2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

3-9-2001

In Re: Unisys Corp.

Precedential or Non-Precedential:

Docket 99-1929

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"In Re: Unisys Corp." (2001). 2001 Decisions. Paper 47.

http://digitalcommons.law.villanova.edu/thirdcircuit_2001/47
Filed March 9, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

NO. 99-1929 

IN RE: UNISYS CORP. RETIREE 

MEDICAL BENEFIT "ERISA" LITIGATION 

FREDERICK E. TONNIES; WILLIAM M. LEONHARDT; 

DAVID S. KAHL; ROBERT E. WILT; CLAY A. BERNICHON; 

SOLVEIG TSCHANN; FREDERICK W. HORPE; LUDSON F. 

WORSHAM; EDWIN MARJALA; KENYON T. BEMENT; 

DONALD E. WAGNER; LUCIUS O. BROWNE, DONALD F . 

FABRY; THOMAS L. DURKIN; BERNARD J. HAR T; 

RONALD R. BENNETT; HERMAN HEIN; DONALD L. 

THOMPSON, individually and on behalf of all members of 

the Sperry, Burroughs and Unisys Classes 

Appellants 

On Appeal From the United States District Court 

For the Eastern District of Pennsylvania 

(MDL 969) 

District Judge: Honorable Bruce W. Kauf fman 

Argued July 18, 2000 

BEFORE: MANSMANN, NYGAARD and STAPLETON, 

Circuit Judges 

(Opinion Filed March 9, 2001) 
 Arnold Levin 

 Levin, Fishbein, Sedran & Berman 

 510 Walnut Street, Suite 500 

 Philadelphia, PA 19106 

 Joseph A. Golden 

 Carl B. Downing 

 Sommers, Schwartz, Silver & 

 Schwartz 

 2000 Town Center, Suite 900 

 Southfield, MI 48075 

 Bryan L. Clobes 

 Miller, Faucher, Cafferty & W exler 

 One Penn Square West, Suite 2500 

 Philadelphia, PA 19102 

 Seymour J. Mansfield 

 Mansfield & Tanick 

 900 Second Avenue South, 

 Suite 1560 

 Minneapolis, MN 55402 

 Sarah E. Siskind 

 Miner, Barnhill & Galland 

 44 East Miffline Street, Suite 803 

 Madison, WI 53703 

 Henry H. Rossbacher 

 Rossbacher & Associates 

 445 South Flower Street 

 Citibank Center, Suite 2100 

 Los Angeles, CA 90071 

 Charles Gottlieb 

 Gottlieb & Goren 

 30150 Telegraph, Suite 249 

 Bingham Farms, MI 48025 

 Joseph F. Roda 

 Roda & Nast 

 801 Estelle Drive 

 Lancaster, PA 17602 

 2 
 Alan M. Sandals (Argued) 

 Sandals, Langer & Taylor 

 1650 Market Street 

 One Liberty Place, 50th Floor 

 Philadelphia, PA 19103 

 Attorneys for Appellants 

 Joseph J. Costello (Argued) 

 Joseph B.G. Fay 

 Morgan, Lewis & Bockius 

 1701 Market Street 

 Philadelphia, PA 19103 

 Joseph A. Teklits 

 UNISYS Corporation 

 P.O. Box 500 

 Blue Bell, PA 19424 

 Attorneys for Appellee 

OPINION OF THE COURT 

STAPLETON, Circuit Judge: 

We are asked to review two or ders granting partial

summary judgment to the defendant in this ERISA action. 

Review of one order requires us to interpret ERISA's statute 

of limitations for breach of fiduciary duty claims, 29 U.S.C. 

S 1113. Review of the other requir es us to determine 

whether the defendant fiduciary, if found to have made 

material misrepresentations to the plaintiffs, may be held 

accountable to those plaintiffs who relied to their detriment 

in making decisions other than decisions to r etire. 

I. 

The factual and procedural history of this case is 

extensive and has been recounted elsewher e in detail.1 We 

_________________________________________________________________ 

1. See e.g., In re Unisys Corp., 57 F.3d 1255, 1257-61 (3d Cir. 1995), 

cert. 

denied sub nom, Unisys v. Pickering, 517 U.S. 1103 (1996); In re Unisys 

Corp., 957 F. Supp. 628, 631-32 (E.D. Pa. 1997); In re Unisys Corp., 837 

F. Supp. 670, 672 (E.D. Pa. 1993), aff 'd, 58 F.3d 896 (3d Cir. 1995). 

 3 
will explain only the status of the case as it comes to us on 

this appeal. This is a class action filed on behalf of retirees 

and disabled former employees of the Sperry, Burroughs, 

and Unisys Corporations ("retirees" or "plaintiffs") against 

Unisys Corporation ("Unisys"). The dispute arises out of 

Unisys' termination of its post-retir ement medical plans for 

retirees and disabled former employees of the three

companies. 

On November 3, 1992, Unisys announced that it would

terminate all of its preexisting medical benefit plans and 

replace them with a new one effective January 1, 1993.2 

Under the majority of the old plans, Unisys paid the entire 

medical premium for the lives of the retir ees and provided 

continuing benefits for their spouses. The new plan, in 

contrast, required the retirees to contribute escalating 

amounts to the cost of the premiums until January 1, 

1995, at which time the retirees would become responsible 

for the entire premium. 

Upon learning about this planned change in r etirement 

benefits, retirees of Sperry, Burr oughs, and Unisys 

separately filed eight different lawsuits against Unisys in 

four jurisdictions. See In re Unisys Corp., 837 F. Supp. 670, 

672 n.1 (E.D. Pa. 1993) (citing cases). These lawsuits were 

eventually consolidated. The retirees asserted three causes 

of action: breach of contract, estoppel, and br each of 

fiduciary duty. 

The District Court granted summary judgment to Unisys 

on the breach of contract claims of the Burr oughs and 

Unisys retirees, as well as on the estoppel and breach of 

fiduciary duty claims of all plaintiffs. See In re Unisys Corp., 

837 F. Supp. 670 (E.D. Pa. 1993). After a non-jury trial, the 

District Court granted judgment to Unisys on the contract 

_________________________________________________________________ 

2. In September 1986, Sperry Corporation and Burr oughs Corporation 

merged to form Unisys Corporation. Following the merger, Unisys 

maintained the preexisting medical benefit plans of its component 

corporations until 1989. That year, Unisys cr eated its own PostRetirement and Extended Disability Medical Plan to cover employees who 

retired after April 1, 1989, most of whom were former Sperry and 

Burroughs employees. Even with the addition of the new plan, however, 

Unisys kept its predecessor plans intact. 

 4 
claims of the Sperry retirees. See In re Unisys Corp., 1994 

WL 284079 (E.D. Pa.). 

During the trial, Unisys relied upon the fact that the 

applicable ERISA plans and summary plan descriptions 

("SPDs") contained a reservation of rights clause, reserving 

to Unisys the right to amend or terminate the plan at any 

time for any reason. The Sperry retir ees advanced two 

theories in response. The first was that, when the 

applicable ERISA plans and summary plan descriptions 

described the health care benefits as "lifetime" benefits, this 

was intended to convey not only that the existing plan 

provided such benefits for life but also that those benefits 

were vested, i.e., guaranteed against change. The second 

theory "was that although the SPDs used lifetime language 

to describe the benefits of [both] actives and retirees, Sperry 

had an unwritten `practice' or `policy' that once an 

individual retired, his/her benefits`locked in.' Pursuant to 

this `lock in' policy, the company could not r educe the 

medical benefits of retirees under any circumstances." In re 

Unisys Corp., 1994 WL 284079 at *23. 

At the seven day trial, the District Court admitted and 

considered extrinsic evidence tendered to show Unisys' 

intent in promulgating the plans. The Court concluded that 

"lifetime benefits" as used in the plans and SPDs did not 

reflect an intent to create "vested" lifetime benefits, 

observing that "the plaintiffs conceded thr oughout the 

entire trial that an active employee's benefits could always 

be awarded or terminated even though lifetime language 

was similarly used to describe that benefit . . . implicitly 

recogniz[ing] that lifetime is not synonymous with vested." 

Id. at *22. With respect to the plaintiffs' second theory, the 

District Court found no evidence of a corporate practice or 

policy of "locking-in" benefits at r etirement, noting that "not 

a single document corroborat[ed] the testimony that an 

active/retiree distinction was in for ce." Id. at *23. 

