan Member.

        The run-of-the-mill Plan Member will receive monthly payments from the Plan under the
“Basic Form.” The Basic Form is an “increasing monthly income commencing on the Member’s
Disability, Early, Normal or Late Retirement Date . . . and continuing for sixty (60) months
certain and for his lifetime thereafter.” § 4.02(a). However, if a Member follows the proper
steps, he can “elect . . . to receive his Monthly Retirement Income in one of the alternative forms
listed below.” § 4.02(b). One of those forms is a lump sum, which is at issue here.

        The lump sum rules are in § 4.02(b)(6). That section states:

        [An] alternative form[] include[s] [a] lump sum payment payable at the Member’s
        Disability, Early, Normal or Late Retirement Date . . . calculated by multiplying
        the increasing Monthly Retirement Income determined under the applicable
        Section by 212 and, if the Monthly Retirement Income is due to Early Retirement
        or Disability Retirement, dividing by one (1) minus the appropriate reduction
        factor under Section 4.05(b)(5), Section 4.06(a)(5) or Section 5.01(c)(5), as
        applicable.

§ 4.02(b)(6). The “applicable Section” here is clearly § 4.05(d), and by extension, § 4.03(b).
Thus, the lump sum is simply the MRI derived under § 4.03(a) and § 4.03(b)(2), multiplied by
        6
          The Retirees argue that the 2008 version of the Plan demonstrates that the final paragraph of § 4.03(a)(3)
in the 2004 version was not meant to be part of the MRI calculation. True, the disputed paragraph does not appear
in the 2008 Plan’s § 4.03(b)(3) (the analogue of § 4.03(a)(3) in the 1997 Plan). The parallel provision in the 1997
Plan’s § 4.03(a)(2) is also gone from its 2008 analogue, § 4.03(b)(2). However, as Norton correctly points out, the
relevant language has simply been placed in a new § 4.03(c), which applies to both §§ 4.03(b)(2) and (3). The
Retirees’ argument is therefore without merit.
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      16-5124

212 and divided by one minus the reduction factor, as appropriate. The parties, however, present
us with two quarrels about this math. First, the Retirees claim that the value of this lump sum
must include the value of an increasing monthly income for sixty months certain, which basic-
form beneficiaries get under § 4.02(a). Second, the Retirees claim that the early retirement
reducers referenced in § 4.02(b)(6) were impliedly repealed by the 2004 amendments and do not
apply to them. The district court agreed with the Retirees.

                                                1

       The Retirees contend that any lump sum must include the actuarial value of an increasing
monthly income, guaranteed for sixty months certain. They reach this conclusion by arguing that
the MRI under § 4.03(b) is identical to the Basic Form identified in § 4.02(a), and the Basic
Form does require an increasing income for sixty months certain.

       The Retirees’ argument is based on two observations. First, they point out that § 4.03(b)
states that “the amount of the Member’s Monthly Retirement Income under the basic form
described in Section 4.02(a)” shall be determined by certain calculations.       Therefore, they
reason, the MRI is equivalent to the basic form and must abide by the same rules. Second,
§ 4.02(a) states that “[t]he basic form of Retirement Benefit (to which the formula indicated in
Section 4.03 applies) shall be an increasing monthly income . . . continuing for sixty (60) months
certain and for [the retiree’s] lifetime thereafter.” The Retirees claim that since the basic form
“shall be determined” per § 4.03(b) and “shall be an increasing monthly income” for sixty
months certain per § 4.02(a), the MRI determined under § 4.03(b) is identical to the sixty-
months-certain, increasing monthly income described under § 4.02(a). We disagree.

       The district court reasoned that “4.03(b) . . . explicitly states the MRI shall be in ‘the
basic form described in Section 4.02(a).’” This is only a half-truth. Section 4.03(b) states that
“the amount of the Member’s [MRI] under the basic form described in Section 4.02(a) . . . shall
be determined as set forth in paragraphs (1) and (2) hereof . . . .” § 4.03(b) (emphasis added).
The emphasized language reveals that the district court was paddling against the current—it put
the words “shall be” in the wrong spot. Under § 4.03(b), MRI is determined by reference to the
two subparagraphs, not by reference to the basic-form rules. The words “under the basic form
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      16-5124

described in Section 4.02(a)” simply direct the reader on how to apply the output of the MRI
calculation. § 4.03(b). In other words, the basic-form rules lie downstream from § 4.03(b),
while the MRI calculation lies upstream. The beneficiary’s election of an alternative form
merely diverts the MRI output through a separate fork in the river.

       This is confirmed by the lump-sum rules. Those rules instruct the reader to use the MRI
“determined under the applicable Section,” not the MRI as expressed by the basic-form rules.
§ 4.02(b)(6). The basic-form rules do not determine MRI, or provide any instructions for doing
so, and therefore cannot be the “applicable Section.” The basic-form section is, by its terms, a
discussion of form, not substance.       In contrast, § 4.03(b) provides detailed, substantive
instructions on how to calculate MRI, and is therefore the “applicable Section” for § 4.02(b)(6)
purposes.

