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. e du/thir dc ir c uit_2001/47Filed 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

2Alan 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 act ion. 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 determi ne whether the defendant fiduciary, if found to have m ade 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 deta il.1 We

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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).

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

this appeal. This is a class action filed on behalf of retirees and disabled former employees of the Sperry, Burrou ghs, and Unisys Corporations ("retirees" or "plaintiffs" ) against Unisys Corporation ("Unisys"). The dispute arises o ut 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 pl ans and replace them with a new one effective January 1, 19 93.2 Under the majority of the old plans, Unisys paid th e 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 escal ating amounts to the cost of the premiums until January 1
, 1995, at which time the retirees would become respo nsible for the entire premium.

Upon learning about this planned change in r etirem ent benefits, retirees of Sperry, Burr oughs, and Unisy s separately filed eight different lawsuits against U nisys in four jurisdictions. See In re Unisys Corp., 837 F. Supp. 670, 672 n.1 (E.D. Pa. 1993) (citing cases). These lawsu its were eventually consolidated. The retirees asserted thre e causes of action: breach of contract, estoppel, and br eac h of fiduciary duty.

The District Court granted summary judgment to Unis ys on the breach of contract claims of the Burr oughs and Unisys retirees, as well as on the estoppel and bre ach 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 co ntract

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2. In September 1986, Sperry Corporation and Burr o ughs Corporation merged to form Unisys Corporation. Following the me rger, 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 form er Sperry and Burroughs employees. Even with the addition of the new plan, however, Unisys kept its predecessor plans intact.

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

WL 284079 (E.D. Pa.).

During the trial, Unisys relied upon the fact that the applicable ERISA plans and summary plan description s ("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 description s described the health care benefits as "lifetime" be nefits, this was intended to convey not only that the existing p lan provided such benefits for life but also that those benefits were vested, i.e., guaranteed against change. The s econd theory "was that although the SPDs used lifetime la nguage to describe the benefits of [both] actives and reti rees, Sperry had an unwritten `practice' or `policy' that once a n individual retired, his/her benefits`locked in.' Pu rsuant to this `lock in' policy, the company could not r educ e the medical benefits of retirees under any circumstance s." 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 Unis ys' intent in promulgating the plans. The Court conclud ed that "lifetime benefits" as used in the plans and SPDs d id not
reflect an intent to create "vested" lifetime benef its, observing that "the plaintiffs conceded thr oughout the entire trial that an active employee's benefits cou ld always be awarded or terminated even though lifetime langu age was similarly used to describe that benefit . . . i mplicitly 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 pra ctice or policy of "locking-in" benefits at r etirement, not ing 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 r ight to
lifetime benefits. The evidence that it hear d and our intervening decision in Bixler v. Cent. Pa. T eamst ers Health & Welfare Fund, 12 F.3d 1292 (3d Cir. 1993), howeve r, caused it to reconsider its summary judgment in Uni sys'

5favor on the Sperry plaintiffs' breach offiduciary duty

claims. Ultimately, it reinstated those claims. 3 I n the course of doing so, it pointed to evidence that (1) a "r e tirement counselor [had] responded to questions about the reservation of rights clause raised by potential re tirees by saying that the language `pertained to active emplo yees 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 Unisy s Corp.,
1994 WL 284079 at *34 n.69. The Court also r eferen ced evidence indicating "the highest levels of corporat e management at Sperry, and later Unisys, recognized that employees might be under the mistaken belief that`l ifetime' meant forever." Id. at *26. The Court explained its reinstatement decision by stating "that based on [t his] evidence and the law in this circuit, it seems poss ible that at least some plaintiffs will be able to sustain a [breach of fiduciary duty] claim." Id. at *27. 4 The Court dec lined, however, to reinstate the estoppel claims.

An interlocutory appeal followed, bringing befor e us the judgments in Unisys' favor on the contract and esto ppel
claims and the decision to reinstate the br each of fiduciary duty claims. We found judgment appropriate on the b reach of contract claim because the plans and SPDs pr ovi ded unambiguous notice that lifetime medical benefits w ere not guaranteed, even for those who retired when the pla ns still provided for such benefits. On the unambiguous face of the plans, there was no right to lifetime medical benef its 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:

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3. After we affirmed this decision, the District Co urt reinstated the similar claims of the Burroughs and Unisys r etiree s as well. In re Unisys Corp., 1996 WL 455968 (E.D. Pa.).

4. At the same time, the Court stressed that the br each of fiduciary duty
claim was not before it and that it was "not holdin g that a breach did in

fact occur." Id. at *27.

6Due to the unambiguous reservation of rights clauses

in the summary plan descriptions by which Un isys
could terminate its retiree medical benefit plans, the regular retirees cannot establish"reasonable " detrimental reliance based on an interpr eta tion that the SPDs promised vested benefits. The r eti rees' interpretation of the plans as providing lif etime benefits
is not reasonable as a matter of law because it cannot be reconciled with the unqualified reservati on 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. ("Un isys 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 c ounseled them that they had lifetime medical benefits withou t making reference to the reservation of rights claus e, even though the representatives were awar e that many employees mistakenly understood such counsel to mea n that such benefits became vested at the time of r e tirement, see id. at 1260-61; and (2) Unisys repr esentatives "affirmatively represent[ed] to them that their med ical benefits were guaranteed once they retir ed, when t he company knew in fact this was not true." Id. at 12 66-67.
We held that such conduct could constitute a breach of Unisys' fiduciary duty as plan administrator .

