Brown v. Owens Corning Investment Review Committee

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 10a0314p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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X
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BRITTON C. BROWN; SANDRA K. BROWN;
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CAROL A. LINDHUBER; SHIRLEY J. REED;
JOHN L. DELGADO, for themselves and all -
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No. 09-3692
others similarly situated,
Plaintiffs-Appellants, ,>
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v.
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OWENS CORNING INVESTMENT REVIEW

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COMMITTEE; OWENS CORNING BENEFITS

Defendants, -
REVIEW COMMITTEE,
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OWENS CORNING SAVINGS AND SECURITY
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PLAN; OWENS CORNING SAVINGS PLAN;
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RICHARD C. TOBER; DOMENICO CECERE;
FIDELITY MANAGEMENT TRUST COMPANY; -
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DAVID JOHNS; EDWARD MIRRA; STEVEN

Defendants-Appellees. -
STOBEL; MICHAEL THAMAN,
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N

Appeal from the United States District Court
for the Northern District of Ohio at Toledo.
No. 06-02125—Jack Zouhary, District Judge.
Argued: March 10, 2010
Decided and Filed: September 27, 2010
Before: COLE, GILMAN, and WHITE, Circuit Judges.

_________________

COUNSEL
ARGUED: Gregory Yann Porter, BAILEY & GLASSER, LLP, Washington, D.C, for
Appellants. Erin E. Kelly, SIDLEY AUSTIN LLP, Chicago, Illinois, Howard Shapiro,
PROSKAUER ROSE LLP, New Orleans, Louisiana, for Appellees. ON BRIEF:
Gregory Yann Porter, BAILEY & GLASSER, LLP, Washington, D.C, Bryan T. Veis,
McTIGUE & VEIS LLP, Washington, D.C., for Appellants. Erin E. Kelly, Walter C.

1
No. 09-3692 Brown et al. v. Owens Corning Investment Page 2
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Carlson, John M. George, Jr., SIDLEY AUSTIN LLP, Chicago, Illinois, Howard
Shapiro, Robert W. Rachal, Charles F. Seemann III, PROSKAUER ROSE LLP, New
Orleans, Louisiana, Edward A. Brill, PROSKAUER ROSE LLP, New York, New York,
Jennifer J. Dawson, MARSHALL & MELHORN LLC, Toledo, Ohio, William M.
Connelly, Steven R. Smith, Janine T. Avila, CONNELLY, JACKSON & COLLIER
LLP, Toledo, Ohio, for Appellees.
GILMAN, J., delivered the opinion of the court, in which COLE, J., joined.
WHITE, J. (pp. 19-23), delivered a separate opinion concurring in all sections except for
Section II.C. and in the result of the majority opinion.
_________________

OPINION
_________________

RONALD LEE GILMAN, Circuit Judge. A number of former Owens Corning
(OC) employees (the Plaintiffs) brought a class-action lawsuit against the fiduciaries of
their retirement plans pursuant to the Employee Retirement Income Security Act
(ERISA), alleging that the fiduciaries failed to protect plan participants by not divesting
the plans of OC stock before the shares became virtually worthless when the company
filed for bankruptcy. The fiduciaries filed motions to dismiss, based in part on the
defense that the claims against them were barred by ERISA’s three-year statute of
limitations. Their motions were later converted by the district court into motions for
summary judgment.

Although the district court originally denied the motions for summary judgment,
it reversed itself after the fiduciaries filed a motion to reconsider. The court held that the
Plaintiffs’ claims against the fiduciaries were time-barred because the Plaintiffs had
actual knowledge of all the relevant facts more than three years before filing their
lawsuit. For the reasons set forth below, we AFFIRM the judgment of the district court.
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I. BACKGROUND

A. Factual background

OC sponsored two defined-contribution retirement plans for its employees: the
OC Savings Plan for salaried employees and the OC Savings & Security Plan for hourly
employees (the Plans). Participants in the Plans could invest in several different
investment funds, including the OC Stock Fund, which primarily invested in OC
common stock.

Plan participants were provided with quarterly account statements, which
reflected a participant’s contribution history as well as the current value of the
participant’s investments. These statements included a “Message from the Plan
Administrator” about various Plan updates. Summary Plan Descriptions (SPDs) for both
the salaried plan and the hourly plan stated that the “Plan Administrator . . . is the Owens
Corning Benefits Review Committee.” They also informed participants that the OC
Investment Review Committee “is a Named Fiduciary” of the Plan.

