                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


STEVE HARRIS; DENNIS F. RAMOS,           No. 10-56014
AKA Dennis Ramos; DONALD
HANKS; JORGE TORRES; ALBERT                 D.C. No.
CAPPA, On Behalf of Themselves           2:07-cv-05442-
and All Others Similarly Situated,          PSG-PLA
                Plaintiffs-Appellants,

                  v.                       OPINION

AMGEN, INC.; AMGEN
MANUFACTURING, LIMITED; FRANK
J. BIONDI, JR.; JERRY D. CHOATE;
FRANK C. HERRINGER; GILBERT S.
OMENN; DAVID BALTIMORE; JUDITH
C. PELHAM; KEVIN W. SHARER;
FREDERICK W. GLUCK; LEONARD D.
SCHAEFFER; CHARLES BELL;
JACQUELINE ALLRED; AMGEN PLAN
FIDUCIARY COMMITTEE; RAUL
CERMENO; JACKIE CROUSE;
FIDUCIARY COMMITTEE OF THE
AMGEN MANUFACTURING LIMITED
PLAN; LORI JOHNSTON; MICHAEL
KELLY,
                Defendants-Appellees,

DENNIS M. FENTON; RICHARD
NANULA; THE FIDUCIARY
COMMITTEE; AMGEN GLOBAL
2                        HARRIS V. AMGEN

 BENEFITS COMMITTEE; AMGEN
 FIDUCIARY COMMITTEE,
                      Defendants.


      On Remand From The United States Supreme Court

                      Filed October 30, 2014

     Before: Jerome Farris and William A. Fletcher, Circuit
     Judges, and Edward R. Korman, Senior District Judge.*

                  Opinion by Judge W. Fletcher


                           SUMMARY**


                               ERISA

    On remand from the United States Supreme Court for
reconsideration in light of Fifth Third Bancorp v.
Dudenhoeffer, 134 S. Ct. 2459 (2014), the panel reversed the
district court’s dismissal of a class action brought by current
and former employees of Amgen, Inc., and an Amgen
subsidiary under the Employee Retirement Income Security



 *
  The Honorable Edward R. Korman, Senior United States District Judge
for the Eastern District of New York, sitting by designation.
  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                      HARRIS V. AMGEN                          3

Act, alleging breach of fiduciary duties regarding two
employer-sponsored pension plans.

    The plans were employee stock ownership plans that
qualified as “eligible individual account plans,” or “EIAPs.”
All of the plaintiffs’ EIAPs included holdings in the Amgen
Common Stock Fund, which held only Amgen common
stock.

    The Supreme Court held in Fifth Third that there is no
presumption of prudence for employee stock ownership plan
fiduciaries beyond the statutory exemption from the
otherwise applicable duty to diversify. The panel held,
therefore, that the plaintiffs were not required to satisfy the
criteria of Quan v. Computer Sci. Corp., 623 F.3d 870 (9th
Cir. 2010), in order to show that no presumption of prudence
applied.

    The panel held that the plaintiffs stated a claim that the
defendants acted imprudently, and thereby violated their duty
of care, by continuing to provide Amgen common stock as an
investment alternative when they knew or should have known
that the stock was being sold at an artificially inflated price.

     The panel held that the plaintiffs sufficiently alleged that
the defendants violated their duty of loyalty and care by
failing to provide material information to plan participants
about investment of the Amgen Common Stock Fund.
Agreeing with the Sixth Circuit, the panel held that the
defendants’ preparation and distribution of summary plan
distributions, including their incorporation of Amgen’s SEC
filings by reference, were acts performed in their fiduciary
capacity.
4                    HARRIS V. AMGEN

    The panel also reversed the dismissal of derivative claims,
as well as a claim that the defendants caused the plans
directly or indirectly to sell or exchange property with a
party-in-interest. Because the Amgen Plan contained no clear
delegation of executive authority, the panel reversed the
district court’s dismissal of Amgen from the case as a non-
fiduciary. The panel remanded for further proceedings
consistent with its opinion.


                         COUNSEL

Stephen J. Fearon, Jr. and Garry T. Stevens, Jr., Squitieri &
Fearon, LLP, New York, New York; Stephen M. Fishback
and Daniel L. Keller, Keller, Fishback & Jackson, LLP,
Tarzana, California; Francis M. Gregorek, Betsy C. Manifold,
and Rachele R. Rickert, Wolf Haldenstein Adler Freeman &
Herz, LLP, San Diego, California, Mark C. Rifkin (argued),
Wolf Haldenstein Adler Freeman & Herz, LLP, New York,
New York; and Thomas James McKenna, Gainey &
McKenna, New York, New York, for Appellants.

Emily Seymour Costin, Sheppard Mullin Richter & Hampton,
LLP, Washington, D.C.; Steven Oliver Kramer and Jonathan
David Moss, Sheppard Mullin Richter & Hampton, LLP, Los
Angeles, California; Jonathan Rose, Alston & Bird, LLP,
Washington, D.C.; John Nadolenco, Mayer Brown, LLP, Los
Angeles, California; Brian David Netter, Mayer Brown, LLP,
Washington, D.C.; and Robert P. Davis (argued), Mayer
Brown, LLP, New York, New York, for Appellees.
                     HARRIS V. AMGEN                       5

                        OPINION

W. FLETCHER, Circuit Judge:

    Plaintiffs, current and former employees of Amgen, Inc.
(“Amgen”) and its subsidiary Amgen Manufacturing, Limited
(“AML”), participated in two employer-sponsored pension
plans, the Amgen Retirement and Savings Plan (the “Amgen
Plan”) and the Retirement and Savings Plan for Amgen
Manufacturing, Limited (the “AML Plan”) (collectively, “the
Plans”). The Plans were employee stock-ownership plans
that qualified as “eligible individual account plans”
(“EIAPs”) under 29 U.S.C. § 1107(d)(3)(A). All of the
plaintiffs’ EIAPs included holdings in the Amgen Common
Stock Fund, one of the investments available to plan
participants. The Amgen Common Stock Fund held only
Amgen common stock.

    After the value of Amgen common stock fell, plaintiffs
filed a class action under the Employee Retirement Income
Security Act (“ERISA”) against Amgen, AML, Amgen’s
board of directors, and the Fiduciary Committees of the Plans
(collectively, “defendants”), alleging that defendants
breached their fiduciary duties under ERISA. The district
court dismissed the complaint against Amgen under Federal
Rule of Civil Procedure 12(b)(6) on the ground that Amgen
was not a fiduciary. It dismissed the complaint against the
other defendants, who were fiduciaries, after applying the
“presumption of prudence” articulated in Quan v. Computer
Sciences Corp., 623 F.3d 870 (9th Cir. 2010). Alternatively,
even assuming the absence of the presumption, the district
court dismissed the complaint on the ground that defendants
had not violated their fiduciary duties.
6                    HARRIS V. AMGEN

    In an earlier opinion, we reversed the district court’s
dismissal of the complaint. Harris v. Amgen, Inc., 738 F.3d
1026 (9th Cir. 2013). Applying Quan, we held that the
presumption of prudence did not apply. We held, further,
that, in the absence of the presumption, plaintiffs had
sufficiently alleged violation of the defendants’ fiduciary
duties. Finally, we held that Amgen was an adequately
alleged fiduciary of the Amgen Plan.

    Defendants petitioned for a writ of certiorari. The
Supreme Court deferred ruling on the petition while it
considered Fifth Third Bancorp v. Dudenhoeffer, 134 S. Ct.
2459 (2014), another ERISA case in which the presumption
of prudence was at issue. In Quan, we had held that the
presumption of prudence was available to ERISA fiduciaries
for both EIAPs and employee stock ownership plans
(“ESOPs”) “when the plan terms require or encourage the
fiduciary to invest primarily in employer stock.” Quan,
623 F.3d at 881. Overruling Quan and similar decisions by
our sister circuits, the Supreme Court held in Fifth Third that
there was no presumption of prudence for ESOP fiduciaries
beyond the statutory exemption from the otherwise applicable
duty to diversify. Fifth Third, 134 S. Ct. at 2467; 29 U.S.C.
§ 1104(a)(2). After deciding Fifth Third, the Court granted
certiorari, and vacated and remanded for reconsideration in
light of its decision. Amgen, Inc. v. Harris, 134 S. Ct. 2870
(2014).