After the breach of fiduciary duty claim was reinst ated for all classes of plaintiffs, Unisys filed two motions for partial summary judgment. At the same time, the Sperry r et irees submitted a motion for summary judgment on their cl aims. In its first motion, Unisys asked the District Cour t to grant it summary judgment against all Sperry retir ees wh o retired before November 17, 1986 (six years befor e the fir st complaint by Sperry retirees was filed), and agains t 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 wer e barred from having their claims heard by ERISA's statute o f limitations, 29 U.S.C. S 1113.

7In its second motion, Unisys sought to have the Dis trict

Court grant summary judgment against all the plaint iffs who would not be able to prove that Unisys' alleged breach of fiduciary duty led them to retire earlier than t hey otherwise would have (e.g., retirees who did not vo luntarily retire). It argued that the only legally cognizable harm that could have resulted from its alleged misr epresenta tions was
acceleration in individual decisions to retir e. Ot her decisions made by the plaintiffs in reliance on Uni sys' 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 d ispute of fact as to any of the elements of their breach of f iduciary duty claims. Accordingly, they urged the District C ourt to grant them judgment as a matter of law.

The District Court granted Unisys' motions for part ial summary judgment and denied summary judgment to the Sperry retirees on their motion. Those r etirees wh ose 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 cl aims 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 subcha pter with respect to a fiduciary's breach of any responsibility, duty, or obligation under th is part, or with respect to a violation of this part, af ter 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 whic h the fiduciary could have cured the breach or vio lation, or

8(2) three years after the earliest date on w hich the

plaintiff had actual knowledge of the br eac h or violation;

except that in the case of fraud or concealm ent, such actions may be commenced not later than six years after the date of discovery of such breach o r violation.

29 U.S.C. S 1113.

The retirees argue that the District Court misappli ed 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 abo ut their health care benefits. In the alternative, the retir ees argue that even if we find the "fraud or concealment" pro vision inapplicable here, their claims are nevertheless ti mely under the six-year provision provided inS 1113(1)(A ), which does not begin to run until "the date of the last a ction which constituted a part of the breach or violation ." The
retirees contend that the date of the last action c onstituting part of the breach in this case was the date on whi ch Unisys terminated the old benefit plans.

A. "Fraud or Concealment"

The purpose of the "fraud or concealment" pr ovisio n is to codify a portion of the common law for ERISA br eac h 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 step s 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 appli es the federal common law discovery rule to ERISA b r each of fiduciary duty claims. In other words, when a lawsuit has been delayed because the defendant itsel f 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

9not whether the complaint "sounds in conceal ment,"

but rather whether there is evidence that th e defendant took affirmative steps to hide its br each o f fiduciary duty.

Id. at 1552.

In Kurz, the alleged breach of fiduciary duty was t he counseling of employees considering retir ement abo ut their retirement benefits without revealing that plan
amendments to increase those benefits wer e under s erious consideration. Because the "wrong . . . was neither selfconcealing nor actively concealed," we expr essly r eserved 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 or iginal fraud that has the effect of concealing the fraud f rom its victims, [while a]ctive concealment refers to acts intended to conceal the original fraud that are distinct fro m the original fraud." Wolin v. Smith Bar ney, Inc., 83 F .3d 847, 852 (7th Cir. 1996). We held in Kurz that, regardle ss of
whether the acts to conceal the breach occur in the course of the conduct that constitutes the underlying br e ach or independent of and subsequent to the breach, there must be conduct beyond the breach itself that has the ef fect of concealing the breach from its victims.

Here, as in Kurz, the issue is "not whether the com plaint `sounds in concealment' [i.e., not whether Unisys

misadvised the retirees or counseled them without d rawing 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). Acco rdingly, if all that a plaintiff can show is that a counselo r 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, eit her as a part of the original breach of duty or ther eafter, to cover up its breach. To the contrary, pursuant to the releva nt

10provisions of ERISA, Unisys regularly distributed t o its

employees and retirees SPDs unambiguously explainin g that the plan provisions calling for lifetime benef its could be amended at any time for any reason. As the District Court aptly put it,

While . . . compliance with SPD disclosure o bligations does not relieve a company of its fiduciary duty to avoid confusing participants about their ben efits, this
court will not hold that the truth about the "lifetime" benefits was concealed from participants whe n the information about the reservation of rights clause was unambiguously printed and distributed [by th e company] in the SPD.

In re Unisys Corp., 957 F. Supp. at 635. Accordingl y, 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 o f equitable tolling can under some circumstances pr event a lim itations period from running in favor of a trustee on a brea ch of fiduciary duty claim even in the absence of conceal ment on his part. Bailey v. Glover, 21 Wall 342 (1875), upo n which plaintiffs heavily rely, provides one example of su ch circumstances. We conclude, however , that superimp osing such equitable tolling rules on the statutory limit ations
scheme set forth in S 1113 would be inconsistent wi th congressional intent and the clear teachings of the Supreme Court.