The SPDs stated that “[t]he Plan is administered on Owens Corning’s behalf by
Fidelity Investments” and listed a contact telephone number for Fidelity. Fidelity was
also listed in the SPDs as the Plan Trustee. The SPDs included several other references
to Fidelity, the Investment Review Committee, and the Benefits Review Committee,
stating that “[u]nder ERISA, the people responsible for operating the Plan are called
‘fiduciaries.’ These individuals have an obligation to administer the Plan prudently and
to act in the interest of Plan participants and beneficiaries.” The parties dispute how
many of the Plaintiffs actually received SPDs, but Richard Tober, the head of
Compensation and Benefits at OC, stated that the SPDs were periodically mailed to all
hourly employees and that salaried employees were notified that the SPDs were
available on the company’s internet website. In addition, Carol Lindhuber, a salaried
employee and one of the named Plaintiffs, acknowledged that she was told where the
electronic version of the Plan documents could be found.
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OC was obligated under the Plans to partially match employee contributions. In
the 1990s, the Plans mandated that all employer matching contributions and one-half of
the employer profit-sharing contributions be invested in the OC Stock Fund. Beginning
in 2000, however, employees were permitted to invest new OC contributions in any
investment fund and could transfer portions of previous OC contributions to any other
investment fund. OC’s Compensation Committee decided in late September 2000 to
close the OC Stock Fund to new investments and to permit participants to immediately
transfer all prior OC contributions into other investment funds. Participants were
notified of this change through a “Message from the Plan Administrator” on their
account statements and by a letter sent from OC Chairman and CEO Glen Hiner on
September 29, 2000 to all Plan participants. The letter listed a contact telephone number
for the OC Compensation and Benefits Call Center as well as for Fidelity if participants
had any questions about the change.

At the same time that these changes to the Plans were being made, OC was
preparing to file for bankruptcy. Prior to 1972, OC had manufactured an industrial
insulating product containing asbestos. OC began to face increased liability in the 1990s
as a result of countless claims by those injured from asbestos exposure. Moreover, two
Supreme Court cases in 1997 and 1999 severely limited the ability of asbestos
manufacturers to settle claims against them through either a class action or a mass-
settlement fund. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (asbestos
class action); Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999) (asbestos mass-settlement
fund). As a result of the asbestos litigation and damage costs, OC filed for bankruptcy
on October 5, 2000. CEO Hiner sent a letter on the same date to all OC employees,
informing them of the bankruptcy filing and how it would affect their employment,
compensation, and benefits.

OC stock began to significantly decline in value after the two Supreme Court
cases were publicized. On the day that Ortiz was decided—June 23, 1999—the stock
closed at $35.44 per share. By the end of 1999, the per-share price had dropped to
$19.31, and in mid-2000 it closed at $9.25. The day before OC filed for bankruptcy, the
No. 09-3692 Brown et al. v. Owens Corning Investment Page 5
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stock closed at $1.81 per share, and the day after, at $0.50. As a result of this steep
decline in value, the OC Stock Fund lost tens of millions of dollars. Plaintiff Lindhuber
eventually filed a proof of claim against OC in the bankruptcy proceedings in April
2002, seeking to recoup the losses that she had suffered in her retirement account.

B. Procedural history

On September 1, 2006, Britton Brown and Sandra Brown filed a purported class-
action lawsuit on behalf of participants in the Plans against the following defendants:
the Plans themselves; the OC Investment Review Committee, which was a named
fiduciary of the Plans; individual members of the OC Investment Review Committee;
the OC Benefits Review Committee, which was the administrator for the Plans;
individual members of the OC Benefits Review Committee; Tober; and several John
Does who performed administrative functions for the Plans. (These parties will
hereinafter be referred to as the OC Defendants.) OC itself was not named as a
defendant.

The Plaintiffs alleged that by July 1, 1999, “when the impact of Ortiz would have
sunk in, the Plans’ fiduciaries knew or should have known that OC’s asbestos liability
threatened OC’s future and that investing in OC stock was highly risky.” Specifically,
the Plaintiffs contended that the OC Defendants breached their fiduciary duties to both
the Plans and the Plan participants by continuing to offer the OC Stock Fund as an
investment option and by limiting the ability of participants to transfer previously
invested funds out of the OC Stock Fund until the company was on the verge of
bankruptcy. The Plaintiffs also alleged that the OC Defendants should have filed a proof
of claim against OC during its bankruptcy proceedings. They brought suit under ERISA
§ 404, 29 U.S.C. § 1104, which requires plan fiduciaries to exercise a prudent standard
of care when administering a plan, as well as ERISA § 405, 29 U.S.C. § 1105, which
imposes liability on a fiduciary for breaches by a cofiduciary.

In December 2006, the Plaintiffs filed their first amended complaint, which
added Lindhuber as a named plaintiff, Fidelity Management Trust Company as a
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corporate defendant, and specific members of the Investment Review Committee as
individual defendants. Fidelity was also sued as the trustee of the Plans. The Plaintiffs
alleged that it violated ERISA § 404 by failing to protect Plan assets when Fidelity did
not file a timely proof of claim against OC in the bankruptcy proceedings for the alleged
breaches of fiduciary duties by the OC Defendants. On the other hand, the first amended
complaint dropped the Investment Review Committee and the Benefits Review
Committee as defendants.

In March 2007, the OC Defendants and Fidelity filed their respective motions to
dismiss. In addition to other arguments, the OC Defendants contended that the
Plaintiffs’ claims were barred by ERISA’s three-year statute of limitations. Fidelity
joined that aspect of the OC Defendants’ motion. In July 2007, the district court
converted the OC Defendants’ and Fidelity’s motions to dismiss into motions for
summary judgment on the issue of whether the Plaintiffs’ claims were barred by
ERISA’s statute of limitations. It also permitted discovery on that issue. The district
court denied summary judgment to all of the defendants in March 2008.

