The Clerk of Court is directed to amend the caption as set forth above. The… v. Westchester County UNITED STATES COURT OF APPEALS 1 FOR THE SECOND CIRCUIT 2 August…

* 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.
09-4061-cv(L)
Novella v. Westchester County
UNITED STATES COURT OF APPEALS 1
FOR THE SECOND CIRCUIT 2
August Term, 2010 3
(Argued: March 11, 2009 Final Submission: June 22, 2011 4
Decided: November 3, 2011) 5
Docket Nos. 09-4061-cv(L), 09-3826-cv(XAP) 6
------------------------------------- 7
CARLO NOVELLA, on his own behalf 8
and on behalf of all similarly situated, 9
Plaintiff-Appellee-Cross-Appellant, 10
- v - 11
WESTCHESTER COUNTY, NEW YORK CARPENTERS' PENSION FUND and BOARD 12
OF TRUSTEES OF WESTCHESTER COUNTY, NEW YORK, 13
Defendants-Appellants-Cross-Appellees.*
14
------------------------------------- 15
Before: WALKER and SACK, Circuit Judges, KOELTL, District 16
Judge.**
17
Appeal from four decisions of the United States 18
District Court for the Southern District of New York (Michael B. 19
Mukasey, then-Chief Judge and Barbara S. Jones, Judge), and 20
related judgments, (1) granting the plaintiff Novella's motion 21
for summary judgment, (2) certifying a class action, (3) granting 22
the plaintiff class's motion for summary judgment on the class 23

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2
claims, and (4) awarding prejudgment interest to the named 1
plaintiff and the class members. We agree with the district 2
court that the defendants' interpretation of certain plan 3
language was arbitrary and capricious. Accordingly, we affirm 4
the district court's award of summary judgment to plaintiff 5
Novella on his individual claims for miscalculation of pension 6
benefits. However, we conclude, contrary to the district court, 7
that the six-year statute of limitations applicable to the 8
plaintiff's and each other putative class member's Employee 9
Retirement Income Security Act claims began to run when each 10
pensioner knew or should have known that the defendants had 11
miscalculated the amount of his pension benefits, and that he was 12
being underpaid as a result. We therefore vacate the district 13
court's judgments certifying the plaintiff class, granting 14
summary judgment to the class, and granting prejudgment interest 15
to the class members. We remand for further factfinding with 16
regard to when each putative class member became, or should have 17
become, aware of his alleged injury so as to begin the running of 18
the statute of limitations as applied to him. 19
AFFIRMED in part; VACATED and REMANDED in part. 20
EDGAR PAUK, New York, NY, for Plaintiff- 21
Appellee-Cross-Appellant. 22
JOHN H. BYINGTON III, Archer, Byington, 23
Glennon & Levine LLP (Robert T. 24
McGovern, of counsel), Melville, NY, for 25
Defendants-Appellants-Cross-Appellees. 26

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3
SACK, Circuit Judge: 1
This appeal and cross-appeal concern the pension 2
benefits owed to plaintiff Carlo Novella, a retired carpenter, 3
and members of a class he purports to represent. During 4
Novella's three-decade career, he performed jobs for which his 5
employers were obligated, under collective bargaining agreements, 6
to pay into the defendant pension fund on his behalf. But there 7
were multi-year periods -- principally from 1982 to 1986 -- 8
during which Novella did not perform any work requiring his 9
employer to make such a contribution. In 1995, when Novella was 10
nearing his sixty-second birthday, he became disabled as a result 11
of injuries sustained while he was on the job. He applied for, 12
and received, a pension ("Disability Pension"); however, he was 13
disappointed to learn that his benefits were not calculated using 14
the pension rate in effect in 1995, but rather using two 15
different rates for Novella's two periods of service. The rate 16
applicable in 1995 was applied to benefits for work performed 17
between 1987 and 1995, and the lower rate in effect in 1981 was 18
applied to benefits for work performed between 1962 and 1981. 19
The use of the 1981 rate for the earlier period resulted in a 20
lower aggregate monthly pension payment. 21
After unsuccessfully seeking administrative redress 22
from the pension fund, Novella filed suit in the United States 23
District Court for the Southern District of New York on his own 24
behalf and on behalf of a class of pensioners whose benefits also 25
were allegedly miscalculated. He asserted that the fund was 26

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4
guilty of seven violations of the Employee Retirement Income 1
Security Act ("ERISA") and sought declaratory and injunctive 2
relief. On cross-motions for summary judgment, the district 3
court agreed with Novella that the defendants -- the pension fund 4
and its trustees -- had erred in calculating his Disability 5
Pension at two different rates. The court did not reach 6
Novella's other claims. 7
Novella then moved to certify a class action on behalf 8
of either of two classes: one including recipients of various 9
types of pensions whose benefits were calculated using multiple 10
per-credit rates, and the other limited to disability pensioners 11
whose benefits were affected by the same practice. The district 12
court concluded that in light of Novella's success on his 13
individual claims, only the narrower class of disability 14
pensioners was eligible for certification. The court determined 15
that the statute of limitations for the absent class members' 16
claims did not accrue until each class member affirmatively 17
challenged the defendants' two-rate benefit calculation, and was 18
rebuffed. The court found twenty-four putative class members 19
whose claims were timely and determined that this number met the 20
numerosity requirement of Rule 23(a)(1) of the Federal Rules of 21
Civil Procedure. Finding the other requirements of Rule 23(a) 22
and (b) to have been met, the court certified this narrower class 23
of disability pensioners. 24
The parties then cross-moved for summary judgment on 25
the class claims, which motions the district court referred to a 26

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5
magistrate judge. The magistrate judge recommended granting the 1
plaintiff class's motion on the merits and denying the 2
defendants', the latter of which the magistrate judge 3
characterized as an untimely motion for reconsideration of the 4
decision certifying the class. The district court reviewed the 5
magistrate judge's recommendation, adopted it, and entered 6
judgment in favor of the class. The court also awarded 7
prejudgment interest at the fund's assumed annual rate of return 8
to both Novella and the members of the plaintiff class. Both 9
parties appealed. 10
We agree with the district court that the defendants' 11
use of two rates in calculating disability pensions finds no 12
support in the language of the fund's controlling documents -- 13
the Summary Plan Description and the Rules of the Pension Plan. 14
We therefore affirm the district court's judgment in Novella's 15
favor on his individual claims. We also affirm its award of 16
prejudgment interest to Novella, and its setting of the rate and 17
date of accrual for the award. However, we conclude that the 18
district court erred in identifying the time at which a claim for 19
miscalculation of benefits accrues. In light of our view that 20
such a claim accrues when the pensioner knew or should have known 21
that his benefits were miscalculated, we vacate the certification 22
of the class, the judgment in favor of the class, and the award 23
of prejudgment interest to the class members, and remand the case 24
for further proceedings before the district court. These 25
proceedings may include a case-by-case inquiry into when each 26

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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
putative class member knew or had sufficient information so that 1
he should have known that the defendants were using two different 2
rates to calculate his pension. 3
BACKGROUND 4
Factual History 5
The relevant facts are not in dispute. 6
The plaintiff, Carlo Novella, is a 78-year-old former 7
carpenter. From 1962 through 1995, he worked in Westchester 8
County, New York, and in New York City, and participated in both 9
the defendant Westchester County, New York Carpenters' Pension 10
Fund (the "Westchester Fund" or the "Fund") 1 -- which is 11
administered by the defendant eight-member Board of Trustees of 12
the Fund -- and the New York City District Council of Carpenters 13
Pension Plan. It is Novella's pension under the Westchester Fund 14
-- which is an employer-funded employee pension benefit plan 15
within the meaning of ERISA, see 29 U.S.C. § 1002(2)(A) -- that 16
is at issue in this appeal. Novella's pension benefits under the 17
Fund are determined by the Pension Fund Rules (the "Plan") and 18
Summary Plan Description (the "SPD") 2, which have been in effect 19