In Lampf, Pleva, Lipkind, Prupis & Petigr ow v. Gil bertson, 501 U.S. 350, 360-62 (1991), the Court held that Ru le 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 vi olation or (b) three years from "the violation" (or, in the ca se of S 18(c), from the date "the cause of action accrued"). The p laintiff

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5. Notwithstanding plaintiffs' argument to the cont rary, we do not regard the fact that the alleged misrepresentations were r epeated (as opposed to isolated) as satisfying the requirement that there be affirmative steps to conceal beyond the misrepresentations themselves.

11there argued that the doctrine of equitable tolling should

apply so that the three-year limitations period wou ld not
start to run until the fraud was discovered even wh ere no steps where taken by the defendant to conceal the f raud. The Court rejected that argument, finding it fundam entally at odds with the legislative scheme:

Plaintiff-respondents note, correctly, that "[t]ime requirements in lawsuits . . . are customari ly subject to `equitable tolling.' " Irwin v. Department o f Veterans Affairs, 498 U.S. 89, 95 (1990), citing Hall strom v. Tillamook County, 493 U.S. 20, 27 (1989). Th us, 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 hi s part, the bar of the statute does not begin to run unt il 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 Wa ll. 342, 348 (1875); see also Holmberg v. Armbr echt, 327 U.S. 392, 396-397 (1946). Notwithstanding this venerab le 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 aft er discovery of the facts constituting the viol ation, making tolling unnecessary. The 3-year limit is a p eriod of repose inconsistent with tolling. One commen tator explains: "[T]he inclusion of the thr ee-yea r period can have no significance in this context other t han 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 sa me. Congress has determined that the cut-of f date shou ld be the earlier of (a) three years from the date of dis covery of the claim and (b) six years from the violation. The only difference is that ERISA's statute makes a single e xpress

12exception 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 t he sixyear period does not begin to run until discovery o f the fraud, where the defendant has engaged in no wr ong ful activity beyond the original fraud on which the pla intiffs' claims are based. Indeed, given the fact that Congr ess provided one express exception in S 1113(2), reject ion of equitable tolling here follows a fortiori from the Supreme Court's holding in Lampf.

Similarly, we must decline plaintiffs' invitation t o apply their equitable tolling principles under the guise of construing S 1113(2)'s "fraud or concealment" provi sion. Accepting that invitation would require us to rejec t Kurz, and we are bound by that precedent. Contrary to pla intiffs' 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 suggesti ng that a "retirement counselor [had] r esponded to questions about the reservation of rights clause raised by potentia l retirees by saying that the language pertained to active emp loyees and not to retirees." In re Unisys Corp., 1994 WL 2 84079 at *34 n.69. It seems to us entirely possible that adv ice of this character might well bring the fraud or concealment provision into play. If, for example, advice about the

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6. In particular, plaintiffs point to this Court's decision in Adams v. Freedom Forge Corp., 204 F.3d 475 (3d Cir. 2000). A s we expressly noted, no statute of limitations issue was befor e us in that appeal. Although a footnote in that case makes refer ence t o "issues left unresolved in Kurz about the anatomy and scope of t he fraudulent concealment doctrine," i.e., whether ERISA's statut e of limitations applies to "self-concealing" as well as "active con cealment" cases, id. at 494 n.5 (full citations and internal quotations omi tted), we do not read Adams as purporting to second guess the Kurz rule that the "fraud or concealment" provision requires"affirmative steps t o hide [the] breach of fiduciary duty." Kurz, 96 F.3d at 1552.

13reservation of rights clause was given under circum stances

such that an employee, who had consulted the SPD, w as dissuaded from consulting counsel regar ding that c lause, we believe that the advice could appropriately be r egarded as an affirmative step having the ef fect of concea ling Unisys' breach.

It would be inappropriate for us to decide at this stage whether "fraud or concealment" within the meaning o f section 1113(2) has occurred in this case. W e hold only that, drawing all permissible inferences against th e party seeking summary judgment, there may be r etirees wh o will be able to prove that Unisys counselors concealed t heir 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 peri od is applicable to plaintiffs' claims, we must determine when that period began to run, i.e., "the date of the la st action which constituted a part of the breach." Unisys ins ists that
this text focuses on the last action of the fiducia ry which was in violation of its fiduciary duty. While it do es 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 r etire are concerned, a retiree's date of r etirement is neces sarily the last date upon which Unisys could have made a r ele vant misrepresentation or upon which a clarifying communication could have prevented detrimental reli ance. Unisys therefore asks us to affir m the District Co urt'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 1 992.

