Full opinion text
MEMORANDUM AND ORDER RE: CROSS-MOTIONS FOR PARTIAL SUMMARY JUDGMENT, DEFENDANTS’ MOTION TO STRIKE CLASS ACTION ALLEGATIONS, AND PLAINTIFFS’ MOTION TO REMOVE PLAN TRUSTEES phries, Hallie Lavick, Michael McNair, Sonya Pace, Judy Seay, Nancy Russell Stanton, Cindy Worth, and Kathleen Ellis filed these consolidated actions against defendants Hollister, Inc. (“Hollister”), Hollister Employee Share Ownership Trust (“HolliShare”), The Firm of John Dickinson Schneider, Inc. (“JDS”), Samuel Brilliant, Richard I. Fremgen, Donald K. Groneberg, Charles H. Gunderson, Alan F. Herbert, James A. Karlovsky, Lori Kelleher, James J. McCormack, Charles C. Schellentrager, Loretta L. Stempinski, Michael C. Winn, and Richard T. Zwirner alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1144. Presently before the court are plaintiffs’ and defendants’ cross-motions for partial summary judgment, defendants’ motion to strike class action allegations, and plaintiffs’ motion to remove the plan trustees. WILLIAM B. SHUBB, District Judge. Plaintiffs James P. DeFazio, Theresa Beetham, Brenda DiMaro, DeLane Hum- I. Factual and Procedural Background In a fourteen-month period between 2004 and 2005, three groups of the current makeup of plaintiffs — former participants and beneficiaries of HolliShare, a defined contribution plan established by Hollister (.see 1st Zwirner Decl. (Docket No. 399) ¶ 7) — independently filed complaints against defendants Hollister, its parent company JDS, the HolliShare trustees, and various members of the boards of directors of both companies. The cases were consolidated by court order on May 25, 2006. (Docket No. 87.) Currently, the plaintiffs are divided into two groups based upon the two operative complaints in this litigation. Ten of the plaintiffs (“De-Fazio/DiMaro plaintiffs”) are represented by the same counsel and filed their Fifth Amended Complaint (“HAC”) on July 22, 2008. (See Docket No. 368.) Ellis, the only plaintiff represented by separate counsel, filed her Fourth Amended Complaint (“FAC”) on January 23, 2008. (See Docket No. 314.) Though they differ in some respects — most notably, the HAC contains class action allegations while the FAC does not — the allegations asserted against defendants are substantially similar in both the HAC and FAC. The claims in this case are based upon the alleged misconduct by the fiduciaries of HolliShare. HolliShare is funded through contributions by Hollister from the company’s profits; participants are not permitted to make personal contributions. (See Defs.’ 1st App’x (Docket Nos. 486-488) Ex. 1 (“Trust Instrument”) §§ 6.01, 6.02.) Hollister is a privately-held Illinois corporation that manufactures and markets healthcare products. (1st Zwirner Decl. (Docket No. 399) ¶¶ 4, 8.) It is the operating subsidiary of JDS, an Illinois corporation that holds all of Hollister’s capital stock. (Id. ¶ 5.) Consistent with the terms of the HolliShare Trust Instrument, the plan’s principal investment is common shares of JDS. (Trust Instrument § 11.01(1); 2d Zwirner Deck (Docket No. 494) ¶ 8.) In their papers on the instant motions, the parties have divided plaintiffs’ claims into three rough categories according to the three primary factual bases upon which they are premised: the prohibited transactions between HolliShare and JDS, the 1999 Transaction (a series of events culminating in the transfer of all of the preferred shares of JDS to a new trust), and the DeFazio-Ellis divorce proceedings. Though these categorizations overlap in certain areas, given the complexity of the factual issues in this case, the court will follow the convention adopted by the parties. A. Prohibited Transactions JDS has two classes of shares, preferred and common, neither of which has a generally recognized public market. (2d Zwirner Deck ¶¶ 10-11.) The JDS Articles of Incorporation (“JDS Articles”) provide several restrictions on JDS shares relevant to this case. First, pursuant to article five, paragraph II.C (“paragraph II.C”), only certain persons and entities are entitled to own JDS shares, including holders of shares as of May 5, 1978, employees of JDS and/or Hollister, and any deferred benefit plan maintained by JDS and/or Hollister. (Defs.’ 1st App’x Ex. 4 (“JDS Articles”) 9.) Second, article five, paragraph II.D (“paragraph II.D”) restricts the manner in which holders of JDS stock may transfer ownership. Specifically, paragraph II.D.2 gives JDS a first right of refusal by requiring that any holder of JDS stock who intends to transfer one or more shares to another must first offer to sell those shares to JDS. (JDS Articles 10.) Paragraph II.D.3 further provides that the price paid for any common share purchased by JDS “shall be its book value as of the end of the calendar month in which the Repurchase Date occurs.... The book value of each common share shall be computed in accordance with generally accepted accounting principles ....” (Id. 12.) Despite these requirements, paragraph II. D.7 provides that: “Under exceptional circumstances and in the discretion of the Corporation’s Board of Directors, shares may be repurchased by the Corporation at such other times, upon such other terms, in such other manners, over such other periods of time, or on such other conditions as the Corporation and the owner or holder of such shares may from time to time agree.” (JDS Articles 15.) JDS common shares are HolliShare’s primary investment, and HolliShare must sell those shares in order to raise the cash needed to pay benefits to participants and beneficiaries. (3d Zwirner Decl. (Docket No. 515) ¶ 7.) Since the mid-1980s, HolliShare has sold its holdings of JDS common shares to JDS pursuant to the “exceptional circumstances” provision of paragraph II. D.7, not the first right of refusal embodied in paragraph II.D.2. (Pis.’ Stmt, of Undisputed Facts Ex. B (“Zwirner Dep.”) 237:19-238:8; 3d Zwirner Deck ¶¶9, 16, 18.) Defendants contend that HolliShare and JDS entered into an agreement (“mid-80s buy-back agreement”) that has since governed JDS’s repurchase of common shares from HolliShare in order to avoid certain complications. (See 3d Zwirner Deck ¶ 16.) The JDS Articles provide that when JDS repurchases shares pursuant to the first right of refusal, it is obligated to pay a only minimal amount in cash (set originally at $5,000 and then increased to $250,000 in 1999) and can pay the remainder with a promissory note. (JDS Articles 12, 44.) Because HolliShare, as an ERISA plan, is prohibited from accepting a promissory note as payment from an employer, see 29 U.S.C. § 1106(a)(1)(B), and HolliShare’s cash needs often exceeded the $5,000 and $250,000 minimums, HolliShare could not have sold its shares to JDS under the terms of that provision. (3d Zwirner Decl. ¶ 15.) If JDS did not waive its right of refusal, HolliShare would thus have been unable to sell its JDS stock to anyone pursuant to paragraph II.D.2. (Id.) To avoid this problem, and to allow JDS to plan ahead for its cash flow needs, HolliShare and JDS agreed in the mid-1980s that: 1) JDS would repurchase HolliShare’s common shares entirely for cash (i.e., would not tender promissory notes); 2) the price employed would be the most recent audited December 31 per share book value rather than the month-end book value from the date of the transaction, as provided in paragraph II.D.3; and 3) such transactions would take place only once a year. (3d Zwirner Decl. ¶ 16.) Plaintiffs contend that these repurchases of JDS common shares from HolliShare using book value violated defendants’ statutory duties under ERISA. Particularly in light of evidence that JDS common shares may have had a value in the “outside world” of up to three-times book value (Pis.’ Stmt. Disputed Facts Ex. F (“Winn Dep.”) 91:15-92:13), plaintiffs assert that defendants breached their fiduciary duties, 29 U.S.C. 1104(a)(1)(B), and violated the provision on prohibited transactions, id. § 1106(a)(1)(A). B. 1999 Transaction HolliShare does not invest in JDS preferred shares. John Schneider, the founder of JDS, owned a majority of the outstanding preferred shares until he placed all of his holdings into a trust in 1977 (“1977 Schneider Trust”). (2d Zwirner Decl. ¶ 24; Defs.’ 1st App’x Ex. 3 at 2-3.) Because those shares comprised a controlling interest in JDS, the 1977 Schneider Trust, through its trustees, effectively controlled JDS. (2d Zwirner Decl. ¶ 24.) After 1981, defendants Winn, Stempinski, and Zwirner became trustees of the trust. (Id. ¶ 29.) The terms of the 1977 Schneider Trust provided that it would expire on April 21, 2001. (Defs.’ 1st App’x Ex. 3 at 11.) Upon its expiration, the trust called for its corpus of preferred shares to be distributed to employees of Hollister who then owned common shares and agreed to abide by certain principles in governing JDS. (Id.) These employee-beneficiaries would have received a number of preferred shares in proportion to their relative holdings of JDS common shares. (Id.) Several years before the 1977 Schneider Trust was set to expire, however, its trustees considered the impact of the distribution of preferred shares on the company. (2d Zwirner Decl. ¶ 32.) Defendants contend that the trustees perceived several adverse effects from the distribution, including the possibility that a small number of employees might form an insulated controlling bloc, the prospect that the employees might vote to take JDS public, and the potential that votes to appoint members of the JDS and Hollister boards of directors could lead to factionalism in the company. (Id.) Ultimately, Winn, Stempinski, and Zwirner proposed that a new trust (“1999 Preferred Share Trust”) be created to hold the preferred shares that would otherwise be distributed to the employee beneficiaries of the 1977 Schneider Trust. (See 2d Zwirner Decl. ¶ 34; Winn Decl. (Docket No. 492) ¶ 28.) On February 17, 1999, they sent a letter (“1999 Proposal Letter”) to all employees of Hollister who then owned JDS common shares, stating that the trustees believed that the 1999 Preferred Share Trust was desirable to maintain the independent and employee-owned nature of Hollister and adherence to the principles of John Schneider. (Defs.’ 1st App’x Ex. 5 (“1999 Proposal Letter”) at 2; 2d Zwirner Decl. ¶ 37.) The letter requested that the recipients transfer the preferred shares to which they would otherwise be entitled to the new trust. (Id.) The letter further informed recipients that they would either need to sign an enclosed “Agreement to Vote,” which stated that the signatory agreed to adhere to the principles specified by the 1977 Schneider Trust, or the “Consent,” which stated that the signatory agreed to transfer the preferred shares he or she would have been entitled to receive to the 1999 Preferred Share Trust. (1999 Proposal Letter 27; id. Enclosures 4, 5.) On April 21, 1999, all of the recipients of the 1999 Proposal Letter agreed to transfer their prospective preferred shares to the 1999 Preferred Share Trust. (Zwirner Decl. ¶ 43; Winn Decl. ¶ 41.) In order to effect the transfer of shares between the 1977 Schneider Trust and the 1999 Preferred Share Trust at the expiration of the former in 2001, however, the JDS Articles had to be amended to allow the 1999 Preferred Share Trust to own JDS shares. Because the JDS Articles provided that any changes to the stock restrictions required a two-thirds vote of all classes of shares — rather than simply a majority of all outstanding stock (JDS Articles 27)— votes from the shares held by HolliShare (approximately 69% of all common shares) were necessary to effect the amendment. (See Thielitz Decl. (Docket No. 493) ¶ 4; 2d Zwirner Decl. ¶ 49.) At a meeting on April 28, 1999, the HolliShare trustees — who at that time were Zwirner, Karlovsky, and McCormack — agreed to vote HolliShare’s JDS common shares in favor of the amendment to the JDS Articles. Ultimately, at the April 30, 1999 JDS shareholders’ meeting, JDS shareholders voted unanimously to amend the JDS Articles, and those amendments were filed with the Illinois secretary of state on June 14, 1999. (2d Zwirner Decl. ¶ 65; JDS Articles 51-52.) The propriety of the vote to approve the amendments, as well as the adequacy of the trustees’ decisionmaking process, form the basis of plaintiffs’ claims related to the 1999 Transaction. Plaintiffs essentially argue that, but for the 1999 Transaction, HolliShare would have become the majority shareholder of JDS and its holdings would have experienced an increase in value. For purposes of the instant motions, plaintiffs contend that all of the HolliShare fiduciaries who voted in favor of the 1999 Transaction violated ERISA by engaging in a self-dealing transaction, 29 U.S.C. § 1106(b), and breaching their fiduciary duties, id. §§ 1104,1105. C. DeFazio-Ellis Divorce Proceedings Particular to plaintiffs DeFazio and Ellis, the HAC and FAC also assert claims against all defendants based upon Hollister’s compliance with a series of domestic relations orders (DROs) issued by the Superior Court of Sacramento as part of DeFazio and Ellis’s divorce proceedings. (HAC ¶¶ 132-34; FAC ¶¶ 69-71.) The marriage of DeFazio and Ellis was dissolved by court order on March 1, 1999. (Defs.’ Req. Judicial Notice (Docket No. 530) Ex. A at 14.) In that order, the Superior Court reserved decision for a later date on the division of Ellis’s retirement assets and the amount of DeFazio’s share of those assets that would be held as security for the payment of child support. (Id. at 6-8.) The issue of the division of Ellis’s retirement account with HolliShare was finally determined by a March 29, 2002 stipulation and order (“March 2002 order”). In that order, entitled “Stipulated Qualified Domestic Relations Order,” DeFazio and Ellis agreed that DeFazio was entitled to one-half the value of Ellis’s HolliShare account as community property, and HolliShare was ordered to hold DeFazio’s share in a segregated account. (Req. Judicial Notice Ex. G (“March 2002 order”) ¶¶ 4-5.) The order further provided that the Superior Court “retains jurisdiction over Husband’s Share in the entire amount up to One Million Five Hundred Thousand and No/100 Dollars ($1,500,-000.00), pending resolution of child support and property settlement issues between Husband and Wife,” and ordered HolliShare to retain possession of those funds “pending further order of this court.” {Id. ¶ 7.) The March 2002 order also stated that “this Order is intended to be a Qualified Domestic Relations Order, as that term is defined in [the Internal