A U.S. court of appeals dismissed a lawsuit by Edison International 401(k) participants alleging the plan and its executives breached their fiduciary duties by choosing certain retail-priced investments over less expensive institutionally priced versions, despite a U.S. Supreme Court ruling last year that favored participants.
On May 18, the U.S. Supreme Court ruled in Tibble et al. vs. Edison International et al. that plan executives had a “continuing duty to monitor trust investments and remove imprudent ones,” even though federal law sets a six-year time limit for lawsuits alleging breaches of fiduciary duty, and that the scope of that responsibility was an issue for the appeals court.
The Edison case was remanded to the 9th U.S. Circuit Court of Appeals in San Francisco, which dismissed the case Wednesday. In its opinion, the appeals court wrote that plaintiffs did not argue before the U.S. District Court or appeals court that Edison had an “ongoing” duty to monitor investments.
The 2015 Supreme Court ruling had vacated a 2013 ruling by the same appeals court, which had decided in favor of Edison.
The appeals court in 2013 had agreed with a federal District Court, which had dismissed the lawsuit because the three retail funds had been introduced in 1999 and the lawsuit was filed in August 2007 — beyond the six-year limit for claims established by the Employee Retirement Income Security Act.
Edison International and Southern California Edison “are committed to providing a wide array of high-quality investment options in the plan. The companies' and plan fiduciaries' efforts to act in the best interests of plan participants are reflected in the numerous rulings in our favor in the class-action challenge to our 401(k) plan,” an Edison spokeswoman said in an e-mailed statement.
An official at Schlichter Bogard & Denton, which represented the plaintiffs, was not immediately available for comment.