Novella v. Westchester County, et al., No. 09-4061 (2d Cir. 2011)
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This appeal and cross-appeal concerned the pension benefits owed to plaintiff, a retired carpenter, and members of a class he purported to represent. Plaintiff asserted that the pension fund was guilty of seven violations of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and sought declaratory and injunctive relief. The court agreed with the district court that defendants' interpretations of certain plan language was arbitrary and capricious and therefore affirmed the district court's award of summary judgment to plaintiff on his individual claims for miscalculation of pension benefits. The court concluded, however, contrary to the district court, that the six-year statute of limitations applicable to plaintiff's and each other putative class member's ERISA claims began to run when each pensioner knew or should have known that defendants had miscalculated the amount of his pension benefits, and that he was being underpaid as a result. Therefore, the court vacated the district court's judgments certifying the plaintiff class, granting summary judgment to the class, and granting prejudgment interest to the class members. The court remanded for further factfinding with regard to when each putative class member became, or should have become, aware of his alleged injury so as to begin the running of the statute of limitations as applied to him.
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09-4061-cv(L) Novella v. Westchester County 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2010 4 5 (Argued: March 11, 2009 Decided: Final Submission: November 3, 2011) June 22, 2011 6 Docket Nos. 09-4061-cv(L), 09-3826-cv(XAP) 7 ------------------------------------- 8 9 CARLO NOVELLA, on his own behalf and on behalf of all similarly situated, 10 Plaintiff-Appellee-Cross-Appellant, 11 - v - 12 13 WESTCHESTER COUNTY, NEW YORK CARPENTERS' PENSION FUND and BOARD OF TRUSTEES OF WESTCHESTER COUNTY, NEW YORK, 14 Defendants-Appellants-Cross-Appellees.* 15 ------------------------------------- 16 17 Before: 18 WALKER and SACK, Circuit Judges, KOELTL, District Judge.** Appeal from four decisions of the United States 19 District Court for the Southern District of New York (Michael B. 20 Mukasey, then-Chief Judge and Barbara S. Jones, Judge), and 21 related judgments, (1) granting the plaintiff Novella's motion 22 for summary judgment, (2) certifying a class action, (3) granting 23 the plaintiff class's motion for summary judgment on the class * The Clerk of Court is directed to amend the caption as set forth above. ** The Honorable John G. Koeltl, of the United States District Court for the Southern District of New York, sitting by designation. 1 claims, and (4) awarding prejudgment interest to the named 2 plaintiff and the class members. 3 court that the defendants' interpretation of certain plan 4 language was arbitrary and capricious. 5 the district court's award of summary judgment to plaintiff 6 Novella on his individual claims for miscalculation of pension 7 benefits. 8 that the six-year statute of limitations applicable to the 9 plaintiff's and each other putative class member's Employee 10 Retirement Income Security Act claims began to run when each 11 pensioner knew or should have known that the defendants had 12 miscalculated the amount of his pension benefits, and that he was 13 being underpaid as a result. 14 court's judgments certifying the plaintiff class, granting 15 summary judgment to the class, and granting prejudgment interest 16 to the class members. 17 regard to when each putative class member became, or should have 18 become, aware of his alleged injury so as to begin the running of 19 the statute of limitations as applied to him. 20 We agree with the district Accordingly, we affirm However, we conclude, contrary to the district court, We therefore vacate the district We remand for further factfinding with AFFIRMED in part; VACATED and REMANDED in part. 21 22 EDGAR PAUK, New York, NY, for PlaintiffAppellee-Cross-Appellant. 23 24 25 26 JOHN H. BYINGTON III, Archer, Byington, Glennon & Levine LLP (Robert T. McGovern, of counsel), Melville, NY, for Defendants-Appellants-Cross-Appellees. 2 1 2 SACK, Circuit Judge: This appeal and cross-appeal concern the pension 3 benefits owed to plaintiff Carlo Novella, a retired carpenter, 4 and members of a class he purports to represent. 5 Novella's three-decade career, he performed jobs for which his 6 employers were obligated, under collective bargaining agreements, 7 to pay into the defendant pension fund on his behalf. 8 were multi-year periods -- principally from 1982 to 1986 -- 9 during which Novella did not perform any work requiring his During But there 10 employer to make such a contribution. 11 nearing his sixty-second birthday, he became disabled as a result 12 of injuries sustained while he was on the job. 13 and received, a pension ("Disability Pension"); however, he was 14 disappointed to learn that his benefits were not calculated using 15 the pension rate in effect in 1995, but rather using two 16 different rates for Novella's two periods of service. 17 applicable in 1995 was applied to benefits for work performed 18 between 1987 and 1995, and the lower rate in effect in 1981 was 19 applied to benefits for work performed between 1962 and 1981. 20 The use of the 1981 rate for the earlier period resulted in a 21 lower aggregate monthly pension payment. 22 In 1995, when Novella was He applied for, The rate After unsuccessfully seeking administrative redress 23 from the pension fund, Novella filed suit in the United States 24 District Court for the Southern District of New York on his own 25 behalf and on behalf of a class of pensioners whose benefits also 26 were allegedly miscalculated. He asserted that the fund was 3 1 guilty of seven violations of the Employee Retirement Income 2 Security Act ("ERISA") and sought declaratory and injunctive 3 relief. 4 court agreed with Novella that the defendants -- the pension fund 5 and its trustees -- had erred in calculating his Disability 6 Pension at two different rates. 7 Novella's other claims. On cross-motions for summary judgment, the district 8 9 The court did not reach Novella then moved to certify a class action on behalf of either of two classes: one including recipients of various 10 types of pensions whose benefits were calculated using multiple 11 per-credit rates, and the other limited to disability pensioners 12 whose benefits were affected by the same practice. 13 court concluded that in light of Novella's success on his 14 individual claims, only the narrower class of disability 15 pensioners was eligible for certification. 16 that the statute of limitations for the absent class members' 17 claims did not accrue until each class member affirmatively 18 challenged the defendants' two-rate benefit calculation, and was 19 rebuffed. 20 whose claims were timely and determined that this number met the 21 numerosity requirement of Rule 23(a)(1) of the Federal Rules of 22 Civil Procedure. 23 and (b) to have been met, the court certified this narrower class 24 of disability pensioners. 25 26 The district The court determined The court found twenty-four putative class members Finding the other requirements of Rule 23(a) The parties then cross-moved for summary judgment on the class claims, which motions the district court referred to a 4 1 magistrate judge. 2 plaintiff class's motion on the merits and denying the 3 defendants', the latter of which the magistrate judge 4 characterized as an untimely motion for reconsideration of the 5 decision certifying the class. 6 magistrate judge's recommendation, adopted it, and entered 7 judgment in favor of the class. 8 prejudgment interest at the fund's assumed annual rate of return 9 to both Novella and the members of the plaintiff class. 10 11 The magistrate judge recommended granting the The district court reviewed the The court also awarded Both parties appealed. We agree with the district court that the defendants' 12 use of two rates in calculating disability pensions finds no 13 support in the language of the fund's controlling documents -- 14 the Summary Plan Description and the Rules of the Pension Plan. 15 We therefore affirm the district court's judgment in Novella's 16 favor on his individual claims. 17 prejudgment interest to Novella, and its setting of the rate and 18 date of accrual for the award. 19 district court erred in identifying the time at which a claim for 20 miscalculation of benefits accrues. 21 such a claim accrues when the pensioner knew or should have known 22 that his benefits were miscalculated, we vacate the certification 23 of the class, the judgment in favor of the class, and the award 24 of prejudgment interest to the class members, and remand the case 25 for further proceedings before the district court. 26 proceedings may include a case-by-case inquiry into when each We also affirm its award of However, we conclude that the 5 In light of our view that These 1 putative class member knew or had sufficient information so that 2 he should have known that the defendants were using two different 3 rates to calculate his pension. 4 BACKGROUND 5 Factual History 6 The relevant facts are not in dispute. 7 The plaintiff, Carlo Novella, is a 78-year-old former 8 carpenter. From 1962 through 1995, he worked in Westchester 9 County, New York, and in New York City, and participated in both 10 the defendant Westchester County, New York Carpenters' Pension 11 Fund (the "Westchester Fund" or the "Fund")1 -- which is 12 administered by the defendant eight-member Board of Trustees of 13 the Fund -- and the New York City District Council of Carpenters 14 Pension Plan. 15 -- which is an employer-funded employee pension benefit plan 16 within the meaning of ERISA, see 29 U.S.C. § 1002(2)(A) -- that 17 is at issue in this appeal. 