In April 2008, the Plaintiffs filed a second amended complaint, adding additional
named Plaintiffs and alleging that the Plaintiffs did not know until 2006 or 2007 that “the
Plans had fiduciaries, there was an Investment Review Committee, [and] fiduciaries
were responsible for managing the Owens Corning Stock Fund.” The OC Defendants
subsequently filed a motion for reconsideration on the statute-of-limitations issue. This
prompted the Plaintiffs to move for leave to file a third amended complaint. The
proposed third amended complaint added additional OC Defendants and contained
allegations that various OC officials had engaged in fraud to conceal the identities,
duties, and fiduciary breaches of the Investment Review Committee members.

In December 2008, the district court granted the OC Defendants’ motion for
reconsideration, finding that all of the Plaintiffs’ claims against the OC Defendants and
against Fidelity were barred by ERISA’s three-year statute of limitations. It also denied
as moot the Plaintiffs’ motion to file a third amended complaint.
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In response, the Plaintiffs filed a motion to alter or amend the judgment, arguing
that the district court erred in dismissing their claims against Fidelity without making
separate findings regarding the Plaintiffs’ actual knowledge of Fidelity’s alleged
breaches. They also contended that the court erred in granting summary judgment
without first deciding the Plaintiffs’ motion to further amend their complaint.

The district court granted in part the motion to alter the judgment, clarifying that
it was dismissing the Plaintiffs’ motion to amend their complaint on the basis that the
motion was futile, not moot, and separately discussing why Fidelity was also entitled to
summary judgment on the statute-of-limitations issue. A timely appeal was filed by the
Plaintiffs regarding the district court’s rulings on the motion for reconsideration and the
motion to alter the judgment.

II. ANALYSIS

A. Standard of review

We review de novo a district court’s grant of summary judgment. ACLU of Ky.
v. Grayson County, 591 F.3d 837, 843 (6th Cir. 2010). Summary judgment is proper
where no genuine issue of material fact exists and the moving party is entitled to
judgment as a matter of law. Fed. R. Civ. P. 56(c)(2). In considering a motion for
summary judgment, the district court must draw all reasonable inferences in favor of the
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). The central issue is “whether the evidence presents a sufficient disagreement to
require submission to a jury or whether it is so one-sided that one party must prevail as
a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

When a district court denies a motion for leave to amend a complaint because the
proposed amendment would be futile, we also employ de novo review of such a decision.
Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 569 (6th Cir. 2003).
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B. ERISA’s statute of limitations

ERISA’s statute of limitations provides for three-year and six-year time periods
during which a plaintiff may bring suit:

No action may be commenced under this subchapter with respect to a
fiduciary’s breach of any responsibility, duty, or obligation under this
part . . . 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;
except that in the case of fraud or concealment, such action may be
commenced not later than six years after the date of discovery of such
breach or violation.

29 U.S.C. § 1113. So even though an ERISA plaintiff alleging a breach of fiduciary
duty generally has six years in which to file suit, “this period may be shortened to three
years when the victim had ‘actual knowledge of the breach or violation.’” Wright v.
Heyne, 349 F.3d 321, 327 (6th Cir. 2003) (quoting 29 U.S.C. § 1113(2)).

Actual knowledge means “knowledge of the facts or transaction that constituted
the alleged violation.” Id. at 330. An ERISA plaintiff has actual knowledge when he
or she has “knowledge of all the relevant facts, not that the facts establish a cognizable
legal claim under ERISA.” Id. at 328. In Wright, this court specifically rejected an
interpretation of actual knowledge adopted by at least two other circuits that “requires
a showing that plaintiffs actually knew not only of the events that occurred which
constitute the breach or violation but also that those events supported a claim for breach
of fiduciary duty or violation under ERISA.” Id. at 327-28, 330 (quoting Int’l Union v.
Murata Erie N. Am., Inc., 980 F.2d 889, 900 (3d Cir. 1992)).
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C. The Plaintiffs’ actual knowledge of the OC Defendants’ alleged breaches

The district court held that the Plaintiffs obtained actual knowledge sufficient to
trigger the three-year period by October 2000. On appeal, the Plaintiffs contend that
they did not have actual knowledge until 2006 or 2007, when they first learned “that the
Plans had fiduciaries, that there was an Investment Review Committee (which was the
named fiduciary for the Plans), and that fiduciaries were responsible for managing the
OC Stock Fund.”

But the Plaintiffs do not dispute that, by October 2000, they were aware of OC’s
bankruptcy filing and that their investment in the OC Stock Fund was virtually
worthless. Moreover, as the district court correctly noted, the Plaintiffs were aware by
October 2000 that “someone was exercising discretionary oversight of the Plan by
altering transfer restrictions and thereby allowing greater diversification.” (Emphasis
in original.) This knowledge came from the message by the Plan Administrator on Plan
participants’ quarterly account statements for the period ending on September 30, 2000,
as well as from CEO Hiner’s September 29, 2000 letter, both of which explained the new
rules on contributions to the OC Stock Fund. These communications gave Plan
participants actual knowledge that they were not locked into that particular investment.