Revenue] Code section 414(p) and section 206(d)(3) of the Employee Retirement Income Security Act.” {Id. 1:26-28.) Pursuant to the March 2002 order, the Superior Court issued six subsequent orders ordering HolliShare to distribute payments to Ellis that comprised child support payments that DeFazio failed to make and advances on future anticipated child support obligations, as well as associated attorneys fees and costs for the collection of past-due child support payments. (See id. Exs. I (order dated August 5, 2002), J (order dated April 2, 2003), K (order dated May 4, 2004), N (order dated June 20, 2004), T (order dated November 9, 2005), U (order dated December 13, 2007).) Presently before the court are the parties’ seven separate motions: 1) defendants’ motion to strike plaintiffs’ class action allegations (Docket No. 495); 2) defendants’ motion for partial summary on claims barred by the statute of limitations (Docket No. 483); 3) defendants’ motion for partial summary judgment on the fiduciary status of the Hollister Board and JDS (Docket No. 484); 4) plaintiffs’ motion for partial summary judgment on claims related to the prohibited transactions and 1999 Transaction (Docket No. 477); 5) defendants’ motion for partial summary judgment on the claims related to the 1999 Transaction (Docket No. 489); 6) DeFazio’s motion for partial summary judgment on claims related to the divorce proceedings (Docket No. 474); and 7) plaintiffs’ motion to remove the plan trustees (Docket No. 475). Before turning to the merits of these motions, the court notes that despite the submission of twenty briefs and hundreds of pages of evidence in support of the instant motions, the parties have declined to address numerous claims and have chosen not to discuss specific arguments and factual issues. Plaintiffs in particular expressly chose to withhold certain theories and evidence in their motions. (See Docket No. 537 at 20:3-9) (“[PJlaintiffs are smarter than that. Our motion for partial summary judgment of the prohibited transaction claims was tailored to narrow questions of law.... We also intentionally avoided disputed factual questions .... ”). Even assuming the wisdom of this strategy, the parties have pursued it haphazardly, creating a disjointed record and often confusing each other as to whether certain issues had been raised or whether plaintiffs had abandoned particular claims. The rationale underlying this strategy is not immediately apparent. Nevertheless, the court shall confine its analysis to the particular theories and arguments presented in the parties’ moving papers. II. Discussion A. Motion to Strike Class Allegations Defendants move to strike the DeFazio/DiMaro plaintiffs’ class allegations, which were first alleged in the Fourth Amended Complaint filed on January 23, 2008. (See Docket No. 312 ¶¶ 13-20.) With discovery now closed and the trial date approaching, plaintiffs have not yet moved for class certification, and defendants contend that they have suffered prejudice as a result of the DeFazio/DiMaro plaintiffs’ delay in doing so. (See Docket No. 495 2:20-26); Siskind v. Sperry Ret. Program, Unisys, 47 F.3d 498, 503 (2d Cir.1995) (“[Fjundamental fairness requires that a defendant named in a suit b.e told promptly the number of parties to whom it may ultimately be liable for money damages.” (citing McCarthy v. Kleindienst, 741 F.2d 1406, 1412 (D.C.Cir.1984))); see also Sterling v. Envtl. Control Bd. of N.Y., 793 F.2d 52, 58 (2d Cir.1986) (holding that a plaintiffs “failure to move for class certification until a late date is a valid reason for denial of such a motion”). In response to defendants’ motion to strike, the DeFazio/DiMaro plaintiffs submitted a statement of non-opposition. (Docket No. 533.) Having considered defendants’ arguments and in light of plaintiffs’ non-opposition, the court will grant defendants’ motion to strike the DeFazio/DiMaro plaintiffs’ class allegations. See, e.g., Rones v. N.A.A.C.P., 170 F.R.D. 80, 82 (D.D.C.1997); Roberson v. Danny Ontiveros Trucking, No. 08-552, 2008 WL 4809960, at *6 (E.D.Cal. Nov. 3, 2008) (O’Neill, J.); Valdez v. St. Francis Mem’l Hosp., No. 78-2174, 1979 WL 146, at *1 (N.D.Cal. Jan. 17, 1979); see also Read v. Input/Output, Inc., No. 05-108, 2005 WL 2086179, at *2-3 (S.D.Tex. Aug. 26, 2005). Accordingly, paragraphs twelve through nineteen of the HAC shall be stricken. B. Cross-Motions for Partial Summary Judgment Summary judgment is proper “if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the nonmoving party’s favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Id. at 256, 106 S.Ct. 2505. On issues for which the ultimate burden of persuasion at trial lies with the nonmoving party, the moving party bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the nonmoving party’s case or by demonstrating that the nonmoving party cannot produce evidence to support an essential element of its claim or defense. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir.2000). Once the moving party carries its initial burden, the nonmoving party “may not rely merely on allegations or denials in its own pleading,” but must go beyond the pleadings and, “by affidavits or as otherwise provided in [Rule 56,] set out specific facts showing a genuine issue for trial.” Fed.R.Civ.P. 56(e); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Valandingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir.1989). On those issues for which it will bear the ultimate burden of persuasion at trial, the nonmoving party “must produce evidence to support its claim or defense.” Nissan Fire, 210 F.3d at 1103. In its inquiry, the court must view any inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The court also may not engage in credibility determinations or weigh the evidence, for these are jury functions. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. When the parties submit cross-motions for summary judgment, the court must consider each motion separately to determine whether either party has met its burden, “giving the nonmoving party in each instance the benefit of all reasonable inferences.” ACLU of Nev. v. City of Las Vegas, 333 F.3d 1092, 1097 (9th Cir.2003); see also Fair Hous. Council v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001) (when parties submit cross-motions for summary judgment, “each motion must be considered on its own merits” and “the court must review the evidence submitted in support of each cross-motion”). 