No. 13-550

In the Supreme Court of the United States

GLENN TIBBLE, ET AL., PETITIONERS

v.

EDISON INTERNATIONAL, ET AL.

ON WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES 

AS AMICUS CURIAE SUPPORTING PETITIONERS

M. PATRICIA SMITH

Solicitor of Labor

G. WILLIAM SCOTT

Associate Solicitor

NATHANIEL I. SPILLER

Counsel for Appellate and 

Special Litigation

STACEY E. ELIAS

Attorney

Department of Labor

Washington, D.C. 20210

DONALD B. VERRILLI, JR. Solicitor General

Counsel of Record

EDWIN S. KNEEDLER

Deputy Solicitor General

NICOLE A. SAHARSKY

Assistant to the Solicitor 

General

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217
QUESTION PRESENTED

The Employee Retirement Income Security Act of 

1974 (ERISA), 29 U.S.C. 1001 et seq., imposes a duty

on fiduciaries of an employee benefit plan to administer the plan prudently. 29 U.S.C. 1104(a). Plan participants and beneficiaries and the Secretary of Labor 

may sue on behalf of the plan to remedy a breach of 

fiduciary duty. 29 U.S.C. 1109, 1132(a)(2). A claim for 

breach of fiduciary duty must be brought within six 

years of “(A) the date of the last action which constituted a part of the breach or violation, or (B) in the 

case of an omission the latest date on which the fiduciary could have cured the breach or violation,” 29 

U.S.C. 1113(1), unless the plaintiff had actual 

knowledge of the breach, 29 U.S.C. 1113(2), or there 

was fraud or concealment of the breach, 29 U.S.C. 

1113. The question presented is:

Whether a claim that ERISA plan fiduciaries 

breached their duty of prudence by offering highercost retail-class mutual funds to plan participants, 

even though identical lower-cost institutional-class 

mutual funds were available, is barred by 29 U.S.C. 

1113(1) when fiduciaries initially chose the higher-cost 

mutual funds as plan investments more than six years 

before the claim was filed.

(I)
TABLE OF CONTENTS

Page

Interest of the United States ........................................................1

Statement.........................................................................................1

Summary of argument...................................................................6

Argument:

A claim that ERISA fiduciaries breached their 

fiduciary duties by offering imprudent plan investments within the six-year limitations period is timely 

even though the fiduciaries initially selected those 

investments before that time...................................................9

A. ERISA fiduciaries have an ongoing duty to review 

plan investments and divest investments that are 

imprudent.............................................................................9

B. Petitioners’ claims for breach of fiduciary duty 

are timely under 29 U.S.C. 1113 ..................................... 17

C. The court of appeals’ reasons for finding petitioners’ claims untimely lack merit .......................................23

D. The court of appeals’ rule disserves the purposes 

of ERISA............................................................................31

Conclusion......................................................................................34

Appendix — Statutory provisions ............................................1a

TABLE OF AUTHORITIES

Cases:

Bay Area Laundry & Dry Cleaning Pension Trust 

Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192 

(1997)......................................................................................26

Central States, Southeast & Southwest Areas Pension Fund v. Central Transp., Inc., 472 U.S. 559 

(1985).................................................................................. 8, 11

CIGNA Corp. v. Amara, 131 S. Ct. 1866 (2011)..................15

Conkright v. Frommert, 559 U.S. 506 (2010).......................11

(III) 
IV

Cases—Continued: Page

Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459 

(2014)............................................................................2, 10, 15

Fink v. National Sav. & Trust Co., 772 F.2d 951 

(D.C. Cir. 1985) .....................................................................27

Fish v. GreatBanc Trust Co., 749 F.3d 671 (7th Cir. 

2014) .......................................................................................20

Howard v. Shay, 100 F.3d 1484 (9th Cir. 1996), 

cert. denied, 520 U.S. 1237 (1997).......................................10

Johns v. Herbert, 2 App. D.C. 485 (1894).......................15, 29

LaRue v. DeWolff, Boberg & Assocs., Inc., 

552 U.S. 248 (2008) .................................................................3

Martin v. Consultants & Adm’rs, Inc., 966 F.2d 1078 

(7th Cir. 1992)..................................................................15, 24

Martin v. Feilen, 965 F.2d 660 (8th Cir. 1992), 

cert. denied, 506 U.S. 1054 (1993).......................................16

Massachusetts Mut. Life Ins. Co. v. Russell, 

473 U.S. 134 (1985) ...................................................10, 11, 31

Morrissey v. Curran, 567 F.2d 546 (2d Cir. 1977)..............16

Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 

1962 (2014).......................................................................25, 26

Phillips v. Alaska Hotel & Rest. Emps. Pension 

Fund, 944 F.2d 509 (9th Cir. 1991), cert. denied, 

504 U.S. 911 (1992) .......................................................4, 6, 25

Stark’s Estate, In re, 15 N.Y.S. 729 (N.Y. Surr. Ct. 

1891) ...........................................................................14, 29, 30

State St. Trust Co. v. DeKalb, 157 N.E. 334 (Mass. 

1927) .......................................................................................15

Varity Corp. v. Howe, 516 U.S. 489 (1996)...........................11

Statutes and regulation:

Employee Retirement Income Security Act of 1974, 

29 U.S.C. 1001 et seq. .........................................................1, 9
V

Statutes and regulation—Continued: Page

29 U.S.C. 1001(b).......................................................1, 9, 31

29 U.S.C. 1002(21)(A)(i)................................................9, 31

29 U.S.C. 1002(34)...............................................................2

29 U.S.C. 1102(a)(1) ......................................................9, 31

29 U.S.C. 1104(a)(1) ......................................................1, 1a

29 U.S.C. 1104(a)(1)(A).......................................2, 9, 16, 1a

29 U.S.C. 1104(a)(1)(B).................................2, 7, 10, 15, 1a

29 U.S.C. 1104(c) .................................................................6

29 U.S.C. 1105(a)(3) ..............................................16, 28, 3a

29 U.S.C. 1109......................................................................2

29 U.S.C. 1109(a).........................................................10, 3a

29 U.S.C. 1109(b).........................................................28, 3a

29 U.S.C. 1113..............................................6, 17, 23, 27, 4a

29 U.S.C. 1113(1)................................................passim, 4a

29 U.S.C. 1113(1)(A)-(B).........................................7, 22, 4a

29 U.S.C. 1113(1)(A) .....................................................5, 4a

29 U.S.C. 1113(1)(B) ...................................................23, 4a

29 U.S.C. 1113(2).........................................................25, 4a

29 U.S.C. 1132(a)(2) ................................................2, 10, 5a

12 C.F.R. 9.6(c) ........................................................................14

Miscellaneous:

Bd. of Governors of the Fed. Reserve Sys., Financial Accounts of the United States: Flow of Funds, 

Balance Sheets, and Integrated Macroeconomic 

Accounts (Sept. 2014), http://www.federalreserve.

gov/releases/z1/Current/z1.pdf...........................................33

Black’s Law Dictionary (9th ed. 2009).................................19

George Gleason Bogert & George Taylor Bogert, 

The Law of Trusts and Trustees (rev. 2d ed. 1993).........11
VI

Miscellaneous—Continued: Page

Emp. Benefits Sec. Admin., U.S. Dep’t of Labor:

A Look at 401(k) Plan Fees (Aug. 2013), 

http://www.dol.gov/ebsa/pdf/401kFees

Employee.pdf...............................................................33

Private Pension Plan Bulletin: Abstract of 2011 

Form 5500 Annual Reports (Sept. 2014), 

http://www.dol.gov/ebsa/pdf/2011pensionplan

bulletin.pdf ...................................................................32

Amy Morris Hess, George Gleason Bogert & George 

Taylor Bogert, The Law of Trusts and Trustees

(3d ed. 2009).........................................................13, 14, 21, 29

Investment Co. Inst.:

Defined Contribution Plan Participants’ Activities, First Half 2014 (Nov. 2014), http://www.

ici.org/pdf/ppr_14_rec_survey_q2.pdf......................33

2014 Investment Company Fact Book (54th ed.), 

http://www.ici.org/pdf/2014_factbook.pdf................33

1 Restatement (Second) of the Law of Trusts 

(1959).............................................................................passim

3 Restatement (Third) of the Law of Trusts 

(2007)..............................................................11, 12, 13, 16, 20

Austin Wakeman Scott et al., Scott and Ascher on 

Trusts (5th ed. 2007):

Vol. 3 ...................................................................................11

Vol. 4 .....................................................11, 12, 14, 15, 21, 29

Uniform Prudent Investor Act, 7B U.L.A. 1 (2006):

§ 2, 7B U.L.A. 21 .........................................................14, 29

§ 7, 7B U.L.A. 37 ...............................................................12

Walter Updegrave, How High Fees Can Derail 

Retirement, Wall St. J., June 21, 2014...............................33
In the Supreme Court of the United States

No. 13-550

GLENN TIBBLE, ET AL., PETITIONERS

v.

