The US Supreme Court ruled unanimously Wednesday in Intel Corp. Investment Policy Committee v. Sulyma that a plaintiff in a retirement plan fiduciary lawsuit must have “actual knowledge” of an alleged fiduciary breach to trigger a shorter three-year statute of limitations under the Employee Retirement Income Security Act of 1974 (ERISA), rather than the six-year period that would otherwise apply.
Plaintiff Sulyma was an employee of Intel from 2010 to 2012. He participated in two Intel retirement plans, payments into which were invested in two funds managed by the Intel Investment Policy Committee. Plaintiff sued in October 2015, alleging that the committee and plan administrators had breached their fiduciary duties by over-investing in alternative assets in violation of §1104 of ERISA. Intel moved to dismiss the complaint, arguing that the case was time-barred under §1113(2). The district court ruled in favor of Intel and was later reversed by Ninth Circuit.
The Supreme Court affirmed Ninth Circuit’s decision, holding that to meet §1113(2)’s “actual knowledge” requirement, the plaintiff must in fact have become aware of the information. The court referred to the plain meaning and dictionary meanings of the phrase, and pointed out that it is different from “constructive knowledge” because Congress used both terms when enacting ERISA. Regarding Intel’s argument that the plain meaning of “actual knowledge” substantially diminishes the protection that it provides for ERISA fiduciaries, the court reasoned that the alternative interpretation would greatly reduce §1113(1)’s value for beneficiaries, and Congress, instead of the court, is to decide whether the current scheme should be altered due to policy considerations.
The court also mentioned that this opinion does not foreclose any of the “usual ways” to prove actual knowledge at any stage in the litigation, such as evidence of “willful blindness.”