                     RECOMMENDED FOR FULL-TEXT PUBLICATION
                         Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                File Name: 13a0084p.06

              UNITED STATES COURT OF APPEALS
                            FOR THE SIXTH CIRCUIT
                              _________________


                                                   X
                                                    -
 WILLIAM J. SCHUMACHER, on behalf of

           Plaintiff-Appellee/Cross-Appellant, --
 himself and all persons similarly situated,

                                                    -
                                                        Nos. 12-3061/3063

                                                    ,
                                                     >
                                                    -
            v.

                                                    -
                                                    -
 AK STEEL CORPORATION RETIREMENT
                                                    -
 ACCUMULATION PENSION PLAN and AK
                                                    -
                                                    -
 STEEL CORPORATION BENEFIT PLANS

      Defendants-Appellants/Cross-Appellees. -
 ADMINISTRATIVE COMMITTEE,
                                                    -
                                                    -
                                                   N
                     Appeal from the United States District Court
                    for the Southern District of Ohio at Cincinnati.
               No. 1:09-cv-794—Sandra S. Beckwith, District Judge.
                             Argued: October 10, 2012
                       Decided and Filed: March 28, 2013
   Before: BATCHELDER, Chief Judge; KEITH and MARTIN, Circuit Judges.

                                _________________

                                    COUNSEL
ARGUED: Andrew R. Kaake, FROST BROWN TODD LLC, Cincinnati, Ohio, for
Appellants/Cross-Appellees. Matthew T. Hurst, SUSMAN, HEFFNER & HURST LLP,
Chicago, Illinois, for Appellee/Cross-Appellant. ON BRIEF: Andrew R. Kaake,
George E. Yund, FROST BROWN TODD LLC, Cincinnati, Ohio, for Appellants/Cross-
Appellees. Matthew T. Hurst, SUSMAN, HEFFNER & HURST LLP, Chicago, Illinois,
for Appellee/Cross-Appellant.




                                          1
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                             Page 2


                                 _________________

                                      OPINION
                                 _________________

       DAMON J. KEITH, Circuit Judge. This class action case involves AK Steel’s
employees’ Employee Retirement Income Security Act (ERISA) claims for a “whipsaw”
calculation of their benefits from an AK Steel pension plan in which they participated
before terminating their employment. This case is related to the case of West v. AK Steel
Corp. Retirement Accumulation Plan, 484 F.3d 395 (6th Cir. 2007). The Class was
originally involved in the West litigation and included identical claims against the same
defendants. The Class was excluded from the West litigation due to the class members’
execution of a severance agreement and release that each of them signed during the West
litigation. The district court ruled in favor of the Class, awarding partial summary
judgment and an award of pre-judgment interest.

       Apellants appeal three district court orders: 1) denial of a motion to dismiss;
2) grant of Schumacher’s motion for class certification; and 3) grant of Schumacher’s
motion for partial summary judgment on liability. The Class cross-appeals the district
court’s decision to award pre-judgment interest at a rate of 0.12%.

       For the reasons that follow, we REVERSE the district court’s award of pre-
judgment interest and REMAND for further proceedings consistent with this opinion.
We AFFIRM the district court’s judgment in all other respects.

                            FACTUAL BACKGROUND

       Plaintiff-Appellee Cross-Appellant William Schumacher brought this case on
behalf of himself and all persons similarly situated (collectively referred to as the
“Class”). The Class in this case is a group of ninety-two former employees of AK Steel
Corporation (“AK Steel”) who participated in the Retirement Accumulation Pension
Plan (“Plan” or “RAPP”). They each elected to receive a lump-sum payment of their
retirement benefits under the Plan which is administered by AK Steel Corporation
Benefit Plans Administrative Committee (“Administrative Committee”). They allege that
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                               Page 3


the Defendants failed to properly calculate their payment. Their claims are essentially
identical to the claims that were presented in West v. AK Steel Corp. Retirement
Accumulation Pension Plan, 484 F.3d 395 (6th Cir. 2007), where this Court affirmed the
district court’s decision that the Plan failed to utilize the so-called “whipsaw” formula
to properly calculate lump-sum payments. Plaintiffs in this case were initially included
within the definition of the class that was certified in West, but were ultimately excluded
due to release agreements they signed after the West litigation began.