1. Defendants’ Motion on the Statute of Limitations Defendants move for partial summary judgment on several of plaintiffs’ claims as time barred. ERISA’s statute of limitations provides: 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 (emphasis added). Unless the “fraud or concealment” exception applies, a plaintiff must file a claim within six years of the date of the last act constituting a part of the alleged violation, regardless of when the plaintiff actually learned of the violation. Kanawi v. Bechtel Corp., 590 F.Supp.2d 1213, 1225 (N.D.Cal.2008). “The fraud or concealment exception applies only when an ERISA fiduciary either misrepresents the significance of facts the beneficiary is aware of (fraud) or ... hides facts so that the beneficiary never becomes aware of them (concealment).” Barker v. Am. Mobil Power Corp., 64 F.3d 1397, 1401 (9th Cir.1995) (quoting Radiology Ctr., S.C. v. Stifel, Nicolaus & Co., 919 F.2d 1216, 1220 (7th Cir.1990)); see Ranke v. Sanofi-Synthelabo Inc., 436 F.3d 197, 204 (3d Cir.2006) (stating that an ERISA fiduciary must “have taken affirmative steps to hide an alleged breach of fiduciary duty from a beneficiary in order for the ‘fraud or concealment’ exception to apply”). Some courts have recognized that the “fraud or concealment” exception to § 1113 incorporates the common law doctrine of “fraudulent concealment.” Barker, 64 F.3d at 1402. Under that common law doctrine, passive concealment alone may toll the statute of limitations if the defendant has a duty to disclose material information. Thorman v. Am. Seafoods Co., 421 F.3d 1090, 1092 (9th Cir.2005). Courts that have considered the question, however, have rejected the doctrine of passive concealment as applied to § 1113. See, e.g., Larson v. Northrop Corp., 21 F.3d 1164, 1174 (D.C.Cir.1994) (“While a fiduciary’s mere silence could, in some circumstances, amount to fraud, it would still fall short of the fraudulent concealment that courts have required for purposes of § 1113.”); Schaefer v. Ark. Med. Soc’y, 853 F.2d 1487, 1491 (8th Cir.1988) (holding that active concealment under § 1113 requires “more than merely a failure to disclose”). The Ninth Circuit in Barker also implicitly found passive concealment insufficient to toll the six-year statute of limitations. In holding that the defendants in that case did not engage in “fraud or concealment,” the Barker court focused only on whether the defendants had affirmatively concealed their breach, see 64 F.3d at 1401, even though the Court of Appeals recognized that an ERISA fiduciary generally has a duty to disclose accurate information to beneficiaries, see id. at 1403 (noting the fiduciary’s duty “to convey complete and accurate information material to the beneficiary’s circumstance”). The “fraud or concealment” exception, therefore, does not apply simply because an ERISA fiduciary fails to disclose material information. a. Amendments to the JDS Articles Defendants first move for summary judgement on plaintiffs’ claims based upon HolliShare trustees’ votes in favor of amending the JDS Articles in 1978, 1980, 1984, and 1999. (Docket No. 483 7:9-16.) According to the complaints, defendants’ breached their fiduciary duties by voting for these amendments, which allegedly harmed HolliShare’s assets. For example, the 1978 amendments reinstated the stock transfer restrictions on repurchases of JDS common shares. (HAC ¶ 66; FAC ¶ 50.) The 1980 amendment allegedly reduced JDS cash reserves and thus JDS’s ability to repurchase HolliShare’s holdings, while the 1984 amendment allegedly reduced the reliability of JDS audits. (See HAC ¶¶ 67-68; FAC ¶¶ 51-52.) The 1999 amendments- — the votes for the last of which were cast on April 30, 1999 — indemnified corporate directors from suit by shareholders and prohibited any natural persons from owning more than 10% of JDS stock. (See HAC ¶¶ 69-70, 76; FAC ¶¶ 53; Thielitz Decl. ¶ 40.) The first of the complaints in this consolidated action was filed on July 15, 2004. (Docket No. 1.) However, the first complaints that asserted claims related to these amendments were not filed until April 19 and 20, 2007 (see Docket Nos. 182-183), more than six years after the vote for the last amendment at issue. Based on the record before the court, there is no evidence from which a reasonable inference could be drawn that defendants took steps to conceal any of the votes in favor of the amendments. Furthermore, all of the amendments to the JDS Articles were filed with the Illinois Secretary of State. (See JDS Articles 6, 32, 40, 42, 49.) Though it does not appear that HolliShare fiduciaries affirmatively disclosed to beneficiaries and participants that they had voted HolliShare’s holdings of JDS common shares in favor of these amendments, such passive concealment does not qualify for the “fraud or concealment” exception of § 1113. Accordingly, because there is no dispute that the first complaints to assert claims based on votes in favor of amendments to the JDS Articles were filed after the six-year limitations period expired for the 1978, 1980, 1984, and certain 1999 amendments, defendants are entitled to summary judgment on plaintiffs’ claims based upon any fiduciary’s affirmative vote in favor of these amendments. Nonetheless, plaintiffs have also asserted claims pursuant to 29 U.S.C. § 1105(a)(3), which makes a fiduciary liable for the breach of another fiduciary if “he has knowledge of a breach by such other fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach.” The failure to remedy such a breach constitutes a separate breach of duty. See Dep’t of Labor Opinion No. 76-95 (Sept. 30, 1976) (providing that the failure to take action to cure the breaches of another fiduciary despite knowledge constitutes a separate breach of fiduciary responsibility of a successor fiduciary). Pursuant to § 1113(1)(B), the six-year statutory period does not begin to run in the case of a fiduciary omission until the date on which the fiduciary “could have cured the breach or violation.” One form of remedying the breaches of a co-fiduciary would be to file a suit against the breaching co-fiduciary to restore the losses to the plan or redress any violations of ERISA. See Fernandez v. K-M Indus. Holding Co., 585 F.Supp.2d 1177, 1185 (N.D.Cal.2008) (holding that the statute of limitations did not begin until the last day defendant could have brought an action against co-fiduciaries for engaging in a prohibited transaction). See generally Concha v. London, 62 F.3d 1493, 1500 (9th Cir.1995) (holding that 29 U.S.C. § 1132(a)(2)(3) authorizes suits by fiduciaries against co-fiduciaries seeking relief on behalf of the plan). Assuming HolliShare fiduciaries had actual knowledge of the votes at the time they were cast and that such votes constituted ERISA violations, they would have had three years to file a suit. 29 U.S.C. § 1113(2). With regard to votes in favor of the 1999 amendments at issue, that three-year period would have expired in April 2002, and there is no evidence indicating that any fiduciary took steps to remedy the breach in question. Since the complaints asserting claims based on these votes were filed on April 19 and 20, 2007, plaintiffs’ § 1105(a)(3) claims related to the votes in favor of the 1999 amendments are not time barred. As part of their motion for partial summary judgment, defendants have also requested that Gunderson be dismissed as a defendant from this action because no basis for his liability appears in the record. (Docket No. 483 at 7:17-8:3.) In response, plaintiffs have not identified any conduct for which Gunderson could be liable other' than a purported failure to challenge the 1978 amendments while he served as a HolliShare trustee in 1979. (Docket No. 532 at 14:27-15:8.) Since claims based on the conduct of fiduciaries associated with the 1978 amendments are time barred, however, the court will grant defendants’ request to dismiss Gunderson as a defendant in this action. b. DiMaro, Humphries, and Seay Defendants also move for summary judgment on the claims asserted by DiMaro, Humphries, and