Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-10-56415/USCOURTS-ca9-10-56415-4/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

GLENN TIBBLE; WILLIAM BAUER;

WILLIAM IZRAL; HENRY 

RUNOWIECKI; FREDERICK 

SUHADOLC; HUGH TINMAN, JR., as 

representatives of a class of 

similarly situated persons, and on 

behalf of the Plan,

Plaintiffs-Appellants,

v.

EDISON INTERNATIONAL; THE 

EDISON INTERNATIONAL BENEFITS 

COMMITTEE, FKA The Southern 

California Edison Benefits 

Committee; EDISON INTERNATIONAL 

TRUST INVESTMENT COMMITTEE;

SECRETARY OF THE EDISON 

INTERNATIONAL BENEFITS 

COMMITTEE; SOUTHERN 

CALIFORNIA EDISON’S VICE 

PRESIDENT OF HUMAN RESOURCES;

MANAGER OF SOUTHERN 

CALIFORNIA EDISON’S HR SERVICE 

CENTER,

Defendants-Appellees.

No. 10-56406

D.C. No.

2:07-cv-05359-

SVW-AGR

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2 TIBBLE V. EDISON INTERNATIONAL

GLENN TIBBLE; WILLIAM BAUER;

WILLIAM IZRAL; HENRY 

RUNOWIECKI; FREDERICK 

SUHADOLC; HUGH TINMAN, JR., as 

representatives of a class of 

similarly situated persons, and on 

behalf of the Plan,

Plaintiffs-Appellees,

v.

EDISON INTERNATIONAL; THE 

SOUTHERN CALIFORNIA EDISON 

BENEFITS COMMITTEE, incorrectly 

named The Edison International 

Benefits Committee; EDISON 

INTERNATIONAL TRUST INVESTMENT 

COMMITTEE; SECRETARY OF THE 

SOUTHERN CALIFORNIA EDISON 

COMPANY BENEFITS COMMITTEE, 

incorrectly named Secretary of the 

Edison International Benefits 

Committee; SOUTHERN CALIFORNIA 

EDISON’S VICE PRESIDENT OF 

HUMAN RESOURCES; MANAGER OF 

SOUTHERN CALIFORNIA EDISON’S 

HR SERVICE CENTER,

Defendants-Appellants.

No. 10-56415

D.C. No.

2:07-cv-05359-

SVW-AGR

OPINION

Appeal from the United States District Court

for the Central District of California

Stephen V. Wilson, District Judge, Presiding

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TIBBLE V. EDISON INTERNATIONAL 3

Argued and Submitted En Banc September 8, 2016

San Francisco, California

Filed December 16, 2016

Before: SIDNEY R. THOMAS, Chief Judge, and 

STEPHEN REINHARDT, BARRY G. SILVERMAN, M. 

MARGARET MCKEOWN, RICHARD A. PAEZ, 

RICHARD R. CLIFTON, CARLOS T. BEA, MILAN D. 

SMITH, JR., JACQUELINE H. NGUYEN, PAUL J. 

WATFORD and MICHELLE T. FRIEDLAND, Circuit 

Judges.

Opinion by Judge Milan D. Smith, Jr.

SUMMARY*

Employee Retirement Income Security Act

On remand from the Supreme Court, the en banc court 

vacated the district court’s judgment in favor of an employer 

and its benefits plan administrator on claims of breach of 

fiduciary duty in the selection and retention of certain mutual 

funds for a benefit plan governed by ERISA.

The court of appeals had previously affirmed the district 

court’s holding that the plan beneficiaries’ claims regarding 

the selection of mutual funds in 1999 were time-barred under 

the six-year limit of 29 U.S.C. § 1113(1). The Supreme 

 * This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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4 TIBBLE V. EDISON INTERNATIONAL

Court vacated the court of appeals’ decision, observing that 

federal law imposes on fiduciaries an ongoing duty to 

monitor investments even absent a change in circumstances.

Rejecting defendants’ contention that the beneficiaries 

waived the ongoing-duty-to-monitor argument, the en banc 

court held that the beneficiaries did not forfeit the argument 

either in the district court or on appeal. Rather, defendants 

themselves failed to raise the waiver argument in their initial 

appeal, and thus forfeited this argument.

