### 1996 D e c i sion s O p inion s of the U nit e d

S t at e s C our t of Appe al s for the Thir d C ir c uit

10-1-1996 

# K ur z v . P hi l a E lec C o

P r e c e de n t i al or N on-P r e c e de n t i al :

D ocke t 95-1795,95-1796

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w

. v i l l a no va

. e du/thir dc ir c uit_1996

Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no va

U niv e r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 1996 D e c i sion s b y a n author i z e d a dmini s tr a t or of V i l l a no va

U niv e r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w

. v i l l a no va

. e du

. 

### Re c omme nde d C it a t ion

" K ur z v . P hi l a Ele c C o " (1996). 1996 D e cisio n s

. P ape r 37. h tt p://d i g it alc ommon s .l a

w

. v i l l a no va

. e du/thir dc ir c uit_1996/37UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 95-1795 and 95-1796

DONALD R. KURZ; WILLIAM ANDERSON; JAMES E.W. BECK; WILLIAM T. BERGEN; CHARLES W. BOWD EN; WILLIAM H. BROWN; RICHARD CAHILL; ARMANDO L. C APOFERRI; ROBERT C. DEMARCO; JAMES J. DILOLLE, SR.; VI NCENT J. DIMAGGIO; JOHN J. DIVALENTINO, JR.; WILLIAM E . DRUMEL; VICTOR J. GIBIALANTE; FRANCIS T. GOLDEN; JAMES J. GRANGER; ELMER D. GREIM, JR.; JAMES H. HAIR; JOHN M. HOOPES; BENJAMIN J. KILIAN; GEORGE C. LINT HICUM; HUBERT A. MCKOWN, JR.; HENRY P. MCNAME E; OLIVER K. MESSNER; ROBERT E. MILLER; JOHN A. MORSE; SAMUEL J. MULLEN; JOHN A. MUNLEY; STANLEY B. MYERS; JOHN J. NUSSPICKEL; JAMES W. PATTERSON; ALF RED B. SCHUMANN; JOSEPH C. SHARKEY; WILLIAM H. SM OYER; WOODROW E. SNYDER; JAMES D. SUTLIFF; EDWARD J . VETNER; DOMINIC C. VIGLIANESE; G. EARLE WATT; FRED ERICK W. WINTERLING; JOHN R. YOUNG

v.

PHILADELPHIA ELECTRIC COMPANY; SERVICE AN NUITY PLAN OF PHILADELPHIA ELECTRIC COMPANY; CHAR LES L. FRITZ; J.L. EVERETT, III; JOHN H. AUSTIN, JR.

JOHN J. DIVALENTINO, JR., WILLIAM E. DRU MEL; JOHN A. MORSE; SAMUEL J. MULLEN; STANELY B. MYERS; DOMINIC C. VIGLIANESE; JAMES J. DILOLLE; BE NJAMIN J. KILIAN; CHARLES W. BOWDEN; ELMER D. GREI M, JR.; FREDERICK W. WINTERLING; JAMES W. BECK; JAMES H. HAIR; ROBERT C. DEMARCO; ALFRED G. SCHUMANN; RICHAR D CAHILL; JAMES W. PATTERSON; JOHN M. HOOPES; HUBERT A. MCKOWN, JR.; ROBERT E. MILLER; JAMES D. SUTLIFF; HE NRY P. MCNAMEE; FRANCIS T. GOLDEN; WILLIAM T. BE RGEN; GEORGE C. LINTHICUM; WILLIAM W. ANDERSON: J OHN R. YOUNG; VINCENT J. DIMAGGIO; SHIELDS L. DAL TROFF; RICHARD O. FOLKMAN; ALFRED E. STAVOLA; ROBE RT H.C. LESS; SAMUEL E. BELL; DONALD F. WASHINGTON; FRANK J. GALLAGHER; MAURICE M. PEITZMAN; HARRY G. TURNER, JR.; ROBERT I. FRIEND; DONALD C. ROBINS ON; WILLIAM J. LEAMAN, JR.; AUGUSTUS W. O'MALLEY ; DALLAS S. SCOTT, JR.; JOHN S. STILLWAGON; ROBERT C. H ECKESSER; WILLIAM R. TRAVETTI; WILLIAM B. HORLOCK; JAME S STATES; THOMAS W. RAYER; JOHN H. VONRHINE; WALTER ALL WOERDEN; GEORGE C. WIEDERSUM, JR.; JAMES R. MCCARRON; SALVATOR J. DESTEFANO; JOHN C. GARVIN; A. WILLIAM LAN CASTER; JOSEPH A. FOCHT; ROBERT MITCHELL; JOSEPH P. S UBRANNI;JOHN F. CRAWFORD; WILLIAM G. TAYLOR; KENNETH R . SEDGLEY,