       However, this does not mean that the Retirees receive a nonincreasing benefit. The
lump-sum rules themselves declare that the Plan must use an “increasing Monthly Retirement
Income determined under the applicable Section.” § 4.02(b)(6). Thus, regardless of what any
other Part of the plan says, § 4.02(b)(6) itself requires that the input be an increasing MRI.
Indeed, the expert testimony in the record, discussed above, suggests the MRI will always be
increasing at this stage in the math, but the district court is free to examine this issue in more
detail. However, because this section is silent about the sixty-months-certain issue, we hold that
the Plan itself does not require the lump sum to account for that variance.

                                                 2

       This is not the end of the matter. ERISA requires that any lump-sum alternative be the
“actuarial equivalent” of the basic-form benefit. 29 U.S.C. § 1054(c)(3). Because the district
court did not address actuarial equivalence, a remand is necessary to answer this question.

       ERISA mandates that “lump-sum payments . . . must be the actuarial equivalent of the
normal accrued pension benefit.” West v. AK Steel Corp., 484 F.3d 395, 400 (6th Cir. 2007).
The Retirees seize upon this doctrine to argue that a lump-sum benefit must include the actuarial
value of an increasing monthly income for sixty months certain, since the basic-form benefit
provides for those features. Norton counters that the lump sum benefit is already based on an
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      16-5124

increasing monthly income. This is true. However, § 4.02(b)(6) does not appear to include the
sixty-months-certain feature of the basic-form benefit. ERISA requires Norton to account for
that feature.

         Further, Norton has complied with ERISA only if all its actuarial assumptions are valid,
taken together. In other words, the calculation in § 4.02(b)(6)—multiplying the § 4.03(b) MRI
by 212 and then dividing by one minus any applicable reduction factor—must produce a lump
sum that is actuarially equivalent to the increasing, sixty-months-certain lifetime annuity
provided under the basic-form rules. See West, 484 F.3d at 400. All of the Plan’s other actuarial
conversions, such as calculations from § 4.03(a)(3), must also be valid. According to Norton’s
experts, they are. The district court, however, struck the experts’ reports and did not address this
issue in its liability order.7

         This made granting summary judgment for the Retirees inappropriate. Whether the
actuarial-equivalence requirement is satisfied is a factual dispute. And because the court granted
the Retirees’ motion, it was obligated to consider the evidence in the light most favorable to
Norton. Cockrel v. Shelby Cty. Sch. Dist., 270 F.3d 1036, 1056 (6th Cir. 2001). We think this
would naturally include Norton’s experts’ explanation of how the actuarial conversions work.
The court need not ultimately accept those explanations as the factfinder, but it must do so on the
Retirees’ motion for summary judgment. Id. Because there is a genuine issue of material fact,
and because we have altered the district court’s interpretation of the plan, neither party is entitled
to summary judgment on this question.                 We therefore vacate the district court’s grant of
summary judgment and remand for further examination of the actuarial-equivalence issue.

         7
           The district court did consider expert opinions at the damages stage and found Plaintiffs’ expert’s opinion
on actuarial equivalence more persuasive. But at that point, the experts’ opinions had accounted for the
consequences of the district court’s merits rulings. It is unclear whether or to what extent their competing formulas
would have been different had the district court correctly interpreted the Plan. It is also unclear whether this might
have changed the district court’s conclusions about the experts’ persuasiveness. Thus, remand is appropriate to
allow both the parties and the district court to address the actuarial equivalence issue for the first time under our
interpretation of the Plan.
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                                                           3

       At long last, we reach the final plan-interpretation issue. And it is here that we find the
ambiguity mandating Firestone deference.                  Section 4.02(b)(6) states that “if the Monthly
Retirement Income is due to Early Retirement . . . [the lump sum shall be calculated by] dividing
[the MRI] by one (1) minus the appropriate reduction factor under Section 4.05(b)(5), Section
4.06(a)(5) or Section 5.01(c)(5), as applicable.” These sections have the effect of reducing a
lump-sum benefit in proportion to the “earliness” of a person’s retirement. Section 4.05(b)(5) is
the governing rule for early retirees.8 Subparagraph (b)(5) comes on the heels of four other
paragraphs explaining how to calculate MRI for a Member who retires before January 1, 2004.
Section 4.05(b) (as amended) states:

       Effective prior to January 1, 2004, upon the Member’s retirement on his Early
       Retirement Date, he shall be entitled to a Monthly Retirement Income equal to the
       largest of the amounts provided under the applicable provisions of paragraphs
       (1), (2) or (3) below . . . .
       (1)        The sum of [§ 4.03(a)(1), reduced by certain fractional amounts, and
                  (a)(1)(B)];
       (2)        For a Member with a Methodist Accrued Benefit, a reduced Monthly
                  Retirement Income equal to his Accrued Benefit determined under
                  Sections 2.01(a)(2) and 4.03(a)(2) as of his Early Retirement Date,
                  [reduced by the subparagraph (1) fractions]
       (3)         For a Member with an NKC Accrued Benefit, [do the same calculation as
                   in (2), but use § 4.03(a)(3), instead of § 4.03(a)(2)].
       (4)         [omitted as immaterial].
       (5)         Anything herein to the contrary notwithstanding, the Monthly Retirement
                   Income described in paragraphs (1), (2), (3) and (4) above [sic] be reduced
                   or further reduced by one three hundredths (1/300) for each month by
                   which the Member’s Early Retirement Date precedes his Normal
                   Retirement Date.

