SECRETARY, U.S. DEPARTMENT OF LABOR, Plaintiff - Appellant,
ROBERT N. PRESTON, TPP HOLDINGS, INC., d.b.a. The Preston Partnership, LLC, TPP HOLDINGS INC., EMPLOYEE STOCK OWNERSHIP PLAN Defendants - Appellees.
from the United States District Court for the Northern
District of Georgia D.C. Docket No. 1:14-cv-04122-WBH
WILSON and NEWSOM, Circuit Judges, and MORENO, [*] District Judge.
NEWSOM, CIRCUIT JUDGE
hornbook law that rights of all kinds-even constitutional
ones-can be waived. For instance, a criminal defendant might
for one reason or another elect to waive his Fourth Amendment
freedom from unreasonable searches, his Fifth Amendment
privilege against self-incrimination, or his Sixth Amendment
right to the assistance of counsel. In the same way, a civil
litigant can waive his Seventh Amendment right to a jury
trial or his right, rooted in the Fourteenth Amendment, to be
free from overbroad assertions of personal jurisdiction. So
too, a sovereign State may choose to waive its Eleventh
Amendment immunity from suit.
case also concerns waiver-but not of some fundamental
constitutional guarantee. Rather, this case is about …
the Employee Retirement Income Security Act of 1974,
affectionately (and hereinafter) known as "ERISA."
In particular, this interlocutory appeal requires us to
determine whether a defendant is capable of expressly waiving
the six-year statute of repose contained in ERISA Section
413(1), 29 U.S.C. § 1113(1)-or whether instead, the
protection provided by Section 1113(1) is so essential, so
fundamental, that it (seemingly almost alone among personal
rights) is inherently indefeasible and unwaivable.
won't bury the lede. In response to the district
court's certified question, we answer yes-Section
1113(1)'s statute of repose is subject to express waiver.
Preston was the owner and CEO of TPP Holdings, Inc., which
established the TPP Employee Stock Ownership Plan in 2004 to
provide retirement income for TPP's employees. The
Secretary of Labor brought this ERISA action alleging that
Preston, who also served as the Plan's trustee, breached
his fiduciary duties and engaged in prohibited self-dealing
when, in 2006 and then again in 2008, he knowingly caused the
Plan to purchase his own TPP stock at an inflated price. The
Secretary separately alleged that Preston, TPP, and the Plan
engaged in assorted other misdeeds (terminating plan
participants, failing to pay required distributions, etc.) in
to filing suit, the Secretary notified Preston, TPP, and the
Plan (together, "the defendants") of his claims,
and the parties attempted to negotiate a
settlement. While the negotiations were ongoing, the
parties entered into a series of "tolling
agreements" of the sort that are increasingly common in
civil litigation. The first such agreement was executed in
August 2011; it was then extended three times over the next
few years. The final extension, which was inked in May 2014,
extended the Secretary's filing deadline until December
of the tolling agreements, the Secretary offered to delay
filing any action until a specified date in exchange for the
defendants' pledge not to raise a timeliness defense in
the event the Secretary later sued. In particular, the
defendants broadly stipulated that, as to any suit filed by
the Secretary during the range of dates specified in the
agreements, they would "not assert in any manner the
defense of statute of limitations, the doctrine of waiver,
laches, or estoppel, or any other matter constituting an
avoidance of the Secretary's claims that is based on the
time within which the Secretary commenced such action."
The defendants have acknowledged that they entered into the
tolling agreements knowingly, willingly, and voluntarily.
See Oral Arg. Tr. at 14:10.
parties ultimately failed to reach a settlement, and the
Secretary filed this action on December 30, 2014, one day
before the expiration of the agreed-upon tolling period.
Despite their agreements not to assert a time bar, the
defendants moved to dismiss the Secretary's complaint on
the ground that all claims arising from alleged violations
that occurred before December 30, 2008- six years prior to
the complaint's filing-were foreclosed by ERISA's
limitation-of-actions provision. That statute, which is at
the heart of this case, provides as follows:
No action may be commenced under this subchapter with respect
to a fiduciary's breach of any responsibility, duty, or
obligation under this part, or with respect to a violation of
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.
response to the Secretary's contention that they had
expressly waived their right to assert a timeliness defense,
the defendants asserted that the tolling agreements were
invalid and unenforceable. Section 1113(1), they said,
"establishes an unyielding statute of repose" that
cannot be waived, even by a party's express agreement.
district court agreed with the defendants and held that
because Section 1113(1) constitutes a statute of repose,
rather than an ordinary statute of limitations, it "is
not subject to waiver-even express waiver." Accordingly,
the court dismissed all of the Secretary's claims arising
from events that occurred before December 30, 2008.
Secretary moved for reconsideration, arguing (among other
things) that the district court's "categorical"
rule that statutes of repose cannot be waived contradicts
governing precedent, which instead requires a determination
whether the applicable time bar is
"jurisdictional." The district court denied the
motion, and the Secretary sought leave to file an
interlocutory appeal pursuant to 28 U.S.C. § 1292(b).
The district court granted permission and certified the
following question, which this Court ...