JR., IRWIN G. BLACKBURN; CHARLES R. CAREY; JOHN R. YOUNG; JESSEE E. GRAY, JR.; JAMES D. DERSTINE; ALLEN H. BRAID; PAUL L. THOMAS; STEPHEN MICKLOSH, JR.; WILLIAM L. GIBBONS; RUSSELL B. MURRAY; ROLAND J. MARKUN; ERNEST W. BEAM; RAYMOND W. SCHOLL, JR.; JOHN F. PARKER; JOSEPH F. MCBRIDE; VINCENT S. BOYER; MARTIN M. MORGAN and DAVID MONZO,

Appellants i n 95-1795

---------------------

DONALD R. KURZ; WILLIAM ANDERSON; JAMES E.W. BECK; WILLIAM T. BERGEN; CHARLES W. BOWD EN; WILLIAM H. BROWN; RICHARD CAHILL; ARMANDO L. C APOFERRI; ROBERT C. DEMARCO; JAMES J. DILOLLE, SR.; VI NCENT J. DIMAGGIO; JOHN J. DIVALENTINO, JR.; WILLIAM E . DRUMEL; VICTOR J. GIBIALANTE; FRANCIS T. GOLDEN; JAMES J. GRANGER; ELMER D. GREIM, JR.; JAMES H. HAIR; JOHN M. HOOPES; BENJAMIN J. KILIAN; GEORGE C. LINT HICUM; HUBERT A. MCKOWN, JR.; HENRY P. MCNAME E; OLIVER K. MESSNER; ROBERT E. MILLER; JOHN A. MORSE; SAMUEL J. MULLEN; JOHN A. MUNLEY; STANLEY B. MYERS; JOHN J. NUSSPICKEL; JAMES W. PATTERSON; ALF RED B. SCHUMANN; JOSEPH C. SHARKEY; WILLIAM H. SM OYER; WOODROW E. SNYDER; JAMES D. SUTLIFF; EDWARD J . VETNER; DOMINIC C. VIGLIANESE; G. EARLE WATT; FRED ERICK W. WINTERLING; JOHN R. YOUNG

v.

PHILADELPHIA ELECTRIC COMPANY; SERVICE AN NUITY PLAN OF PHILADELPHIA ELECTRIC COMPANY; CHA RLES L. FRITZ; J.L. EVERETT, III; JOHN H. AUSTIN, JR.

Peco Energy Company, formerly Known as Philadelphia Electric Company, Service Annuity Plan of Philadelphia Electric Company, Charles L. Fritz, J.L. Everett, III and John H. Austin, Jr.

Appellants in 95-1796

On Appeal from the United States District Court for the Eastern District of Pennsylvan ia (D.C. Civil Action No. 91-cv-02771)

Argued April 29, 1996Before: COWEN and ROTH, Circuit Judge s

and CINDRICH, District Judge

(Opinion filed October 1, l996)

Ronald L. Wolf, Esq. Martina W. McLaughlin, Esq. (Argued) Litvin, Blumberg, Matusow & Young

1339 Chestnut Street The Widener Building, 18th Floor Philadelphia, PA 19107

Attorneys for Appellants in 95-1795 and for Cross-Appellees in 95-1796

David H. Marion, Esq. David Zalesne, Esq. (Argued) Howard J. Bashman, Esq. Montgomery, McCracken, Walker & Rhoads Three Parkway, 20th Floor Philadelphia, PA 19102