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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
and unchanged since January 1, 1986. The Plan creates six 1
classes of benefits, four of which are pension-type allowances: 2
"Regular Pension" benefits, governed by sections 3.02-3.03 of the 3
Plan; "Early Retirement Pension" benefits, governed by sections 4
3.04-3.05 of the Plan; "Deferred Pension" benefits, dictated by 5
sections 3.06-3.07 of the Plan; and "Disability Pension" 6
benefits, as set forth in sections 3.08-3.11 of the Plan. 3 See 7
J.A. 151-54. 4 Each participant is entitled to only one type of 8
benefit, "except that a Disability Pensioner who recovers [from 9
his disabling injury] may be entitled to a different type of 10
pension." Id. at 155. 11
Fund participants earn pension credits based on the 12
number of hours they serve in jobs that are covered by the Plan. 13
A job constitutes "Covered Employment" if the employer is 14

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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
"obligated by its [collective bargaining] agreement to contribute 1
to the Fund" on behalf of the relevant Plan participant. Id. at 2
146. Novella has had two periods of covered employment: from 3
1962 through 1981, 5 during which time he earned 13.20 pension 4
credits, and from 1987 to 1995, during which time he earned an 5
additional 6.30 pension credits. 6 In the years between 1982 and 6
1986, Novella performed work in New York City, which was covered 7
by the New York City Fund -- not a party to this action -- but he 8
did not perform any work covered by the defendant Westchester 9
Fund. 10
On March 22, 1995, Novella, then sixty-one years old, 11
suffered a disabling accident while at work, for which he 12
immediately began to receive workers' compensation. He also 13
applied to the Fund for pension benefits. To calculate the 14
amount of Novella's monthly pension, the defendants used two 15
different rates: They applied a rate of $17 per credit to the 16
13.20 pension credits Novella earned between 1962 and 1981, and a 17
second rate of $40 per credit for the credits he earned between 18
1987 and 1995. 19
Immediately after receiving notice in fall 1995 that 20
his pension would be calculated using two different rates, 21

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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
Novella asked the Fund trustees for an explanation of his 1
benefits. The defendants explained to him that the two-rate 2
calculation was appropriate because of the break in his covered 3
service from 1982 through 1986, during which time he performed no 4
work covered under the Westchester Plan. 5
The defendants denied Novella's repeated appeals from 6
the two-benefit rate calculation, referring Novella to section 7
3.07 of the Westchester Plan, which applies to Deferred Pensions. 7
8
By letter dated August 28, 1997, the defendants explained that 9
under that section of the Plan, 10
a Deferred Pension is calculated based on the 11
rate in effect on the last day you worked in 12
Covered Employment prior to the accumulation 13
of three One-Year Breaks in Service. . . . 14
Since each of the years you were not working 15
in covered employment was a Break in 16
Service, [8] the credits you had accumulated up 17
to 1981 when you left covered employment 18

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10
under the Plan (13.20) were calculated at the 1
1981 rate ($17.00). 2
Section 3.07 also provides that if any 3
additional credits were earned after the 4
Break in Service, the benefit amount for the 5
additional credits shall be calculated on the 6
rate that was in effect at the time of 7
termination. The credits you earned after 8
the Break in Service (6.30) were calculated 9
at the rate in effect when you terminated 10
($40.00). 11
J.A. 194. Although Novella was awarded a Disability Pension, not 12
a Deferred Pension, the letter did not cite the sections of the 13
Plan governing Disability Pensions: sections 3.08 to 3.11. The 14
letter also failed to cite section 3.16 of the Plan, entitled 15
"Application to Benefit Increases," on which the defendants would 16
later rely in this litigation. Id. at 156. Section 3.16 17
provides that a Fund participant is entitled to a Pension in an 18
amount to be "determined under the terms of the Plan and [at] the 19
benefit level as in effect at the time the Participant last 20
separates from Covered Employment." Id. Under section 3.16, "[a 21
Plan p]articipant shall be deemed to have last separated from 22
Covered Employment on the last day of Work which is followed by 23
three consecutive calendar years of less than 1,000 hours of 24
Covered Employment in each year." Id. 25
Procedural History 26
On March 19, 2002, having contested the two-rate 27
calculation through the Fund's administrative review process and 28
having failed to obtain relief, Novella filed suit in the United 29
States District Court for the Southern District of New York 30
against the defendant Fund and its Board of Trustees, asserting 31

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9 Subject matter jurisdiction was premised upon the
questions of federal law that underlie this dispute. See 28
U.S.C. § 1331(a).
11
violations of ERISA, and seeking declaratory and injunctive 1
relief. 9 He filed an amended complaint on October 27, 2003. His 2
suit was brought on behalf of himself and a class of "[a]ll 3
[others s]imilarly [s]ituated." J.A. 24. 4
The amended complaint asserted seven claims falling 5
into two categories: Claims One and Two challenged the 6
defendants' failure to accord Novella credit for the workers' 7
compensation hours he received; Claims Three through Seven 8
contested the defendants' calculation of Novella's (and the class 9
members') pensions using two different rates because of a break 10
in service. As relevant to this appeal, Claim Six asserted that 11
the defendants' practice of applying section 3.07 of the Plan, 12
which governs Deferred Pensions, to recipients of Disability 13
Pensions violated the Plan's terms, and Claim Seven alleged that 14
because the Plan "does not contain any provision describing the 15
application of two benefit rates when a participant suffers a 16
three-year interruption in service," the defendants had violated 17
ERISA in calculating Novella's pension using two rates. Id. at 18
31-32. 19
In early 2004, before moving for class certification, 20
Novella moved for summary judgment on his individual claims. The 21
defendants cross-moved for the same. The district court (Michael 22
B. Mukasey, then-Chief Judge) granted Novella's motion in part. 23

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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
The court dismissed as unexhausted 10 Novella's claims (styled as 1
Claims One and Two) regarding the "defendants' refusal to credit 2
him with hours of service, and therefore pension credits, during 3
the time he received workers' compensation benefits." 11 Novella 4
v. Westchester County, N.Y. Carpenters' Pension Fund (Novella I), 5
No. 02-cv-2192, 2004 WL 1752820, at *6, 2004 U.S. Dist. LEXIS 6
15152, at *16 (S.D.N.Y. Aug. 4, 2004); see id. at *6-*7, 2004 7
U.S. Dist. LEXIS 15152, at *16-*22. 8
With regard to Novella's challenge to the two-rate 9
pension calculation (Claim Six), the court concluded that the 10
defendants had acted arbitrarily and capriciously 12 by using two 11

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13
different rates to calculate Novella's pension because "their 1
decision was based on an interpretation of the Westchester Plan 2
that is inconsistent with the plain words of that Plan." Id. at 3
*3, 2004 U.S. Dist. LEXIS 15152, at *8. Citing sections 3.03 and 4
3.10 of the Plan, the court reasoned that the "Plan plainly 5
provides that a participant who collects a Disability Pension 6
should be entitled to the amount of a Regular Pension, which is 7
calculated at one benefit rate." Id., 2004 U.S. Dist. LEXIS 8
15152, at *9. The court rejected the defendants' argument that 9
they were entitled to rely on the provisions governing Deferred 10
Pensions -- section 3.07 -- because, at the time of his 11
disability, Novella was not eligible for a Regular Pension as a 12
result of his break in service. See id. at *4, 2004 U.S. Dist. 13
LEXIS 15152, at *10-*13. The court concluded instead that 14
"[n]othing in [the section of the plan] . . . describ[ing] the 15
eligibility requirements for a Disability Pension . . . states 16
that a [P]lan participant must satisfy the eligibility 17
requirements for a Regular Pension . . . in order to collect a 18
Disability Pension." Id., 2004 U.S. Dist. LEXIS 15152, at *12. 19
The court explained that section 3.10's "use of the word 20
'eligible' in the phrase 'the Regular Pension amount for which 21
the Employee would have been eligible,' . . . refer[red] to a 22
'Regular Pension amount,' rather than simply to a 'Regular 23
Pension.'" Id. (emphasis in Novella I) (quoting the Plan). 24
The court also addressed the defendants' theory, raised 25
for the first time after commencement of this lawsuit, that 26

