Christopher Sulyma v. Intel Corp. Inv. Policy
909 F.3d 1069
9th Cir.2018Background
- Plaintiff Christopher Sulyma worked at Intel (2010–2012) and participated in two ERISA‑governed retirement plans invested in Intel‑managed funds that increased allocations to alternative investments (hedge funds, private equity, commodities).
- Intel disclosed fund allocations and strategy on fund fact sheets, plan documents, and its website; Sulyma accessed some materials but testified he was unaware his accounts were significantly invested in alternatives while employed.
- Sulyma filed suit on October 29, 2015, alleging imprudence under 29 U.S.C. § 1104 (claims 1 and 3), failures to disclose (claims 2 and 4, not appealed), failure to monitor (claim 5), and knowing participation/derivative liability (claim 6).
- Intel moved to dismiss as time‑barred under ERISA’s 3‑year actual‑knowledge limitation (29 U.S.C. § 1113(2)); the district court converted the motion to summary judgment, limited discovery to the limitations issue, and entered summary judgment for Intel, finding Sulyma had actual knowledge before October 29, 2012.
- The Ninth Circuit reverses, holding disputed facts about Sulyma’s actual awareness precluded summary judgment on the appealed imprudence and derivative claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1113(2)’s 3‑year clock runs from knowledge of disclosed transactions alone for §1104 imprudence claims | Sulyma: Intel’s disclosures did not make him actually aware investments were imprudent; he was unaware of the alternative allocations while employed | Intel: Disclosures (fact sheets, notices, SPD, website) gave Sulyma actual knowledge of the investment mix and strategy, so claims are time‑barred | Reversed: actual knowledge requires awareness of facts constituting the breach (here, that the investments were imprudent); fact dispute prevents summary judgment |
| Whether a plaintiff is charged with actual knowledge merely because documents were available or furnished | Sulyma: Mere availability/receipt does not equal actual awareness | Intel: Providing specific disclosures and access should impose actual knowledge | Court: Availability or constructive knowledge is insufficient; §1113(2) requires actual, subjective awareness of the breach |
| Whether derivative/monitoring claims’ limitations period waits for resolution of primary claims | Sulyma: Derivative claims’ clock should not run until primary breach is known | Intel: Derivative claims accrue when plaintiff has actual knowledge of the underlying breach | Court: Same rule applies—limitations begins when plaintiff has actual knowledge of the breach; disputed facts as to Sulyma’s awareness preclude summary judgment |
| Proper standard for "actual knowledge" under §1113(2) | Sulyma: Narrow actual‑knowledge requiring subjective awareness of imprudence | Intel: Broader standard including constructive knowledge from disclosures | Court: "Actual knowledge" means the plaintiff actually knew the facts constituting the breach (not mere constructive knowledge); adopt a claim‑specific actual‑awareness standard |
Key Cases Cited
- Blanton v. Anzalone, 760 F.2d 989 (9th Cir. 1985) (knowledge of transaction by fiduciaries can trigger limitations when transaction itself reveals violation)
- Meagher v. Int’l Ass’n of Machinists Pension Plan, 856 F.2d 1418 (9th Cir. 1988) (receipt of reduced benefit checks notified plaintiff of transaction; limitations applies to checks older than three years)
- Ziegler v. Conn. Gen. Life Ins. Co., 916 F.2d 548 (9th Cir. 1990) (actual knowledge when informed the consequences of the transaction)
- Waller v. Blue Cross of California, 32 F.3d 1337 (9th Cir. 1994) (knowledge of a transaction is not necessarily "actual knowledge of the alleged breach" when the transaction is not inherently a statutory breach)
- Phillips v. Alaska Hotel & Restaurant Employees Pension Fund, 944 F.2d 509 (9th Cir. 1991) (continuous breaches of the same kind do not restart the three‑year clock if plaintiff had actual knowledge earlier)
- Ventura Content, Ltd. v. Motherless, Inc., 885 F.3d 597 (9th Cir. 2018) ("actual knowledge" means subjective, not constructive, knowledge)
- Tibble v. Edison Int’l, 135 S. Ct. 1823 (U.S. 2015) (ERISA fiduciary duty principles and statute of limitations context)
- Lockheed Corp. v. Spink, 517 U.S. 882 (U.S. 1996) (ERISA fiduciary duty of care principles)