       This is where the confusion sets in. “[P]aragraphs (1), (2), (3) and (4)” all refer to MRI
calculations that were expressly made “effective prior to January 1, 2004.” § 4.05(b)(5); Plan
Amendments, § 6 (Jan. 2004).                 The amendments did not modify the cross-reference in

       8
           Sections 4.06(a)(5) and 5.01(c)(5) apply to disability retirement and severance pay, respectively.
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§ 4.02(b)(6); neither did they create a parallel reduction scheme for post-2004 early retirees.
The Retirees claim that the amendments thereby “subsidized” early retirement by eliminating the
reducers. Norton claims that it never intended to create such a subsidy, and that the lump-sum
rules obviously contemplate that all early retirees will have their benefits reduced. We think that
the Plan is ambiguous on this point. Under Firestone, therefore, the district court was obligated
to determine whether Norton’s interpretation was a reasonable way to resolve the ambiguity.

       The Retirees’ argument is plausible as a matter of the plain text of the Plan. At no point
in our calculation of MRI do we encounter the rules in § 4.05(b). The first time they come up in
the decision tree is during the lump-sum conversion. This appears to be intentional. A post-
2004 early retiree is expressly governed by § 4.05(d), not § 4.05(b). That section, in turn, refers
us to the normal-retirement rules in § 4.03(b). Thus, on the front end, the text of the plan
strongly suggests that the Retirees do get the benefit of the normal-retirement rules, sans
reductions. The lump-sum rules seem to dictate this outcome as well. Section 4.05(b)(5) is
expressly limited in its operation to “the Monthly Retirement Income described in paragraphs
(1), (2), (3) and (4) above.” Since the Retirees’ MRI was not calculated by way of those
paragraphs, it is hard to see how subsection (b)(5) would apply, either.

       However, Norton presents a plausible counter-point. The lump-sum rules do command
that the MRI shall be reduced “if the [MRI] is due to Early Retirement,” and that the reduction
shall be accomplished by the rules in one of three sections, “as applicable.” § 4.02(b)(6). The
district court’s view, essentially, was that the phrase “as applicable” in § 4.02(b)(6) means the
cross-reference to the reducers only operates if § 4.05(b)(5) is applicable on its own terms; that
is, only if the retiree’s MRI has been calculated under § 4.05(b)(1)–(4). Norton correctly points
out, however, that § 4.02(b)(6) says “as applicable,” not “if applicable.” We presume that this
change in wording has real meaning, since the Plan drafters used the words “if applicable” many
other times in the Plan documents, including in the 2004 Amendments.               See, e.g., Plan
Amendments § 4 (Jan. 2004); Norton Plan § 2.01(a).
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         In sum, for post-2004 early Retirees, the Plan commands us to apply a section that, by its
terms, does not apply. This is a classic example of a patent ambiguity.9 We suspect that during
the amendment process, someone either failed to account for this particular fact pattern or
neglected to include language clarifying that the reducers applied to post-2004 early retirees.
But since we cannot discern the contours of the parties’ intent from the text of the document,
Firestone requires the courts to defer to Norton’s interpretation unless it is arbitrary and
capricious. However, this is a question that the district court should decide in the first instance.
The district court refused to consider expert testimony on Norton’s interpretation of the Plan at
the liability stage, and as we have said, we believe such testimony is necessary to fully
understand whether Norton’s position is arbitrary and capricious. Since the record lacks a
complete explanation for Norton’s position, we think a remand is the best course of action. We
therefore vacate the district court’s holding that the Plan unambiguously favored the Retirees on
this point, and we remand with instructions to apply Firestone deference.

                                                           V

         The district court concluded that Kentucky’s five-year limitations period for statutory
claims applies in this case, rather than the fifteen-year limitations period for claims on written
contracts. It also refused to decertify the class. Both issues are contested on appeal, and we
address each in turn.