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14
section 3.16 of the Plan supported their decision to use two 1
different rates because it "authorizes [P]lan administrators to 2
apply multiple benefit levels when calculating the pension of a 3
[P]lan participant who has had a break in service." Id. at *5, 4
2004 U.S. Dist. LEXIS 15152, at *14, *15. The court concluded 5
that the defendants' reliance on section 3.16 was misplaced 6
because that section "does not reasonably allow [for the] 7
interpretation" urged by the defendants. Id. In sum, the court 8
rejected each of the defendants' arguments, concluding that the 9
defendants were not entitled under the terms of the Plan to use 10
two different rates to calculate Novella's Disability Pension. 11
Having granted Novella's motion on the basis of his 12
challenge to the two-rate calculation, the district court 13
"dismissed as moot" Novella's other claims regarding the amount 14
of his Disability Pension (Claims Three, Four, Five, and Seven), 15
which were argued "in the alternative," and were "premised on the 16
assumption that the terms of the . . . Plan support [the] 17
defendants' decision." Id. at *2, 2004 U.S. Dist. LEXIS 15152, 18
at *6. Although the district court granted summary judgment to 19
Novella on the merits of Claim Six, it did not award final relief 20
at that time. 21
Following the district court's decision in Novella's 22
favor on his individual claims, Novella moved for class 23
certification under Rules 23(b)(1) and (2) of the Federal Rules 24
of Civil Procedure, seeking certification of a class to include 25
recipients of various types of pensions calculated using two 26

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13 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-cv-
2192, 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
rates, or, in the alternative, a narrower class of disability 1
pensioners injured by the same practice. 13 The district court 2
first determined that the only class for which Novella 3
potentially could serve as class representative was the "more 4
limited class of Disability Pensioners" affected by the 5
defendants' practice of applying section 3.07 of the Plan -- 6
which pertains to Deferred Pensions and permits the use of 7
multiple per-credit rates -- to Disability Pensions. Novella v. 8
Westchester County, N.Y. Carpenters' Pension Fund (Novella II), 9
No. 02-cv-2192, 2004 WL 3035405, at *4-*5, 2004 U.S. Dist. LEXIS 10
26149, at *14 (S.D.N.Y. Dec. 29, 2004). Turning to the 11
requirements of Rule 23(a), the district court concluded that the 12
commonality, typicality, and adequacy-of-representation prongs 13
were met, but that an evidentiary hearing was necessary to 14
determine whether the numerosity prong was satisfied. Id. at *6- 15
*7, 2004 U.S. Dist. LEXIS 26149, at *16-*22. And, although the 16
court had not yet decided whether Novella could satisfy Rule 17
23(a), it concluded that, should the class be numerous enough to 18
satisfy Rule 23(a), "the class action [could] be maintained under 19
Rule 23(b)(1)" because "[r]eformation of [the] defendants' 20

-- 15 of 48 --

14 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
practice in calculating these Disability Pensions will result in 1
pensions amounts being due to [all] these class members" -- that 2
is, "Plan-wide relief." Id. at *8, 2004 U.S. Dist. LEXIS 26149, 3
at *23, *24. 4
On August 2, 2006, after conducting the evidentiary 5
hearing, the district court certified the class of Disability 6
Pension recipients. See Novella v. Westchester County, N.Y. 7
Carpenters' Pension Fund (Novella III), 443 F. Supp. 2d 540, 542- 8
43 (S.D.N.Y. 2006). The court concluded that the proposed class 9
of twenty-four "disability pensioners whose pensions were 10
calculated using more than one rate due to a break in service" 11
met the numerosity requirement of Rule 23(a)(1). 14 Id. at 544. 12
The court's determination turned on its view of the event 13
necessary to start the running of the six-year statute of 14
limitations for an ERISA claim. The defendants had argued that 15
the statute of limitations applicable to each class member's 16
claim accrued as soon as the putative class member's pension was 17
calculated, and that only eight of the pensioners had begun 18
receiving pensions within six years before Novella filed his 19

-- 16 of 48 --

17
complaint. Id. Novella asserted to the contrary that the court 1
should adopt a continuing-violation approach to the statute of 2
limitations, under which each month's pension check would begin a 3
new six-year limitations period. Id. at 545. The district court 4
chose a third alternative, concluding that 5
[t]he relevant date for fixing the accrual of 6
[the putative class members'] claim[s] is 7
when a plaintiff was put on notice that the 8
defendants believed the method used to 9
calculate his disability pension was correct. 10
Thus, the claim does not begin to run until a 11
prospective class member inquires about the 12
calculation of his benefits and the Plan 13
rejects his claim that the benefits were 14
miscalculated. 15
Id. (emphasis added). 16
Applying this rule, the court found Novella's claim 17
timely. Id. With regard to the other putative class members, 18
the court determined that, "[b]ecause the defendants ha[d] 19
presented no evidence that they confirmed the correctness of the 20
dual-rate benefits calculation[s] more than six years before the 21
filing of this lawsuit, th[e] court [could not] find [that] the 22
statute of limitations ha[d] run on the claims of any of the 24 23
proposed class members." Id. at 546. The court therefore 24
concluded that the class consisted of twenty-four disability 25
pensioners with timely claims and therefore was sufficiently 26
large to satisfy Rule 23, and certified it. See id. at 546-48. 27
After the class was certified, both parties again moved 28
for summary judgment, this time to resolve the class-action 29

-- 17 of 48 --

15 The case was reassigned to Judge Jones in October 2006,
after Chief Judge Mukasey retired.
18
claims. The district court (Barbara S. Jones, Judge 15 ) referred 1
the motions to a magistrate judge for a report and 2
recommendation. On September 10, 2007, Magistrate Judge James C. 3
Francis IV issued a Report & Recommendation (the "R&R") 4
recommending that the district court grant the plaintiff's motion 5
and deny the defendants'. See Novella v. Westchester County, 6
N.Y. Carpenters' Pension Fund (Novella IV), No. 02-cv-2192, 2007 7
WL 2582171, at *1, 2007 U.S. Dist. LEXIS 66235, at *2 (S.D.N.Y. 8
Sept. 10, 2007). 9
The R&R first addressed the defendants' motion, in 10
which the defendants "renew[ed] their argument that fifteen of 11
the pensioners[' claims] are time-barred." Id. at *2, 2007 U.S. 12
Dist. LEXIS 66235, at *5. As a preliminary matter, the 13
magistrate judge construed the motion for summary judgment as "an 14
untimely application for reconsideration" of the district court's 15
ruling in Novella III determining the accrual of the statute of 16
limitations and certifying the class. Id. The magistrate judge 17
further concluded that "[e]ven if the defendants' motion were 18
timely, there is no basis for reconsideration," id., 2007 U.S. 19
Dist. LEXIS 66235, at *7, because "[t]he law of the case doctrine 20
requires a court to adhere to its own decision at an earlier 21
stage of the litigation" absent "cogent or compelling reasons not 22
to," id., 2007 U.S. Dist. LEXIS 66235, at *8 (internal quotation 23
marks omitted), and the defendants had not shown that they would 24

-- 18 of 48 --

19
suffer any "injustice" if the court adhered to then-Chief Judge 1
Mukasey's prior decisions, id. at *3, 2007 U.S. Dist. LEXIS 2
66235, at *10. The magistrate judge rejected the defendants' 3
argument that Novella III would "'wreak havoc [on] Taft-Hartley 4
Funds, such as [the] defendant [Fund], which rely on actuarial 5
soundness for their very continued existence.'" Id. (quoting 6
Defs.' Mem. of Law in Support of Summ. J. 9). Finally, the 7
magistrate judge refused to credit the defendants' contention 8
that the class members' claims were not tolled by the filing of 9
Novella's suit because, based on the holding of Novella III, 10
"'their individual claims never accrued in the first instance.'" 11
Id. at *4, 2007 U.S. Dist. LEXIS 66235, at *11 (quoting Defs.' 12
Mem. of Law in Support of Summ. J. 11). In the magistrate 13
judge's view, the absent class members' claims accrued "once Mr. 14
Novella filed his complaint challenging the Fund's practice of 15
applying two benefit rates." Id., 2007 U.S. Dist. LEXIS 66235, 16
at *12. 17
The magistrate judge then turned to Novella's motion 18
for summary judgment on behalf of the class, agreeing with 19
Novella that the defendants' argument denying liability for the 20
class members' claims was "based exclusively on the theory of 21
accrual that Judge Mukasey previously rejected." Id. at *5, 2007 22
U.S. Dist. LEXIS 66235, at *15. The magistrate judge therefore 23
recommended granting summary judgment to the class "on the issue 24
of liability . . . with respect to the entire plaintiff class." 25
Id. With regard to Novella's request for prejudgment interest 26

