The U.S. Supreme Court has denied Hilton Hotels’ petition for certiorari seeking review of a decision by the U.S. Court of Appeals for the D.C. Circuit that reinstated retirement plan participants’ request for class certification in an Employment Retirement Income Security Act (ERISA) case. The case is Hilton Hotels Retirement Plan et al. v. Valerie White et al., case number 23-166, U.S. Supreme Court.
A panel of the D.C. Circuit found that the lower court erred in denying class certification to the Hilton retirement plan participants based on a “stand-alone and extra-textual rule against certifying fail-safe classes.” Membership in a fail-safe class can be determined only by weighing the underlying merits of a particular claim.
The panel’s ruling rejected a categorical rule against fail-safe classes as the sole basis for the trial court’s denial of class certification. The panel noted that Federal Rule of Civil Procedure 23 provides sufficient guidance for courts to rule on class certification.
The extensive Hilton legal dispute over its retirement plan dates back to 1998, when Jamal Kifafi filed a previous ERISA claim against the giant hotel chain, alleging that it had miscalculated the vesting date for his pension benefits and backloaded plans by awarding benefits in later years of service. Another suit was filed in 2016 by a proposed class of about 200 workers, alleging that they were denied vested benefits in violation of ERISA in a way that the Kifafi litigation had specifically prohibited. The employees also claimed they had been shortchanged benefits due to erroneous vesting techniques.
Furthermore, the Kifafi litigation was revived in 2020 after a D.C. Circuit panel issued an unpublished opinion overturning the lower court’s refusal to enforce a 2011 permanent injunction against Hilton, which provided that the hotel was to pay the affected workers more benefits and stop using the flawed vesting calculation method. The panel advised that while a court could end active supervision over a case, it nonetheless retained jurisdiction over the underlying injunction.
The employees who filed this suit in 2016 have sought class certification since 2018. A November 2020 district court ruling on the employees’ renewed certification motion, which the employees appealed to the D.C. Circuit, led to Hilton’s failed petition for certiorari. The case goes back to the district court for further consideration on the certification motion.
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