Intel Corp. Inv. Policy Comm. v. Sulyma

• Decision Date: 26 February 2020
• Docket Number: No. 18-1116,18-1116
• Citation: 206 L.Ed.2d 103,140 S.Ct. 768
• Parties: INTEL CORPORATION INVESTMENT POLICY COMMITTEE, et al., Petitioners v. Christopher M. SULYMA
• Court: U.S. Supreme Court

140 S.Ct. 768

206 L.Ed.2d 103

INTEL CORPORATION INVESTMENT POLICY COMMITTEE, et al., Petitioners

v.Christopher M. SULYMA

No. 18-1116

Supreme Court of the United States.

Argued December 4, 2019

Decided February 26, 2020

Matthew W.H. Wessler, Jonathan E. Taylor, Gupta Wessler PLLC, Gregory Y. Porter, Bailey & Glasser LLP, R. Joseph Barton, Block & Leviton LLP, Washington, DC, Joseph A. Creitz, Creitz & Serebin LLP, San Francisco, CA, for Respondent.

John J. Buckley, Jr., Daniel F. Katz, Vidya Atre Mirmira, David Kurtzer-Ellenbogen, Juli Ann Lund, Tanya Abrams, Jyoti Jindal, Williams & Connolly LLP, Donald B. Verrilli, Jr., Ginger D. Anders, Munger, Tolles & Olson LLP, Washington, DC, Jordan D. Segall, Munger, Tolles & Olson LLP, Angeles, CA, for Petitioners.

Justice ALITO delivered the opinion of the Court.

The Employee Retirement Income Security Act of 1974 (ERISA) requires plaintiffs with "actual knowledge" of an alleged fiduciary breach to file suit within three years of gaining that knowledge rather than within the 6-year period that would otherwise apply. § 413(a)(2)(A), 88 Stat. 889, as amended, 29 U.S.C. § 1113. The question here is whether a plaintiff necessarily has "actual knowledge" of the information contained in disclosures that he receives but does not read or cannot recall reading. We hold that he does not and therefore affirm.

I

A

Retirement plans governed by ERISA must have at least one named fiduciary, § 1102(a)(1), who must manage the plan prudently and solely in the interests of participants and their beneficiaries, § 1104(a). Fiduciaries who breach these duties are personally liable to the plan for any resulting losses. § 1109(a). ERISA authorizes participants and their beneficiaries, as well as co-fiduciaries and the Secretary of Labor, to sue for that relief. § 1132(a)(2).

Such suits must be filed within one of three time periods, each with different triggering events. The first begins when the breach occurs. Specifically, under § 1113(1), suit must be filed within six years of "the date of the last action which constituted a part of the breach or violation" or, in cases of breach by omission, "the latest date on which the fiduciary could have cured the breach or violation." We have referred to § 1113(1) as a statute of repose, which "effect[s] a legislative judgment that a defendant should be free from liability after the legislatively determined period of time." California Public Employees' Retirement System v. ANZ Securities, Inc. , 582 U.S. ––––, ––––, 137 S.Ct. 2042, 2049, 198 L.Ed.2d 584 (2017) (internal quotation marks omitted).

The second period, which accelerates the filing deadline, begins when the plaintiff gains "actual knowledge" of the breach. Under § 1113(2), suit must be filed within three years of "the earliest date on which the plaintiff had actual knowledge of the breach or violation." Section 1113(2) is a statute of limitations, which "encourage[s] plaintiffs to pursue diligent prosecution of known claims." Id. , at ––––, 137 S.Ct., at 2049 (internal quotation marks omitted).

The third period, which applies "in the case of fraud or concealment," begins when the plaintiff discovers the alleged breach. § 1113. In such cases, suit must be filed within six years of "the date of discovery." Ibid.

B

Respondent Sulyma worked at Intel Corporation from 2010 to 2012. He participated in two Intel retirement plans, the Intel Retirement Contribution Plan and the Intel 401(k) Savings Plan. Payments into these plans were in turn invested in two funds managed by the Intel Investment Policy Committee.¹ These funds mostly comprised stocks and bonds. After the stock market decline in 2008, however, the committee increased the funds' shares of alternative assets, such as hedge funds, private equity, and commodities. These assets carried relatively high fees. And as the stock market rebounded, Sulyma's funds lagged behind others such as index funds.

Sulyma filed this suit on behalf of a putative class in October 2015, alleging primarily that the committee and other plan administrators (petitioners here) had breached their fiduciary duties by overinvesting in alternative assets. Petitioners countered that the suit was untimely under § 1113(2). Although Sulyma filed it within six years of the alleged breaches, he filed it more than three years after petitioners had disclosed their investment decisions to him.