EDISON INTERNATIONAL, ET AL.

ON WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES 

AS AMICUS CURIAE SUPPORING PETITIONERS

INTEREST OF THE UNITED STATES

This case concerns the timeliness of claims for 

breach of fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 

1001 et seq. The Secretary of Labor has primary 

authority for administering Title I of ERISA. At the 

Court’s invitation, the United States filed a brief as 

amicus curiae at the petition stage of this case.

STATEMENT

1. ERISA “protect[s] * * * the interests of 

participants in employee benefit plans and their beneficiaries” by “establishing standards of conduct, responsibility, and obligation for fiduciaries of [those] 

plans.” 29 U.S.C. 1001(b). In particular, ERISA imposes the trust-law duties of loyalty and prudence on 

plan fiduciaries. 29 U.S.C. 1104(a)(1). The fiduciaries 

(1)
2

must act “solely in the interest of the participants and 

beneficiaries” and “for the exclusive purpose” of 

providing benefits and defraying reasonable plan 

expenses. 29 U.S.C. 1104(a)(1)(A). They also must 

discharge their responsibilities “with the care, skill, 

prudence, and diligence” that a prudent person “acting in a like capacity and familiar with such matters” 

would use. 29 U.S.C. 1104(a)(1)(B); see Fifth Third 

Bancorp v. Dudenhoeffer, 134 S. Ct. 2459, 2463, 2467 

(2014). 

A plan participant, beneficiary, or fiduciary, or the 

Secretary, may sue on behalf of the plan to remedy a 

breach of fiduciary duty. 29 U.S.C. 1132(a)(2). Fiduciaries are personally liable for such breaches. 29 

U.S.C. 1109. With exceptions not applicable here (see

note 4, infra), an action for breach of fiduciary duty 

must be brought within six years of “(A) the date of 

the last action which constituted a part of the breach 

or violation, or (B) in the case of an omission the latest 

date on which the fiduciary could have cured the 

breach or violation.” 29 U.S.C. 1113(1). 

2. a. Respondent Edison International is a holding 

company for electric utilities and energy interests 

(collectively, Edison). Pet. App. 13. Petitioners are 

current or former employees of Edison and participants in the Edison 401(k) Savings Plan (the Plan), 

which serves approximately 20,000 employees. Id. at 

12-14, 70, 105. 

The Plan is a defined-contribution plan under 

ERISA, meaning that participants are entitled to the 

value of their own investment accounts, rather than 

any specific benefit amount. Pet. App. 13; see 29 

U.S.C. 1002(34). The value of each participant’s account depends upon the participant’s and employer’s 
3

contributions and the investments’ market performance, minus expenses. Pet. App. 13; see LaRue v. 

DeWolff, Boberg & Assocs., Inc., 552 U.S. 248, 250 n.1 

(2008). 

Respondent Southern California Edison Benefits 

Committee (Benefits Committee) is the plan administrator, and respondents Edison International Trust 

Investment Committee and Trust Investment Subcommittee (collectively, the Investment Committees) 

choose the plan investments that will be made available to participants. Pet. App. 167, 169-170. Participants in turn choose their investments from the menu 

of funds selected by the Investment Committees. Id.

at 72-73. The Investment Committees “have the authority to decide whether to select, maintain or replace the investment options in the Plan.” Id. at 74. 

During the time period at issue, they met quarterly to 

review plan investments. Id. at 74-75. At those meetings, they received reports and recommendations 

from investment staff and decided whether to remove, 

replace, or add funds. Ibid.; id. at 77; see J.A. 120-

121, 125-126. The members of the Investment Committees are plan fiduciaries. Pet. App. 72. 

Since 1999, plan participants have been able to 

choose from a variety of investment options, including 

approximately 40 mutual funds. Pet. App. 13-14. For 

six mutual funds, the Investment Committees selected 

retail-class funds as plan investments, even though

lower-cost institutional-class versions of the funds

were available. Id. at 14, 83-84. Aside from the fees 

charged, the retail-class funds and institutional-class 

funds were identical: they invested in the same securities and were overseen by the same managers. Id.

at 61, 84. The fees were collected out of mutual fund 
4

assets before any returns were paid to investors, 

thereby reducing the value of the investments. Id. at 

171-172. 

b. Petitioners sued Edison, the Benefits Committee, the Investment Committees, and others (respondents in this Court), alleging breach of fiduciary duties. 

Pet. App. 65-67. Petitioners sued on behalf of the Plan

for losses suffered by the Plan, as well as for injunctive and other equitable relief. Id. at 65-66, 107. As 

relevant here, petitioners contended that respondents 

breached their duty of prudence by offering six higher-cost retail-class mutual funds as plan investments 

when identical lower-cost institutional-class funds 

were available. Id. at 65-68, 126. Respondents argued

that petitioners’ claims regarding three of the six 

mutual funds were time-barred because those funds 

were initially selected as plan investments more than 

six years before petitioners filed suit. Id. at 127.

c. The district court granted partial summary 

judgment to respondents. Pet. App. 166-268. The 

court held that 29 U.S.C. 1113(1) barred claims arising 

from respondents’ retention of mutual funds that were 

first selected as plan investments more than six years 

before the complaint was filed, on the ground that 

“[t]here is no ‘continuing violation’ theory” under 

ERISA. Pet. App. 180 (quoting Phillips v. Alaska 

Hotel & Rest. Emps. Pension Fund, 944 F.2d 509, 520 

(9th Cir. 1991), cert. denied, 504 U.S. 911 (1992)); id.

at 262-263. The court stated that “although the [fiduciaries’] conduct could be viewed as a series of breaches, the statute of limitations did not begin anew because each breach was ‘of the same character.’” Id. at 

180 (quoting Phillips, 944 F.2d at 520). 
5

After a bench trial, the district court held that respondents breached their duty of prudence by offering 

retail-class mutual funds as plan investments when 

identical lower-cost institutional-class funds were 

available. Pet. App. 68-69. The court concluded that 

respondents “ha[d] not offered any credible explanation” for why they chose to invest in the higher-cost 

funds. Id. at 142. The court found “no evidence” that 

the Investment Committees “even considered or evaluated the different share classes,” and it determined 

that if the Investment Committees had considered the 

issue, “they would have realized that the institutional 

share classes offered the exact same investment at a 

lower cost to the Plan participants” and that plan 

participants were paying “wholly unnecessary fees.” 

Id. at 129-130 (emphasis omitted). 

The district court limited its finding of liability to 

the three mutual funds that were first offered to plan 

participants within the six-year limitations period,

Pet. App. 68-69, 128-142, because it had already held 

that ERISA’s six-year limitations period barred petitioners’ claims regarding the three funds first offered 

before that period. The court allowed petitioners to 

argue that certain changed circumstances required 

removal of the latter three funds, but then rejected 

that argument. Id. at 142-150. 

3. The court of appeals affirmed. Pet. App. 1-64. 

The court assessed the timeliness of petitioners’ 

claims concerning the retention of the higher-cost

mutual funds under 29 U.S.C. 1113(1)(A), the provision that requires suit to be brought within six years 

of the “last action” constituting the fiduciary breach. 

Pet. App. 17. The court reasoned that “the act of 

designating an investment for inclusion starts the six-
6

year period under [Section 1113(1)(A)] for claims 

asserting imprudence in the design of the plan menu,” 

and so such a claim must be filed within six years of 

that initial designation. Id. at 17-18. In support of 

that holding, the court noted that it had previously 

rejected a “continuing violation” theory for ERISA 

claims. Id. at 17 (citing Phillips, 944 F.2d at 520). 

With respect to the three mutual funds initially offered within the limitations period, the court of appeals upheld the district court’s determination that 

respondents breached the duty of prudence by offering the higher-cost funds. Pet. App. 60-64. The court 

explained that “all three funds offered institutional 

options” in which the Plan “almost certainly could 

have participated”; the three institutional-class funds

were significantly “cheaper than the retail class options”; and “there were no salient differences in the 

investment quality or management” of those funds. 

Id. at 61.1

SUMMARY OF ARGUMENT

Petitioners’ claims that respondents breached their 

fiduciary duties by failing to prudently manage plan 

investments within the limitations period are timely

under 29 U.S.C. 1113. 