-- 19 of 48 --

20
for himself and for the class members, the magistrate judge 1
decided that such an award was "appropriate." Id. at *6, 2007 2
U.S. Dist. LEXIS 66235, at *18. Analogizing Novella's and the 3
class's claims to those based upon latent injuries, he set the 4
interest accrual date, for Novella, as "the date that the Fund 5
denied his claim," id. at *7, 2007 U.S. Dist. LEXIS 66235, at 6
*20, and, for the absent class members, as "the date of the 7
filing of the complaint," id. Lastly, the magistrate judge 8
recommended setting the interest rate at "the Fund's assumed 9
return of seven and one-half percent," which the magistrate judge 10
found to be more equitable than either New York's statutory rate 11
of 9 percent or the federal post-judgment rate. Id. at *8, 2007 12
U.S. Dist. LEXIS 66235, at *21-*22. 13
Over both parties' objections and on de novo review, 14
see Fed. R. Civ. P. 72(b)(3), the district court (Barbara S. 15
Jones, Judge) adopted the R&R in its entirety. See Novella v. 16
Westchester County, N.Y. Carpenters' Pension Fund (Novella V), 17
No. 02-cv-2192, 2008 WL 1743342, at *1, 2008 U.S. Dist. LEXIS 18
108341, at *2-*3 (S.D.N.Y. Jan. 14, 2008). 19

-- 20 of 48 --

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), 09-
3826(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
The parties each appeal. 16 The defendants appeal from 1
the summary judgment in favor of Novella individually, from the 2
certification of the class, from the summary judgment in favor of 3
the class, and from the awards of prejudgment interest to Novella 4
and the class members. Novella challenges the district court's 5
refusal to certify a broader class and its decision to award 6
prejudgment interest to the class members only from the date that 7
the complaint was filed. 8
DISCUSSION 9
I. Interpretation of the Plan 10
A. Standard of Review 11
"We review de novo a district court's ruling on cross- 12
motions for summary judgment, in each case construing the 13
evidence in the light most favorable to the non-moving party." 14
Fund for Animals v. Kempthorne, 538 F.3d 124, 131 (2d Cir. 2008) 15

-- 21 of 48 --

22
(internal quotation marks omitted). "Summary judgment is 1
appropriate where there exists no genuine issue of material fact 2
and, based on the undisputed facts, the moving party is entitled 3
to judgment as a matter of law." O & G Indus., Inc. v. Nat'l 4
R.R. Passenger Corp., 537 F.3d 153, 159 (2d Cir. 2008) (brackets 5
and internal quotation marks omitted), cert. denied, 129 S. Ct. 6
2043 (2009); see also Fed. R. Civ. P. 56(a) ("The court shall 7
grant summary judgment if the movant shows that there is no 8
genuine dispute as to any material fact and the movant is 9
entitled to judgment as a matter of law."). 10
"ERISA does not itself prescribe the standard of 11
review [by district courts] for challenges to benefit eligibility 12
determinations." Celardo v. GNY Auto. Dealers Health & Welfare 13
Trust, 318 F.3d 142, 145 (2d Cir. 2003). The Supreme Court has 14
instructed that "plans investing the administrator with broad 15
discretionary authority to determine eligibility are reviewed 16
under the arbitrary and capricious standard." Id. (citing 17
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). 18
Otherwise, courts review plan administrators' determinations de 19
novo. See Mario v. P & C Food Mkts., Inc., 313 F.3d 758, 763 (2d 20
Cir. 2002) (citing Firestone Tire, 489 U.S. at 115). 21
When the arbitrary-and-capricious standard applies, 22
"[a] court may overturn a plan administrator's decision . . . 23
only if the decision was without reason, unsupported by 24
substantial evidence[,] or erroneous as a matter of law." 25
Celardo, 318 F.3d at 146 (internal quotation marks omitted). 26

-- 22 of 48 --

23
"Where both the trustees of [an ERISA plan] and a rejected 1
applicant offer rational, though conflicting, interpretations of 2
plan provisions, the trustees' interpretation must be allowed to 3
control." Miles v. N.Y. State Teamsters Conference Pension & 4
Ret. Fund Emp. Pension Benefit Plan, 698 F.2d 593, 601 (2d Cir.), 5
cert. denied, 464 U.S. 829 (1983). 6
Here, the district court did not decide which of the 7
two standards of review should apply, because it concluded that 8
the defendants' interpretation of the Plan could not be sustained 9
under either standard. However, in their briefing to this Court, 10
the parties appear to agree that the arbitrary-and-capricious 11
standard applies in this case. See Defs.-Appellants' Br. 17 12
[hereinafter Appellants' Br.]; Pl.-Appellee's Br. 49, 56 13
[hereinafter Appellee's Br.]. We therefore address the 14
defendants' interpretation of the Plan only under that 15
deferential standard, although, like the district court, we think 16
that the outcome under the other, less deferential option -- de 17
novo review -- would be no different. 18
B. The Merits 19
The question before us is whether the defendants acted 20
arbitrarily and capriciously in interpreting the Plan to permit 21
them to calculate Disability Pensions using two different per- 22
credit rates if the pensioner had a break in service. The 23
district court held that doing so was arbitrary and capricious 24
because "[n]othing in the provisions of the [Plan provides] that 25
a Disability Pension may be calculated using two different 26

-- 23 of 48 --

24
benefit rates when a participant has had a break in service." 1
Novella I, 2004 WL 1752820, at *3, 2004 U.S. Dist. LEXIS 15152, 2
at *8-*9. We agree. 3
Disability Pensions are governed by section 3.10 of the 4
Plan, which provides in relevant part that "[t]he Disability 5
Pension amount shall be equal to the Regular Pension amount for 6
which the Employee would have been eligible if he had been age 65 7
when he became disabled if the Participant had 10 or more units 8
of credit at the time of his disability." J.A. 153. Section 9
3.03 sets forth the means of calculating the Regular Pension 10
amount. It authorizes calculation of that amount by reference to 11
the number of credits a pensioner earned during "the period 12
during which the Employer is obligated . . . to contribute to the 13
Fund" on behalf of the pensioner. See id. at 147, 151. The 14
defendants offer four arguments in support of their contentions 15
that this Plan language permits a two-rate benefit calculation 16
for recipients of Disability Pensions, and that the district 17
court erred in concluding to the contrary. 18
First, the defendants assert that the Trustees awarded 19
Novella the full benefit amount to which he was entitled because, 20
although Novella was only sixty-one years old at the time of his 21
disability, they treated him as if he were sixty-five years old 22
when he became disabled as required by section 3.10, the Plan 23
section governing Disability Pensions. They did not apply the 24
age-based reduction that would otherwise have been permissible 25
under section 3.05, which is entitled "Early Retirement Pension - 26

-- 24 of 48 --

17 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
- Amount." 17 Id. at 152. The defendants contend that they 1
therefore complied with section 3.10's requirements. 2
Although it is correct that, had Novella received an 3
Early Retirement Pension, the pension amount would have been 4
reduced to reflect his age, the argument is irrelevant. 5
Throughout this lengthy dispute, Novella has never contended that 6
his pension was reduced because of his age at retirement, nor has 7
any party argued that he should have been awarded an Early 8
Retirement Pension instead of a Disability Pension. Novella's 9
grievance, and these judicial proceedings, have focused entirely 10
on whether the defendants' use of two different rates to 11
calculate Novella's Disability Pension was improper. 12
Second, under section 3.02 of the Plan, to qualify for 13
a Regular Pension, a pensioner's employment -- and consequently, 14
employer contributions on his behalf -- must have been "more or 15
less continuous to his retirement date." Id. at 151. The Plan's 16
provisions explain that, in this context, "more or less 17
continuous" means that there must be "no period of three or more 18
consecutive years without [his performing] at least" a small, 19
specified, amount of covered work. Id. The defendants argue 20
that because Novella's employment was not "more or less 21

