February 26, 2020
Decided February 26, 2020
Intel Corp. Investment Policy Committee v. Sulyma, No. 18-1116
Today, the Supreme Court unanimously held that a fiduciary’s disclosure of plan information alone does not trigger ERISA’s three-year limitations period in fiduciary breach cases. “Actual knowledge” sufficient to trigger this limitations period requires participants be “aware of” the disclosed information.
Section 413(2) of the Employee Retirement Income Security Act of 1974 (ERISA) requires that claims for breach of fiduciary duty be brought no later than “three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation.” 29 U.S.C. § 1113(2). Absent “actual knowledge,” breach of fiduciary duty claims under ERISA must be brought within six years of the breach or violation. In 2015, Christopher Sulyma, a former Intel employee, sued multiple retirement plans, claiming that his retirement plans improperly overinvested in alternative investments. More than three years, but less than six years, before that suit was filed, Sulyma received disclosures that explained the investments Sulyma claimed were imprudent. The Ninth Circuit held that the disclosures did not trigger the three-year bar because Sulyma testified he had not read the disclosures and Intel had not established Sulyma had subjective awareness of what was disclosed. The United States filed an amicus brief in support of Sulyma defending that position and participated in oral argument.
Whether the ERISA three-year limitations period in Section 413(2), which runs from “the earliest date on which the plaintiff had actual knowledge of the breach or violation,” bars suit when all relevant information was disclosed to the plaintiff more than three years before the plaintiff filed the complaint, but the plaintiff chose not to read, or could not recall having read, the information.
No. A plan participant has “actual knowledge of the breach” only if the participant was “aware of” the relevant plan information. Disclosure of plan information alone does not trigger the three-year limitations period in Section 413(2).
“[T]o have ‘actual knowledge’ of a piece of information, one must in fact be aware of it.”
Justice Alito, writing for the unanimous Court
Gibson Dunn submitted an amicus brief on behalf of the National Association of Manufacturers, the Chamber of Commerce of the United States, the Securities Industry and Financial Markets Association, the American Benefits Counsel, the ERISA Industry Committee, and the American Retirement Association in support of petitioner: Intel Corp. Investment Policy Committee
What It Means:
The Court’s opinion is available here.
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