The U.S. Supreme Court on Wednesday allowed a class action lawsuit against Intel that challenges the chipmaker over allegations it made high-risk investments that cost retirement plan beneficiaries hundreds of millions of dollars.
The high court unanimously ruled that Intel cannot void the lawsuit brought before a lower court by former Intel engineer Christopher Sulyma.
Intel declined to comment on the ruling.
Justices rejected Intel’s argument that Sulyma's lawsuit had been filed too late. They said that a plaintiff suing a retirement fund doesn’t need to have actual knowledge of fraud, a condition which would have triggered a shorter deadline for bringing a suit.
The Employee Retirement Income Security Act of 1974 requires plaintiffs with actual knowledge of an alleged fiduciary breach to file a suit within three years of gaining that knowledge, instead of the normal six years. Sulyma worked at Intel from 2010 to 2012 and participated in two retirement plans. He sued the administrators of the plans in 2015, arguing they had “managed the plans imprudently,” the justices wrote.
Sulyma objected to the investment of his retirement funds into assets with high fees about the time of the stock market decline in 2008. As the stock market rebounded, his funds lagged behind other funds, including index funds.
Intel argued the suit was untimely because Sulyma filed it more than three years after administrators disclosed their investment decisions to him. Sulyma testified he hadn’t remembered reviewing the relevant disclosures and was unaware of the allegedly imprudent investments while at Intel.
The Supreme Court held that a plaintiff doesn’t need actual knowledge under the 1974 act. “To meet…the actual knowledge requirement, the plaintiff must in fact have become aware of that information,” the court said.
The U.S. District Court for the North District of California originally ruled in favor of Intel, but the Ninth Circuit Court of Appeals reversed, saying that Sulyma could have known about the investments from the disclosures but that his testimony created a dispute as to when he gained actual knowledge.