The retirees, on the other hand, contend that the d ate of the last action which constituted part of the br ea ch was November 3, 1992, the date on which Unisys announce d the termination of its "lifetime" plans. They argue that S 1113 must be interpreted in this manner because n o

14actual harm occurred and thus no legitimate claim o f

breach of fiduciary duty arose until Unisys termina ted the plans that it initially had misrepresented. Even th ough the retirees concede that the termination of the old pl ans was a non-fiduciary act, they nevertheless insist that a nonfiduciary act can constitute "part of the br each o r 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 C ir. 2000), this Court recently reviewed the elements of a breach of fiduciary duty claim like that of the pla intiffs here. We found the controlling pr ecepts in our pri or decision in this case:

An employee may recover for a breach of fid uciary 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 offiduci ary duty in this context, it necessarily follows that a ny breach that may have occurred was completed, and a claim b ased thereon accrued, no later than the date upon which the employee relied to his detriment on the misr eprese ntations. Surely, any employee who sought counsel and who too k early retirement based on Unisys' expr ess assuranc e that she possessed guaranteed lifetime health car e, the reby reducing the amount of pension she would otherwise receive, could bring suit immediately and secur e r escission of her retirement or some other appr opriate equita ble relief.7

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7. The dissenting opinion assumes that an employee misled by Unisys about guaranteed life care benefits would be entitl ed to a remedy taking into account his or her expectancy interest in such benefits rather than, or perhaps in addition to, the economic loss suffer ed when he changed position in detrimental reliance on Unisys' conduct . The District Court has not yet addressed what remedies may be availabl e to a retiree who establishes a breach of fiduciary duty, and we, of course, express no opinion on the availability of expectancy compensat ion or any other form

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

such plaintiffs commenced no later than the r espec tive
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 ou t, the alleged breach of fiduciary duty here concerned the counsel allegedly given or not given, and there is no causa l 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 eti rements may not have occurred when they did, but ther e is no reason to believe retirees would now have free cove rage. As the District Court held, Unisys had a right to ter minate free

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

between the value of a health care plan with guaranteed lif etime 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 we re entitled to an expectancy remedy as a result of r etiring after be ing told he had the former, when in fact he had the latter , he would b e 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 h ealth 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 ep resentation been true. Accordingly, his estate would have no claim b ased on lost health
care benefits.

8. If the "date of the last action which constitute s a part of the breach" is the date of Unisys' last misrepresentation, it i s theoretically possible that the statute could begin to run before a r etir ee could seek relief

from a court since detrimental reliance is a necessary e lement of a breach of fiduciary duty of this kind. We need not decide, ho wever, whether the six year period can begin to run before a br each of fi duciary duty claim accrues. As we have noted, the District Court and t he parties have regarded the date of the last relevant misrepresent ations 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 f r 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 detr imental reliance.

16health care coverage, and it exercised that right i n 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 b eing asserted here is clearly that many relied on the misrepresentations to their detriment by deciding t o take voluntary retirement, as we explain her eafter, Uni sys has not persuaded us that this is the only viable theor y of liability. It may well be that retirees who retired before those dates relied to their detriment in making oth er decisions after those dates. Accordingly, the summa ry judgment entered by the District Court was overbroa d and must be reversed. Summary judgment for Unisys would be appropriate, however, with respect to those who ass ert claims based solely on retirement decisions made mo re than six years before suit was filed.

III.

Unisys argues that an essential element of the brea ch of fiduciary duty claim recognized in our prior opinio n 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 i s entitled to summary judgment with respect to anyone who was mandatorily retired at age 65, left the company's e mploy involuntarily because of disability, or for some ot her reason
made no such decision.

In response, the plaintiffs insist that the categor y of claims we earlier recognized is not limited to clai ms based
on retirement decisions and have submitted affidavi ts from members of the class who allege that, in reliance o n their

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9. It is only fortuitous that the fiduciary who did the alleged counseling here was the employer who exercised its right to ch ange the plans. If Unisys had not been the administrator of the plans and an independent administrator had breached its fiduciary duty by mi scounseling retirees, it would be even more clear that the plan admendmen ts were not "the last action which constituted a part of the br each ."

17belief that they had guaranteed lifetime benefits, they

declined other employment opportunities, chose to f orego the opportunity to purchase supplemental health insurance, or made other important financial decisi ons 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 hold ing in Unisys II. After all, in Bixler, upon which we heav ily relied there, the decision resulting from the breach of fi duciary duty was a decision on whether to purchase COBRA insurance rather than a decision regarding retireme nt. 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. 19 94) (fiduciary's misrepresentations about a new life in surance plan caused plaintiff to fail to obtain adequate co verage). It is, of course, not clear that the plaintiffs who re ly upon
these affidavits will be able to establish their en titlement to relief, but we decline Unisys' invitation to adopt an across the board prohibition of relief based upon reasonab le
reliance in contexts other than retir ement decisio ns.

Understanding the import of our decision in Unisys II requires a recognition of the pr ocedural posture i n which that appeal arose. As we have noted, the District C ourt initially granted summary judgment to Unisys on the breach of fiduciary duty claim. See In r e Unisys C orp., 837 F. Supp. at 679-80. It was only after the trial and our decision in Bixler that it decided to r einstate th at claim. See In re Unisys Corp., 1994 WL 284079 at *25-27. It wa s the propriety of that decision to reinstate, and only t he 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 fu rther proceedings."10 Unisys II, 57 F.3d at 1269.