       West Litigation

       After entry of the West class certification order, the Defendants brought to the
attention of the district court that AK Steel had undertaken layoffs in the fall of
2003 after the litigation began, and had offered severance packages to some 300
employees. Ninety-two of the West class members accepted AK Steel’s offer and
executed severance agreements that generally included a release of “all claims” against
AK Steel and its “related entities.” The West Defendants moved for summary judgment
against these ninety-two individuals. Alternatively, Defendants argued these individuals
should be excluded from the already-certified class. Out of an abundance of caution, the
district court also excluded the ninety-two individuals from the West class.

       The West plaintiffs ultimately prevailed on the merits of their case and were
awarded over $37 million in additional benefits under the whipsaw calculation, in
addition to pre-judgment interest at the statutory post-judgment rate under 28 U.S.C.
§ 1961(a). At the time of judgment, the rate was 4.7%, which resulted in over $9 million
in pre-judgment interest. We affirmed the district court’s holdings.

       Schumacher Litigation

       The complaint in the present case was filed on October 29, 2009, on behalf of a
class of all participants in the Plan seeking “whipsaw” benefits who had been excluded
from the West class. They received lump-sum payments between February 1, 1996 and
August 17, 2006, and were previously excluded from other litigation due to their
Nos. 12-3061/3063     Schumacher v. AK Steel, et al.                                Page 4


execution of a severance agreement and release. Therefore, some of the following facts
occurred during the pendency of the West litigation.

       The layoffs of the ninety-two plaintiffs in the present case started in the midst of
the West litigation. The Human Resources Managers (“HR”) notified the plaintiffs that
they were being terminated. The employees were not told of the ongoing West litigation
and neither was HR. HR followed a script when requesting the signatures. During the
meeting with HR, employees were told that they would “receive information concerning
pension benefits in the mail approximately 60–90 days following termination.”

       The agreements did not mention pension benefits, the Plan, the administrative
committee, or ERISA. Paragraph 9 of each agreement states:

       You waive and release and forever discharge, on behalf of yourself and
       your heirs, representatives and assigns, AK Steel Holding Corporation,
       AK Steel Corporation and its predecessors, and past, current and future,
       subsidiaries, related entities, their officers, directors, shareholders,
       agents, employees, successors, or assigns, from any and all claims,
       causes of action, and rights of recovery of any kind or nature, including
       without limitation back or front pay or benefits, damages of any sort,
       debts, liabilities, and contract rights, and any costs, fees, or other
       expenses or attorneys’ fees incurred in law or in equity, whether known
       or unknown. This waiver, release and discharge also includes but is not
       limited to any claims, whether known or unknown (including those
       arising out of or relating to your employment with the Company and/or
       the separation of your employment with the Company) for
       discrimination, slander, libel, damage to reputation, emotional distress,
       attorney fees, compensatory damages, punitive damages, tort damages,
       breach of contract, quasi-contract, promissory estoppel, any violation of
       federal, state, local, statutory or common law, including but not limited
       to the Age Discrimination in Employment Act of 1967, the Older
       Workers’ Benefit Protection Act, Title VII of the Civil Rights Act of
       1964, the Family and Medical Leave Act, and the Americans with
       Disabilities Act. However, you do not waive, nor shall this Agreement
       be construed to waive, any right which is not subject to waiver as a
       matter of law. . . . However, [you do not waive any rights or claims you
       may have under the federal Age Discrimination in Employment Act that
Nos. 12-3061/3063          Schumacher v. AK Steel, et al.                                         Page 5


         arise after the date you sign this Agreement. In addition,]1 you do not
         waive, nor shall this Agreement be construed to waive, any right which
         is not subject to waiver as a matter of law.

R. 87, at 5.

         Schumacher, the named Plaintiff, was one of the employees who accepted a
severance agreement and release. He worked at AK Steel and its predecessor, Armco
Inc., from June 1962 until he retired in November 2003 at the age of 60. Schumacher
executed a severance agreement sometime between late 2003 and early 2004. He, and
the other Class members, claimed their pension benefits after the execution of the
Severance Agreements, requesting a lump-sum payment. Schumacher’s agreement did
not include a whipsaw calculation.