The District Court's ultimate conclusion at the end of the 

trial was that the plaintiffs lacked any contract right to 

lifetime benefits. The evidence that it hear d and our 

intervening decision in Bixler v. Cent. Pa. T eamsters Health 

& Welfare Fund, 12 F.3d 1292 (3d Cir. 1993), however, 

caused it to reconsider its summary judgment in Unisys' 

 5 
favor on the Sperry plaintiffs' breach offiduciary duty 

claims. Ultimately, it reinstated those claims. 3 In the course 

of doing so, it pointed to evidence that (1) a "r etirement 

counselor [had] responded to questions about the 

reservation of rights clause raised by potential retirees by 

saying that the language `pertained to active employees and 

not to retirees' ", and (2) a "personnel manager . . . admitted 

to routinely telling inquiring employees that their postretirement medical benefits were`guaranteed to them for 

life.' " The Court described this evidence as"just a small 

sample of the evidence on this issue." In r e Unisys Corp., 

1994 WL 284079 at *34 n.69. The Court also r eferenced 

evidence indicating "the highest levels of corporate 

management at Sperry, and later Unisys, recognized that 

employees might be under the mistaken belief that`lifetime' 

meant forever." Id. at *26. The Court explained its

reinstatement decision by stating "that based on [this] 

evidence and the law in this circuit, it seems possible that 

at least some plaintiffs will be able to sustain a [breach of 

fiduciary duty] claim." Id. at *27. 4 The Court declined, 

however, to reinstate the estoppel claims. 

An interlocutory appeal followed, bringing befor e us the 

judgments in Unisys' favor on the contract and estoppel 

claims and the decision to reinstate the br each of fiduciary 

duty claims. We found judgment appropriate on the breach 

of contract claim because the plans and SPDs pr ovided 

unambiguous notice that lifetime medical benefits were not 

guaranteed, even for those who retired when the plans still 

provided for such benefits. On the unambiguous face of the 

plans, there was no right to lifetime medical benefits and 

extrinsic evidence should not be considered. See In re 

Unisys Corp. ("Unisys I"), 58 F .3d 896, 904-06 (3d Cir. 

1995). 

We found that summary judgment was appr opriate on 

the retirees' estoppel claim as well: 

_________________________________________________________________ 

3. After we affirmed this decision, the District Court reinstated the 

similar claims of the Burroughs and Unisys r etirees as well. In re Unisys 

Corp., 1996 WL 455968 (E.D. Pa.). 

4. At the same time, the Court stressed that the breach of fiduciary duty 

claim was not before it and that it was "not holding that a breach did in 

fact occur." Id. at *27. 

 6 
 Due to the unambiguous reservation of rights clauses 

 in the summary plan descriptions by which Unisys 

 could terminate its retiree medical benefit plans, the 

 regular retirees cannot establish"reasonable" 

 detrimental reliance based on an interpr etation that 

 the SPDs promised vested benefits. The r etirees' 

 interpretation of the plans as providing lifetime benefits 

 is not reasonable as a matter of law because it cannot 

 be reconciled with the unqualified reservation of rights 

 clauses in the plans. 

Unisys I, 58 F.3d at 907. 

In a separate opinion, we also upheld the District Court's 

reinstatement decision. See In re Unisys Corp. ("Unisys II"), 

57 F.3d 1255 (3d Cir. 1995). W e did so because the record 

suggested that some retirees might be able to show one or 

both of the following: (1) Unisys representatives counseled 

them that they had lifetime medical benefits without 

making reference to the reservation of rights clause, even 

though the representatives were awar e that many 

employees mistakenly understood such counsel to mean 

that such benefits became vested at the time of r etirement, 

see id. at 1260-61; and (2) Unisys repr esentatives

"affirmatively represent[ed] to them that their medical 

benefits were guaranteed once they retir ed, when the 

company knew in fact this was not true." Id. at 1266-67. 

We held that such conduct could constitute a breach of 

Unisys' fiduciary duty as plan administrator . 

After the breach of fiduciary duty claim was reinstated for 

all classes of plaintiffs, Unisys filed two motions for partial 

summary judgment. At the same time, the Sperry r etirees 

submitted a motion for summary judgment on their claims. 

In its first motion, Unisys asked the District Court to grant 

it summary judgment against all Sperry retir ees who retired 

before November 17, 1986 (six years befor e the first 

complaint by Sperry retirees was filed), and against all 

Burroughs retirees who retir ed before December 3, 1986 

(six years before the first complaint by Burr oughs retirees 

was filed). Unisys argued that these plaintiffs were barred 

from having their claims heard by ERISA's statute of 

limitations, 29 U.S.C. S 1113. 

 7 
In its second motion, Unisys sought to have the District 

Court grant summary judgment against all the plaintiffs 

who would not be able to prove that Unisys' alleged breach 

of fiduciary duty led them to retire earlier than they 

otherwise would have (e.g., retirees who did not voluntarily 

retire). It argued that the only legally cognizable harm that 

could have resulted from its alleged misr epresentations was 

acceleration in individual decisions to retir e. Other 

decisions made by the plaintiffs in reliance on Unisys' 

misrepresentations, Unisys contended, should not be

considered a "resulting harm" of the alleged breach of 

fiduciary duty. 

In support of their summary judgment motion, the 

Sperry retirees argued that ther e is no material dispute of 

fact as to any of the elements of their breach of fiduciary 

duty claims. Accordingly, they urged the District Court to 

grant them judgment as a matter of law. 

The District Court granted Unisys' motions for partial 

summary judgment and denied summary judgment to the

Sperry retirees on their motion. Those r etirees whose claims 

were extinguished by the partial summary judgments in 

Unisys' favor then successfully moved under Fed. R. Civ. P. 

54(b) for the entry of a final judgment on their claims so 

they could prosecute this appeal. See In r e Unisys Corp., 

189 F.R.D. 149 (E.D. Pa. 1999). 

II. 

Section 1113 of ERISA, 29 U.S.C. S 1113 states, in its 

entirety: 

 No action may be commenced under this subchapter 

 with respect to a fiduciary's breach of any 

 responsibility, duty, or obligation under this part, or 

 with respect to a violation of this part, after the earlier 

 of 

 (1) six years after (A) the date of the last action which 

 constituted part of the breach or violation, or (B) in the 

 case of an omission, the latest date on which the 

 fiduciary could have cured the breach or violation, or 

 8 
 (2) three years after the earliest date on which the 

 plaintiff had actual knowledge of the br each or 

 violation; 

 except that in the case of fraud or concealment, such 

 actions may be commenced not later than six years 

 after the date of discovery of such breach or violation. 

29 U.S.C. S 1113. 

The retirees argue that the District Court misapplied 

S 1113 in two respects. First, they ar gue that the Court 

erred in refusing to hold that under the"fraud or 

concealment" provision, the limitations period did not end 

until six years after they discovered the truth about their 

health care benefits. In the alternative, the retirees argue 

that even if we find the "fraud or concealment" provision 

inapplicable here, their claims are nevertheless timely 

under the six-year provision provided inS 1113(1)(A), which 

does not begin to run until "the date of the last action 

which constituted a part of the breach or violation." The 

retirees contend that the date of the last action constituting 

part of the breach in this case was the date on which 

Unisys terminated the old benefit plans. 

A. "Fraud or Concealment" 

The purpose of the "fraud or concealment" pr ovision is to 

codify a portion of the common law for ERISA br each of 

fiduciary duty claims. The issue raised by this pr ovision is 

not simply whether the alleged breach involved some kind 

of fraud but rather whether the fiduciary took steps to hide 

its breach so that the statute should not begin to run until 

the breach is discovered. As we explained in Kurz v. 

Philadelphia Elec. Co., 96 F.3d 1544 (3d Cir. 1996): 

 We now join our sister courts and hold thatS [1113]'s 

 "fraud and [sic] concealment" language applies the 

 federal common law discovery rule to ERISA br each of 

 fiduciary duty claims. In other words, when a lawsuit 

 has been delayed because the defendant itself has 

 taken steps to hide its breach of fiduciary duty, . . . the 

 limitations period will run six years after the date of 

 the claim's discovery. The relevant question is therefore 

 9 
 not whether the complaint "sounds in concealment," 

 but rather whether there is evidence that the defendant 

 took affirmative steps to hide its br each of fiduciary 

 duty. 

Id. at 1552. 

In Kurz, the alleged breach of fiduciary duty was the 

counseling of employees considering retir ement about their 

retirement benefits without revealing that plan 

amendments to increase those benefits wer e under serious 

consideration. Because the "wrong . . . was neither selfconcealing nor actively concealed," we expr essly reserved 

the issue, elsewhere debated, of "whetherS [1113]'s six year 

period extends to both `self-concealing' wr ongs as well as 

`active concealment' separate from the underlying 

wrongdoing." Id. at 1552. In this context, "a self-concealing 

act is an act committed during the course of the original 

fraud that has the effect of concealing the fraud from its 

victims, [while a]ctive concealment refers to acts intended 

to conceal the original fraud that are distinct from the 

original fraud." Wolin v. Smith Bar ney, Inc., 83 F.3d 847, 

852 (7th Cir. 1996). We held in Kurz that, regardless of 

whether the acts to conceal the breach occur in the course 

of the conduct that constitutes the underlying br each or 

independent of and subsequent to the breach, there must 

be conduct beyond the breach itself that has the effect of 

concealing the breach from its victims. 