A. ERISA imposes on plan fiduciaries certain duties drawn from the law of trusts. Under ERISA’s 

duty of prudence, plan fiduciaries must discharge 

1 The court of appeals also held that respondents may not rely on 

ERISA’s safe-harbor provision for certain individual-account 

plans, 29 U.S.C. 1104(c). Pet. App. 21-32. That holding is not 

before this Court, because respondents did not cross-petition on 

the issue or raise it as an alternate ground for affirmance in their 

brief in opposition. See Br. in Opp. 15 n.5 (characterizing the issue 

as “a completely separate issue not before this Court”). 

 
7

their duties using the “care, skill, prudence, and diligence” that a prudent person would use in making 

decisions for the plan. 29 U.S.C. 1104(a)(1)(B). 

The duty of prudence under ERISA, as under trust 

law, requires plan fiduciaries with investment responsibility to examine periodically the prudence of existing investments and to remove imprudent investments 

within a reasonable period of time. A prudent trustee 

investigates a potential investment and then makes a 

reasonable decision based on that investigation. A 

prudent trustee also is cost-conscious in making investments. And once a trustee chooses investments, 

the trustee has an ongoing duty to systematically 

review them and to remove imprudent investments 

from the trust. Just as an individual investor would 

choose initial investments for her retirement plan and 

then revisit them periodically, so too an ERISA fiduciary who chooses investments for an ERISA plan 

must revisit those investments from time to time. 

B. ERISA’s limitations period applicable to suits 

for fiduciary breach provides that a suit must be 

brought within six years of “the last action which 

constituted a part of the breach or violation” or, in the 

case of an omission, “the latest date on which the 

fiduciary could have cured the breach or violation.” 29 

U.S.C. 1113(1)(A)-(B). Petitioners’ contention that 

respondents breached the duty of prudence by offering higher-cost retail-class funds as investments when 

the same funds were available as lower-cost institutional-class funds is timely under that provision. 

Respondents had an ongoing duty of prudence, 

which included a duty to revisit the plan investments 

and remove imprudent ones. Offering higher-cost

retail-class funds when the same investments were 
8

available as lower-cost institutional class funds was a 

breach of the duty of prudence. Accordingly, regardless of what happened before the limitations period, 

petitioners have adequately alleged that respondents 

breached the duty of prudence within the limitations 

period by failing to monitor fund fees and to switch to 

the lower-cost funds. 

C. None of the court of appeals’ reasons for finding 

petitioners’ claims untimely has merit. First, petitioners’ claims are based not on the initial decision to 

offer the higher-cost funds as plan investments, but on 

the breaches of fiduciary duty committed when the 

imprudent investments remained in the plan. These 

claims do not rely on a “continuing violation theory,” 

Pet. App. 17, because they concern only acts and 

omissions within the limitations period—petitioners 

are not seeking to reach back and recover for fiduciary breaches before that time. Second, petitioners’ 

claims do not impose liability on current fiduciaries 

for past fiduciaries’ mistakes. Current fiduciaries 

have their own duty of prudence, and under petitioners’ theory, they are being held liable for their own 

breaches, not those of others. Third, a plaintiff is not 

required to demonstrate significant changes in circumstances (id. at 19) to challenge the imprudent 

retention of plan investments. Under the law of 

trusts, a trustee must periodically review trust assets 

and remove imprudent investments, regardless of 

whether there has been a significant change in circumstances. 

D. The court of appeals’ rule would seriously jeopardize the investments of plan participants and beneficiaries. The court of appeals effectively exempted

plan fiduciaries from a significant aspect of the trust-
9

law duties imposed by ERISA once an investment has 

been in an ERISA plan for six years. Such an exemption would have a real and substantial impact on the 

millions of Americans who participate in retirement 

savings plans. The court of appeals’ decision therefore should be reversed and the case remanded for 

further proceedings.

ARGUMENT

A CLAIM THAT ERISA FIDUCIARIES BREACHED THEIR 

FIDUCIARY DUTIES BY OFFERING IMPRUDENT PLAN 

INVESTMENTS WITHIN THE SIX-YEAR LIMITATIONS 

PERIOD IS TIMELY EVEN THOUGH THE FIDUCIARIES 

INITIALLY SELECTED THOSE INVESTMENTS BEFORE 

THAT TIME 

A. ERISA Fiduciaries Have An Ongoing Duty To Review 

Plan Investments And Divest Investments That Are 

Imprudent

1. The Employee Retirement Income Security Act 

of 1974 (ERISA), 29 U.S.C. 1001 et seq., is designed to 

protect the interests of participants in employee benefit plans and their beneficiaries. 29 U.S.C. 1001(b). 

One way that it does so is by imposing certain trustlaw duties on plan fiduciaries.

2

 Fiduciaries must discharge their duties for the “exclusive purpose” of

“providing benefits to participants and their beneficiaries” and “defraying reasonable expenses of administering the plan.” 29 U.S.C. 1104(a)(1)(A). ERISA’s 

“strict standards of trustee conduct” include “a stand2 ERISA requires that every plan have one or more named fiduciaries who have authority to control and manage the operation 

and administration of the plan. 29 U.S.C. 1102(a)(1). In addition, 

anyone who exercises authority or control respecting management 

or disposition of plan assets is a fiduciary. 29 U.S.C. 1002(21)(A)(i). 

 
10

ard of care.” Central States, Southeast & Southwest 

Areas Pension Fund v. Central Transp. Inc., 472 U.S. 

559, 570 (1985) (Central States). ERISA requires plan 

fiduciaries to discharge their responsibilities “with the 

care, skill, prudence, and diligence” that a prudent 

person “acting in a like capacity and familiar with 

such matters” would use. 29 U.S.C. 1104(a)(1)(B). 

The “prudent person” standard is based not on a prudent layperson, but on a prudent fiduciary who is 

“acting in a like capacity” and is “familiar with such 

matters” and is making decisions for “an enterprise of 

a like character and with like aims.” Ibid.; see Pet. 

App. 113; accord Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct. 2459, 2468 (2014). 

ERISA authorizes plan participants, beneficiaries, 

and fiduciaries, as well as the Secretary of Labor, to 

sue for appropriate relief to remedy a breach of fiduciary duty. 29 U.S.C. 1132(a)(2). In determining 

whether an ERISA fiduciary’s investment was prudent, the court in such a suit reviews the investigation 

and decisionmaking process leading up to the challenged conduct. Howard v. Shay, 100 F.3d 1484, 1488 

(9th Cir. 1996), cert. denied, 520 U.S. 1237 (1997). 

Fiduciaries who breach their duties are “personally 

liable” to the plan for losses resulting from the breach 

and for profits they made as a result of the breach. 29 

U.S.C. 1109(a). Recovery for a breach of fiduciary 

duty “inures to the benefit of the plan.” Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 140

(1985). By placing fiduciary obligations on plan administrators and authorizing civil suits to remedy 

breaches of fiduciary duty, ERISA ensures that fiduciaries serve the interests of plan participants and 
11

beneficiaries, provide the benefits due under the plan, 

and pay only reasonable expenses. See id. at 142. 

2. ERISA’s fiduciary duties “draw much of their 

content” from the common law of trusts. Varity Corp. 

v. Howe, 516 U.S. 489, 496-497 (1996). In particular, 

ERISA’s standard of care was “derived from the 

common law of trusts.” Central States, 472 U.S. at 

570. This Court therefore “look[s] to principles of 

trust law for guidance” to interpret ERISA’s fiduciary-duty provisions, including the duty of care at issue 

here. Conkright v. Frommert, 559 U.S. 506, 512 

(2010) (citation and internal quotation marks omitted). 

Trust law uses a “prudent person” standard to define the level of care, skill, and judgment required of a 

trustee. See, e.g., 3 Restatement (Third) of the Law of 

Trusts § 77, at 81-82 (2007) (Third Restatement); 1 

Restatement (Second) of the Law of Trusts § 174, at 

379 (1959) (Second Restatement). Under that standard, “the trustee is required to manifest the care, skill, 

prudence, and diligence of an ordinarily prudent man 

engaged in similar business affairs and with objectives 

similar to those of the trust in question.” George 

Gleason Bogert & George Taylor Bogert, The Law of 

Trusts and Trustees § 541, at 167 (rev. 2d ed. 1993);

see 3 Austin Wakeman Scott et al., Scott and Ascher 

on Trusts § 17.6, at 1205 (5th ed. 2007) (Scott).

