- Court: United States Supreme Court
- Area(s) of Law: Trusts and Estates
- Date Filed: May 18, 2015
- Case #: 13-550
- Judge(s)/Court Below: Court of Appeals 9th Circuit
- Full Text Opinion
Beneficiaries of the Edison 401(k) Savings Plan brought a suit against Edison International, for breach of fiduciary duty, seeking to recover damages sustained as a result of Edison's alleged failure to offer available lower priced mutual funds that were identical to the mutual funds offered to the beneficiaries at a higher price. Under the Employee Retirement Income Security Act of 1974, a breach of fiduciary duty claim is timely if filed no more than six years after the date of the last action that constituted the breach. The district court held that the alleged breach did not fall within the six year statute of limitations because the mutual funds were selected eight years before the action was brought against Edison. The Ninth Circuit affirmed the decision. The U.S. Supreme Court vacated and remanded the Ninth Circuit decision, holding that the Ninth Circuit focused on the act of designating an investment for inclusion to start the six year time limit and failed to consider the fiduciary duty to monitor the investment. The Supreme Court held that the continuing duty to monitor is separate and apart from the trustee's duty to exercise prudence in selecting the investments at the outset. A plaintiff may allege that a fiduciary breached a duty by failing to monitor investments and the claim is timely so long as the alleged breach occurred within six years of suit.