Mandate Rule and Law-of-the-Case Doctrine in ERISA Benefit Calculations

Introduction

McCutcheon v. Colgate-Palmolive Co., 24-1419 (2d Cir. Apr. 4, 2025), is a summary order affirming a district court’s implementation of an earlier appellate mandate in a nearly decade-long ERISA dispute. Plaintiffs-Appellees, Rebecca McCutcheon and Paul Caufield, challenged Colgate-Palmolive’s administration of its employee retirement income plan (the “Plan”) and sought residual annuity benefits they alleged were unlawfully forfeited. On remand from McCutcheon II (62 F.4th 674), the district court entered revised relief rejecting two new arguments by Defendants–applying a pre-retirement mortality discount and using a separate projection rate for employee contributions–and this appeal followed.

Summary of the Judgment

The Second Circuit affirmed the district court in full. It held that:

The law-of-the-case and mandate rules prohibit litigants from raising issues on remand that were ripe but unargued on initial appeal.
Defendants cannot apply a pre-retirement mortality discount when calculating the Residual Annuity, as that issue was decided in McCutcheon I and affirmed in McCutcheon II.
Defendants cannot re-argue using a lower projection rate for employee contributions; the § 1.3 interest-rate provision governs the entire conversion to an age-65 annuity.

As a result, the district court’s amended judgment implementing the prior mandate was affirmed.

Analysis

Precedents Cited

McCutcheon I (481 F. Supp. 3d 252): District court granted summary judgment to Plaintiffs on three “Errors,” including Error 3 (use of a mortality discount); it also held that the 20 + 1% rate applied to convert the PRA cash balance into an annuity for § 2(b)(ii).
McCutcheon II (62 F.4th 674): Second Circuit affirmed McCutcheon I. It upheld the ban on pre-retirement mortality discounts and confirmed the use of the 20 + 1% Treasury-plus-one rate under Plan § 1.3 for all components of the § 2(b)(ii) annuity.
Callahan v. County of Suffolk, 96 F.4th 362 (2d Cir. 2024): Clarified that a district court must implement an appellate mandate without deferring to the trial court’s reasoning and that both the letter and spirit of the mandate must be followed.
Havlish v. 650 Fifth Ave. Co., 934 F.3d 174 (2d Cir. 2019): Held that issues ripe at the time of initial appeal but not raised are forfeited on remand by the mandate rule.

Legal Reasoning

The court’s reasoning centers on two interlocking doctrines:

Law-of-the-Case Doctrine – Once an appellate court resolves an issue, the trial court must adhere to that decision on remand. Here, McCutcheon I and McCutcheon II resolved that pre-retirement mortality discounts are impermissible and that the single 20 + 1% rate applies to convert PRA balances into annuities.
Mandate Rule – A district court cannot reopen issues on remand that were ripe but not raised at the first appeal. Defendants had every opportunity in McCutcheon I and II to argue that the early-retirement mortality discount and a separate projection rate for employee contributions should be allowed, but they did not. The Second Circuit therefore barred these belated contentions.

Impact

This decision underscores the importance of fully presenting all legal arguments at the initial appeal level. Practitioners in ERISA and other appellate contexts will take note that:

Arguments not advanced on the first appeal, even if closely related to issues decided, may be permanently forfeited on remand.
Plan documents’ interest-rate provisions must be applied strictly as written; litigants cannot split application rates between employer and employee contributions unless the Plan expressly provides for such differentiation.
The Supreme Court’s and Second Circuit’s teachings on the mandate and law-of-the-case doctrines continue to define the limits of post-mandate relitigation, promoting finality and judicial efficiency.

Complex Concepts Simplified

Pre-Retirement Mortality Discount (PRMD): A reduction in an annuity’s present value to account for the chance a retiree dies before reaching the benefit start age. In ERISA plans, applying such a discount when no death-based forfeiture can occur improperly reduces an already earned benefit.
Appendix C § 2(b)(ii) Benefit: A two-part annuity offered to employees who made additional contributions to preserve rights under the “grandfathered” annuity. It comprises (1) the employer’s hypothetical cash-balance account and (2) the employee’s own contributions, both converted into a retirement annuity.
20 + 1% Projection Rate: The interest assumption set forth in the Plan for converting hypothetical cash-balance accounts into retirement annuities. It uses 20-year Treasury yields plus one percentage point.

Conclusion

McCutcheon v. Colgate-Palmolive Co. reaffirms that the mandate rule and law-of-the-case doctrine are powerful safeguards against second bites at the apple. ERISA plan administrators and litigants alike must appreciate that unraised arguments become foreclosed on remand, and that Plan-specified interest-rate provisions apply uniformly to all account components. This decision strengthens finality in appellate procedure and clarifies benefit-calculation rules under ERISA, ensuring participants receive the full measure of their residual annuity rights.