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10. At times, the plaintiffs appear to r ead our op inion as, in effect, directing the entry of summary judgment in their fa vor 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 poin t, Unisys had been provided with no opportunity to build a trial or su mmary judgment

18It is true, as Unisys stresses, that our opinion ad dressed

the issue for decision in the context of the plaint iffs having relied to their detriment in making decisions to re tire. That was our focus because that was the plaintiffs' prim ary contention, and the absence of any refer ence to ot her kinds of reliance can hardly be taken as a ruling that ot her forms of reliance could not provide a valid basis for rel ief. We therefore reject the District Court's view that Uni sys 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 i n the course of granting summary judgment to Unisys on th e 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 th ose 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 e liance by the employees on the misrepresentations of Unisy s, while not "reasonable reliance" for purposes of a claim of equitable estoppel, can still support a clai m for br each of fiduciary duty. In a sense, the rulings i n this case

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record in opposition to Bixler claims, and any ruli ng on the merits of those claims would have been inappropriate. On rema nd, the District Court noted that the breach of fiduciary duty claim s had not been before it during the trial on the contract and estoppel cl aims and that, when reinstating those claims, it had made no deter mina tion that any plaintiff had proven his breach of fiduciary duty claim. On t he contrary, the District Court on remand quoted the following obser vations it had made
at the time of reinstatement:

[B]ecause some plaintiffs have str onger cas es than others based on their specific inquiries and the information given to them personally, the court finds that subclasses, and possibl y even individual hearings, will be necessary to adjudicate th ese claims.

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

19excuse the plan participants from their fail ur e to read

their summary plan documents in the limited context of making the retirement decision: because o f the breach of duty, the employees may have r eti red earlier than they otherwise would have, and even if their reliance on the misrepresentations was not r easonable, 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 clai m only in certain limited circumstances--in this case, where the employees retired earlier than they might ha ve 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 ei nstate the claims for equitable estoppel.

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

The District Court's characterization of our decisi on in Unisys II as excusing "unreasonable r eliance" is inappropriate. We did not there hold that the exist ence of the SPD was irrelevant to the analysis of the breac h of fiduciary duty claims. An employer, even when actin g in a fiduciary capacity, is not responsible for harm tha t is not reasonably foreseeable. As we pointed out in our pr ior opinion in this case and in Adams, in or der for re lief to be afforded, the conduct of the fiduciary must be such as to
create a "substantial likelihood that it would misl ead 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 si mply ignore the existence of the SPD. Rather , what we h eld on this score in Unisys II was as follows: (1) that th e SPD did not as a matter of law satisfy Unisys' fiduciary responsibility; and (2) that there was evidence fro m which a trier of fact could conclude that Unisys should h ave foreseen that its conduct with respect to at least some of the class would cause reasonable employees to r ely to their

20detriment, despite the existence of the SPD. Whethe r 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 situat ions in which a fiduciary can reasonably foresee unreasonab le reliance and, accordingly, be held accountable. Bix ler, 12 F.3d 1292 (3d Cir. 1994), provides an example. Mrs. Bixler there acknowledged that she had received a notice f rom the fiduciary concerning a right to apply for COBRA hea lth care insurance, but she mistakenly believed that she and her husband were not eligible to do so because he was a lready hospitalized. Shortly after Mr. Bixler's death but still well within the period when she could have elected to se cure COBRA coverage, Mrs. Bixler called the fiduciary's representative to inquire about a death benefit. Th e fiduciary accurately informed her that ther e was n o death
benefit but failed to advise her that she could r e ceive reimbursement for her husband's considerable hospit al expenses by signing and returning the COBRA notice the fiduciary had sent to her husband. We concluded tha t 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 unavailabil ity 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 inq uiring whether Mrs. Bixler's understanding of the COBRA no tice

was reasonable or unreasonable.

Our decision in Bixler is based on a fiduciary's du ty to deal fairly with its beneficiary and, more specific ally, "to communicate to the beneficiary material facts af fe cting the interest of the beneficiary which he knows the bene ficiary does not know and which the beneficiary needs to kn ow 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 wi th 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 expecte d to
make retirement decisions based on the mistaken bel ief that their health benefits were guaranteed for life . See

21Unisys 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 wo uld not

be relevant.

We also recognized in Unisys II that a duty to advi se affirmatively of the reservation of rights clause m ight have arisen even in the absence of beneficiary-specific information concerning confusion or mistake. The ev idence then of record, we suggested, could per mit a findi ng that Unisys had acquired knowledge of confusion so perva sive that a reasonable fiduciary would have done more th an 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 benefici aries and, in doing so, that it "exercise such car e and skill as a man of ordinary prudence would exercise" in his own aff airs. 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 plain tiffs would result in important decision making on their part based on a mistaken belief that they possessed guar anteed lifetime benefits. In situations involving actual k nowledge 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 oth er situations, however, the fact that Unisys had distr ibuted what purported to be an authoritative guide to bene fits is
one of the circumstances that must be consider ed i n passing this judgment on its conduct.

We do not believe holding Unisys to the kind of fai r dealing standard we recognized in Unisys II will im pose an unfair burden upon it even if it is held to that st andard in the context of decisions other than voluntary r eti rement. We stress, however, that the character of the decis ion made and reliance claimed will, of course, play an impor tant role in determining the extent of Unisys' fiduciary duty and whether that duty was breached. We also note that t he 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

22a 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 pl aintiffs had relied to their detriment on the text of the pl an and SPD. See Slip at 25, supra. On that occasion, we summarized our holding as follows:

Because our decisions require that any detri mental reliance on plan language also be "r easonab le," our finding that the [reservation of rights clau ses] are unambiguous undercuts the reasonableness of any detrimental reliance by the retirees. Accord ingly, we
hold that the district court did not err in concluding, on summary judgment, that the retirees' esto ppel 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 o r the SPDs, but rather that they relied on counseling which the y received from Unisys representatives.