When a trustee is making investment decisions, the 

trustee’s conduct is judged using a “prudent investor” 

standard. Third Restatement § 90, at 292. The trustee must “invest and manage the funds of the trust as 

a prudent investor would, in light of the purposes, 

terms, distribution requirements, and other circumstances of the trust.” Ibid.; see Second Restatement 

§ 227, at 529; see also 4 Scott § 19.1, at 1386, 1390-
12

1392 (noting that virtually every State has codified the 

“prudent investor” standard). The trustee must 

“make[] an investigation as to the safety of [an] investment and the probable income to be derived 

therefrom” and then make a reasonable investment 

decision based on that investigation. Second Restatement § 227 cmt. b, at 530. The trustee may seek 

the advice of “attorneys, bankers, brokers and others,” but the trustee ultimately is responsible for the 

investment decision. Ibid.; see 4 Scott § 19.1.3, at 

1397 (noting a trustee’s “duty to exercise the trustee’s 

own judgment” even if the trustee receives advice 

from others). 

In making investment decisions, a prudent trustee 

seeks to minimize costs. “Trustees, like other prudent 

investors, prefer (and, as fiduciaries, ordinarily have a 

duty to seek) the lowest level of risk and cost for a 

particular level of expected return.” Third Restatement § 90 cmt. f(1), at 308; see id. § 88 cmt. a, at 256 

(trustee has “a duty to be cost-conscious”). Put simply, “[w]asting beneficiaries’ money is imprudent.” 

Uniform Prudent Investor Act § 7 & cmt., 7B U.L.A. 

37 (2006). If a trustee pays improper expenses “from 

the trust estate,” the trustee “ordinarily has a duty to 

restore the amount of the improper payment(s) to the 

trust.” Third Restatement § 88 cmt. a, at 256-257. 

A prudent trustee incurs “only costs that are reasonable in amount and appropriate to the investment 

responsibilities of the trusteeship.” Third Restatement § 90(c)(3), at 293; 4 Scott § 19.1.2, at 1394 

(“[T]he trustee must be cost-conscious * * * in 

carrying out the trustee’s investment duties.”). And 

in the particular context of mutual funds, trustees 

should pay “special attention” to “sales charges, com-
13

pensation, and other costs” and should “make careful 

overall cost comparisons, particularly among similar 

products of a specific type being considered for a trust 

portfolio.” Third Restatement § 90 cmt. m, at 332. 

3. A trustee has a duty to periodically review investments and to remove imprudent investments from 

the trust. “[A] trustee’s duties apply not only in making investments but also in monitoring and reviewing 

investments.” Third Restatement § 90 cmt. b, at 294-

296. A trustee “owes the beneficiary the duty of examining and checking the trust investments periodically throughout the life of the trusteeship.” Amy 

Morris Hess, George Gleason Bogert & George Taylor 

Bogert, The Law of Trusts and Trustees § 684, at 145

(3d ed. 2009) (Bogert 3d). The trustee’s ongoing review of trust investments must be “reasonable and 

appropriate to the particular investments, courses of 

action, and strategies involved.” Third Restatement 

§ 90 cmt. b, at 294-296. The trustee “cannot assume 

that if investments are legal and proper for retention 

at the beginning of the trust, or when purchased, they 

will remain so indefinitely.” Bogert 3d § 684, at 145-

146; see Second Restatement § 231 cmt. a, at 550. 

A trustee’s ongoing duty to review trust investments is not limited to situations in which the trustee

might be prompted to act because of a significant 

change in circumstances. A trustee, to be sure, must 

“review trust investments” as “changes occur,” but

the trustee also must “systematic[ally] consider[] 

* * * all the investments of the trust at regular 

intervals” to ensure that they are appropriate. Bogert 

3d § 684, at 147-148 (suggesting an interval such as 
14

“once every six months”).

3

 The trustee has a “continuing duty to see to it that the trust remains appropriately invested,” and that includes a “duty, from time 

to time, to examine the state of the trust’s investments.” 4 Scott § 19.4, at 1451; see Bogert 3d § 685, 

at 159 (noting that “a trustee has a duty to continue to 

monitor investments regularly to ensure that they are 

still legal and productive”). The Uniform Prudent 

Investor Act (upon which many States’ “prudent investor” laws are based) confirms that “[m]anaging 

embraces monitoring” and that a trustee has “continuing responsibility for oversight of the suitability of the 

investments already made.” Uniform Prudent Investor Act § 2 cmt., 7B U.L.A. 21 (internal quotation 

marks omitted); see 4 Scott § 19.1.2, at 1390-1392. 

Accordingly, a trustee may be held liable for his “failure to use such proper care, watchfulness, and oversight” to monitor the trust’s investment and prevent 

losses. In re Stark’s Estate, 15 N.Y.S. 729, 731-732 

(N.Y. Surr. Ct. 1891) (holding that a trustee who invested in bonds secured by a mortgage failed to “exercise[] a reasonable degree of diligence in looking 

after the security after the investment had been 

made”). 

A trustee also has a duty at all times to divest investments that are imprudent or otherwise inappropriate for the trust. If an investment is “determined 

to be imprudent,” the trustee “must dispose of it within a reasonable time.” Bogert 3d § 685, at 156-157; see 

3 For example, federal law requires national banks to conduct at 

least yearly reviews of “all assets of each fiduciary account for 

which the bank has investment discretion to evaluate whether they 

are appropriate, individually and collectively, for the account.” 12 

C.F.R. 9.6(c). 

 
15

4 Scott § 19.3.1, at 1439-1440. The duty to dispose of 

imprudent investments corresponds with the trustee’s 

ongoing duty to monitor investments and runs 

throughout the trusteeship, from the time the trustee 

first takes office until the trustee leaves office. See 

Second Restatement § 230, at 544; id. § 231, at 550. 

A trustee who fails to remove imprudent investments 

is liable to the trust for losses suffered by the trust. 

See, e.g., State St. Trust Co. v. DeKalb, 157 N.E. 334, 

336 (Mass. 1927) (trustee was required to take action 

to “protect the rights of the beneficiaries” when the 

value of trust assets declined); Johns v. Herbert, 2 

App. D.C. 485, 499 (1894) (holding trustee liable for 

failure to discharge his “duty to watch the investment 

with reasonable care and diligence”); see also 4 Scott 

19.4, at 1451-1452 & n.10 (citing cases). 

4. These trust-law principles apply to ERISA fiduciaries with investment responsibility. See, e.g., 

CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1879 (2011) 

(ERISA “typically treats” a plan fiduciary as a trustee 

and the plan as a trust.). Like a trustee, an ERISA 

fiduciary is required to manage plan assets prudently 

at all times. See 29 U.S.C. 1104(a)(1)(B); Fifth Third 

Bancorp, 134 S. Ct. at 2463, 2467 (ERISA “requires 

the fiduciary of a pension plan to act prudently in 

managing the plan’s assets”). As part of that ongoing 

duty, ERISA fiduciaries have a “continuing fiduciary 

duty” to “review plan investments and eliminate imprudent ones” within a reasonable period of time. 

Martin v. Consultants & Adm’rs, Inc., 966 F.2d 1078, 

1087-1088 (7th Cir. 1992); see Br. in Opp. 8 (“Nobody 

disagrees” that “ERISA fiduciaries have a continuing 

duty to monitor the investments offered.”). This duty 

is a common-sense one: just as an individual investor 
16

would make an initial choice of investments for her 

retirement plan and then revisit that choice periodically, so too a fiduciary choosing investments for an 

ERISA plan makes an initial decision about what 

funds to offer and then must revisit those investments 

from time to time. 

This duty of periodic review of plan investments includes not only consideration of performance, but also

of costs, because a prudent investor is “costconscious.” Third Restatement § 88 cmt. a, at 256; 

see, e.g., Martin v. Feilen, 965 F.2d 660, 671 (8th Cir. 

1992) (overpaying for an ERISA plan asset is imprudent and not in the interests of the participants and 

beneficiaries), cert. denied, 506 U.S. 1054 (1993). 

Indeed, ERISA expressly requires that, in discharging their duties, fiduciaries limit expenses to those 

that are “reasonable.” 29 U.S.C. 1104(a)(1)(A). 

The duty to remove imprudent investments is ongoing, and it applies even if the fiduciary is not responsible for the initial investment decision or the 

initial decision is beyond challenge. See Morrissey v. 