18 Fund are determined by the Pension Fund Rules (the "Plan") and 19 Summary Plan Description (the "SPD")2, which have been in effect It is Novella's pension under the Westchester Fund Novella's pension benefits under the 1 In approximately 1998, the Westchester Fund "merged with and into the Suburban New York Regional Council Pension Fund, which is now known as the Empire State Carpenters Pension Fund." J.A. 57. The Westchester Fund no longer exists as a distinct entity. 2 The SPD is the simplified explanation of the Plan that must be provided to participants under ERISA. According to the Department of Labor, "[t]he summary plan description . . . tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when 6 1 and unchanged since January 1, 1986. The Plan creates six 2 classes of benefits, four of which are pension-type allowances: 3 "Regular Pension" benefits, governed by sections 3.02-3.03 of the 4 Plan; "Early Retirement Pension" benefits, governed by sections 5 3.04-3.05 of the Plan; "Deferred Pension" benefits, dictated by 6 sections 3.06-3.07 of the Plan; and "Disability Pension" 7 benefits, as set forth in sections 3.08-3.11 of the Plan.3 8 J.A. 151-54.4 9 benefit, "except that a Disability Pensioner who recovers [from See Each participant is entitled to only one type of 10 his disabling injury] may be entitled to a different type of 11 pension." 12 Id. at 155. Fund participants earn pension credits based on the 13 number of hours they serve in jobs that are covered by the Plan. 14 A job constitutes "Covered Employment" if the employer is benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits." U.S. Dep't of Labor, ERISA - Plan Information, http://www.dol.gov/dol/topic/health-plans/planinformation.htm (latest visit Sept. 5, 2011); see also Wilkins v. Mason Tenders Dist. Council Pension Fund, 445 F.3d 572, 580-81 (2d Cir. 2006) ("Among other things, an SPD must set out the 'circumstances which may result in disqualification, ineligibility, or denial or loss of benefits.' 29 U.S.C. § 1022(b)."). The defendants printed the SPD and Plan together in one booklet, which they then provided to Plan participants. Although there are some differences between the SPD and the Plan, they are not material to our resolution of this appeal. 3 The other two allowances provided for in the Plan are lump-sum benefits: the "Death Benefit" and the "Termination Benefit." See J.A. 154-55. 4 For reasons described infra at, all citations to the parties' submissions on appeal, including briefs, refer to documents filed in connection with an earlier appeal in this case, docketed as numbers 08-0788-cv(L) and 08-0807-cv(XAP). 7 1 "obligated by its [collective bargaining] agreement to contribute 2 to the Fund" on behalf of the relevant Plan participant. 3 146. 4 1962 through 1981,5 during which time he earned 13.20 pension 5 credits, and from 1987 to 1995, during which time he earned an 6 additional 6.30 pension credits.6 7 1986, Novella performed work in New York City, which was covered 8 by the New York City Fund -- not a party to this action -- but he 9 did not perform any work covered by the defendant Westchester 10 Id. at Novella has had two periods of covered employment: from In the years between 1982 and Fund. 11 On March 22, 1995, Novella, then sixty-one years old, 12 suffered a disabling accident while at work, for which he 13 immediately began to receive workers' compensation. 14 applied to the Fund for pension benefits. 15 amount of Novella's monthly pension, the defendants used two 16 different rates: 17 13.20 pension credits Novella earned between 1962 and 1981, and a 18 second rate of $40 per credit for the credits he earned between 19 1987 and 1995. 20 21 He also To calculate the They applied a rate of $17 per credit to the Immediately after receiving notice in fall 1995 that his pension would be calculated using two different rates, 5 According to the plaintiff's Local Rule 56.1 statement, he did not perform any work covered by the Plan between 1965 and 1975 because there were no jobs available to him. See J.A. 220. This break in service is not at issue in this appeal. 6 The Plan sets out various schedules for the accumulation of pension credits, which depend on the year in which the credits were earned. See J.A. 130-34. 8 1 Novella asked the Fund trustees for an explanation of his 2 benefits. 3 calculation was appropriate because of the break in his covered 4 service from 1982 through 1986, during which time he performed no 5 work covered under the Westchester Plan. 6 The defendants explained to him that the two-rate The defendants denied Novella's repeated appeals from 7 the two-benefit rate calculation, referring Novella to section 8 3.07 of the Westchester Plan, which applies to Deferred Pensions.7 9 By letter dated August 28, 1997, the defendants explained that 10 under that section of the Plan, 11 12 13 14 15 16 17 18 a Deferred Pension is calculated based on the rate in effect on the last day you worked in Covered Employment prior to the accumulation of three One-Year Breaks in Service. . . . Since each of the years you were not working in covered employment was a Break in Service,[8] the credits you had accumulated up to 1981 when you left covered employment 7 That section reads: Section 3.07 Deferred Pension -- Amount The Deferred Pension shall be calculated in the same manner as the Regular or Early Retirement Pension but shall be based on the benefit level that was in effect on the last day he Worked prior to accumulation of three One-Year Breaks in Service. If additional units of credit were earned after the period in which he accumulated three consecutive One-Year Breaks in Service, the benefit amount for such additional units of credit shall be based on the benefit level in effect when the additional units were earned. J.A. 152. 8 Any calendar year "after 1974 in which [the participant] fails to complete 100 hours of Covered Employment" constitutes a one-year Break in Service. J.A. 163. 9 1 2 under the Plan (13.20) were calculated at the 1981 rate ($17.00). 3 4 5 6 7 8 9 10 11 Section 3.07 also provides that if any additional credits were earned after the Break in Service, the benefit amount for the additional credits shall be calculated on the rate that was in effect at the time of termination. The credits you earned after the Break in Service (6.30) were calculated at the rate in effect when you terminated ($40.00). 12 J.A. 194. Although Novella was awarded a Disability Pension, not 13 a Deferred Pension, the letter did not cite the sections of the 14 Plan governing Disability Pensions: sections 3.08 to 3.11. 15 letter also failed to cite section 3.16 of the Plan, entitled 16 "Application to Benefit Increases," on which the defendants would 17 later rely in this litigation. 18 provides that a Fund participant is entitled to a Pension in an 19 amount to be "determined under the terms of the Plan and [at] the 20 benefit level as in effect at the time the Participant last 21 separates from Covered Employment." 22 Plan p]articipant shall be deemed to have last separated from 23 Covered Employment on the last day of Work which is followed by 24 three consecutive calendar years of less than 1,000 hours of 25 Covered Employment in each year." Id. at 156. Id. The Section 3.16 Under section 3.16, "[a Id. 26 Procedural History 27 On March 19, 2002, having contested the two-rate 28 calculation through the Fund's administrative review process and 29 having failed to obtain relief, Novella filed suit in the United 30 States District Court for the Southern District of New York 31 against the defendant Fund and its Board of Trustees, asserting 10 1 violations of ERISA, and seeking declaratory and injunctive 2 relief.9 3 suit was brought on behalf of himself and a class of "[a]ll 4 [others s]imilarly [s]ituated." 5 He filed an amended complaint on October 27, 2003. His J.A. 24. The amended complaint asserted seven claims falling 6 into two categories: Claims One and Two challenged the 7 defendants' failure to accord Novella credit for the workers' 8 compensation hours he received; Claims Three through Seven 9 contested the defendants' calculation of Novella's (and the class 10 members') pensions using two different rates because of a break 11 in service. 12 the defendants' practice of applying section 3.07 of the Plan, 13 which governs Deferred Pensions, to recipients of Disability 14 Pensions violated the Plan's terms, and Claim Seven alleged that 15 because the Plan "does not contain any provision describing the 16 application of two benefit rates when a participant suffers a 17 three-year interruption in service," the defendants had violated 18 ERISA in calculating Novella's pension using two rates. 19 31-32. 20 As relevant to this appeal, Claim Six asserted that Id. at In early 2004, before moving for class certification, 21 Novella moved for summary judgment on his individual claims. 22 defendants cross-moved for the same. 23 B. Mukasey, then-Chief Judge) granted Novella's motion in part. 9 The The district court (Michael Subject matter jurisdiction was premised upon the questions of federal law that underlie this dispute. See 28 U.S.C. § 1331(a). 11 1 The court dismissed as unexhausted10 Novella's claims (styled as 2 Claims One and Two) regarding the "defendants' refusal to credit 3 him with hours of service, and therefore pension credits, during 4 the time he received workers' compensation benefits."11 5 v. Westchester County, N.Y. Carpenters' Pension Fund (Novella I), 6 No. 02-cv-2192, 2004 WL 1752820, at *6, 2004 U.S. Dist. LEXIS 7 15152, at *16 (S.D.N.Y. Aug. 4, 2004); see id. at *6-*7, 2004 8 U.S. Dist. LEXIS 15152, at *16-*22. 9 Novella With regard to Novella's challenge to the two-rate 10 pension calculation (Claim Six), the court concluded that the 11 defendants had acted arbitrarily and capriciously12 by using two 10 Although "ERISA does not contain an explicit exhaustion[]of[-]remedies requirement . . . this Circuit has inferred [one]." Burke v. PriceWaterHouseCoopers LLP Long Term Disability Plan, 572 F.3d 76, 79 n.3 (2d Cir. 2009); see also id. at 79 (noting that "an ERISA action may not be brought in federal court until administrative remedies are exhausted"). 