On February 26, 2020, the U.S. Supreme Court issued its unanimous decision in Intel Corporation Investment Policy Committee v. Sulyma, Case No. 18-1116. https://www.supremecourt.gov/opinions/19pdf/18-1116_h3cj.pdf. The decision resolves a split in the Circuits concerning the appropriate date by which to measure the shortened statute of limitations for breach of fiduciary duty claims. The triggering event for the three-year statute is based on the ERISA participant’s “actual knowledge.” The Court held that there is a proof requirement when a plan or fiduciary seeks to invoke a claim of “actual knowledge” under 29 U.S.C. §1113(2). Previously, courts around the United States (including the Sixth Circuit) had applied a quasi-constructive notice standard. Under that low threshold, if there was proof of sufficient disclosure, the ERISA participant could be held to the shortened period of limitations. No longer.
In Sulyma, the Court held:
This is the reason for ERISA’s requirements that disclosures be written for a lay audience. See, e.g., 29 U. S. C. §1022(a). Once plan administrators satisfy their obligations to impart knowledge, petitioners say, §1113(2)’s knowledge requirement is satisfied too. But that is simply not what §1113(2) says. Unlike other ERISA limitations periods—which also form §1113(2)’s context—§1113(2) begins only when a plaintiff actually is aware of the relevant facts, not when he should be. And a given plaintiff will not necessarily be aware of all facts disclosed to him; even a reasonably diligent plaintiff would not know those facts immediately upon receiving the disclosure.
This is a significant development in ERISA litigation. The decision also signals that the Supreme Court is taking a strict construction approach to the statute.