Seay related to HolliShare’s use of book value both in the calculation of the balance of individual accounts and in the sales of JDS common shares to JDS (the prohibited transactions). (Docket No. 483 at 8:6-12:11.) They contend that, because these plaintiffs terminated their employment with Hollister more than six years before they filed suit, any claims based on the use of book value that affected these plaintiffs’ retirement accounts are time barred. (Docket No. 483 at 11-23.) The record shows that Humphries’ employment with Hollister terminated on January 3, 1998; Seay’s employment terminated on July 16, 1999; and DiMaro’s employment terminated on September 30, 1999. (Thielitz Decl. ¶ 4.) The statute of limitations must be applied separately to the claims concerning the valuation of individual accounts and the use of book value in the prohibited transactions, as these claims are based on distinct facts. With regard to the use of book value to determine the value of individual accounts, the Trust Instrument provides that, when participants become “former participants” — such as by terminating their Hollister employment (Trust Instrument § 3.14) — their account balances are determined using the most recent December 31 valuation preceding the employee’s termination date. (Id. § 7.02(2).) Those calculations are apparently not made until after the annual audit of JDS year-end financial statements is available, usually by late April or May. (3d Zwirner Decl. ¶ 10.) Thus, the last use of the book value method that affects the determination of a terminated employee’s account occurs in the middle of the year following the December 31 preceding termination. Consequently, the ERISA violations applicable to the claims at issue occurred, at the latest, by late April or May 1998 for Humphries and late April or May 1999 for DiMaro and Seay. DiMaro did not file a complaint until August 25, 2005 (Case No. 05-1726, Docket No. 1), and Humphries and Seay did not assert claims in this action until April 19, 2007 (Second Am. Compl. (Docket No. 183)) — both more than six years after the last valuations of their respective accounts. Furthermore, the “fraud or concealment” exception does not apply, as plaintiffs have not identified acts by defendants that concealed or misrepresented the fact that HolliShare accounts are valued using book value. Accordingly, defendants have demonstrated an absence of genuine issues of material fact concerning the expiration of the statute of limitations for DiMaro’s, Humphries’, and Seay’s claims related to HolliShare’s valuations of their accounts using book value, and defendants are entitled to judgment as a matter of law on those claims. These plaintiffs have also asserted claims pursuant to § 1105(a) (3) based on the valuations of their accounts. As described earlier, fiduciaries with knowledge of the breaches of a co-fiduciary have three years to bring suit to remedy the breach, and there is no indication in the record that any fiduciary took steps to remedy the breaches in question. Even assuming that all HolliShare fiduciaries were aware of the valuations at the earliest possible date, the limitations period did not begin to run for the § 1105(a)(3) claims until three years after the last valuation of the accounts — he., late April or May 2001 for Humphries and late April or May 2002 for DiMaro and Seay. DiMaro’s complaint filed on August 25, 2005, and Seay’s complaint filed on April 19, 2007, were thus timely for their § 1105(a)(3) claims. Humphries’ complaint, filed on April 19, 2007, may have been filed more than six years after the last date on which a co-fiduciary could have brought suit in late April or May 2001, assuming that all HolliShare fiduciaries had knowledge of the valuation when it was made in 1998. However, in the absence of evidence of the exact date on which Humphries’ account was valued in 1998 and the date on which all co-fiduciaries acquired knowledge of that valuation, defendants have not shown that her claims are barred as a matter of law. Accordingly, defendants are not entitled to summary judgment on the § 1105(a)(3) claims asserted by DiMaro, Humphries, and Seay related to the use of book value in calculating the balances of their accounts. With regard to claims based upon the use of book value in the prohibited transactions, the last violation occurred on the date of HolliShare’s annual sale of JDS common shares to JDS preceding the final valuation of DiMaro’s, Humphries’, and Seay’s accounts, as that is the last sale of plan assets that could have affected the balances of those plaintiffs’ accounts. Those sales took place in the middle of the year after the completion of JDS’s year-end audit. (3d Zwirner Deck ¶ 11.) Thus, the last sale that affected Humphries’ account took place in mid-1997, and the last transaction that affected DiMaro’s and Seay’s accounts took place in mid-1998. Because these plaintiffs did not file complaints until more than six years later on August 25, 2005, and April 19, 2007, their claims are time-barred unless acts of “fraud or concealment” tolled the statute of limitations. Plaintiffs seek to toll the statute of limitations by identifying disclosures made to HolliShare participants that appear to misrepresent the circumstances and conditions of sales of JDS common shares by HolliShare to JDS. For example, the HolliShare trustees provide each HolliShare participant with an annual publication entitled “HolliShare Highlights.” (See 2d Zwirner Deck ¶ 25; Defs.’ 1st App’x Ex. 9.) That publication, at least since 1997, has stated that “[JDS common shares] are subject to severe transfer restrictions which require that the Trust [i.e., HolliShare] first offer them to JDS at their book value. To date, JDS has repurchased common shares from the Trust at their book value to provide the plan with needed cash.” (Ellis’s App’x (Docket Nos. 513, 517, 519-20) Ex. E at 7 (1997 edition); Pis.’ Stmt. Undisputed Facts Ex. C at 1 (1999 edition); Defs.’ 1st App’x Ex. 9 at 1 (2005 edition).) Upon reading these two sentences, a recipient of “HolliShare Highlights” could have reasonably believed that HolliShare sold its holdings of JDS common shares pursuant to the sale price specified in the “transfer restrictions” of the JDS Articles. Under paragraph II.D.3 of the JDS Articles, those restrictions require the use of month-end book value from the month in which the transaction occurs. The evidence shows, however, that all sales since the mid-1980s have occurred pursuant to the mid-80s buy-back agreement whereby the prior December 31 book value is used. (Zwirner Dep. 237:19-238:8; 3d Zwirner Deck ¶¶ 9,16,18.) In addition, because this disclosure references the stock restrictions in connection with the sale of JDS common shares, it appears to conceal the fact that HolliShare’s sales to JDS occurred pursuant to a negotiated agreement under the “exceptional circumstances” provision of paragraph II.D.7 rather than the absolute right of first refusal contained in paragraph II. D.2. These disclosures could thus be read to misrepresent not only the sale price used in HolliShare’s sales of JDS common shares, but also the flexibility and discretion HolliShare fiduciaries may have had in setting the terms of those sales. Making