    On reconsideration in light of Fifth Third, we again
reverse the district court’s dismissal.
                     HARRIS V. AMGEN                         7

                       I. Background

    The following narrative is taken from the complaint and
documents that provide uncontested facts. On a motion to
dismiss, we assume the allegations of the complaint to be
true. See Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007).

   Amgen is a global biotechnology company that develops
and markets pharmaceutical drugs. AML, a wholly owned
subsidiary of Amgen, operates a manufacturing facility in
Puerto Rico. To provide retirement benefits to their
employees, Amgen set up the Amgen Plan on April 1, 1985.
AML set up the AML Plan in 2002 and it became effective on
January 1, 2006.

    The Plans are covered by the Employee Retirement
Income Security Act (“ERISA”). Both qualify as “individual
account plans.” See 29 U.S.C. § 1002(34). Plan participants
contribute a portion of their pre-tax compensation to
individual investment accounts. They receive benefits based
solely upon their contributions, adjusted for any gains and
losses in assets held by the Plans. Participants may contribute
up to thirty percent of their pre-tax compensation. They may
select from a number of investment funds offered by the
Plans. One of those is the Amgen Common Stock Fund,
which holds only Amgen stock. Amgen stock constituted the
largest single asset of both Plans in 2004 and 2005.

   This litigation arises out of a controversy concerning
Amgen drugs used for the treatment of anemia. Anemia is a
condition in which blood is deficient in red blood cells or
hemoglobin. Causes of anemia include an iron-deficient diet,
excessive bleeding, certain cancers and cancer treatments,
8                    HARRIS V. AMGEN

and kidney or liver failure. In the early 1980s, Amgen
scientists discovered how to make artificial erythropoietin, a
protein formed in the kidneys that stimulates erythropoiesis,
the formation of red blood cells. After this discovery, Amgen
commercialized the manufacture of a class of drugs known as
erythropoiesis-stimulating agents (“ESAs”) to treat anemia.

    In 1989, the Federal Drug Administration (“FDA”)
approved Amgen’s first commercial ESA, epoetin alfa, for
the treatment of anemia associated with chronic kidney
failure. Amgen marketed epoetin alfa for approved uses
under the brand name EPOGEN (“Epogen”), and licensed
patents to Johnson & Johnson (“J&J”) to develop additional
marketable uses. J&J obtained FDA approval between 1991
and 1996 to market epoetin alfa under the brand name
PROCRIT (“Procrit”) for anemia associated with
chemotherapy and HIV therapies, for chronic kidney
diseases, and for pre-surgery support of anemic patients. J&J
had exclusive marketing rights for Procrit under its licensing
agreement with Amgen.

    Sometime before 2001, Amgen developed a new ESA,
darbepoetin alfa, whose sales by Amgen were not restricted
by J&J’s exclusive marketing rights for Procrit. Darbepoetin
alfa, marketed as Aranesp, lasts longer in the bloodstream
than epoetin alfa. The FDA approved Aranesp for treatment
of anemia associated with chronic kidney failure and cancer
chemotherapy. Aranesp has taken significant market share
from J&J’s Procrit. At the time the complaint was filed,
Aranesp “control[led] half the market” for non-dialysis ESA.
Sales of EPOGEN and Aranesp have been “core to
[Amgen’s] survival and success,” making up roughly half of
Amgen’s $14.3 billion in revenue in 2006.
                     HARRIS V. AMGEN                        9

    In the late 1990s and early 2000s, several clinical trials
raised safety concerns regarding the use of ESAs for
particular anemic populations. In 1998, the Normal
Hematocrit Study tested the efficacy of ESAs on anemia
patients with pre-existing heart disease. The study was
terminated because the test group experienced statistically
significant higher rates of blood clotting. In 2003 and early
2004, two trials — ENHANCE and BEST — tested ESAs on
cancer patients in Europe. The ENHANCE trial showed
shorter progression-free survival and shorter overall survival
of head and neck cancer patients for the ESA group than the
placebo group. The BEST trial was terminated after four
months because breast cancer patients in the group taking
epoetin alfa had a higher rate of death than those in the
placebo group.

    ENHANCE and BEST did not test the safety of ESAs for
the specific uses and doses for which they had been approved
in the United States. In March 2004, the FDA published
notice in the Federal Register that the Oncology Drug
Advisory Committee (“ODAC”), an FDA-sponsored group of
oncology experts, would convene in May 2004 to discuss
safety concerns about Aranesp. In April, before the ODAC
meeting, an Amgen spokesperson stated during a conference
call with investors, analysts, and plan participants that “the
focus [of the ODAC meeting] was not on Aranesp” and that
“the safety for Aranesp has been comparable to placebo.”

    During its two-day meeting with ODAC, the FDA urged
Amgen to conduct further clinical trials to test the safety of
ESAs for uses that had already been approved by the FDA.
Amgen made a presentation at the meeting outlining what it
called the “Amgen Pharmacovigilance Program,” consisting
of five ongoing or planned clinical trials testing Aranesp “in
10                   HARRIS V. AMGEN

different tumor treatment settings.” Amgen’s Vice President
for Oncology Clinical Development described the Amgen
program as the “responsible and credible approach to
definitively resolv[e] the questions raise[d]” by the FDA.

    One of the trials under Amgen’s program was the Danish
Head and Neck Cancer Group (“DAHANCA”) 10 Trial. The
DAHANCA 10 Trial tested whether high doses of Aranesp
could help shrink tumors in patients receiving radiation
therapy for head and neck cancer. On October 18, 2006,
DAHANCA investigators temporarily halted the study “due
to information about potential unexpected negative effects.”
Amgen was informed of the temporary halt of the study on or
near that day. Amgen did not disclose that the DAHANCA
10 Trial had been temporarily halted.

    An analysis of the halted DAHANCA 10 Trial was
completed on November 28, 2006. The principal investigator
reported that “[b]ased on these outcome results the
DAHANCA group concluded that the likelihood of a reverse
outcome, i.e. that Aranesp would be significantly better than
in control[,] was almost non-existing.” The DAHANCA 10
Trial was permanently terminated on December 1, 2006.
DAHANCA investigators concluded that “there is a small but
significant poor outcome in the patients treated with Aranesp”
in that tumor growth was worse for patients who took
Aranesp compared to patients who did not. Amgen was
informed in December 2006 that the study had been
permanently terminated.

    Another clinical trial, CHOIR, raised additional safety
concerns about ESAs. The CHOIR trial investigated the
safety of epoetin alfa (EPOGEN) when used to treat chronic
kidney disease patients. The safety monitoring board for
                     HARRIS V. AMGEN                        11

CHOIR terminated the trial when a higher incidence of death
and cardiovascular hospitalization was observed among
epoetin alfa users. Yet another clinical trial, CREATE, tested
the benefit provided by Roche Pharmaceuticals’s ESA in
raising hemoglobin levels in patients with chronic kidney
disease. On November 16, 2006, Roche announced that the
results of the CREATE trial “clearly show that there is no
additional cardiovascular benefit from treating to higher
hemoglobin levels in this patient group.”

    On November 20, Amgen posted a public statement
responding to the CHOIR and CREATE trials. Amgen wrote,
“A very substantial body of evidence, developed over the past
17 years, demonstrates that anemia associated with chronic
kidney disease can be treated safely and effectively with
EPOGEN and Aranesp when administered according to the
Food and Drug Administration (FDA)-approved dosing
guidelines.” Two weeks later, Amgen issued a press release
to correct “what the company believes are misleading and
inaccurate news reports regarding the use of its drugs.”
Amgen reiterated, “EPOGEN and Aranesp are effective and
safe medicines when administered according to the Food and
Drug Administration (FDA) label.”