         Pre-Judgment Interest

         Both the West and Schumacher classes were awarded pre-judgment interest under
28 U.S.C. § 1961(a). At the time of the West judgment, the class received pre-judgment
interest at an annual rate of 4.7%. The Schumacher class received a rate of 0.12%.

                              PROCEDURAL BACKGROUND

         Schumacher and the Class were originally included in the West Class on March
9, 2004. West, No. 02-0001, R. 55. The district court eventually excluded them from
the West class “out of an abundance of caution.” Schumacher was notified of his
exclusion from the West class.

         On October 29, 2009, Schumacher filed the present suit to recover benefits on
behalf of himself and the class. On March 8, 2010, the district court denied Defendants’
motion to dismiss, in which they raised a statute of limitations issue. On January 24,
2011, the court issued an order granting Plaintiff’s motion for class certification. On
June 27, 2011, the court granted Plaintiffs’ motion for partial summary judgment.


         1
          The bracketed language appears in the particular form of release that Schumacher and other class
members over the age of forty signed. It does not appear in the release form signed by class members
under the age of forty.
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                               Page 6


       The parties stipulated that the amount of unpaid benefits to this class was
$3,010,060. On October 12, 2011 the district court issued an order ruling that pre-
judgment interest was due at the federal statutory rate established by 28 U.S.C.
§ 1961(a). At the time of the judgment, that rate was 0.12%. Final Judgment for
Plaintiffs was entered on December 12, 2011. Plaintiffs were awarded damages of
$3,010,060 and pre-judgment interest of $29,094.

                              STANDARD OF REVIEW

       This Court reviews a dismissal de novo. Hughes v. Sanders, 469 F.3d 475, 477
(6th Cir. 2006). We also review a district court’s grant of a motion for summary motion
de novo, construing the evidence and drawing all reasonable inferences in favor of the
non-moving party. Ireland v. Tunis, 113 F.3d 1435, 1440 (6th Cir. 1997).

       Certification of a class action is reviewed for an abuse of discretion. Pipefitters
Local 636 Ins. Fund v. Blue Cross Blue Shield of Mich., 654 F.3d 618, 629 (6th Cir.
2011). A district court’s award of pre-judgment interest is also reviewed for abuse of
discretion. Rybarczyk v. TRW, Inc., 235 F.3d 975, 985 (6th Cir. 2000). “An abuse of
discretion occurs when the district court relies on erroneous findings of fact, applies the
wrong legal standard, misapplies the correct legal standard when reaching a conclusion,
or makes a clear error of judgment.” Pipefitters Local 636, 654 F.3d at 629 (internal
citation and quotation marks omitted).

                                     DISCUSSION

       This case involves the appeal of four of the district court’s orders. AK Steel and
the Plan (collectively “Appellants”) appeal the district court’s denial of their motion to
dismiss based on the statute of limitations, the grant of the class certification, and the
ruling in favor of the Class on liability. The Class appeals the district court’s pre-
judgment interest award rate. Each order is addressed below.
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                               Page 7


       A.      Motion to Dismiss

       AK Steel and the Plan appeal the denial of their motion to dismiss. They contend
that the Class’s claims should have been dismissed as untimely. Appellants argue that
the Class’s “whipsaw” claims were barred by the federal catch-all statute of limitations
contained in 28 U.S.C. § 1658(a). Upon de novo review, we hold that § 1658(a) does
not apply to the Class’s claims.

       “Where a federal statute provides a cause of action but does not specify a
limitations period, courts determine the appropriate statute of limitations in one of two
ways.” McCormick v. Miami Univ., 693 F.3d 654, 662 (6th Cir. 2012). If a federal
cause of action arises under a post-1990 amendment, the courts apply the four-year
statute of limitations as provided by 28 U.S.C. § 1658. If that is not the case, the courts
borrow the state’s most analogous limitations period. See id.

       In a case involving a federal cause of action that arises under an Act of Congress
that was enacted after December 1, 1990, the cause of action is “governed by 28 U.S.C.
§ 1658, which prescribes a four-year statute of limitations period.” Id. The Supreme
Court has held that § 1658 applies to claims “arising under” amendments to pre-existing
statutes. Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 380–81 (2004). Section
§ 1658 also applies where legislation “establishes a new cause of action without
reference to preexisting law.” Id. (internal quotation marks omitted).