Curran, 567 F.2d 546, 548-549 & n.9 (2d Cir. 1977) 

(explaining that plan fiduciaries in that case “cannot 

be excused” from their obligation to review plan assets “merely because the unwise investment was made 

before ERISA took effect”); cf. 29 U.S.C. 1105(a)(3) 

(ERISA fiduciary has an obligation to make “reasonable efforts” to remedy a breach of fiduciary duty by 

another plan fiduciary). Accordingly, an ERISA fiduciary cannot evade the ongoing duty of prudence by 

relying on investment decisions made by a different 

fiduciary or at an earlier time. 
17

B. Petitioners’ Claims For Breach Of Fiduciary Duty Are 

Timely Under 29 U.S.C. 1113

1. ERISA includes a limitations provision applicable to suits for breach of fiduciary duty. It provides 

that “[n]o action” for breach of fiduciary duty “may be 

commenced” after the earlier of “six years after (A) 

the date of the last action which constituted a part of 

the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have 

cured the breach or violation.” 29 U.S.C. 1113(1). A 

three-year limitations period applies if the plaintiff 

had “actual knowledge of the breach or violation,” and 

a six-year discovery rule applies in “case[s] of fraud or 

concealment.” 29 U.S.C. 1113. Neither of those special rules is at issue here.4

By its plain terms, the limitations period allows a 

plan participant or beneficiary (or the Secretary) to 

bring suit for any breach of fiduciary duty that occurred by act or omission within six years of the suit. 

Further, the statute specifies that only the “last action” constituting “part of” the breach or violation, or 

the “latest date” on which the breach or violation by 

omission could have been cured, needs to have occurred within the six-year limitations period. 29 

U.S.C. 1113(1). Accordingly, petitioners’ claims are 

4 Petitioners contended below that the discovery rule for cases of 

fraud or concealment applied, but the district court rejected that 

argument, Pet. App. 179-181, and petitioners did not renew it on 

appeal. Respondents argued that the shortened limitations period

for cases of actual knowledge applied, but the district court and 

court of appeals rejected that argument. Id. at 19-21, 181. Respondents did not cross-petition for certiorari on that issue and 

only mentioned it in passing in their brief in opposition. See Br. in 

Opp. 11 n.3. 

 
18

timely as long as petitioners allege that some part of 

respondents’ breach of the duty of prudence occurred 

within six years of the filing of the complaint, or that 

respondents breached the duty of prudence by omission and could have cured the breach within the sixyear period. 

2. Petitioners contend that respondents breached 

the duty of care in making certain investments available for the Edison Plan. The Plan offers participants 

a selection of investments, including about 40 mutual 

funds. Pet. App. 13-14. This case focuses on six of 

those mutual funds. Petitioners’ claim is that “it was 

objectively imprudent for the Plan fiduciaries to decide to invest (or to continue to invest) in retail share 

classes of the six mutual funds where identical investments were available in the institutional share 

classes for lower fees.” Id. at 126. 

Some mutual funds offer both retail and institutional share classes, and the institutional share classes 

“often charge lower fees (i.e., a lower expense ratio) 

because the amount of assets invested” by institutional investors “is far greater than the typical individual 

investor.” Pet. App. 84.5

 For each of the six mutual 

funds challenged in this case, “[t]he only difference 

between the retail share classes and the institutional 

share classes was that the retail share classes charged 

higher fees to the Plan participants.” Id. at 128-129; 

see id. at 61. The difference in fees was significant—

for the six funds at issue, the retail-class funds ranged 

from 18 to 40 basis points higher than the institution5 Mutual fund fees are commonly expressed in an expense ratio, 

which is the percentage of the assets under management that is 

paid as fees. Pet. App. 79-80.

 
19

al-class funds. Id. at 85, 87, 90, 92, 94, 97.

6

 As the 

courts below recognized (id. at 60-64, 68-69), it was 

imprudent to offer retail-class mutual funds to plan 

participants when the same funds were available as 

lower-cost, institutional-class funds. 

The district court found, however, that respondents 

engaged in no “discussion or evaluation of the institutional versus retail share classes” and that there is “no 

evidence” that respondents “even considered or evaluated the different share classes” for these funds. 

Pet. App. 129 (emphasis omitted); see id. at 90, 94, 98. 

Had respondents sought to invest in the institutionalclass funds, as opposed to the retail-class funds, they 

could have done so. Id. at 61, 86-87, 91-92, 94, 96. 

Although the institutional-class funds all had investment minimums, “a prudent fiduciary managing a 

401(k) plan the size of the Edison Plan could have (and 

would have) obtained a waiver of the investment minimums.” Id. at 137-140.7

 The result of respondents’

decision to offer the higher-cost retail-class funds was 

that participants in the Plan paid “wholly unnecessary 

6 A basis point is one-hundredth of one percent. Black’s Law 

Dictionary 172 (9th ed. 2009). 7 For one of the three mutual funds added to the Plan within the 

limitations period, the Investment Committees did “review the 

merits of the institutional share class of the [fund] versus the retail 

share class” as part of an inquiry about whether to transfer assets 

from another fund into that fund, and they ultimately decided to 

switch from the higher-cost retail-class fund to the lower-cost 

institutional-class fund. Pet. App. 131. That decision was “very 

telling,” because the one time the plan fiduciaries “actually reviewed the different share classes of one of these three funds,” 

they “realized that it would be prudent to invest in the institutional 

share class rather than the retail share class.” Id. at 131-132. 

 
20

fees” that eroded the value of their retirement accounts. Id. at 130. 

The courts below correctly concluded that respondents breached their duty of prudence by offering the 

higher-cost retail-class funds as plan investments 

when the lower-cost institutional-class funds were 

available. “[A] prudent person managing his own 

funds would invest in the cheaper share class, all else 

being equal, because doing so saves money.” Pet. 

App. 126-127; see, e.g., Third Restatement §§ 88 & 

cmt. a, 90(c)(3) & cmt. f(1), at 256-257, 293, 308 (trustee has a duty to minimize costs). But the courts below limited their holdings to the three funds that were 

first added as plan investments within the six-year 

limitations period. That was error, because respondents had an ongoing duty of prudence with respect to 

plan investments, and petitioners have alleged 

breaches of that duty within the six-year limitations 

period. 

3. The timeliness of a fiduciary-breach claim depends on the nature of the claim. See, e.g., Fish v. 

GreatBanc Trust Co., 749 F.3d 671, 680 (7th Cir. 2014) 

(court must “examine the nature of the alleged 

breaches” to determine whether fiduciary-breach 

claims are timely). For the three mutual funds at 

issue for limitations purposes, petitioners challenge 

the imprudent retention of the funds during the limitations period from 2001 through 2007 and not the 

initial selection of the funds in 1999. Petitioners seek 

to recover “losses caused to the Plan * * * within 

the six years preceding commencement of their action” by respondents’ “failure” to “switch[] from retail 

to institutional class shares.” Pet. C.A. Br. 16 (cita-
21

tion and internal quotation marks omitted); see Pet. 

Br. 39-42. 

Petitioners’ claims are timely because they are 

claims for breaches of the duty of prudence within the 

limitations period. ERISA’s duty of prudence requires fiduciaries with investment responsibility to 

periodically examine the prudence of existing investments and remove imprudent investments from the 

Plan. Here, the Investment Committees had “a continuing duty to see to it that the [plan assets] remain[ed] appropriately invested,” and that duty required them “to examine the state of the trust’s investments” “from time to time” to determine whether 

the investments were appropriate. 4 Scott § 19.4, at 

1451; see, e.g., id. § 19.1.2, at 1395; Bogert 3d § 684, at 

147-148. The Investment Committees met quarterly, 

and at those meetings, they received reports and 

recommendations from investments staff and decided 

whether to make changes to the investment portfolio. 

Pet. App. 74-75, 253-254; J.A. 120-121, 170. On several 

occasions, the Investment Committees removed funds 

from the Plan. Pet. App. 76-78. 

Although the Investment Committees took those 

steps to monitor plan investments, they failed to consider a key question, which was whether the mutual 

funds at issue were available as lower-cost institutional-class funds. Although “the fund’s total expense 

ratio” was one of the Plan’s investment criteria, J.A. 

145, 151, 176, 230, and those criteria “were expected to 

be applied periodically in [the] monitoring of the[] 

plan investments,” J.A. 183; see J.A. 124, 155-156, 169, 

respondents never “even considered or evaluated the 

different share classes” of the mutual funds at issue,

Pet. App. 129; see id. at 63-64. The Investment Com-
22

mittees “were not informed about the institutional 

share classes and did not conduct a thorough investigation” of fund fees. Id. at 130. These facts establish 

breaches of the ongoing duty of prudence within the 

limitations period, because a prudent fiduciary would 

have considered whether institutional-class funds 

were available and would have offered those funds to 

save money for plan participants. Id. at 142. 

4. Petitioners have argued that respondents violated their fiduciary duties within the limitations period 

through both actions constituting breaches and omissions that they failed to cure, and petitioners have 

invoked both parts of Section 1113(1).8 They contend 

that respondents committed “breaches by action” 

when they “conduct[ed] imprudent reviews during 

each quarterly meeting,” and that respondents 

breached their fiduciary duties by “omission” by “failing to monitor properly the investment options on a 

periodic basis and to remove the imprudent retail 

classes.” Pet. Br. 41. 