Attorneys for Appellees in 95-1795 For Cross-Appellants in 95-1796

OPINION OF THE COURT

ROTH, Circuit Judge: This appeal marks the second time this case ha s reached this court. In its first incarnation, Kurz v. Phil adelphia Elec. Co., 994 F.2d 136 (3d Cir.) ("Kurz I"), cert. denie d, 510 U.S. 1020 (1993), we reversed the district court's grant of summary judgment to defendant Philadelphia Electric Co. ("P ECo"). Applying the rule established in Fischer v. Philade lphia Elec. Co., 994 F.2d 130 (3d Cir.) ("Fischer I"), cert. de nied, 510 U.S. 1020 (1993), we held that genuine issues of materia l fact remained as to whether PECo, acting in its role as fiduciary under the Employee Retirement Income Security Act ( "ERISA"), had made affirmative material misrepresentations to its employeebeneficiaries by denying, or failing to disclose wh en asked, that it was seriously considering changes in its pension benefits program. On remand, after a bench trial, the distr ict court entered judgment for those members of the plaintiff class who had asked about a change in benefits after March 1, 198 7, the date on

which the district court found that serious conside ration began. Kurz v. Philadelphia Elec. Co., No. 91-2771, slip o p. at 24 (E.D.Pa. May 13, 1994) ("District Ct. Op."). We will ap ply the

formulation of "serious consideration" established in Fischer v. Philadelphia Elec. Co., ___ F.3d ___ (3d Cir. 1996) ("Fischer II"), and on the basis of that analysis we will rev erse the district court's decision and enter judgment for de fendant PECo.

I. This action stems from PECo's efforts to chang e its pension plan to provide more lucrative benefits to its employees. PECo announced this change on July 2, 1987, and imp lemented it on August 1, 1987. The plaintiff class consists of va rious employees who retired between February 1, 1987, and July 1, 1987, and who were therefore ineligible for the plan. On April 30, 1991, the plaintiffs filed suit i n the

U.S. District Court for the Eastern District of Pen nsylvania, alleging that PECo had long known of its intent to change its pension package and had breached its fiduciary duty under ERISA § 404, 29 U.S.C. § 1104, by representing that no chan ge was under

consideration. The district court certified the cl ass, then entered summary judgment for PECo. In Kurz I, we r eversed. Relying on our decision in Fischer I, we held that PECo could be liable for breach of fiduciary duty if it had made affirmative misrepresentations, such as denying that any change was being considered when in fact a change was under serious consideration. Kurz I, 994 F.2d at 139. We remanded for a trial o n the merits to determine, inter alia, when the plan came under serious

consideration. The district court found the follow ing facts, the vast majority of which were stipulated. Since 1977, PECo had conducted periodic review s of its pension fund program as part of its ordinary course of business. PECo also participated in an annual or biannual sur vey that compared benefits packages at selected utilities. On October 2, 1985, the consulting firm of Tow ers, Perrin, Forster & Crosby ("TPF&C") completed a stud y of PECo's pension benefit plan. TPF&C concluded that the pla n was wellfunded and that the current rate of contributions w ould be sufficient to cover improvements in the benefits pa ckage. At approximately the same time, Michael Crommie, PECo' s Director of Employee Services, noted that PECo's comparative ra nking in the benefits survey had fallen. On June 23, 1986, Crommie sent a memorandum to Ronald Downs, Manager of the Industri al Relations Department, asking whether TPF&C should be asked to prepare a pension benefit study based on the survey results. Downs responded, "Probably not, but suggest we consider a fter we see [this year's] survey results. Obviously, some inpu t from TPF&C will be required with regard to our recommended mod ifications to plan!" In 1986, PECo took over the task of compiling the benefits survey. Fred Beaver, an Administrative As sistant in the Personnel and Industrial Relations Department, was assigned the task of preparing the survey. In February, 1987, B eaver received

data from other utilities on their 1986 benefits le vels. Beaver concluded that PECo's position was below the mid-po int for the industry. After discussing the matter with his col leagues, Beaver suggested that PECo increase its benefits. On February27, 1987, Beaver contacted Donald Fleischer, a cons ultant at

