WASHINGTON (CN) — Holding open the fiduciary-duty doors, the Supreme Court ruled Wednesday that participants in corporate retirement accounts can bring suits for account mismanagement within six years if they don’t remember reading the required disclosures.
The case stems from a suit Christopher Sulyma brought five years after he took a job at Intel and enrolled in a couple of the company’s retirement plans.
A doctor of experimental physics, Sulyma told the court that his money had been put into the wrong mix of investments and that plan participants were kept in the dark about decision making.
The retirement fund argued meanwhile that Sulyma had missed the three-year statute of limitations for filing suit under the Employee Retirement Income Security Act.
It said Sulyma received numerous emails about his plans and had access to a trove of information that would have revealed to him how his money was being invested early enough to have brought a timely claim.
A federal judge initially sided with Intel, but the Ninth Circuit reversed, holding that, because Sulyma had testified he did not remember reading the disclosures he received, there was enough dispute over relevant facts to prevent the court from deciding the issue on summary judgment.
Writing for the unanimous Supreme Court on Wednesday, Justice Samuel Alito said Sulyma should be entitled to a more generous six-year statute of limitations under ERISA.
“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,” Alito wrote for the court. “We hold that he does not and therefore affirm.”
Alito called it clear that the law’s use of the term “actual knowledge” means Congress intended to start the clock only when someone is actually aware of the details that make up the base of their claims.
Sulyma’s attorney Matthew Wessler praised the court’s decision as refusing “to water down the critical safeguards” of ERISA.
“Today, the Supreme Court handed an important win to workers around the country,” the Gupta Wessler lawyer said. “The court unanimously held that ERISA fiduciaries — those entrusted with an unyielding duty to protect and safeguard retirement investments — cannot escape their obligations by relying on dense and often impenetrable financial disclosures to cut in the half the time workers and retirees have to bring their claims under ERISA.”
Donald Verrilli, an attorney with the firm Mungar Tolles & Olson who represents the retirement plans, did not immediately return a request for comment on the decision.