Kifafi v. Hilton Hotels Retirement Plan

Citations: 826 F. Supp. 2d 55; 2011 U.S. Dist. LEXIS 155443; 2011 WL 6004608Docket: Civil Action 98-1517 (CKK)

Court: District Court, District of Columbia; December 2, 2011; Federal District Court

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Defendants, Hilton Hotels, filed a Motion for a Stay Pending Appeal regarding the Court's August 31, 2011, Order, which mandated that Hilton amend its Retirement Plan to comply with the Employee Retirement Income Security Act (ERISA), specifically addressing anti-backloading provisions. The Court's Order required Hilton to implement these changes and commence back payments and increased benefits by January 1, 2012. Defendants sought an expedited briefing on their motion without prior consultation with the Plaintiff, violating Local Civil Rule 7(m). The Court responded by partially granting the Plaintiff's motion for a temporary stay while denying both Defendants' request for expedited treatment and the Plaintiff's demand for additional financial disclosures. The Court established a new briefing schedule and maintained the requirement for Hilton to make the necessary amendments by the stipulated date.

Defendants proposed an expedited briefing schedule for their motion, or a normal timeline under Local Rules if a temporary stay is granted. Plaintiff seeks to temporarily stay parts of the Court's August 31, 2011 Order regarding backloading, allowing time for Defendants' motion briefing. The stay proposed by Plaintiff would only last until the motion is briefed, not until the Court's decision. Defendants request a stay until thirty days after the Court rules on their motion, which the Court agrees would be beneficial, ensuring it lasts until the Court makes a decision.

The Court will stay specific provisions of the August 31, 2011 Order, including Hilton's obligation to amend the Plan, back payments, increased benefits to previously vested participants, and benefits to newly vested participants. However, Hilton must continue scheduled payments to previously vested participants. This stay will be effective until either thirty days post-decision on Defendants' motion or until Defendants post an approved supersedeas bond. This arrangement allows time for briefing and enables Hilton to prepare for potential changes or seek a stay from the Court of Appeals if the motion is denied.

Regarding the briefing schedule, the Court finds no need to shorten it due to the complexities of the case and allows Plaintiff until December 22, 2011, to file an opposition, with Defendants' reply due by December 30, 2011, without further extensions. Additionally, Plaintiff's request for Hilton to re-file its motion with supporting financial documents is denied, although Defendants will provide some additional materials related to increased Plan funding requirements.

The Plaintiff did not adequately justify the inadequacy of the information provided or explain the relevance of the additional requested materials. It is Hilton's responsibility to furnish sufficient documentation to demonstrate its solvency, which is necessary for the Court to determine whether to grant a stay without a bond or with the bond amount proposed by Defendants. Defendants assume the risk that the Court may find their motion inadequate, leading to a denial of the stay or a requirement for a larger bond. The Court will not compel Hilton to produce documents to fulfill its burden. 

Consequently, the Court has decided to temporarily stay the portions of its August 31, 2011 order that require Defendants to amend the Plan and provide back payments and benefits to participants by January 1, 2012. This stay will last until thirty days after the Court rules on Defendants' motion to stay the Order pending appeal or until a supersedeas bond is posted or approved by the Court. Due to the complexity of the issues and the reduced urgency with the stay, the Court will accept the briefing schedule proposed by the Plaintiff and deny both the Defendants' request for expedited briefing and the Plaintiff's request for additional financial disclosures from Defendants. An appropriate Order will accompany this Memorandum Opinion. Additionally, the Court will address Defendants' motion to seal in a separate order.