-- 25 of 48 --

18 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
continuous to his retirement date," id.,18 Novella "was not . . . 1
eligible for the single accrual rate Regular Pension." 2
Appellants' Br. 22. 3
The defendants may be correct that Novella is 4
ineligible for a Regular Pension, but any such eligibility is not 5
material to this dispute in light of the fact that he was awarded 6
a Disability Pension. We agree with the district court that 7
nothing in the Plan provisions governing Disability Pensions 8
requires that a disability pensioner actually be eligible for 9
another type of pension as a prerequisite to receipt of his 10
Disability Pension. See Novella I, 2004 WL 1752820, at *3, 2004 11
U.S. Dist. LEXIS 15152, at *8-*9. Section 3.10's reference to 12
"the Regular Pension amount for which [Novella] would have been 13
eligible if he had been age 65 when he became disabled," J.A. 153 14
(emphases added), establishes not an eligibility requirement for 15
a Disability Pension but a reference point for determining the 16
proper amount of such a pension. 17
Moreover, were we to endorse a reading of the Plan 18
requiring a Disability Pension recipient also to be eligible for 19
a Regular Pension, we would render the Plan's inclusion of a 20
Disability Pension meaningless, inasmuch as any person who 21
qualified for a Disability Pension would also be eligible for a 22
Regular Pension. It would appear likely that the Plan's drafters 23
established both Disability Pensions and Regular Pensions -- and 24

-- 26 of 48 --

27
assigned different eligibility requirements to each -- because 1
they contemplated that Plan participants might become disabled 2
before they become eligible for a Regular Pension, and did not 3
want to bar such participants from receiving pension benefits. 4
Third, the defendants contend that because Novella did 5
not meet the eligibility requirements for a Regular Pension due 6
to his failure to perform covered work from 1982 to 1986, his 7
pension benefit amount was "calculated pursuant to the only other 8
methodology [i.e., section 3.07, which governs Deferred Pensions] 9
for calculating a pension where there was a break in service." 10
Appellants' Br. 22. Section 3.07 states that when a pensioner 11
has a break in service that lasts at least three years, his 12
pension shall be calculated using two rates: compensation for all 13
credits earned before the break in service is "based on the 14
benefit level that was in effect on the last day [the pensioner 15
w]orked prior to" the break, while "the benefit amount for [any] 16
additional units of credit" earned after a three-year break in 17
service is "based on the benefit level in effect when the 18
additional units were earned." J.A. 152. The defendants argue 19
that because Novella's break in covered employment spanned more 20
than three years, they are permitted to "us[e] two separate 21
benefit accrual rates." Appellant's Br. 21. 22
The defendants' argument is fatally flawed. The quoted 23
section, Section 3.07, explicitly applies to Deferred Pensions; 24
however, Novella was awarded a Disability Pension, not a Deferred 25
Pension. Nothing in the Plan permits the defendants to apply a 26

-- 27 of 48 --

28
section controlling one specific type of pension to a pension of 1
a different kind. In other words, the fact that the Disability 2
Pension provisions do not include language permitting a two-rate 3
calculation does not entitle the defendants to search for 4
authorization to do so elsewhere in the Plan. Indeed -- 5
following both the presumption of consistent usage and meaningful 6
variation, and the textual canon of expressio unius est exclusio 7
alterius, see Cordiano v. Metacon Gun Club, Inc., 575 F.3d 199, 8
221 (2d Cir. 2009) -- the presence of that provision applicable 9
to one type of pension makes clear that the omission of that 10
provision in the part of the Plan governing another type of plan 11
was deliberate. To permit the defendants to pick and choose 12
language from disparate sections of the Plan would subvert the 13
intention of the Plan's drafters and the reasonable expectations 14
of Plan participants. 15
Finally, the defendants argue that section 3.16, which 16
is entitled "Application to Benefit Increases," J.A. 156, 17
justifies a two-rate method for calculating Disability Pensions. 18
That section provides: "The pension to which a Participant is 19
entitled shall be determined under the terms of the Plan and the 20
benefit level as in effect at the time the Participant last 21
separates from Covered Employment." Id. The Plan defines a 22
"last separat[ion] from Covered Employment" as the "last day of 23
[covered] Work which is followed by three consecutive calendar 24
years of less than 1,000 hours of Covered Employment in each 25
year." Id. The defendants argue that a person can "last 26

-- 28 of 48 --

29
separate" from employment more than once, and that Novella did so 1
in 1981 and again in 1995, thus permitting the defendants to 2
calculate a pension using multiple benefit levels. 3
It is apparent from the record, however, that the 4
defendants did not use Section 3.16 to calculate Novella's 5
pension in the first instance. As the district court noted, the 6
defendants identified this section as justification for their 7
calculation of Novella's pension "for the first time in 8
litigation." Novella I, 2004 WL 1752820, at *5, 2004 U.S. Dist. 9
LEXIS 15152, at *13. They did not cite this section of the Plan 10
in their letters to Novella explaining the calculation of his 11
benefits. See J.A. 183-94 (letters between Novella and the 12
Fund). Nor did they indicate to Novella at any point during his 13
administrative appeals that their two-rate calculation relied in 14
any way on section 3.16. To permit them to assert this newly 15
coined rationale in litigation despite their failure to rely upon 16
it during the internal Fund proceedings that preceded this 17
lawsuit would subvert some of the chief purposes of ERISA 18
exhaustion: to "'uphold Congress'[s] desire that ERISA trustees 19
be responsible for their actions, not the federal courts,'" and 20
to "'provide a sufficiently clear record of administrative 21
action'" should litigation ensue. Paese v. Hartford Life & 22
Accident Ins. Co., 449 F.3d 435, 445 (2d Cir. 2006) (quoting 23
Kennedy v. Empire Blue Cross & Blue Shield, 989 F.2d 588, 594 (2d 24
Cir. 1993)). It would also clearly be inequitable. See id. at 25
447-48 (equitably estopping the defendant from arguing that the 26

-- 29 of 48 --

19 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
plaintiff had failed to exhaust an issue because a letter from 1
the defendant had misled the plaintiff into thinking that he had 2
no other administrative remedies to pursue). 19
3
Because we agree with the district court's 4
determination that the defendants' two-rate calculation of 5
Novella's disability pension was arbitrary and capricious, we 6
affirm its entry of summary judgment in favor of Novella 7
individually. However, for the reasons discussed below, we 8
nonetheless decline to affirm the summary judgment in favor of 9
the plaintiff class. 10
II. Statute of Limitations and Class Certification 11
A. Standards of Review 12
We review the question of the application of the 13
relevant statute of limitations -- as we do all questions of 14
law -- de novo. United States v. Domino Sugar Corp., 349 F.3d 15
84, 86 (2d Cir. 2003). However, "[a] district court's 16
certification of a class under Rule 23 is reviewed for abuse of 17
discretion, provided that . . . the court applied the proper 18
legal standard[]." Brown v. Kelly, 609 F.3d 467, 475 (2d Cir. 19

