Tibble v. Edison Int'l
135 S. Ct. 1823
| SCOTUS | 2015Background
- Petitioners (Plan participants) sued Edison International and other Plan fiduciaries under ERISA for offering higher‑priced retail‑class mutual funds instead of materially identical lower‑priced institutional‑class shares, alleging imprudent investment decisions and breach of fiduciary duties.
- Six mutual funds were at issue: three added in 1999 and three added in 2002; the District Court found the 2002 funds imprudently selected but held claims about the 1999 funds time‑barred.
- Plaintiffs argued the 1999 funds underwent changes within the six‑year limitations period that should have triggered a review and conversion to institutional shares.
- The Ninth Circuit affirmed as to the 1999 funds, treating the initial 1999 selection as the last actionable conduct and requiring a significant change in circumstances within six years to revive liability.
- Supreme Court granted certiorari to decide whether alleged imprudent retention/monitoring is an "action" or "omission" under 29 U.S.C. §1113, and whether fiduciaries have a continuing duty to monitor investments such that claims within six years are timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary’s continued retention/offering of an investment is a "breach or violation" that restarts §1113 limitations | Tibble: fiduciary has continuing duty to monitor; failure to review/convert during the 6‑year period is a timely breach | Edison: last actionable conduct was the initial 1999 selection; absent a significant intervening change, §1113 bars suit | Court: Must consider the nature of the fiduciary duty; continuing monitoring duty can give rise to timely claims if breach occurred within 6 years |
| Whether ERISA fiduciary duty derives from trust law and includes a continuing monitoring obligation | Tibble: ERISA prudence duty parallels trust law’s continuing duty to monitor/remove imprudent investments | Edison: argued that treating mere continuation as a new breach would make statute meaningless and impose liability for old decisions | Court: ERISA duty is informed by common law of trusts; trustees have a continuing duty to monitor and remove imprudent investments |
| What triggers a new breach for limitations purposes — initial selection vs. later failure to monitor | Tibble: later failures to monitor/remediate can constitute continuing breaches within §1113 | Edison: only a significant change in circumstances within 6 years would trigger a duty to re‑examine | Court: Remanded — courts must analyze the contours of the alleged continuing breach (monitoring/removal), not automatically time‑bar based on initial selection |
| Whether plaintiffs forfeited the monitoring/continuing‑duty theory by not raising it below | Edison: plaintiffs did not raise that specific theory below | Tibble: contested below that circumstances required review; plaintiffs maintain monitoring theory | Court: Left forfeiture questions to Ninth Circuit on remand |
Key Cases Cited
- Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985) (ERISA fiduciary duty is derived from common law of trusts)
- United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (1906) (syllabus is not part of Court’s opinion)
- State Street Trust Co. v. DeKalb, 259 Mass. 578 (1927) (trustee must act to protect beneficiaries when asset value declines)