IV.

The District Court's order dated March 10, 1997, wi ll be
reversed and this matter will be remanded to the Di strict Court for further proceedings consistent with this opinion.

23MANSMANN, 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 fi duciary who has created confusion about rights under a bene fit plan has an ongoing responsibility for har m stemmi ng from
beneficiaries' decisions attributable to that confu sion. While I also agree with the holding in Part II of the maj ority opinion that summary judgment must be reversed, I a m unable to subscribe to the reasoning of that Part I I because it threatens to undercut a fiduciary's r esponsibil ity by allowing a safe harbor so long as the breachingfidu ciary arranges to keep the beneficiaries in the dark for six years after they rely on his misrepresentations. I believ e that the majority's analysis of the statute of limitations a f 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

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1. Part II of the majority opinion contemplates ent ry of summary judgment against retirees whose claims (i) are base d solely on retirement decisions made more than six years befor e this act ion was filed, and (ii) were not concealed by Unisys's advice. It is not cl ear that any actual person's claim will meet these criteria, however . As the majority recognizes, retirees may rely on the presence of me dical 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 partic ipants 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 conc ealment, and the potentially pervasive presence of acts of r eliance beyond the retirement decision, my disagreement with Part II of the major ity'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 al l claims fall within

the saving provisions of Part IIA or Part III.

24I.

The applicable statute of limitations requir es tha t claims be brought within six years of the "date of the las t 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 i s detrimental reliance. See Opinion at 15 (r eferring to material misrepresentation and detrimental reliance as elements) (quoting Adams v. Freedom For ge Corp., 2 04 F.3d 475, 492 (3d Cir. 2000)). See also Unisys II, 57 F. 3d at 1265 (defining elements of claim for fiduciary brea ch as (1) proof of fiduciary status, (2) misrepr esentations, (3) company knowledge of confusion, and (4) resulting h arm).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" t o the participants was their retirement without the prote ction of a guarantee. See Opinion at 15-16. This ef fectivel y reads
the element of harm or detriment out of the claim. Although the retirement decisions wer e made in rel iance,
such reliance did not become detrimental until Unis ys announced termination of the promised post-retireme nt medical benefits. If the benefits had continued, th ere would have been no injury. Cf. Texas v. United States, 52 3 U.S. 296, 300 (1998) ("A claim is not ripe for adjudicat ion if it rests upon `contingent future events that may not o ccur as anticipated, or indeed may not occur at all.' ") (q uoting Thomas v. Union Carbide Agric. Prod. Co., 473 U.S. 568, 580-81 (1985)). Here, resulting har m was contingen t on the company's future conduct.

The majority argues that actual harm is not a neces sary element of a claim for breach of fiduciary duty. Wh ile that may be correct as a general proposition, it is inco rrect as

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2. We recently observed that construction of ERISA' s six-year statute "implicates sophisticated questions about whether t he 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 detr imental amendment, while the majority believes it runs from "some othe r date" -- viz., the
date of the last act undertaken in reliance on the misrepresentations.

25applied to the subset of fiduciary claims pr edicat ed 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 s tatute of limitations. The significance of harm in the limita tions context is that it brings the existence of the clai m home to the claimant so that he may reasonably be expected to act. This purpose is not well served by a technical noti on of "detriment" that does not actually impact the claim ant.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 assura nce of lifetime health care could "surely" bring suit imme diately
and secure rescission of her retir ement or other a ppropriate equitable relief.4 Opinion at 15. However, the ques tion of

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3. Moreover, cases holding that it is not necessary to demonstrate harm to establish a breach of fiduciary duty do not stan d 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 qualita tive difference between an act by a fiduciary which falls short of the stan dard imposed by law and an act that also injures cestui que trust. Cons equently, even a "nonfiduciary" act by the company which imposes injury on a beneficiary left vulnerable by a prior fiduciary breach becomes "par t of the breach," and worsens it character. Thus, the "last action" could consist in the imposition of harm where it is part of the fiduciar y breach, even if it were not a required element.

4. Although the question of remedy is not now befor e us, the majority's reference to rescission as an illustrative remedy i s significant. As the majority recognizes in Part III, participants may r ely on their misapprehension of the plan benefits in many ways b eyond deciding to
retire. Some of these acts of reliance -- those inv olving expenditures or commitments made in expectation of a strongerfinanc ial position -- would be difficult to rescind, and rescission would not make the participant whole. So in general the rescission rem edy may be unwieldy and inadequate. This follows from the majority's un realistic assumption
that the decisions themselves constitute the detrim ent to be redressed; whereas, actually the harm to be r emedied is the u nexpected 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

26what actual or prospective harm is sufficient to al low suit

by one apprized of her rights is not before us. 5 T o my view, a more apt hypothetical concerns whether the estate of a participant who died before the old plan was termin ated, and so received the promised medical benefits for l ife,
would nevertheless be able to sue for breach offidu ciary duty because the promised benefits, though paid, ha d not been sufficiently assured by the written plan? Sure ly not.
The claim would fail due to the absence of actual i njury. Thus, while I am not prepared to say that a retiree may never bring suit prior to enactment of a thr eatene d detrimental change, I do not believe that the statu te of limitations requires her to bring a pr eemptive act ion to ward off potential harm that might never occur.

