Kifafi v. Hilton Hotels Ret. Plan, Civil Action No. 98–1517 CKK

• Decision Date: 04 February 2015
• Docket Number: Civil Action No. 98–1517 CKK
• Citation: 79 F.Supp.3d 93
• Parties: Jamal J. Kifafi, individually and on behalf of all others similarly situated, Plaintiff, v. Hilton Hotels Retirement Plan, et al., Defendants.
• Court: U.S. District Court — District of Columbia

79 F.Supp.3d 93

Jamal J. Kifafi, individually and on behalf of all others similarly situated, Plaintiff

v.Hilton Hotels Retirement Plan, et al., Defendants.

Civil Action No. 98–1517 CKK

United States District Court, District of Columbia.

Filed February 4, 2015

Stephen Robert Bruce, Allison C. Pienta, Stephen R. Bruce Law Offices, Washington, DC, for Plaintiff.

Andrew M. Lacy, Simpson Thacher & Bartlett, LLP, Washington, DC, Jonathan K. Youngwood, Simpson Thacher & Bartlett LLP, New York, NY, Thomas C. Rice, Cooley LLP, San Francisco, CA, for Defendant.

MEMORANDUM OPINION

COLLEEN KOLLAR–KOTELLY, UNITED STATES DISTRICT JUDGE

This action was brought by Plaintiff Jamal J. Kifafi, on behalf of himself and similarly situated individuals, to recover for violations of the Employee Retirement Income Security Act (“ERISA”) of 1974, as amended, 29 U.S.C. §§ 1001 et seq., in the Hilton Hotels Retirement Plan (the “Plan”). Defendants are the Plan, the individual members of the Committee of the Plan, the Hilton Hotels Corporation, and individual Hilton officers or directors (collectively, “Defendants” or “Hilton”). On May 15, 2009, this Court granted-in-part Plaintiff's motion for summary judgment, finding that Defendants had violated ERISA's anti-backloading provision, 29 U.S.C. § 1054(b)(1), and had violated the Plan's vesting provisions with respect to the rights of four certified subclasses. See Kifafi v. Hilton Hotels Retirement Plan, 616 F.Supp.2d 7 (D.D.C.2009). On August 31, 2011, the Court issued a final remedial Order requiring Defendants to amend the Plan to remedy the backloading and vesting violations and commence awarding back payments and increased benefits to class members. See generally Order (Aug. 31, 2011), ECF No. [258]. The Court stayed its August 31, 2011, Order pending the United States Court of Appeals for the District of Columbia Circuit's resolution of the parties' appeal of the Court's liability and remedial orders. Mem. Op. & Order (Jan. 19, 2012), ECF No. [313], at 10–11. The Court granted the stay contingent upon Defendants posting a supersedeas bond in the amount of $75.8 million to secure the judgment. Id. at 11. Presently before the Court is Defendants' Motion to Release the Supersedeas Bond. Also before the Court are Plaintiff's Motion for Post–Judgment Discovery and Motion to Modify the Judgment in Aid of Enforcement, which Plaintiff effectively filed in opposition to Defendants' Motion. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court finds that Defendants have satisfied the terms of the Court's judgment. Accordingly, Defendants' Motion to Release the Supersedeas Bond is GRANTED and Plaintiff's Motion for Post–Judgment Discovery and Motion to Modify the Judgment in Aid of Enforcement are DENIED.

I. BACKGROUND

A. Procedural History

The history of the case is thoroughly laid out in the Court's prior opinions, most significantly its opinion on summary judgment, see Kifafi v. Hilton Hotels Retirement Plan, 616 F.Supp.2d 7 (D.D.C.2009), and its opinions regarding equitable remedies, see Kifafi v. Hilton Hotels Retirement Plan, 736 F.Supp.2d 64 (D.D.C.2010) (initial remedial order); Kifafi v. Hilton Hotels Retirement Plan, 826 F.Supp.2d 25 (D.D.C.2011) (final remedial order); Kifafi v. Hilton Hotels Retirement Plan, 825 F.Supp.2d 298 (D.D.C.2011) (order on amendments to remedial plan). The Court assumes familiarity with these opinions. Nevertheless, the Court shall review the facts of this case insofar as they are relevant to the issues discussed herein.

On August 31, 2011, the Court issued its final remedial Order requiring Defendants to (1) amend the Plan's benefit accrual formula to remedy the backloading violation; (2) administer a claim procedure for crediting participants' years of union service for vesting purposes; (3) award back payments for increased benefits that should have been paid in the past; and (4) commence increased benefits for all class members by no later than January 1, 2012. Order (Aug. 31, 2011), at 7, 9. The Court retained “continuing and exclusive jurisdiction over the parties and over the administration and enforcement of this Order for a period of two (2) years.” Id. at 10–11.

