A decade-long court case on whether Edison International’s financial advisors and investment committee breached their fiduciary duties to retirement plan participants came to an end Wednesday when the U.S. District Court for the Central District of California ruled that the firm breached its fiduciary obligations by not switching participants to lower-fee institutional mutual fund shares.
In the matter of Tibble v. Edison International, the court ruled that the defendant breached its fiduciary obligations of prudence and monitoring in the selection of all 17 mutual funds at issue, with damages to be calculated “from 2011 to the present, based not on the statutory rate, but by the 401(k) plan’s overall returns” during this period.
“After 10 years of litigation, and a unanimous favorable ruling by the U.S. Supreme Court, we are pleased that the court agreed with our position,” said Jerry Schlichter of Schlichter, Bogard & Denton, the attorney for the plaintiffs, in a statement. “We look forward to continuing our work on behalf of the employees and retirees involved in this case, so that they may soon see a resolution and find relief.”
Tibble v. Edison International is the only 401(k) excessive fee case taken by the Supreme Court.
The case started in the U.S. District Court for the Central District of California and made its way to the U.S. Supreme Court in 2015. The high court ruled unanimously in favor of the employees.
After the Supreme Court ruling, the Court of Appeals for the Ninth Circuit ruled unanimously, in a 10-judge en banc decision, in favor of plaintiffs that the District Court should award damages to the plaintiffs.
“With yesterday’s ruling, the employees and retirees move one step closer to a final judgment and damages awarded,” Schlichter said.