       In contrast, where an application of state law is not “at odds with the purpose or
operation of federal substantive law,” the court borrows the most analogous state
limitations period. McCormick, 693 F.3d at 662 (quoting N. Star Steel Co. v. Thomas,
515 U.S. 29, 35 (1995)). Generally, the statute of limitations for an ERISA claim is
governed by the most analogous state statute of limitations. Santino v. Provident Life
& Accident Ins. Co., 276 F.3d 772, 776 (6th Cir. 2001). Ohio law provides that the
statute of limitations could be as short as six years or as long as fifteen years. See
Gelesky v. AK Steel Corp., 828 F. Supp. 2d 935, 939, 942 (S.D. Ohio 2011) (finding that
the claim was subject to a six-year statute of limitation); see also Meade v. Pension
Appeals & Review Comm., 966 F.2d 190, 193, 195 (6th Cir. 1992) (finding that the claim
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                               Page 8


was subject to a fifteen-year statute of limitations). Even under the shorter six-year time
limit, the Class’s claims were timely.

       Contrary to Appellants’ argument that the Class’s claim for the payment of
benefits arises from the 1994 Retirement Protection Act (“RPA”), whipsaw actions
predate both the RPA and the passage of § 1658. Thompson, 716 F. Supp. 2d at 762
(finding that RPA “did not ‘create a new right’ for the plaintiffs that did not previously
exist” with respect to a claim involving their lump-sum payments). The ability to bring
a claim for benefits under ERISA § 502(a)(1)(B) was in existence before the RPA.

       Furthermore, the RPA did not make any substantive changes, but simply
changed the definition of “applicable interest rate.” The 1994 RPA requires the
calculation of lump-sum payments by using an “applicable mortality table” and an
“applicable interest rate” based on thirty-year treasury rates. Thompson v. Ret. Plan for
Emps. of S.C. Johnson & Sons, Inc., 716 F. Supp. 2d 752, 762 (E.D. Wisc. 2010).

       Because passage of the RPA did not create a new right to bring a whipsaw action,
it cannot be said that the Class’s claim “arises under” the post-1990 amendment. The
district court correctly concluded that the Class’s complaint was timely filed.

       B.      Class Certification

       AK Steel and the Plan argue that the district court abused its discretion in
granting the Class’s motion for class certification. Appellants argue that the district
court abused its discretion with respect to the commonality and typicality requirements
of Rule 23(a) and therefore also abused its discretion in finding that common questions
predominated over questions affecting individuals pursuant to Rule 23(b)(3). We
disagree.

       To obtain class certification, plaintiffs must show that:

       (1) the class is so numerous that joinder of all members is impracticable;
       (2) there are questions of law or fact common to the class; (3) the claims
       or defenses of the representative parties are typical of the claims or
       defenses of the class; and (4) the representative parties will fairly and
       adequately protect the interests of the class.
Nos. 12-3061/3063       Schumacher v. AK Steel, et al.                               Page 9


Fed. R. Civ. P. 23(a); In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig.,
678 F.3d 409, 416 (6th Cir. 2012). “The proposed class must also meet at least one of
the three requirements listed in Rule 23(b).” In re Whirlpool, 678 F.3d at 416 (citing
Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550 (2011)).

        The district court certified the Schumacher class by concluding that it satisfied
the four prerequisites of Federal Rule of Civil Procedure 23(a)—numerosity,
commonality, typicality, and adequacy of representation. The two common issues that
the district court found appropriate for classwide treatment were:

        (1) whether the anti-alienation provisions of ERISA bar the release of the
        whipsaw claims at issue in this case when the general releases do not
        expressly refer to the Retirement Plan, to pension benefits, and/or the
        ERISA statute; and (2) whether the express terms of the release
        agreements included any and all claims against the Defendants in this
        case.

R. 60, at 16. The district court also found that the action could be maintained under
Federal Rule of Civil Procedure 23(b)(3) because the issue of whether Plaintiffs were
entitled to whipsaw benefits predominated over any individual issues involved in
calculating the amount of those benefits for each class member.

        The district court first determined the scope and validity of the Severance
Agreements pursuant to general contract law. Releases are contracts. 29 Williston on
Contracts § 73:7 (4th ed. 2011). Therefore, the waivers were properly examined under
normal contract principles first. Id. (citing Raczak v. Ameritech Corp., 103 F.3d 1257,
1268 (6th Cir. 1997) (“[A] court should examine waivers and releases ‘under normal
contract principles[.]’”).