At a minimum, petitioners have stated timely 

claims of a breach of fiduciary duty by omission. Petitioners’ claims that respondents failed to review fund 

fees, inquire about the availability of lower-cost 

8 See Pet. C.A. Br. 16 (“[T]he ‘last action which constituted a 

part of the breach’—using retail class shares—occurred within six 

years and the ‘latest date on which the fiduciary could have cured 

the breach’—replacing retail with institutional shares—also occurred within six years.” (quoting 29 U.S.C. 1113(1)(A)-(B)); Pet. 

C.A. Reply Br. 29-30 (specifically arguing that respondents’ 

“breach also is one of omission”); J.A. 76 (alleging that respondents breached their fiduciary duties by “subjecting the Plan and its 

participants to the high costs of retail/publicly-traded mutual 

funds and failing to provide investment options with significantly 

lower costs”). 

 
23

institutional-class funds, and switch to those funds are

based on “omission[s]” that occurred at the quarterly 

meetings within the limitations period, and those 

breaches by omission were ones the “fiduciary could 

have cured” during that period. 29 U.S.C. 1113(1)(B). 

The courts below did not specifically address whether 

petitioners’ claims are better characterized as claims 

of breaches of fiduciary duty by action or by omission 

because they categorically rejected any such claims.9 

But it is clear that petitioners’ challenge concerns 

events that occurred within the limitations period, so 

whether viewed as breaches of the ongoing duty of 

prudence by actions or by omissions, their claims are 

timely under 29 U.S.C. 1113. 

C. The Court Of Appeals’ Reasons For Finding Petitioners’ Claims Untimely Lack Merit 

1. The court of appeals found petitioners’ claims

untimely by characterizing them as “alleging imprudence in plan design” and then reasoning that such 

claims accrued when “the decision to include th[e] 

investments in the Plan was initially made.” Pet. App. 

17. The court misunderstood the nature of petitioners’ claims. For the three mutual funds added before 

9 Although petitioners argued below that their fiduciary-breach 

claims are timely under both parts of Section 1113(1), the court of 

appeals analyzed the claims only under paragraph (A), which 

addresses affirmative actions within the limitations period. See 

Pet. App. 17-18. The court did not give any reason for that limited 

consideration. It was wrong for the court to ignore paragraph (B), 

which addresses omissions, because petitioners relied on both 

parts of Section 1113(1) in their briefing (see, e.g., Pet. C.A. Br. 16; 

Pet. C.A. Reply Br. 29-30) and because they have identified specific ways in which respondents failed to act as prudent fiduciaries 

within the limitations period (see, e.g., Pet. Br. 39-42). 

 
24

the limitations period, petitioners challenge not the 

initial selection of the funds but the imprudent management of the Plan during the limitations period. 

Petitioners do not seek to recover damages for the

fees charged going back to 1999, when the three funds 

were first added to the Plan; instead, they seek to 

recover for losses resulting from the excessive fees 

charged to plan participants from 2001 to 2007 (the six 

years before they filed suit). Their claims do not depend on the propriety of the initial investment decision; they depend on an ERISA fiduciary’s “continuing fiduciary duty” to review plan investments periodically and remove those that are imprudent. Martin, 

966 F.2d at 1087-1088. Petitioners have alleged 

breaches of that continuing duty during the limitations period, and so their claims are timely. The court 

of appeals’ contrary conclusion absolves ERISA fiduciaries of their continuing duty of prudence and immunizes bad investment decisions after six years have 

elapsed. 

Relatedly, the court of appeals reasoned that petitioners’ claims are untimely because there is no “continuing violation theory” under ERISA. Pet. App. 17. 

That rationale again assumes that petitioners alleged 

a single breach of fiduciary duty that occurred when 

the funds were added to the Plan in 1999 and that 

continued to harm plan participants through the limitations period. But petitioners do not argue that there 

was a “continuing violation,” in the sense of one violation starting on the date of the initial selection of 

investments that permits a plaintiff to obtain damages 

reaching back to that date. Instead, they contend that 

respondents breached a continuing duty of prudence 

within the limitations period by failing to research 
25

fund options and offer available lower-cost institutional-class funds. J.A. 71, 76-78.10 

2. The court of appeals confused “[s]eparately accruing harm” with “harm from past violations that are 

continuing.” Petrella v. Metro-Goldwyn-Mayer, Inc., 

134 S. Ct. 1962, 1969 n.6 (2014). Petitioners do not 

seek to recover for the initial decision to include the 

mutual funds as plan investments. Instead, they seek 

to recover for the “new wrong[s]” committed within 

the limitations period, when respondents breached 

their ongoing duty to manage the plan investments in 

a prudent manner. Id. at 1969. Those new wrongs 

gave petitioners a new opportunity to bring suit to 

recover for losses suffered during the limitations 

period, even though petitioners could not recover for 

losses caused by the same type of imprudent actions 

or omissions before the limitations period.

The Court has recognized that a plaintiff may sue 

for violations occurring within the limitations period 

even if the plaintiff is barred from recovering for 

10 The decision upon which the court of appeals relied—Phillips

v. Alaska Hotel & Restaurant Employees Pension Fund, 944 F.2d 

509 (9th Cir. 1991), cert. denied, 504 U.S. 911 (1992)—provides no 

valid basis for finding petitioners’ claims untimely. Phillips concerned the shortened limitations period applicable to a fiduciarybreach claim when the plaintiff had actual knowledge of the 

breach. Id. at 520. In that context, the court concluded that 

because the limitations period began on “the earliest date” the 

plaintiff had “actual knowledge” of the breach (29 U.S.C. 1113(2)), 

the plaintiff must sue within three years of that first breach. Ibid. 

That holding is inapposite here because the limitations period uses 

materially different language—not the “earliest date” the plaintiff 

had knowledge but the “last action” constituting a breach or the 

“latest date” when the breach by omission could have been cured. 

See 944 F.2d at 520; compare 29 U.S.C. 1113(2) with 29 U.S.C. 

1113(1). 

 
26

similar violations outside the limitations period. For 

example, in the copyright context, the Court has explained that each act of copyright infringement gives 

rise to a separate claim, and a plaintiff may sue for 

acts of infringement within the three-year limitations 

period even when she cannot sue for similar acts of 

copyright infringement committed before that time. 

See Petrella, 134 S. Ct. at 1969. In those circumstances, the copyright holder may recover only for acts of 

infringement within the limitations period and may 

not reach back to recover for acts of infringement 

before that time. Id. at 1969-1970. 

Similarly, in a case about an employer’s liability for 

withdrawal from a multi-employer pension plan, the 

Court recognized that an employer may be liable for 

missed withdrawal liability payments within the limitations period, even if the employer also had missed 

payments before the limitations period. See Bay Area 

Laundry & Dry Cleaning Pension Trust Fund v. 

Ferbar Corp. of Cal., Inc., 522 U.S. 192, 206-208 (1997)

(Bay Area Laundry). The Court recognized that 

“each missed payment creates a separate cause of 

action with its own six-year limitations period.” Id. at 

206. And the Court rejected the argument that “a 

plan that sues too late to recover the first payment 

forfeits the right to recover any of the outstanding 

withdrawal liability.” Ibid. Instead, the Court recognized that the way to account for the limitations period is to limit the plaintiffs’ recovery to violations that 

occurred within that period. Id. at 195-196. 

Just as the copyright owner in Petrella and the 

pension fund in Bay Area Laundry could bring claims 

for violations within the limitations periods even 

though similar violations occurred before those peri-
27

ods, so too may petitioners bring claims for breach of 

fiduciary duty during the limitations period even 

though they may not challenge the initial decision to 

invest in those funds. Section 1113 cannot bar a claim 

of a “failure to invest prudently during the period 

within [six] years of the commencement of th[e] suit” 

when it is based on discrete breaches within the limitations period, even if they are part of a series of acts 

or omissions that commenced earlier; the effect of 

Section 1113 in that situation is to limit “damages 

recoverable” to the breaches within the limitations 

period. Fink v. National Sav. & Trust Co., 772 F.2d 

951, 962-963 (D.C. Cir. 1985) (Scalia, J., concurring in 

part and dissenting in part). 

Accordingly, petitioners’ failure to challenge the initial decision to offer the three mutual funds added as 

plan investments in 1999 does not bar them from recovering for imprudent investment management within the limitations period. That result would be contrary not only to the general principles of limitation law 

discussed above but also to Congress’s specific decision under ERISA to permit plan participants and 

beneficiaries to sue based on the “last action” constituting a part of the breach and the “latest date” on

which a breach by omission could be cured. 29 U.S.C. 

1113(1) (emphases added). 