The Plaintiffs respond by contending that these changes merely related to Plan
amendment, not Plan management. They thus argue that, at most, the Plaintiffs knew
that someone had the authority to amend the Plans’ terms. But this is a difference in
semantics only. The communications informed Plan participants that someone had the
authority to close the OC Stock Fund and to permit the participants to transfer prior
contributions, which is the very solution that the Plaintiffs wanted, albeit a solution that
they wanted many months before the OC stock became virtually worthless. They
therefore knew that someone had the power to take steps to protect their Plan
investments.

Moreover, at least some participants were provided with access to the SPDs,
which clearly identified the OC Benefits Review Committee as the Plan Administrator
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and the OC Investment Review Committee as a Named Fiduciary of the Plan. But the
Plaintiffs argue that even if the Plan participants were provided with access to the SPDs,
this, at most, would amount to constructive knowledge of the terms contained therein,
not actual knowledge. We disagree. Actual knowledge does not “require proof that the
individual Plaintiffs actually saw or read the documents that disclosed” the allegedly
harmful investments. See Young v. Gen. Motors Inv. Mgmt. Corp., 550 F. Supp. 2d 416,
419 n.3 (S.D.N.Y. 2008) (holding that the plaintiffs had actual knowledge of an alleged
failure to diversify plan investments when they were provided with plan documents that
described the investments as undiversified, regardless of whether the plaintiffs “actually
saw or read the documents”), aff’d on other grounds, 325 F. App’x 31 (2d Cir. 2009);
see also Edes v. Verizon Commc’ns, Inc., 417 F.3d 133, 142 (1st Cir. 2005) (stating that
Congress did not intend “the actual knowledge requirement to excuse willful blindness
by a plaintiff”). The Plaintiffs attempt to distinguish these cases by arguing that they
involved situations where plan participants were directly given plan documents, rather
than, as is the case here, provided with information on how to access plan documents.

But we see no material distinction between being directly handed plan documents
and being given instructions on how to access them. When a plan participant is given
specific instructions on how to access plan documents, their failure to read the
documents will not shield them from having actual knowledge of the documents’ terms.
See Shirk v. Fifth Third Bancorp, No. 05-cv-049, 2009 WL 3150303, at *3 (S.D. Ohio
Sept. 30, 2009) (“[B]ecause Plaintiffs’ actual knowledge runs from the date that
documents were provided, or made available, to Plan Participants disclosing the facts
underlying the alleged breach of fiduciary duty, Plaintiffs cannot avoid the bar of
ERISA’s three year statute of limitations by merely claiming that they did not read the
documents that form the basis for their claims.” (emphasis added)).

At oral argument, the Plaintiffs argued that the SPDs did not provide actual
knowledge that the Plans had fiduciaries in charge of managing the OC Stock Fund
because the SPDs state that OC’s “Investment Review Committee has been delegated
the authority to alter, adjust, eliminate, substitute or replace any or all of the Funds made
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available to participants from time to time (except the Owens Corning Stock Fund).”
(Emphasis added.) The Plaintiffs thus contend that this statement would have given Plan
participants the impression that no one had the authority to get them out of the OC Stock
Fund.

This contention is unavailing for two reasons. First, the argument that the SPDs
would not have notified Plan participants that someone was exercising discretionary
control over the OC Stock Fund is directly counter to their repeated assertion that the
Plaintiffs gained actual knowledge when they allegedly first received the SPDs in
August 2006. Second, any potential misconception that may have been created by this
lone statement in the SPDs would have been cleared up when, in September 2000, Plan
participants were notified that the OC Stock Fund was closed to new investments and
that participants could transfer all prior OC contributions into other investment funds.

The SPDs and other Plan communications thus gave the Plaintiffs actual
knowledge that someone was responsible for managing the Plans—i.e., that some
individual or committee or entity was responsible for the decision to allow participants
to continue to invest in the OC Stock Fund when the Fund was declining in value. So
by October 2000, the Plaintiffs knew that they had been harmed by someone who had
allegedly failed to adequately manage the Plans. These were all the “relevant facts”
needed to trigger the start of the statute-of-limitations period. See Wright v. Heyne, 349
F.3d 321, 328 (6th Cir. 2003). Contrary to what the Plaintiffs argue, they did not need
to know that the responsible parties were charged with fiduciary duties under ERISA.
That is the type of legal conclusion rejected by this court in Wright as not necessary to
a finding of actual knowledge. In any event, the Plaintiffs did receive notice that federal
laws protected their investments. The October 5, 2000 letter from CEO Hiner notified
all employees that “[a]ny investments you have in the company’s profit sharing or
401(k) savings plans are . . . protected by federal regulations.”

Nor did they need to know the specific identity or name of the responsible
individuals or committees. Plaintiffs are permitted to bring suit against unnamed “John
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Doe” defendants until discovery or other information reveals the identity of the party.
See, e.g., Cox v. Treadway, 75 F.3d 230, 240 (6th Cir. 1996). Indeed, the Plaintiffs filed
their original complaint without any of the names of the members of the Investment
Review Committee or the Benefits Review Committee. They could have therefore
brought suit long before 2006 against “John Doe” as a placeholder for the individual or
entity responsible for managing the Plans.

