Tibble v. Edison International, et al.

Case Updates

In a unanimous decision, the Supreme Court vacated and remanded a Ninth Circuit decision that had dismissed claims against Edison International and allowed the plaintiffs another chance to argue that the company violated the Employee Retirement Income Security Act (“ERISA”) by failing to monitor and remove imprudent investments. The Ninth Circuit dismissed the claims because any imprudence in initially selecting the investments had occurred outside ERISA’s six-year statute of limitations.

The Supreme Court, however, reasoned that Edison International not only had a duty to select prudent investment options at the outset but also had a continuing “duty of some kind to monitor investments and remove imprudent ones.” The Supreme Court did not conclude that Edison International violated its fiduciary duties or even address the scope of the monitoring an ERISA fiduciary must conduct in any particular case.

In its coalition brief, the U.S. Chamber asked the U.S. Supreme Court to affirm the judgment of the Ninth Circuit holding that petitioners’ challenge to three mutual funds is time-barred by section 413(1) of the Employee Retirement Income Security Act (“ERISA”). The brief argues that overturning the Ninth Circuit’s judgment could have detrimental impact on employer-sponsored retirement plans. The brief points out that by cutting off liability after a set date, ERISA reduces the uncertainties faced by plan fiduciaries, plan sponsors, and plan participants. Further, it deters plaintiffs from advancing non-meritorious or frivolous claims in the hope of securing a settlement, thereby saving litigation expenses that could be put to better use providing benefits to participants. The brief goes on to assert that if the Court were to reject the Ninth Circuit’s decision and accept petitioners’ argument, it would upset the careful balance between protecting beneficiaries and preserving benefit plans that is central to ERISA by transforming Section 413(1) from a time bar into a mere limitation on damages.

The Chamber filed the brief jointly with the National Association of Manufacturers, the ERISA Industry Committee, the American Benefits Council, and the Business Roundtable.

Mark A. Perry, William J. Kilberg, Jason Mendro, and Paul Blankenstein of Gibson, Dunn & Crutcher LLP represented the U.S. Chamber of commerce as co-counsel to the U.S. Chamber Litigation Center.