-- 30 of 48 --

31
2010). This standard "applies both to the district court's 1
ultimate decision on class certification and to its rulings as to 2
the individual Rule 23 requirements." Id. 3
B. The Merits 4
1. Accrual of the Statute of Limitations. The Federal 5
Rules of Civil Procedure permit maintenance of a class action 6
only if the "class is so numerous that joinder of all members is 7
impracticable." Fed. R. Civ. P. 23(a)(1). This "numerosity" 8
requirement "does not mandate that joinder of all parties be 9
impossible -- only that the difficulty or inconvenience of 10
joining all members of the class make use of the class action 11
appropriate." Cent. States Se. & Sw. Areas Health & Welfare Fund 12
v. Merck-Medco Managed Care, L.L.C., 504 F.3d 229, 244-45 (2d 13
Cir. 2007). "Determination of practicability depends on all the 14
circumstances surrounding a case, not on mere numbers." Robidoux 15
v. Celani, 987 F.2d 931, 936 (2d Cir. 1993). Nonetheless, 16
several district courts in our Circuit have suggested that courts 17
are likely to conclude that the "numerosity" requirement is 18
satisfied "when the class comprises 40 or more members" and 19
unlikely to be satisfied "when the class comprises 21 or fewer." 20
Ansari v. N.Y. Univ., 179 F.R.D. 112, 114 (S.D.N.Y. 1998). 21
In this case, the question of whether the certified 22
class was sufficiently large to satisfy Rule 23 hinges on whether 23
the statute of limitations for each class member's claim began to 24
run upon receipt of his first pension payment, as the defendants 25
contend, or upon a class member's first inquiry to the Fund 26

-- 31 of 48 --

20 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
regarding the amount of his benefits and the Fund's rejection of 1
his request that his pension be calculated using one rate, as the 2
district court concluded and as Novella urges on appeal. 3
The parties agree that a six-year statute of 4
limitations governs ERISA claims and that "[t]he relevant date 5
for fixing the accrual of a miscalculation claim is when a 6
plaintiff was put on notice that the defendants believed the 7
method used to calculate his disability pension was correct." 8
Appellants' Br. 26 (brackets omitted) (quoting Novella III, 443 9
F. Supp. 2d at 545); see also id. at 27 ("The Fund agrees with 10
the . . . sentence quoted above. It makes perfect sense for a 11
claim to accrue when the participant is put on notice that the 12
Fund 'believed the method used to calculate his disability 13
pension was correct.'"); Appellees' Br. 57 (asserting that 14
federal courts generally apply a "discovery rule" for the 15
"purposes of triggering the statute of limitations on an ERISA 16
benefit claim"). The parties dispute, however, the time at which 17
a pensioner can be considered to have been put on such notice. 18
The issue is undecided in this Circuit. 20
19

-- 32 of 48 --

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
The defendants urge us to reject the district court's 1
determination that the statute of limitations on a class member's 2
claim does "not begin to run until a prospective class member 3
inquires about the calculation of his benefits and the Plan 4
rejects his claim that the benefits were miscalculated," Novella 5
III, 443 F. Supp. 2d at 545, and the court's consequent finding 6
that the existence of twenty-four class members whose claims were 7
therefore timely meant that the class was numerous enough to meet 8
the requirement of Rule 23(a)(1) of the Federal Rules of Civil 9
Procedure. They argue that we should instead adopt a strict 10
first-payment approach under which the statute of limitations for 11
a miscalculation claim would begin to run when the pensioner 12
receives his first check. 13
In support, the defendants point to Miller v. Fortis 14
Benefits Insurance Co., 475 F.3d 516 (3d Cir. 2007), in which the 15
Third Circuit concluded that the statute of limitations on a 16
claim that benefits have been miscalculated starts to run when 17
the calculation or repudiation is both "clear and made known to 18
the beneficiary." Id. at 521-22. The Miller court observed that 19
this "ordinarily" will be "when [the beneficiary] first receives 20
his miscalculated benefit award" because "[a]t that point, the 21
beneficiary should be aware that he has been underpaid and that 22
his right to a greater award has been repudiated." Id. The 23
court explicitly "reject[ed]" the rule proposed by the plaintiff 24

-- 33 of 48 --

34
in that case, which would have required a "formal denial of 1
benefits to trigger the statute of limitations." Id. at 521. 2
The court did, however, require that a Fund's "repudiation of the 3
benefits [be] clear and [be] made known to the beneficiary" in 4
order for the limitations period to begin running. Id. at 520- 5
21 (emphasis in original). The court explained that it 6
"consider[ed] the clear repudiation concept to be useful . . . , 7
as it represents a refinement of the federal discovery rule in 8
the context of ERISA claims for benefits." Id. at 521. The 9
defendants rely on Miller to support their contention that the 10
Third Circuit has adopted a strict first-payment test for the 11
accrual of the statute of limitations in ERISA miscalculation 12
claims, and argue that we should follow suit. 13
Some other courts, however, including the district 14
court in this case, have required that an ERISA fund provide a 15
formal denial of a plaintiff's application for the adjustment of 16
benefits to trigger the running of the statute of limitations. 17
In Miele v. Pension Plan of New York State Teamsters Conference 18
Pension & Retirement Fund, 72 F. Supp. 2d 88 (E.D.N.Y. 1999), for 19
example, the court considered the argument that "a miscalculation 20
claim accrues on the date that a plaintiff is clearly and 21
unequivocally informed of the amount of his benefit." Id. at 99. 22
The court noted the "logic and appeal" of such a "bright-line 23
rule," which would be "easily enforced and would correspond 24
directly to the . . . rule that a clear and unequivocal denial of 25
benefits commences the statute of limitations period." Id. 26

-- 34 of 48 --

35
(emphasis added). But, mindful of the fact that "a 1
miscalculation generally involves an award of benefits rather 2
than a denial of benefits and thus is less likely to put a 3
plaintiff on notice of a possible claim," id., the Miele court 4
applied the rule adopted by the district court here: that "a 5
miscalculation claim does not accrue until a plaintiff 'inquires 6
about the amount of benefits and is told that those benefits were 7
correctly computed.'" Id. (brackets and ellipses omitted) 8
(quoting Kiefer v. Ceridian Corp., 976 F. Supp. 829, 843 (D. 9
Minn. 1997)). 10
Still other courts have applied a continuing-violation 11
theory to the accrual of a claim in similar circumstances. See 12
Meagher v. Int'l Ass'n of Machinists & Aerospace Workers Pension 13
Plan, 856 F.2d 1418 (9th Cir. 1988). Under this theory, each 14
payment based upon an alleged miscalculation "constitutes a fresh 15
breach by the [defendants] of their duty to administer the 16
pension plan in accordance . . . with ERISA," gives rise to "[a] 17
separate cause of action," and starts the running of a new 18
"limitations period . . . for each cause of action." Id. at 19
1423. Many courts have, however, expressly rejected this 20
approach. See, e.g., Miller, 475 F.3d at 522 (collecting Third 21
Circuit cases declining to apply a continuing-violation approach 22
to claim accrual); Edes v. Verizon Commc'ns, Inc., 417 F.3d 133, 23
139-40 (1st Cir. 2005) (rejecting a continuing-violation theory 24
where the wrongful conduct was the defendant's single 25
misclassification of plaintiffs as off-payroll employees); 26

-- 35 of 48 --

36
Pisciotta v. Teledyne Indus., 91 F.3d 1326, 1332 (9th Cir. 1996) 1
("Although the [plaintiffs] now contend that each and every time 2
that they were entitled to a reimbursement payment it constituted 3
a new and separate breach of ERISA . . . , the applicable four- 4
year statute of limitations begins to run 'when a plaintiff knows 5
or has reason to know of the injury that is the basis of the 6
action.'"); Phillips v. Alaska Hotel & Rest. Emps. Pension Fund, 7
944 F.2d 509, 520-21 (9th Cir. 1991) (declining to apply a 8
continuing-violation approach), cert. denied, 504 U.S. 911 9
(1992). 10
We do not adopt the continuing-violation theory. We 11
think that approach is appropriate in ERISA cases, as elsewhere, 12
only "where separate violations of the same type, or character, 13
are repeated over time." L.I. Head Start Child Dev. Servs., Inc. 14
v. Econ. Opportunity Comm'n of Nassau County, Inc., 558 F. Supp. 15
2d 378, 400 (E.D.N.Y. 2008). Usually, "[t]hese cases are marked 16
by repeated decision-making, of the same character, by the 17
fiduciaries." Id. But it is not as clear a fit in cases where, 18
as here, "the plaintiff['s] claims are based on a single decision 19
that results in lasting negative effects." Id. at 401; see also 20
Schultz v. Texaco, Inc., 127 F. Supp. 2d 443, 447 (S.D.N.Y. 2001) 21
("[T]he mere fact that the effects of a single, wrongful act 22
continue to be felt over a period of time does not render that 23
single, wrongful act a single 'continuing violation.'"); Miele, 24
72 F. Supp. 2d at 102 n.14 (rejecting application of the 25
continuing-violation theory of accrual because a pension fund has 26