    Amgen also conducted its own clinical trial, the “103
Study.” The 103 Study tested Aranesp in 939 patients with
anemia secondary to cancer. The FDA later described the
103 Study as “demonstrat[ing] significantly shorter survival
rate[s] in cancer patients receiving ESAs as compared to
th[o]se receiving transfusion support.” However, during a
January 2007 conference call, an Amgen representative
described the 103 Study as not demonstrating a “statistically
significant adverse [e]ffect of Aranesp on overall mortality in
this patient population.” He said that “the risk benefit ratio
12                   HARRIS V. AMGEN

for Aranesp in these extremely ill patients with anemia
secondary to malignancy is, at best, neutral and perhaps
negative.” During what may have been the same conference
call, discussing Amgen’s fourth-quarter earnings on January
25, an Amgen representative stated, in response to concerns
expressed about the 103 Study, that “we have a well
established risk benefit profile.”

    During a February 16, 2007, investor conference call,
defendant Kevin Sharer, Amgen’s President, Chief Executive
Officer, and Chairman of the Board, stated, “We strongly
believe, as we have consistently stated, that Aranesp and
EPOGEN are safe and effective medicines when used in
accordance with label indications.” During a March
conference call, defendant Sharer reiterated, “When we look
at the totality of data, we believe our products are safe and
effective when used on-label.” On March 9, 2007, Amgen
posted a statement on the company website available to plan
participants under the title “Amgen’s Statement on the Safety
of Aranesp (darbepoetin alfa) and EPOGEN (Epoetin alfa)”:

       Aranesp (darbepoetin alfa) and EPOGEN
       (Epoetin alfa) have favorable risk/benefit
       profiles in approximately four million patients
       with chemotherapy-induced anemia or CKD
       when administered according to the FDA-
       approved dosing guidelines.

    Amgen engaged in extensive marketing, encouraging both
on- and off-label uses of its ESAs. Amgen trained its sales
representatives to ask questions that steered doctors to
discussions about off-label uses. In an Amgen sales
personnel manual, Amgen gave an “expanded list” of
“excellent questions” to ask doctors in order to move the
                     HARRIS V. AMGEN                      13

discussions toward off-label uses. Examples include, “What
is keeping you from using Aranesp in all your MDS/HIV/CIA
patients?” MDS is myelodysplastic syndrome, an illness
often resulting in anemia. The FDA has never approved
Aranesp to treat MDS or HIV patients.

    Amgen created a speakers program in which Amgen paid
for dinners at which “expert” speakers talked to physicians
and other providers about off-label uses for Aranesp.
Speakers program events were not accredited as continuing
medical education seminars conducted by an independent
medical association. Amgen paid not only the speakers but
also the doctors and other medical providers who attended the
events. The $1,000 payments to physician attendees were
“paid from [Amgen’s] marketing budget.”

     Amgen educated medical providers about the profit they
could obtain by prescribing its ESAs. Before January 1,
2005, Medicare calculated drug reimbursement rates based on
the average wholesale price (“AWP”) of drugs. Medical
providers could purchase Amgen’s ESAs at a price lower
than the AWP, but could charge Medicare the AWP. Amgen
created spreadsheets and other tools to help providers
calculate the profit. Amgen also encouraged doctors to use
its ESAs inefficiently. For example, it encouraged doctors to
deliver Epogen intravenously rather than subcutaneously,
because an intravenous delivery of the drug requires a
substantially larger dose to achieve the same effect.

    Amgen marketing efforts were successful. For example,
Amgen’s worldwide sales of Aranesp increased fourteen
percent during the first quarter of 2007 compared to the same
quarter in 2006. Amgen told investors on several occasions
that its marketing practices were proper. In public SEC
14                   HARRIS V. AMGEN

filings, Amgen stated that it marketed its products only for
on-label uses. In December 2006, in response to negative
publicity about off-label uses, Amgen issued a press release
“intended to clarify Amgen’s position on the use of EPOGEN
and Aranesp and to correct what the company believes are
misleading and inaccurate news reports regarding the use of
its drugs.” The company clarified that “Amgen only
promotes the use of EPOGEN and Aranesp consistent with
the FDA label.” On a January 2007 conference call, Amgen
stated that “our promotion [of EPOGEN] has always been
strictly according to our label, we do not anticipate a major
shift in clinical practice.”

    In February 2007, The Cancer Letter published an article
entitled “Amgen Didn’t Tell Wall Street About Results of
[DAHANCA] Study.” The article reported that the
DAHANCA trial had been temporarily halted due to the
“significantly inferior therapeutic outcome from adding
Aranesp to radiation treatment of patients with head and neck
cancer.” On February 23, the Associated Press announced
that the USP DI, an influential drug reference guide, had
delisted Aranesp as a treatment for anemia in cancer patients
not undergoing chemotherapy. On February 27, the New
York Times published an article stating:

       New studies are raising questions about
       whether drugs that have been used by millions
       of cancer patients might actually be harming
       them. The drugs, sold by Amgen, Roche, and
       Johnson & Johnson, are used to treat anemia
       caused by chemotherapy and meant to reduce
       the need for blood transfusions and give
       patients more energy. But the new results
       suggest that the drugs may make the cancer
                     HARRIS V. AMGEN                       15

       itself worse. . . . [S]ome cancer specialists and
       securities analysts say the new information
       may make doctors more cautious in using the
       drugs, which have combined sales for the
       three companies exceeding $11 billion and
       have been heavily promoted through efforts
       that include television commercials.

    On March 9, the FDA mandated a “black box” warning
for off-label use of Aranesp and Epogen. A black box
warning is the strongest warning the FDA can require. Cf. 21
C.F.R. § 201.57(c)(1) (2012). The black box warning read:

       Recently completed studies describe an
       increased risk of death, blood clots, strokes,
       and heart attacks in patients with kidney
       failure where ESAs were given at higher than
       recommended doses. In other studies, more
       rapid tumor growth occurred in patients with
       head and neck cancer who received these
       higher doses. In studies where ESAs were
       given at recommended doses, an increased
       risk of death was reported in patients with
       cancer who were not receiving chemotherapy
       and an increased risk of blood clots was
       observed in patients following orthopedic
       surgery.

    On March 21, 2007, two House of Representatives
subcommittees opened an investigation into the safety profile
of Aranesp and EPOGEN as well as into Amgen’s off-label
marketing practices. The Chairs of those two subcommittees
“ordered” Amgen to halt direct-to-consumer advertising and
physician incentives pending further FDA action. On May 8,
16                    HARRIS V. AMGEN

the FDA noted on its website that Aranesp and EPOGEN
“were clearly demonstrated to be unacceptable” in high
doses. On May 10, ODAC reconvened and voted to restrict
the use of ESAs, to expand existing warnings, and to require
ESA manufacturers to conduct further studies.

    Defendant Sharer, Amgen’s President and CEO, told a
Wall Street Journal reporter in an interview that 2007 was the
“most difficult [year] in [Amgen’s] history.” According to
Sharer, there was an “unexpected $800 million to $1 billion
hit to operating income due to safety concerns” about
Aranesp. Sales of Aranesp decreased by fifty percent.

    Amgen stock, and thus the Amgen Common Stock Fund,
lost significant value as a result of these safety concerns. The
class period runs from May 4, 2005, to March 9, 2007.
Amgen common stock was at its high of $86.17 on
September 19, 2005. On February 16, 2007, when The
Cancer Letter published its article revealing that Amgen had
not been forthcoming about the result of the DAHANCA 10
Trial, Amgen stock sold for $66.73. When ODAC voted to
restrict the use of ESA drugs, on or shortly after May 10, the
price of Amgen stock dropped to $57.33, the class period
low. Between September 19, 2005 and the ODAC vote, the
price of Amgen stock dropped $28.83, or thirty-three percent.