TPF&C, to discuss a possible pension plan change. During March, 1987, the pace of deliberati ons increased. Charles L. Fritz, PECo's Vice President of Personnel and Industrial Relations, met with members of the I ndependent Group Association, PECo's unofficial employee repre sentative, to discuss an increase in pension benefits. Fritz tol d them that the time was ripe to make significant changes in th e pension plan. It was also during March that TPF&C began ca lculating the results of various changes in the pension benefit r ate. TPF&C continued its work through April and May. On May 6, 1987, Crommie and William Murdoc h, a consultant with TPF&C, met to discuss competing alt ernatives for the amended plan. On May 11, Fritz reviewed the co sts of the various alternatives with Murdoch. On May 20, TPF& C presented the results of its pension benefit study and recomm ended a pension increase. The TPF&C report discussed seven different proposals for changing the plan. By memorandum dat ed May 28, Fritz contacted J.L. Everett, III, PECo's Chief Exe cutive Officer, and John H. Austin, Jr., PECo's President & Chief Operating Officer, to request permission to recomme nd a pension change to the Board of Directors. Everett and Aust in were the only two individuals with authority to make recomme ndations to the Board. After receiving permission, Fritz prepa red a recommendation, which was approved at the Board's J une 22, 1987, meeting. Based on this record, the district court c oncluded that PECo began seriously considering an increase in its pension benefit plan in March, 1987. It therefore set Marc h 1, 1987, as the date on which PECo's duty to inform its employe es arose. The district court entered judgment for those retirees who asked about pension benefits and retired after that date. The court entered judgment for PECo on the claims of those re tirees who asked about pension benefits and retired before tha t date. This appeal followed.

II. Our analysis proceeds within the confines of Fischer Iand Fischer II. Liability turns on the materiality of PECo's representation that no change was being considered. Fischer I, 994 F.2d at 135. Under Fischer II, whether PECo's statement was a material "misrepresentation" turns on whether a c hange in

benefits was in fact under serious consideration at the time the statement was made. Fischer II, ___ F.3d at ___ [t ypescript at 11-12]. "[S]erious consideration requires (1) a spe cific proposal (2) discussed for purposes of implementation (3) by senior management with the authority to implement the chan ge." Id. at ___ [typescript at 15]. Based on this formulation, the district court's conclusion that serious consideration began on March 1, 1987, was incorrect. Under the first Fischer II factor, we mus t examine the record for evidence of a specific proposal. No suc h proposal existed until May 20, 1987, when TPF&C presented th e results of its pension benefits study. The TPF&C report

noted that PECO's normal retirement benefi tswere below average of the survey group . .

..

It commented that PECO needed to improve i ts pension, [and it] recommend[ed] that alternative pension improvements should ta ke into consideration 1. objectives for incom e replacement at various pay levels, 2. the company's desired competitive posture, 3. cost implications for alternatives, 4. posture with respect to introduction of company-matching contribution in savings plan, and 5. other benefits such as life

insurance and medical benefits. District Ct. Op. at 12. Most importantly, the stud y "proposed seven alternate benefit improvements." Id. at 13.

This document marked the culmination of PE Co's considerable efforts, with the help of TPF&C, to "g ather[] information, develop[] strategies, and analyz[e] op tions." Fischer II, ___ F.3d at ___ [typescript at 16]. It provided specific proposals for the company to evaluate, and it outlined factors and principles for senior management to con sider. This document was "sufficiently concrete to support cons ideration by senior management for the purpose of implementation ." Id.[typescript at 16]. Indeed, it appears to have been intended for this very purpose. The TPF&C report therefore sati sfies the

first Fischer II factor. By contrast, the laundry list of pre-May 2 0, 1987, events cited by the plaintiff class falls short of serious consideration. These activities fit comfortably wi thin the categories of gathering information, developing str ategies, and analyzing options that precede the drafting of a sp ecific proposal. As we explained in Fischer II,