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37
no obligation "to continually reassess claim denials or benefit 1
underpayments on a monthly basis"). 2
We also decline, however, to accept either of the 3
approaches urged by the parties. The defendants' bright-line 4
approach is too harsh in that it places the burden on the 5
pensioner -- a party less likely to have a clear understanding of 6
the terms of the pension plan and their application to his 7
case -- to confirm the correctness of his pension award 8
immediately upon the first payment of benefits, regardless of the 9
complexity of the calculations, or of the adequacy of the 10
defendants' explanation of the basis for the calculation. 11
Indeed, this case illustrates the hazards of the defendants' 12
approach. The SPD -- the document provided to all Plan 13
participants, including Novella and the plaintiff class, to 14
explain the rules of the pension plan -- is silent on the 15
underlying issue of multiple benefit calculation rates for 16
Disability Pensions. And, unlike the simple percentage 17
calculation at issue in Miller, see Miller, 475 F.3d at 522; cf. 18
Young v. Verizon's Bell Atl. Cash Balance Plan, 615 F.3d 808, 816 19
(7th Cir. 2010) (finding a claim timely because the lump-sum 20
payment the plaintiff received more than six years before was 21
"not so inconsistent with her current claim for additional 22
benefits as to serve as a clear repudiation"), cert. denied, 131 23
S. Ct. 2924 (2011), the determination of a Disability Pension 24

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21 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
award under the defendants' Plan may have required more than a 1
simple multiplication of two static numbers. 21
2
The district court's and Novella's bright-line 3
approach -- in which a limitations period does not begin to run 4
"until a prospective class member inquires about the calculation 5
of his benefits and the Plan rejects his claim," Novella III, 443 6
F. Supp. 2d at 545 -- also poses problems. Under that approach, 7
a pensioner could collect benefit checks for twenty or thirty 8
years without any obligation to inquire as to the correctness of 9
the calculations underlying the benefit payments and could still 10
thereafter assert a timely claim for miscalculation. Indeed, as 11
the defendants point out, at least one class member is long dead. 12
See Appellants' Br. 29-30. Allowing that class member's 13
survivors to pursue his claim, the defendants say, despite the 14
fact that he collected his benefits for years before passing 15
away, would undermine the purpose of a statute of limitations. 16
See, e.g., Order of R.R. Telegraphers v. Ry. Express Agency, 17
Inc., 321 U.S. 342, 348-49 (1944) ("Statutes of limitation . . . 18
in their conclusive effects are designed to promote justice by 19
preventing surprises through the revival of claims that have been 20
allowed to slumber until evidence has been lost, memories have 21
faded, and witnesses have disappeared."); Carey v. Int'l Bhd. of 22

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39
Elec. Workers Local 363 Pension Plan, 201 F.3d 44, 47 (2d Cir. 1
1999) ("Statutes of limitation serve several important policies, 2
including rapid resolution of disputes, repose for those against 3
whom a claim could be brought, and avoidance of litigation 4
involving lost evidence or distorted testimony of witnesses."). 5
To the extent that the defendants could show that the deceased 6
class member or his survivors had information available to them 7
by which they reasonably could have discovered the alleged 8
miscalculation, the district court might well agree with the 9
defendants that permitting his survivors to assert a claim more 10
than six years after receiving such information would be 11
inequitable. 12
Having rejected each party's views, we choose a third 13
approach: We conclude that notice of a miscalculation can be 14
imputed to a pensioner -- and the statute of limitations will 15
start to run -- when there is enough information available to the 16
pensioner to assure that he knows or reasonably should know of 17
the miscalculation. We think this approach best balances a 18
pension plan's legitimate interest in predictability and finality 19
with a pensioner's equally legitimate interest in having a fair 20
opportunity to challenge a miscalculation of benefits once it 21
becomes known -- or should have become known -- to him. Stated 22
another way, this case-by-case reasonableness inquiry mitigates 23
some of the harshness of the defendants' proffered approach, 24

-- 39 of 48 --

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
while better respecting the defendants' interests in finality and 1
repose than the district court's and Novella's chosen method. 22
2
We think this method is consistent with the Third 3
Circuit's reasoning in Miller, which we read to endorse not a 4
strict first-payment theory -- such as that urged by the 5
defendants -- but rather a similar reasonableness approach. 6
Indeed, in Miller, the Third Circuit appeared to contemplate that 7
its "clear repudiation" rule would vary in its application to the 8
facts of any individual case. See Miller, 475 F.3d at 521 9
(rejecting the plaintiff's "proposed application of the clear 10
repudiation rule," which would have required an explicit demand 11
and refusal, and concluding that a court should ask "when a 12
beneficiary knows or should know he has a cause of action" 13
(emphasis added)); see also Fletcher v. Comcast Comprehensive 14
Health and Welfare Plan, No. 09-cv-1272, 2011 WL 743459, at *5, 15
*3, 2011 U.S. Dist. LEXIS 18199, at , *13, *14-*15 (W.D. Pa. Feb. 16
24, 2011) (noting that "Miller . . . does not stand for the 17
proposition that every erroneously calculated benefit award 18
automatically serves as a 'clear repudiation,'" and holding that 19
"[a] reasonable finder of fact could conclude that . . . 20
[communications between the Plan and the plaintiff beneficiary] 21

-- 40 of 48 --

41
did not suffice to alert plaintiff that his benefits were being 1
repudiated"). 2
Turning to the present case: In light of the standard 3
we adopt, on the factual record before us, we are unable to 4
determine whether, and if so when, each class member had 5
information by which he knew or should have known of the 6
miscalculation. We note that, based on the foregoing discussion, 7
simply receiving a lower pension payment is not enough to put a 8
pensioner on notice of a miscalculation. Conversely, actual 9
notice to a pensioner that a double rate method was used would 10
put him on notice. Similarly, informing a pensioner of the 11
correct rate-times-units calculation, so that any difference 12
between the putative calculation and the actual amount of the 13
check would be obvious, is also probably enough. However, we 14
cannot yet tell how many of the class members' claims are timely. 15
We therefore cannot, at this stage of the proceedings, confirm 16
the district court's conclusion that the class is sufficiently 17
large to satisfy Rule 23(a)(1)'s numerosity requirement. 18
We therefore vacate the class certification and remand 19
to the district court for further factfinding regarding when each 20
plaintiff class member knew or should have known that the Fund 21
had miscalculated his Disability Pension payments, and for 22
consideration of whether there are enough class members with 23
timely claims to merit certification. We therefore also vacate 24
the summary judgment in favor of the class. 25

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42
Finally on this score, we note that the approach we 1
adopt may in some cases require a resource-intensive, claimant- 2
by-claimant inquiry to determine when a pensioner knew or 3
reasonably should have known that his benefits were 4
miscalculated. And this fact-dependent inquiry into each 5
pensioner's accrual date may in turn lessen the value, and indeed 6
the availability, of class actions in this kind of litigation. 7
However, that sort of problem is not unique to this context. 8
See, e.g., Avila v. Willits Envt'l Remediation Trust, 633 F.3d 9
828, 841-42 (9th Cir.) (concluding that material issues of fact 10
precluded summary judgment regarding whether certain class 11
members in toxic-tort class action knew or should have known of 12
their injuries), cert. denied, 2011 WL 4530474, 2011 U.S. LEXIS 13
5526 (Oct. 3, 2011); In re Brooklyn Navy Yard Asbestos Litig., 14
971 F.2d 831, 836 n.1 (2d Cir. 1992) (differentiating between 15
joint trials which are "not questioned by plaintiffs or 16
defendants" in mass tort cases from the issue of "the propriety 17
of class actions" in such cases). 18
Moreover, the fact-intensive nature of our 19
reasonableness approach could make it difficult for a potential 20
class representative to meet the typicality requirement of Fed. 21
R. Civ. P. 23(a)(3). But the case law on the effect of an 22
individualized statute-of-limitations-accrual evaluation on a 23
proposed class's ability to meet the typicality requirement, if 24
any, is sparse, see Chiang v. Veneman, 385 F.3d 256, 269 (3d. 25
Cir. 2004); Ruppert v. Alliant Energy Cash Balance Pension Plan, 26