The en banc court distinguished Phillips v. Alaska Hotel 

& Rest. Emps. Pension Fund, 944 F.2d 509 (9th Cir. 1991), 

which held that when a fiduciary violated a continuing duty 

over time, the three-year limitations period set forth in 29 

U.S.C. § 1113(2) began when the plaintiff had actual 

knowledge of a breach in a series of discrete but related 

breaches. The panel held that Phillips did not apply to the 

continuing duty claims at issue under § 1113(1). Thus, only 

a “breach or violation,” such as a fiduciary’s failure to 

conduct its regular review of plan investments, need occur 

within the six-year statutory period of § 1113(1); the initial 

investment need not be made within the statutory period.

Looking to the law of trusts to determine the scope of 

defendants’ fiduciary duty to monitor investments, the en 

banc court held that the duty of prudence required 

defendants to reevaluate investments periodically and to take 

into account their power to obtain favorable investment 

products, particularly when those products were 

substantially identical—other than their lower cost—to 

products they had already selected. 

The en banc court vacated the district court’s decisions 

concerning the funds added to the ERISA plan before 2001 

and remanded on an open record for trial on the claim that, 

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TIBBLE V. EDISON INTERNATIONAL 5

regardless of whether there was a significant change in 

circumstances, defendants should have switched from retailclass fund shares to institutional-class fund shares to fulfill 

their continuing duty to monitor the appropriateness of the 

trust investments. The en banc court also directed the district 

court to reevaluate its award of costs and attorneys’ fees in 

light of the Supreme Court’s decision and the en banc court’s 

decision.

COUNSEL

Michael A. Wolff (argued), Jason P. Kelly, Sean E. Soyars,

Nelson G. Wolff, and Jerome J. Schlichter, Schlichter 

Bogard & Denton, Saint Louis, Missouri, for PlaintiffsAppellants/Cross-Appellees.

Jonathan D. Hacker (argued), Meaghan VerGow, Robert N. 

Eccles, and Walter Dellinger, O’Melveny & Myers LLP,

Washington, D.C.; Gabriel Markoff and Ward A. Penfold, 

O’Melveny & Myers LLP, San Francisco, California; 

Sergey Trakhtenberg, Southern California Edison Company, 

Rosemead, California; for Defendants-Appellees/CrossAppellants.

Jay E. Sushelsky, AARP Foundation Litigation, and Melvin 

Radowitz, AARP, Washington, D.C., for Amicus Curiae 

AARP.

Stacey E. Elias, Trial Attorney; Elizabeth Hopkins, Counsel 

for Appellate and Special Litigation, Washington, D.C.; 

Timothy D. Hauser, Associate Solicitor for Plan Benefits 

Security Division, and M. Patricia Smith, Solicitor of Labor, 

United States Department of Labor, Washington, D.C.; for 

Amicus Curiae Secretary of Labor.

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6 TIBBLE V. EDISON INTERNATIONAL

S. Michael Chittenden and Thomas L. Cubbage III, 

Covington & Burling LLP, Washington, D.C., for Amicus 

Curiae Investment Company Institute.

Abbey M. Glenn, Alison B. Willard, and Nicole A. Diller, 

Morgan Lewis Bockius LLP, San Francisco, California; for 

Amicus Curiae California Employment Law Council.

OPINION

M. SMITH, Circuit Judge:

FACTS AND PRIOR PROCEEDINGS

Edison sponsors a defined-contribution 401(k) Savings 

Plan (Plan), wherein “participants’ retirement benefits are 

limited to the value of their own individual investment 

accounts, which is determined by the market performance of 

employee and employer contributions, less expenses.” 

Tibble v. Edison Int’l, 135 S. Ct. 1823, 1826 (2015) (Tibble 

IV). “Expenses, such as management or administrative fees, 

can sometimes significantly reduce the value of an account 

in a defined-contribution plan.” Id.

In 2007, plaintiffs-appellants (beneficiaries) brought this 

action against Edison and the other defendants (collectively, 

Edison). The district court denied the beneficiaries’ motion 

for partial summary judgment, and partially granted 

Edison’s summary judgment motion. Tibble v. Edison Int’l, 

639 F. Supp. 2d 1074, 1080 (C.D. Cal. 2009) (Tibble I). This 

appeal concerns a claim that survived summary judgment; 

namely, that Edison breached its fiduciary duties by offering 

“higher priced retail-class mutual funds as Plan investments 

when materially identical lower priced institutional-class 

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TIBBLE V. EDISON INTERNATIONAL 7

mutual funds were available (the lower price reflects lower 

administrative costs).” Tibble IV, 135 S. Ct. at 1826.

The Plan is governed by the Employee Retirement 

Income Security Act (ERISA), 29 U.S.C. §§ 1001–1461. 