The Plaintiffs, however, contend that they needed to know more information to
trigger the actual-knowledge requirement because the breach complained of in the
instant case is a “stealth” breach, i.e., a failure to act to protect Plan participants from
the decline in value of their investments in OC stock. To support this argument, they
rely on Brown v. American Life Holdings, Inc., 190 F.3d 856 (8th Cir. 1999), where the
court stated in dicta that

the nature of the alleged breach is critical to the actual knowledge issue.
For example, if the fiduciary made an illegal investment—in ERISA
terminology, engaged in a prohibited transaction—knowledge of the
transaction would be actual knowledge of the breach. But if the fiduciary
made an imprudent investment, actual knowledge of the breach would
usually require some knowledge of how the fiduciary selected the
investment.

Id. at 859 (emphasis in original).

But the Brown court used the Third Circuit’s definition of actual knowledge,
which has been specifically rejected by this court. See Wright, 349 F.3d at 328-30.
Moreover, the plaintiff in Brown alleged that the plan trustees breached their fiduciary
duties by investing plan assets in overly conservative investments and by taking too long
to decide whether to terminate the plan and roll its assets into another plan. Brown, 190
F.3d at 858-59. Despite the court’s statement in dicta, it ultimately held that “[t]he
alleged failure to diversify, from Brown’s perspective, was severe and apparent from an
examination of the [Plan’s] assets any time after October 20, 1994”—the date the Plan
invested in the allegedly conservative funds. Id. at 859. The Brown court therefore
rejected the plaintiff’s argument that he did not have actual knowledge until he received
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a letter in 1997 from the company vice president explaining that “there is no
contemporaneous detailed explanation” for the decisions to invest in conservative
investments. Id. at 860.

Thus, on closer examination, Brown does not support the Plaintiffs’ argument.
In the instant case, the alleged failure to eliminate the harmful effects of the investment
in the OC Stock Fund would have been apparent in October 2000—when OC filed for
bankruptcy and the stock value dropped well below one dollar per share. The Plaintiffs
at that point were on notice that they had been harmed by the retention of OC stock in
the OC Stock Fund.

In sum, the Plaintiffs allege that the OC Defendants breached their fiduciary
duties to the Plaintiffs by their “failure to act to eliminate or otherwise minimize the
harmful effects of an investment—the OC Stock Fund—that had become imprudent.”
But by October 2000, the Plaintiffs knew (1) that they had been harmed because their
investments in OC stock had lost almost all value, and (2) that someone was acting to
manage those investments. This knowledge was sufficient to trigger the three-year
statute-of-limitations period. Because the Plaintiffs did not file their first complaint until
September 2006, their claims against the OC Defendants are time-barred.

D. The Plaintiffs’ motion for leave to amend

While the OC Defendants’ motion for reconsideration was pending, the Plaintiffs
moved to file a third amended complaint. The proposed complaint contained allegations
that various OC officials took steps “to hide the OC Defendants’ breach of fiduciary
duty, as well as to frustrate the efforts of any participant who might seek to bring suit for
breach of the duty.” As quoted above, the ERISA statute of limitations increases to six
years “after the date of discovery” of the alleged breach or violation “in the case of fraud
or concealment.” 29 U.S.C. § 1113. The Plaintiffs presumably sought this amendment
in an attempt to save their lawsuit.
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ERISA’s fraud exception to the statute of limitations “requires the plaintiffs to
show (1) that defendants engaged in a course of conduct designed to conceal evidence
of their alleged wrong-doing and that (2) [the plaintiffs] were not on actual or
constructive notice of that evidence, (3) despite their exercise of diligence.” Larson v.
Northrop Corp., 21 F.3d 1164, 1172 (D.C. Cir. 1994) (alteration in original) (citation
omitted); see also Schaefer v. Ark. Med. Soc’y, 853 F.2d 1487, 1491-92 (8th Cir. 1988)
(applying the same standard). The second element of this test is particularly critical in
the present case because the majority of the actions that the Plaintiffs contend constituted
fraud and concealment were taken at or after the time when the Plaintiffs gained actual
knowledge in early October 2000 of the facts underlying the alleged breaches.

They allege, for example, that the pattern of fraud and concealment includes the
letter from CEO Hiner on October 5, 2000 claiming that the company’s bankruptcy
filing “does not affect” participants’ investments, a statement by Hiner on December 4,
2000 that nothing could be done to recoup losses from the OC Stock Fund, and an April
25, 2001 letter from Hiner stating that “[s]teps would be taken to change the 401(k) Plan
in a positive direction.” The Plaintiffs further contend that several participants asked
questions in mid-October 2000 about their losses and whether the OC Stock Fund had
been properly managed, but that no one at OC responded to these specific inquiries.
Although OC did issue a general “Question and Answer” communication to all
employees, the Plaintiffs contend that the answers did not inform the Plan participants
that they had legal rights under ERISA or that Plan fiduciaries had breached their duties.

The Plaintiffs also claim that when the company made a $2.2 million restorative
payment to participants in November 2000, various OC officials explained in a letter to
Plan participants that the payment was “[b]ased on the unintended consequences [that]
unit accounting had on the participants remaining in the Stock Fund.” This explanation
was misleading, the Plaintiffs argue, because the letter should have also informed the
Plan participants that restorative payments are permitted by ERISA when a fiduciary’s
actions create a substantial risk of liability for breach of fiduciary duty. The Plaintiffs
further claim that several of the OC Defendants were aware that they could face lawsuits
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for breaches of their fiduciary duties because they discussed potential liability with
outside counsel in October and November 2000.