large corporate entities conduct regular o r on-going reviews of their benefit packages in their ordinary course of business. These entities employ individuals, including mid dle and upper-level management employees, to gather information and conduct reviews. T he periodic review process may also entail contacting outside consultants or commissioning studies. During the course of their employment, the employees assigned these tasks necessarily discuss their duti es and the results of their studies. These discussions may include issues of implementation. The employees may also ma ke recommendations to upper level management or senior executives. As a general rule, suc h operations will not constitute serious

consideration. Fischer II, ___ F.3d at ___ [typescript at 17]. Th e efforts of Beaver, Crommie, Downs, and other individuals in PE Co's seemingly far-flung personnel department illustrate this gene ral rule. These individuals were simply performing their ordi nary duties.Their activities do not constitute serious consider ation.

Because a specific proposal did not emerge until May 20, 1987, serious consideration could not have comm enced before this date. The existence of a specific proposal, h owever, does

not resolve matters. [The Fischer II] formulation does not turn on any single factor; the determination is inherently fact-specific. Kurz I, 994 F.2 d at 139. Likewise, the factors themselves are not isolated criteria; the three interact and coalesce to form a composite picture of

serious consideration. Id. at ___ [typescript at 15-16]. Moreover, as we emphasized in Fischer II, "these factors do not establish a brigh t-line rule." Id. at ___ [typescript at 18]. We therefore turn t o the second

and third factors. Under the second and third factors, we loo k to whether the specific proposal was being considered for impl ementation by senior management. As noted, supra, the contents o f the proposal itself suggest that TPF&C intended its report for c onsideration by senior management for purposes of implementation . What is important for this phase of our inquiry, however, i s whether PECo's senior management considered the document fo r purposes of implementation. In addition, consideration must ha ve been by senior management with the authority to implement t he change. This final requirement will not limit serious consi deration to discussion by the Board of Directors: "It is suffi cient for this factor that the plan be considered by those members of senior management with responsibility for the benefits are a of the business, and who ultimately will make recommendati ons to the Board regarding benefits operations." Id. at ___ [ typescript at 18]. Although the record is sparse on these poi nts, the district court found that "[t]he persons having aut hority in 1987 to recommend that the PECO Board of Directors imple ment the pension plan changes were Everett and Austin." Dis trict Ct. Op.at 14. Based on this finding, we conclude that Everett and Austin were the appropriate cadre of senior managem ent whose consideration is pertinent.

We must therefore determine when Everett a nd Austin began considering the specific proposal for purpose s of implementation. The record indicates that on May 2 2, 1987, Everett and Austin submitted the TPF&C report to th e Board of Directors. On May 28, Fritz sent a memorandum to A ustin and Everett setting out the cost for one of the seven p roposals and requesting their approval to proceed further. Afte r receiving approval, Fritz prepared a recommendation for the B oard. The Board made the decision to amend the plan on June 2 2, 1987. We conclude that Fritz's May 28 memorandum and Everett and Austin's subsequent approval of his recommendat ion mark the beginning of serious consideration by senior manage ment for purposes of implementation. We therefore hold that serious consideration began on May 28, 1987. In reaching this conclusion, we stress yet again thefact-specific nature of our analysis. Our holding in this case

does not establish a bright-line rule based on mana gement's approval of an employee's request to make a recomme ndation to the Board of Directors, just as in Kurz I we rejected a bright-line rule based on the formal proposal of a plan change to the Board of Directors. 994 F.2d at 139. Rather, serious co nsideration depends on "(1) a specific proposal (2) discussed f or purposes of implementation (3) by senior management with the au thority to implement the change." Fischer II, ___ F.3d at ___ [typescript at 15]. Here, these factors indicate that serious consideration began on May 28, 1987. Based on this analysis, any employee who a sked about changes in pension benefits after serious considera tion began on May 28, 1987, but before the formal announcement of the change on July 2, 1987, received material misinformation. We will enter judgment for PECo on the claims of all employees wh o asked about a benefits change and retired before May 28. The r ecord reveals, however, that some members of the plaintiff class r etired after May 28, 1987. We must therefore consider the viabi lity of their claims in light of PECo's statute of limitations de fense. ERISA § 413, 29 U.S.C. § 1113, establishes a combination of limitations provisions to govern bre ach of fiduciary duty claims. It provides: 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 respec t to a violation of this part, after the

earlier of (1) six years after (A) the date of the l ast action which constituted a part of the bre ach 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 (2) three years after the earliest date o n which the plaintiff had actual knowledge o f the breach or violation; except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation.

