Intel Corp. Investment Policy Comm. v. Sulyma (18-1116)

argument 18-1116

Intel Corp. Investment Policy Comm. v. Sulyma

Supreme Court of the United States 1h 1m 6 speakers 8 chapters transcribed 6 days ago official recording ↗

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What is the central dispute over the “actual knowledge” requirement in §1113‑2?

John G. Roberts 0:00

We'll hear argument first this morning in case eighteen, eleven, sixteen, Intel Corporation Investment Policy Committee versus Salimah Mr. Burrill? Mm-hmm.

Trevor W. Burrus, Jr. 0:10

Mr. Chief Justice, and may it please the Court. Section eleven thirteen two of ERISA requires that claims for breach of fiduciary duty be brought within three years of when the plaintiff first had actual knowledge of the breach. In 2015, the respondent Suleima sued, claiming that his retirement plans imprudently overinvested in hedge funds and commodities. But more than three years before that suit was filed, Suleima received planned disclosures that apprised him of the precise investment allocations he later claimed were imprudent. The Ninth Circuit held that those disclosures would not trigger the three year bar because Suleima testified that he had not read them and Intel therefore had not established that he had subjective awareness of what was disclosed.

Trevor W. Burrus, Jr. 0:52

The Ninth Circuit was wrong to read the statute to require proof of subjective awareness. Under Section 1113-2, Plan participants have actual knowledge of facts that are actually given to them in mandatory ERISA disclosures. That reading respects ERISA's text and the statutory emphasis on the structural emphasis in the statute on robust disclosure by plan fiduciaries and private policing by plan participants. The Ninth Circuit's reading upends that balance. Doubles from three to six years the period in which plaintiffs can exploit hindsight bias to second-guess investments, even when plans have fully disclosed the basis for those investments. And it introduces arbitrariness and intractable proof problems.

Trevor W. Burrus, Jr. 1:37

Now, one way to bring the correct interpretation of Section 1113-2 into focus is by considering the provision as it was originally enacted in 1974. reproduced at pages thirty eight and thirty nine of the Blue Brief. The original statute provided that the three-year limitations period would be triggered either when a plaintiff had actual knowledge of the breach or when the plan filed with the Department of Labour a report that included facts from which a participant could reasonably learn of the facts of the breach. Now if you read the statute in the way that the Ninth Circuit read it, it doesn't make any sense as it was originally enacted because the three year period would be triggered in a situation in which the plan disclosed to the Department of Labour

Trevor W. Burrus, Jr. 2:26

the facts that established the breach, but not when the when the uh plan disclosed to the plan participants themselves in mandatory disclosures, the very same facts that were triggered if provided to the Department of Labor. That just doesn't make any sense of the statute. Our reading in contrast makes perfect sense of the statute. And if I could, I I will start with the text and And and and I think try to take a minute and explain why we've got a perfectly reasonable linguistic understanding of the Section eleven thirteen two. And it's this a plaintiff has actual knowledge of facts actually provided to him in mandatory disclosures. Because when the plaintiff receives the disclosure, he has, in the word of the statute past tense had, but he has

Trevor W. Burrus, Jr. 3:16

in his possession of bot the body of knowledge contained in the disclosures. He possesses that knowledge. And that's the knowledge he actually has. Most people don't read

Brett M. Kavanaugh 3:26

them. You know, I I I I Or many many people don't read them. So how do you have actual knowledge if you haven't read So I I uh you

Trevor W. Burrus, Jr. 3:34

know Your Honor, I don't know that that's correct. I I think actually with respect to these kinds of documents.

Trevor W. Burrus, Jr. 3:46

So I I think the reason is uh because the the phrase actual knowledge in this context in particular But frankly, in any context, isn't limited to subjective awareness in the way that the Ninth Circuit limited it. And I think that the willful blindness doctrine demonstrates that. But Mr.

Unknown 4:03

Burley, we do have the six year adder limit. And then there's a special shorter limit. If you have actual knowledge. It's hard to read the word actual to mean something other than yes, I in fact