3. The court of appeals’ decision was based in part 

on its concern that finding petitioners’ claims timely 

would “expose present Plan fiduciaries to liability for 

decisions made by their predecessors.” Pet. App. 18

(citation omitted). That concern is misplaced. ERISA 

expressly provides that “[n]o fiduciary shall be liable 

with respect to a breach of fiduciary duty * * * if 

such breach was committed before he became a fiduci-
28

ary or after he ceased to be a fiduciary.” 29 U.S.C. 

1109(b). But the new fiduciary may be liable for his

own breaches of the ongoing fiduciary duty of prudence. 

An ERISA fiduciary with responsibility for plan investments has a duty to periodically review those 

investments and remove imprudent ones, even if that 

fiduciary did not make the initial investment decision. 

Under the law of trusts, it is well-established that one 

of a trustee’s first duties upon taking office is to review the settlor’s investments and “dispose of any part 

of the trust property included in the trust at the time 

of its creation which would not be a proper investment 

for the trustee to make.” Second Restatement § 230, 

at 544. Similarly, an ERISA fiduciary may not simply 

assume that past investment decisions were (or continue to be) proper; the fiduciary has an independent 

obligation to periodically review the plan investments. 

ERISA makes this point clear, because it requires 

fiduciaries to “make[] reasonable efforts” to remedy a 

breach of fiduciary duty by another fiduciary. 29 

U.S.C. 1105(a)(3). 

If ERISA fiduciaries fail to periodically monitor 

the investments and remove imprudent ones, the 

fiduciaries are being held liable for their own mismanagement of plan investments, not for “decisions made 

by their predecessors” (Pet. App. 18). And the court 

of appeals’ decision would have the perverse effect of 

enshrining a predecessor’s imprudent investment 

decisions and exempting the new fiduciary’s ongoing 

management of the plan from scrutiny. 

4. The court of appeals concluded that petitioners 

could only bring a timely claim for fiduciary breach if 

they demonstrated “significant changes in conditions 
29

* * * that should have prompted a full due diligence review of the funds.” Pet. App. 19 (citation and 

internal quotation marks omitted). But an ERISA 

fiduciary’s ongoing duty of prudence is not limited to 

reacting to changed circumstances. As explained 

above (see pp. 13-15, supra), under the law of trusts, 

“[t]he duty to review trust investments should be 

performed” not only “as changes occur,” but “also by a 

systematic consideration of all the investments of the 

trust at regular intervals.” Bogert 3d § 684, at 147-

148; see 4 Scott § 19.4, at 1451 (trustee has a “duty, 

from time to time, to examine the state of the trust’s 

investments”); Uniform Prudent Investor Act § 2 

cmt., 7B U.L.A. 21 (a trustee has “continuing responsibility for oversight of the suitability of investments 

already made”). A trustee who fails to monitor investments and make appropriate changes breaches 

the duty of prudence. See, e.g., Johns, 2 App. D.C. at 

499 (trustee breached his “duty to watch the investment with reasonable care and diligence”); Stark’s 

Estate, 15 N.Y.S. at 731-732 (trustee failed to “exercise[] a reasonable degree of diligence in looking after 

the security after the investment had been made”). 

Respondents contend that the trust-law duty to 

remove imprudent investments arises only when 

changed circumstances make the investment imprudent. Resp. Supp. Cert. Br. 4 (citing Second Restatement § 231, at 550). But the Restatement language 

upon which respondents rely assumes that the trustee’s initial investment decision was prudent and then 

addresses whether changed circumstances have made 

the investment imprudent. The Restatement first 

explains that a trustee has a duty upon taking office to 

review the trust investments and “dispose of any part 
30

of the trust property” that is not a proper investment. 

Second Restatement § 230, at 544. The Restatement 

then provides that, if the initial investment was prudent, but the investment at some point has become 

imprudent, the trustee must divest it within a reasonable period of time. Id. § 231, at 550. In particular, 

the Restatement provides that if the “trustee holds 

property which when acquired by him was a proper 

investment, but which thereafter becomes an investment which would not be a proper investment for the 

trustee to make,” the trustee has a “duty * * * to 

the beneficiary to dispose of the property within a 

reasonable time.” Ibid. 

The point of this provision is that a trustee has a 

duty at all times to remove imprudent investments 

from the trust. If the initial investments were proper, 

the trustee still has an ongoing duty of prudence to 

periodically review the investments and dispose of an 

inappropriate investment. Nothing in the Restatement—or the law of trusts generally—establishes that 

a trustee may continue to retain an investment that 

has been imprudent from the outset and remains imprudent, simply because circumstances have not significantly changed. And not only is respondents’ view 

inconsistent with the law of trusts, but it would create 

uncertainty for fiduciaries about whether circumstances have changed enough to warrant a review of 

plan investments and would complicate fiduciarybreach suits by requiring mini-trials on that question.

“It is not by prudent investment alone that a trustee performs his whole duty in regard to a trust fund”; 

the trustee is “bound to be watchful,” to “keep himself 

informed” about the fund, and to “tak[e] all prudent 

means to prevent a loss to the estate.” Stark’s Estate, 
31

15 N.Y.S. at 731-732. The same is true under ERISA. 

ERISA fiduciaries have an ongoing duty of prudence, 

and that duty requires them to periodically assess 

whether investments and the expenses associated with 

them remain prudent—regardless of whether any 

external event should have prompted a review. 

D. The Court Of Appeals’ Rule Disserves The Purposes Of 

ERISA 

1. A primary reason that Congress enacted ERISA 

was to stop the “misuse and mismanagement of plan 

assets by plan administrators” Russell, 473 U.S. at 

141 n.8. ERISA imposes “standards of conduct, responsibility, and obligation”—and authorizes suits to 

enforce those duties—to stop and prevent such mismanagement. 29 U.S.C. 1001(b). These duties apply 

both to named fiduciaries and those who act as fiduciaries by exercising authority or control over plan 

assets, and there is no limit on the duration of fiduciary duties so long as the fiduciaries continue to hold 

the position. See 29 U.S.C. 1002(21)(A)(i), 1102(a)(1). 

But the effect of the court of appeals’ rule is to exempt 

ERISA fiduciaries from those important duties and to 

immunize imprudent plan investments so long as 

those investments have been offered in the plan for 

more than six years and circumstances have not significantly changed.

Under the court of appeals’ rule, so long as an investment had been in an ERISA plan for at least six 

years, plan participants and beneficiaries—and the 

Secretary—could not challenge the fiduciary conduct 

regarding the investment as imprudent unless a 

change in circumstances made the investment even 

more imprudent. That would be true even if the continued imprudence of the investment is obvious. See 
32

Pet. App. 126-127 (“[A] prudent person managing his 

own funds would invest in the cheaper share classes, 

all else being equal, because doing so saves money.”). 

And a participant who invested in the plan or the 

particular investment option at issue more than six 

years after the initial investment decision could never 

sue. See J.A. 58 (class includes participants who began investing in the Plan more than six years after the 

mutual funds at issue initially were added as plan 

investments). 

Further, a person who became a fiduciary within 

the limitations period would be immunized from liability even if she never reviewed the investments. Under 

the court of appeals’ rule, fiduciaries would have no 

incentive to monitor and update plan investments, and 

they could retain imprudent investment options forever (absent changed circumstances) once the investment options had been available for more than six 

years. The result would be to place plan participants’ 

retirement savings in jeopardy. And the effect of the 

court of appeals’ rule would be particularly significant 

in light of the long investment horizon for retirement 

savings accounts. 

2. The court of appeals’ rule could have a great adverse effect for participants in and beneficiaries of 

ERISA retirement plans. Saving for retirement is a 

significant undertaking for many Americans. As 

of 2011, more than 88 million Americans participated 

in defined-contribution plans like the plan at issue 

here. Employee Benefits Sec. Admin., U.S. Dep’t 

of Labor, Private Pension Plan Bulletin: Abstract 

of 2011 Form 5500 Annual Reports 3 tbl. A1 (Sept. 

2014), http://www.dol.gov/ebsa/pdf/2011pensionplan

bulletin.pdf. As of 2014, those defined-contribution 
33

plans held an estimated $5.2 trillion in assets. Bd. of 

Governors of the Fed. Reserve Sys., Financial Accounts of the United States: Flow of Funds, Balance 

Sheets, and Integrated Macroeconomic Accounts 131 

tbl. L.117.c (Sept. 2014), http://www.federalreserve.

gov/releases/z1/Current/z1.pdf; see Pet. App. 167 (in 

2007, the Edison Plan held $3.8 billion in assets). 

Defined-contribution plans make up more than one 

quarter of all retirement assets in the United States. 

Investment Co. Inst., Defined Contribution Plan 

Participants’ Activities, First Half 2014 2 fig. 1 (Nov. 