11 After exhausting these claims, Novella again filed suit asserting Claims One and Two against the same defendants in the United States District Court for the Southern District of New York. On March 26, 2009, the district court (Barbara S. Jones, Judge) granted the defendants' motion for summary judgment and denied Novella's cross-motion. See Novella v. Empire State Carpenters Pension Fund, No. 05-cv-2079, 2009 WL 812271, at *1, 2009 U.S. Dist. LEXIS 25245, at *1-*2 (S.D.N.Y. Mar. 26, 2009); see also id. at *1 n.1, 2009 U.S. Dist. LEXIS 25245, at *2 n.1 (explaining the history of Novella's litigation against the Fund and its successor, the Empire State Carpenters Pension Fund). Novella appealed from the district court's judgment. On November 18, 2009, another panel of this Court affirmed the judgment in favor of the defendants. See Novella v. Empire State Carpenters Pension Fund, 353 F. App'x 596 (2d Cir. 2009) (summary order). 12 The court noted that there was some question regarding whether the arbitrary-and-capricious or de novo standard of review was appropriate to the circumstances of this case, but concluded that the defendants' interpretation of the Plan failed under either standard. See Novella I, 2004 WL 1752820, at *3, 2004 U.S. Dist. LEXIS 15152, at *8. 12 1 different rates to calculate Novella's pension because "their 2 decision was based on an interpretation of the Westchester Plan 3 that is inconsistent with the plain words of that Plan." 4 *3, 2004 U.S. Dist. LEXIS 15152, at *8. 5 3.10 of the Plan, the court reasoned that the "Plan plainly 6 provides that a participant who collects a Disability Pension 7 should be entitled to the amount of a Regular Pension, which is 8 calculated at one benefit rate." 9 15152, at *9. Id. at Citing sections 3.03 and Id., 2004 U.S. Dist. LEXIS The court rejected the defendants' argument that 10 they were entitled to rely on the provisions governing Deferred 11 Pensions -- section 3.07 -- because, at the time of his 12 disability, Novella was not eligible for a Regular Pension as a 13 result of his break in service. 14 LEXIS 15152, at *10-*13. 15 "[n]othing in [the section of the plan] . . . describ[ing] the 16 eligibility requirements for a Disability Pension . . . states 17 that a [P]lan participant must satisfy the eligibility 18 requirements for a Regular Pension . . . in order to collect a 19 Disability Pension." 20 The court explained that section 3.10's "use of the word 21 'eligible' in the phrase 'the Regular Pension amount for which 22 the Employee would have been eligible,' . . . refer[red] to a 23 'Regular Pension amount,' rather than simply to a 'Regular 24 Pension.'" 25 26 See id. at *4, 2004 U.S. Dist. The court concluded instead that Id., 2004 U.S. Dist. LEXIS 15152, at *12. Id. (emphasis in Novella I) (quoting the Plan). The court also addressed the defendants' theory, raised for the first time after commencement of this lawsuit, that 13 1 section 3.16 of the Plan supported their decision to use two 2 different rates because it "authorizes [P]lan administrators to 3 apply multiple benefit levels when calculating the pension of a 4 [P]lan participant who has had a break in service." 5 2004 U.S. Dist. LEXIS 15152, at *14, *15. 6 that the defendants' reliance on section 3.16 was misplaced 7 because that section "does not reasonably allow [for the] 8 interpretation" urged by the defendants. 9 rejected each of the defendants' arguments, concluding that the 10 defendants were not entitled under the terms of the Plan to use 11 two different rates to calculate Novella's Disability Pension. 12 Id. at *5, The court concluded Id. In sum, the court Having granted Novella's motion on the basis of his 13 challenge to the two-rate calculation, the district court 14 "dismissed as moot" Novella's other claims regarding the amount 15 of his Disability Pension (Claims Three, Four, Five, and Seven), 16 which were argued "in the alternative," and were "premised on the 17 assumption that the terms of the . . . Plan support [the] 18 defendants' decision." 19 at *6. 20 Novella on the merits of Claim Six, it did not award final relief 21 at that time. 22 Id. at *2, 2004 U.S. Dist. LEXIS 15152, Although the district court granted summary judgment to Following the district court's decision in Novella's 23 favor on his individual claims, Novella moved for class 24 certification under Rules 23(b)(1) and (2) of the Federal Rules 25 of Civil Procedure, seeking certification of a class to include 26 recipients of various types of pensions calculated using two 14 1 rates, or, in the alternative, a narrower class of disability 2 pensioners injured by the same practice.13 3 first determined that the only class for which Novella 4 potentially could serve as class representative was the "more 5 limited class of Disability Pensioners" affected by the 6 defendants' practice of applying section 3.07 of the Plan -- 7 which pertains to Deferred Pensions and permits the use of 8 multiple per-credit rates -- to Disability Pensions. 9 Westchester County, N.Y. Carpenters' Pension Fund (Novella II), 10 No. 02-cv-2192, 2004 WL 3035405, at *4-*5, 2004 U.S. Dist. LEXIS 11 26149, at *14 (S.D.N.Y. Dec. 29, 2004). 12 requirements of Rule 23(a), the district court concluded that the 13 commonality, typicality, and adequacy-of-representation prongs 14 were met, but that an evidentiary hearing was necessary to 15 determine whether the numerosity prong was satisfied. 16 *7, 2004 U.S. Dist. LEXIS 26149, at *16-*22. 17 court had not yet decided whether Novella could satisfy Rule 18 23(a), it concluded that, should the class be numerous enough to 19 satisfy Rule 23(a), "the class action [could] be maintained under 20 Rule 23(b)(1)" because "[r]eformation of [the] defendants' 13 The district court Novella v. Turning to the Id. at *6- And, although the The defendants argued that the motion was untimely because it was not made until after the court had resolved the summary judgment motions in Novella's favor. See Novella v. Westchester County, N.Y. Carpenters' Pension Fund, No. 02-cv2192, 2004 WL 3035405, at *2, 2004 U.S. Dist. LEXIS 15152, at *5 (S.D.N.Y. Dec. 29, 2004). The court rejected this argument, noting that "Rule 23 [of the Federal Rules of Civil Procedure] does not prohibit the filing of a class certification motion . . . after a decision on the merits of the named individual plaintiff's claims." Id., 2004 U.S. Dist. LEXIS 15152, at *7. 15 1 practice in calculating these Disability Pensions will result in 2 pensions amounts being due to [all] these class members" -- that 3 is, "Plan-wide relief." 4 at *23, *24. Id. at *8, 2004 U.S. Dist. LEXIS 26149, 5 On August 2, 2006, after conducting the evidentiary 6 hearing, the district court certified the class of Disability 7 Pension recipients. 8 Carpenters' Pension Fund (Novella III), 443 F. Supp. 2d 540, 542- 9 43 (S.D.N.Y. 2006). See Novella v. Westchester County, N.Y. The court concluded that the proposed class 10 of twenty-four "disability pensioners whose pensions were 11 calculated using more than one rate due to a break in service" 12 met the numerosity requirement of Rule 23(a)(1).14 13 The court's determination turned on its view of the event 14 necessary to start the running of the six-year statute of 15 limitations for an ERISA claim. 16 the statute of limitations applicable to each class member's 17 claim accrued as soon as the putative class member's pension was 18 calculated, and that only eight of the pensioners had begun 19 receiving pensions within six years before Novella filed his 14 Id. at 544. The defendants had argued that The court explained that, while a class of twenty-four does not in all cases satisfy the numerosity requirement, Novella III, 443 F. Supp. 2d at 546, a balancing of the relevant factors in this case justified certification of the relatively small class, id. at 546-48 (discussing the five factors for numerosity set forth in Ansari v. N.Y. Univ., 179 F.R.D. 112, 114-15 (S.D.N.Y. 1998): "(1) . . . judicial economy . . .; (2) the geographic dispersion of members of the proposed class; (3) the financial resources of those members; (4) the ability of the members to file individual suits; and (5) requests for prospective relief that may have an effect on future class members."). 16 1 complaint. 2 should adopt a continuing-violation approach to the statute of 3 limitations, under which each month's pension check would begin a 4 new six-year limitations period. 5 chose a third alternative, concluding that 6 7 8 9 10 11 12 13 14 15 16 Id. Novella asserted to the contrary that the court Id. at 545. The district court [t]he relevant date for fixing the accrual of [the putative class members'] claim[s] is when a plaintiff was put on notice that the defendants believed the method used to calculate his disability pension was correct. Thus, the claim does not begin to run until a prospective class member inquires about the calculation of his benefits and the Plan rejects his claim that the benefits were miscalculated. Id. (emphasis added). 17 Applying this rule, the court found Novella's claim 18 timely. 19 the court determined that, "[b]ecause the defendants ha[d] 20 presented no evidence that they confirmed the correctness of the 21 dual-rate benefits calculation[s] more than six years before the 22 filing of this lawsuit, th[e] court [could not] find [that] the 23 statute of limitations ha[d] run on the claims of any of the 24 24 proposed class members." 25 concluded that the class consisted of twenty-four disability 26 pensioners with timely claims and therefore was sufficiently 27 large to satisfy Rule 23, and certified it. 28 29 Id. With regard to the other putative class members, Id. at 546. The court therefore See id. at 546-48. After the class was certified, both parties again moved for summary judgment, this time to resolve the class-action 17 The district court (Barbara S. Jones, Judge15) referred 1 claims. 2 the motions to a magistrate judge for a report and 3 recommendation. 