29 U.S.C. § 1113. This section thus creates a gene ral six year statute of limitations, shortened to three years in cases where the plaintiff has actual knowledge, and potentially extended to six years from the date of discovery in cases invol ving fraud or

concealment. Invoking § 413, PECo argues that the three year period for actual knowledge applies. PECo points out that the benefits change was formally announced on July 2, 1987. No lawsuit was filed until April 3, 1991, more than three and a ha lf years later. In addition, the record contains statements by sixteen of the twenty members of the plaintiff class stating t hat they knewof the plan change more than three years before the complaint was

filed. PECo concludes that on these facts, the cla im was untimely. The plaintiff class responds by pointing t o § 413's language on fraud and concealment, claiming it refe rs to the type of behavior in which PECo engaged. The district co urt adopted this position, explaining, The class action complaint clearly sounds in concealment. The heart of the complaint i s PECO's concealment of the plan to implemen t the early retirement plan. PECO admits it had a policy of keeping such matters confidential and telling potential retiree s that no such plans existed until formally

announced. Section [413] provides a six year statut e of limitation for cases of concealment, measured from the time the plaintiff

discovers the breach or violation. Members of the plaintiffs' class discove red the breach or violation as early as June 1987. Suit was filed in this matter April 30, 1991, less than six years later.

District Ct. Op. at 25-26. We disagree with the di strict court's interpretation of the statute in the circumstances of this case. The proper interpretation of § 413 present s an issue of law subject to plenary review. Board of Trustees o f District No. 15 Machinists' Pension Fund v. Kahale Engineering C orp., 43 F.3d 852, 857 (3d Cir. 1994); Sheet Metal Workers, Local 19 v. 2300 Group, Inc., 949 F.2d 1274, 1278 (3d Cir. 1991). We first hold that § 413(2)'s three year period applies on the fa cts of this

case. We next hold that the district court miscons trued § 413's fraud and concealment language. We find that the c laims of the plaintiff class are untimely and barred. We begin with the selection of the 6 year or the 3 year limitations period as provided in subsections (1) a nd (2). We find that the 3 year "actual knowledge" provision o f subsection (2) applies here. We first examined the meaning of § 413(2)'s "actual knowledge" in Gluck v. Unisys Corp., 960 F. 2d 1168 (3d Cir. 1992). We interpreted the phrase "actual know ledge" to require actual knowledge of "all material facts nec essary to understand that some claim exists, which facts coul d include necessary opinions of experts, knowledge of a trans action's harmful consequences, or even actual harm." Id. at 1177 (citations omitted). In the current case, all the material elem ents of a breach of fiduciary duty claim were patently obviou s on July 2, 1987, the day PECo announced the pension increase. On that date, employees who had asked about benefits and retired before July 2 knew (1) benefits had been increased, (2) they were not eligible for the new package, and (3) no one had told them a bout the change even though they had asked. This was not a technical violation of ERISA, nor a cleverly concealed plan a mendment.PECo openly announced that certain employees would receive better

benefits, and others would not. For those who did not qualify, the "harmful consequences" of the change were obvio us. Gluck, 960 F.2d at 1177. No "opinions of experts" were ne eded. Id. Legal consultation was not required. Id. The plai ntiffs had "knowledge of all relevant facts at least sufficien t to give [them] knowledge that a fiduciary duty ha[d] been b reached or ERISA provision violated." Id. at 1178. The plain tiff class therefore had actual knowledge as of July 2, 1987, and § 413's three year statute of limitations began to run on t hat date.