    On August 20, 2007, plaintiffs Steve Harris, a participant
in the Amgen Plan, and Dennis Ramos, a participant in the
AML Plan, filed a complaint alleging that defendants
breached their fiduciary duties under ERISA. The district
court dismissed Harris’s claims for lack of standing, on the
ground that Harris no longer owned assets in the Amgen Plan
on the date he filed his complaint. Harris v. Amgen, Inc.,
573 F.3d 728, 731 (9th Cir. 2009). The court dismissed
                      HARRIS V. AMGEN                        17

Ramos’s claims without leave to amend on the ground that he
had failed to identify the proper fiduciaries of the AML Plan.
Id. We reversed, holding that Harris had standing as a
“participant” of the Amgen Plan during the Class Period, and
that Ramos should have been allowed to amend the
complaint. Id.

   The complaint now at issue is the First Amended Class
Action Consolidated Complaint (“FAC”), filed on March 23,
2010, by five plaintiffs, including Harris and Ramos. The
FAC alleges six counts of violation of fiduciary duty under
ERISA against Amgen, AML, nine Directors of the Amgen
Board (“the Directors”), and the Plans’ Fiduciary Committees
and their members. The district court dismissed the FAC
against Amgen on the ground that it was not a fiduciary. It
dismissed the FAC against the remaining defendants under
Rule 12(b)(6) for failure to state a claim.

    In a separate class action simultaneously pending before
the same district judge, investors in Amgen common stock
claimed violations of federal securities laws based on the
same alleged facts as in the ERISA action now before us. In
a careful thirty-five page order, the district court concluded
that the investors had sufficiently alleged material
misrepresentations and omissions, scienter, reliance, and
resulting economic loss to state claims under Sections 10(b)
and 20(a) of the 1934 Exchange Act. See 15 U.S.C.
§§ 78j(b), 78t(a). The district court certified a class based on
the facts alleged in the complaint. We affirmed the district
court’s class certification in Conn. Ret. Plans & Trust Funds
v. Amgen, Inc., 660 F.3d 1170 (9th Cir. 2011). The Supreme
Court affirmed in Amgen, Inc. v. Conn. Ret. Plans & Trust
Funds, 133 S. Ct. 1184 (2013).
18                   HARRIS V. AMGEN

   For the reasons that follow, we reverse the district court’s
decision in the ERISA case before us.

                   II. Standard of Review

    “We review de novo the district court’s grant of a motion
to dismiss under Rule 12(b)(6), accepting all factual
allegations in the complaint as true and construing them in
the light most favorable to the nonmoving party.” Skilstaf,
Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir.
2012). “[C]ourts must consider the complaint in its entirety,
as well as other sources courts ordinarily examine when
ruling on Rule 12(b)(6) motions to dismiss, in particular,
documents incorporated into the complaint by reference, and
matters of which a court may take judicial notice.” Tellabs,
Inc., 551 U.S. at 322. We then determine whether the
allegations in the complaint and information from other
permissible sources “plausibly suggest an entitlement to
relief.” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009); Starr v.
Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (quoting Iqbal).

                       III. Discussion

     Congress enacted ERISA to provide “minimum standards
. . . assuring the equitable character of [employee benefit]
plans and their financial soundness.” 29 U.S.C. § 1001(a).
These minimum standards regulate the “conduct,
responsibility, and obligation for fiduciaries of employee
benefit plans . . . .” Id. § 1001(b). “Congress painted with a
broad brush, expecting the federal courts to develop a ‘federal
common law of rights and obligations’ interpreting ERISA’s
fiduciary standards.” Bins v. Exxon Co. U.S.A., 220 F.3d
1042, 1047 (9th Cir. 2000) (en banc) (citation omitted).
                      HARRIS V. AMGEN                          19

     The Supreme Court has established certain interpretive
rules specific to ERISA’s fiduciary duties. These duties,
including those governing fiduciary status, “draw much of
their content from the common law of trusts, the law that
governed most benefit plans before ERISA’s enactment.”
Varity Corp. v. Howe, 516 U.S. 489, 496 (1996). ERISA
reflects a “congressional determination that the common law
of trusts did not offer completely satisfactory protection.” Id.
at 497. The law of trusts “often . . . inform[s]” but does “not
necessarily determine the outcome of” an interpretation of
ERISA’s fiduciary duties. Id. The common law of trusts
offers “only a starting point” that must yield to the “language
of the statute, its structure, or its purposes,” if necessary. Id.

    We first address the sufficiency of the FAC against each
properly named fiduciary. We then address whether the
plaintiffs have adequately alleged that Amgen is a fiduciary.

                  A. Sufficiency of the FAC

   The district court dismissed all six counts of the FAC
under Rule 12(b)(6). Plaintiffs have appealed only the
dismissal of Counts II through VI.

                           1. Count II

     Plaintiffs allege in Count II that defendants acted
imprudently, and thereby violated their duty of care under
29 U.S.C. § 1104(a)(1)(B), by continuing to provide Amgen
common stock as an investment alternative when they knew
or should have known that the stock was being sold at an
artificially inflated price. Defendants originally contended
that they were entitled to a “presumption of prudence” under
Quan v. Computer Sci. Corp., 623 F.3d 870 (9th Cir. 2010).
20                    HARRIS V. AMGEN

In our earlier opinion, we held that plaintiffs had satisfied the
criteria of Quan, such that the presumption of prudence did
not apply. The Supreme Court’s opinion in Fifth Third has
now made clear that an ERISA plaintiff does not need to
satisfy the criteria we articulated in Quan. The Court wrote
in Fifth Third:

        [T]he law does not create a special
        presumption favoring ESOP fiduciaries.
        Rather, the same standard of prudence applies
        to all ERISA fiduciaries, except that an ESOP
        fiduciary is under no duty to diversify the
        ESOP’s holdings.

134 S. Ct. at 2467. Defendants are EAIP fiduciaries rather
than ESOP fiduciaries, but they do not dispute that Fifth
Third applies equally to them, and they do not contend that
they enjoy a presumption of prudence. However, defendants
contend that their actions were prudent even if the
presumption of prudence does not apply.

    ERISA requires that a fiduciary perform duties under a
plan “with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like
aims.” 29 U.S.C. § 1104(a)(1)(B). This standard governs a
fiduciary’s decision to allow investment of plan assets in
employer stock. Quan, 623 F.3d at 878–79. “This is true,
even though the duty of prudence may be in tension with
Congress’s expressed preference for plan investment in the
employer’s stock.” Id. at 879 (internal quotation marks
omitted).     A “myriad of circumstances” surrounding
investments in company stock could support a violation of the
                      HARRIS V. AMGEN                         21

prudence requirement. In re Syncor, 516 F.3d at 1102. “‘A
court’s task in evaluating a fiduciary’s compliance with this
standard is to inquire whether the individual trustees, at the
time they engaged in the challenged transactions, employed
the appropriate methods to investigate the merits of the
investment and to structure the investment.’” Quan, 623 F.3d
at 879 (quoting Wright, 360 F.3d at 1097) (alterations and
quotation marks omitted).

    Count II alleges that defendants knew or should have
known about material omissions and misrepresentations, as
well as illegal off-label sales, that artificially inflated the
price of the stock while, at the same time, they continued to
offer the Amgen Common Stock Fund as an investment
alternative to plan participants. The district court held that,
even without the assistance of the presumption of prudence,
defendants were entitled to dismissal of Count II under Rule
12(b)(6). We disagree.