inferences in favor of plaintiffs, such misrepresentations could have reasonably hindered DiMaro, Humphries, and Seay from discovering the alleged breaches of fiduciary duty. See Montrose Med. Group Participating Sav. Plan v. Bulger, 243 F.3d 773, 789 (3d Cir.2001) (finding that a fiduciary’s misrepresentations as to the reasons justifying particular transactions could have inhibited the plaintiffs’ capacity to discovery the breaches of fiduciary duty). Defendants have identified another disclosure made to HolliShare participants that appears to disclose the use of the December 31 book value in sales of JDS common shares. (See 3d Zwirner Deck Ex. A at 16.) This other, seemingly conflicting disclosure, however, simply provides additional evidence of a genuine issue of material fact over whether the information provided to HolliShare participants affirmatively misrepresented or concealed facts concerning the use of book value in the prohibited transactions. Despite evidence of “fraud or concealment,” the statute of limitations would not be tolled as to claims asserted against defendants who did not actually engage in the acts designed to conceal the alleged fiduciary breaches. See Barker, 64 F.3d at 1402 (noting that the “fraud or concealment” exception applies only when “the defendant himself has taken steps to hide his breach”). The evidence does not indicate whether all of the defendants played a role in the production or distribution of the disclosures in question. Nevertheless, in light of evidence that at least some of the defendants, including individuals who served as HolliShare trustees, were responsible for the disclosures in question, the court cannot determine as a matter of law that all of the claims related to the use of book value in the sales of JDS common shares asserted by DiMaro, Humphries, and Seay are time barred. Finally, assuming defendants did engage in acts of “fraud or concealment,” the statute of limitations was tolled only until the point at which plaintiffs could have discovered the breaches or misrepresentations with reasonable diligence. See Bulger, 243 F.3d at 788 (“The statute of limitations is tolled until the plaintiff in the exercise of reasonable diligence discovered or should have discovered the alleged fraud or concealment.” (internal quotation marks omitted)); Schaefer v. Ark. Med. Soc’y, 853 F.2d 1487, 1491-92 (8th Cir.1988) (providing that, under the “fraud or concealment” exception to § 1113, the plaintiffs had to show that “despite their exercise of due diligence or care, they were not on notice of [defendant’s] breach of duty”). The evidence indicates that the minutes of the annual JDS Board of Directors meetings state that JDS repurchased JDS common shares from HolliShare at December 31 book value based on the recommendation of the HolliShare trustees. (See, e.g., Pis. Stmt. Disputed Facts Ex. A at H02445.) Those Board minutes could have put plaintiffs on notice of the purported concealment of the facts concerning the circumstances of HolliShare’s sales of JDS common shares. The record, however, does not indicate whether (or when) plaintiffs or other HolliShare participants had access to these JDS Board minutes. Making inferences in favor of plaintiffs, there thus exists a genuine issue of material fact concerning whether DiMaro, Humphries, and Seay could have discovered the alleged breaches and acts of concealment more than six years before they filed their claims in this action, and defendants are not entitled to summary judgment on these claims. Defendants are also not entitled to summary judgment on these plaintiffs’ § 1105(a)(3) claims related to the use of book value in the prohibited transactions for the same reasons that the § 1105(a)(3) claims related to the valuation of plaintiffs’ accounts survive summary judgment. Accordingly, defendants are entitled to summary judgment only on the non- § 1105(a)(3) claims asserted by DiMaro, Humphries, and Seay related to the valuation of their accounts using the book value method. c. Ellis Defendants claim that Ellis had actual knowledge of her claims related to HolliShare’s valuation of her account and the use of book value in the sales of JDS common shares more than three years before she filed her complaint on March 22, 2005. (Docket No. 483 at 9:15-18; see Case No. 05-559, Docket No. 1.) Actual knowledge of a breach or violation starts the shorter three-year statute of limitations pursuant to 29 U.S.C. § 1113(a)(2). See Ziegler v. Conn. Gen. Life Ins. Co., 916 F.2d 548, 552 (9th Cir.1990). Unlike the “fraud or concealment” exception, under which a plaintiffs constructive knowledge may start the statutory period, J. Geils Band Employee Benefit Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1255 (1st Cir.1996), actual knowledge requires that “a plaintiff [] know of the essential facts of the transaction or conduct constituting the violation.” Martin v. Consultants & Adm’rs, Inc., 966 F.2d 1078, 1086 (7th Cir.1992); see Waller v. Blue Cross of Cal., 32 F.3d 1337, 1341 (9th Cir.1994) (holding that knowledge of a transaction that was not inherently a breach of fiduciary duty was not the equivalent of actual knowledge of the breach of the duties of care and loyalty). Whether a plaintiff had actual knowledge more than three years before filing a claim involves a two-step analysis: “first, when did the alleged ‘breach or violation’ occur; and second, when did [plaintiff] have ‘actual knowledge’ of the breach or violation?” Ziegler, 916 F.2d at 550. With regard to Ellis’s claims related to the valuation of her account, the alleged breach or violation occurred in late April or May each year when book value of JDS common shares was used to value her account. As for Ellis’s knowledge of that violation, the evidence shows that Ellis was in receipt of several letters beginning in 1997 discussing HolliShare’s use of book value to calculate account balances. First, on May 25, 1997, Ellis drafted a letter to the HolliShare plan administrator asking whether book value was “a fair representation of the value of the Company.” (Defs.’ 2d App’x Ex. 5 at 45.) Though Ellis wrote the letter, DeFazio, her husband at the time, instructed her what to write. (Ellis’s App’x Ex. I (“Ellis Dep.”) 67:5.) Ellis then received a reply to this letter from Hollister, which stated that “the fair value of HolliShare’s investment in JDS Inc. shares is the book value of such shares,” and that any “hypothesis as to what JDS Inc. might be sold for as an entity is highly speculative and irrelevant given the [Trust Instrument].” (Id. Ex. K at 1.) In addition, on December 24, 1997, Ellis received and read a copy of a September 26, 1997 letter sent by DeFazio to Hollister. (Ellis Dep. 83:14-19.) That letter described DeFazio’s concern over the use of the book value method “as the basis for determining account balances,” and how “all the tax attorneys and pension consultants [DeFazio] discussed this matter with say that this is definitely an incorrect practice.” (Defs.’ 2d App’x Ex. 5 at 49.) The letter goes on to say that the “current value should reflect what the stock would sell for.” (Id.) Finally, in the DeFazioEllis divorce proceeding, Ellis filed a declaration on September 20, 2001, in which she indicated that