4 Francis IV issued a Report & Recommendation (the "R&R") 5 recommending that the district court grant the plaintiff's motion 6 and deny the defendants'. 7 N.Y. Carpenters' Pension Fund (Novella IV), No. 02-cv-2192, 2007 8 WL 2582171, at *1, 2007 U.S. Dist. LEXIS 66235, at *2 (S.D.N.Y. 9 Sept. 10, 2007). 10 On September 10, 2007, Magistrate Judge James C. See Novella v. Westchester County, The R&R first addressed the defendants' motion, in 11 which the defendants "renew[ed] their argument that fifteen of 12 the pensioners[' claims] are time-barred." 13 Dist. LEXIS 66235, at *5. 14 magistrate judge construed the motion for summary judgment as "an 15 untimely application for reconsideration" of the district court's 16 ruling in Novella III determining the accrual of the statute of 17 limitations and certifying the class. 18 further concluded that "[e]ven if the defendants' motion were 19 timely, there is no basis for reconsideration," id., 2007 U.S. 20 Dist. LEXIS 66235, at *7, because "[t]he law of the case doctrine 21 requires a court to adhere to its own decision at an earlier 22 stage of the litigation" absent "cogent or compelling reasons not 23 to," id., 2007 U.S. Dist. LEXIS 66235, at *8 (internal quotation 24 marks omitted), and the defendants had not shown that they would 15 Id. at *2, 2007 U.S. As a preliminary matter, the Id. The magistrate judge The case was reassigned to Judge Jones in October 2006, after Chief Judge Mukasey retired. 18 1 suffer any "injustice" if the court adhered to then-Chief Judge 2 Mukasey's prior decisions, id. at *3, 2007 U.S. Dist. LEXIS 3 66235, at *10. 4 argument that Novella III would "'wreak havoc [on] Taft-Hartley 5 Funds, such as [the] defendant [Fund], which rely on actuarial 6 soundness for their very continued existence.'" 7 Defs.' Mem. of Law in Support of Summ. J. 9). 8 magistrate judge refused to credit the defendants' contention 9 that the class members' claims were not tolled by the filing of The magistrate judge rejected the defendants' Id. (quoting Finally, the 10 Novella's suit because, based on the holding of Novella III, 11 "'their individual claims never accrued in the first instance.'" 12 Id. at *4, 2007 U.S. Dist. LEXIS 66235, at *11 (quoting Defs.' 13 Mem. of Law in Support of Summ. J. 11). 14 judge's view, the absent class members' claims accrued "once Mr. 15 Novella filed his complaint challenging the Fund's practice of 16 applying two benefit rates." 17 at *12. 18 In the magistrate Id., 2007 U.S. Dist. LEXIS 66235, The magistrate judge then turned to Novella's motion 19 for summary judgment on behalf of the class, agreeing with 20 Novella that the defendants' argument denying liability for the 21 class members' claims was "based exclusively on the theory of 22 accrual that Judge Mukasey previously rejected." 23 U.S. Dist. LEXIS 66235, at *15. 24 recommended granting summary judgment to the class "on the issue 25 of liability . . . with respect to the entire plaintiff class." 26 Id. Id. at *5, 2007 The magistrate judge therefore With regard to Novella's request for prejudgment interest 19 1 for himself and for the class members, the magistrate judge 2 decided that such an award was "appropriate." 3 U.S. Dist. LEXIS 66235, at *18. 4 class's claims to those based upon latent injuries, he set the 5 interest accrual date, for Novella, as "the date that the Fund 6 denied his claim," id. at *7, 2007 U.S. Dist. LEXIS 66235, at 7 *20, and, for the absent class members, as "the date of the 8 filing of the complaint," id. 9 recommended setting the interest rate at "the Fund's assumed Id. at *6, 2007 Analogizing Novella's and the Lastly, the magistrate judge 10 return of seven and one-half percent," which the magistrate judge 11 found to be more equitable than either New York's statutory rate 12 of 9 percent or the federal post-judgment rate. 13 U.S. Dist. LEXIS 66235, at *21-*22. 14 Id. at *8, 2007 Over both parties' objections and on de novo review, 15 see Fed. R. Civ. P. 72(b)(3), the district court (Barbara S. 16 Jones, Judge) adopted the R&R in its entirety. 17 Westchester County, N.Y. Carpenters' Pension Fund (Novella V), 18 No. 02-cv-2192, 2008 WL 1743342, at *1, 2008 U.S. Dist. LEXIS 19 108341, at *2-*3 (S.D.N.Y. Jan. 14, 2008). 20 See Novella v. The parties each appeal.16 1 The defendants appeal from 2 the summary judgment in favor of Novella individually, from the 3 certification of the class, from the summary judgment in favor of 4 the class, and from the awards of prejudgment interest to Novella 5 and the class members. 6 refusal to certify a broader class and its decision to award 7 prejudgment interest to the class members only from the date that 8 the complaint was filed. 9 DISCUSSION 10 11 Novella challenges the district court's I. Interpretation of the Plan A. Standard of Review 12 "We review de novo a district court's ruling on cross- 13 motions for summary judgment, in each case construing the 14 evidence in the light most favorable to the non-moving party." 15 Fund for Animals v. Kempthorne, 538 F.3d 124, 131 (2d Cir. 2008) 16 After hearing argument in these cross-appeals on March 11, 2009, this panel determined that the district court's judgments on appeal were not final and that we therefore lacked jurisdiction over the appeals. We therefore dismissed the appeals and instructed the parties that "[i]n the event a final judgment is entered," they could file a new, timely notice of appeal to return the cross-appeals to this panel for disposition. See Novella v. Westchester County, 335 F. App'x 73, 74 (2d Cir. 2009) (summary order). We also denied the defendants' subsequent motion for panel rehearing. See id. at 74-76 (appending the Court's order denying rehearing). In September 2009, the parties each filed a notice of appeal, and their cross-appeals were returned to this panel. See Docket, Novella v. Westchester County, Nos. 09-4061(L), 093826(XAP) (2d Cir.). Pursuant to a scheduling order issued by this panel, the parties filed supplemental briefing, which briefing was later withdrawn on the parties' motion. As a result, we now address only the issues presented when the parties first filed their cross-appeals in 2008. 21 1 (internal quotation marks omitted). 2 appropriate where there exists no genuine issue of material fact 3 and, based on the undisputed facts, the moving party is entitled 4 to judgment as a matter of law." 5 R.R. Passenger Corp., 537 F.3d 153, 159 (2d Cir. 2008) (brackets 6 and internal quotation marks omitted), cert. denied, 129 S. Ct. 7 2043 (2009); see also Fed. R. Civ. P. 56(a) ("The court shall 8 grant summary judgment if the movant shows that there is no 9 genuine dispute as to any material fact and the movant is 10 "Summary judgment is O & G Indus., Inc. v. Nat'l entitled to judgment as a matter of law."). 11 "ERISA does not itself prescribe the standard of 12 review [by district courts] for challenges to benefit eligibility 13 determinations." 14 Trust, 318 F.3d 142, 145 (2d Cir. 2003). 15 instructed that "plans investing the administrator with broad 16 discretionary authority to determine eligibility are reviewed 17 under the arbitrary and capricious standard." 18 Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). 19 Otherwise, courts review plan administrators' determinations de 20 novo. 21 Cir. 2002) (citing Firestone Tire, 489 U.S. at 115). Celardo v. GNY Auto. Dealers Health & Welfare The Supreme Court has Id. (citing See Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 763 (2d 22 When the arbitrary-and-capricious standard applies, 23 "[a] court may overturn a plan administrator's decision . . . 24 only if the decision was without reason, unsupported by 25 substantial evidence[,] or erroneous as a matter of law." 26 Celardo, 318 F.3d at 146 (internal quotation marks omitted). 22 1 "Where both the trustees of [an ERISA plan] and a rejected 2 applicant offer rational, though conflicting, interpretations of 3 plan provisions, the trustees' interpretation must be allowed to 4 control." 5 Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 601 (2d Cir.), 6 cert. denied, 464 U.S. 829 (1983). 7 Miles v. N.Y. State Teamsters Conference Pension & Here, the district court did not decide which of the 8 two standards of review should apply, because it concluded that 9 the defendants' interpretation of the Plan could not be sustained 10 under either standard. 11 the parties appear to agree that the arbitrary-and-capricious 12 standard applies in this case. 13 [hereinafter Appellants' Br.]; Pl.-Appellee's Br. 49, 56 14 [hereinafter Appellee's Br.]. 15 defendants' interpretation of the Plan only under that 16 deferential standard, although, like the district court, we think 17 that the outcome under the other, less deferential option -- de 18 novo review -- would be no different. 19 B. The Merits 20 However, in their briefing to this Court, See Defs.-Appellants' Br. 17 We therefore address the The question before us is whether the defendants acted 21 arbitrarily and capriciously in interpreting the Plan to permit 22 them to calculate Disability Pensions using two different per- 23 credit rates if the pensioner had a break in service. 24 district court held that doing so was arbitrary and capricious 25 because "[n]othing in the provisions of the [Plan provides] that 26 a Disability Pension may be calculated using two different 23 The 1 benefit rates when a participant has had a break in service." 2 Novella I, 2004 WL 1752820, at *3, 2004 U.S. Dist. LEXIS 15152, 3 at *8-*9. 4 We agree. Disability Pensions are governed by section 3.10 of the 5 Plan, which provides in relevant part that "[t]he Disability 6 Pension amount shall be equal to the Regular Pension amount for 7 which the Employee would have been eligible if he had been age 65 8 when he became disabled if the Participant had 10 or more units 9 of credit at the time of his disability." J.A. 153. Section 10 3.03 sets forth the means of calculating the Regular Pension 11 amount. 12 the number of credits a pensioner earned during "the period 13 during which the Employer is obligated . . . to contribute to the 14 Fund" on behalf of the pensioner. 