Chances have improved that the Supreme Court could rule on an ERISA fiduciary-breach case involving a dispute over how courts should interpret the law's statute of limitations on fiduciary-breach lawsuits, ERISA attorneys say.
The reason is that the U.S. solicitor general has filed an opinion supporting a Supreme Court appeal by plaintiffs in the case of Tibble et al. vs. Edison International et al. The plaintiffs, who are participants in a 401(k) plan, allege that decisions by a federal District Court and a federal appeals court improperly restricted their ability to file fiduciary-breach claims. Edison International is the parent of Southern California Edison, the sponsor of the $4 billion Edison 401(k) plan.
The opinion by Solicitor General Donald Verrilli Jr. was filed Aug. 20, in response to a request in March by the Supreme Court for his office to comment on the Tibble case. A formal request to the Supreme Court to hear the case was filed last October by the Tibble plaintiffs' lead attorney, Jerome J. Schlichter, the founding and managing partner of Schlichter, Bogard & Denton LLP, St. Louis.
Does ERISA's statute of limitations “immunize 401(k) plan fiduciaries for retaining imprudent investments that continue to cause the plan losses if the funds were first included in the plan more than six years ago?” Mr. Schlichter's petition to the Supreme Court said. District and appeals court rulings should be overturned because the Employee Retirement Income Security Act “incorporates the concept that a plan fiduciary's duty is a continuing duty that does not expire and immunize fiduciaries after six years,” he wrote.
The solicitor general agreed. “The court of appeals erred in finding such claims time-barred,” his opinion said. “ERISA imposes a continuing duty of prudence on plan fiduciaries, and (the Edison plan fiduciaries) breached that duty throughout the limitations period by continuing to offer higher-cost investment options when identical lower-cost options were available.”
Because the appeals court decision in the Tibble case “conflicts with the decisions of other courts of appeals, and (because) the statute of limitations issue is an important one,” the Supreme Court should accept the case for review, the solicitor general wrote.