Accordingly, I would hold that the "last action whi ch constituted a part of the breach" for statute of li mitation purposes was the termination of the medical benefit s 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 l imited to fiduciary conduct by Unisys, the retir ees' claims still should

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enforcement of the promise on which the participant s relied, then it becomes clear that the injury that triggers the sui t results from the fiduciary's failure to comply with the pr omise, ra ther 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 permanen cy of the benefits is the same entity that ultimately cut off those benef its. To the contrary,
it was the ability of Unisys to honor its promises tha t helped to induce the retirees' reliance and created a real prospect that they would not be injured.

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

that Unisys continued to breach its duty by failing to correct the mistaken beliefs that its prior misstat ements created. Because this continuing breach involved an omission rather than an act, the six-year limitatio ns 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 ecog nized that a fiduciary has a "duty to deal fairly with it s beneficiary and, more specifically, `to communicate to the beneficiary material facts affecting the interest o f 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. Centr al Pa. Teamsters Health & Welfare Fund , 12 F.3d 1292, 130 0 (3d Cir. 1993).7 Here, the evidence suggests that Unisy s breached this duty continuously from the time it fi rst misrepresented the terms of the plan until the time the beneficiaries learned the material facts by receivi ng notice of the plan termination. Under the majority's holdi ng, the beneficiaries' interests were not pr otected by the fiduciary's word, but could only be protected if they brought s uit within six years. They therefore "needed to know fo r their protection" that the plan was not as it had been represented; and as the majority acknowledges in Pa rt III of its opinion, there is evidence that Unisys knew tha t 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 u naware of the material fact that the company retained a right to cut off their "lifetime" medical benefits, it was a vio lation 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

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7. Indeed, "[t]he duty to disclose material informa tion is the core of a fiduciary's responsibility." Harte v. Bethlehem Ste el 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 af firmatively 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 i nformation about the retention of power was breach of its fidu ciary duty.").

Had Unisys told plaintiffs the truth, they could ha ve acted to protect themselves. Cf. Harte v. Bethelehe m Steel Corp., 214 F.3d 446, 448 (3d Cir. 2000) (holding th at where beneficiaries might predictably and r easonably rel y 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 th ey relied to their detriment on Unisys's continuing non-discl osure, 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 limitatio ns 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 th e fiduciary from any ongoing duty to corr ect the misstatement. Today's holding is therefor e contrar y to our
decisions in Bixler and Harte.

III.

The most troubling aspect of the majority opinion i s its treatment of the self-concealing wrong issue. As th e

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beneficiary-specific information of confusion or mi stake" where the fiduciary has "acquired knowledge of confusion so p ervasive that a reasonable fiduciary would have done mor e than sim ply rely on its SPD." Supra at 22 (citing Unisys II, 57 F .3d at 1266). T his duty is independent of the reasonableness of, or even the r easons for, the misapprehension.

9. It might be objected that recognition of an ongo ing duty would result in an open-ended statute of limitations. However , I believe that it is entirely consistent with public policy and the fede ral 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.

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

1544, 1552 (3d Cir. 1996) we "expr essly reserved t he 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 ongdoi ng.' " Supra at 10. Although the majority does not expr es sly 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 th e statute, supra at 11 n.5, amounts to an outright r ejection of the self-concealing wrong doctrine. A requir ement of a dditional conduct beyond the breach itself is fundamentally a t odds with the concept that a wrong may be self -conceali ng.

I believe that the majority errs in interposing an additional requirement of an affir mative act of co ncealment on self-concealing wrongs. In so holding, it permit s the
ERISA statute of limitations to become an instrumen t to immunize fiduciary wrongdoing.

The "fraud or concealment" provision incorporates t he long-established principle of federal common law th at 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 ex plained,

The reading we adopt . . . interprets the ph rase "fraud or concealment" in a way that gives both ter ms meaning. An ERISA fiduciary can delay a wr o nged beneficiary's discovery of his claim either by misrepresenting the significance of facts th e beneficiary is aware of (fraud) or by hiding facts so th at the beneficiary never becomes aware of them
(concealment).

. . . [T]his interpretation of "fraud or con cealment" harmonizes the phrase's meaning with the wid ely known doctrine of fraudulent concealment, wh ich tolls the running of a statute of limitations when the

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10. The effect of the majority's requirement of add itional 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.