The relevant ERISA statute of limitations is six years, 

29 U.S.C. § 1113(1), and at least three of the disputed funds 

were added more than six years before the complaint was 

filed. Tibble IV, 135 S. Ct. at 1826. The district court 

allowed the beneficiaries to present evidence that their 

claims concerning those funds were timely because Edison, 

within the six-year limitations period, “fail[ed] to convert the 

retail shares to institutional shares upon the occurrence of 

certain ‘triggering events’” that should have prompted a full 

due-diligence review. Tibble v. Edison Int’l, No. CV 07-

5359 SVW (AGRx), 2010 U.S. Dist. LEXIS 69119, at *99 

(C.D. Cal. July 8, 2010) (Tibble II).

After a bench trial, the district court ruled for the 

beneficiaries on the retail-class funds selected within the sixyear period, because Edison did “not offer[] any credible 

explanation for why the retail share classes were selected 

instead of the institutional share classes,” and “a prudent 

fiduciary acting in a like capacity would have invested in the 

institutional share classes.” Id. at *98. Indeed, the court held 

that there was “no evidence that [Edison] even considered or 

evaluated the different share classes” when the funds were 

added. Id. at *81 (emphasis in original).

As to the funds initially selected before the statute of 

limitations, the district court held that the “triggering events” 

proffered by the beneficiaries for two of the funds—a name 

change because of a partial change in ownership of a subadvisor, and a name change related to a years-old ownership 

change—were insufficient to trigger a full diligence review, 

and that a change in strategy in a third fund—from small-cap 

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8 TIBBLE V. EDISON INTERNATIONAL

to mid-cap—triggered a review to which Edison responded 

adequately by adding another small-cap option. Id. at *102–

07.

On appeal to our court, the beneficiaries argued that the 

district court should have allowed them to prove their claims 

concerning funds selected before the relevant six-year 

period. Tibble v. Edison Int’l, 729 F.3d 1110, 1119 (9th Cir. 

2013) (Tibble III), vacated, 135 S. Ct. 1823, 1829 (2015). In 

response, Edison acknowledged that it had a duty to monitor 

the funds for changed circumstances that would make the 

investment no longer prudent, but argued that the 

beneficiaries did not show sufficiently changed 

circumstances. Our vacated decision accepted Edison’s 

contention, and noted that “the district court was entirely 

correct to have entertained” the possibility of changed 

circumstances, and correct to have found the circumstances 

insufficient to trigger a response by Edison. Id. at 1120. We 

thus concluded that any theory of a duty absent changed 

circumstances amounted to a continuing violation theory 

that we declined to read into the ERISA statute of 

limitations. Id. at 1119–20.

Plaintiffs successfully petitioned for certiorari, and the 

Supreme Court reversed our decision concerning the statute 

of limitations, holding that regardless of when an investment 

was initially selected, “a fiduciary’s allegedly imprudent 

retention of an investment” is an event that triggers a new 

statute of limitations period. Tibble IV, 135 S. Ct. at 1826, 

1828–29. The Court specifically rejected “the conclusion 

that only a significant change in circumstances could 

engender a new breach of a fiduciary duty.” Id. at 1827. We 

were cautioned against “applying a statutory bar to a claim 

of a ‘breach or violation’ of a fiduciary duty without 

considering the nature of the fiduciary duty,” and told to 

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TIBBLE V. EDISON INTERNATIONAL 9

“recognize that under trust law a fiduciary is required to 

conduct a regular review of its investment with the nature 

and timing of the review contingent on the circumstances.” 

Id. at 1827–28. The Court instructed us to decide “the scope 

of [Edison’s] fiduciary duty” to monitor investments. Id. at 

1829.

The Court also left to us on remand “any questions of 

forfeiture,” acknowledging Edison’s contention that the 

beneficiaries “did not raise the claim below that [Edison] 

committed new breaches of the duty of prudence by failing 

to monitor their investments and remove imprudent ones 

absent a significant change in circumstances.” Id.

A panel of our court in Tibble v. Edison International, 

820 F.3d 1041, 1048 (9th Cir. 2016) (Tibble V), concluded 

that the issue was forfeited. We then ordered that the case 

be reheard en banc, so the panel’s decision in Tibble V is 

vacated. Tibble v. Edison Int’l, 831 F.3d 1262 (9th Cir. 

2016).

For the reasons discussed below, we vacate the district 

court’s decisions concerning the funds added to the Plan 

before 2001, and remand for trial on an open record on the 

claim that, regardless of whether there was a significant 

change in circumstances, Edison should have switched from 

retail-class fund shares to institutional-class fund shares to 

fulfill its continuing duty to monitor the appropriateness of 

the trust investments. We also encourage the district court 

to reevaluate its fee determination in light of the Supreme 

Court’s decision, and our decision en banc.