         9
           Judge White contends that the only ambiguity here is whether or not the MRI should be increased by
dividing by a § 4.02(b)(6) fraction (which yields a larger number). This reading would essentially generate a
“buyout” incentive for employees to retire early, since the MRI reductions are no longer taken upstream because of
§ 4.05(d). Judge White thinks the ambiguity ends there; in other words, she believes the only reasonable choice is
between a lump-sum that is the same as a normal retiree (obtained by ignoring the plain text of the plan) or that is
greater than a normal retiree (obtained by applying the reversal even though no reduction was taken). We disagree.
Norton presents a third plausible option. As Judge White observes, the § 4.02(b)(6) fraction existed in the old Plan
solely to reverse a reduction taken during the MRI process. The new Plan shifts the MRI calculation away from the
front-end reducers, but still retained the reversal on the back end. We think a third plausible option is that the
reversal must be viewed in light of the reduction that traditionally precedes it. By retaining the reversal, Norton
argues, the Plan implicitly contemplates some sort of earlier reduction. Otherwise, the text of the Plan would create
an elephantine buyout hidden in an unlikely mousehole—as we stated above, § 4.02 is about form, not substance.
We think that this nudges the tension identified in Part IV.A into a full-fledged ambiguity and requires a remand for
a Firestone analysis.
         Judge White also concludes that adopting this third interpretation would be arbitrary and capricious. In our
view, the record is insufficient to support this position as a matter of law, since the district judge held that the Plan
was unambiguous. A remand is therefore necessary to fully examine the issue.
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                                                A

       The Retirees contend that the district court should have applied a longer limitations
period to their underpayment claims. See 29 U.S.C. § 1132(a)(1)(B). We agree. “ERISA does
not explicitly provide a limitations period for § 1132(a)(1)(B) claims,” so “courts fill the
statutory gap using federal common law,” and we look to the most analogous state statute of
limitations to answer that question. Patterson v. Chrysler Grp., LLC, 845 F.3d 756, 762 (6th Cir.
2017). We have held that “when a plaintiff seeks benefits under the plan and those claims
depend on alleged violations of ERISA’s statutory protections, Kentucky’s five-year limitations
period applies.” Fallin v. Commonwealth Indus., Inc., 695 F.3d 512, 515 (6th Cir. 2012)
(internal quotation marks omitted). In contrast, when a claim is based on the contract alone, then
Kentucky’s longer statute of limitations for contract claims applies. Redmon v. Sud–Chemie Inc.
Ret. Plan, 547 F.3d 531, 537 (6th Cir. 2008).

       To the extent that the Retirees’ claims are based solely on the improper interpretation of
the Plan terms, the contract limitations period must apply. As we explained in Redmon:

       The plaintiffs in Fallin alleged that certain amendments to their employee
       retirement benefit plan violated the protections afforded them by ERISA.
       Although plaintiffs in Fallin also sought benefits under the plan, the benefits
       claim depended on the alleged violations of ERISA’s statutory protections. Here,
       Redmon does not dispute that she signed the DFBP waiver. Rather, she argues
       that the plan administrator obtained her signature in violation of ERISA. She
       alleges that her waiver of survivor benefits was therefore invalid under ERISA
       and that she is entitled to the benefits she would have received if she had not
       signed the waiver. Redmon’s claim for benefits therefore depends on a finding
       that her signature was invalidly obtained in violation of ERISA. Thus, her claim
       for benefits can be said to arise more specifically from ERISA’s statutory
       protections than from an independent contract between the Redmons and Sud–
       Chemie. The result might be different if, for example, Redmon contested the
       authenticity of the signature on the DFBP. Such a claim might present an issue of
       contract law.

Id. This is such a case. At least as to their underpayment claims, the retirees argue that Norton
misconstrued the Plan terms and failed to pay them what the Plan required. Absent some
indication that this cause of action depends on “ERISA’s statutory protections” rather than on the
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      16-5124

interpretation of the contract, the most analogous limitations period here would be that which
Kentucky applies to contract claims. Id.

         Thus, we hold that to the extent the retirees’ claims are based on alleged
misinterpretations of the Plan, they are governed by Kentucky’s contractual limitations period.
The retirees’ actuarial-equivalence claims remain governed by the statutory limitations period.

                                                  B

         Norton also challenges the district court’s certification of the class at both the liability
and damages stages. We will not reverse a certification decision in the absence of “a strong
showing that the district court’s decision amounted to a clear abuse of discretion.” In re
Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 722 F.3d 838, 850 (6th Cir. 2013).
“An abuse of discretion occurs if the district court relies on clearly erroneous findings of fact,
applies the wrong legal standard, misapplies the correct legal standard when reaching a
conclusion, or makes a clear error of judgment.” Id. Any class certification must satisfy Rule
23(a)’s requirement of numerosity, commonality, typicality, and adequate representation.
Further, a class action must fit under at least one of the categories identified in Rule 23(b). The
district court must conduct “a ‘rigorous analysis’ . . . as to all the requirements of Rule 23.”
Pipefitters Local 636 Ins. Fund v. Blue Cross Blue Shield of Mich., 654 F.3d 618, 630 (6th Cir.
2011).