15 defendants offer four arguments in support of their contentions 16 that this Plan language permits a two-rate benefit calculation 17 for recipients of Disability Pensions, and that the district 18 court erred in concluding to the contrary. 19 It authorizes calculation of that amount by reference to See id. at 147, 151. The First, the defendants assert that the Trustees awarded 20 Novella the full benefit amount to which he was entitled because, 21 although Novella was only sixty-one years old at the time of his 22 disability, they treated him as if he were sixty-five years old 23 when he became disabled as required by section 3.10, the Plan 24 section governing Disability Pensions. 25 age-based reduction that would otherwise have been permissible 26 under section 3.05, which is entitled "Early Retirement Pension 24 They did not apply the 1 - Amount."17 2 therefore complied with section 3.10's requirements. 3 Id. at 152. The defendants contend that they Although it is correct that, had Novella received an 4 Early Retirement Pension, the pension amount would have been 5 reduced to reflect his age, the argument is irrelevant. 6 Throughout this lengthy dispute, Novella has never contended that 7 his pension was reduced because of his age at retirement, nor has 8 any party argued that he should have been awarded an Early 9 Retirement Pension instead of a Disability Pension. Novella's 10 grievance, and these judicial proceedings, have focused entirely 11 on whether the defendants' use of two different rates to 12 calculate Novella's Disability Pension was improper. 13 Second, under section 3.02 of the Plan, to qualify for 14 a Regular Pension, a pensioner's employment -- and consequently, 15 employer contributions on his behalf -- must have been "more or 16 less continuous to his retirement date." 17 provisions explain that, in this context, "more or less 18 continuous" means that there must be "no period of three or more 19 consecutive years without [his performing] at least" a small, 20 specified, amount of covered work. 21 that because Novella's employment was not "more or less 17 Id. Id. at 151. The Plan's The defendants argue Section 3.05 provides: "The monthly amount of the Early Retirement Pension is the amount of the Regular Pension reduced by one-half of one percent for each month by which the Participant is under age 65 on the Effective Date of his Pension." J.A. 152. 25 1 continuous to his retirement date," id.,18 2 eligible for the single accrual rate Regular Pension." 3 Appellants' Br. 22. Novella "was not . . . 4 The defendants may be correct that Novella is 5 ineligible for a Regular Pension, but any such eligibility is not 6 material to this dispute in light of the fact that he was awarded 7 a Disability Pension. 8 nothing in the Plan provisions governing Disability Pensions 9 requires that a disability pensioner actually be eligible for We agree with the district court that 10 another type of pension as a prerequisite to receipt of his 11 Disability Pension. 12 U.S. Dist. LEXIS 15152, at *8-*9. 13 "the Regular Pension amount for which [Novella] would have been 14 eligible if he had been age 65 when he became disabled," J.A. 153 15 (emphases added), establishes not an eligibility requirement for 16 a Disability Pension but a reference point for determining the 17 proper amount of such a pension. 18 See Novella I, 2004 WL 1752820, at *3, 2004 Section 3.10's reference to Moreover, were we to endorse a reading of the Plan 19 requiring a Disability Pension recipient also to be eligible for 20 a Regular Pension, we would render the Plan's inclusion of a 21 Disability Pension meaningless, inasmuch as any person who 22 qualified for a Disability Pension would also be eligible for a 23 Regular Pension. 24 established both Disability Pensions and Regular Pensions -- and 18 It would appear likely that the Plan's drafters Novella does not dispute that he performed no covered work between 1982 and 1986, and therefore that his employment was not "more or less continuous" as defined in the Plan. 26 1 assigned different eligibility requirements to each -- because 2 they contemplated that Plan participants might become disabled 3 before they become eligible for a Regular Pension, and did not 4 want to bar such participants from receiving pension benefits. 5 Third, the defendants contend that because Novella did 6 not meet the eligibility requirements for a Regular Pension due 7 to his failure to perform covered work from 1982 to 1986, his 8 pension benefit amount was "calculated pursuant to the only other 9 methodology [i.e., section 3.07, which governs Deferred Pensions] 10 for calculating a pension where there was a break in service." 11 Appellants' Br. 22. 12 has a break in service that lasts at least three years, his 13 pension shall be calculated using two rates: compensation for all 14 credits earned before the break in service is "based on the 15 benefit level that was in effect on the last day [the pensioner 16 w]orked prior to" the break, while "the benefit amount for [any] 17 additional units of credit" earned after a three-year break in 18 service is "based on the benefit level in effect when the 19 additional units were earned." 20 that because Novella's break in covered employment spanned more 21 than three years, they are permitted to "us[e] two separate 22 benefit accrual rates." Section 3.07 states that when a pensioner J.A. 152. The defendants argue Appellant's Br. 21. 23 The defendants' argument is fatally flawed. The quoted 24 section, Section 3.07, explicitly applies to Deferred Pensions; 25 however, Novella was awarded a Disability Pension, not a Deferred 26 Pension. Nothing in the Plan permits the defendants to apply a 27 1 section controlling one specific type of pension to a pension of 2 a different kind. 3 Pension provisions do not include language permitting a two-rate 4 calculation does not entitle the defendants to search for 5 authorization to do so elsewhere in the Plan. 6 following both the presumption of consistent usage and meaningful 7 variation, and the textual canon of expressio unius est exclusio 8 alterius, see Cordiano v. Metacon Gun Club, Inc., 575 F.3d 199, 9 221 (2d Cir. 2009) -- the presence of that provision applicable In other words, the fact that the Disability Indeed -- 10 to one type of pension makes clear that the omission of that 11 provision in the part of the Plan governing another type of plan 12 was deliberate. 13 language from disparate sections of the Plan would subvert the 14 intention of the Plan's drafters and the reasonable expectations 15 of Plan participants. 16 To permit the defendants to pick and choose Finally, the defendants argue that section 3.16, which 17 is entitled "Application to Benefit Increases," J.A. 156, 18 justifies a two-rate method for calculating Disability Pensions. 19 That section provides: 20 entitled shall be determined under the terms of the Plan and the 21 benefit level as in effect at the time the Participant last 22 separates from Covered Employment." 23 "last separat[ion] from Covered Employment" as the "last day of 24 [covered] Work which is followed by three consecutive calendar 25 years of less than 1,000 hours of Covered Employment in each 26 year." Id. "The pension to which a Participant is Id. The Plan defines a The defendants argue that a person can "last 28 1 separate" from employment more than once, and that Novella did so 2 in 1981 and again in 1995, thus permitting the defendants to 3 calculate a pension using multiple benefit levels. 4 It is apparent from the record, however, that the 5 defendants did not use Section 3.16 to calculate Novella's 6 pension in the first instance. 7 defendants identified this section as justification for their 8 calculation of Novella's pension "for the first time in 9 litigation." As the district court noted, the Novella I, 2004 WL 1752820, at *5, 2004 U.S. Dist. 10 LEXIS 15152, at *13. They did not cite this section of the Plan 11 in their letters to Novella explaining the calculation of his 12 benefits. 13 Fund). 14 administrative appeals that their two-rate calculation relied in 15 any way on section 3.16. 16 coined rationale in litigation despite their failure to rely upon 17 it during the internal Fund proceedings that preceded this 18 lawsuit would subvert some of the chief purposes of ERISA 19 exhaustion: to "'uphold Congress'[s] desire that ERISA trustees 20 be responsible for their actions, not the federal courts,'" and 21 to "'provide a sufficiently clear record of administrative 22 action'" should litigation ensue. 23 Accident Ins. Co., 449 F.3d 435, 445 (2d Cir. 2006) (quoting 24 Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d 25 Cir. 1993)). 26 447-48 (equitably estopping the defendant from arguing that the See J.A. 183-94 (letters between Novella and the Nor did they indicate to Novella at any point during his To permit them to assert this newly Paese v. Hartford Life & It would also clearly be inequitable. 29 See id. at 1 plaintiff had failed to exhaust an issue because a letter from 2 the defendant had misled the plaintiff into thinking that he had 3 no other administrative remedies to pursue).19 4 Because we agree with the district court's 5 determination that the defendants' two-rate calculation of 6 Novella's disability pension was arbitrary and capricious, we 7 affirm its entry of summary judgment in favor of Novella 8 individually. 9 nonetheless decline to affirm the summary judgment in favor of 10 the plaintiff class. 11 12 However, for the reasons discussed below, we II. Statute of Limitations and Class Certification A. Standards of Review 13 We review the question of the application of the 14 relevant statute of limitations -- as we do all questions of 15 law -- de novo. 16 84, 86 (2d Cir. 2003). 17 certification of a class under Rule 23 is reviewed for abuse of 18 discretion, provided that . . . the court applied the proper 19 legal standard[]." 