DeFazio had been labeled a “whistle blower” at Hollister with respect to his investigation into the value of Ellis’s HolliShare account. (Id. at 53.) The collection of letters from 1997 provides sufficient evidence of Ellis’s actual knowledge of her claims related to the use of book value to calculate the balance of her HolliShare account. Even though she testified that she did not understand the distinctions between book value and fair market value at the time she drafted the May 25, 1997 letter (Ellis Dep. 68:1-2), DeFazio’s September 26,1997 letter, which Ellis read, explained DeFazio’s opinion that book value is not an appropriate measure of JDS stock. These letters were sufficient to give Ellis awareness that HolliShare used book value to determine the value of her account, that HolliShare relied upon the Trust Instrument and JDS Articles to justify the use of book value, and that there was a question as to whether that method represented the market value of the stock. That knowledge constituted the essential facts underlying her claims related to HolliShare’s valuation of her account. Whether Ellis knew or agreed with DeFazio that the facts surrounding HolliShare’s use of book value to value her account constituted a violation of ERISA is irrelevant. See Blanton v. Anzalone, 760 F.2d 989, 992 (9th Cir.1985) (holding that the ERISA statute of limitations is triggered by “knowledge of the transaction that constituted the alleged violation, not by [] knowledge of the law”). Furthermore, even though the final valuation of Ellis’s account occurred in 2004, the year of the termination of her employment, the three-year statute of limitations began to run at the latest in 1997, as that was the earliest time she became aware of the breaches in question. See Phillips v. Alaska Hotel & Rest. Employees Pension Fund, 944 F.2d 509, 520 (9th Cir.1991) (holding that, pursuant to § 1113(2), the statute of limitations begins to run upon the earliest date that the plaintiff becomes aware of any breach in a series of breaches of the same character). Finally, the plan administrator’s denial of wrongdoing does not constitute an act of fraud or concealment. See Whitlock Corp. v. Deloitte & Touche, L.L.P., 233 F.3d 1063, 1066 (7th Cir.2000) (“Simple denials of liability do not toll the period of limitations or estop the adverse party to rely on it.”). Ellis’s knowledge in 1997 therefore started the three-year statute of limitations, and her claims filed on March 22, 2005, related to HolliShare’s use of book value to calculate the balance of her account and the failure to correct that practice are time-barred. With regard to Ellis’s claims related to the use of book value in the prohibited transactions, the relevant violation occurred each year when HolliShare sold shares to JDS for the allegedly improper sale price. As for Ellis’s knowledge, the evidence does not indicate that she had actual knowledge of the essential facts related to the use of book value in the prohibited transactions more than three years before she filed her complaint on March 22, 2005. None of the correspondence identified by defendants describes the circumstances of the sales of JDS common shares by HolliShare; instead, the letters focus on the use of book value in calculating the balance of individual accounts and the value of HolliShare’s holdings generally. {See, e.g., Defs.’ 2d App’x Ex. 5 at 50 (describing DeFazio’s concern only with “the practice of using the book value of the JDS stock as the current value for that stock in the annual report of the plan, and more important as the basis for determining the account balances and the amount of the distributions to former employees”).) Furthermore, Ellis’s declaration submitted in her divorce proceedings references the “valuation of HolliShare” {id. at 49) and does not indicate that she was aware of the use of book value in the annual sales of JDS common shares to JDS. The evidence therefore does not show that Ellis had actual knowledge of the essential facts underlying her claims related to the use of book value in the sales of JDS common shares. Accordingly, defendants are entitled to summary judgment only on Ellis’s claims related to HolliShare’s use of book value in calculating the balance of her account, d. DeFazio Defendants move to dismiss DeFazio’s claims based on HolliShare’s alleged mishandling of his alternate payee account by not providing the same return as other HolliShare accounts. (Docket No. 483 at 12:20-13:3.) They argue that DeFazio had actual knowledge of his claim in 1997. In his September 26, 1997 letter, DeFazio expressed some concern regarding HolliShare’s handling of alternate payee accounts, stating, “I believe the plan automatically invests the account balances of former employees or alternate payees in an investment, similar to a money market account, until those balances are paid out.” (Defs.’ 2d App’x Ex. 5 at 49.) The letter also expressed that “this is not a correct practice.” (Id.) In response to an inquiry from DeFazio, Hollister sent a letter on October 18, 2002, stating that his “funds are in a segregated account within HolliShare earning the 90-Commercial Paper Rate as per the Wall Street Journal.” (Pis.’ Supplemental Stmt. Undisputed Facts (Docket No. 528) Ex. HH at 2.) DeFazio appeared to recognize as early as 1997 that he would not be receiving the same increase in value on his alternate payee account as did HolliShare participants, and claims based only on that difference are time barred. Nevertheless, his letter does not demonstrate that he had actual knowledge that the plan retained possession of the funds within HolliShare. That distinction is an essential fact to any claim that HolliShare fiduciaries retained the difference in interest between the shares held in DeFazio’s alternate payee account and the 90-day commercial paper rate, which DeFazio has identified as his basis for asserting claims based upon the segregation of his alternate payee account. (See Docket No. 532 at 11:17-24.) Moreover, the evidence does not indicate that DeFazio became aware of this distinction before he received Hollister’s letter on October 18, 2002. Since he filed his first amended complaint containing allegations related to the segregation of his alternate payee account on October 6, 2004, his claims are not time barred. Accordingly, defendants are not entitled to summary judgment on DeFazio’s claims. 