30defendant has prevented the plaintiff 's tim ely 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 t hat S 1113 "does not protect defendants in instances in volving concealment or fraud") (quoting Gluck v. Unisys Cor p., 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 th e course of the underlying breach, "there must be conduct be yond 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" f rom " `active concealment' separate from underlying wro ng". Id.
at 1552 n.5.11

This case is not like Kurz. There was no occasion t o address the effect of a self-concealing wrong there , because there was no concealment. Indeed, we observed in Ku rz that the employer's announcement of the amendment a t issue just 35 days after the alleged misrepr esenta tion "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 majo rity 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, [w hile a]ctive

concealment refers to acts intended to conceal the original fra ud 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 origin al 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: Un isys Corp. Retiree Medical Benefit "ERISA" Litigation, 1996 WL 455968 at *4-6 (discussing sufficiency of evidence of syst ematic misrepresentation and confusion in r einstating cla ims of Burroughs and Unisys plaintiffs). As discussed abov e, one effect of the resultant confusion was to mislead beneficiaries into believing they had no need or ca use to sue.12 Consequently here, unlike in Kurz, it is necessary to consider the effect of such self-concealing miscond uct 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 la w 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 pri nciple that the law should not reward concealment is parti cularly applicable in the context of a fiduciary r elations hip. See Amen v. Black, 234 F.2d 12, 26 (10th Cir . 1956) (" The law does not require one to suspect his fiduciary. Sure ly 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"affirma tive conduct upon the part of the defendant which would, under the ci r cumstances of the case, lead a reasonable person to believe that he d id not have a claim for relief "). Cf. Lettrich v. J.C. Penney Co., Inc., 2 13 F.3d 765 (3d Cir. 2000) (holding placement of amendment notice within techn ical document and failure to use more effective channels would suppor t inference that employer intended to conceal amendment from af fect ed employees).

13. Congress enacted ERISA to "pr otect . . . the i nterests of participants in employee benefit plans . . . by establishing sta ndards of conduct, responsibility and obligation for fiduciaries." 29 U.S.C. S 1001(b). ERISA

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

wrong doctrine, this is such a case. Considering th e facts in the light most favorable to the participants, as th e party opposing summary judgment: Unisys purposely systematically misled its workers into believing th at they had a legally protected right to medical benefits f or life;14 it perpetuated the misinformation by repeating its misstatements to many employees over a period of ye ars;15 and it avoided any action that would have br ought the misrepresentation to the participants' attention, b y paying the benefits until after the statutory period had p assed.

Thus, Unisys's conduct may be distinguished fr om a garden-variety fiduciary breach by two important fa ctors: first, the beneficiaries were deceived, and remaine d so, to Unisys's knowledge, for several years, until shortl y before suit was filed; and second, the deception was pr oc ured 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 wi thout regard to "additional" conduct -- such as telling r etirees

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should therefore be applied to avoid r esults that "would afford less protection to employees and their beneficiaries tha n 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 the ir benefits").

15. See Unisys II, 57 F.3d at 1265 ("Here the distr ict court found that virtually the entire company management had consist ently misrepresented the plan, not just on one occasion t o 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 wi th the majority's

offhand remark that mere repetition of a misr epresentation cannot constitute concealment -- especially in the present context, w here the misrepresentation was repeated to all and sundry, c reating pervasive misunderstanding. It seems clear that consistent r epetition of a falsehood to all employees would well serve to pr e vent the truth from becoming known.

33that the reservation of rights in the SPD did not a pply to

them -- which the majority properly finds sufficien t to
create a triable issue of concealment.16

The majority gives great weight to Unisys's distrib ution of a Summary Plan Description with a reservation of ri ghts clause. Any implication that there can be no concea lment where an accurate SPD is provided is inconsistent w ith our cases holding that participants can be misled despi te an accurate SPD, and that a fiduciary should not be pe rmitted to prey upon the participants' foreseeable confusio n.17 Moreover, it is inconsistent with the majority's ow n recognition of evidence that, "despite the existenc e 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 acti ve employees and not to retirees" supra at 6, quotingIn re Unisys Corp., 19 94 WL 284079 at*34, amounts to an affirmative step to conceal the effec t 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 wher e participants contended that, based on the employer's communicati ons, they "reasonably believed that the active employees' boo klets did not apply to
them").

17. See, e.g., Adams, 204 F.3d at 492-93 ("[A] comp any cannot insulate itself from liability by including unequivocal stat ements retaining the right to terminate the plans at any time in the SPD s. . . . . [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 fid uciary duty to disclose and explain is not achieved solely by technical com pliance with the statutory notice requirements."); Unisys II, 57 F.3 d at 1264 ("[S]atisfaction . . . of . . . disclosur e obligat ions [through an SPD] .

. . does not foreclose the possibility that the plan ad ministrator may nonetheless breach its fiduciary duty . . . to comm unicate candidly, if the plan administrator simultaneously or subsequent ly 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 offiduciar y breach. Supra at
22. The same must hold true for the role of the SPD on the question of

concealment.

34In sum, this case involves systematic conduct by Un isys

that foreseeably led participants and beneficiaries to believe that they did not have a claim.19 That the conceali ng acts were woven into the fabric of Unisys's initial wron gdoing should be of no moment. Accordingly, I concur with the majority's holding that the plaintiffs have establi shed 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

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19. As the majority concludes in Part III of its op inion, "there was
evidence from which a trier of fact could conclude that Unisys should
have foreseen that its conduct . . . would cause re asonable employees to rely to their detriment, despite the existence of t he SPD." Supra at 20. By the same token, a factfinder could conclude that Un isys's conduct would cause those employees "to believe that [they] did n ot have a claim for
relief " -- which is the essential characteristic o f concealment. Barker,
64

F.3d at 1402.

35