None of these allegations, however, support a finding of fraud or concealment
sufficient to invoke ERISA’s six-year statute of limitations because the Plaintiffs were
already on actual notice of the alleged wrongdoing—the failure to properly manage the
Plans—when these acts occurred. See Schaefer, 853 F.2d at 1492 (stating that the fraud-
or-concealment provision requires plaintiffs to show that, “despite their exercise of due
diligence or care, they were not on notice of [a defendant’s] breach of duty”). In other
words, the OC Defendants could not have engaged in fraud to conceal from the Plaintiffs
what the Plaintiffs already knew.

The one allegation that predates the Plaintiffs’ actual knowledge is the claim that
OC never informed Plan participants of the identities of the members of the OC
Investment Review Committee during all relevant times (1999 to 2006), an action
required by Plan language. This failure allegedly concealed the identity of the
Committee members. But this sole allegation is insufficient to invoke the six-year
statute of limitations period because, at most, it shows inaction on the part of OC and its
officials and thus “does not rise to the level of active concealment, which is more than
merely a failure to disclose.” See Schaefer, 853 F.2d at 1491. “Concealment by mere
silence is not enough.” Martin v. Consultants & Adm’rs, Inc., 966 F.2d 1078, 1094 (7th
Cir. 1992) (citation omitted). The OC defendants must have engaged in “some trick or
contrivance intended to exclude suspicion and prevent inquiry.” See id. (citation
omitted). The Plaintiffs’ proposed amendment contains no such claims.

Because these allegations are not sufficient to invoke the fraud-or-concealment
exception for ERISA’s statute of limitations, the Plaintiffs’ amendment would have been
futile. See Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000)
(holding that a proposed amendment is futile if the complaint, as amended, would not
withstand a motion filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil
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Procedure to dismiss for failure to state a claim). The district court thus did not err in
denying the Plaintiffs’ motion to amend.

E. Statute of limitations for Plaintiff Lindhuber

We turn now to Lindhuber, one of the named plaintiffs in the instant action.
Lindhuber filed a proof of claim against OC during its bankruptcy proceedings in April
2002 because she believed that OC was responsible for the losses in the OC Stock Fund.
In June 2006, OC moved to disallow and expunge her claim. The Plaintiffs now argue
that the statute of limitations should be equitably tolled for Lindhuber for the time that
her proof of claim was pending against OC.

Strictly defined, equitable tolling is “[t]he doctrine that if a plaintiff files a suit
first in one court and then refiles in another, the statute of limitations does not run while
the litigation is pending in the first court if various requirements are met.” Black’s Law
Dictionary (8th ed. 2004). We have found only one case where this court has equitably
tolled ERISA’s statute of limitations. The court did so in Farrell v. Automobile Club of
Michigan, 870 F.2d 1129 (6th Cir. 1989), because the plaintiffs there had timely filed
suit in state court and the state court arguably had jurisdiction over the case because the
plaintiffs’ lawsuit could have been interpreted as seeking to recover accrued benefits
under ERISA, “a claim for which federal jurisdiction is concurrent with state court
jurisdiction.” Id. at 1134. Other courts have interpreted Farrell narrowly in declining
to apply equitable tolling. See Shofer v. Hack Co., 970 F.2d 1316, 1319 (4th Cir. 1992)
(interpreting Farrell to hold that equitable tolling of ERISA claims applies only where
the state court’s lack of jurisdiction was not clear); Smith v. Eaton Corp., 102 F. Supp.
2d 439, 442 (W.D. Mich. 2000) (“This Court reads Farrell to apply equitable tolling
only to claims over which state courts have concurrent jurisdiction.”).

We analyze five factors in determining whether equitable tolling is justified:
“1) lack of notice of the filing requirement; 2) lack of constructive knowledge of the
filing requirement; 3) diligence in pursuing one’s rights; 4) absence of prejudice to the
defendant; and 5) the plaintiff’s reasonableness [in] remaining ignorant of the particular
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legal requirement.” Truitt v. County of Wayne, 148 F.3d 644, 648 (6th Cir. 1998).
Equitable tolling is thus narrowly applied. Egerer v. Woodland Realty, Inc., 556 F.3d
415, 424 (6th Cir. 2009) (declining to apply equitable tolling where the plaintiffs did not
exercise due diligence to discover their cause of action under the Real Estate Settlement
and Procedures Act).

Applying the above factors to Lindhuber leads us to the conclusion that she did
not lack notice of her rights under ERISA. Lindhuber acknowledged that she was told
how to access Plan documents prior to 2003. She also said that she had “seen” the SPDs,
but the record is unclear as to whether she had read them. The SPDs had two pages of
information on participants’ rights under ERISA, and they specifically stated that
“[u]nder ERISA, the people responsible for operating the Plan are called ‘fiduciaries.’
These individuals have an obligation to administer the Plan prudently and to act in the
interest of Plan participants and beneficiaries.” The SPDs also had a chart listing the
Plan Administrator and the Plan Fiduciary, as well as addresses and telephone numbers
so that participants could contact these entities. Moreover, the October 5, 2000 letter
from CEO Hiner, which was sent to all employees, notified them that their 401(k)
savings plans were “protected by federal regulations.”

