So, Tibble, Tibble, toil and trouble, to paraphrase (badly) Shakespeare (MacBeth, to be precise). And with that, I am going to launch into what I expect will be a number of posts concerning the Supreme Court’s decision to accept the Ninth Circuit’s decision in Tibble for review, limited to the application of ERISA’s six year statute of limitations. I tweeted, when the Court first accepted the case for review, that while I try to avoid the constant hyperbole about Supreme Court decisions (in which every time the Court does anything, lawyers issue client alerts and every other form of media under the sun, announcing that the sky is falling in the hope of drawing in readers), I did think that Tibble had the capacity to be a game changer.
And why is that? For a few reasons, one of which I will discuss right now. In the first instance, even leaving aside the type of excessive fee and revenue sharing dispute at issue in Tibble itself, the federal courts continue to struggle with the interpretation and application of ERISA’s six year statute of limitations. While written cleanly on its face, the statutory language is almost the walking embodiment of an insurance coverage concept, the latent ambiguity, which has to do with policy language that does not look ambiguous on its face (and thus would not appear to invoke various doctrines by which ambiguous policy language would be construed against the insurance company that issued the policy) but becomes ambiguous when applied to a particular fact pattern because, in application, it becomes unclear how the language should actually be applied. As Tibble itself reflects, the six year statute of limitation is open to varying interpretations when a court or litigant sits down and tries to apply it to a particular fact pattern, even though the language does not, as written, look like it should generate such confusion. The six year statute of limitations talks in terms of ending six years after the last date of breach or six years after the last day on which a breach of fiduciary duty could be remedied, which seems straight forward enough. The problem, though, commences when one tries to apply it to particular fact patterns. Give me a hypothetical, and I can give you two equally plausible arguments (at least on their face) as to when the six year statute of limitation ends under that hypothetical. Indeed, that is a fair description of exactly what occurs with most motions to dismiss filed on statute of limitations grounds in ERISA breach of fiduciary duty cases. Both the moving defendant and the responding participant are almost always able to present plausible sounding arguments over whether the six year statute of limitations period has been triggered, reflecting the lack of clarity and fact specific nature of the analysis under both the statutory language itself and the case law. Greater clarity on the application of the six year limitation period would be a boon to ERISA practitioners across the board.
I have a number of things I want to say about Tibble, a case which has been of interest to me all the way back to its relatively humble beginnings as a bench trial (when it was wrongly overshadowed in the legal media by the Seventh Circuit’s analysis at around the same time of many of the same issues) and I will be returning to it in detail over the next couple of weeks, as time allows. I plan to start with a discussion of the United State’s brief in support of granting cert, which offers an excellent jumping off point for a discussion of the merits of the case.