Brown v. Owens Corning Investment Review Committee

Summarized by Geoffrey Peters , Weltman, Weinberg & Reis Co., LPA
15 years 5 months ago

Citation:

6th Circuit Court of Appeals, Case No. 09-3692 (September 27, 2010)

Tag(s):

6th Circuit

Ruling:

The 6th Circuit Court of Appeals affirmed a judgment of the district court in holding that a lawsuit filed by former employees of Owens Corning against the fiduciaries of their retirement plan was time barred by ERISA's three-year statute of limitations. The 6th Circuit affirmed the finding that the Plaintiff's had actual knowledge of all the relevant facts more than three years before filing the lawsuit. The 6th Circuit held that Plaintiff's were aware that its investment in the Owens Corning Stock Fund was virtually worthless at the time of the bankruptcy filing in 2000 and "someone" was exercising oversight of the plan. It was not necessary to know the specific party to bring the lawsuit against as Plaintiffs are permitted to bring suit against unnamed "John Doe" defendants until discovery reveals the identity of the party. The complaint filed in September 2006 was outside the statute of limitations period. The 6th circuit also rejected the argument that the statute of limitations should be equitably tolled during the time one of the named Plaintiff's proof of claim was pending in the bankruptcy case as the Plaintiff had notice of her rights to file suit under ERISA.

Procedural context:

The 6th Circuit Court of Appeals heard this appeal from a final judgment of the district court on Defendant's motion for summary judgment. The district court originally denied the motions for summary judgment but reversed itself on Defendant's motion for reconsideration.

Facts:

Owens Corning sponsored two defined-contribution retirement plans. In the 1990's the plan mandated that certain contributions must be invested in the Owens Corning Stock Fund. In late September 2000, plan participants were notified that the Owens Corning Stock Fund would be closed to new investments and participants could immediately transfer all prior Owens Corning contributions into other investment funds. Owens Corning filed for bankruptcy on October 5, 2000. The Owens Corning Stock Fund lost tens of millions of dollars between 1999 and the date of the bankruptcy filing. Former employees of Owens Corning filed a class action lawsuit against the fiduciaries of their retirement plan on September 1, 2006. Plaintiff's contended that Defendant's breached their fiduciary duty to the plan and plan participants by continuing to allow Owens Corning Stock Fund as an investment option in the plan and by placing a limitation of the ability of participants to transfer previously invested funds out of the Owens Corning Stock Fund. One of the named Plaintiff's in the class action suit, Lindhuber, filed a proof of claim in the Owens Corning bankruptcy case. Plaintiff argued that the statute of limitations should be equitably tolled for Lindhuber for the time her proof of claim was pending in the bankruptcy case.

Judge(s):

Gilman (Cole joined), (White, concurring)

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