972 F.3d 1043
9th Cir.2020Background
- Guenther worked for Lockheed Martin, accrued ~11.5 years of credited service, left, and sought rehire in 2006 conditioned on "bridging" his prior service so future service would count toward his defined‑benefit pension.
- He submitted an "Application for Bridging" and received a July 25, 2006 letter stating his prior service "will be bridged"; he then rejoined Lockheed in September 2006.
- On November 7, 2006 Lockheed sent a second letter saying his prior service was bridged only for CAP vesting and that he was not participating in a Lockheed defined‑benefit pension (contradicting the July letter); Guenther checked his online account, saw no accrual, and repeatedly contacted HR/ESC with no resolution.
- A 2005 Plan amendment (effective for rehires on/after Jan. 1, 2006) barred rehires from earning credited service under the defined‑benefit Plan; Guenther claims Lockheed knew of the amendment but failed to disclose it when promising bridging.
- Guenther sued (seeking equitable surcharge under ERISA §1132(a)(3) for fiduciary breach). Lockheed asserted ERISA §1113 statute‑of‑limitations defenses (three years from actual knowledge; six years for fraud/concealment). The district court found Guenther had actual knowledge on Nov. 7, 2006 and dismissed; the Ninth Circuit affirmed.
Issues
| Issue | Guenther's Argument | Lockheed Martin's Argument | Held |
|---|---|---|---|
| Whether Guenther had "actual knowledge" of the fiduciary breach under 29 U.S.C. §1113(2) | Guenther says he did not actually know the Plan amendment prevented bridging until 2010; receipt of the November letter wasn’t actual knowledge of a breach | Lockheed says the November 7, 2006 letter made clear the July letter’s representation was false and that Guenther understood that effect | Held: Guenther had actual knowledge on Nov. 7, 2006; three‑year period began then, so suit (filed after) is time‑barred |
| Whether Lockheed’s failure to disclose the 2005 Plan amendment is a separate, continuing breach that would delay accrual | Guenther contends nondisclosure continued and constituted a distinct omission, so limitations should run later | Lockheed contends nondisclosure was of the same character as the July misrepresentation and imparted nothing new after Nov. 7, 2006 | Held: Failure to disclose was of the same character; knowledge of the November letter’s effect was sufficient to start the limitations period |
| Whether the fraud/concealment exception extends limitations to six years | Guenther argues Lockheed affirmatively concealed the breach (runaround, refusal to disclose amendment) so six‑year rule applies | Lockheed says there is no evidence of affirmative steps to hide the breach—at most bureaucratic inefficiency | Held: No evidence of affirmative concealment or self‑concealing conduct beyond the alleged breach; six‑year exception does not apply |
| Whether Lockheed waived the statute‑of‑limitations defense or district abused discretion denying reconsideration | Guenther argues waiver because Lockheed previously litigated without raising the defense and compelled exhaustion; he also cites new deposition evidence for reconsideration | Lockheed says the defense arose only after the fiduciary claim was pled on remand; exhaustion requirement did not apply to fiduciary claims; new evidence was discoverable earlier | Held: No waiver; defense timely pled; district did not abuse discretion in denying reconsideration |
Key Cases Cited
- Sulyma v. Intel Corp. Inv. Policy Comm., 140 S. Ct. 768 (Sup. Ct. 2020) ("actual knowledge" requires in‑fact awareness; disclosure alone insufficient)
- CIGNA Corp. v. Amara, 563 U.S. 421 (Sup. Ct. 2011) (equitable relief available under ERISA §1132(a)(3) includes surcharge, reformation, estoppel)
- Barker v. Am. Mobil Power Corp., 64 F.3d 1397 (9th Cir. 1995) (ERISA fiduciary may breach by misleading participants)
- Waller v. Blue Cross of California, 32 F.3d 1337 (9th Cir. 1994) (partial or factual knowledge may be insufficient for actual knowledge of a breach)
- Phillips v. Alaska Hotel & Rest. Emps. Pension Fund, 944 F.2d 509 (9th Cir. 1991) (earliest awareness of a breach in a series starts the limitations period)
- Washington v. Bert Bell/Pete Rozelle NFL Ret. Plan, 504 F.3d 818 (9th Cir. 2007) (ERISA fiduciary has affirmative duty to disclose information material to beneficiaries)