Here, as in Kurz, the issue is "not whether the complaint 

`sounds in concealment' [i.e., not whether Unisys 

misadvised the retirees or counseled them without drawing 

attention to the reservation of rights clause], but rather 

whether there is evidence that the defendant took 

affirmative steps [at any point] to hide its breach of 

fiduciary duty." Id. at 1552 (emphasis added). Accordingly, 

if all that a plaintiff can show is that a counselor 

represented to him that he had guaranteed lifetime health 

care benefits or failed to give him accurate advice knowing 

that he believed he had such benefits, the fraud or

concealment clause is inapplicable. In such cases, Unisys 

cannot be said to have taken affirmative steps, either as a 

part of the original breach of duty or ther eafter, to cover up 

its breach. To the contrary, pursuant to the relevant 

 10 
provisions of ERISA, Unisys regularly distributed to its 

employees and retirees SPDs unambiguously explaining 

that the plan provisions calling for lifetime benefits could be 

amended at any time for any reason. As the District Court 

aptly put it, 

 While . . . compliance with SPD disclosure obligations 

 does not relieve a company of its fiduciary duty to 

 avoid confusing participants about their benefits, this 

 court will not hold that the truth about the "lifetime" 

 benefits was concealed from participants when the 

 information about the reservation of rights clause was 

 unambiguously printed and distributed [by the 

 company] in the SPD. 

In re Unisys Corp., 957 F. Supp. at 635. Accordingly, we 

hold that the "fraud or concealment" pr ovision of S 1113(2) 

is inapplicable to such cases.5 

It is true, as retirees stress, that the doctrine of equitable 

tolling can under some circumstances pr event a limitations 

period from running in favor of a trustee on a breach of 

fiduciary duty claim even in the absence of concealment on 

his part. Bailey v. Glover, 21 Wall 342 (1875), upon which 

plaintiffs heavily rely, provides one example of such 

circumstances. We conclude, however , that superimposing 

such equitable tolling rules on the statutory limitations 

scheme set forth in S 1113 would be inconsistent with 

congressional intent and the clear teachings of the

Supreme Court. 

In Lampf, Pleva, Lipkind, Prupis & Petigr ow v. Gilbertson, 

501 U.S. 350, 360-62 (1991), the Court held that Rule 

10(b)(5) misrepresentation claims ar e governed by S 9(e) and 

S 18(c) of the Securities and Exchange Act, each of which 

requires that suit be filed befor e the earlier of (a) one year 

from the discovery of the facts constituting the violation or 

(b) three years from "the violation" (or, in the case of S 18(c), 

from the date "the cause of action accrued"). The plaintiff 

_________________________________________________________________ 

5. Notwithstanding plaintiffs' argument to the contrary, we do not regard 

the fact that the alleged misrepresentations were repeated (as opposed to 

isolated) as satisfying the requirement that there be affirmative steps to 

conceal beyond the misrepresentations themselves. 

 11 
there argued that the doctrine of equitable tolling should 

apply so that the three-year limitations period would not 

start to run until the fraud was discovered even where no 

steps where taken by the defendant to conceal the fraud. 

The Court rejected that argument, finding it fundamentally 

at odds with the legislative scheme: 

 Plaintiff-respondents note, correctly, that "[t]ime 

 requirements in lawsuits . . . are customarily subject to 

 `equitable tolling.' " Irwin v. Department of Veterans 

 Affairs, 498 U.S. 89, 95 (1990), citing Hallstrom v. 

 Tillamook County, 493 U.S. 20, 27 (1989). Thus, this 

 Court has said that in the usual case, "wher e the party 

 injured by the fraud remains in ignorance of it without 

 any fault or want of diligence or care on his part, the 

 bar of the statute does not begin to run until the fraud 

 is discovered, though there be no special 

 circumstances or efforts on the part of the party 

 committing the fraud to conceal it from the knowledge 

 of the other party." Bailey v. Glover, 21 Wall. 342, 348 

 (1875); see also Holmberg v. Armbr echt, 327 U.S. 392, 

 396-397 (1946). Notwithstanding this venerable 

 principle, it is evident that the equitable tolling 

 doctrine is fundamentally inconsistent with the 1-and- 

 3-year structure. 

 The 1-year period, by its terms, begins after 

 discovery of the facts constituting the violation, making 

 tolling unnecessary. The 3-year limit is a period of 

 repose inconsistent with tolling. One commentator 

 explains: "[T]he inclusion of the thr ee-year period can 

 have no significance in this context other than to 

 impose an outside limit." . . . Because the purpose of 

 the 3-year limitation is clearly to serve as a cutof f, we 

 hold that tolling principles do not apply to that period. 

Id. at 363. 

Although the specified duration of the limitations periods 

here is different, the legislative scheme is the same. 

Congress has determined that the cut-of f date should be 

the earlier of (a) three years from the date of discovery of 

the claim and (b) six years from the violation. The only 

difference is that ERISA's statute makes a single express 

 12 
exception for cases of "fraud or concealment." Just as in 

Lampf, it would be fundamentally inconsistent with the 

statutory scheme here to accept the argument that the sixyear period does not begin to run until discovery of the 

fraud, where the defendant has engaged in no wr ongful 

activity beyond the original fraud on which the plaintiffs' 

claims are based. Indeed, given the fact that Congress 

provided one express exception in S 1113(2), rejection of 

equitable tolling here follows a fortiori from the Supreme 

Court's holding in Lampf. 

Similarly, we must decline plaintiffs' invitation to apply 

their equitable tolling principles under the guise of 

construing S 1113(2)'s "fraud or concealment" provision. 

Accepting that invitation would require us to reject Kurz, 

and we are bound by that precedent. Contrary to plaintiffs' 

suggestion, we do not read our subsequent case law as 

diluting the significance of Kurz in the context of this case.6 

This does not end the matter, however . Unlike the District 

Court, we are unwilling to say based on the current record 

that no retiree will be able to successfully invoke the "fraud 

or concealment" provision of S 1113(2). As we have noted, 

the District Court, when deciding to reinstate the breach of 

fiduciary duty claims, pointed to evidence suggesting that a 

"retirement counselor [had] r esponded to questions about 

the reservation of rights clause raised by potential retirees 

by saying that the language pertained to active employees 

and not to retirees." In re Unisys Corp., 1994 WL 284079 at 

*34 n.69. It seems to us entirely possible that advice of this 

character might well bring the fraud or concealment

provision into play. If, for example, advice about the 

_________________________________________________________________ 

6. In particular, plaintiffs point to this Court's decision in Adams v. 

Freedom Forge Corp., 204 F.3d 475 (3d Cir. 2000). As we expressly 

noted, no statute of limitations issue was befor e us in that appeal. 

Although a footnote in that case makes refer ence to "issues left 

unresolved in Kurz about the anatomy and scope of the fraudulent 

concealment doctrine," i.e., whether ERISA's statute of limitations 

applies to "self-concealing" as well as "active concealment" cases, id. at 

494 n.5 (full citations and internal quotations omitted), we do not read 

Adams as purporting to second guess the Kurz rule that the "fraud or 

concealment" provision requires"affirmative steps to hide [the] breach of 

fiduciary duty." Kurz, 96 F.3d at 1552. 

 13 
reservation of rights clause was given under circumstances 

such that an employee, who had consulted the SPD, was 

dissuaded from consulting counsel regar ding that clause, 

we believe that the advice could appropriately be regarded 

as an affirmative step having the ef fect of concealing 

Unisys' breach. 

It would be inappropriate for us to decide at this stage 

whether "fraud or concealment" within the meaning of 

section 1113(2) has occurred in this case. W e hold only 

that, drawing all permissible inferences against the party 

seeking summary judgment, there may be r etirees who will 

be able to prove that Unisys counselors concealed their 

breach from them and that the limitation period did not 

foreclose suit until six years after the date they discovered 

the breach had occurred. 

B. "Date of the last action which constituted 

part of the breach" 

Having concluded that the six-year limitations period is 

applicable to plaintiffs' claims, we must determine when 

that period began to run, i.e., "the date of the last action 

which constituted a part of the breach." Unisys insists that 

this text focuses on the last action of the fiduciary which 

was in violation of its fiduciary duty. While it does not 

maintain that the current record pinpoints the date upon 

which the last alleged misrepresentation was made, it 

correctly points out that insofar as decisions to retire are 

concerned, a retiree's date of r etirement is necessarily the 

last date upon which Unisys could have made a r elevant 

misrepresentation or upon which a clarifying 

communication could have prevented detrimental reliance. 