19 United States v. Domino Sugar Corp., 349 F.3d However, "[a] district court's Brown v. Kelly, 609 F.3d 467, 475 (2d Cir. Novella also argues, and the district court concluded, that even if the defendants had cited to section 3.16 to justify their calculation, the defendants' interpretation of that section fails because the phrase "last separated from Covered Employment" must be read to contemplate only one such "last separat[ion]." See Novella I, 2004 WL 1752820, at *5, 2004 U.S. Dist. LEXIS 15152, at *14-*16. While Judge Walker agrees with the district court on this score, Judge Koeltl and Judge Sack are not persuaded that the plain language of section 3.16 forecloses multiple dates of "last separat[ion] from Covered Employment." But because we think the defendants' reliance on this section fails on other grounds, we need not reach this particular rationale of the district court. 30 1 2010). This standard "applies both to the district court's 2 ultimate decision on class certification and to its rulings as to 3 the individual Rule 23 requirements." 4 B. The Merits Id. 5 1. Accrual of the Statute of Limitations. 6 Rules of Civil Procedure permit maintenance of a class action 7 only if the "class is so numerous that joinder of all members is 8 impracticable." 9 requirement "does not mandate that joinder of all parties be Fed. R. Civ. P. 23(a)(1). The Federal This "numerosity" 10 impossible -- only that the difficulty or inconvenience of 11 joining all members of the class make use of the class action 12 appropriate." 13 v. Merck-Medco Managed Care, L.L.C., 504 F.3d 229, 244-45 (2d 14 Cir. 2007). 15 circumstances surrounding a case, not on mere numbers." 16 v. Celani, 987 F.2d 931, 936 (2d Cir. 1993). 17 several district courts in our Circuit have suggested that courts 18 are likely to conclude that the "numerosity" requirement is 19 satisfied "when the class comprises 40 or more members" and 20 unlikely to be satisfied "when the class comprises 21 or fewer." 21 Ansari v. N.Y. Univ., 179 F.R.D. 112, 114 (S.D.N.Y. 1998). 22 Cent. States Se. & Sw. Areas Health & Welfare Fund "Determination of practicability depends on all the Robidoux Nonetheless, In this case, the question of whether the certified 23 class was sufficiently large to satisfy Rule 23 hinges on whether 24 the statute of limitations for each class member's claim began to 25 run upon receipt of his first pension payment, as the defendants 26 contend, or upon a class member's first inquiry to the Fund 31 1 regarding the amount of his benefits and the Fund's rejection of 2 his request that his pension be calculated using one rate, as the 3 district court concluded and as Novella urges on appeal. 4 The parties agree that a six-year statute of 5 limitations governs ERISA claims and that "[t]he relevant date 6 for fixing the accrual of a miscalculation claim is when a 7 plaintiff was put on notice that the defendants believed the 8 method used to calculate his disability pension was correct." 9 Appellants' Br. 26 (brackets omitted) (quoting Novella III, 443 10 F. Supp. 2d at 545); see also id. at 27 ("The Fund agrees with 11 the . . . sentence quoted above. 12 claim to accrue when the participant is put on notice that the 13 Fund 'believed the method used to calculate his disability 14 pension was correct.'"); Appellees' Br. 57 (asserting that 15 federal courts generally apply a "discovery rule" for the 16 "purposes of triggering the statute of limitations on an ERISA 17 benefit claim"). 18 a pensioner can be considered to have been put on such notice. 19 The issue is undecided in this Circuit.20 20 It makes perfect sense for a The parties dispute, however, the time at which In Larsen v. NMU Pension Trust of the NMU Pension & Welfare Plan, 902 F.2d 1069 (2d Cir. 1990), we concluded that on the facts of that case -- which involved a claim by a pensioner's widow seeking to receive her late husband's pension as a "husband and wife pension" payable after his death, id. at 1070-71 -- the defendant fund had not "clear[ly] repudiat[ed]" her claim until it responded to an inquiry made on the widow's behalf and stated that "[a]ll monies have been paid that are payable and there are no further monies due [the plaintiff]," id. at 1074. We did not, however, decide that an ERISA claim cannot under any circumstances accrue before an affirmative demand is made and an explicit rejection is offered. Moreover, Larsen is factually distinguishable. That case concerned not an underpayment claim 32 1 The defendants urge us to reject the district court's 2 determination that the statute of limitations on a class member's 3 claim does "not begin to run until a prospective class member 4 inquires about the calculation of his benefits and the Plan 5 rejects his claim that the benefits were miscalculated," Novella 6 III, 443 F. Supp. 2d at 545, and the court's consequent finding 7 that the existence of twenty-four class members whose claims were 8 therefore timely meant that the class was numerous enough to meet 9 the requirement of Rule 23(a)(1) of the Federal Rules of Civil 10 Procedure. 11 first-payment approach under which the statute of limitations for 12 a miscalculation claim would begin to run when the pensioner 13 receives his first check. 14 They argue that we should instead adopt a strict In support, the defendants point to Miller v. Fortis 15 Benefits Insurance Co., 475 F.3d 516 (3d Cir. 2007), in which the 16 Third Circuit concluded that the statute of limitations on a 17 claim that benefits have been miscalculated starts to run when 18 the calculation or repudiation is both "clear and made known to 19 the beneficiary." 20 this "ordinarily" will be "when [the beneficiary] first receives 21 his miscalculated benefit award" because "[a]t that point, the 22 beneficiary should be aware that he has been underpaid and that 23 his right to a greater award has been repudiated." 24 court explicitly "reject[ed]" the rule proposed by the plaintiff Id. at 521-22. The Miller court observed that Id. The like the one at issue in the present appeal, but a denial of benefits. We therefore do not think that Larsen provides binding Circuit precedent on the statute-of-limitations issue before us. 33 1 in that case, which would have required a "formal denial of 2 benefits to trigger the statute of limitations." 3 The court did, however, require that a Fund's "repudiation of the 4 benefits [be] clear and [be] made known to the beneficiary" in 5 order for the 6 21 (emphasis in original). 7 "consider[ed] the clear repudiation concept to be useful . . . , 8 as it represents a refinement of the federal discovery rule in 9 the context of ERISA claims for benefits." Id. at 521. limitations period to begin running. Id. at 520- The court explained that it Id. at 521. The 10 defendants rely on Miller to support their contention that the 11 Third Circuit has adopted a strict first-payment test for the 12 accrual of the statute of limitations in ERISA miscalculation 13 claims, and argue that we should follow suit. 14 Some other courts, however, including the district 15 court in this case, have required that an ERISA fund provide a 16 formal denial of a plaintiff's application for the adjustment of 17 benefits to trigger the running of the statute of limitations. 18 In Miele v. Pension Plan of New York State Teamsters Conference 19 Pension & Retirement Fund, 72 F. Supp. 2d 88 (E.D.N.Y. 1999), for 20 example, the court considered the argument that "a miscalculation 21 claim accrues on the date that a plaintiff is clearly and 22 unequivocally informed of the amount of his benefit." 23 The court noted the "logic and appeal" of such a "bright-line 24 rule," which would be "easily enforced and would correspond 25 directly to the . . . rule that a clear and unequivocal denial of 26 benefits commences the statute of limitations period." 34 Id. at 99. Id. 1 (emphasis added). 2 miscalculation generally involves an award of benefits rather 3 than a denial of benefits and thus is less likely to put a 4 plaintiff on notice of a possible claim," id., the Miele court 5 applied the rule adopted by the district court here: that "a 6 miscalculation claim does not accrue until a plaintiff 'inquires 7 about the amount of benefits and is told that those benefits were 8 correctly computed.'" 9 (quoting Kiefer v. Ceridian Corp., 976 F. Supp. 829, 843 (D. 10 But, mindful of the fact that "a Id. (brackets and ellipses omitted) Minn. 1997)). 11 Still other courts have applied a continuing-violation 12 theory to the accrual of a claim in similar circumstances. See 13 Meagher v. Int'l Ass'n of Machinists & Aerospace Workers Pension 14 Plan, 856 F.2d 1418 (9th Cir. 1988). 15 payment based upon an alleged miscalculation "constitutes a fresh 16 breach by the [defendants] of their duty to administer the 17 pension plan in accordance . . . with ERISA," gives rise to "[a] 18 separate cause of action," and starts the running of a new 19 "limitations period . . . for each cause of action." 20 1423. 21 approach. 22 Circuit cases declining to apply a continuing-violation approach 23 to claim accrual); Edes v. Verizon Commc'ns, Inc., 417 F.3d 133, 24 139-40 (1st Cir. 2005) (rejecting a continuing-violation theory 25 where the wrongful conduct was the defendant's single 26 misclassification of plaintiffs as off-payroll employees); Under this theory, each Id. at Many courts have, however, expressly rejected this See, e.g., Miller, 475 F.3d at 522 (collecting Third 35 1 Pisciotta v. Teledyne Indus., 91 F.3d 1326, 1332 (9th Cir. 1996) 2 ("Although the [plaintiffs] now contend that each and every time 3 that they were entitled to a reimbursement payment it constituted 4 a new and separate breach of ERISA . . . , the applicable four- 5 year statute of limitations begins to run 'when a plaintiff knows 6 or has reason to know of the injury that is the basis of the 7 action.'"); Phillips v. Alaska Hotel & Rest. Emps. Pension Fund, 8 944 F.2d 509, 520-21 (9th Cir. 1991) (declining to apply a 9 continuing-violation approach), cert. denied, 504 U.S. 911 10 11 (1992). We do not adopt the continuing-violation theory. We 12 think that approach is appropriate in ERISA cases, as elsewhere, 13 only "where separate violations of the same type, or character, 14 are repeated over time." 15 v. Econ. Opportunity Comm'n of Nassau County, Inc., 558 F. Supp. 16 2d 378, 400 (E.D.N.Y. 2008). 