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10 TIBBLE V. EDISON INTERNATIONAL

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction pursuant to 28 U.S.C. § 1291. We 

review summary judgment determinations de novo. Szajer 

v. City of Los Angeles, 632 F.3d 607, 610 (9th Cir. 2011).

ANALYSIS

I. Applicable Law

The applicable statute of limitations in this case is the 

six-year limit of 29 U.S.C. § 1113(1)(A), which states that 

“[n]o action may be commenced . . . with respect to a 

fiduciary’s breach of any responsibility, duty, or obligation 

. . . six years after [] the date of the last action which 

constituted a part of the breach or violation.” As the 

Supreme Court noted in Tibble IV, under this statute only a 

“breach or violation,” not an original investment decision, 

need occur to start the six-year statutory period. 135 S. Ct. 

at 1827.

Generally, we do not “entertain[] arguments on appeal 

that were not presented or developed before the district 

court.” Visendi v. Bank of Am., N.A., 733 F.3d 863, 869 (9th 

Cir. 2013). “Although no bright line rule exists to determine 

whether a matter [h]as been properly raised below, an issue 

will generally be deemed waived on appeal if the argument 

was not raised sufficiently for the trial court to rule on it.” In 

re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988, 992 

(9th Cir. 2010) (internal quotation marks omitted).

II. Forfeiture

Before addressing the statute of limitations and ERISAtrust law issues remanded to us by the Supreme Court, we 

address Edison’s claims that the issues presently on appeal 

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TIBBLE V. EDISON INTERNATIONAL 11

have been forfeited by the beneficiaries. We conclude that 

the beneficiaries did not forfeit their failure-to-monitor 

argument in either the district court or on appeal. Instead, 

we conclude that Edison itself forfeited the forfeiture 

argument in its initial appeal.

A. There Was No Forfeiture by the Beneficiaries on 

Appeal

We begin with the appeal. The beneficiaries argued in 

their opening brief that:

Defendants had a continuing duty to ensure 

that each of the Plans’ investment options 

was and remained prudent and had 

reasonable expenses. Merely because they 

allowed an imprudent fund into the Plan at 

one point does not mean Defendants could 

just leave it in the Plan forever. Within six 

years prior to the commencement of this 

action, Defendants could have switched the 

Plan out of the retail shares and into the 

institutional shares of three excluded mutual 

funds and saved the Plan millions in 

unnecessary fees.1

 1 Edison attempts to obscure this clear statement with irrelevant 

specificity, noting that “Plaintiffs’ appellate briefs also did not raise the 

argument . . . that the district court’s summary judgment orders 

improperly barred plaintiffs from challenging Edison’s monitoring of the 

pre-2001 mutual funds during the repose period, unless plaintiffs 

established that the funds underwent significant changes.” But, having 

lost at trial on the merits of the “significant changes” issue, the 

beneficiaries argued simply that the district court should have allowed a 

claim that “‘the last action which constituted a part of the breach’—using 

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12 TIBBLE V. EDISON INTERNATIONAL

Similarly, the beneficiaries argued:

At any time in that six-year period 

Defendants could have switched from retail 

to institutional class shares. Their failure to 

do so caused the Plan to pay unnecessary, 

retail fees in each of those six years. 

Therefore, the “last action which constituted 

a part of the breach”—using retail class 

shares—occurred within six years and the 

“latest date on which the fiduciary could have 

cured the breach”—replacing retail with 

institutional shares—also occurred within six 

years.

And, the beneficiaries argued that “[f]und fiduciaries . . . 

were under a continuing obligation to advise the Fund to 

divest itself of unlawful or imprudent investments.” (Citing 

Buccino v. Cont’l Assurance Co., 578 F. Supp. 1518, 1521 

(S.D.N.Y. 1983)).

Thus, the beneficiaries argued on appeal for an ongoing 

duty to monitor investments and to remove imprudent 

investments—a duty that was not limited to “changed 

circumstances.” The theory was simply that: “[i]n light of 

the continuing duty of prudence imposed on plan fiduciaries 

by ERISA, each failure to exercise prudence constitutes a 

new breach of duty, that is to say, a new claim”—squarely 

embracing the theory accepted by the Supreme Court. See 

 

retail class shares—occurred within six years.” That the beneficiaries’ 

later phrasing articulated both what the district court allowed (a 

significant changes theory) and what the district court rejected (a pure 

continuing duty to prudently monitor) does not show forfeiture of the 

latter argument. Indeed, it was specifically raised in the beneficiaries’ 

opening brief.

