Opinion ID: 821419
Heading Depth: 1
Heading Rank: 3

Heading: Count Two: Duty of Candor

Text: ERISA does not impose an affirmative duty on fiduciaries to disclose information regarding the company’s financial condition to ERISA plan participants. In re Citigroup ERISA Litig., 662 F.3d at 143 (holding that fiduciaries have no duty to “provide participants with nonpublic information pertaining to specific investment options”). It does, however, provide for 7 liability when fiduciaries make a misstatement that they know “lack[s] a reasonable basis in fact.” Id. at 144 (internal quotation marks omitted). Statements made in a “corporate, rather than ERISA fiduciary[ ] capacity” do not lead to liability for breach of the duty of candor under ERISA, however. Gearren II, 660 F.3d at 611. As the District Court held, beyond asserting a non-actionable duty to affirmatively disclose information, the SCAC only alleges misstatements and omissions made by defendants that appeared in SEC filings and press releases. These statements were all made by defendants in their corporate fiduciary capacities, not their ERISA fiduciary capacities, and thus cannot lead to liability for a breach of the duty of candor under ERISA. See In re Citigroup ERISA Litig., 662 F.3d at 144. Further, the allegations in the SCAC regarding what, if any, alleged misstatements or omissions occurred are vague, and do not adequately allege the basis of defendants’ purported knowledge (actual or constructive) that the particular statements were false or misleading at the time they were made. See Gearren II, 660 F.3d at 611. Thus, we affirm the District Court’s dismissal of plaintiffs’ duty of candor claims as to both the SIP and Plus Plan.