                                                  1

         In 2011, the district court certified the class under Rules 23(b)(1)(A) and (b)(2).
It defined the class as:

         All participants in the Norton Healthcare, Inc. Retirement Plan, its predecessors
         and successors, whose contractual lump sum pension benefits:
         (1)    Did not include the value of the basic form of benefit – an “increasing
                monthly retirement income” (annual cost-of-living adjustment) – when
                election of such basic form would have yielded the highest value for the
                participant; and/or
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       (2)     Did not include the value of the “alternative” lump sum benefit where the
               basic form of benefit is multiplied by 212, when election of such
               alternative form would have yielded the highest value for the participant;
               and/or
       (3)     Did not include the value of the early retirement subsidy.

       We assess the (b)(2) certification first. Rule 23(b)(2) applies when “the party opposing
the class has acted or refused to act on grounds that apply generally to the class, so that final
injunctive relief or corresponding declaratory relief is appropriate respecting the class as a
whole.” Any analysis of a (b)(2) certification must start with the Supreme Court’s decision in
Wal-Mart Stores, Inc. v. Dukes. In Dukes, the Court unanimously held that Rule 23(b)(2) “does
not authorize class certification when each class member would be entitled to an individualized
award of monetary damages.” 564 U.S. 338, 360–61 (2011). Instead, the Court stated that
“individualized monetary claims belong in Rule 23(b)(3),” noting the due-process issues raised
by binding a (b)(2) class without notice and an opportunity to opt out. Id. at 361–63. Further,
the Court stated:

       The key to the (b)(2) class is the indivisible nature of the injunctive or declaratory
       remedy warranted—the notion that the conduct is such that it can be enjoined or
       declared unlawful only as to all of the class members or as to none of them. In
       other words, Rule 23(b)(2) applies only when a single injunction or declaratory
       judgment would provide relief to each member of the class.

Id. at 360 (internal citations and quotation marks omitted). The Court held open the possibility,
however, that (b)(2) certification might be appropriate when monetary relief is “incidental to . . .
injunctive or declaratory relief.” Id. (internal quotation marks omitted).

       Our precedent speaks to this residual question. In Gooch v. Life Investors Insurance Co.
of America, the ultimate issue was “the difference between the charges for which [each class
member] was billed and the amount that [the defendant] paid.” 672 F.3d 402, 409, 428 n.15 (6th
Cir. 2012). We held that those issues required (b)(3) certification. Id. at 428 n.15. However, we
also stated that “Rule 23(b)(2) certification remains available . . . when the plaintiffs seek a
declaration about the meaning of a contract,” even “when the declaratory relief serves as a
predicate for later monetary relief.” Id. at 427, 429.
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       Importantly, Gooch approved the practice of bifurcated certification: subrule (b)(2)
certification for contract interpretation, and subrule (b)(3) certification of classes and subclasses
for determining damages. Id. at 427–28. Although we have yet to extend this approach to post-
Dukes ERISA cases, the Seventh Circuit has done so. Johnson v. Meriter Health Servs. Emp.
Ret. Plan, 702 F.3d 364, 371 (7th Cir. 2012) (“[A]ll that the class is seeking . . . at least initially,
is a reformation of the Meriter pension plan—a declaration of the rights that the plan confers and
an injunction ordering Meriter to conform the text of the plan to the declaration.”). We think
Gooch is equally applicable to ERISA plans, as demonstrated by the logic in Johnson.
Therefore, the district court did not abuse its discretion by certifying the class under Rule
23(b)(2) for plan-interpretation purposes. Since the plan must mean the same thing regardless of
the person to whom it applies, “uniform declaratory relief is appropriate.” Gooch, 672 F.3d at
428; Johnson, 702 F.3d at 371.

       The fact that the district court also certified the class under Rule 23(b)(1)(A) does not
change that conclusion. Rule 23(b)(1)(A) permits certification when separate actions “would
create a risk of . . . inconsistent or varying adjudications with respect to individual class members
that would establish incompatible standards of conduct for the party opposing the class.” As the
Supreme Court has explained,

       Rule 23(b)(1)(A) takes in cases where the party is obliged by law to treat the
       members of the class alike (a utility acting toward customers; a government
       imposing a tax), or where the party must treat all alike as a matter of practical
       necessity (a riparian owner using water as against downriver owners).

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 614 (1997) (internal quotation marks omitted).

       The district court did not abuse its discretion by certifying a Rule 23(b)(1)(A) class at the
liability stage. At that point in the case, the issue before the district court was the interpretation
of the Plan. ERISA administrators may not discriminate between similarly situated beneficiaries.
Varity Corp. v. Howe, 516 U.S. 489, 514 (1996); Alday v. Raytheon Co., 619 F. Supp. 2d 726,
736 (D. Ariz. 2008) (“ERISA requires plan administrators to treat all similarly situated
participants in a consistent manner.”); Adams v. Anheuser–Busch Cos., No. 2:10-CV-826, 2012
WL 1058961, at *10 (S.D. Ohio, Mar. 28, 2012). Here, individual actions by multiple retirees
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      16-5124

would clearly have created a risk of “inconsistent or varying adjudications” that “would establish
incompatible standards of conduct” for Norton. Fed. R. Civ. P. 23(b)(1)(A). We therefore
affirm the district court’s certification, but only as it relates to the liability and plan-interpretation
aspects of the case.