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TIBBLE V. EDISON INTERNATIONAL 13

Tibble IV, 135 S. Ct. at 1829. In response, Edison argued for 

a duty that was limited to changed circumstances: “Plan 

fiduciaries do have a continuing duty under ERISA to 

monitor investment options for changed circumstances 

rendering a once-prudent investment now imprudent, but 

plaintiffs here allege no changed circumstances.” The 

Tibble III panel accepted Edison’s limiting theory, but the 

Supreme Court rejected it. The claim was not forfeited on 

appeal.

B. There Was No Forfeiture by the Beneficiaries in 

the District Court

Nor did the beneficiaries forfeit their claim in the district 

court. Edison’s post-trial briefing stated:

The Court expressly held in its first summary 

judgment ruling that plaintiffs could not 

revisit the prudence of selecting mutual funds 

that became part of the Plan’s investment 

lineup more than six years prior to the filing 

of the Complaint. By challenging the 

prudence of maintaining retail share classes

of the three “name change” funds, plaintiffs 

have done what the Court has forbidden, by 

attempting to resurrect claims that were 

properly held barred by the six-year statute of 

limitations.

(Emphasis added and citation omitted). Given this 

contemporaneous statement that any claim challenging the 

prudence of maintaining retail share classes first selected 

before the limitations period had been rejected on summary 

judgment, it is hard to see how Edison can now argue that 

the beneficiaries forfeited the argument by not presenting 

“any evidence establishing that a prudent fiduciary would 

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14 TIBBLE V. EDISON INTERNATIONAL

have identified the alleged share-class issue during regular, 

periodic reviews.”

Simply put, the district court held at summary judgment 

that because “the initial decision to add retail mutual funds” 

was made outside of the six-year limitations period, “the 

prudence claims arising out of these decisions are barred by 

the statute of limitations.” Tibble I, 639 F. Supp. 2d at 1120. 

And, the district court stated in its trial decision: “three 

funds were added to the Plan before the statute of limitations 

period; thus, Plaintiffs challenged the failure to switch to an 

institutional share class upon the occurrence of certain 

significant events within the limitations period.” Tibble II, 

2010 U.S. Dist. LEXIS 69119 at *7 (emphasis added). The 

district court used the causal “thus” to describe why 

Plaintiffs relied on a “significant changes theory”: because 

prudence claims arising out of the initial selection were 

outside the statute of limitations, and barred by the summary 

judgment order (absent changed circumstances).

Edison also pointed to the district court’s questioning of 

the beneficiaries’ expert, Dr. Steven Pomerantz, who 

attempted to identify changed circumstances that would 

have triggered a duty to switch the share class, such that the 

claim would not be barred by the district court’s statute of 

limitations ruling. In conversation with Pomerantz, the 

district court said that it did not understand the connection 

between a name change of a fund and whether Edison should 

have switched to institutional class shares, and asked 

whether Edison should have removed the funds even without 

a name change. The court asked: “[w]ould you contend . . . 

that during the relevant time period due diligence would 

have required the plan to nevertheless buy an institutional 

share class, all things being equal, assuming the institutional 

share class had a lower fee?” Pomerantz mostly stuck to his 

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TIBBLE V. EDISON INTERNATIONAL 15

significant changes theory in response. Edison argued that 

this exchange showed that the district court did not forbid a 

duty-to-monitor claim; indeed, according to Edison, the 

district court “invited Pomerantz to make [a duty-to-monitor 

claim] . . . , but he refused to agree,” sticking to the 

significant changes theory.

It is certainly possible that the district court had forgotten 

a portion of its voluminous summary judgment ruling, and 

was at that time open to a theory imposing a continuing duty 

in the absence of “changed circumstances.” Or it could be, 

as the beneficiaries suggest, that the district court was 

checking to see whether the theory Pomerantz was 

articulating was in substance the same as the theory the 

district court had excluded. It does not matter which 

interpretation is correct, because neither shows forfeiture. 

Whatever the intent behind the district court’s hypothetical 

questions to an expert, they did not constitute a change in its 

earlier ruling sufficient to put the beneficiaries on notice that 

they could then, contrary to the court’s earlier ruling, put on 

evidence to prove their preferred continuing duty theory.

Finally, Edison emphasizes that the district court 

allowed the beneficiaries to put on a continuing duty case 

concerning a different investment, the Money Market Fund. 