Defendants and Plaintiff appealed the Court's liability and remedial orders to the United States Court of Appeals for the District of Columbia Circuit and Defendants sought a stay pending appeal, which the Court granted “until thirty days after the exhaustion of Defendants' appeal to the United States Court of Appeals for the District of Columbia Circuit.” Mem. Op. & Order (Jan. 19, 2012), at 11. As Defendants asserted that they were only appealing the Court's rulings as to the backloading class, the Court granted the stay of the August 31, 2011, Order “to the extent it requires Defendants to amend the Plan or pay out benefits as part of the backloading remedy.” Id. The Court still required Hilton to begin the process of paying out original benefits to newly vested participants. Id. at 10–11. The Court's granting of the stay was contingent upon Defendants posting a bond in the amount of $75.8 million, “Hilton's undisputed estimate of the increased liability the Plan faces under the Court's judgment in 2012, in order to secure Plaintiff's interest in the judgment.” Id. at 9.

On December 14, 2012, the Court of Appeals affirmed the Court's liability and remedial orders. See Kifafi v. Hilton Hotels Retirement Plan, 701 F.3d 718 (D.C.Cir.2012). The Court of Appeals mandate was issued on January 23, 2013. See Ct. of Appeals Mandate, ECF No. [340]. Accordingly, the stay of the Court's final remedial order, which had been stayed until thirty days after the resolution of the parties' appeal, was lifted and the Court's two-year continuing and exclusive jurisdiction over the parties and over the administration and enforcement of its final remedial order began to run on February 22, 2013. The Court's jurisdiction over the parties and the administration and enforcement of the August 31, 2011, final remedial Order terminates on February 23, 2015.

Following the Court of Appeals' mandate, Defendants filed a Motion for Clarification, which the Court granted in part, clarifying that Defendants were not required to enact and implement the Plan amendment until after the Court's resolution of Plaintiff's motion for attorney's fees. Order (Oct. 11, 2013), ECF No. [366], at 4–5. The Court ordered Defendants to “amend the Plan within seven days of the Court's final order on the Plaintiff's motion for attorney's fees.” Id. at 5–6. In turn, the Plan amendment required that the amendment “be implemented as soon as administratively feasible, but no later than 90 days from date of Court's final order resolving the Plaintiff's motion for attorney's fees, with respect to any payment required, or required to be increased.” See id. at 7 (internal brackets omitted).

On November 18, 2013, the Court entered its final order on Plaintiff's Motion for Attorney's Fees. Order (Nov. 18, 2013), ECF No. [375]. Accordingly, Hilton was required to amend the Plan by no later than November 25, 2013, and implement the amendment by no later than February 16, 2014.

B. Hilton's Efforts to Satisfy the Court's Judgment

As evidence of the efforts they have made to satisfy the Court's August 31, 2011, judgment, Defendants present sworn declarations from Javier Hernandez, Principal and consulting actuary with Aon Hewitt, the firm Hilton hired to provide recordkeeping and other consulting services in support of Hilton's administration of the Plan;² from Michael W. Duffy, Senior Vice President—Corporate Accounting of Hilton Worldwide, Inc.;³ and from Ted Nelson, Vice President Benefits Americas of Hilton Worldwide, Inc.⁴ These sworn declarations detail the efforts Defendants have made to comply with the Court's judgment.

Plaintiff has challenged Defendants' reliance on these declarations, arguing that they are “conclusory” and not sufficiently detailed to establish Defendants' compliance or substantial compliance. Pl.'s Opp'n at 6. Plaintiff contends that Defendants cannot simply rely on summary declarations or exhibits, but must provide the actual records supporting those exhibits. Id. at 7. In support of his argument, Plaintiff relies on this Court's ruling in SEC v. Kenton Capital, Ltd., 983 F.Supp. 13 (D.D.C.1997), where this Court rejected defendant's “bald and conclusory statements in his affidavit” supporting his contention that he was unable to satisfy an order of disgorgement because he had repaid several loans. 983 F.Supp. at 15. The Court finds Plaintiff's reliance on Kenton Capital unavailing because that case involved the defendant himself simply averring that he could not satisfy a court order because he had repaid several loans. Id. Moreover, it was clear to the Court that the defendant had more than sufficient assets to make the required payment. Id. at 16. Here, by contrast, Defendants have provided sworn declarations from Hilton officials intimately involved with the benefits process and from an official from the accounting firm responsible for administrating the Plan, all attesting in great detail how Defendants have complied with the Court's judgment. Defendants also provided directly to Plaintiff's counsel a summary categorization spreadsheet, “detailing participant-by-participant, which class members had been paid increased benefits or sent notices of increased benefits, including how much was paid to each participant.” Defs.' Opp'n at 5–6 (citing Declaration of Jonathan K. Youngwood, ECF No. [386–1], Ex. C; Declaration of Allison C. Pienta (“Pienta Decl.”), ECF No. [385–5], Ex. 4, at 3). Defendants' declarations do not make “bald and conclusory” assertions that the judgment has been satisfied, but break the class members down into different categories and detail the efforts they have made to satisfy the judgment as to each category and sub-category of class members. Most importantly,...