        Appellants raise two arguments to support the proposition that the releases
required individualized review. Both fail because, as the district court determined, the
issue of law as to the contracts’ scope and validity precluded the need to conduct an
individualized review. First, Appellants argue that the district court’s decision in the
present case is inconsistent with the West court’s findings that the nature of the releases
required individual review. Id. at 19-20. They also argue that the West court excluded
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                              Page 10


Schumacher and the ninety-one others in this class noting that the determination of
whether the Releases were knowingly and voluntarily agreed to would require an
individualized factual review. Id. at 21. Second, Appellants argue that the central
question with respect to the enforceability of the release is whether it was made
knowingly and voluntarily. Id. at 22 (citing Nicklin v. Henderson, 352 F.3d 1077, 1080
(6th Cir. 2003)).

        Whether the Severance Agreements were valid–whether they were a violation
of ERISA’s anti-alienation provisions or were obtained by a breach of fiduciary
duties–was a question that the district court properly determined first before inquiring
as to the intent of the parties as Appellants suggest it should have. As the district court
noted, all of the releases were obtained during the 2003 layoffs and were executed in a
short time frame. The critical language of the releases was identical for each plaintiff,
and the common questions identified by the district court did not depend upon the intent
of each employee. The determination of the scope and validity of the agreements
involved common questions of law that lend themselves well for class certification.

        Appellants have not shown that the district court abused its discretion in granting
class certification. The court was correct to begin by determining the scope and validity
of the agreements as a common issue of law for the class certification motion. See
Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32, 42 (1st Cir. 2003) (considering the
interpretation of a form contract, executed by all class members as the threshold issue
as to whether common issues of law and fact predominate).

        C.      Partial Summary Judgment

        AK Steel and the Plan appeal the district court’s grant of partial summary
judgment on liability in favor of the Class. The district court interpreted the scope of the
Severance Agreements, holding that the agreements did not affect pension benefits or
preclude pension claims that had not yet accrued at the time the agreements were
executed. Upon de novo review, we agree.
Nos. 12-3061/3063          Schumacher v. AK Steel, et al.                                      Page 11


         This claim is identical to the claims raised in the West litigation. This Court held,
in West, that a so-called “whipsaw calculation” claim “arises when participants opt to
‘cash out’ their hypothetical accounts before they reach normal retirement age.” West,
484 F.3d at 400. In this case, the whipsaw claim could not possibly arise until the
moment a class member opted to cash out her pension in lump-sum form. Because none
of the Class members requested a lump-sum payment until after the execution of the
Severance Agreements, their claims had not accrued. Therefore, the dispositive issue,
as the district court correctly recognized, is whether the text of the general Severance
Agreements released future ERISA claims.

         Paragraph 9 of each agreement provides the waiver and release clause. It states,
in relevant part:

         You waive and release . . . AK Steel Holding Corporation, AK Steel
         Corporation and its predecessors, and . . . related entities . . . from any
         and all claims, causes of action, and rights of recovery of any kind . . .
         whether known or unknown. This waiver . . . also includes but is not
         limited to any claims, whether known or unknown . . . .

R. 87, at 5.

         While the agreement broadly mentions “any and all claims, causes of action, and
rights of recovery of any kind,” what is not mentioned is critical to the question before
the Court. As the district court noted, the agreement does not mention RAPP or the Plan.
It does not contain any words that would support a release of future “ERISA” or
“pension” claims.2

         The conclusion made by the district court and adopted by this Court is consistent
with established law and the public policy concerns surrounding earned pension rights.
See, e.g., Ruppert v. Alliant Energy Cash Balance Pension Plan, 255 F.R.D. 628, 635
(W.D. Wisc. 2009) (“[T]o the extent plaintiffs’ releases could be construed as releasing
defendant from this ERISA suit, the agreement would be unenforceable because