See Tibble II, 2010 U.S. Dist. LEXIS 69119 at *108–21. It 

is true that the claims have much in common, and it is not 

clear why the district court provided a distinct treatment of 

the Money Market Fund. Perhaps it was because Edison 

continued to negotiate the rate for the fund throughout the 

period at issue, while Edison employed a “set it and forget 

it” approach with the mutual funds. Whatever the reason, 

that the district court allowed a similar claim as to the Money 

Market Fund simply does not show that, contrary to both 

sides’ understanding, the beneficiaries were allowed to put 

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16 TIBBLE V. EDISON INTERNATIONAL

on a monitor-and-remove-absent-significant-changedcircumstances theory concerning the mutual funds.

Because the beneficiaries—and Edison—reasonably 

believed that the district court’s summary judgment order 

precluded the duty to monitor claim, and because the 

beneficiaries preserved the claim on appeal, it has not been 

forfeited.

C. Edison’s Own Forfeiture

The beneficiaries argue that Edison forfeited its

forfeiture argument by failing to raise it in the initial appeal. 

Edison did not argue forfeiture in the initial appeal consistent 

with its understanding, as expressed in its post-trial motion, 

that the district court’s summary judgment ruling barred 

claims relating to the funds first selected before 2001.

Edison argues that it did not raise forfeiture because the 

beneficiaries did not articulate their continuing duty theory 

before they submitted their Supreme Court briefing. 

However, as discussed above, the beneficiaries raised the 

continuing duty argument in their opening brief on appeal. 

Edison therefore forfeited any potential forfeiture response 

to that argument. And, even at the Supreme Court, where 

the beneficiaries clearly presented their continuing duty 

argument in their petition for certiorari, Edison responded 

not that the beneficiaries had forfeited that claim, but 

instead, that a fiduciary only has a “duty to monitor for 

material changes in circumstances.” (Emphasis omitted).

III.Phillips Does Not Bar the Beneficiaries’ Claim

In Phillips v. Alaska Hotel and Restaurant Employees 

Pension Fund, 944 F.2d 509, 520–21 (9th Cir. 1991), we 

held that the limitations period under a different subsection 

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TIBBLE V. EDISON INTERNATIONAL 17

of the ERISA statute of limitations, 29 U.S.C. § 1113(2), 

begins when a plaintiff has actual knowledge of a breach. 

When there is “a series of discrete but related breaches” 

because a fiduciary violated a continuing duty over time, the 

§ 1113(2) limitations period does not begin anew with each 

related breach. Id.

Phillips followed the plain language of the statute: 

§ 1113(2) provides that the plaintiff’s “actual knowledge of 

the breach” is measured from “three years after the earliest 

date” of such knowledge. “Once a plaintiff knew of one 

breach, an awareness of later breaches [of the same 

character] would impart nothing materially new,” and 

applying a “continuing violation theory [would] essentially 

read[] the ‘actual knowledge’ standard out of [§ 1113(2)].” 

Phillips, 944 F.2d at 520. Thus, we held that “[t]he earliest 

date on which a plaintiff became aware of any breach . . . 

start[s] the limitation period of § 1113[](2)2 running.” Id.

The district court in Tibble I misunderstood Phillips to 

stand for the broad proposition that “[t]here is no ‘continuing 

violation’ theory to claims subject to ERISA’s statute of 

limitations.” Tibble I, 639 F. Supp. 2d at 1086. However, 

Phillips did not reject a continuing violation theory for the 

ERISA statute of limitations generally; it merely held that, 

for claims subject to § 1113(2), the earliest date of actual 

knowledge of a breach begins the limitations period, even if 

the breach continues. When a plaintiff has actual knowledge 

of a breach, § 1113(2) operates to keep her from sitting on 

her rights and allowing the series of related breaches to 

 2 Our opinion identified the statute as § 1113(a)(2), but quoted from 

and discussed § 1113(2). Because there is no subsection (a)(2) in § 1113, 

the reference appears to have been in error, and Phillips’ holding applies 

to § 1113(2).

