Tibble v. Edison Int’l, — F.3d –, 2016 WL 1445220 (9th Cir. Apr. 13, 2016) (“Tibble II”), marks the Ninth Circuit’s second review of the case after its earlier decision was vacated by the Supreme Court. Tibble v. Edison Int’l, 135 S.Ct. 1823 (2015) (“Tibble I”). Tibble I concerns the commencement of the statute of limitations for breach of fiduciary duty under 29 U.S.C. § 1113, which provides that an action must be brought within six years of “the last action which constituted a part of the breach or violation.”

The dispute between the plaintiffs and the plan involved mutual funds added to the plan’s investment menu in 1999 (more than six years before suit) and in 2002 (less than six years before suit). The essential claim was that these funds charged retail fees, instead of significantly lower institutional fees. The district court agreed with plaintiffs’ arguments regarding the 2002 funds.

Plaintiffs’ arguments regarding the 1999 funds changed in proceedings leading up to Tibble I. After the district court dismissed the claim for breach in connection with the 1999 investment decision as untimely, plaintiff argued at trial that “significant events within the limitations period” regarding the 1999 funds should have triggered a due diligence review by the plan. The trial court ruled that the alleged events were insufficient to justify a review. When the plaintiffs appealed to the Ninth Circuit, they did not challenge the finding about the significant events, but argued that section 1113 incorporates a continuing violation doctrine. On that appeal, the fiduciary acknowledged that it had a continuing duty to ensure that investments remained prudent, but argued that plaintiffs “were not alleging acts that constituted violations of fiduciary duty within the six-year period, but were arguing that their claims were timely because of the “continuing effects” of decisions made in 1999. The Ninth Circuit agreed with the fiduciaries, holding that the clock on the original investment decision began to run when that decision was made, and the continued offering of the investment was not a continuing breach. The Ninth Circuit also held that plaintiffs could assert evidence of significant changes giving rise to a new breach, but found that the district court correctly concluded that no such changes existed here.

In Tibble I, the Supreme Court held that the Ninth Circuit erred by requiring a finding of significant changes before a fiduciary was obligated to conduct a due diligence review of a prior investment. The Court held that fiduciaries must conduct regular reviews of investments “with the nature and timing of the review contingent on the circumstances.” It also noted that it was possible that the plan fiduciary’s review was adequate under the circumstances presented here. Finally, the Court left to the Ninth Circuit the question whether plaintiffs had forfeited the argument that the defendants could have breached their fiduciary duties by failing to monitor investments without a significant change in circumstances.

On remand in Tibble II, the Ninth Circuit held that plaintiffs had not preserved the argument that the defendants failed to monitor investments without a significant change in circumstances. The court found that the district court had not precluded plaintiffs from arguing that the plain had a continuing duty to monitor the 1999 mutual funds, but that plaintiffs failed to make that argument at trial. The court found the “claim is doubly forfeit” because plaintiffs did not present it on their initial appeal. “In short, beneficiaries never asserted Edison violated its duty by failing to monitor the retail-class mutual funds; they asserted only that we ought to read ERISA as excusing an otherwise time-barred lawsuit where the effects of a past breach continue into the future.”