In Fuller v. Suntrust Banks, Inc., No. 12-16217 (11th Cir. 2014), the plaintiff, Barbara Fuller (“Fuller”), was appealing the dismissal of her putative class-action complaint brought under ERISA.
In this case, in late 2005, Fuller ended her employment with defendant Suntrust Banks, Inc. (“Suntrust”), and on October 12, 2005, Fuller was distributed her entire account balance in the 401(k) plan maintained by Suntrust. More than five years later, on March 11, 2011, Fuller filed a putative class-action complaint alleging that Suntrust and the other defendants had breached their ERISA-imposed fiduciary duties of loyalty and prudence to the 401(k) plan participants, by selecting and adding certain investment options in the Plan menu–specifically proprietary mutual funds of Suntrust that performed poorly and had high fees benefiting Suntrust, rather than the 401(k) plan participants.
The central issue in the case is whether Fuller’s claim is barred by the statute of limitations. On this issue, the Eleventh Circuit Court of Appeals (the “Court”) said that, for the claims of ERISA fiduciary breaches at issue, ERISA provides, in Section 413, that no action may be commenced “after the earlier of”:
(1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation.
As to the three-year limitations period, the Court concluded that Fuller did not have actual knowledge of the defendants’ alleged breaches within three years of filing suit, since she had not been provided with any documents pertaining to the 401(k) plan which contained the facts underlying her claim, and the defendants did not show that she otherwise obtained the knowledge.
However, as to the six-year limitations period, the relevant period is six years after the date of the last action which constituted a part of the breach or violation. The selection of the mutual funds in question all occurred prior to April 9, 2004, which (due to some tolling matters) is the earliest date a breach could occur and not be barred under ERISA’s statute of limitations. The closer question is whether the alleged failure to remove those mutual funds from the 401(k) plan in subsequent years constitutes a cognizable breach separate from the alleged improper selection of the mutual funds, so that the six-year limitations period does not bar the claims. Because the plaintiff’s allegations concerning the defendant’s failure to remove the mutual funds are in all relevant respects identical to the allegations concerning the selection process, the Court concluded that Fuller’s complaint contains no factual allegation that would allow it to distinguish between the alleged imprudent acts occurring at selection from the alleged imprudent acts occurring thereafter. Thus, Fuller’s claims, at their core, are a challenge to the initial selection of the mutual funds, and the failure to remove them is not a separate breach. As a result, the six-year limitations period began to run prior to April 9, 2004, more than six years before Fuller filed this suit even considering the tolling, so that her suit is time-barred by the six-year limitations period. Therefore, the Court affirmed the district court’s decision.