    We begin by noting that we held in Syncor that “[a]
violation [of the prudent man standard] may occur where a
company’s stock . . . was artificially inflated during that time
by an illegal scheme in which the fiduciaries knew or should
have known, and then suddenly declined when the scheme
was exposed.” In re Syncor, 516 F.3d at 1102. In Syncor, the
company was a fiduciary that knowingly made cash bribes to
doctors in Taiwan in violation of the Foreign Corrupt
Practices Act. Upon disclosure of these illegal payments,
Syncor’s stock price lost nearly half its value. “Despite these
illegal practices, the [fiduciaries] allowed the Plan to hold and
acquire Syncor stock when they knew or had reason to know
of Syncor’s foreign bribery scheme.” Id. at 1098. We held
on appeal from summary judgment that “there is a genuine
issue whether the fiduciaries breached the prudent man
22                   HARRIS V. AMGEN

standard by knowing of, and/or participating in, the illegal
scheme while continuing to hold and purchase artificially
inflated Syncor stock for the ERISA Plan.” Id. at 1103.

    In their original briefing, filed before the Court decided
Fifth Third, defendants make five arguments in favor of
dismissal of Count II. None is persuasive. First, defendants
argue that investments in Amgen stock during the class
period were not imprudent “because Amgen was not even
remotely experiencing severe financial difficulties during that
time, and remains a strong, viable, and profitable company
today.” This argument is beside the point. Amgen was not
“experiencing severe financial difficulties” during the
relevant time period in part because of the very actions about
which plaintiffs are now complaining. That is, Amgen was
earning large but unsustainable profits based on improper and
unsustainable sales of EPOGEN and Aranesp. Further,
Amgen may have been, and may now be, a “strong, viable,
and profitable company,” but that does not mean that the
price of Amgen stock was not artificially inflated during the
class period.

    Second, defendants argue that the decline in price in
Amgen stock was insufficient to show an imprudent
investment by the fiduciaries. They write, “[A]s the District
Court correctly held, this ‘relatively modest and gradual
decline in the stock price’ does not render the investment
imprudent.” As an initial matter, we note that the proper
question is not whether the investment results were
unfavorable, but whether the fiduciary used “‘appropriate
methods’” to investigate the merits of the transaction. Quan,
623 F.3d at 879 (quoting Wright, 360 F.3d at 1097); see also
Kirschbaum, 526 F.3d at 254 (explaining that the “test of
prudence is one of conduct, not results”); Bunch v. W.R.
                      HARRIS V. AMGEN                         23

Grace & Co., 555 F.3d 1, 7 (1st Cir. 2009) (same). But
defendants’ argument fails even on its own terms. Their
argument is foreclosed by the district court’s decision in the
federal securities class action against Amgen based on the
same alleged sequence of events. See Conn. Ret. Plans &
Trust Funds v. Amgen, Inc., 660 F.3d 1170 (9th Cir. 2011),
aff’d Amgen Inc. v. Conn. Ret. Plans & Trust Funds, __
U.S.__, 133 S. Ct. 1184 (2013).                If the alleged
misrepresentations and omissions, scienter, and resulting
decline in share price in Connecticut Retirement Plans were
sufficient to state a claim that defendants violated their duties
under Section 10(b), the alleged misrepresentations and
omissions, scienter, and resulting decline in share price in this
case are sufficient to state a claim that defendants violated
their more stringent duty of care under ERISA.

    Third, quoting Kirschbaum, 526 F.3d at 253, 256,
defendants argue that

        [w]hen, like here, retirement plans are at
        issue, courts must be mindful of “the long-
        term horizon of retirement investing, as well
        as the favored status Congress has granted to
        employee stock investments in their own
        companies.” . . . [H]olding fiduciaries liable
        for continuing to offer the option to invest in
        declining stock would place them in an
        “untenable position of having to predict the
        future of the company stock’s performance.
        In such a case, [a fiduciary] could be sued for
        not selling if he adhered to the plan, but also
        sued for deviating from the plan if the stock
        rebounded.”
24                   HARRIS V. AMGEN

Defendants’ reliance on Kirschbaum is misplaced. The court
wrote in that case, “The Plan documents, considered as a
whole, compel that the Common Stock Fund be available as
an investment option for employee-participants.”
Kirschbaum, 526 F.3d at 249. The concerns expressed in
Kirschbaum have little bearing on the case before us. Here,
unlike in Kirschbaum, the fiduciaries of the Amgen and AML
Plans were under no such compulsion. They knew or should
have known that the Amgen Common Stock Fund was
purchasing stock at an artificially inflated price due to
material misrepresentations and omissions by company
officers, as well as by illegal off-label marketing, but they
nevertheless continued to allow plan participants to invest in
the Fund.

    Fourth, quoting In re Computer Sciences Corp., ERISA
Litig., 635 F. Supp. 2d 1128, 1136 (C.D. Cal. 2009), aff’d
623 F.3d 870 (9th Cir. 2010), defendants argue that if the
Amgen Fund had been “remove[d] . . . as an investment
option,” based on nonpublic information about the company,
this action “may have brought about ‘precisely the result
[P]laintiffs seek to avoid: a drop in the stock price.’” The
Court wrote in Fifth Third:

           To state a claim for breach of the duty of
       prudence on the basis of inside information, a
       plaintiff must plausibly allege an alternative
       action that the defendant could have taken that
       would have been consistent with the securities
       laws and that a prudent fiduciary would not
       have viewed as more likely to harm the fund
       than to help it.

134 S. Ct. at 2472. More specifically, the Court wrote:
                     HARRIS V. AMGEN                      25

       [L]ower courts faced with such claims should
       also consider whether the complaint has
       plausibly alleged that a prudent fiduciary in
       the defendant’s position could not have
       concluded that stopping purchases — which
       the market might take as a sign that insider
       fiduciaries viewed the employer’s stock as a
       bad investment — or publicly disclosing
       negative information would do more harm
       than good to the fund by causing a drop in the
       stock price and a concomitant drop in the
       value of the stock already held in the fund.

Id. at 2473.

    Based on the allegations in the complaint, it is at least
plausible that defendants could have removed the Amgen
Stock Fund from the list of investment options available to
the plans without causing undue harm to plan participants. It
is unclear how much the price of Amgen stock would have
declined if the Amgen Common Stock Fund had been
removed as an investment option during the period when the
price was artificially inflated. Removing the Fund as an
investment option would not have meant liquidation of the
Fund. It would have meant only that while the share price
was artificially inflated, plan participants would not have
been allowed to invest additional money in the Fund, and that
the Fund would therefore not have purchased additional
shares at the inflated price. Given the relatively small
number of Amgen shares that would not have been purchased
by the Fund in comparison to the enormous number of
actively traded shares, it is extremely unlikely that this
decrease in the number of shares that would otherwise have
26                   HARRIS V. AMGEN

been purchased, considered alone, would have had an
appreciable negative impact on the share price.

     It is true that removing the Amgen Common Stock Fund
as an investment option would have sent a negative signal to
investors if the fact of the removal had been made public, and
that such a signal may have caused a drop in the share price.
But several factors would have mitigated this effect. The
efficient market hypothesis ordinarily applied in stock fraud
cases suggests that the ultimate decline in price would have
been no more than the amount by which the price was
artificially inflated. Further, once the Fund was removed as
an investment option, plan participants would have been
protected from making additional purchases of the Fund
while the price of Amgen shares remained artificially
inflated. Finally, the defendants’ fiduciary obligation to
remove the Fund as an investment option was triggered as
soon as they knew or should have known that Amgen’s share
price was artificially inflated. That is, defendants began
violating their fiduciary duties under ERISA by continuing to
authorize purchases of Amgen shares at more or less the same
time some of the defendants began violating the federal
securities laws. If defendants had acted to remove the Fund
as an investment option when Amgen’s share price began to
be artificially inflated — that is, when some of the defendants
began to violate their obligations under the securities laws —
that action may well have caused those defendants to comply
with those obligations. But defendants did not do this.
Instead, they continued to authorize the Fund as an
investment option for a considerable period after they knew
or should have known that the share price was artificially
inflated.
                     HARRIS V. AMGEN                        27