We next turn to the "fraud and concealment " language of § 413, which the district court applied to save the class claim. The district court apparently interpreted this lang uage as referring to the type of ERISA claim in question. See District Ct. Op. at 25 ("[t]he class action complaint clearl y sounds in concealment"). We disagree. With rare exceptions, the courts of appeal s have interpreted the final clause of § 413's as incorpor ating the

federal doctrine of fraudulent concealment: The st atute of limitations is tolled until the plaintiff in the ex ercise of reasonable diligence discovered or should have disc overed the alleged fraud or concealment. See J. Geils Band Em ployee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1253 (1st Cir.), petition for cert. filed, 65 U.S.L.W. 3001 ( June 19, 1996); Barker v. American Mobil Power Corp., 64 F.3 d 1397, 1401-02 (9th Cir. 1995); Larson v. Northrop Corp., 21 F.3d 1164, 1172-74 (D.C. Cir. 1994); Martin v. Consultants & A dministrators, Inc., 966 F.2d 1078, 1093-96 (7th Cir. 1992); Schae fer v. Arkansas Medical Soc'y, 853 F.2d 1487, 1491-92 (8th Cir. 1988); but see Diduck v. Kaszycki & Sons Contractors, Inc. , 874 F.2d 912, 919 (2d Cir. 1989) ("[f]or a breach of fiducia ry duty involving fraud or concealment, the three year exce ption for actual knowledge does not apply, and a party has si x years from the time it discovers the breach to bring an action "). Although we have yet to address this issu e squarely, we have implicitly rejected the district court's in terpretation in dictum. See Gluck, 960 F.2d at 1177 n.5 ("Altho ugh not implicated here, we note that the six-year limitati on period of [§ 413(1)] does not protect defendants in instances involving concealment or fraud."). We now join our sister co urts and hold that § 413's "fraud and concealment" language appli es the federal common law discovery rule to ERISA breach of fiduci ary duty claims. In other words, when a lawsuit has been de layed because the defendant itself has taken steps to hide its br each of fiduciary duty, see Barker, 64 F.3d at 1402, the li mitations period will run six years after the date of the cla im's discovery. The relevant question is therefore not whether the complaint "sounds in concealment," but rather wheth er there is evidence that the defendant took affirmative steps to hide its breach of fiduciary duty. Turning to the case at bar, we find nothin g suggesting that fraud or concealment delayed the discovery of the breach of fiduciary duty claim. Serious consideration began on May 28, 1987. The plan was announced one month later on Ju ly 2, 1987.Although again eschewing a bright-line rule, we sug gest that this

relatively brief period exemplifies the type of tim ely notification that companies should give their emplo yees. By publicly announcing its decision on July 2, 1987, P ECo foreclosed any suggestion that it attempted to conceal its pla ns or engaged in a campaign of fraud to prevent the plaintiff cla ss from suing for the alleged breach. The claim, such as it was, lay bare for the world to see. The federal discovery rule, and hence the six year fraud or concealment limitation period, does n ot apply. We therefore hold that § 413's statute of limi tations bars the fiduciary duty claims of those members of the plaintiff class who asked about a change in pension benefits and retired after May 28 but before July 2, 1987. Given our di sposition of