Given these facts, Lindhuber did not lack notice of her right to file suit under
ERISA. She thus had no basis to claim ignorance of ERISA as the proper avenue
through which to pursue her claims. Equitable tolling is therefore not appropriate in the
instant case.

F. Statute of limitations for the Plaintiffs’ claims against Fidelity

The Plaintiffs’ final argument on appeal is that the district court erred in
dismissing their claims against Fidelity pursuant to ERISA’s statute of limitations. They
claim that Fidelity breached its fiduciary duties as trustee of the Plans by failing to sue
the other cofiduciaries on behalf of the Plans. The Plaintiffs contend that Fidelity had
actual knowledge of a fiduciary breach by the OC Defendants when OC filed for
bankruptcy in October 2000. All parties therefore agree that Fidelity’s statute-of-
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limitations period for bringing a suit against the cofiduciaries would have expired three
years later, in October 2003. The Plaintiffs’ claim against Fidelity thus accrued in
October 2003, at which point no suit had been brought by Fidelity. But the Plaintiffs did
not sue Fidelity until December 2006, so if the Plaintiffs had actual knowledge of the
relevant facts regarding Fidelity’s alleged breach before December 2003, their claim
against Fidelity is time-barred.

All of the quarterly account statements in the record contain references to
Fidelity and at least one specifically has a “Message from Fidelity.” Moreover, the
October 5, 2000 letter from CEO Hiner informs Plan participants that their 401(k)
investments were “maintained in trusts separate from the company.” Finally, the SPDs
identify Fidelity as the trustee and were provided to at least some of the Plaintiffs. All
of the Plaintiffs therefore had actual knowledge by October 2000 that Fidelity was
intimately involved in the Plans and that the Plans were held in a trust, and at least some
of the Plaintiffs knew that Fidelity was the trustee for the Plans.

Moreover, by October 2003, the Plaintiffs knew that no one had brought suit
against OC on behalf of the Plans or the Plan participants and that their losses had not
been recouped. This constitutes “knowledge of all the relevant facts”; i.e., their
investments had suffered, Fidelity was significantly involved in managing the Plans, and
no one had sued OC on behalf of the Plans. See Wright, 349 F.3d at 330. The Plaintiffs
did not need to know that Fidelity was legally deemed a trustee or that, as such, it had
a duty to sue the Plan fiduciaries. Because the Plaintiffs had actual knowledge of the
relevant facts regarding Fidelity’s alleged breach by October 2003, but did not file suit
until December 2006, their claims against Fidelity are barred by ERISA’s three-year
statute of limitations.

III. CONCLUSION

For all of the reasons set forth above, we AFFIRM the judgment of the district
court.
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_____________________

CONCURRENCE
_____________________

HELENE N. WHITE, Circuit Judge, concurring. I concur in all but Section II.C.
of the majority opinion, as to which I write separately to identify two points of
disagreement. I nevertheless concur in the ultimate conclusion of that section – that
Plaintiffs had actual knowledge sufficient to trigger the statute of limitations.

I.

Plaintiffs argue that even after receiving the message from the Plan Administrator
in the quarterly account statement for the period ending on September 30, 2000, and the
September 29, 2000, letter from CEO Hiner, they still did not know that someone had
discretionary oversight over the plans and could have worked to move their money from
the OC Stock Fund sooner. They emphasize that the communications that explained the
new rules on contributions to the OC Stock Fund relate to plan “amendment” rather than
plan “management.” The majority rejects this argument as presenting a mere semantic
difference, concluding that “[t]he communications informed Plan participants that
someone had the authority to close the OC Stock Fund and to permit the participants to
transfer prior contributions. . . . They therefore knew that someone had the power to take
steps to protect their Plan investments.” (Opinion at 9.)

I must disagree. After reviewing the communications, I see nothing in them
indicating that a fiduciary, charged to protect Plan participants’ interests, was involved
in the change in rules. The September 29th letter from CEO Hiner merely states that
“the Compensation Committee of the Board of Directors has approved certain changes
to your 401(k) Plan.” (App. 115.) Thus, it appears that the change was effected by OC,
not the Plan administrator or anyone acting to protect the participants. And, even
assuming that the “the Compensation and Benefits Call Center,” to which the letter
directs any questions from Plan participants, is related to the Plan Administrator, the OC
Benefits Review Committee, this provides no indication that the Plan Administrator
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played any role in bringing about the changes. Similarly, the “Message From The Plan
Administrator” in the quarterly account statement at issue simply states the new status
quo: “Effective September 29, 2000[,] the Owens Corning Stock fund was closed to any
new contributions or transfers into the fund. Additionally, all company contributions
that were previously restricted are now available to be transferred to any of the other
investment options offered in the plan.” (App. 122.) These documents convey the
message that Owens Corning alone had the authority to amend the plans, and that the
company exercised that authority and then announced the unilateral change via the Plan
Administrator. Thus, a plaintiff receiving this information would not necessarily have
“kn[own] that someone had the power to take steps to protect their Plan investments.”
(Opinion at 9.)