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18 TIBBLE V. EDISON INTERNATIONAL

continue. However, when a plaintiff does not have actual 

knowledge of a breach of a continuing duty and § 1113(1) 

applies, the rationale for Phillips’ continuing duty limit on 

§ 1113(2) is no longer relevant. Thus, we hold that Phillips

is inapplicable to the continuing duty claims at issue here, 

namely to 29 U.S.C. § 1113(1).3

The Supreme Court held that the fiduciary duty 

identified in this case is continuing in nature, and that each 

new breach begins a six-year limitations period under 

§ 1113(1). The Court recognized the breach as “a 

fiduciary’s allegedly imprudent retention of an investment” 

which results in a series of related breaches as the investment 

is retained over time. Tibble IV, 135 S. Ct. at 1826, 1828–

29 (emphasis added). As the Court made clear, only a 

“breach or violation,” such as a fiduciary’s failure to conduct 

its required regular review of Plan investments, need occur 

within the six-year statutory period; the initial investment 

need not be made within the statutory period. Id. at 1827–

28.

IV.ERISA and Analogous Trust Law

The Supreme Court tasked us with resolving “the scope 

of [Edison’s] fiduciary duty” to monitor investments, while 

 3 The district court held that the beneficiaries’ claims were governed 

by § 1113(1) because Edison did not produce undisputed evidence of the 

beneficiaries’ actual knowledge of the alleged breaches, making 

§ 1113(2) inapplicable. Tibble I, 639 F. Supp. 2d at 1086. We affirmed, 

holding that, “because the[] beneficiaries’ trial claims hinged on 

infirmities in the selection process for investments,” Edison’s contention 

that “mere notification that retail funds were in the Plan menu” was 

insufficient to satisfy the “actual knowledge” standard. Tibble III, 

729 F.3d at 1121. The Supreme Court also applied § 1113(1). Tibble 

IV, 135 S. Ct. at 1827.

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TIBBLE V. EDISON INTERNATIONAL 19

“recognizing the importance of analogous trust law.” Id. at 

1829. Edison’s fiduciary duty arises from ERISA, “a 

comprehensive statute designed to promote the interests of 

employees and their beneficiaries in employee benefit 

plans.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 90 

(1983). “An ERISA fiduciary must discharge his 

responsibility ‘with the care, skill, prudence, and diligence’ 

that a prudent person ‘acting in a like capacity and familiar 

with such matters’ would use.” Tibble IV, 135 S. Ct. at 1828 

(quoting 29 U.S.C. § 1104(a)(1)). “These duties are the 

highest known to the law.” Howard v. Shay, 100 F.3d 1484, 

1488 (9th Cir. 1996) (internal quotation marks omitted). “To 

enforce them, the court focuses not only on the merits of the 

transaction, but also on the thoroughness of the investigation 

into the merits of the transaction.” Id.

ERISA fiduciary duties are derived from the common 

law of trusts, so “courts often must look to the law of trusts” 

to “determin[e] the contours of an ERISA fiduciary’s duty.” 

Tibble IV, 135 S. Ct. at 1828. “Under trust law, a trustee has 

a continuing duty to monitor trust investments and remove 

imprudent ones . . . separate and apart from the trustee’s duty 

to exercise prudence in selecting investments at the outset.” 

Id. “[A] trustee cannot assume that if investments are legal 

and proper for retention at the beginning of the trust, or when 

purchased, they will remain so indefinitely.” Id. (quoting A.

HESS, G. BOGERT & G. BOGERT, LAW OF TRUSTS AND 

TRUSTEES § 684, 145–46 (3d ed. 2009) [hereinafter Bogert 

3d]). “Rather, the trustee must ‘systematic[ally] conside[r] 

all the investments of the trust at regular intervals’ to ensure 

that they are appropriate.” Id. (quoting Bogert 3d § 684, at 

147–48). In fulfilling his duties, a trustee is held to “the 

prudent investor rule,” which requires that he “invest and 

manage trust assets as a prudent investor would”; that is, by 

“exercis[ing] reasonable care, skill, and caution,” and by 

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20 TIBBLE V. EDISON INTERNATIONAL

“reevaluat[ing] the trust’s investments periodically as 

conditions change.” Bogert 3d § 684.

Additionally, pursuant to the Restatement (Third) of 

Trusts, a trustee is to “incur only costs that are reasonable in 

amount and appropriate to the investment responsibilities of 

the trusteeship.” RESTATEMENT (THIRD) OF TRUSTS

§ 90(c)(3); see also id. § 88. The Restatement further 

instructs that “cost-conscious management is fundamental to 

prudence in the investment function,” and should be applied 

“not only in making investments but also in monitoring and 

reviewing investments.” Id. § 90, cmt. b; see also id. § 88, 

cmt. a (“Implicit in a trustee’s fiduciary duties is a duty to be 

cost-conscious.”); Donahue v. Donahue, 182 Cal. App. 4th 

259, 273 (2010) (reversing and remanding an award for 

attorneys’ fees incurred by a trustee because the trial court 

did not consider whether the trustee fulfilled his duty to be 

cost-conscious in incurring the fees). As the Uniform 

Prudent Investor Act observes: “Wasting beneficiaries’ 

money is imprudent. In devising and implementing 

strategies for the investment and management of trust assets, 

trustees are obliged to minimize costs.” Unif. Prudent 

Investor Act § 7.