the claims of class members who asked about benefit s and retired before May 28, we will enter judgment for PECo on t he entire class's breach of fiduciary duty claim. Our treatment of the breach of fiduciary duty claim leaves the plaintiff class with two theories of rec overy, discriminatory treatment under ERISA § 510, 29 U.S. C. § 1140, and equitable estoppel. Neither theory has merit. We reject the class's § 510 claim for the reasons announced in Fi scher II, ___ F.3d at ___ [typescript at 26-27]. As to the equit able estoppel claim, our reasoning in Fischer II is equally contr olling for those members who retired before May 28, 1987. PEC o correctly informed these class members that no pension increa se was under serious consideration. As a result, these class me mbers cannot establish the first element of an estoppel claim, m aterial misrepresentation. See Curcio v. John Hancock Mut. Life Ins. Co., 33 F.3d 226, 235 (3d Cir. 1994) (listing eleme nts of equitable estoppel claim under ERISA); Fischer II, ___ F.3d at ___ [typescript at 25]. We also reject the equitab le estoppel claim of the post-May 28 class members. These plai ntiffs have failed to establish the third ERISA estoppel elemen t, extraordinary circumstances. See Curcio, 33 F.3d a t 235. We have never clearly defined "extraordina ry circumstances," relying instead on case law to esta blish its parameters. Id. A review of our precedents indica tes that extraordinary circumstances do not exist in this ca se. To support this element, we have previously required a showing of affirmative acts of fraud or similarly inequitable conduct by an employer. See Rosen v. Hotel & Restaurant Employee s & Bartenders Union, 637 F.2d 592, 598 (3d Cir. 1981) (holding th at pension fund could not deny benefits to participant on grou nds that participant's employer failed to pay required contr ibutions where fund administrator allowed employee to pay contribu tions himself), cert. denied, 454 U.S. 898 (1981); see al so Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1165 n.10 ( 3d Cir. 1990) (citing Rosen). Elsewhere, we have focused on the network of misrepresentations that arises over an extended cou rse of dealing between parties. See Curcio, 33 F.3d at 238 (findi ng extraordinary circumstances where insurer misrepres ented type of coverage available, informed patient that certain c overage would be provided, then disclaimed coverage); Smith v. Ha rtford Ins. Group, 6 F.3d 131, 142 (3d Cir. 1993) (suggesting e xtraordinarycircumstances might exist where plaintiff repeatedl y and

diligently inquired about benefits and defendant re peatedly misrepresented scope of coverage to plaintiff). We have also cited the vulnerability of particular plaintiffs. See Curcio, 33 F.3d at 238 (hospital patient denied coverage for s ubstantial claim after hospital represented that coverage woul d exist); Smith, 6 F.3d at 142 (same); but see Gridley v. Cle veland Pneumatic Co., 924 F.2d 1310, 1319 (3d Cir.) (rejec ting estoppel where widow of terminal cancer victim sought increa sed life insurance benefits), cert. denied, 501 U.S. 1232 (1 991). These cases demonstrate that a plaintiff m ust do more than merely make out the "ordinary elements" of equ itable estoppel to establish a claim for equitable estoppe l under ERISA. Gillis v. Hoechst Celanese Corp., 4 F.3d 1137, 1142 (3d Cir. 1993), cert. denied, ___ U.S. ___, 114 S.Ct. 1540 ( 1994); Gridley, 924 F.2d at 1319. Because of these height ened requirements, we have consistently rejected estoppe l claims based on simple ERISA reporting errors or disclosure viol ations, such as a variation between a plan summary and the plan itself, or an omission in the disclosure documents. See Gillis, 4 F.3d at 1142 (denying recovery where plaintiffs claimed plan doc uments failed to disclose that severance pay would not be provide d to employees who continued working for purchaser of corporate di vision); Gridley, 924 F.2d at 1319 (denying recovery despite omission from disclosure documents of requirement that employee b e "actively at work" to qualify for increased life insurance benef its; employee was later denied increased benefits based on requir ement). Applying these principles to the current c ase, we find nothing to suggest that extraordinary circumstances exist. At best, plaintiffs have established the basic element s of an estoppel claim. There is no conduct suggesting tha t PECo sought to profit at the expense of its employees, no showi ng of repeated misrepresentations over time, no suggestion that pl aintiffs are particularly vulnerable. In addition, we note that the district court made no finding of extraordinary circumstance s. SeeDistrict Ct. Op. at 20, 24. The plaintiffs seem to have ignored the issue, despite the fact that they bear the burd en of proof on each estoppel element. See Gillis, 4 F.3d at 1142. We therefore hold that extraordinary circumstances do not exist on the facts of this case, and we will enter judgment for the de fendant on the post-May 28 class members' equitable estoppel claim

. III. The plaintiff class has failed to establis h a valid claim for breach of fiduciary duty. Those class me mbers who retired prior to May 28, 1987, did not receive mate rial misinformation about a benefits change because no p ension

increase was then under serious consideration. The claims of the remaining class members are barred by the applicabl e statute of limitations. The class's equitable estoppel claim and ERISA §

510 claim also fail. We will therefore reverse the district court's judgment and enter judgment for defendant P ECo.