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43
255 F.R.D. 628, 633-34 (W.D. Wis. 2009), and we decline to 1
address whether that requirement is satisfied on the record 2
before us. We note, however, the well-established rule that a 3
plaintiff must satisfy all of the requirements of Rule 23, by a 4
preponderance of the evidence, to obtain class certification, see 5
Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, 6
Inc., 546 F.3d 196, 202 (2d Cir. 2008); In re Initial Pub. 7
Offerings Sec. Litig., 471 F.3d 24, 41 (2d Cir. 2006), including 8
the numerosity and typicality requirements of Rule 23(a), see 9
Marisol A. v. Giuliani, 126 F.3d 372, 375-76 (2d Cir. 1997) 10
(citing Comer v. Cisneros, 37 F.3d 775, 796 (2d Cir. 1994)). 11
2. Novella's Cross-Appeal. We find no merit in 12
Novella's contention, asserted in his cross-appeal, that the 13
certified class was too narrow inasmuch as the district court 14
should not have limited it to persons receiving Disability 15
Pensions. 16
Novella's amended complaint asserted claims relating 17
both to the two-rate calculation for disability pensioners and to 18
the Plan's "accrued benefit" provisions. See J.A. 30-31. The 19
district court granted summary judgment to Novella on his 20
individual Disability Pension claims and did not reach the other 21
"accrued benefit" claims, but rather dismissed them as moot in 22
light of the fact that the other claims would entitle Novella to 23
no further relief. When Novella subsequently moved for class 24
certification with regard to both the Disability Pension claim 25
and the other claims, the district court certified only the 26

-- 43 of 48 --

23 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
former class because it concluded that Novella lost standing to 1
pursue the "accrued benefit" claims when he had already 2
"succeeded on an alternative theory of recovery." Novella II, 3
2004 WL 3035405, at *4, 2004 U.S. Dist. LEXIS 26149, at *13. 4
Novella asserts in his cross-appeal that the district 5
court "confused the mootness of an issue with the mootness of a 6
case," Appellee's Br. 16 (emphasis in original), and therefore 7
erred in dismissing Novella's non-Disability Pension claims as 8
"moot." We agree that the claims were not "moot" in the 9
technical sense; "it is cases rather than reasons that become 10
moot" within the meaning of Article III. 23 Air Line Pilots Ass'n 11
Int'l v. UAL Corp., 897 F.2d 1394, 1397 (7th Cir. 1990). But 12
where, as here, a litigant asserts multiple arguments in support 13
of the relief he seeks, and the court grants him complete relief 14
based upon one contention, courts also sometimes use "the word 15
'moot' . . . to refer to an issue that need not be decided in 16
light of the resolution [by the court] in the same opinion of 17
another issue." Id. It is in this sense that we understand the 18
district court to have said that some of Novella's claims were 19
"moot." 20

-- 44 of 48 --

24 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
In any event, we agree with the district court's 1
decision not to certify the broader class. It was Novella's 2
choice to proceed individually first and only later move for 3
class certification. In his briefing on his individual motion 4
for summary judgment, Novella offered his various arguments in 5
support of his motion in the alternative. See Novella I, 2004 WL 6
1752820, at *2, 2004 U.S. Dist. LEXIS 1266, at *6. The district 7
court granted Novella complete relief on one claim and, in the 8
exercise of its discretion, did not decide the merits of the 9
others. It is the latter, unresolved claims that relate to the 10
broader class for which Novella later sought certification. But 11
by the time Novella moved for class certification, his individual 12
claims no longer matched the claims of the broader purported 13
class, and he therefore was no longer an appropriate 14
representative of that broader class. 24 Stated otherwise, 15
Novella's interest as a litigant would be to pursue the claim 16
based on the Disability Pensions, while some class members' 17
interest would be to pursue the claims based on the Plan's 18
"accrued benefit" provisions instead. Novella therefore would 19
not satisfy the typicality or adequacy-of-representation prongs 20
of Rule 23(a). 21

-- 45 of 48 --

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
III. Prejudgment Interest 1
A. Standard of Review 2
"The decision whether to grant prejudgment interest and 3
the rate used if such interest is granted are matters confided to 4
the district court's broad discretion, and will not be overturned 5
on appeal absent an abuse of discretion." Endico Potatoes, Inc. 6
v. CIT Group/Factoring, Inc., 67 F.3d 1063, 1071-72 (2d Cir. 7
1995) (internal quotation marks omitted); see also Slupinski v. 8
First Unum Life Ins. Co., 554 F.3d 38, 53-55 (2d Cir. 2009); 9
Commercial Union Assurance Co. v. Milken, 17 F.3d 608, 613-15 (2d 10
Cir.), cert. denied, 513 U.S. 873 (1994). 11
B. The Merits 12
The district court awarded prejudgment interest to both 13
Novella -- beginning on the date the Fund denied his claim -- and 14
to the individual class members -- beginning on the date Novella 15
first asserted the class claims. We find no abuse of discretion 16
in the district court's award of prejudgment interest to Novella 17
individually or in its selection of the appropriate rate. 25 We 18
nonetheless vacate the award of prejudgment interest to the class 19
in light of our determination that we must decertify the class 20
and vacate the judgment in its favor. 21
The defendants argue that the district court's award of 22
prejudgment interest to Novella amounts to a "windfall" because 23

-- 46 of 48 --

47
such an award would compensate him without regard to his break in 1
service, even though his employers did not pay contributions to 2
the Fund during that time. But this argument essentially 3
restates the defendants' arguments on the merits of the two-rate 4
calculation, which we have rejected. To the extent that the 5
payment of prejudgment interest creates a financial burden on the 6
Fund, that is a result of the Fund's misinterpretation of its own 7
Plan. It does not render the district court's conclusion that 8
prejudgment interest is necessary to fully compensate Novella an 9
abuse of discretion. 10
We similarly conclude that the district court's 11
determination that the proper interest rate is 7.5 percent -- the 12
Fund's assumed rate of return -- was within its discretion. In 13
light of the other options before the court, this rate seems to 14
us to be entirely consistent with the principle that plaintiffs 15
should be "made whole" and that defendants should "not profit by 16
their failure to comply with their ERISA obligations." Algie v. 17
RCA Global Commc'ns, Inc., 891 F. Supp. 875, 899 (S.D.N.Y. 1994), 18
aff'd, 60 F.3d 956 (2d Cir. 1995); see also Slupinski, 554 F.3d 19
at 54 (quoting Algie, 891 F. Supp. at 899). 20
We find no merit in Novella's argument that the 21
district court should have awarded prejudgment interest from the 22
date of the first miscalculated check. In his R&R, the 23
magistrate judge acknowledged three possible dates for the 24
accrual of prejudgment interest: "the date of each underpayment, 25
the date that a plaintiff asserted a claim, or the date that the 26

-- 47 of 48 --

48
Fund denied the claim." Novella IV, 2007 WL 2582171, at *6, 2007 1
U.S. Dist. LEXIS 66235, at *18. The R&R recommended -- and the 2
district court concluded -- that it would, in this case, be 3
"anomalous to calculate interest from the date of injury, since 4
it was within the power of the plaintiffs to assert a claim of 5
underpayment at any time and thus trigger review by the Fund." 6
Id., 2007 U.S. Dist. LEXIS 66235, at *19. We have been given no 7
reason to conclude that the district court abused its discretion 8
in this regard. 9
CONCLUSION 10
For the foregoing reasons, we affirm the district 11
court's judgment in favor of Novella on his individual ERISA 12
claims and its award to Novella of prejudgment interest. We 13
vacate the district court's certification of the class of 14
Disability Pension recipients, its grant of judgment on the 15
merits in favor of the class, and its award of prejudgment 16
interest to the class members. We remand the case to the 17
district court for further proceedings. 18
Each party shall bear its own costs. 19

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