II.

The majority also concludes that the SPDs provided Plaintiffs with actual
knowledge that someone had the power to take steps to protect their Plan investments.
I find the record insufficient to establish such notice as a matter of law, especially as to
the salaried employees.

The majority observes that “at least some participants were provided with access
to the SPDs.” (Opinion at 9.) The evidence concerning Plaintiffs being provided SPDs
comes primarily from the testimony of Richard Tober, head of Compensation and
Benefits for OC. Tober testified that, with regard to hourly employees, SPDs were
“periodically” mailed to participants, and that with regard to salaried employees, SPDs
were “available online” and that their availability was “communicated to all employees.”
(R. 134-2 at 12-13.) Tober also testified that “some were at plant locations that would
have been available.” (R. 134-2 at 13.) In addition, one salaried-employee plaintiff said
that she received a notice (apparently by email) about once a year that stated that a plan
existed and “told you how to find the entire plan if you wanted to,” though the notice did
not contain a link to the entire SPD and she never actually looked up the entire SPD. (R.
54-20 at 15-16.) The majority concludes that this is sufficient to establish that Plaintiffs
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had actual knowledge of the information contained in the SPDs: “we see no material
distinction between being directly handed plan documents and being given instructions
on how to access them.” (Opinion at 10.)

Although I agree with the majority that a plaintiff’s failure to read an SPD
furnished to him (or other types of willful blindness) do not prevent a plaintiff from
having actual knowledge of the information in the SPD, the record does not adequately
establish that the SPDs were furnished to Plaintiffs. A helpful yardstick is provided by
the ERISA statute and regulations that describe the publication and disclosure
requirements that apply to SPDs. According to 29 U.S.C. § 1024(b),

Publication of summary plan descriptions and annual reports shall be
made to participants and beneficiaries of the particular plan as follows:
(1) The administrator shall furnish to each participant,
and each beneficiary receiving benefits under the plan, a
copy of the summary plan description, and all
modifications and changes referred to in section
1022(a)(1) of this title--

(emphasis added.) 29 C.F.R. § 2520 sheds some light on how an SPD must be
“furnished” to a plan participant. See Leyda v. AlliedSignal, Inc., 322 F.3d 199, 208 (2d
Cir. 2003); Gertjejansen v. Kemper Ins. Companies, Inc., 274 F. App’x 569, 570 (9th
Cir. 2008). The regulation provides that “the plan administrator shall use measures
reasonably calculated to ensure actual receipt of the material by plan participants,
beneficiaries and other specified individuals.” 29 C.F.R. § 2520.104b-1(b)(1). In
particular, “[m]aterial which is required to be furnished to all participants covered under
the plan . . . must be sent by a method or methods of delivery likely to result in full
distribution.” Id. This standard is high. For example,

in-hand delivery to an employee at his or her worksite is acceptable.
However, in no case is it acceptable merely to place copies of the
material in a location frequented by participants. . . . Material distributed
through the mail may be sent by first, second, or third-class mail.
However, distribution by second or third-class mail is acceptable only if
return and forwarding postage is guaranteed and address correction is
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requested. Any material sent by second or third-class mail which is
returned with an address correction shall be sent again by first-class mail
or personally delivered to the participant at his or her worksite.

29 C.F.R. § 2520.104b-1(b)(1). With regard to electronic distribution, the administrator
must

(i) take[] appropriate and necessary measures reasonably calculated to
ensure that the system for furnishing documents–
(A) Results in actual receipt of transmitted information
(e.g., using return-receipt or notice of undelivered
electronic mail features, conducting periodic reviews or
surveys to confirm receipt of the transmitted information)
...

29 C.F.R. § 2520.104b-1(c)(1)(i) & (i)(A). In addition, the plan administrator must
ensure that

(iii) Notice is provided to each participant . . . at the time a document is
furnished electronically, that apprises the individual of the significance
of the document when it is not otherwise reasonably evident as
transmitted (e.g., the attached document describes changes in the benefits
provided by your plan) and of the right to request and obtain a paper
version of such document . . .

29 C.F.R. § 2520.104b-1(c)(1)(iii).

Thus, ERISA’s requirements for furnishing SPDs to plan participants are quite
demanding. It would be strange, indeed, for a plaintiff in an ERISA suit to be
understood to have actual knowledge of the information in an SPD that was not
sufficiently furnished to the plaintiff under ERISA’s own standards. Because it is not
clear from the record whether the ERISA requirements were met, I cannot conclude that
there is no genuine issue whether Plaintiffs possessed actual knowledge of the
information contained in the SPDs.
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III.

Despite the above observations, I agree with the result of the majority opinion.
Even without the SPD information, Plaintiffs knew that they had investments that were
protected by ERISA’s requirements. And, by October 2000 they knew about the
bankruptcy and knew that OC stock was nearly worthless. They also knew that their
investments had not been liquidated or moved to another fund before they had lost their
value. I understand these facts to be the “facts . . . that constituted the alleged violation”
under this court’s standard as articulated in Wright v. Heyne, 349 F.3d 321, 330 (6th Cir.
2003).