ERISA and its implementing regulations mandate various disclosures to plan participants. See generally 29 U.S.C. §§ 1021 – 1031 ; see also Gobeille v. Liberty Mut. Ins. Co. , 577 U.S. ––––, –––– – ––––, 136 S.Ct. 936, 944, 194 L.Ed.2d 20 (2016). Sulyma received numerous disclosures while working at Intel, some explaining the extent to which his retirement plans were invested in alternative assets. In November 2011, for example, he received an e-mail informing him that a Qualified Default Investment Alternative (QDIA) notice was available on a website called NetBenefits, where many of his disclosures were hosted. See App. 149–151; see also 29 CFR §§ 2550.404c–5(b) – (d) (2019) (QDIA notices); § 2520.104b–1(c) (regulating electronic disclosure). This notice broke down the percentages at which his 401(k) fund was invested in stocks, bonds, hedge funds, and commodities. See App. 236. In 2012, he received a summary plan description explaining that the funds were invested in stocks and alternative assets, id ., at 227, and referring him to other documents—called fund fact sheets—with the percentages in graphical form. See 29 U.S.C. §§ 1022, 1024(b) (summary plan descriptions); see also App. 307 (June 2012 fact sheet for his 401(k) plan fund); id ., at 338 (June 2012 fact sheet for his retirement contribution plan fund); id ., at 277–340 (other fact sheets provided during his tenure at Intel). Also in 2012, he received e-mails directing him to annual disclosures that petitioners provided for both his plans, which showed the underlying funds' return rates and again directed him to the NetBenefits site for further information. See 29 CFR § 2550.404a–5 ; see also App. 242–243 (retirement contribution plan annual disclosure); id ., at 250–251 (401(k) plan annual disclosure).

Petitioners submitted records showing that Sulyma visited the NetBenefits site repeatedly during his employment. Id ., at 258–276. But he testified in his deposition that he did not "remember reviewing" the above disclosures during his tenure. Id ., at 175; see also id ., at 183, 193, 196–197. He also stated in a declaration that he was "unaware" while working at Intel "that the monies that [he] had invested through the Intel retirement plans had been invested in hedge funds or private equity." Id ., at 212. He recalled reviewing only account statements sent to him by mail, which directed him to the NetBenefits site and noted that his plans were invested in "short-term/other" assets but did not specify which. See, e.g. , id ., at 375.

The District Court granted summary judgment to petitioners under § 1113(2), reasoning that "[i]t would be improper to allow Sulyma's claims to survive merely because he did not look further into the disclosures made to him." 2017 WL 1217185, *9 (N.D. Cal., Mar. 31, 2017). The Ninth Circuit reversed. As relevant here,² the court construed "actual knowledge" to mean "what it says: knowledge that is actual, not merely a possible inference from ambiguous circumstances." 909 F.3d 1069, 1076 (2018) (internal quotation marks omitted). Although Sulyma "had sufficient information available to him to know about the allegedly imprudent investments" more than three years before filing suit, the court held that his testimony created a dispute as to when he actually gained that knowledge. Id. , at 1077.

Several Circuits have likewise construed § 1113(2) to require "knowledge that is actual," id. , at 1076, but one has construed it to require only proof of sufficient disclosure.³ We granted certiorari, 587 U.S. ––––, 139 S.Ct. 2692, 204 L.Ed.2d 1089 (2019), to resolve whether the phrase "actual knowledge" does in fact mean "what it says," 909 F.3d at 1076, and hold that it does.

II

A

"We must enforce plain and unambiguous statutory language" in ERISA, as in any statute, "according to its terms." Hardt v. Reliance Standard Life Ins. Co. , 560 U.S. 242, 251, 130 S.Ct. 2149, 176 L.Ed.2d 998 (2010). Although ERISA does not define the phrase "actual knowledge," its meaning is plain. Dictionaries are hardly necessary to confirm the point, but they do. When Congress passed ERISA, the word "actual" meant what it means today: "existing in fact or reality." Webster's Seventh New Collegiate Dictionary 10 (1967); accord, Merriam-Webster's Collegiate Dictionary 13 (11th ed. 2005) (same); see also American Heritage Dictionary 14 (1973) ("In existence; real; factual"); id ., at 18 (5th ed. 2011) ("Existing in reality and not potential, possible, simulated, or false"). So did the word "knowledge," which meant and still means "the fact or condition of being aware of something." Webster's Seventh New Collegiate Dictionary 469 (1967); accord, Merriam-Webster's Collegiate Dictionary 691 (2005) (same); see also American Heritage Dictionary 725 (1973) ("Familiarity, awareness, or understanding gained through experience or study"); id ., at 973 (2011) (same). Thus, to have "actual knowledge" of a piece of information, one must in fact be aware of it.

Legal dictionaries give "actual knowledge" the same meaning: "[r]eal knowledge as distinguished from presumed knowledge or knowledge imputed to one." Ballentine's Law Dictionary 24 (3d ed. 1969); accord, Black's Law Dictionary 1043 (11th ed. 2019) (defining "actual knowledge" as "[d]irect and clear knowledge, as distinguished from constructive knowledge").⁴ The qualifier "actual" creates that distinction. In everyday speech, "actual knowledge" might seem redundant; one who claims "knowledge" of a topic likely means to suggest that he actually knows a thing or two about it. But the law will sometimes...