SCOTUS Hears ERISA Case on ‘Actual Knowledge’
Do plaintiffs lack actual knowledge of an ERISA disclosure if they didn’t read it?

by Doug Chartier
The U.S. Supreme Court building in Washington, D.C.

If the Supreme Court gives “actual knowledge” a broad definition under ERISA, it could allow many plaintiffs a longer window to file ERISA claims. / PHOTO: LAW WEEK FILE

Depending on how the U.S. Supreme Court rules on an appeal by Intel, it could open the door to more employees suing over mismanagement of their retirement funds. The case hinges on two words: “actual knowledge.”

When participants in an ERISA plan want to sue for an alleged breach of fiduciary duty, they have to bring their claim either within six years of the alleged violation or three years of when they had actual knowledge of it. ERISA, however, doesn’t define what actual knowledge is. Supreme Court justices heard oral argument Wednesday in Intel Corporation Investment Policy Committee v. Sulyma, a case concerning whether the Employee Retirement Income Security Act’s six-year statute of limitations or its three-year window applies.

Former Intel employee Christopher Sulyma is pushing for a strict definition of the term “actual knowledge,” which would mean a plan beneficiary has actually read the information that shows an alleged ERISA breach and not just that Intel made the information available to the beneficiary. That position has the backing of the Department of Justice.

Intel, however, is arguing for a broader interpretation and that Sulyma had actual knowledge when the company informed him that his plan information was available on a website he could access.

Justices challenged Intel’s arguing attorney on that point, including Justice Brett Kavanaugh who asked, “Suppose for the group of people who don’t read [the documents], how can you say that they have actual knowledge if they haven’t read something?”

Justice Ruth Bader Ginsberg also commented, “[I]t’s hard to read the word ‘actual’ to mean something other than yes, I, in fact, know.”

Donald Verrilli, representing Intel, said the “actual knowledge” should be interpreted in the context of the rest of the statute. The limitation is “a unicorn,” Verrilli said, noting that ERISA might be the only federal law where a statute of limitations hinges on “actual knowledge.”

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