9th Circuit Won’t Revive|Edison Pension Case

(CN) - The Ninth Circuit took another look at pension-mismanagement claims against Edison International after Supreme Court intervention, but declined to revive the case Wednesday.

Glenn Tibble led a group of current and former Edison employees claiming that their retirement plans had been recklessly managed through the inclusion of expensive retail-class mutual funds and other risky investment vehicles, in violation of the Employee Retirement Income Security Act (ERISA).

A federal judge dismissed the bulk of the employees' claims for being outside the six-year statute of limitations allowed by ERISA. The court did, however, agree that Edison should have investigated wiser, institutional investments before going with the retail-class mutual funds and awarded the employees $370,000.

A panel for the Ninth Circuit upheld the lower court decision, finding that ERISA starts the statute of limitations clock when a company decides to include an investment vehicle in its plan. If the employees know about the inclusion, the clock runs for three years and if — as in this case — they are unaware until later, the six-year limit applies, the appeals court held.

On appeal, a unanimous U.S. Supreme Court held in May 2015 that the Ninth Circuit should not have laid down a strict deadline for filing claims without considering the nature of Edison's fiduciary duty to its employees.

The Ninth Circuit revisited the matter, but again ruled in favor of Edison on Wednesday.

"Beneficiaries admit that during trial they did not argue that Edison violated its duty of prudence by failing to monitor retail-class mutual funds added to the plan in 1999. Instead, they pursued a theory that 'significant changes' in these funds ought to have triggered a due diligence review," Circuit Judge Diarmuid O'Scannlain said, writing for the three-judge panel. "They now argue their failure to present a continuing-duty-to-monitor argument ought to be excused since the district court's summary judgment order precluded 'any claim' of this type. We are not persuaded."

Plaintiffs could have pursued a failure-to-monitor claim against Edison even after the federal judge ruled that their challenge to Edison's initial decision to add retail mutual funds in 1999 and 2000 was untimely under the six-year statute of limitations, the panel said.

"The district court's interaction with beneficiaries' expert Dr. Steven Pomerantz also confirms that their decision to forego a duty-to-monitor argument was their own, not one the court forced upon them," O'Scannlain said. "Beneficiaries' trial strategy was their own choice, not one mandated by the court."

No exception forgives plaintiffs' forfeiture of the failure-to-monitor argument by failing to argue it before the lower court, the 18-page opinion concluded.

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