                                                    2

        Throughout its hearings on damages, the district court refined its definition of the class.
It held that the class includes all retirees who took lump-sum distributions after January 30,
2003, regardless of whether their benefit was ultimately determined on a cash-balance or
defined-benefit basis, but not disability retirees or those receiving mandatory lump-sum
payments. On appeal, Norton argues that certification under Rules 23(b)(1)(A) and (b)(2) was
inappropriate; that retirees whose lump-sum distribution was determined on a cash-balance basis
should not have been included in the class; and that, as ultimately defined, the class contains
members with antagonistic interests, at least some of whom cannot be adequately represented by
Khaliel. We hold that the district court abused its discretion by failing to engage in a meaningful
analysis under Dukes when certifying a damages class. We therefore vacate the district court’s
decision on this point and remand for a more thorough analysis.

        We address the (b)(2) problem first.            Dukes was clear that when a case involves
individualized damages awards, a damages class cannot be certified under subrule (b)(2). Dukes,
564 U.S. at 360–62. And it is clear from the record that the amount of any individual class
member’s award may vary wildly depending on their circumstances. This reality should have
prompted the district court to consider the due-process concerns highlighted by the Supreme
Court in Dukes. See id. at 362–63; Randleman v. Fid. Nat’l Title Ins. Co., 646 F.3d 347, 352
(6th Cir. 2011) (stating that district courts have a “continuing obligation to ensure that the class
certification requirements are met”). The district court, however, said only: “This Court has
previously considered and denied Norton’s motion to alter or amend the class certification
order. . . . Having considered Norton’s renewed arguments against class certification, this Court
finds that its previous certification will stand.” But this order contains no substantive discussion
of certifying a damages class under Rule 23(b)(2).
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      16-5124

       This does not satisfy the “rigorous analysis” requirement. Pipefitters, 654 F.3d at 629–
30. In Pipefitters, the district court issued an order certifying a class “for the reasons stated on
the record.” Id. at 628. At the relevant hearing, the district court had done little more than recite
the applicable rule and state that its requirements were satisfied. Id. We reversed, holding that
the district court had not addressed “the basic facts” underlying its decision. Id. at 629. Here,
the district court did even less than the district court in Pipefitters. Indeed, the district court has
never addressed the due-process issues raised by Dukes at all, much less analyzed them in light
of the facts of this case. On remand, the district court must address this issue prior to certifying a
damages class under subrule (b)(2).

       The district court’s (b)(1)(A) certification is also suspect on these grounds. Only Rule
23(b)(2) was at issue in Dukes, and the Court did not address whether its holding applied to Rule
23(b)(1) classes. 564 U.S. at 346 n.2. But the due process concerns that led the Court to
conclude that “individualized monetary claims belong in Rule 23(b)(3)” are similar for (b)(1)
classes. Id. at 361–62; see WILLIAM B. RUBENSTEIN, NEWBERG ON CLASS ACTIONS § 4:13 (5th
ed. 2017). Thus, for the same reasons discussed above, the district court abused its discretion by
failing to address these issues in a meaningful way. Although the district court may be within its
authority to certify a damages class under (b)(1)(A), it must address these issues first.

       In sum, to the extent that the district court certified the class for plan-interpretation
purposes, that decision is affirmed. To the extent that its certification extended to damages
calculations, we vacate the certification and remand for further proceedings consistent with this
opinion. We do not reach the remainder of the parties’ class-certification arguments. The parties
also raise arguments about the damages formula adopted by the court and the appropriate rate of
prejudgment interest. Because our resolution of the merits of this case requires us to vacate the
award of damages, these issues are no longer ripe.

                                                  VI

       This is not an easy case. We hope that our opinion today lends some finality to the major
legal issues presented by the parties. To the extent that uncertainties remain, we reiterate the
importance of the judicial role under Firestone: Ask only if the plan is ambiguous. If it is,
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Norton’s decisions—factual and interpretive—must stand unless they are arbitrary and
capricious.

       Except as stated below, we AFFIRM the judgment of the district court. The district
court’s order dismissing certain contract claims as barred by the statute of limitations is
REVERSED. Further, the district court’s order granting summary judgment to Plaintiffs is
VACATED IN PART insofar as it (a) held that the plan unambiguously subsidized early
retirement; (b) held that the plan required Norton to pay a lump sum including the value of sixty-
months-certain benefits; and (c) disposed of the actuarial-equivalence issue. Consequently, the
district court’s damages order is VACATED—including as it relates to class certification at the
damages stage—and the case is REMANDED for proceedings not inconsistent with this
opinion.
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             _________________________________________________________

                  CONCURRING IN PART AND DISSENTING IN PART
             _________________________________________________________

       HELENE N. WHITE, Circuit Judge, concurring in part and dissenting in part. I concur
in the majority opinion except for Part IV. C. 3., addressing the early-retirement/lump sum issue,
and Part III., addressing the applicability of the doctrine of contra proferentum.