17 by repeated decision-making, of the same character, by the 18 fiduciaries." 19 as here, "the plaintiff['s] claims are based on a single decision 20 that results in lasting negative effects." 21 Schultz v. Texaco, Inc., 127 F. Supp. 2d 443, 447 (S.D.N.Y. 2001) 22 ("[T]he mere fact that the effects of a single, wrongful act 23 continue to be felt over a period of time does not render that 24 single, wrongful act a single 'continuing violation.'"); Miele, 25 72 F. Supp. 2d at 102 n.14 (rejecting application of the 26 continuing-violation theory of accrual because a pension fund has Id. L.I. Head Start Child Dev. Servs., Inc. Usually, "[t]hese cases are marked But it is not as clear a fit in cases where, 36 Id. at 401; see also 1 no obligation "to continually reassess claim denials or benefit 2 underpayments on a monthly basis"). 3 We also decline, however, to accept either of the 4 approaches urged by the parties. The defendants' bright-line 5 approach is too harsh in that it places the burden on the 6 pensioner -- a party less likely to have a clear understanding of 7 the terms of the pension plan and their application to his 8 case -- to confirm the correctness of his pension award 9 immediately upon the first payment of benefits, regardless of the 10 complexity of the calculations, or of the adequacy of the 11 defendants' explanation of the basis for the calculation. 12 Indeed, this case illustrates the hazards of the defendants' 13 approach. 14 participants, including Novella and the plaintiff class, to 15 explain the rules of the pension plan -- is silent on the 16 underlying issue of multiple benefit calculation rates for 17 Disability Pensions. 18 calculation at issue in Miller, see Miller, 475 F.3d at 522; cf. 19 Young v. Verizon's Bell Atl. Cash Balance Plan, 615 F.3d 808, 816 20 (7th Cir. 2010) (finding a claim timely because the lump-sum 21 payment the plaintiff received more than six years before was 22 "not so inconsistent with her current claim for additional 23 benefits as to serve as a clear repudiation"), cert. denied, 131 24 S. Ct. 2924 (2011), the determination of a Disability Pension The SPD -- the document provided to all Plan And, unlike the simple percentage 37 1 award under the defendants' Plan may have required more than a 2 simple multiplication of two static numbers.21 3 The district court's and Novella's bright-line 4 approach -- in which a limitations period does not begin to run 5 "until a prospective class member inquires about the calculation 6 of his benefits and the Plan rejects his claim," Novella III, 443 7 F. Supp. 2d at 545 -- also poses problems. 8 a pensioner could collect benefit checks for twenty or thirty 9 years without any obligation to inquire as to the correctness of 10 the calculations underlying the benefit payments and could still 11 thereafter assert a timely claim for miscalculation. 12 the defendants point out, at least one class member is long dead. 13 See Appellants' Br. 29-30. 14 survivors to pursue his claim, the defendants say, despite the 15 fact that he collected his benefits for years before passing 16 away, would undermine the purpose of a statute of limitations. 17 See, e.g., Order of R.R. Telegraphers v. Ry. Express Agency, 18 Inc., 321 U.S. 342, 348-49 (1944) ("Statutes of limitation . . . 19 in their conclusive effects are designed to promote justice by 20 preventing surprises through the revival of claims that have been 21 allowed to slumber until evidence has been lost, memories have 22 faded, and witnesses have disappeared."); Carey v. Int'l Bhd. of 21 Under that approach, Indeed, as Allowing that class member's We do not intend to suggest that the underlying basis for the class members' claims was undiscoverable at the time of the first payment. Rather, it is for the district court to determine in the first instance at what point the defendants provided sufficient information to each class member such that that pensioner should have been able to recognize the miscalculation. 38 1 Elec. Workers Local 363 Pension Plan, 201 F.3d 44, 47 (2d Cir. 2 1999) ("Statutes of limitation serve several important policies, 3 including rapid resolution of disputes, repose for those against 4 whom a claim could be brought, and avoidance of litigation 5 involving lost evidence or distorted testimony of witnesses."). 6 To the extent that the defendants could show that the deceased 7 class member or his survivors had information available to them 8 by which they reasonably could have discovered the alleged 9 miscalculation, the district court might well agree with the 10 defendants that permitting his survivors to assert a claim more 11 than six years after receiving such information would be 12 inequitable. 13 Having rejected each party's views, we choose a third 14 approach: We conclude that notice of a miscalculation can be 15 imputed to a pensioner -- and the statute of limitations will 16 start to run -- when there is enough information available to the 17 pensioner to assure that he knows or reasonably should know of 18 the miscalculation. 19 pension plan's legitimate interest in predictability and finality 20 with a pensioner's equally legitimate interest in having a fair 21 opportunity to challenge a miscalculation of benefits once it 22 becomes known -- or should have become known -- to him. 23 another way, this case-by-case reasonableness inquiry mitigates 24 some of the harshness of the defendants' proffered approach, We think this approach best balances a 39 Stated 1 while better respecting the defendants' interests in finality and 2 repose than the district court's and Novella's chosen method.22 3 We think this method is consistent with the Third 4 Circuit's reasoning in Miller, which we read to endorse not a 5 strict first-payment theory -- such as that urged by the 6 defendants -- but rather a similar reasonableness approach. 7 Indeed, in Miller, the Third Circuit appeared to contemplate that 8 its "clear repudiation" rule would vary in its application to the 9 facts of any individual case. See Miller, 475 F.3d at 521 10 (rejecting the plaintiff's "proposed application of the clear 11 repudiation rule," which would have required an explicit demand 12 and refusal, and concluding that a court should ask "when a 13 beneficiary knows or should know he has a cause of action" 14 (emphasis added)); see also Fletcher v. Comcast Comprehensive 15 Health and Welfare Plan, No. 09-cv-1272, 2011 WL 743459, at *5, 16 *3, 2011 U.S. Dist. LEXIS 18199, at , *13, *14-*15 (W.D. Pa. Feb. 17 24, 2011) (noting that "Miller . . . does not stand for the 18 proposition that every erroneously calculated benefit award 19 automatically serves as a 'clear repudiation,'" and holding that 20 "[a] reasonable finder of fact could conclude that . . . 21 [communications between the Plan and the plaintiff beneficiary] 22 And it may be that in many cases, our reasonableness approach will yield the same result as the first-payment theory favored by the defendants, in that the miscalculation will be apparent from the face of a payment check, or will readily be discoverable from information furnished to pensioners by the pension plan at the time the first check is issued, thereby starting the running of the statute of limitations as of that date. Nevertheless, whether that is the case is for each district court to determine in the first instance. 40 1 did not suffice to alert plaintiff that his benefits were being 2 repudiated"). 3 Turning to the present case: In light of the standard 4 we adopt, on the factual record before us, we are unable to 5 determine whether, and if so when, each class member had 6 information by which he knew or should have known of the 7 miscalculation. 8 simply receiving a lower pension payment is not enough to put a 9 pensioner on notice of a miscalculation. We note that, based on the foregoing discussion, Conversely, actual 10 notice to a pensioner that a double rate method was used would 11 put him on notice. 12 correct rate-times-units calculation, so that any difference 13 between the putative calculation and the actual amount of the 14 check would be obvious, is also probably enough. 15 cannot yet tell how many of the class members' claims are timely. 16 We therefore cannot, at this stage of the proceedings, confirm 17 the district court's conclusion that the class is sufficiently 18 large to satisfy Rule 23(a)(1)'s numerosity requirement. 19 Similarly, informing a pensioner of the However, we We therefore vacate the class certification and remand 20 to the district court for further factfinding regarding when each 21 plaintiff class member knew or should have known that the Fund 22 had miscalculated his Disability Pension payments, and for 23 consideration of whether there are enough class members with 24 timely claims to merit certification. 25 the summary judgment in favor of the class. 41 We therefore also vacate 1 Finally on this score, we note that the approach we 2 adopt may in some cases require a resource-intensive, claimant- 3 by-claimant inquiry to determine when a pensioner knew or 4 reasonably should have known that his benefits were 5 miscalculated. 6 pensioner's accrual date may in turn lessen the value, and indeed 7 the availability, of class actions in this kind of litigation. 8 However, that sort of problem is not unique to this context. 9 See, e.g., Avila v. Willits Envt'l Remediation Trust, 633 F.3d 10 828, 841-42 (9th Cir.) (concluding that material issues of fact 11 precluded summary judgment regarding whether certain class 12 members in toxic-tort class action knew or should have known of 13 their injuries), cert. denied, 2011 WL 4530474, 2011 U.S. LEXIS 14 5526 (Oct. 3, 2011); In re Brooklyn Navy Yard Asbestos Litig., 15 971 F.2d 831, 836 n.1 (2d Cir. 1992) (differentiating between 16 joint trials which are "not questioned by plaintiffs or 17 defendants" in mass tort cases from the issue of "the propriety 18 of class actions" in such cases). And this fact-dependent inquiry into each 19 Moreover, the fact-intensive nature of our 20 reasonableness approach could make it difficult for a potential 21 class representative to meet the typicality requirement of Fed. 22 R. Civ. P. 23(a)(3). 