    Fifth, defendants argue that “they could not have removed
the Amgen Stock Fund based on undisclosed alleged adverse
material information — a potentially illegal course of action.”
(emphasis in original). Defendants misunderstand the nature
of their duties under federal law. As we noted in Quan,
“[F]iduciaries are under no obligation to violate securities
laws in order to satisfy their ERISA fiduciary duties.” Quan,
623 F.3d at 882 n.8. The central problem in this case is that
Amgen officials, many of whom are defendants here, made
material misrepresentations and omissions in violation of the
federal securities laws. Compliance with ERISA would not
have required defendants to violate those laws; indeed,
compliance with ERISA would likely have resulted in
compliance with the securities laws. If defendants had
revealed material information in a timely fashion to the
general public (including plan participants), thereby allowing
informed plan participants to decide whether to invest in the
Amgen Common Stock Fund, they would have
simultaneously satisfied their duties under both the securities
laws and ERISA. See Cal. Ironworkers Field Pension Trust
v. Loomis Sayles & Co., 259 F.3d 1036, 1045 (9th Cir. 2001)
(“ERISA imposes upon fiduciaries a general duty to disclose
facts material to investment issues.”); Acosta v. Pac. Enter.,
950 F.2d 611, 619 (9th Cir. 1991) (holding that a fiduciary is
affirmatively required to “inform beneficiaries of
circumstances that threaten the funding of benefits”).
Alternatively, if defendants had made no disclosures but had
simply not allowed additional investments in the Fund while
the price of Amgen stock was artificially inflated, they would
not thereby have violated the prohibition against insider
trading, for there is no violation absent purchase or sale of
stock.
28                    HARRIS V. AMGEN

    On remand in the wake of Fifth Third, defendants make
an additional argument to those they have already made.
They argue on remand that Fifth Third announced “new
pleading requirements” applicable to ERISA cases such as
this one. We disagree. The Court wrote as follows:

           We consider more fully one important
       mechanism for weeding out meritless claims,
       the motion to dismiss for failure to state a
       claim. That mechanism . . . requires careful
       judicial consideration of whether the
       complaint states a claim that the defendant
       acted imprudently. See Fed. Rule Civ. Proc.
       12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662,
       677–680 (2009); Bell Atlantic Corp. v.
       Twombly, 550 U.S. 5434, 554–563 (2007).
       Because the content of the duty of prudence
       turns on “the circumstances . . . prevailing” at
       the time the fiduciary acts, § 1104(a)(1)(B),
       the appropriate inquiry will necessarily be
       context specific.

134 S. Ct. at 2471.

    To the extent defendants are arguing that Fifth Third
requires a higher pleading standard of particularity or
plausibility, this passage from the Court’s opinion makes
clear that they are mistaken. Ashcroft and Twombly had
already been decided when this case was first before us on
appeal, and the Court’s citation of those two cases indicates
that it was not articulating a new pleading standard in this
sense. To the extent defendants are arguing that the Court has
articulated new standards of liability (as opposed to a new
standard of pleading) that we had not previously applied, they
                      HARRIS V. AMGEN                         29

are also mistaken. It is true that the Court articulated certain
standards for ERISA liability in Fifth Third. But we had
already assumed those standards when we wrote our earlier
opinion. For example, the Court specified in Fifth Third that
a fiduciary is not required to perform an act that will do more
harm than good to plan participants. We assumed that to be
so, and we addressed precisely this point in our earlier
opinion. See Harris v. Amgen, 738 F.3d at 1041.

    We therefore conclude that plaintiffs have sufficiently
alleged that defendants have violated the duty of care they
owe as fiduciaries under ERISA.

                          2. Count III

    Plaintiffs allege in Count III that defendants violated their
duty of loyalty and care under 29 U.S.C. §§ 1104(a)(1)(A)
and (B) by failing to provide material information to plan
participants about investment in the Amgen Common Stock
Fund. Defendants contend that they have limited obligations
under ERISA to disclose information to plan participants, and
that their disclosure obligations do not extend to information
that is material under the federal securities laws. Defendants
contend, further, that plaintiffs have not alleged detrimental
reliance by plan participants on defendants’ omissions and
misrepresentations. Finally, defendants contend that their
omissions and misrepresentations, if any, were not made in
their fiduciary capacity. We disagree.

    To some extent, the analysis for Count II overlaps with
the analysis for Count III. We have already established that
there is no contradiction between defendants’ duty under the
federal securities laws and ERISA. Indeed, properly
understood, these laws are complementary and reinforcing.
30                   HARRIS V. AMGEN

    Defendants’ first argument is that they owe no duty under
ERISA to provide material information about Amgen stock
to plan participants who must decide whether to invest in
such stock. In other words, defendants contend that their
fiduciary duties of loyalty and care to plan participants under
ERISA, with respect to company stock, are less than the duty
they owe to the general public under the securities laws.
Defendants are wrong, as we made clear in Quan:

       We have recognized [that] . . . “[a] fiduciary
       has an obligation to convey complete and
       accurate information material to the
       beneficiary’s circumstance, even when a
       beneficiary has not specifically asked for the
       information.” Barker [v. Am. Mobil Power
       Corp., 64 F.3d 1397, 1403 (9th Cir. 1995)].
       “[T]he same duty applies to ‘alleged material
       misrepresentations made by fiduciaries to
       participants regarding the risks attendant to
       fund investment.’” Edgar [v. Avaya Inc.,
       503 F.3d 340, 350 (3d Cir. 2007)].

Quan, 623 F.3d at 886. We specifically endorsed the Third
Circuit’s definition of materiality in Quan. We wrote, “[A]
misrepresentation is ‘material’ if there was a substantial
likelihood that it would have misled a reasonable participant
in making an adequately informed decision about whether to
place or maintain monies in a particular fund.” Id. (quoting
Edgar, 503 F.3d at 350) (internal quotation marks omitted).

    Defendants’ second argument is that plaintiffs have failed
to show that they relied on defendants’ material omissions
and misrepresentations. Defendants contend that plaintiffs
must show that they actually relied on the omissions and
                     HARRIS V. AMGEN                       31

misrepresentations. It is well established under Section 10(b)
that a defrauded investor need not show actual reliance on the
particular omissions or representations of the defendant.
Instead, as the Supreme Court explained in Erica P. John
Fund, Inc. v. Halliburton Co., 131 S. Ct. 2179 (2011), the
investor can rely on a rebuttable presumption of reliance
based on the “fraud-on-the-market” theory:

       According to that theory, “the market price of
       shares traded on well-developed markets
       reflects all publicly available information,
       and, hence, any material misrepresentations.”
       [Basic, Inc. v. Levinson, 485 U.S. 224, 246
       (1988)]. Because the market “transmits
       information to the investor in the processed
       form of a market price,” we can assume, the
       Court explained [in Basic], that an investor
       relies on public misstatements whenever he
       “buys or sells stock at the price set by the
       market.” Id.[] at 244, 247.

Erica P. John Fund, 131 S. Ct. at 2185; see also Conn. Ret.
Plans & Trust, 133 S. Ct. 1184 (2013). We see no reason
why ERISA plan participants who invested in a company
stock fund whose assets consisted solely of publicly traded
common stock should not be able to rely on the fraud-on-the-
market theory in the same manner as any other investor in a
publicly traded stock.