         2
           Although the releases in some of the Agreements specifically excluded future claims arising
under the federal Age Discrimination in Employment Act, in light of our discussion below, we believe this
is an insufficient basis for implying waiver of future pension claims arising under ERISA.
Nos. 12-3061/3063          Schumacher v. AK Steel, et al.                                     Page 12


agreements that waive future violations of ERISA are unenforceable . . . .”); Wright v.
Sw. Bell Tel. Co., 925 F.2d 1288, 1293 (10th Cir. 1991) (holding that a waiver of a right
to sue was insufficient to release future ERISA claims where the parties were unaware
of such claims when the release was signed); see also 29 Williston on Contracts § 73:10
(4th ed.) (“[A] general release will not be construed to bar the enforcement of a claim
that had not accrued as of the date of the release.”). Appellants rely on a series of cases
where courts have held that ERISA claims could be released. As the district court
reasoned, the cases cited by AK Steel and the Plan are distinguishable because each case
involves ERISA claims that had already accrued.3 See Valeck v. Watson Wyatt & Co.,
92 F. App’x 270, 273 (6th Cir. 2004) (finding release effective where the contract
specifically released two named individuals, i.e. “all claims made by [Valeck] or that
could have been made by her against [Defendant] . . . .” prior to the execution of the
release was executed); Halvorson v. Boy Scouts of Am., 215 F.3d 1326, 1326 (6th Cir.
2000) (table) (finding that employee had waived his medical benefits and disability
claims because his medical issues were known before signing the release); see also
Howell v. Motorola, Inc., 633 F.3d 552, 556, 558 (7th Cir. 2011) (noting that the events
leading to the cause of action occurred before the release was signed). Appellants also
rely on cases where future ERISA claims were released. Those cases, however, involved
an explicit reference to “ERISA” in the agreement—a critical distinction from the
present case. See Goepfert v. Trustmark Ins. Co., 541 F. Supp. 2d 1052, 1054 (E.D.
Wisc. 2008) (quoting the language of the release which specifically includes claims
arising from ERISA); see also Sullivan v. CAP Gemini Ernst & Young U.S., 573 F. Supp.
2d 1009, 1021 n.16 (N.D. Ohio 2008) (quoting the language of the release which
explicitly included “any and all rights or claims [. . .] arising under [. . .] [ERISA]”)
(alterations in original).

         The Class’s future pension claims were not released as a matter of law because
the whipsaw claims had not accrued at the time of the execution of the Severance



         3
           While the district court and the parties detail numerous grounds upon which the finding on
liability was correct, we decline to address the remaining arguments; the reasoning here is dispositive.
Nos. 12-3061/3063          Schumacher v. AK Steel, et al.                                      Page 13


Agreements and because the scope of the contracts did not relate to future ERISA
claims.4

         D.       Pre-judgment Interest

         The Schumacher Plaintiffs argue that the district court abused its discretion by
awarding pre-judgment interest at the statutory rate under 28 U.S.C. § 1961(a), which
at the time was 0.12%. We agree. The district court’s failure to consider the case-
specific factors and its mechanical application of the statutory rate under § 1961
constituted an abuse of discretion.

         “[T]he district court may [award pre-judgment interest] at its discretion in
accordance with general equitable principles.” Rybarczyk v TRW, Inc., 235 F.3d 975,
985 (6th Cir. 2000) (quoting Ford v. Uniroyal, 154 F.3d 613, 616 (6th Cir. 1998)). A
proper determination of pre-judgment interest involves a consideration of various case-
specific factors and competing interests to achieve a just result. While we have upheld
awards of pre-judgment interest calculated pursuant to 28 U.S.C. § 1961, a mechanical
application of the rate at the time of the award amounts to an abuse of discretion. See
Rybarczyk, 235 F.3d at 985–87.

         One purpose of an award of pre-judgment interest is to compensate plaintiffs for
the “lost interest value of money wrongly withheld.” Id. at 985. Courts consider
compensation for the “time value of the lost money as well as for the effects of
inflation.” United States v. City of Warren, 138 F.3d 1083, 1096 (6th Cir. 1998). An
award that fails to make the plaintiff whole due to an inadequate compensation for her
lost use of money frustrates the purpose of ERISA’s remedial scheme. This is also true
of an award that is excessive. See Ford, 154 F.3d at 618. “Our court and others have
. . . upheld awards of pre-judgment interest that were tied to prevailing market rates, thus
reflecting what the defendants would have had to pay in order to borrow the money at
issue.” Rybarczyk, 235 F.3d at 986.