2014), http://www.ici.org/pdf/ppr_14_rec_survey_q2.pdf. 

Mutual funds make up a majority of the assets in 

defined-contribution plans. See Investment Co. Inst., 

2014 Investment Company Fact Book 11 (54th ed.), 

http:// www.ici.org/pdf/2014_factbook.pdf. 

A key concern of investors in retirement plans is 

the erosion of their long-term earnings by fees. Even 

small differences in fees can make a significant difference in the value of an individual account over time. 

See Employee Benefits Sec. Admin., U.S. Dep’t of 

Labor, A Look at 401(k) Plan Fees 1-2 (Aug. 2013),

http://www.dol.gov/ebsa/pdf/401kFees Employee.pdf. 11 In this case, respondents’ breach of their 

duty of prudence shortchanged plan participants and 

beneficiaries by charging them “wholly unnecessary 

fees.” Pet. App. 129-130. Left unremedied, that fidu11 For example, a 30-year-old earning $60,000 per year, receiving 

2% annual raises, and investing 15% of annual salary will (assuming a 7% rate of return and 1% in expenses) have $1.3 million by 

age 65. Walter Updegrave, How High Fees Can Derail Retirement, Wall St. J., June 21, 2014, at B8. But if the expenses were 

just half a percentage point higher, the value of the account at age 

65 would fall by $100,000 to $1.2 million. Ibid. 

 
34

ciary breach will continue to harm the tens of thousands of participants in the multi-billion-dollar plan in 

this case. See id. at 167. And the court of appeals’

broad ruling, if affirmed by this Court, would severely 

weaken the fiduciary duties Congress put in place to 

protect participants and beneficiaries in ERISA plans. 

CONCLUSION

The judgment of the court of appeals should be reversed, and the case should be remanded for appropriate proceedings.

Respectfully submitted. 

M. PATRICIA SMITH

Solicitor of Labor

G. WILLIAM SCOTT

Associate Solicitor

NATHANIEL I. SPILLER

Counsel for Appellate and 

Special Litigation

STACEY E. ELIAS

Attorney

Department of Labor

DONALD B. VERRILLI, JR. Solicitor General

EDWIN S. KNEEDLER

Deputy Solicitor General

NICOLE A. SAHARSKY

Assistant to the Solicitor 

General

DECEMBER 2014
APPENDIX

1. 29 U.S.C. 1104 provides in pertinent part: 

Fiduciary duties 

(a) Prudent man standard of care

(1) Subject to sections 1103(c) and (d), 1342, and 

1344 of this title, a fiduciary shall discharge his duties 

with respect to a plan solely in the interest of the 

participants and beneficiaries and—

(A) for the exclusive purpose of:

(i) providing benefits to participants and 

their beneficiaries; and 

(ii) defraying reasonable expenses of administering the plan; 

(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that 

a prudent man acting in a like capacity and familiar with such matters would use in the conduct of 

an enterprise of a like character and with like 

aims; 

(C) by diversifying the investments of the plan 

so as to minimize the risk of large losses, unless 

under the circumstances it is clearly prudent not to 

do so; and 

(D) in accordance with the documents and 

instruments governing the plan insofar as such 

documents and instruments are consistent with the 

provisions of this subchapter and subchapter III of 

this chapter. 

(1a)
2a

(2) In the case of an eligible individual account 

plan (as defined in section 1107(d)(3) of this title), the 

diversification requirement of paragraph (1)(C) and 

the prudence requirement (only to the extent that it 

requires diversification) of paragraph (1)(B) is not violated by acquisition or holding of qualifying employer 

real property or qualifying employer securities (as defined in section 1107(d)(4) and (5) of this title). 

* * * * *

2. 29 U.S.C. 1105 provides in pertinent part:

Liability for breach of co-fiduciary

(a) Circumstances giving rise to liability

In addition to any liability which he may have

under any other provisions of this part, a fiduciary 

with respect to a plan shall be liable for a breach of 

fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances:

(1) If he participate knowingly in, or knowingly 

undertakes to conceal, an act or omission of such 

other fiduciary, knowing such act or omission is a 

breach;

(2) If, by his failure to comply with section 

1104(a)(1) of this title in the administration of his 

specific responsibilities which give rise to his status as a fiduciary, he has enabled such other fiduciary to commit a breach; or
3a

(3) If he has knowledge of a breach by such 

other fiduciary, unless he makes reasonable efforts 

under the circumstances to remedy the breach.

* * * * *

3. 29 U.S.C. 1109 provides:

Liability for breach of fiduciary duty

(a) Any person who is a fiduciary with respect to a 

plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such 

plan any losses to the plan resulting from each such 

breach, and to restore to such plan any profits of such 

fiduciary which have been made through use of assets 

of the plan by the fiduciary, and shall be subject to 

such other equitable or remedial relief as the court 

may deem appropriate, including removal of such fiduciary. A fiduciary may also be removed for a violation 

of section 1111 of this title.

(b) No fiduciary shall be liable with respect to a 

breach of fiduciary duty under this subchapter if such 

breach was committed before he became a fiduciary or 

after he ceased to be a fiduciary. 

4. 29 U.S.C. 1113 provides: 

Limitation of actions 

No action may be commenced under this subchapter with respect to a fiduciary’s breach of any respon-
4a

sibility, duty, or obligation under this part, or with 

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

(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest 

date on which the fiduciary could have cured the 

breach or violation, or

(2) three years after the earliest date on which 

the plaintiff had actual knowledge of 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. 

5. 29 U.S.C. 1132 provides in pertinent part: 

Civil enforcement 

(a) Persons empowered to bring a civil action 

A civil action may be brought—

(1) by a participant or beneficiary—

(A) for the relief provided for in subsection 

(c) of this section, or

(B) to recover benefits due to him under 

the terms of his plan, to enforce his rights under 

the terms of the plan, or to clarify his rights to 

future benefits under the terms of the plan;

(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title;
5a

(3) by a participant, beneficiary, or fiduciary 

(A) to enjoin any act or practice which violates any 

provision of this subchapter or the terms of the 

plan, or (B) to obtain other appropriate equitable 

relief (i) to redress such violations or (ii) to enforce 

any provisions of this subchapter or the terms of 

the plan;

(4) by the Secretary, or by a participant, or 

beneficiary for appropriate relief in the case of a 

violation of 1025(c) of this title;

(5) except as otherwise provided in subsection 

(b) of this section, by the Secretary (A) to enjoin 

any act or practice which violates any provision of 

this subchapter, or (B) to obtain other appropriate 

equitable relief (i) to redress such violation or (ii) to 

enforce any provision of this subchapter;

(6) by the Secretary to collect any civil penalty 

under paragraph (2), (4), (5), (6), (7), (8), or (9) of 

subsection (c) of this section or under subsection (i) 

or (l) of this section;

(7) by a State to enforce compliance with a 

qualified medical child support order (as defined in 

section 1169(a)(2)(A) of this title);

(8) by the Secretary, or by an employer or 

other person referred to in section 1021(f)(1) of this 

title, (A) to enjoin any act or practice which violates 

subsection (f) of section 1021 of this title, or (B) to 

obtain appropriate equitable relief (i) to redress 

such violation or (ii) to enforce such subsection; 

(9) in the event that the purchase of an insurance contract or insurance annuity in connection 
6a 

with termination of an individual’s status as a participant covered under a pension plan with respect 

to all or any portion of the participant’s pension 

benefit under such plan constitutes a violation of 

part 4 of this title1 or the terms of the plan, by the 

Secretary, by any individual who was a participant 

or beneficiary at the time of the alleged violation, 

or by a fiduciary, to obtain appropriate relief, including the posting of security if necessary, to assure receipt by the participant or beneficiary of the 

amounts provided or to be provided by such insurance contract or annuity, plus reasonable prejudgment interest on such amounts; or

 (10) in the case of a multiemployer plan that has 

been certified by the actuary to be in endangered 

or critical status under section 1085 of this title, if 

the plan sponsor— 

 (A) has not adopted a funding improvement 

or rehabilitation plan under that section by the 

deadline established in such section, or

 (B) fails to update or comply with the terms 

of the funding improvement or rehabilitation 

plan in accordance with the requirements of 

such section, 

by an employer that has an obligation to contribute 

with respect to the multiemployer plan or an employee organization that represents active participants in the multiemployer plan, for an order compelling the plan sponsor to adopt a funding improvement or rehabilitation plan or to update or 

1

 So in original. Probably should be “subtitle”.

 
7a

comply with the terms of the funding improvement 

or rehabilitation plan in accordance with the requirements of such section and the funding improvement or rehabilitation plan. 

* * * * *