    Defendants’ final argument is that statements made to the
Securities and Exchange Commission in documents required
by the federal securities laws were not made in a fiduciary
capacity, and that these statements therefore cannot be
considered in an ERISA suit for breach of fiduciary duty.
32                    HARRIS V. AMGEN

Although our circuit has not decided the issue, defendants
might be correct if these documents had only been filed and
distributed as required under the securities laws, for such acts
would have been performed in a corporate capacity. See
Lanfear v. Home Depot, Inc., 679 F.3d 1267, 1285 (11th Cir.
2012) (“When the defendants in this case filed the Form S-8s
and created and distributed the stock prospectuses, they were
acting in their corporate capacities and not in their capacity as
ERISA fiduciaries.”); Kirschbaum, 526 F.3d at 257 (“REI
was discharging its corporate duties under the securities laws,
and was not acting as an ERISA fiduciary.”). However,
defendants did more than merely file and distribute the
documents as required by the securities laws. See Varity
Corp., 516 U.S. at 504 (fiduciary may be “communicating
with [plan participants] both in its capacity as employer and
in its capacity as plan administrator”) (emphasis in original).

    As they were required to do under ERISA, defendants
prepared and distributed summary plan descriptions (“SPDs”)
to Plan participants. See 29 U.S.C. § 1022(a) (requiring
fiduciaries to provide a summary plan description). In the
SPDs for both the Amgen and the AML Plans, defendants
explicitly incorporated by reference Amgen’s SEC filings,
including “The Company’s Annual Report on Form 10-K for
the year ending December 31, 2006,” and “The Company’s
Current Reports on Form 8-K filed on January 19, 2007,
February 20, 2007, March 2, 2007, and March 12, 2007,
respectively.” Plaintiffs allege that the defendants knew or
should have known that statements contained in these filings,
incorporated by reference into the SPDs, were materially
false and misleading.

    We hold that defendants’ preparation and distribution of
the SPDs, including their incorporation of Amgen’s SEC
                      HARRIS V. AMGEN                        33

filings by reference, were acts performed in their fiduciary
capacities. In so holding, we agree with the Sixth Circuit,
which has held that such incorporation by reference is an act
performed in a fiduciary capacity:

        Defendants exercised discretion in choosing
        to incorporate the [SEC] filings into the Plan’s
        SPD as a direct source of information for Plan
        participants about the financial health of [the
        company] and the value of its stock, an
        investment option under the plan. The SPD is
        a fiduciary communication to plan
        participants and selecting the information to
        convey through the SPD is a fiduciary
        activity. Moreover, whether the fiduciary
        states information in the SPD itself or
        incorporates by reference another document
        containing that information is of no moment.
        To hold otherwise would authorize fiduciaries
        to convey misleading or patently untrue
        information through documents incorporated
        by reference, all while safely insulated from
        ERISA’s governing reach. Such a result is
        inconsistent with the intent and stated
        purposes of ERISA . . . and would create a
        loophole in ERISA large enough to devour all
        its protections.

Dudenhoefer v. Fifth Third Bancorp, 692 F.3 410, 423 (6th
Cir. 2012) (internal citation omitted); see also In re Citigroup
ERISA Litigation, 662 F.3d 128, 144–45 (2d Cir. 2011)
(noting that SEC filings had been incorporated in the Plans’
SPDs, but dismissing ERISA claim on the ground that
plaintiffs had not sufficiently alleged that the defendant
34                    HARRIS V. AMGEN

fiduciaries knew or should have known that the filings
contained false information); Quan, 623 F.3d at 886
(assuming, “without deciding, that alleged misrepresentations
in SEC disclosures that were incorporated into
communications about an ERISA plan are ‘fiduciary
communications’ on which an ERISA misrepresentation
claim can be based.”) (citations omitted). The statements
made in Amgen’s SEC filings and incorporated in the Plans’
SPDs may therefore be used under ERISA to show that
defendants knew or should have known that the price of
Amgen shares was artificially inflated, and to show that
plaintiffs presumptively detrimentally relied on defendants’
statements under the fraud-on-the-market theory.

    We therefore conclude that plaintiffs have sufficiently
alleged that defendants have violated the duty of loyalty and
care they owe as fiduciaries under ERISA. We emphasize,
however, as to Counts II and III, that we have decided only
that the complaint contains allegations with a sufficient
degree of plausibility to survive a motion to dismiss under
Rule 12(b)(6). A determination whether defendants have
actually violated their fiduciary duties requires fact-based
determinations, such as the likely effect of the alternative
actions available to defendants, to be made by the district
court on remand, with the assistance of expert opinion as
appropriate.

                     3. Counts IV and V

     The district court correctly concluded that Counts IV and
V are derivative of Counts II and III. Because we reverse the
district court’s dismissal of Counts II and III, we also reverse
its dismissal of Counts IV and V. See In re Gilead Sciences
Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
                     HARRIS V. AMGEN                       35

                        4. Count VI

    Count VI alleges that defendants caused the Plans directly
or indirectly to sell or exchange property with a party-in-
interest, in violation of 29 U.S.C. § 1106(a). Specifically,
Count VI alleges that Amgen and AML are parties-in-interest
that concealed material information in order to inflate the
price of Amgen stock sold to the Plans. In relevant part,
29 U.S.C. § 1106(a)(1) provides,

       A fiduciary with respect to a plan shall not
       cause the plan to engage in a transaction, if he
       knows or should know that such transaction
       constitutes a direct or indirect –

           (A) sale or exchange, or leasing, of any
           property between the plan and a party in
           interest; . . .

           (D) transfer to, or use by or for the
           benefit of a party in interest, of any assets
           of the plan[.]

A party in interest includes “any fiduciary” of a plan or “an
employer” of the plan beneficiaries. 29 U.S.C. § 1002(14).

    Defendants did not argue in the district court that Count
VI fails to state a prohibited transaction claim under
§ 1106(a)(1). Nor do they raise this argument on appeal.
Instead, defendants argue that 29 U.S.C. § 1108(e) exempts
the sale of employer stock from the restrictions of
§ 1106(a)(1).
36                    HARRIS V. AMGEN

    Section 1108(e) specifies that § 1106 does not prohibit the
purchase or sale of employer stock if, as relevant here, (1) the
sale price was the “price . . . prevailing on a national
securities exchange”; (2) no commission is charged for the
transaction, and (3) the plan is an EIAP. 29 U.S.C.
§§ 1107(d)(5), (e)(1), 1108(e).

    In Howard v. Shay, 100 F.3d 1484, 1488 (9th Cir. 1996),
we held that because § 1108(e) is an affirmative defense, a
defendant has the burden to prove its applicability. We
explained, “A fiduciary who engages in a self-dealing
transaction pursuant to 29 U.S.C. § [1106(a)] has the burden
of proving that he fulfilled his duties of care and loyalty and
that the ESOP received adequate consideration [under
§ 1108(e)].” Id.; see also Marshall v. Snyder, 572 F.2d 894,
900 (2d Cir. 1978) (“The settled law is that in [prohibited
self-dealing transactions] the burden of proof is always on the
party to the self-dealing transaction to justify its fairness
[under a statutory exception].”). Citing Howard, the Eighth
Circuit has held that a plaintiff need not plead in his
complaint that a transaction was not exempt under § 1108(e).
See Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 600–01
(8th Cir. 2009); see also Jones v. Bock, 549 U.S. 199, 211–12
(2007) (holding that a plaintiff need not plead the absence of
an affirmative defense, even a defense like exhaustion of
remedies, which is “mandatory”).

    Because the existence of an exemption under § 1108(e) is
an affirmative defense, we can dismiss Count VI based on the
§ 1108(e) exemption only if the defense is “clearly indicated”
and “appear[s] on the face of the pleading.” 5B Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure
§ 1357 (3d ed. 2004); see also Jones, 549 U.S. at 215 (citing
Wright & Miller for rule that affirmative defense must appear
                      HARRIS V. AMGEN                        37

on the face of the complaint). Here, we cannot say that the
face of the complaint clearly indicates the availability of a
§ 1108(e) defense.