23 individualized statute-of-limitations-accrual evaluation on a 24 proposed class's ability to meet the typicality requirement, if 25 any, is sparse, see Chiang v. Veneman, 385 F.3d 256, 269 (3d. 26 Cir. 2004); Ruppert v. Alliant Energy Cash Balance Pension Plan, But the case law on the effect of an 42 1 255 F.R.D. 628, 633-34 (W.D. Wis. 2009), and we decline to 2 address whether that requirement is satisfied on the record 3 before us. 4 plaintiff must satisfy all of the requirements of Rule 23, by a 5 preponderance of the evidence, to obtain class certification, see 6 Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, 7 Inc., 546 F.3d 196, 202 (2d Cir. 2008); In re Initial Pub. 8 Offerings Sec. Litig., 471 F.3d 24, 41 (2d Cir. 2006), including 9 the numerosity and typicality requirements of Rule 23(a), see We note, however, the well-established rule that a 10 Marisol A. v. Giuliani, 126 F.3d 372, 375-76 (2d Cir. 1997) 11 (citing Comer v. Cisneros, 37 F.3d 775, 796 (2d Cir. 1994)). 12 2. Novella's Cross-Appeal. We find no merit in 13 Novella's contention, asserted in his cross-appeal, that the 14 certified class was too narrow inasmuch as the district court 15 should not have limited it to persons receiving Disability 16 Pensions. 17 Novella's amended complaint asserted claims relating 18 both to the two-rate calculation for disability pensioners and to 19 the Plan's "accrued benefit" provisions. 20 district court granted summary judgment to Novella on his 21 individual Disability Pension claims and did not reach the other 22 "accrued benefit" claims, but rather dismissed them as moot in 23 light of the fact that the other claims would entitle Novella to 24 no further relief. 25 certification with regard to both the Disability Pension claim 26 and the other claims, the district court certified only the See J.A. 30-31. The When Novella subsequently moved for class 43 1 former class because it concluded that Novella lost standing to 2 pursue the "accrued benefit" claims when he had already 3 "succeeded on an alternative theory of recovery." 4 2004 WL 3035405, at *4, 2004 U.S. Dist. LEXIS 26149, at *13. Novella II, 5 Novella asserts in his cross-appeal that the district 6 court "confused the mootness of an issue with the mootness of a 7 case," Appellee's Br. 16 (emphasis in original), and therefore 8 erred in dismissing Novella's non-Disability Pension claims as 9 "moot." We agree that the claims were not "moot" in the 10 technical sense; "it is cases rather than reasons that become 11 moot" within the meaning of Article III.23 12 Int'l v. UAL Corp., 897 F.2d 1394, 1397 (7th Cir. 1990). 13 where, as here, a litigant asserts multiple arguments in support 14 of the relief he seeks, and the court grants him complete relief 15 based upon one contention, courts also sometimes use "the word 16 'moot' . . . to refer to an issue that need not be decided in 17 light of the resolution [by the court] in the same opinion of 18 another issue." 19 district court to have said that some of Novella's claims were 20 "moot." 23 Id. Air Line Pilots Ass'n But It is in this sense that we understand the Mootness in the Article III sense occurs when there "no longer is an actual controversy between adverse litigants," and the plaintiff therefore lacks standing to continue to pursue his claims in federal court. Erwin Chemerinsky, Federal Jurisdiction 130 (5th ed. 2007); see also In re Zarnel, 619 F.3d 156, 162 (2d Cir. 2010); County of Suffolk, N.Y. v. Sebelius, 605 F.3d 135, 140 (2d Cir. 2010); ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 485 F.3d 85, 94 (2d Cir. 2007); Richard H. Fallon, Jr. et al., Hart and Wechsler's The Federal Courts and the Federal System 205 (5th ed. 2003) (summarizing the "foundations" of the mootness doctrine). 44 1 In any event, we agree with the district court's 2 decision not to certify the broader class. It was Novella's 3 choice to proceed individually first and only later move for 4 class certification. 5 for summary judgment, Novella offered his various arguments in 6 support of his motion in the alternative. 7 1752820, at *2, 2004 U.S. Dist. LEXIS 1266, at *6. 8 court granted Novella complete relief on one claim and, in the 9 exercise of its discretion, did not decide the merits of the In his briefing on his individual motion See Novella I, 2004 WL The district 10 others. 11 broader class for which Novella later sought certification. 12 by the time Novella moved for class certification, his individual 13 claims no longer matched the claims of the broader purported 14 class, and he therefore was no longer an appropriate 15 representative of that broader class.24 16 Novella's interest as a litigant would be to pursue the claim 17 based on the Disability Pensions, while some class members' 18 interest would be to pursue the claims based on the Plan's 19 "accrued benefit" provisions instead. 20 not satisfy the typicality or adequacy-of-representation prongs 21 of Rule 23(a). 24 It is the latter, unresolved claims that relate to the But Stated otherwise, Novella therefore would Notwithstanding Novella's success on his individual claim, Novella had standing to represent the class of Disability Pension recipients inasmuch as the district court had not yet reduced Novella's victory to a final judgment. 45 1 2 III. Prejudgment Interest A. Standard of Review 3 "The decision whether to grant prejudgment interest and 4 the rate used if such interest is granted are matters confided to 5 the district court's broad discretion, and will not be overturned 6 on appeal absent an abuse of discretion." 7 v. CIT Group/Factoring, Inc., 67 F.3d 1063, 1071-72 (2d Cir. 8 1995) (internal quotation marks omitted); see also Slupinski v. 9 First Unum Life Ins. Co., 554 F.3d 38, 53-55 (2d Cir. 2009); Endico Potatoes, Inc. 10 Commercial Union Assurance Co. v. Milken, 17 F.3d 608, 613-15 (2d 11 Cir.), cert. denied, 513 U.S. 873 (1994). 12 B. The Merits 13 The district court awarded prejudgment interest to both 14 Novella -- beginning on the date the Fund denied his claim -- and 15 to the individual class members -- beginning on the date Novella 16 first asserted the class claims. 17 in the district court's award of prejudgment interest to Novella 18 individually or in its selection of the appropriate rate.25 19 nonetheless vacate the award of prejudgment interest to the class 20 in light of our determination that we must decertify the class 21 and vacate the judgment in its favor. 22 23 We find no abuse of discretion We The defendants argue that the district court's award of prejudgment interest to Novella amounts to a "windfall" because 25 Although ERISA does not explicitly provide for prejudgment interest, courts can make such awards as part of their "wide discretion in fashioning equitable relief to protect the rights of pension fund beneficiaries." Katsaros v. Cody, 744 F.2d 270, 281 (2d Cir.), cert. denied, 469 U.S. 1072 (1984). 46 1 such an award would compensate him without regard to his break in 2 service, even though his employers did not pay contributions to 3 the Fund during that time. 4 restates the defendants' arguments on the merits of the two-rate 5 calculation, which we have rejected. 6 payment of prejudgment interest creates a financial burden on the 7 Fund, that is a result of the Fund's misinterpretation of its own 8 Plan. 9 prejudgment interest is necessary to fully compensate Novella an 10 11 But this argument essentially To the extent that the It does not render the district court's conclusion that abuse of discretion. We similarly conclude that the district court's 12 determination that the proper interest rate is 7.5 percent -- the 13 Fund's assumed rate of return -- was within its discretion. 14 light of the other options before the court, this rate seems to 15 us to be entirely consistent with the principle that plaintiffs 16 should be "made whole" and that defendants should "not profit by 17 their failure to comply with their ERISA obligations." 18 RCA Global Commc'ns, Inc., 891 F. Supp. 875, 899 (S.D.N.Y. 1994), 19 aff'd, 60 F.3d 956 (2d Cir. 1995); see also Slupinski, 554 F.3d 20 at 54 (quoting Algie, 891 F. Supp. at 899). 21 In Algie v. We find no merit in Novella's argument that the 22 district court should have awarded prejudgment interest from the 23 date of the first miscalculated check. 24 magistrate judge acknowledged three possible dates for the 25 accrual of prejudgment interest: "the date of each underpayment, 26 the date that a plaintiff asserted a claim, or the date that the 47 In his R&R, the 1 Fund denied the claim." 2 U.S. Dist. LEXIS 66235, at *18. 3 district court concluded -- that it would, in this case, be 4 "anomalous to calculate interest from the date of injury, since 5 it was within the power of the plaintiffs to assert a claim of 6 underpayment at any time and thus trigger review by the Fund." 7 Id., 2007 U.S. Dist. LEXIS 66235, at *19. 8 reason to conclude that the district court abused its discretion 9 in this regard. 10 11 Novella IV, 2007 WL 2582171, at *6, 2007 The R&R recommended -- and the We have been given no CONCLUSION For the foregoing reasons, we affirm the district 12 court's judgment in favor of Novella on his individual ERISA 13 claims and its award to Novella of prejudgment interest. 14 vacate the district court's certification of the class of 15 Disability Pension recipients, its grant of judgment on the 16 merits in favor of the class, and its award of prejudgment 17 interest to the class members. 18 district court for further proceedings. 19 We remand the case to the Each party shall bear its own costs. 48 We
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