Tibble v. Edison International
Issues
Does ERISA time-bar claims brought against fiduciaries (for a breach of the duty of prudence) if the initial breach occurred more than six years before filing, but allegedly harmed the beneficiaries within the last six years?
In this case, the Supreme Court will determine whether the ERISA’s six-year filing window prohibits a claim that 401(k) plan fiduciaries breached their duty of prudence by offering higher-cost mutual funds to plan participants, despite identical lower-cost mutual funds being available, when fiduciaries initially chose the higher-cost mutual funds more than six years before the claim was filed. A group of employee-beneficiaries argue that plan fiduciaries have an “ongoing” duty of prudence under ERISA and the failure to remove an imprudent investment gives rise to a new six-year period. Edison International, the employer, counters that case should be dismissed because the record does not reflect the question that the Court granted certiorari for; or, in the alternative, that the judgment below should be affirmed because there is no reversible error. The resolution of this case could have implications concerning the future cost of ERISA-governed benefits plan, and the scope of fiduciary duties.
Questions as Framed for the Court by the Parties
Whether a claim that ERISA plan fiduciaries breached their duty of prudence by offering higher-cost retail-class mutual funds to plan participants, even though identical lower-cost institution-class mutual funds were available, is barred by 29 U.S.C. § 1113(1) when fiduciaries initially chose the higher-cost mutual funds as plan investments more than six years before the claim was filed?
Respondent Edison International (“Edison”) is a holding company with interests in electrical utilities and other energy concerns, with a full-time workforce of over 14,000 employees. Tibble v. Edison Int’l, 711 F. 3d. 1061, 1066 (9th Cir. 2013); Facts at a Glance, Edison International (last visited Feb.
Edited by
The authors would like to thank Professor Robert Hockett for his support with this preview.
Additional Resources
- Employee Retirement Income Security Act--ERISA, United State Department of Labor (Last visited Feb. 1, 2014).
- Greg Stohr: 401(k) Fees at Issue as Court Takes Edison Worker Appeal, Bloomberg Business (Oct. 2, 2014).