         B. Amgen as Properly Named Fiduciary

    Amgen argues that it is not a fiduciary under the Plan
because it has delegated its discretionary authority. “To be
found liable under ERISA for breach of the duty of prudence
and for participation in a breach of fiduciary duty, an
individual or entity must be a ‘fiduciary.’” Wright v. Or.
Metallurgical Corp., 360 F.3d 1090, 1101 (9th Cir. 2004). In
defining a fiduciary, ERISA says,

       a person is a fiduciary with respect to a plan to
       the extent (i) he exercises any discretionary
       authority or discretionary control respecting
       management of such plan or exercises any
       authority or control respecting management or
       disposition of its assets . . . or (iii) he has any
       discretionary authority or discretionary
       responsibility in the administration of such
       plan.

29 U.S.C. § 1002(21)(A). “We construe ERISA fiduciary
status ‘liberally, consistent with ERISA’s policies and
objectives.’” Johnson v. Couturier, 572 F.3d 1067, 1076 (9th
Cir. 2009) (quoting Ariz. State Carpenters Pension Trust
Fund v. Citibank, 125 F.3d 715, 720 (9th Cir. 1997)).
Whether a defendant is a fiduciary is a question of law we
review de novo. See Varity Corp. v. Howe, 516 U.S. 489, 498
(1996).
38                    HARRIS V. AMGEN

    Under ERISA, a “named fiduciary” is “a fiduciary who is
named in the plan instrument.” 29 U.S.C. § 1102(a)(2). The
Amgen Plan provides that Amgen is “the ‘named fiduciary,’
‘administrator[,]’ and ‘plan sponsor’ of the Plan (as such
terms are used in ERISA).” ERISA grants a named fiduciary
broad authority to “control and manage the operation and
administration of the plan.” 29 U.S.C. § 1102(a)(1).
“Generally, if an ERISA plan expressly provides for a
procedure allocating fiduciary responsibilities to persons
other than named fiduciaries under the plan, the named
fiduciary is not liable for an act or omission of such person in
carrying out such responsibility.” Ariz. State Carpenters,
125 F.3d at 719–20 (citing 29 U.S.C. § 1105(c)(2)).

    Amgen argues that it delegated authority to trustees and
investment managers. Section 15.1 of the Plan provides, “To
the extent that the Plan requires an action under the Plan to be
taken by the Company [Amgen], the party specified in this
Section 15.1 shall be authorized to act on behalf of the
Company.” Section 15.1 says nothing about delegation to
trustees and investment managers. Rather, it explains that the
Fiduciary Committee has the authority, on behalf of the
Company, to “review the performance of the Investment
Funds . . . and make recommendations” and to “otherwise
control and manage the Plan’s assets.” In the absence of a
Fiduciary Committee, the Global Benefits Committee will
perform these tasks. Section 14.2 of the Plan governs the
relationship between Amgen (“the Company”) and the
trustees and managers. It provides:

           The Trustee shall have the exclusive
       authority and discretion to control and manage
       assets of the Plan it holds in trust, except to
       the extent that . . . the Company directs how
                     HARRIS V. AMGEN                        39

       such assets shall be invested [or] the
       Company allocates the authority to manage
       such assets to one or more Investment
       Managers. Each Investment Manager shall
       have the exclusive authority to manage,
       including the authority to acquire and dispose
       of, the assets of the Plan assigned to it by the
       Company, except to the extent that the Plan
       prescribes or the Company directs how such
       assets shall be invested. Each Trustee and
       Investment Manager shall be solely
       responsible for diversifying, in accordance
       with Section 404(a)(1)(C) of ERISA, the
       investment of the assets of the Plan assigned
       to it by the Committee, except to the extent
       that the plan prescribes or the Committee
       directs how such assets shall be invested.

    ERISA requires that a trustee hold plan assets in trust for
plan participants. 29 U.S.C. § 1103(a). A trustee has
“exclusive authority and discretion to manage and control the
assets of the plan” subject to two exceptions. Id. The first
exception is that a plan may “expressly provide[] that the
trustee or trustees are subject to the direction of a named
fiduciary who is not a trustee.” Id. § 1103(a)(1). Under this
exception, a named fiduciary with the power to direct trustees
is a fiduciary with authority to manage plan assets. The
second exception is that an “investment manager,” duly
licensed as an investment adviser under federal or state law,
may also be appointed to manage plan assets in lieu of the
trustee. Id. §§ 1002(38)(B), 1103(a)(2).

  There is no question that Amgen appointed a trustee.
However, nothing in the record indicates that Amgen
40                    HARRIS V. AMGEN

appointed an investment manager. Neither ERISA nor the
Plan requires that an investment manager be appointed. Even
if Amgen had appointed an investment manager, the Plan
makes clear that the trustee and any investment manager do
not have complete control over investment decisions. See
29 U.S.C. § 1002(21)(A)(i) (defining a person with “any
authority or control” over plan assets to be a fiduciary)
(emphasis added); cf. Gelardi v. Pertec Comp. Corp.,
761 F.2d 1323, 1325 (9th Cir. 1985) (finding delegation
where defendant “retained no discretionary control”)
(emphasis added), overruled on other grounds in Cyr v.
Reliance Standard Life Ins. Co., 642 F.3d 1202, 1207 (9th
Cir. 2011).

    Section 15.1 of the Plan, which authorizes the Fiduciary
Committee to take action on behalf of Amgen, does not
preclude fiduciary status for Amgen. In Madden v. ITT Long
Term Disability Plan for Salaried Empl., 914 F.2d 1279, 1284
(9th Cir. 1990), we held that the company had delegated
authority to an administration committee where the plan
provided that the Committee had “‘responsibility for carrying
out all phases of the administration of the Plan’” and had the
“‘exclusive right . . . to interpret the Plan and to decide any
and all matters arising hereunder.’” (emphasis omitted). This
language contains two features absent from the language in
the Amgen Plan. First, it delegates responsibility for all
phases of administering the plan, rather than responsibility
“to the extent that the Plan requires an action . . . to be taken
by the Company.” Second, and more important, it provides
the Committee the exclusive right to make decisions under
the plan. The Amgen Plan merely authorizes the Fiduciary
Committee to act on behalf of Amgen. It neither provides
exclusive authority to the Committee, nor precludes Amgen
from acting on its own behalf.
                      HARRIS V. AMGEN                          41

    Other courts have found a company’s grant of exclusive
authority to a delegate and an express disclaimer of authority
to be critical. In Maher v. Massachusetts General Hospital
Long Term Disability Plan, 665 F.3d 289 (1st Cir. 2011), the
First Circuit held that a hospital had delegated its fiduciary
duties when the plan stated, “‘The Hospital shall be fully
protected in acting upon the advice of any such agent . . . and
shall not be liable for any act or omission of any such agent,
the Hospital’s only duty being to use reasonable care in the
selection of any such agent.’” Id. at 292. In Costantino v.
Washington Post Multi-Option Benefits Plan, 404 F. Supp. 2d
31 (D.D.C. 2005), the district court for the District of
Columbia found delegation when the plan granted the plan
administrator “‘sole and absolute discretion’” to carry out
various Plan duties. Id. at 39 n.8. Given that ERISA allows
fiduciaries to have overlapping responsibilities under a plan,
a clear grant of exclusive authority is necessary for proper
delegation by a fiduciary. See 29 U.S.C. § 1102(a)(1)
(“[O]ne or more named fiduciaries . . . jointly or severally . . .
have authority to control and manage the operation and
administration of the plan”); see also 1 ERISA Practice and
Litigation § 6:5 (“Those who wish to avoid liability exposure
through allocation of plan responsibilities to others must
therefore take pains to ensure that their documents fully
authorize the contemplated delegation.”).

    Because the Plan contains no clear delegation of exclusive
authority, we reverse the district court’s dismissal of Amgen
from the case as a non-fiduciary.

                          Conclusion

    We conclude that defendants are not entitled to a
presumption of prudence, that plaintiffs have stated claims
42                   HARRIS V. AMGEN

under ERISA in Counts II through VI, and that Amgen is a
properly named fiduciary under the Amgen Plan. We
therefore reverse the decision of the district court and remand
for further proceedings consistent with this opinion.

     REVERSED and REMANDED.