         4
          Consequently, Appellants argument that the district court abused its discretion by not allowing
discovery as to whether each Class member knowingly and voluntarily waived the claims is moot.
Nos. 12-3061/3063      Schumacher v. AK Steel, et al.                              Page 14


        An excessive pre-judgment interest award may contravene ERISA’s remedial
goal of simply placing the plaintiff in the position he or she would have occupied but for
the defendant’s wrongdoing. Similarly, an exceedingly low pre-judgment interest rate
fails to make the plaintiff whole. Ford, 154 F.3d at 618. Accordingly, courts must strike
a balance between making sure not to impose a punitive measure and allowing a Plan or
Fund to “retain the interest it earned on funds wrongfully withheld would be to approve
of unjust enrichment.” Rybarczyk, 235 F.3d at 985–86 (internal citation and quotation
marks omitted).

        In the West case, the court awarded pre-judgment interest at the rate provided by
28 U.S.C. § 1961(a). Section 1961(a) is the one-year Treasury rate for the week that
precedes a court’s final judgment. At the time the West judgment was awarded, the rate
was 4.7%. At the time of the district court’s judgment in the present case, the rate was
at an all-time low of 0.12%.

        Here, if the 0.12% rate were to stand, AK Steel and the Plan would essentially
be rewarded for their wrongdoing. There are at least three examples that highlight the
potential injustice that could result if the district court’s award were affirmed. First, AK
Steel’s rate on return (6.55%) and its borrowing costs (7.75%) were much higher than
the 0.12% it has been ordered to pay. Allowing such a disparity would result in an
unfair economic benefit to Appellants. See Rybarczyk, 235 F.3d at 986 (“[A]
requirement that [defendants] pay the actual rate [on return] merely deprives
[defendants] of [their] profit on the wrongfully denied benefits.”). Second, the West and
Schumacher plaintiffs are identical plaintiffs. Both sets of plaintiffs worked for the same
company, brought the same whipsaw calculation claims, during the same period, and
were awarded damages under the same calculation. Nevertheless, the West class
members received pre-judgment interest of 4.7%, while the Schumacher plaintiffs
received only 0.12%. Such an absurd result amounts to a reversible error. See Ford, 154
F.3d at 618–19. Third, the Consumer Price Index measured the annual inflation rate at
approximately 2.75%. In City of Warren, this Court held that a district court’s award of
pre-judgment interest that only compensated the plaintiffs for the rate of inflation
Nos. 12-3061/3063       Schumacher v. AK Steel, et al.                               Page 15


constituted an abuse of discretion where it failed to adequately compensate them for the
lost use of their money. City of Warren, 138 F.3d at 1096.

        Here, the district court’s award of an “exceedingly low pre-judgment interest rate
fail[ed] to make the [Class members] whole by inadequately compensating [them] for
the lost use of money.” See Ford, 154 F.3d at 618. The district court was concerned
with an award that would produce a “windfall” that would punish AK Steel and the Plan,
although it seems that it did the opposite and created a windfall in favor of Appellants’
wrongdoing. See Rybarczyk, 235 F.3d at 987 (“If the award . . . were lower than
[defendant’s] actual rate of return, it is [defendant] that would arguably receive a
windfall.”). Because the award of 0.12% by the district court would inadequately
compensate the Class and unjustly enrich Appellants for their wrongdoing, the district
courts mechanical award of pre-judgment interest rate pursuant to § 1961 constituted an
abuse of discretion. See id. at 985 (“[W]e look with disfavor on simply adopting . . .
interest rates.”). While district courts may fashion an award in their sound discretion,
such an award must consider the case-specific factors such as, but not limited to: the
remedial goal to place the plaintiff in the position that he or she would have occupied
prior to the wrongdoing; the prevention of unjust enrichment on behalf of the wrongdoer;
the lost interest value of money wrongly withheld; and the rate of inflation. Here, the
district court failed to do so. We, therefore, reverse the district court’s application of the
§ 1961 rate and remand on this issue. On remand, the district court shall fashion an
award that considers and balances the interests involved in determining a just pre-
judgment interest award.

                                     CONCLUSION

        For the foregoing reasons, we REVERSE and REMAND the district court’s
award of pre-judgment interest at the rate of 0.12% and AFFIRM the district court’s
judgment in all other respects.