       The majority concludes that the Plan is ambiguous regarding reductions for early
retirement, and remands for further consideration and application of Firestone deference. I
would affirm the grant of summary judgment to the Retirees on this issue based on the
unambiguous provisions of the Plan. As the majority opinion explains, 4.05(b), which contains
all the early-retirement reductions, including the 4.05(b)(5) reduction at issue here, applies to
Members who retired before January 1, 2004. (Maj. Op. at 23.) For Members retiring after that
date, 4.05(b) was replaced with 4.05(d), which adopts 4.03(b)(3) as the applicable formula.
Section 4.03(b)(3) has no reductions for early retirement. The majority and I agree that the old
4.05(b) reductions do not apply based on the express language of section 4.05. (Id. at 35.)

       The majority concludes, however, that ambiguity is introduced by 4.02(b)(6), which
continues to refer to 4.05(b)(5), and other reducers, notwithstanding that they no longer apply.
(Id. at 34-36.) Section 4.02(b)(6) states:

       A lump sum payment payable at the Member’s Disability, Early, Normal or Late
       Retirement Date or the date specified in Section 5.01, and calculated by
       multiplying the increasing Monthly Retirement Income determined under the
       applicable Section by 212 and, if the Monthly Retirement Income is due to Early
       Retirement or Disability Retirement, dividing by one (1) minus the appropriate
       reduction factor under Section 4.05(b)(5), Section 4.06(a)(5) or Section
       5.01(c)(5), as applicable.

       In response to the Retirees’ analysis of the Plan language, the majority states that “Norton
presents a plausible counter-point. The lump-sum rules do command that the MRI shall be
reduced ‘if the [MRI] is due to Early Retirement,’ and that the reduction shall be accomplished
by the rules in one of three sections, ‘as applicable.’” (Id. at 35.) It is here that I part ways with
the majority. The lump-sum rules do not command that the MRI be reduced if the MRI is due to
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      16-5124

early retirement. Nowhere are the words “the MRI shall be reduced if due to early retirement,”
or similar words, found in the section. Instead, the section sets forth a formula for converting the
MRI into a lump sum. This formula instructs that the lump-sum payment be calculated by
multiplying the MRI by 212, and “if the Monthly Retirement Income is due to Early
Retirement,” “dividing by one (1) minus the appropriate reduction factor under Section
4.05(b)(5), . . . as applicable.” Applying this second step does not reduce the MRI; it increases
it. Mathematically, it cannot be disputed that if after multiplying the MRI by 212 as instructed,
one goes on to divide that product by 1 minus the appropriate reduction factor under 4.05(b)(5),
the lump-sum payment goes up, not down; dividing a number by a number that is less than 1
increases the number. This is not a drafting mistake. The Form of Benefit section makes an
adjustment for early-retirement reductions that were at one time taken upstream of the 4.02(b)
calculations. All of the 4.02(b) alternatives intentionally restore the early-retirement MRIs to
their values before the early-retirement reduction by dividing by one minus the applicable
reduction. And Norton’s proposed calculations do so as well. (See infra note 2.)

       Thus, reading section 4.05 on Early Retirement and section 4.02(b)(6) on lump-sum
payments together does, indeed, reveal an ambiguity, because 4.02(b)(6) continues to refer to
4.05(b)(5) and the other reducers, and reverses early-retirement reductions that are no longer
applicable. But that ambiguity is not whether the 4.05(b)(5) reduction should be taken; it is
whether the 4.02(b)(6) formula (which increases the payment) should still apply in light of the
elimination of 4.05(b)(5)’s upstream reductions. The majority observes that “for the post-2004
early Retirees, the Plan commands us to apply a section that, by its terms, does not apply. This is
a classic example of a patent ambiguity. . . . But since we cannot discern the contours of the
parties’ intent from the text of the document, Firestone requires the courts to defer to Norton’s
interpretation unless it is arbitrary and capricious.” (Maj. Op. at 36.) I agree. But this does not
lead to the conclusion the majority reaches.

       Any reading of the Plan that fails to recognize that 4.05(d) rendered all the provisions of
4.05(b), including 4.05(b)(5), inapplicable would be arbitrary and capricious. As explained, the
ambiguity introduced by 4.02(b)(6) is not whether to apply the reduction found in 4.05(b)(5)
itself, because it clearly no longer applies; the ambiguity is whether 4.02(b)(6) should be applied
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      16-5124

in accordance with its explicit terms, or whether the final adjustment (dividing by 1 minus the
reduction factor) should be ignored because the reduction was never taken. This is the issue
regarding which Norton is entitled to Firestone deference. But because the Retirees do not argue
that they are entitled to have their MRIs increased under 4.02(b)(6), and argue only that Norton
wrongly decreased their benefits under 4.05(b)(5), we do not have to address the real ambiguity.1
Because Norton’s contention that 4.02(b)(6) somehow entitles it to reduce benefits under
4.05(b)(5) is entirely unsupported and contrary to the plain language of the Plan, it is arbitrary
and capricious.2 I would therefore affirm the district court’s ultimate conclusion that 4.05(b)(5)
cannot be used to reduce the MRI based on the unambiguous language of the Plan, and would
not remand for further consideration of the issue.3