It is beyond dispute that the higher the fees charged to a 

beneficiary, the more the beneficiary’s investment shrinks. 

As a simple example, if a beneficiary invested $10,000, the 

investment grew at a rate of 7% a year for 40 years, and the 

fund charged 1% in fees each year,4 at the end of the 40-year 

period the beneficiary’s investment would be worth 

 4 The funds Edison offered beneficiaries had expense ratios ranging 

from 0.03% to 2%. Tibble I, 639 F. Supp. 2d at 1117.

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TIBBLE V. EDISON INTERNATIONAL 21

$100,175. If the fees were raised to 1.18%, or 1.4%,5 the 

value of the investment at the end of the 40-year period 

would decrease to $93,142 and $85,198, respectively. 

Beneficiaries subject to higher fees for materially identical 

funds lose not only the money spent on higher fees, but also 

“lost investment opportunity”; that is, the money that the 

portion of their investment spent on unnecessary fees would 

have earned over time. Tibble II, 2010 U.S. Dist. LEXIS 

69119, at *124–25. Pursuant to the aforementioned trust law 

principles, a trustee cannot ignore the power the trust wields 

to obtain favorable investment products, particularly when 

those products are substantially identical—other than their 

lower cost—to products the trustee has already selected.

The beneficiaries request “a new trial on the issue of 

whether [Edison] breached [its] fiduciary duties by 

providing as Plan investments during the limitations period 

mutual funds in a share class that was more expensive than 

other share classes that were available to the Plan.” (Citing 

Lam v. Univ. Of Haw., 40 F.3d 1551, 1554–55, 1566–67 (9th 

Cir. 1994) (remanding for trial after reversal of summary 

judgment)). The beneficiaries wrote that “[b]ecause [they] 

were precluded from presenting [the continuing-dutyabsent-changed-circumstances] claims by the district court’s 

erroneous interpretation of the limitations statute, there is no 

record on which the Court can resolve this claim on appeal.” 

We agree that the record does not establish exactly what 

would have resulted from the application of the correct legal 

standard, and accordingly remand on an open record for the 

 5 The district court found that, for Edison’s six retail class funds that 

had institutional class funds available, each retail fund’s fees were 0.18% 

to 0.4% higher than the corresponding institutional funds’ fees over the 

2001–2009 period. Tibble II, 2010 U.S. Dist. LEXIS 69119, at *26–41.

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22 TIBBLE V. EDISON INTERNATIONAL

district court to consider these issues in light of the principles 

explicated by the Supreme Court and this opinion.

V. Attorneys’ Fees and Costs

The beneficiaries also requested that we direct the 

district court “to reconsider an award of costs and attorney 

fees in light of the results of the trial on remand.” The 

beneficiaries had originally sought nearly $2.5 million in 

attorneys’ fees and nontaxable costs, and in response to the 

court’s order, sought a reduced amount of $407,277.30 in 

fees and $3,731.92 in costs. The district court held that even 

if the attorneys’ fees request was appropriate, it would be 

offset by the costs due to Edison as the prevailing party on 

the majority of claims originally filed.

In determining that the beneficiaries’ original fee request 

should be drastically reduced, the district court expressed its 

skepticism concerning the importance of the beneficiaries’ 

partial victory. Considering the Supreme Court decision that 

followed, and our en banc decision in this case, we believe 

that this case has far greater importance than the district 

court believed it did at the time of its earlier fee 

determinations. Accordingly, we direct the district court to 

reconsider the fee issue in light of the significant amount of 

work that has been required to vindicate an important ERISA 

principle in our court and the Supreme Court.

CONCLUSION

We VACATE the district court’s decisions concerning 

the funds added to the Plan before 2001, and REMAND on 

an open record for trial on the claim that, regardless of 

whether there was a significant change in circumstances, 

Edison should have switched from retail-class fund shares to 

institutional-class fund shares to fulfill its continuing duty to 

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TIBBLE V. EDISON INTERNATIONAL 23

monitor the appropriateness of the trust investments. The 

district court is also directed to reevaluate its fee 

determination in light of the Supreme Court’s decision and 

this court’s en banc decision.

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