Unisys therefore asks us to affir m the District Court's grant 

of summary judgment against those members of the 

plaintiffs' class who retired mor e than six years before the 

date on which their case was originally filed, in 1992. 

The retirees, on the other hand, contend that the date of 

the last action which constituted part of the br each was 

November 3, 1992, the date on which Unisys announced 

the termination of its "lifetime" plans. They argue that 

S 1113 must be interpreted in this manner because no 

 14 
actual harm occurred and thus no legitimate claim of 

breach of fiduciary duty arose until Unisys terminated the 

plans that it initially had misrepresented. Even though the 

retirees concede that the termination of the old plans was 

a non-fiduciary act, they nevertheless insist that a nonfiduciary act can constitute "part of the br each or violation" 

of fiduciary duty if it is the final act that gives rise to a 

cause of action. 

In Adams v. Freedom Forge Corp., 204 F.3d 475 (3d Cir. 

2000), this Court recently reviewed the elements of a 

breach of fiduciary duty claim like that of the plaintiffs 

here. We found the controlling pr ecepts in our prior 

decision in this case: 

 An employee may recover for a breach of fiduciary 

 duty if he or she proves that an employer , acting as a 

 fiduciary, made a material misrepresentation that 

 would confuse a reasonable beneficiary about his or 

 her benefits, and the beneficiary acted ther eupon to his 

 or her detriment. 

Id. at 492, citing Unisys II, 57 F .3d at 1264. 

Given these elements of a claim for breach offiduciary 

duty in this context, it necessarily follows that any breach 

that may have occurred was completed, and a claim based 

thereon accrued, no later than the date upon which the 

employee relied to his detriment on the misr epresentations. 

Surely, any employee who sought counsel and who took 

early retirement based on Unisys' expr ess assurance that 

she possessed guaranteed lifetime health car e, thereby 

reducing the amount of pension she would otherwise 

receive, could bring suit immediately and secur e rescission 

of her retirement or some other appr opriate equitable relief.7 

_________________________________________________________________ 

7. The dissenting opinion assumes that an employee misled by Unisys 

about guaranteed life care benefits would be entitled to a remedy taking 

into account his or her expectancy interest in such benefits rather than, 

or perhaps in addition to, the economic loss suffered when he changed 

position in detrimental reliance on Unisys' conduct. The District Court 

has not yet addressed what remedies may be available to a retiree who 

establishes a breach of fiduciary duty, and we, of course, express no 

opinion on the availability of expectancy compensation or any other form 

 15 
Accordingly, it seems clear to us that the six-year period for 

such plaintiffs commenced no later than the r espective 

dates of their retirements.8 

We therefore agree with the District Court that the denial 

of free health care coverage was not an element of the 

plaintiffs' claim. As the District Court pointed out, the 

alleged breach of fiduciary duty here concerned the counsel 

allegedly given or not given, and there is no causal nexus 

between that counsel and the denial of free health care 

coverage. In re Unisys Corp., 957 F . Supp. at 639. If Unisys 

had provided clear and accurate counsel, some r etirements 

may not have occurred when they did, but ther e is no 

reason to believe retirees would now have free coverage. As 

the District Court held, Unisys had a right to ter minate free 

_________________________________________________________________ 

of relief. We do note, however, that there is a material difference 

between 

the value of a health care plan with guaranteed lifetime benefits and the 

value of a health care plan with benefits that can be canceled at any 

time for any reason. Accordingly, if an employee were entitled to an 

expectancy remedy as a result of r etiring after being told he had the 

former, when in fact he had the latter , he would be entitled to bring 

suit 

immediately for the difference between the value he was promised and 

the value he received or for specific per formance of the promise to 

provide a plan or policy with guaranteed lifetime health care. The dissent 

is correct, however, that a retir ee who chose not to bring a suit for 

guaranteed lifetime benefits or the value ther eof, and who died before 

any change in the plan, would serendipitously have wound up in the 

same position he would have been in had the misr epresentation been 

true. Accordingly, his estate would have no claim based on lost health 

care benefits. 

8. If the "date of the last action which constitutes a part of the breach" 

is the date of Unisys' last misrepresentation, it is theoretically 

possible 

that the statute could begin to run before a r etiree could seek relief 

from 

a court since detrimental reliance is a necessary element of a breach of 

fiduciary duty of this kind. We need not decide, however, whether the six 

year period can begin to run before a br each of fiduciary duty claim 

accrues. As we have noted, the District Court and the parties have 

regarded the date of the last relevant misrepresentations and the date of 

detrimental reliance as being the same date and the only issue briefed 

is whether that date or the date of the denial of fr ee health care 

coverage 

is the legally relevant date. Accordingly, we hold only that the statute 

began to run no later than the date of alleged detrimental reliance. 

 16 
health care coverage, and it exercised that right in a nonfiduciary capacity. Id. at 638.9 

It is not clear to us, however, that the claims of all Sperry 

retirees who retired befor e November 17, 1986, and all 

Burroughs retirees who retir ed before December 3, 1986, 

are barred. While the primary theory of liability being 

asserted here is clearly that many relied on the 

misrepresentations to their detriment by deciding to take 

voluntary retirement, as we explain her eafter, Unisys has 

not persuaded us that this is the only viable theory of 

liability. It may well be that retirees who retired before 

those dates relied to their detriment in making other 

decisions after those dates. Accordingly, the summary 

judgment entered by the District Court was overbroad and 

must be reversed. Summary judgment for Unisys would be 

appropriate, however, with respect to those who assert 

claims based solely on retirement decisions made more 

than six years before suit was filed. 

III. 

Unisys argues that an essential element of the breach of 

fiduciary duty claim recognized in our prior opinion is a 

voluntary decision to retire made in r eliance on a mistaken 

view that health care benefits were guaranteed for life. It 

necessarily follows, according to Unisys, that it is entitled 

to summary judgment with respect to anyone who was 

mandatorily retired at age 65, left the company's employ 

involuntarily because of disability, or for some other reason 

made no such decision. 

In response, the plaintiffs insist that the category of 

claims we earlier recognized is not limited to claims based 

on retirement decisions and have submitted affidavits from 

members of the class who allege that, in reliance on their 

_________________________________________________________________ 

9. It is only fortuitous that the fiduciary who did the alleged counseling 

here was the employer who exercised its right to change the plans. If 

Unisys had not been the administrator of the plans and an independent 

administrator had breached its fiduciary duty by miscounseling retirees, 

it would be even more clear that the plan admendments were not "the 

last action which constituted a part of the br each." 

 17 
belief that they had guaranteed lifetime benefits, they 

declined other employment opportunities, chose to forego 

the opportunity to purchase supplemental health 

insurance, or made other important financial decisions for 

their retirement. 

The District Court agreed with Unisys and granted 

summary judgment against all who would be unable to

prove a voluntary decision to retir e. We perceive no 

principled basis, however, for so cabining our holding in 

Unisys II. After all, in Bixler, upon which we heavily relied 

there, the decision resulting from the breach of fiduciary 

duty was a decision on whether to purchase COBRA 

insurance rather than a decision regarding retirement. See 

Bixler, 12 F.3d at 1301-03; see also Curcio v. John Hancock 

Mut. Life Ins. Co., 33 F.3d 226, 237-39 (3d Cir. 1994) 

(fiduciary's misrepresentations about a new life insurance 

plan caused plaintiff to fail to obtain adequate coverage). It 

is, of course, not clear that the plaintiffs who rely upon 

these affidavits will be able to establish their entitlement to 

relief, but we decline Unisys' invitation to adopt an across 

the board prohibition of relief based upon reasonable 

reliance in contexts other than retir ement decisions. 

Understanding the import of our decision in Unisys II 

requires a recognition of the pr ocedural posture in which 

that appeal arose. As we have noted, the District Court 

initially granted summary judgment to Unisys on the

breach of fiduciary duty claim. See In r e Unisys Corp., 837 

F. Supp. at 679-80. It was only after the trial and our 

decision in Bixler that it decided to r einstate that claim. See 

In re Unisys Corp., 1994 WL 284079 at *25-27. It was the 

propriety of that decision to reinstate, and only the 

propriety of that decision, that was befor e us as a certified 

issue in that interlocutory appeal. We held that 

reinstatement was appropriate and r emanded "for further 

proceedings."10 Unisys II, 57 F.3d at 1269. 

