Tibble v. Edison International, No. 10-56406 (9th Cir. 2013)
Annotate this CaseBeneficiaries sued Edison under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. Beneficiaries claimed that their pension plan had been managed imprudently and in a self-interested fashion. The court rejected both parties' timeliness arguments and affirmed the district court's application of ERISA's six-year limitations period. Because the DOL's interpretation of how the safe harbor functions were consistent with the statutory language, the court concluded that the district court properly decided that section 404(c) of Title I of ERISA did not preclude merits consideration of beneficiaries' claims. The court reserved the question of whether the Ninth Circuit should adopt a rule akin to that articulated in Spano v. Boeing Co. regarding class action certification. On the merits, the court was satisfied that revenue sharing as carried out by Edison did not violate ERISA; Edison did not violate its duty of prudence by including several investment vehicles in the Plan menu; but Edison had been imprudent in deciding to include retail-class shares of three specific mutual funds in the Plan menu.
Court Description: ERISA. The panel affirmed the district court’s judgment in a class action brought under the Employee Retirement Income Security Act by beneficiaries who alleged that their pension plan was managed imprudently and in a self-interested fashion. Rejecting a continuing violation theory, the panel held that under ERISA’s six-year statute of limitations, the district court correctly measured the timeliness of claims alleging imprudence in plan design from when the decision to include those investments in the plan was initially made. The panel held that the beneficiaries did not have actual knowledge of conduct concerning retail-class mutual funds, and so the three-year statute of limitations set forth in ERISA § 413(2) did not apply. The panel held that ERISA § 404(c), a safe harbor that can apply to a pension plan that “provides for individual accounts and permits a participant or beneficiary to exercise control over the assets in his account,” did not apply. Disagreeing with the Fifth Circuit, the panel applied Chevron deference to the Department of Labor’s final rule interpreting § 404(c). The panel declined to consider for the first time on appeal defendants’ arguments concerning class certification. The panel affirmed the district court’s grant of summary judgment to defendants on the beneficiaries’ claim that revenue sharing between mutual funds and the administrative service provider violated the pension plan’s governing document and was a conflict of interest. Agreeing with the Third and Sixth Circuits, and disagreeing with the Second Circuit, the panel held that, as in cases challenging denials of benefits, an abuse of discretion standard of review applied in this fiduciary duty and conflict-of-interest suit because the plan granted interpretive authority to the administrator. The panel held that the defendants did not violate their duty of prudence under ERISA by including in the plan menu mutual funds, a short-term investment fund akin to a money market, and a unitized fund for employees’ investment in the company’s stock. The panel affirmed the district court’s holding, after a bench trial, that the defendants were imprudent in deciding to include retail-class shares of three specific mutual funds in the plan menu because they failed to investigate the possibility of institutional-share class alternatives.
The court issued a subsequent related opinion or order on August 1, 2013.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.