         This leads me to the contra proferentum issue. I would accept the district court’s
statement that it did not apply the doctrine, and find no need to address it because, as in our prior

         1
           If this were the issue before us, I would conclude on this record that a decision by the fiduciary that there
is no early-retirement increase under 4.02(b)(6) is reasonably supported by the Plan and not arbitrary and capricious.
         2
          I note that Norton’s expert’s submission shows that Norton not only wrongly applied the section
4.05(b)(5) reduction, but also the 4.05(b)(3) reductions in computing benefits. (R. 117-3, PID 1626.) For instance,
in the expert’s calculations for Khaliel, benefits are first computed under 4.03(a)(3) as $2849.13. The reduction
required by the “212” calculation using the Pension Benefit Guaranty Corporation rate and the proper mortality rate
is then applied and reduces the MRI to $2288.78. Correct so far. But the calculation then goes on to apply two
reductions from old section 4.05(b): 4.05(b)(3) and 4.05(b)(5), which clearly no longer apply. Tellingly, the
calculation then goes on to reverse the reduction based on 4.05(b)(5), thus increasing the payment. (Id.)
         3
           I am baffled by the majority’s parenthetical assertion in footnote 9 that my reading of the Plan as
providing a lump-sum payment for early retirees that is the same as for normal retirees is “obtained by ignoring the
plain text of the plan”; the majority acknowledges that the plain text provides that the reducers no longer apply.
(Maj. Op., at 35.) The only textual remnant of the reducer is found in the reversal of the reduction. Further, it is
significant that if an early retiree chooses the basic form, there is no early-retirement reduction under the plain terms
of the Plan. And, even if the majority’s third option provides an interpretation that is not arbitrary and capricious
and the 4.05(b)(5) reducer is applied in direct conflict with 4.05(d), the reduction would still be reversed by
4.02(b)(6). Although not necessary to decide the case because the language rendering the reductions inapplicable is
unambiguous, I observe that once the accumulations were tied off, and the computation of the second part of the
pension was tied to the date of actual retirement, the reductions for early retirement became unnecessary. The
employees simply receive what they accumulate to the date of retirement, and early or late retirement simply
explains when the employee retires. The computations are the same either way; the Member accumulates increases
to his or her MRI based on interest, 4.03(b)(2)(A), and service, 4.03(b)(2)(B), until the date of retirement, at which
point the benefits are payable. An employee who retires early receives the benefits earlier, but ceases to accumulate
added benefit for time worked and added value on the benefits already earned; the employee who takes a late
retirement continues to accumulate value. The bottom line is that when the Plan was modified to tie off the old
benefit and tie benefits to the date of retirement, the early retirement penalties became irrelevant.
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      16-5124

decisions,4 the language at issue is unambiguous. I acknowledge that the majority reaches the
contra proferentum issue because it finds the early-retirement provisions ambiguous. However,
given our many references to the doctrine in prior cases, we should refrain from foreclosing
application of contra proferentum in conjunction with Firestone deference in all cases until
presented with a case in which that doctrine is actually applied. To be sure, the two approaches
are in inherent tension, and in light of Firestone, there can be no binding “rule of interpretation
that would completely contradict the deference paid to an administrator’s decision” in an ERISA
case. Mitchell v. Dialysis Clinic, Inc., 18 F. App’x 349, 353 (6th Cir. 2001). However, we have
said that “even an arbitrary and capricious standard of review can be tempered by . . . construing
ambiguities against a plan drafter.” Copeland Oaks v. Haupt, 209 F.3d 811, 813 (6th Cir. 2000)
(citing University Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846–47 (6th Cir.
2000)). What that application might look like is an open question. However, acknowledging the
tension between contra proferentum and Firestone deference, I find the analogy to the conflict-
of-interest situation apt. Just as we are instructed in appropriate cases to temper the arbitrary and
capricious standard by taking into account the fiduciary’s conflict of interest, Metro. Life Ins. Co.
v. Glenn, 554 U.S. 105, 117 (2008), there may be situations in the gray area between arbitrary
and capricious and Firestone deference where the contra proferentum doctrine may have a role.
Because we have not been presented with such a case, we have not been required to resolve the
issue. And because the district court did not apply the doctrine, I would not do so now.

        I join in the majority opinion in all other respects.

        4
          See, e.g., University Hosps. of Cleveland v. Emerson Elec. Co., 202 F.3d 839, 846–47 (6th Cir. 2000);
Perez v. Aetna Life Insurance Co., 150 F.3d 550, 557 n.7 (6th Cir. 1998) (en banc).