_________________________________________________________________ 

10. At times, the plaintiffs appear to r ead our opinion as, in effect, 

directing the entry of summary judgment in their favor on at least the 

voluntary decision to retire claims. W e do not so read the opinion, and 

the District Court did not so read it. At that point, Unisys had been 

provided with no opportunity to build a trial or summary judgment 

 18 
It is true, as Unisys stresses, that our opinion addressed 

the issue for decision in the context of the plaintiffs having 

relied to their detriment in making decisions to retire. That 

was our focus because that was the plaintiffs' primary 

contention, and the absence of any refer ence to other kinds 

of reliance can hardly be taken as a ruling that other forms 

of reliance could not provide a valid basis for relief. We 

therefore reject the District Court's view that Unisys II, as 

a matter of law, limits recovery on the br each of fiduciary 

duty claims to claims based on voluntary decisions to 

retire. Moreover, we have found no other precedent 

supporting that position. 

The District Court expressed two related concerns in the 

course of granting summary judgment to Unisys on the 

claims not based on voluntary retirement decisions: a 

concern about opening Unisys to unjustifiably broad relief 

and a concern about inconsistency with this Court's

disposition of the estoppel claims. It expressed those 

concerns as follows: 

 In allowing the breach of fiduciary claims to go 

 forward, this court and the Court of Appeals for the 

 Third Circuit have essentially held that r eliance by the 

 employees on the misrepresentations of Unisys, while 

 not "reasonable reliance" for purposes of a claim of 

 equitable estoppel, can still support a claim for br each 

 of fiduciary duty. In a sense, the rulings in this case 

_________________________________________________________________ 

record in opposition to Bixler claims, and any ruling on the merits of 

those claims would have been inappropriate. On remand, the District 

Court noted that the breach of fiduciary duty claims had not been before 

it during the trial on the contract and estoppel claims and that, when 

reinstating those claims, it had made no deter mination that any plaintiff 

had proven his breach of fiduciary duty claim. On the contrary, the 

District Court on remand quoted the following observations it had made 

at the time of reinstatement: 

 [B]ecause some plaintiffs have str onger cases than others based on 

 their specific inquiries and the information given to them 

personally, 

 the court finds that subclasses, and possibly even individual 

 hearings, will be necessary to adjudicate these claims. 

In re Unisys Corp., 957 F. Supp. at 645. 

 19 
 excuse the plan participants from their failur e to read 

 their summary plan documents in the limited context 

 of making the retirement decision: because of the 

 breach of duty, the employees may have r etired earlier 

 than they otherwise would have, and even if their 

 reliance on the misrepresentations was not reasonable, 

 the reliance supports a breach of fiduciary duty claim 

 because it was at least partially the fault of Unisys. 

 The "unreasonable" reliance excused here is narrow, 

 and supports a breach of fiduciary duty claim only in 

 certain limited circumstances--in this case, where the 

 employees retired earlier than they might have had 

 they not been misled by the lifetime 

 misrepresentations. This court believes that expanding 

 the concept of "resulting harm" in this case to the 

 types of reliance alleged in the retir ees' affidavits would 

 create an unjustified expansion of the narr ow holdings 

 of this court, and would by indirection r einstate the 

 claims for equitable estoppel. 

In re Unisys Corp., 957 F. Supp. at 644. 

The District Court's characterization of our decision in 

Unisys II as excusing "unreasonable r eliance" is 

inappropriate. We did not there hold that the existence of 

the SPD was irrelevant to the analysis of the breach of 

fiduciary duty claims. An employer, even when acting in a 

fiduciary capacity, is not responsible for harm that is not 

reasonably foreseeable. As we pointed out in our prior 

opinion in this case and in Adams, in or der for relief to be 

afforded, the conduct of the fiduciary must be such as to 

create a "substantial likelihood that it would mislead a 

reasonable employee in making [a decision to change his or 

her position]." Unisys II, 57 F .3d at 1264. Any 

determination of whether Unisys conveyed a message that 

was "materially misleading" in this sense cannot simply 

ignore the existence of the SPD. Rather , what we held on 

this score in Unisys II was as follows: (1) that the SPD did 

not as a matter of law satisfy Unisys' fiduciary 

responsibility; and (2) that there was evidence from which 

a trier of fact could conclude that Unisys should have 

foreseen that its conduct with respect to at least some of 

the class would cause reasonable employees to r ely to their 

 20 
detriment, despite the existence of the SPD. Whether that is 

the case depends, of course, on the content of the message 

conveyed and the context in which it was conveyed. 

We did recognize in Unisys II that there are situations in 

which a fiduciary can reasonably foresee unreasonable 

reliance and, accordingly, be held accountable. Bixler, 12 

F.3d 1292 (3d Cir. 1994), provides an example. Mrs. Bixler 

there acknowledged that she had received a notice from the 

fiduciary concerning a right to apply for COBRA health care 

insurance, but she mistakenly believed that she and her 

husband were not eligible to do so because he was already 

hospitalized. Shortly after Mr. Bixler's death but still well 

within the period when she could have elected to secure 

COBRA coverage, Mrs. Bixler called the fiduciary's 

representative to inquire about a death benefit. The 

fiduciary accurately informed her that ther e was no death 

benefit but failed to advise her that she could r eceive 

reimbursement for her husband's considerable hospital 

expenses by signing and returning the COBRA notice the 

fiduciary had sent to her husband. We concluded that there 

was evidence from which a trier of fact could infer that the 

fiduciary was aware of the Bixlers' cir cumstances and of 

Mrs. Bixler's mistaken belief about the unavailability of 

COBRA insurance. See id. at 1302-03. In these 

circumstances, we held that the trier of fact could find a 

breach of fiduciary duty, and we did so without inquiring 

whether Mrs. Bixler's understanding of the COBRA notice 

was reasonable or unreasonable. 

Our decision in Bixler is based on a fiduciary's duty to 

deal fairly with its beneficiary and, more specifically, "to 

communicate to the beneficiary material facts af fecting the 

interest of the beneficiary which he knows the beneficiary 

does not know and which the beneficiary needs to know for 

his protection." Bixler, 12 F .3d at 1300, quoting 

Restatement (Second) of Trusts, S 173, comment (d) (1959). 

As we noted in Unisys II, there is evidence here with respect 

to some employees from which a trier of fact could conclude 

that specific inquiries were made giving notice to Unisys 

representatives that the employees could be expected to 

make retirement decisions based on the mistaken belief 

that their health benefits were guaranteed for life. See 

 21 
Unisys II, 57 F.3d at 1266. Under Bixler, in these 

situations, a duty to advise of the reservation of rights 

clause would arise, and the existence of the SPD would not 

be relevant. 

We also recognized in Unisys II that a duty to advise 

affirmatively of the reservation of rights clause might have 

arisen even in the absence of beneficiary-specific 

information concerning confusion or mistake. The evidence 

then of record, we suggested, could per mit a finding that 

Unisys had acquired knowledge of confusion so pervasive 

that a reasonable fiduciary would have done more than 

simply rely on its SPD. See id. We did not, however, require 

clairvoyance on the part of the fiduciary. The law requires 

only that a fiduciary deal fairly with his beneficiaries and, 

in doing so, that it "exercise such car e and skill as a man 

of ordinary prudence would exercise" in his own affairs. 

Restatement (Second) of Trusts, S 174. 

A judgment remains to be made as to whether a 

reasonable fiduciary in Unisys' position would have

foreseen that its conduct towards the various plaintiffs 

would result in important decision making on their part 

based on a mistaken belief that they possessed guaranteed 

lifetime benefits. In situations involving actual knowledge 

on the part of Unisys that an employee was about to rely on 

such a misunderstanding, we agree with the District Court 

that the existence of the SPD is irrelevant. In other 

situations, however, the fact that Unisys had distributed 

what purported to be an authoritative guide to benefits is 

one of the circumstances that must be consider ed in 

passing this judgment on its conduct. 

We do not believe holding Unisys to the kind of fair 

dealing standard we recognized in Unisys II will impose an 

unfair burden upon it even if it is held to that standard in 

the context of decisions other than voluntary r etirement. 

We stress, however, that the character of the decision made 

and reliance claimed will, of course, play an important role 

in determining the extent of Unisys' fiduciary duty and 

whether that duty was breached. We also note that the 

District Court has not yet addressed what equitable

remedies may be available to members of the class. 

Common law damages are not recoverable under ERISA for 

 22 
a breach of fiduciary duty, and this fact may also limit 

Unisys' exposure. See Mertens v. Hewitt Assoc., 508 U.S. 

248 (1993). 

