A majority of nonrecused, active judges in the 9th U.S. Circuit Court of Appeals ordered the case of Tibble v. Edison International be reheard en banc by the full panel of appellate judges.
In the original case, Glenn Tibble accused Edison and plan fiduciaries of violating their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by adding retail-class mutual funds to the plan when lower-cost, institutional-class funds were available. Edison added three retail-class mutual funds to the plan in 1999, and three more in 2002.
The U.S. District Court for the Central District of California found the defendants violated their duties under ERISA for the three funds added in 2002, but dismissed claims concerning the funds added in 1999, saying that transaction occurred before ERISA’s six-year statute of limitations on lawsuits. The 9th Circuit affirmed this decision.
The case went to the U.S. Supreme Court, which found the “ongoing duty to monitor” investments is a fiduciary duty that is separate and distinct from the duty to exercise prudence in selecting investments for use on a defined contribution (DC) plan investment menu. The high court remanded the case to the 9th Circuit, instructing it to decide whether Tibble forfeited the ongoing-duty-to-monitor argument by not raising it before the court previously.
The appellate court ruled in April that because he failed to raise the argument in a timely way and there has been no change in the law that could justify failure to raise the argument, Tibble forfeited the argument.