2. Defendants’ Motion on the Fiduciary Status of JDS and the Hollister Board Defendants move for summary judgment on all claims asserted against certain individual defendants in their capacities as members of the Hollister Board of Directors on the basis that these defendants properly discharged their duties under ERISA. They also move to dismiss the claims asserted against JDS, contending that the company does not qualify as a de facto ERISA fiduciary. (Docket No. 484 1:19-2:2.) a. Hollister Board To qualify as an ERISA fiduciary, an individual or entity may either be named as a fiduciary under the terms of an ERISA plan, see 29 U.S.C. § 1102(a), or act as a functional or de facto fiduciary by exercising discretionary control over the management or administration of the plan or its assets, see 29 U.S.C. § 1002(21)(A). When an individual or entity is a named fiduciary, that fiduciary’s liability may be limited pursuant to provisions of a plan instrument that allocates responsibility among named fiduciaries. See Walker v. Nat’l City Bank of Minneapolis, 18 F.3d 630, 633 (8th Cir.1994) (“[U]nless ERISA mandates otherwise, division of authority in the plan determines the duties of the various fiduciaries.”); 29 C.F.R. § 2509.75-8(D-^) (noting that a plan instrument may allocate responsibility among named fiduciaries). Here, the Trust Instrument specifies Hollister, the HolliShare trustees, and the Hollister Board as named fiduciaries. (Trust Instrument § 11.11.) Hollister is responsible for plan administration (id.), the trustees are responsible for management of the plan’s assets (id. §§ 11.01, 11.02), and the Hollister Board has the authority to appoint and remove trustees, (id. §§ 11.05-11.07). The Board also has the authority to inspect and audit plan records and receive reports from the plan trustees. (Id. § 11.04.) The parties do not dispute that the Hollister Board’s potential liability therefore arises from its fiduciary duty to appoint and monitor the HolliShare trustees. (See Docket No. 484 3:24-25; Docket No. 531 20:1-3); Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1325 (9th Cir.1985) (per curiam) (holding that an employer who appointed the plan administrator was only a fiduciary and liable as such with respect to the selection of the administrator); In re Calpine Corp., No. 03-1685, 2005 WL 1431506, at *3 (N.D.Cal. Mar. 31, 2005) (noting that the “power of appointment gives rise to a limited duty to monitor”). Plaintiffs do not dispute that over the years, the Hollister Board appointed competent individuals as trustees, including the General Counsel of JDS and Hollister (Zwirner), Hollister’s Chief Financial Officers (Gunderson, McCormack, and Brilliant), and Hollister’s heads of human resources (Simon, Schellentrager, Karlovsky, and Kelleher). (2d Zwirner Decl. ¶ 70; Winn Decl. ¶ 57.) The Hollister Board received annual reports from the trustees covering the performance of HolliShare assets, its benefit obligations, and the sales of JDS common shares. (2d Zwirner Decl. ¶ 71; Winn Decl. ¶ 58.) The Board also monitored the returns on HolliShare’s investments, including the annual increases in the book value of JDS common shares. (2d Zwirner Decl. ¶ 72; Winn Decl. ¶ 59.) The adequacy of such monitoring, however, depends largely on the factual circumstances of the plan’s investments and the trustees’ conduct. See 29 C.F.R. § 2509.75-8 (FR-17) (“[Trustees and other fiduciaries should be reviewed by the appointing fiduciary in such manner as may be reasonably expected to ensure that their performance has been in compliance with the terms of the plan and statutory standards ....”). The evidence shows that the vast majority of HolliShare’s holdings consisted of JDS common shares (2d Zwirner Decl. ¶ 8), meaning that most of the plan’s transactions fell explicitly within the ERISA’s prohibited transaction provision. See 29 U.S.C. § 1106(a)(1)(A) (prohibiting transactions “between the plan and a party in interest”); id. § 1002(14) (defining “party in interest” to include “an employer any of whose employees are covered by such plan”). The HolliShare trustees may therefore have had conflicts of interest in those transactions, especially since at least one trustee — Zwirner—also held positions with JDS and Hollister. The Hollister Board would have reasonably been aware of these potential conflicts of interest since they flowed directly from the formal positions held by the parties to the transactions. The Hollister Board should have known that ERISA required that the trustees perform a good faith determination of the fair market value of plan assets. In light of these circumstances, a factfinder could reasonably infer that the Hollister Board’s limited annual monitoring of HolliShare trustees was insufficient. See Leigh v. Engle, 727 F.2d 113, 135-36 (7th Cir.1984) (holding that appointing fiduciaries who were aware of the plan trustees’ conflicting loyalties in certain transactions were obliged to take extra measures to monitor the trustees’ actions). A genuine issue of material fact thus exists as to the adequacy of the Hollister Board’s monitoring of the plan trustees. b. JDS The Trust Instrument does not make JDS a named fiduciary. Nevertheless, to the extent that JDS exercised discretionary control or authority over the management of HolliShare’s assets, it can be considered a de facto, or functional, fiduciary of the plan. See Wright v. Or. Metallurgical Corp., 360 F.3d 1090, 1100 (9th Cir.2004) (citing 29 U.S.C. § 1002(21)(A)); Beddall v. State Street Bank & Trust Co., 137 F.3d 12, 18 (1st Cir.1998) (“The key determinant of whether a person qualifies as a functional fiduciary is whether that person exercises discretionary authority in respect to, or meaningful control over, an ERISA plan, its administration, or its assets ....”). Here, though JDS did not actually manage HolliShare’s assets, the evidence indicates that JDS exercised discretion over HolliShare’s sales of its primary asset— JDS common shares. It is undisputed that, as a result of the JDS stock ownership and transfer restrictions, no generally recognized market exists for HolliShare’s holdings of JDS common shares. {See 1st Zwirner Decl. ¶ 10; Pis.’ Resp. Defs.’ Stmt. Disputed Facts (Docket No. 540) No. 5.) Zwirner stated in his declaration that, given the number of shares that HolliShare must sell each year to meet its cash needs, HolliShare might not be able to sell its holdings for even book value without JDS’s commitment to purchase its shares. (1st Zwirner Deck ¶ 50.) This evidence alone is sufficient to create a genuine issue of material fact as to JDS’s discretionary control over HolliShare’s holdings of JDS common shares. If, for example, HolliShare had a particularly strong need for cash in a particularly lean year for JDS, JDS could choose not to repurchase HolliShare’s shares or to repurchase fewer than all of the shares HolliShare sought to sell. According to Zwirner, HolliShare would thereafter be forced to sell its holdings for a lower price. JDS has, of course, agreed to repurchase HolliShare’s holdings pursuant to the mid-80s buy-back agreement and currently through three-year commitments. {See id. ¶49). Defendants contend that under those arrangements, HolliShare trustees determine the number of shares that JDS will repurchase in a given transaction. (2d Zwirner Deck ¶ 77.) Nevertheless, no evidence suggests that those commitments are legally binding on JDS, and a reasonable factfinder could infer that HolliShare would have no recourse if JDS decided to stop or reduce its repurchases. Accordingly, because there exist genuine issues of material fact regarding the fiduciary status of the Hollister Board and JDS, defendants are not entitled to partial summary judgment in their favor, and the court must deny their motion. 3. Prohibited Transactions Plaintiffs move for partial summary judgment on their claims arising out of the annual sales of JDS common shares by HolliShare to JDS. Specifically, plaintiffs argue that HolliShare’s sales of JDS common shares to JDS for per-share book value breached ERISA’s fiduciary duty of p