Our insistence on reasonable foreseeability as a 

prerequisite to legal responsibility on the breach of 

fiduciary duty claims is not inconsistent with our resolution 

of the plaintiffs' estoppel claims in Unisys I. As our earlier 

quotation above from our prior opinion demonstrates, those 

claims were predicated on an allegation that the plaintiffs 

had relied to their detriment on the text of the plan and 

SPD. See Slip at 25, supra. On that occasion, we 

summarized our holding as follows: 

 Because our decisions require that any detrimental 

 reliance on plan language also be "r easonable," our 

 finding that the [reservation of rights clauses] are 

 unambiguous undercuts the reasonableness of any 

 detrimental reliance by the retirees. Accordingly, we 

 hold that the district court did not err in concluding, 

 on summary judgment, that the retirees' estoppel claim 

 failed as a matter of law. 

Unisys I, 58 F.3d at 908. The claim here, however, is not 

that the retirees relied on the text of the plans or the SPDs, 

but rather that they relied on counseling which they 

received from Unisys representatives. 

IV. 

The District Court's order dated March 10, 1997, will be 

reversed and this matter will be remanded to the District 

Court for further proceedings consistent with this opinion. 

 23 
MANSMANN, Circuit Judge, concurring in part, and 

concurring in the result in part. 

I am pleased to join with my colleagues in Part III of the 

majority opinion, which recognizes that an ERISA fiduciary 

who has created confusion about rights under a benefit 

plan has an ongoing responsibility for har m stemming from 

beneficiaries' decisions attributable to that confusion. While 

I also agree with the holding in Part II of the majority 

opinion that summary judgment must be reversed, I am 

unable to subscribe to the reasoning of that Part II because 

it threatens to undercut a fiduciary's r esponsibility by 

allowing a safe harbor so long as the breachingfiduciary 

arranges to keep the beneficiaries in the dark for six years 

after they rely on his misrepresentations. I believe that the 

majority's analysis of the statute of limitations af fords too 

little protection for trusting workers by using an artificial 

notion of detriment to start the statutory period, by 

disregarding the fiduciary's ongoing obligation to correct 

known misunderstanding, and by effectively writing out of 

the statute the doctrine of tolling until discovery of a selfconcealing wrong.1 

_________________________________________________________________ 

1. Part II of the majority opinion contemplates entry of summary 

judgment against retirees whose claims (i) are based solely on retirement 

decisions made more than six years befor e this action was filed, and (ii) 

were not concealed by Unisys's advice. It is not clear that any actual 

person's claim will meet these criteria, however . As the majority 

recognizes, retirees may rely on the presence of medical coverage in 

making many of life's decisions beyond the decision to retire. Most 

people probably take such vital backgroundfinancial circumstances into 

consideration, at least tacitly, in everything that they do. Moreover, as 

explained below, I believe that all of these participants and 

beneficiaries 

detrimentally relied on Unisys's ongoing impr oper omission to correct its 

misrepresentations in declining to sue before they ultimately brought 

this action. 

In light of the wide scope of Unisys's alleged concealment, and the 

potentially pervasive presence of acts of r eliance beyond the retirement 

decision, my disagreement with Part II of the majority's analysis may be 

no more than theoretical, as it may well be that no claims at issue are 

"based solely on retirement decisions", and that all claims fall within 

the 

saving provisions of Part IIA or Part III. 

 24 
I. 

The applicable statute of limitations requir es that claims 

be brought within six years of the "date of the last action 

which constituted a part of the breach or violation." 29 

U.S.C. S 1113(1)(A). As the majority acknowledges, the "last 

action" necessary to make out the claims at issue is 

detrimental reliance. See Opinion at 15 (r eferring to 

material misrepresentation and detrimental reliance as 

elements) (quoting Adams v. Freedom For ge Corp., 204 F.3d 

475, 492 (3d Cir. 2000)). See also Unisys II, 57 F.3d at 

1265 (defining elements of claim for fiduciary breach as (1) 

proof of fiduciary status, (2) misrepr esentations, (3) 

company knowledge of confusion, and (4) resulting harm).2 

The majority reasons, essentially, that the br each of duty 

by Unisys was its misrepresentation of the plan's 

provisions, and the detriment or "resulting harm" to the 

participants was their retirement without the protection of 

a guarantee. See Opinion at 15-16. This ef fectively reads 

the element of harm or detriment out of the claim. 

Although the retirement decisions wer e made in reliance, 

such reliance did not become detrimental until Unisys 

announced termination of the promised post-retirement 

medical benefits. If the benefits had continued, there would 

have been no injury. Cf. Texas v. United States, 523 U.S. 

296, 300 (1998) ("A claim is not ripe for adjudication if it 

rests upon `contingent future events that may not occur as 

anticipated, or indeed may not occur at all.' ") (quoting 

Thomas v. Union Carbide Agric. Prod. Co., 473 U.S. 568, 

580-81 (1985)). Here, resulting har m was contingent on the 

company's future conduct. 

The majority argues that actual harm is not a necessary 

element of a claim for breach of fiduciary duty. While that 

may be correct as a general proposition, it is incorrect as 

_________________________________________________________________ 

2. We recently observed that construction of ERISA's six-year statute 

"implicates sophisticated questions about whether the statute begins to 

run at the date of the misrepresentations, the date of the plan 

amendment, or some other date". Adams, 204 F.3d at 494 n.19. As will 

appear, I believe it runs from the date of the detrimental amendment, 

while the majority believes it runs from "some other date" -- viz., the 

date of the last act undertaken in reliance on the misrepresentations. 

 25 
applied to the subset of fiduciary claims pr edicated on 

detrimental reliance. "Actual harm" and "detriment" appear 

to be synonymous. To the extent that ther e may be a 

difference between legal detriment and actual harm, only 

the latter should start the clock running for the statute of 

limitations. The significance of harm in the limitations 

context is that it brings the existence of the claim home to 

the claimant so that he may reasonably be expected to act. 

This purpose is not well served by a technical notion of 

"detriment" that does not actually impact the claimant.3 

The majority illustrates its view of detriment by 

hypothesizing that an employee who "sought counsel" and 

took early retirement based on the company's assurance of 

lifetime health care could "surely" bring suit immediately 

and secure rescission of her retir ement or other appropriate 

equitable relief.4 Opinion at 15. However, the question of 

_________________________________________________________________ 

3. Moreover, cases holding that it is not necessary to demonstrate harm 

to establish a breach of fiduciary duty do not stand for the proposition 

that harm, where present, is not part of the breach. See Adams, 204 

F.3d 475, 492 (3d Cir. 2000). Fiduciary conduct is measured in light of 

all the attendant circumstances. There is a qualitative difference between 

an act by a fiduciary which falls short of the standard imposed by law 

and an act that also injures cestui que trust. Consequently, even a "nonfiduciary" act by the company which imposes injury on a beneficiary left 

vulnerable by a prior fiduciary breach becomes "part of the breach," and 

worsens it character. Thus, the "last action" could consist in the 

imposition of harm where it is part of the fiduciary breach, even if it 

were not a required element. 

4. Although the question of remedy is not now before us, the majority's 

reference to rescission as an illustrative remedy is significant. As the 

majority recognizes in Part III, participants may rely on their 

misapprehension of the plan benefits in many ways beyond deciding to 

retire. Some of these acts of reliance -- those involving expenditures or 

commitments made in expectation of a strongerfinancial position -- 

would be difficult to rescind, and rescission would not make the 

participant whole. So in general the rescission remedy may be unwieldy 

and inadequate. This follows from the majority's unrealistic assumption 

that the decisions themselves constitute the detriment to be redressed; 

whereas, actually the harm to be r emedied is the unexpected withdrawal 

of promised benefits. 

If instead of assuming that the object of a suit is to undo the retiree's 

life decisions, we recognize that the paradigmatic remedy may be 

 26 
what actual or prospective harm is sufficient to allow suit 

by one apprized of her rights is not before us. 5 To my view, 

a more apt hypothetical concerns whether the estate of a 

participant who died before the old plan was terminated, 

and so received the promised medical benefits for life, 

would nevertheless be able to sue for breach offiduciary 

duty because the promised benefits, though paid, had not 

been sufficiently assured by the written plan? Surely not. 

The claim would fail due to the absence of actual injury. 

Thus, while I am not prepared to say that a retiree may 

never bring suit prior to enactment of a thr eatened 

detrimental change, I do not believe that the statute of 

limitations requires her to bring a pr eemptive action to 

ward off potential harm that might never occur. 

Accordingly, I would hold that the "last action which 

constituted a part of the breach" for statute of limitation 

purposes was the termination of the medical benefits that 

Unisys had assured the retirees they would receive for life, 

rather than any particular decisions the retir ees made on 

the strength of that assurance.6 

II. 

Even if our statute of limitations analysis wer e limited to 

fiduciary conduct by Unisys, the retir ees' claims still should 

_________________________________________________________________ 

enforcement of the promise on which the participants relied, then it 

becomes clear that the injury that triggers the suit results from the 

fiduciary's failure to comply with the pr omise, rather than from the 

employee's decision to retire. Cf. Unisys II, 57 F.3d at 1269 (indicating 

that "an injunction ordering specific per formance of the assurances 

Unisys made" is an equitable remedy available under 29 U.S.C. 

S 1132(a)(3)). 

5. That question concerns the requir ement that we may only decide 

cases and controversies, and so turns on different policies from those 

underlying the statute of limitations. 

6. I disagree with the majority's statement that it is merely "fortuitous" 

that the fiduciary that misrepresented the permanency of the benefits is 

the same entity that ultimately cut off those benefits. To the contrary, 

it 

was the ability of Unisys to honor its promises that helped to induce the 

retirees' reliance and created a real prospect that they would not be 

injured. 

 27 
not be barred on the present recor d, as there is evidence 

that Unisys continued to breach its duty by failing to 

correct the mistaken beliefs that its prior misstatements 

created. Because this continuing breach involved an

omission rather than an act, the six-year limitations period 

would not commence until "the latest date on which the 

fiduciary could have cured the breach or violation". 29 

U.S.C. S 1113(1)(B). 

As the majority observes, we have previously r ecognized 

that a fiduciary has a "duty to deal fairly with its 

beneficiary and, more specifically, `to communicate to the 

beneficiary material facts affecting the interest of the 

beneficiary which he knows the beneficiary does not know 

and which the beneficiary needs to know for his 

protection.' " Supra at 21, quoting Bixler v. Central Pa. 

Teamsters Health & Welfare Fund , 12 F.3d 1292, 1300 (3d 

Cir. 1993).7 Here, the evidence suggests that Unisys 

breached this duty continuously from the time it first 

misrepresented the terms of the plan until the time the 

beneficiaries learned the material facts by receiving notice 

of the plan termination. Under the majority's holding, the 

beneficiaries' interests were not pr otected by the fiduciary's 

word, but could only be protected if they brought suit 

within six years. They therefore "needed to know for their 

protection" that the plan was not as it had been 

represented; and as the majority acknowledges in Part III of 

its opinion, there is evidence that Unisys knew that the 

employees were unaware of the material facts. 

Unisys therefore had an ongoing duty to inform the 

participants of the true state of affairs. As long as Unisys 

had reason to believe that the retir ees remained unaware of 

the material fact that the company retained a right to cut 

off their "lifetime" medical benefits, it was a violation of 

trust (i.e., a breach of fiduciary duty) every day for Unisys 

not to inform them.8 See Adams, 204 F.3d at 493-94 

_________________________________________________________________ 

7. Indeed, "[t]he duty to disclose material information is the core of a 

fiduciary's responsibility." Harte v. Bethlehem Steel Corp., 214 F.3d 446, 

452 (3d Cir. 2000) (quoting Glaziers & Glassworkers Union Local No. 252 

Annuity Fund v. Newbridge Sec., Inc., 93 F .3d 1171, 1182 (3d Cir. 1996)). 

8. As the majority recognizes, "a duty to advise affirmatively of the 

reservation of rights clause might have arisen even in the absence of 

 28 
("[B]ecause Unisys was aware that it r etained the right to 

modify, a knowing failure to clarify the material information 

about the retention of power was breach of its fiduciary 

duty."). 

Had Unisys told plaintiffs the truth, they could have 

acted to protect themselves. Cf. Harte v. Bethelehem Steel 

Corp., 214 F.3d 446, 448 (3d Cir. 2000) (holding that where 

beneficiaries might predictably and r easonably rely on a 

misinterpretation of a plan provision,"a fiduciary may be 

held liable for failing to inform a beneficiary" of his rights 

"in a timely manner . . . (so that he might attempt to 

protect himself)."). Consequently, the participants and 

beneficiaries should be permitted to pr ove that they relied 

to their detriment on Unisys's continuing non-disclosure, 

by refraining from bringing the pr esent suit until after the 

omitted information was supplied. 

Recognition of an ongoing duty to correct prior 

misstatements entails that the statute of limitations does 

not run while a misstatement remains uncorr ected.9

Conversely, the majority's holding that the statute runs 

from the date of retirement amounts to absolving the 

fiduciary from any ongoing duty to corr ect the 

misstatement. Today's holding is therefor e contrary to our 

decisions in Bixler and Harte. 

III. 

The most troubling aspect of the majority opinion is its 

treatment of the self-concealing wrong issue. As the 

_________________________________________________________________ 

beneficiary-specific information of confusion or mistake" where the 

fiduciary has "acquired knowledge of confusion so pervasive that a 

reasonable fiduciary would have done mor e than simply rely on its SPD." 

Supra at 22 (citing Unisys II, 57 F .3d at 1266). This duty is independent 

of the reasonableness of, or even the r easons for, the misapprehension. 

9. It might be objected that recognition of an ongoing duty would result 

in an open-ended statute of limitations. However , I believe that it is 

entirely consistent with public policy and the federal common law 

embodied in the "fraud or concealment exception" to hold that a 

fiduciary who has misled his beneficiary may never seek refuge behind 

the statute of limitations as long as he allows the deception to continue 

unabated. 

 29 
majority observes, in Kurz v. Philadelphia Elec. Co., 96 F.3d 

1544, 1552 (3d Cir. 1996) we "expr essly reserved the issue, 

elsewhere debated, of `whether S [1113]'s six year period 

extends to both "self-concealing" wrongs as well as "active 

concealment" separate from the underlying wr ongdoing.' " 

Supra at 10. Although the majority does not expr essly state 

whether its opinion is meant to address that issue, its 

requirement of "affirmative steps to conceal beyond the 

misrepresentations themselves" in or der to toll the statute, 

supra at 11 n.5, amounts to an outright r ejection of the 

self-concealing wrong doctrine. A requir ement of additional 

conduct beyond the breach itself is fundamentally at odds 

with the concept that a wrong may be self -concealing. 

I believe that the majority errs in interposing an 

additional requirement of an affir mative act of concealment 

on self-concealing wrongs. In so holding, it permits the 

ERISA statute of limitations to become an instrument to 

immunize fiduciary wrongdoing. 

The "fraud or concealment" provision incorporates the 

long-established principle of federal common law that a 

statute of limitations is tolled until discovery of the wrong 

where there is either underlying fraud or separate acts to 

conceal wrongdoing.10 As the Seventh Circuit has explained, 

 The reading we adopt . . . interprets the phrase "fraud 

 or concealment" in a way that gives both ter ms 

 meaning. An ERISA fiduciary can delay a wr onged 

 beneficiary's discovery of his claim either by 

 misrepresenting the significance of facts the beneficiary 

 is aware of (fraud) or by hiding facts so that the 

 beneficiary never becomes aware of them 

 (concealment). 

 . . . [T]his interpretation of "fraud or concealment" 

 harmonizes the phrase's meaning with the widely 

 known doctrine of fraudulent concealment, which tolls 

 the running of a statute of limitations when the 

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10. The effect of the majority's requirement of additional acts of 

concealment even in cases of self-concealing fraud is to allow tolling 

only 

in cases of concealment, and so to write the fraud alternative out of the 

statutory exception. 

 30 
 defendant has prevented the plaintiff 's timely discovery 

 of the wrong she has suffered. 

Radiology Ctr., S.C. v. Stifel, Nicholas & Co., 919 F.2d 1216, 

1220 (7th Cir. 1990). See also Kurz v. Philadelphia Elec. 

Co., 96 F.3d 1544, 1552 (3d Cir. 1996) (observing that 

S 1113 "does not protect defendants in instances involving 

concealment or fraud") (quoting Gluck v. Unisys Corp., 960 

F.2d 1168, 1177 (3d Cir. 1992)) (emphasis added). 

The majority misinterprets our decision in Kurz as 

holding that even where concealing acts occur in the course 

of the underlying breach, "there must be conduct beyond 

the breach itself that has the effect of concealing the breach 

from its victims." Supra at 10. On the contrary, in Kurz, we 

expressly distinguished "self-concealing wr ongs" from 

" `active concealment' separate from underlying wrong". Id. 

at 1552 n.5.11 

This case is not like Kurz. There was no occasion to 

address the effect of a self-concealing wrong there, because 

there was no concealment. Indeed, we observed in Kurz 

that the employer's announcement of the amendment at 

issue just 35 days after the alleged misrepr esentation 

"exemplifie[d] the type of timely notification that companies 

should give their employees", and "for eclosed any 

suggestion that [the employer] attempted to conceal its 

plans or engaged in a campaign of fraud to pr event the 

plaintiff class from suing for the alleged breach". 96 F.3d at 

1552. In the present case, in contrast, the company's 

conduct was far from exemplary, as it engaged in a 

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11. See also Bailey v. Glover, 88 U.S. 342, 349-50 (1874) (distinguishing 

between a fraud which "has been concealed" and one which "is of such 

character as to conceal itself "). Indeed, the majority opinion expressly 

acknowledges this distinction: "In this context,`a self-concealing act is 

an act committed during the course of the original fraud that has the 

effect of concealing the fraud from its victims, [while a]ctive 

concealment 

refers to acts intended to conceal the original fraud that are distinct 

from 

the original fraud.' Wolin v. Smith Bar ney, Inc., 83 F.3d 847, 852 (7th 

Cir. 1996)." Supra at 10. Nevertheless, it proceeds to conflate the two 

concepts by requiring acts distinct from the original breach even where 

concealment occurs in the course of the underlying breach. See supra at 

10-11. 

 31 
"systematic campaign of confusion." In r e: Unisys Corp. 

Retiree Medical Benefit "ERISA" Litigation, 1994 WL 284079 

at 33 (E.D. Pa. June 24, 1994); see also In r e: Unisys Corp. 

Retiree Medical Benefit "ERISA" Litigation, 1996 WL 455968 

at *4-6 (discussing sufficiency of evidence of systematic 

misrepresentation and confusion in r einstating claims of 

Burroughs and Unisys plaintiffs). As discussed above, one 

effect of the resultant confusion was to mislead 

beneficiaries into believing they had no need or cause to sue.12 

Consequently here, unlike in Kurz, it is necessary to 

consider the effect of such self-concealing misconduct on 

ERISA's statute of limitations. 

The rationale underlying the self-concealing wr ong

doctrine has long been recognized in our law: 

 To hold that . . . by committing a fraud in a manner 

 that it concealed itself until such time as the party 

 committing the fraud could plead the statute of 

 limitations to protect it, is to make the law which was 

 designed to prevent fraud the means by which it is 

 made successful and secure. 

Bailey v. Glover, 88 U.S. 342, 349 (1874). This principle 

that the law should not reward concealment is particularly 

applicable in the context of a fiduciary r elationship. See 

Amen v. Black, 234 F.2d 12, 26 (10th Cir . 1956) ("The law 

does not require one to suspect his fiduciary. Surely no one 

would contend that the . . . statute of limitations was 

intended to impose upon the defrauded party the bur den of 

discovering a fraud perpetrated by one standing in a 

position of trust.").13 

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12. See Barker v. American Mobile Power Corp. , 64 F.3d 1397, 1402 (9th 

Cir. 1995) (fraudulent concealment involves"affirmative conduct upon 

the part of the defendant which would, under the cir cumstances of the 

case, lead a reasonable person to believe that he did not have a claim for 

relief "). Cf. Lettrich v. J.C. Penney Co., Inc., 213 F.3d 765 (3d Cir. 

2000) 

(holding placement of amendment notice within technical document and 

failure to use more effective channels would support inference that 

employer intended to conceal amendment from af fected employees). 

13. Congress enacted ERISA to "pr otect . . . the interests of 

participants 

in employee benefit plans . . . by establishing standards of conduct, 

responsibility and obligation for fiduciaries." 29 U.S.C. S 1001(b). ERISA 

 32 
If ever a case calls for application of the self-concealing 

wrong doctrine, this is such a case. Considering the facts in 

the light most favorable to the participants, as the party 

opposing summary judgment: Unisys purposely 

systematically misled its workers into believing that they 

had a legally protected right to medical benefits for life;14 it 

perpetuated the misinformation by repeating its 

misstatements to many employees over a period of years;15 

and it avoided any action that would have br ought the 

misrepresentation to the participants' attention, by paying 

the benefits until after the statutory period had passed. 

Thus, Unisys's conduct may be distinguished fr om a

garden-variety fiduciary breach by two important factors: 

first, the beneficiaries were deceived, and remained so, to 

Unisys's knowledge, for several years, until shortly before 

suit was filed; and second, the deception was pr ocured by 

a systematic course of repeated misrepr esentations

calculated to prevent the entire class of aggrieved retirees 

from learning the truth. I believe this amounts to a selfconcealing wrong, sufficient to toll the statute without 

regard to "additional" conduct -- such as telling retirees 

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should therefore be applied to avoid r esults that "would afford less 

protection to employees and their beneficiaries than they enjoyed before 

ERISA was enacted." Heasley v. Belden & Blake Corp., 2 F.3d 1249, 

1257 (3d Cir. 1993). Enabling fiduciaries to secure immunity for their 

self-concealing misrepresentations by lapse of time would violate this 

principle. 

14. See Unisys II, 57 F.3d at 1266 (noting that the District Court "found 

that the company, both actively and affirmatively, systematically 

misinformed its employees about the duration of their benefits"). 

15. See Unisys II, 57 F.3d at 1265 ("Here the district court found that 

virtually the entire company management had consistently 

misrepresented the plan, not just on one occasion to one employee, but 

over a period of many years and both orally (in gr oup meetings) and in 

writing (in newsletters) as well."). I disagr ee with the majority's 

offhand 

remark that mere repetition of a misr epresentation cannot constitute 

concealment -- especially in the present context, where the 

misrepresentation was repeated to all and sundry, creating pervasive 

misunderstanding. It seems clear that consistent r epetition of a 

falsehood to all employees would well serve to pr event the truth from 

becoming known. 

 33 
that the reservation of rights in the SPD did not apply to 

them -- which the majority properly finds sufficient to 

create a triable issue of concealment.16 

The majority gives great weight to Unisys's distribution of 

a Summary Plan Description with a reservation of rights 

clause. Any implication that there can be no concealment 

where an accurate SPD is provided is inconsistent with our 

cases holding that participants can be misled despite an 

accurate SPD, and that a fiduciary should not be permitted 

to prey upon the participants' foreseeable confusion.17 

Moreover, it is inconsistent with the majority's own 

recognition of evidence that, "despite the existence of the 

SPD", employees had "the mistaken belief that their health 

benefits were guaranteed for life." Supra at 21.18 

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16. I agree with the majority's conclusion that the company's advice that 

the reservation of rights clause "pertained to active employees and not to 

retirees" supra at 6, quotingIn re Unisys Corp., 1994 WL 284079 at*34, 

amounts to an affirmative step to conceal the effect of the clause at 

issue, and thus to conceal the retirees' potential injury. Cf. Adams, 204 

F.3d at 492 (finding participants likely to succeed on merits 

notwithstanding explicit reservation of rights where participants 

contended that, based on the employer's communications, they 

"reasonably believed that the active employees' booklets did not apply to 

them"). 

17. See, e.g., Adams, 204 F.3d at 492-93 ("[A] company cannot insulate 

itself from liability by including unequivocal statements retaining the 

right to terminate the plans at any time in the SPDs. . . . . 

[C]onflicting 

assertions cannot be ignored because they ar e not in the formal ERISA 

document."); Harte, 214 F.3d at 451 n.6 ("[T]he fiduciary duty to disclose 

and explain is not achieved solely by technical compliance with the 

statutory notice requirements."); Unisys II, 57 F.3d at 1264 

("[S]atisfaction . . . of . . . disclosur e obligations [through an SPD] . 

. . 

does not foreclose the possibility that the plan administrator may 

nonetheless breach its fiduciary duty . . . to communicate candidly, if 

the plan administrator simultaneously or subsequently makes material 

misrepresentations to those [to] whom the dut[ies] of loyalty and 

prudence are owed."). 

18. The majority holds that the SPD is but "one of the circumstances 

that must be considered" on the question offiduciary breach. Supra at 

22. The same must hold true for the role of the SPD on the question of 

concealment. 

 34 
In sum, this case involves systematic conduct by Unisys 

that foreseeably led participants and beneficiaries to believe 

that they did not have a claim.19 That the concealing acts 

were woven into the fabric of Unisys's initial wrongdoing 

should be of no moment. Accordingly, I concur with the 

majority's holding that the plaintiffs have established at 

least a triable issue as to whether this is a case of "fraud 

or concealment", so that the statute of limitations would 

only begin to run upon discovery of the breach. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

_________________________________________________________________ 

19. As the majority concludes in Part III of its opinion, "there was 

evidence from which a trier of fact could conclude that Unisys should 

have foreseen that its conduct . . . would cause reasonable employees to 

rely to their detriment, despite the existence of the SPD." Supra at 20. 

By 

the same token, a factfinder could conclude that Unisys's conduct would 

cause those employees "to believe that [they] did not have a claim for 

relief " -- which is the essential characteristic of concealment. Barker, 

64 

F.3d at 1402. 

 35